Volkswagen has said it will cut investment by €1b a year to cope with the financial implations of the diesel emissions scandal.

The investment cut will be coupled with new projects such as an electric passenger car and light commercial vehicles and more focus on its Phaeton model, which it plans to make purely electric and capable of driving long distances on a single charge.

Volkswagen said that from now on it will only install diesel engines with exhaust systems that use the best environmental technology.