Entire Vw Ar23

2023
ANNUAL REPORT
Key Figures
VOLKSWAGEN GROUP
2023 20221 %
Volume Data2 in thousands

Deliveries to customers (units) 9,240 8,263 +11.8
Vehicle sales (units) 9,362 8,481 +10.4
Production (units) 9,309 8,717 +6.8
Employees at Dec. 31 684.0 675.8 +1.2
Financial Data (IFRSs), € million

Sales revenue 322,284 279,050 +15.5
Operating result before special items 22,576 22,509 +0.3
Operating return on sales before special items (%) 7.0 8.1
Special items 0 –399 x
Operating result 22,576 22,109 +2.1
Operating return on sales (%) 7.0 7.9
Earnings before tax 23,194 22,070 +5.1
Return on sales before tax (%) 7.2 7.9
Earnings after tax 17,928 15,852 +13.1
Automotive Division3
Total research and development costs 21,779 18,908 +15.2
R&D ratio (%) 8.1 8.1
Cash flows from operating activities 37,851 29,865 +26.7
Cash flows from investing activities attributable to operating activities4 27,153 25,058 +8.4
of which: capex 14,371 12,731 +12.9
ratio of capex to sales revenue (%) 5.4 5.5
Net cash flow 10,698 4,807 x
Net liquidity at Dec. 31 40,289 43,015 –6.3
Return on investment (ROI) in % 12.3 12.0
Financial Services Division

Return on equity before tax5 (%) 8.8 14.1
VOLKSWAGEN AG
2023 20221 %
Volume Data in thousands

Employees at Dec. 31 116.1 116.7 –0.5
Financial Data (HGB), € million

Sales 92,413 79,491 +16.3
Net income for the fiscal year 6,243 12,477 –50.0
Dividends (€)
per ordinary share 9.00 8.70
per preferred share 9.06 8.76
1 Prior-year figures adjusted (see disclosures on IFRS 17).

