New Volkswagen chief Matthias Mueller has warned employees of the difficult times ahead.

The car manufacturer, which was recently revealed to be thwarting emissions standards with “defeat devices”, could be dealt tens of millions of dollars’ worth of fines in Australia alone.

Speaking to 20,000 employees in the company’s headquarters in Wolfsburg, Mr Mueller admitted the scope of the crisis had not yet been uncovered, and lay-offs could not be ruled out.

“The commercial and financial consequences are not yet foreseeable,” he said.

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“One thing is certain: The burden will be big. Potentially very big.”

Mueller said the company had set aside $A10.3 billion in the third quarter of this year after the scandal broke.

“It includes the estimated cost to fix the affected vehicles,” he said.

“But it won’t be enough. We must prepare for significant penalties. And many could take the events as an opportunity to claim damages against Volkswagen.”

Mr Mueller took up the post of CEO after Martin Winkelton was forced to resign amid the scandal.

It’s estimated the company could face up to A$25 billion in fines just in the USA.

The scandal was revealed by John German and a team of US researchers working for the International Council on Clean Transportation, an international organisation aiming to reduce emissions.

Mr German and his associates discovered discrepancies between the emissions of VW cars on real roads as opposed to in laboratory test conditions.

The research paper was actually released in May last year, but was not brought to the attention of the public until September 2015.

The device could affect up to 40,000 diesel vehicles sold in Australia since 2009, while up to 11 million cars could be affected word wide.

Volkswagen employs 600,000 people across 20 plants internationally.