SAN FRANCISCO -- Volkswagen, U.S. regulators and lawyers for vehicle owners have made "substantial progress" on a deal for the remaining 80,000 diesel cars caught in the company's emissions cheating scandal but need more time to negotiate, a federal judge said Friday.

U.S. District Judge Charles Breyer in San Francisco gave the parties until today to report whether they had reached a settlement. He said he was optimistic a resolution would be reached after twice postponing a hearing to give the parties more time to talk.

At issue is what to do with about 80,000 3-liter diesel cars that spewed excess pollution after being programmed to cheat on emissions tests.

Volkswagen lawyer Robert Giuffra has said the company believes it can recall and fix the 3-liter vehicles without affecting their performance.

The German automaker previously reached a deal for the other 475,000 polluting vehicles in the scandal. That settlement gives owners of 2-liter diesel cars the option to have Volkswagen buy back their vehicles regardless of condition for the full trade-in price Sept. 18, 2015, when the scandal broke, or pay for repairs.

FILE - In this July 19, 2016, file photo, New York Attorney General Eric Schneiderman announces a lawsuit against Volkswagen in New York. A federal judge on Friday, Dec. 16, 2016, planned to hear whether Volkswagen, U.S. regulators and attorneys for vehicle owners had reached a deal for the remaining 80,000 cars caught up in the company'Äôs emissions cheating scandal. U.S. District Judge Charles Breyer in San Francisco was set to get an update about the settlement talks. (AP Photo/Mark Lennihan, File)

Regulators have not approved fixes for the 2-liter cars.

Either way, Volkswagen also will pay owners $5,100 to $10,000 each, depending on the age of the car and whether the owner had it before Sept. 18, 2015.

Volkswagen has agreed to spend up to $10 billion compensating consumers.

The global scandal erupted last year when the U.S. Environmental Protection Agency said Volkswagen had fitted many of its cars with software to fool emissions tests. Car owners and the U.S. Department of Justice sued.

The software recognized when the cars were being tested on a treadmill and turned on pollution controls. The controls were turned off when the cars returned to the road. The EPA alleged the scheme let the cars spew up to 40 times the allowable limit of nitrogen oxide, which can cause respiratory problems in humans.

FILE - In this April 21, 2016, file photo, Joyce Ertel Hulbert, owner of a 2015 Volkswagen Golf TDI, holds a sign while interviewed outside of the Phillip Burton Federal Building in San Francisco. A federal judge on Friday, Dec. 16, 2016, planned to hear whether Volkswagen, U.S. regulators and attorneys for vehicle owners had reached a deal for the remaining 80,000 cars caught up in the company'Äôs emissions cheating scandal. U.S. District Judge Charles Breyer in San Francisco was set to get an update about the settlement talks. (AP Photo/Jeff Chiu, File)

The scandal has damaged Volkswagen's reputation and hurt its sales. The company has reached a separate $1.2 billion deal with its U.S. dealers and is facing potentially billions more in fines and penalties and possible criminal charges.