2 The figures also include the equity-accounted Chinese joint ventures. Prior-year deliveries have been updated to reflect subsequent statistical trends.
3 Including allocation of consolidation adjustments between the Automotive and Financial Services divisions.
4 Excluding acquisition and disposal of equity investments: €25,038 (22,061) million.
5 Earnings before tax as a percentage of average equity.
This document is an English translation of the original annual report written in German. In case of discrepancies, the German version shall take precedence. All figures shown in the report
are rounded, so minor discrepancies may arise from addition of these amounts. The figures from the previous fiscal year are shown in parentheses directly after the figures for the current
reporting year. Specified vehicle ranges correspond to results obtained through the Worldwide Harmonized Light Vehicles Test Procedure (WLTP) on the chassis dynamometer. WLTP value
ranges for series-produced vehicles may vary depending on the equipment. The actual range will deviate in practice depending on various other factors.
To our Shareholders G roup Management
04 Letter to our Shareholders R epor t
08 The Board of Management of Volkswagen 93 Goals and Strategies
Aktiengesellschaft 99 Internal Management System and
10 Report of the Supervisory Board Key Performance Indicators
102 Structure and Business Activities
106 Disclosures Required under Takeover Law
109 Business Development
125 Shares and Bonds
133 Results of Operations, Financial Position and
Divisions Net Assets
18 Brands and Business Fields 152 Volkswagen AG (condensed, in accordance
21 Volkswagen Passenger Cars with the German Commercial Code)
23 Škoda 157 Sustainable Value Enhancement
25 SEAT/CUPRA 196 EU Taxonomy
27 Volkswagen Commercial Vehicles 213 Report on Expected Developments
29 Audi 222 Report on Risks and Opportunities
31 Porsche 263 Outlook for 2024
33 TRATON GROUP
35 Volkswagen Group China
37 Volkswagen Financial Services
C onsolidate d
F inancial S t atements
267 Income Statement
268
C orporate G overnance Statement of Comprehensive Income
270 Balance Sheet
41 Group Corporate Governance Declaration
272 Statement of Changes in Equity
56 Members of the Board of Management
273 Cash Flow Statement
58 Members of the Supervisory Board and
274 Notes
Composition of the Committees
442 Responsibility Statement
61 Remuneration Report
443 Independent Auditor’s Report
(on the Remuneration Report)
Additional Information
460 Five-Year Review
461 Financial Key Performance Indicators
462 Glossary
465 Scheduled Dates
This annual report was published on the occasion of the Annual Media Conference on March 13, 2024.
This annual report contains forward-looking statements on the business development of the Volkswagen Group.
These statements are based on assumptions relating to the development of the economic, political and legal environment
in individual countries, economic regions and markets, and in particular for the automotive industry, which we have
made on the basis of the information available to us and which we consider to be realistic at the time of going to press.
The estimates given entail a degree of risk, and actual developments may differ from those forecast. Any changes
in significant parameters relating to our key sales markets, or any significant shifts in exchange rates, energy and
other commodities or the supply of parts relevant to the Volkswagen Group will have a corresponding effect on the
development of our business. In addition, there may be departures from our expected business development if the
assessments of the factors influencing sustainable value enhancement and of risks and opportunities presented in this
annual report develop in a way other than we are currently expecting, or if additional risks and opportunities or other
factors emerge that affect the development of our business.
To our Shareholders
04 Letter to our Shareholders
08 The Board of Management of Volkswagen Aktiengesellschaft
10 Report of the Supervisory Board
To our Shareholders Letter to our Shareholders
Letter to our Shareholders
Growth that enhances value for years to come: that is the Volkswagen Group's objective. For our investors, for our
customers, for our employees and for society as a whole.
Amidst a demanding environment, we delivered robust results in fiscal year 2023. We increased deliveries to
customers by 12% to 9.24 million vehicles, with all regions contributing to this growth. In China, the Group’s largest
single market, we expanded by 1.6% despite a very challenging market environment. At the same time, the
Volkswagen Group successfully continued its transformation, delivering 771,100 all-electric vehicles, up 34.7%
compared with the previous year. In Europe, we further consolidated our strong market position in this segment.
Our robust financial performance reflects our customers' satisfaction in our products. With sales revenue of
