In February, US District Judge Charles Breyer ruled that "six months is long enough" for VW to come up with a diesel emissions fix, but the automaker failed to comply.
The initial deadline expired on Thursday, March 24, and Breyer gave Volkswagen and US regulators until April 21 to come up with a plan.
If no deal is reached by that date, the judge will consider holding a trial this summer about the 580,000 diesel-powered vehicles that were sold in the US and equipped with emissions cheating devices found to emit up to 40 times the allowable federal amount of emissions in real world driving.
"We continue to make progress and are cooperating fully with the efforts undertaken by Judge Breyer, working through Director Mueller (former FBI Director appointed as settlement master for the VW litigation), to bring about a prompt and fair resolution of the US civil litigation", Volkswagen said in a statement, quoted by AutoNews.
One solution speculated is for the manufacturer to buy back all affected vehicles, for a cost that would rise to $9.4 billion, as AutomotiveNewsEurope states quoting a BloombergIntelligence report.
The US Justice Department sued Volkswagen for $46 billion last month, but an eventual settlement might bring the number down. In the meantime, diesel-powered cars from Volkswagen, Porsche and Audi remain in stop-sale mode in the States for an indefinite period of time.