The investigation announced on Tuesday by the public prosecutor in the northwestern city of Braunschweig is another blow to Europe's largest automaker, which finds itself already mired in an emissions scandal.

The investigation centers on tax-breaks VW received for producing low-emitting vehicles that are now in question due to false reporting of CO2 emissions.

Emissions tests are important criteria for taxing cars in many countries, especially in Europe.

VW is stuck in the biggest business crisis in its 78-year history after admitting it had installed cheating software in around 11 million of its diesel-engine cars to thwart emission tests around the world. That scandal had centered on nitrogen oxide emissions.

Separately, VW admitted in early November to understating carbon dioxide emissions and fuel consumption.

The emissions scandal is expected to cost the company several billion euros.

cw/kms (dpa, Reuters)