€322.3 billion, an operating result of €22.6 billion and a resulting operating return on sales of 7%, we have
demonstrated the resilience of our business model. These results were achieved despite substantial headwinds
from the measurement of commodity derivatives, which had had a beneficial effect on the operating result in the
previous year. Another successful outcome of our endeavors was that we generated convincing net cash flow in
the Automotive Division on the back of earnings of €10.7 billion. What’s more, the Automotive Division’s net
liquidity of €40.3 billion at the end of 2023 puts us in a very solid position.
The Volkswagen Group delivers. Again and again. And it does so reliably, even in a market environment charac-
terized by uncertainty. We are proud of our strong performance, and it is important to us that our shareholders also
participate in this result. The Board of Management and Supervisory Board therefore propose a dividend of €9.00
per ordinary share and €9.06 per preferred share.
Our focus is on electrification. At the same time, we are seeing that the ramp-up of e-mobility in some regions,
such as North America and Europe, is progressing at a slower rate than previously assumed. Other countries, such
as China, continue to impress with the speed of their transformation. This is why the Volkswagen Group is pursuing
powertrain flexibility and financial robustness. Our unique portfolio provides the right products for customers.
While we are investing extensively in the ramp-up of e-mobility, we continue to offer highly competitive, efficient
and attractive combustion-engine models. By including both these models and our hybrid and electric vehicles in
our portfolio, we ensure maximum flexibility without losing sight of our goal – the transition to e-mobility is our
priority.
4
The Top 10 program again guided the success of our operational and strategic actions in the past year. We set
priorities, and in doing so follow a clear and transparent logic: specific milestones, clear responsibilities and
regular progress reviews. One of the key points of the program is to align our company with the capital market.
The development of virtual equity stories for all Volkswagen Group brands was an important element in this pursuit.
To us, investors are more than an important source of impetus: as shareholders, they are part of our company.
Generating added value for them, together with all other stakeholders, is a key component of how we see our
corporate governance role. This was one of the motivations for the Group Board of Management to seek intensive
dialog with the capital market; as part of personal discussions at investor conferences in the world’s most impor-
tant financial centers or at our Capital Markets Day held at the Hockenheimring in June 2023.
2023 was a year of realignment and restructuring for the Volkswagen Group. In many areas, we made faster prog-
ress than originally planned and expected. A lot of streamlining has been completed, and we are forging ahead
with other tasks. We are transforming ourselves. The ground has been prepared: we are turning from renovator to
architect and builder all in one. We have a plan and a clear view of the strengths and potential of the Volkswagen
Group. We know where we are heading. We know the way. Our focus is on implementation. We are moving ahead,
step by step and day by day, making visible, measurable progress.
The Group’s strength lies in the strength of its brands. No other company offers such a compelling, strong and
unique product portfolio. We cater to our customers' wishes in all segments and across all vehicle categories. We
set high standards for the quality and design of our vehicles. In the past, we did not always meet these standards
– our own and those of our customers – to the fullest extent. Last year, we established ambitious quality and design
programs across all brands, drawing on synergies and lessons learned from all players in the Volkswagen Group
team. Initial results have shown that we are on the right track. 2024 will be a record year for new models. The
launch of our first vehicles on the all-electric premium PPE platform, the Audi Q6 e-tron and the Porsche Macan,
is an important milestone. They mark the establishment of a new generation of powerful, attractive models.
We have lived up to our responsibility in the interest of generations, for generations. Our brands and our products
must be viable for the future. To achieve this, we have to make a strong investment in the future. We have to be in
a position to finance this goal, which is why we have agreed clear targets with all brands and launched effective
performance programs. These programs are not just to make cost savings: they are a unique opportunity to shape
things. We want to prepare the brands for future success, which includes new sources of revenue. It’s about
