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Volkswagen headquarters in Wolfsburg, Germany. Image source: Volkswagen

Volkswagen's (NASDAQOTH:VLKAY) cheating scandal is going to be an expensive one for the giant German automaker.

But it looks like VW is hoping to take the impact of those costs as soon as possible.

Reuters, citing sources inside VW, reported on Friday that VW's core auto division will likely post a loss for the full year, because of the costs of the scandal.

That could be just the beginning for VW shareholders.

VW has already said that it will take a one-time charge of 6.5 billion euros ($7.4 billion) in the third quarter to cover the costs of the scandal. That's expected to pay for the costs of repairing the 11 million diesel-powered vehicles equipped with software that cheats on emissions tests.

But new CEO Matthias Mueller has hinted that it may not be enough to cover the repairs as well as other scandal-related costs, including all of the fines that the company is likely to be hit with by governments around the world.

Porsche Ceo Matthias Mueller

New Volkswagen CEO Matthias Mueller. The former Porsche chief is tasked with cleaning up the emissions scandal that has already cut VW's market cap by over a third. Image source: Volkswagen

The Reuters report suggests that the one-time charge will be absorbed by VW's passenger-car division. It seems likely that that will be enough to swing the unit to a second-half loss all by itself, as VW's passenger-car division posted an operating profit of 5.34 billion euros ($6.1 billion) in the first half of 2015. (VW's much smaller commercial-vehicles unit had an operating profit of 354 million euros over the same period.)

Clearly, there are more charges to come.

VW could theoretically face a fine of over $18 billion for its Clean Air Act violations just in the United States. While the actual fine is likely to be a lot lower, it could be more than Toyota and General Motors were obliged to pay to settle charges in the wake of their own safety scandals: While Toyota and GM were arguably guilty of negligence and perhaps ineptitude, VW's "defeat device" shows clear criminal intent.

Images

Image source: Volkswagen

VW shareholders have already taken a big hit from the scandal. The shares have lost over a third of their value since the U.S. Environmental Protection Agency announced its charges against the company on Sept. 18. VW's CEO was forced to resign, and several of its senior executives have been "suspended" -- sent home (with pay) pending an investigation. 

Meanwhile, Mueller is warning VW employees that deep cuts in spending are coming. VW had the largest research and development budget of any automaker in 2014, and was pushing ahead on a slew of important programs including a massive electric-car effort. 

As of right now, the future of that program -- and many others -- is in doubt. And that may hurt VW and its shareholders much more than any fines or recall costs over the long run.

John Rosevear has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.