sustainably increasing our profitability.
Living up to our responsibility also means that we think of sustainability holistically, mindful of the natural environ-
ment, people, society and value-creating entrepreneurship. We have launched ambitious, structured programs in
the Volkswagen Group and in all the brands. Meeting the targets set in these programs is the personal respon-
sibility of the managers. An important element of our sustainability strategy is our commitment to decarbonization.
Production is one of the key levers in this regard: by 2030, we aim to cut production-related CO2 emissions from
passenger cars and light commercial vehicles by 50% compared with the base year 2018. The prestigious Science
Based Targets initiative (SBTi) has confirmed that, by setting this target for the production phase (Scope 1 and
Scope 2), our company will meet the requirements for contributing to limiting global warming to 1.5 degrees Celsius.
The target to reduce CO2 emissions during the use phase (Scope 3) by 30% has been confirmed by the SBTi as
compliant with limiting global warming to 2 degrees Celsius. These confirmations are an incentive for us.
5
The Volkswagen Group team stands for a new leadership mindset. Together, we have committed ourselves to a
clear stance: one of entrepreneurship and individual responsibility, a winning stance. Volkswagen – our joint enter-
prise. Those are our tasks. And it is for us to solve them.
In 2023, we homed in on one of our key skills, technology leadership, which is an integral part of Volkswagen’s
DNA. The customers of our strong and captivating brands benefit from an intelligent platform strategy. This is also
the key to creating greater efficiency, using synergies and building economic resilience in challenging and fiercely
competitive times. In this process, we think from the customer’s perspective and are able to offer attractive vehi-
cles with attractive solutions at an attractive price. With the realignment of our architectures, the establishment
of technology profiles, progress in implementing the battery strategy and the expansion of high-performance
charging networks, we have already achieved important milestones. The realignment of our software activities
also is a powerful lever in the revision of our technology strategy. We focus on our core competencies, and also
collaborate with a strong network of high-performing partners.
The Volkswagen Group thinks global and acts local. We want to remain strong in Europe and China and take
advantage of our growth opportunities in North America. We do so with products tailored to the various require-
ments of our customers in different regions. Our strategy for the largest single market is entitled “In China for
China”, and our actions have reflected the meaning of these words. In Hefei, we established Volkswagen China
Technology Company last year. Today, more than 2,000 technology experts are already working here on the future
of Chinese automaking. We aim to cut the development time for new products and technology by around 30%
compared to the status quo to be in line with “China speed”. We are also making our product substance in China
more Chinese. Our cooperations with strong partners such as XPeng, Thundersoft and Horizon Robotics are
helping to make this possible: we will continue to work on the development of vehicles that are fully aligned with
the needs of Chinese customers. In the North America region, we have taken significant steps forward by making
fundamental strategy decisions such as on increasingly localized production, the construction of a battery cell
plant in Ontario, Canada, and the revival and electrification of the traditional Scout brand. Here we will make
increased use of product synergies to leverage our growth potential with local production. Beyond the markets in
China, North America and Europe, we also apply regional strategies in the growth markets of South America and India.
We established a new steering model in 2023, which signifies less head office and more entrepreneurial respon-
sibility and greater creative freedom for the brands and their decision makers. We pursue intelligent capital allo-
cation and set clear guidelines.
Growth that enhances value for years to come, with our transformation, ladies and gentlemen, we are making
systematic progress toward realizing this objective. Step by step. After a year of reorganizing and streamlining our
structures and focusing on the fundamental alignment of the Volkswagen Group, we are heading into a year of
stabilizing and shaping our business. The path is clear. We are working toward the vision of a sustainably profitable
group. A group with the most attractive products, the best team and the clear promise: sustainable mobility for
generations to come.
Sincerely,
Oliver Blume
6
We have lived up to our responsibility

in the interest of generations, for generations.
Our brands and our products must be viable
for the future. To achieve this, we have to
make a strong investment in the future.
– Oliver Blume –
7
The Board
of Management
of Volkswagen Aktiengesellschaft
Oliver Blume
Chair of the Board of Management
of Volkswagen AG,
Sport Luxury brand group
Dr. Arno Antlitz

Finance and Operations
Ralf Brandstätter
China
Dr. Manfred Döss

Integrity and Legal Affairs
Dr. Gernot Döllner
Progressive brand group
Gunnar Kilian
Human Resources and Trucks brand group
Thomas Schäfer
Core brand group
Thomas Schmall-
von Westerholt
Technology
Hauke Stars
IT
To our Shareholders Report of the Supervisory Board
Report of the Supervisory Board

(in accordance with section 171(2) of the AktG)
Ladies and gentlemen,
In fiscal year 2023, the work of the Supervisory Board of Volkswagen AG and its committees focused on the
Volkswagen Group’s strategic alignment, with the spotlight on the China strategy and the transformation. The
Supervisory Board regularly deliberated on the Company’s position and development in the reporting year. We
supervised and supported the Board of Management in its running of the business and advised it on issues
relating to the management of the Company, and particularly on sustainability issues, in accordance with our
duties under the law, the Articles of Association and the rules of procedure. The Supervisory Board was directly
involved in all decisions of fundamental importance to the Group. Additionally, we discussed strategic con-
siderations with the Board of Management at regular intervals.
The Board of Management complied with its disclosure obligations, which are set out in the information
policy adopted by the Supervisory Board. The Board of Management provided us with information regularly,
promptly and comprehensively both in writing and orally, particularly on all matters of relevance to the Company
relating to its strategy, business development and the Company’s planning and position. This also included the
risk situation and risk management. In this respect, the Board of Management also informed the Supervisory
Board of further improvements to the internal control system and the risk and compliance management system.
In addition, the Supervisory Board received information about compliance and other topical issues from the
Board of Management on an ongoing basis. We received the documents relevant to our decisions in good time
for our meetings. At regular intervals, we also received a detailed report from the Board of Management on the
current business position and the forecast for the current year. Any deviations in performance from the plans and
targets previously drawn up were explained in detail by the Board of Management, either in person or in writing.
Together with the Board of Management we analyzed the reasons for the deviations and determined corre-
sponding countermeasures. In addition, the Board of Management continued to report on the situation related to
the Russia-Ukraine conflict and discussed corresponding action with the Supervisory Board.
Furthermore, the Chair of the Supervisory Board consulted with the Chair of the Board of Management at regular
intervals between meetings to discuss important current issues. These included the Group’s strategy and plan-
ning, its business development, and the risk situation and risk management, including integrity and compliance
issues in the Volkswagen Group. The Chair of the Supervisory Board regularly discussed Supervisory Board-
specific topics with investors and, in consultation with the Board of Management, also non-Supervisory Board-
specific topics. One of the focuses of debate was corporate governance and ESG issues. The Chair of the Super-
visory Board informed the Supervisory Board of such discussions after they had taken place.
The Supervisory Board held a total of eight meetings in fiscal year 2023. Six of the meetings were held face to
face and two as video or conference calls. The attendance rate (calculated for all meetings held during the fiscal
year and for all Supervisory Board members in office) was 92%. Supervisory Board members who did not attend a
meeting for reasons other than a possible conflict of interests were able to engage with the meeting topics using
10
the preparatory documents and could participate in the resolutions by means of a written vote. Particularly urgent
matters were decided in writing or using electronic means of communication.
COMMITTEE ACTIVITIES
In order to discharge the duties entrusted to it, the Supervisory Board has established four committees: the Exec-
utive Committee, the Nomination Committee, the Mediation Committee established in accordance with section
27(3) of the Mitbestimmungsgesetz (MitbestG – German Codetermination Act) and the Audit Committee. The
Executive Committee is comprised of four shareholder representatives and four employee representatives. The
shareholder representatives on the Executive Committee make up the Nomination Committee. The Mediation
Committee is comprised of two shareholder representatives and two employee representatives, while the Audit
Committee is comprised of three shareholder representatives and three employee representatives. The members
of these committees as of December 31, 2023 are stated in the Group Corporate Governance Declaration.
The Executive Committee met 12 times in the reporting year. Five of the meetings were held face to face and
seven as video or conference calls. The Executive Committee meticulously prepared the resolutions of the
Supervisory Board, discussed the composition of the Board of Management and took decisions on matters such
as contractual issues concerning the Board of Management other than remuneration, and on consent to ancillary
activities by members of the Board of Management. The Executive Committee also exercised the function of a
Remuneration Committee and prepared the Supervisory Board’s decisions on matters relating to Board of Man-
agement remuneration.
The Nomination Committee is responsible for proposing suitable candidates for the Supervisory Board to
recommend for election to the Annual General Meeting. In doing so, it takes into account the targets set by the
Supervisory Board for its composition, and the diversity concept for the composition of the Supervisory Board,
and strives to fill the profile of skills and expertise prepared for the full Board. The Nomination Committee also
particularly makes sure that there are no gaps in the skills and expertise of the full Board (Skill Gaps Assess-
ment). The Nomination Committee held one meeting face to face in 2023 and, taking the aforementioned
requirements into account, proposed candidates for the Supervisory Board to recommend to the Annual General
Meeting for election.
The Mediation Committee established in accordance with section 27(3) of the MitbestG did not need to
convene in the reporting year.
The Audit Committee held four meetings in fiscal year 2023. Three of the meetings were held face to face and
one meeting was held as a video or conference call. The focus was on the annual and consolidated financial
statements, the Risk Management System including the appropriateness and effectiveness of the Internal
Control System and the Internal Audit System, and the work performed by the Company’s Compliance organi-
zation. In addition, the Audit Committee concerned itself with the Volkswagen Group’s quarterly reports and the
half-yearly financial report, as well as with current issues, the supervision of financial reporting and the financial
reporting process, and the examination thereof by the auditors. The Audit Committee regularly evaluates the
quality of the audit. In consultation with the auditors, it discussed the assessment of audit risk, the audit strategy
and audit planning and the results of the audit.
Furthermore, the shareholder and employee representatives generally met for separate preliminary discus-
sions before each of the Supervisory Board meetings.
In connection with their seat on the Supervisory Board, members of the Supervisory Board receive support
from the Company upon induction as well as with respect to education and training; the Company particularly
supports the organization of seminars and bears the costs thereof. In the reporting year, the Supervisory Board
members received training on the raw materials situation and on battery cell production, for instance. What is
more, Volkswagen AG gives the members of the Supervisory Board the opportunity to become more familiar with
the Group’s products and with market developments. Here, Volkswagen AG offers the members of the Super-
visory Board in-house product and innovation presentations, for example, and encourages attendance at trade
fairs. Supervisory Board members appointed for the first time are also provided with a detailed introduction to
topics that apply specifically to the Supervisory Board of Volkswagen AG (onboarding).
11
Hans Dieter Pötsch
TOPICS DISCUSSED BY THE SUPERVISORY BOARD

The first Supervisory Board meeting in the reporting year took place on February 10, 2023. At this meeting, we
discussed matters related to the Board of Management and remuneration and consulted with the Board of
Management in particular on the e-mobility strategy in China and the supply situation. We also looked at the
current status of the Volkswagen Group’s investment and financial planning.
The next meeting of the Supervisory Board took place on March 3, 2023. Following a detailed examination,
we approved the consolidated financial statements and the annual financial statements of Volkswagen AG for
fiscal year 2022 prepared by the Board of Management. We examined the combined management report, the
combined separate nonfinancial report for 2022 and the precautionary Report by the Board of Management on
Relationships of Volkswagen AG with Affiliated Companies (dependent company report) in accordance with
section 312 of the Aktiengesetz (AktG – German Stock Corporation Act). The other items on the agenda included
the issue of the audit engagement for the 2023 annual and consolidated financial statements as well as other
accounting documents, an amendment of the remuneration system for the members of the Board of Manage-
ment, the restructuring of sections of the Financial Services Division of the Volkswagen Group, especially for the
establishment of TRATON Financial Services AB, the choice of location for a battery cell factory in North America
and the production strategy for all-electric models in the United States.
On May 9, 2023, the Supervisory Board held a meeting that, alongside the composition of the Board of Manage-
ment of Volkswagen AG, focused on the raw materials situation and preparations for the 63th Annual General
Meeting of Volkswagen AG. Further topics that we discussed with the Board of Management included business
development in the first quarter of 2023, developments in the Chinese market and the repositioning of CARIAD SE.
Along with the concept for the Capital Markets Day, the Supervisory Board meeting on June 13, 2023 con-
centrated primarily on strategic considerations for the Chinese market. In addition, we discussed with the Board
of Management the current status of the Volkswagen Group’s investment and financial planning and Volks-
wagen AG’s energy strategy.
The Supervisory Board meeting on June 29, 2023 focused on the composition of the Board of Management of
Volkswagen AG. At this meeting, we resolved to appoint Mr. Gernot Döllner as a member of the Board of Man-
agement of Volkswagen AG with effect from September 1, 2023 to succeed Mr. Markus Duesmann, who left the
Company by mutual agreement, and also agreed that Mr. Döllner would additionally assume the role of Chair of
the Board of Management of AUDI AG.
12
The meeting of the Supervisory Board on July 26, 2023 focused on the e-mobility strategy in China.
On September 29, 2023, the Supervisory Board met to discuss in particular the composition of the Board of
Management, the supply of raw materials to Volkswagen AG and the portfolio strategy of the Commercial
Vehicles Business Area.
One of the topics we discussed with the Board of Management at the Supervisory Board meeting on Novem-
ber 17, 2023 was the current status of the Volkswagen Group’s investment and financial planning and the Com-
mercial Vehicles portfolio strategy. Together with the Board of Management, we issued the annual declaration of
conformity with the German Corporate Governance Code (the Code).
In the reporting year, we voted in writing on, among other things, a further amendment of the remuneration
system for the members of the Board of Management, the proposal to change the remuneration provisions for the
members of the Supervisory Board submitted to the Annual General Meeting, approval of the choice of location
for a battery cell factory in North America and the composition of Supervisory Board committees.
The following table shows the number of meetings of the full Board and the committees as well as the
individual participation of the members of the Supervisory Board in 2023:
Meetings of the full Meetings of the

Supervisory Board Committees
Hans Dieter Pötsch 8 out of 8 13 out of 13

Jörg Hofmann 8 out of 8 11 out of 12
Dr. Hessa Sultan Al Jaber 7 out of 8 –
Mansoor Ebrahim Al-Mahmoud 6 out of 8 4 out of 4
Harald Buck 8 out of 8 –
Matías Carnero Sojo 7 out of 8 –
Daniela Cavallo 8 out of 8 15 out of 16
Julia Willie Hamburg 6 out of 8 –
Marianne Heiß 8 out of 8 4 out of 4
Dr. Arno Homburg 7 out of 8 –
Günther J. Horvath (since February 28, 2023) 6 out of 7 –
Simone Mahler (until May 31, 2023) 3 out of 3 –
Peter Mosch 8 out of 8 12 out of 12
Daniela Nowak 8 out of 8 –
Dr. Hans Michel Piëch 7 out of 8 10 out of 13
Dr. Ferdinand Oliver Porsche 8 out of 8 4 out of 4
Dr. Wolfgang Porsche 6 out of 8 12 out of 13
Jens Rothe (until March 3, 2023) 2 out of 2 4 out of 4
Gerardo Scarpino (since April 21, 2023) 6 out of 6 10 out of 10
Karina Schnur (since July 11, 2023) 3 out of 3 –
Conny Schönhardt 8 out of 8 4 out of 4
Stephan Weil 7 out of 8 11 out of 13
13
CONFLICTS OF INTEREST
No conflicts of interest were reported or were discernible in the reporting year.
CORPORATE GOVERNANCE AND DECLARATION OF CONFORMITY

Among the topics addressed at the Supervisory Board meeting on November 17, 2023 was the implementation
of the recommendations and suggestions of the Code in the Volkswagen Group. We discussed the Code’s require-
ments in detail and issued the annual declaration of conformity with the recommendations of the Code in
accordance with section 161 of the AktG together with the Board of Management.
The joint declarations of conformity by the Board of Management and the Supervisory Board are permanently
available at www.volkswagen-group.com/declaration. Additional information on the implementation of the
recommendations and suggestions of the Code can be found in the Group Corporate Governance Declaration.
The Audit Committee agreed on a suitable procedure with the Board of Management for ongoing monitoring
of the Volkswagen Group’s related-party transactions. In some cases, related-party transactions are subject to a
requirement for the Supervisory Board to provide consent and a disclosure obligation. The procedure for ongoing
monitoring of related-party transactions and the approach taken by the Supervisory Board are described in detail
in the Group Corporate Governance Declaration. In the reporting year, there were no cases in which a require-
ment to provide consent and a disclosure obligation arose based on the rules for related-party transactions.
COMPOSITION OF THE SUPERVISORY BOARD AND BOARD OF MANAGEMENT

Mr. Jens Rothe, Chair of the General Works Council of Volkswagen Sachsen GmbH, resigned from the Super-
visory Board of Volkswagen AG with effect from March 3, 2023. Jens Rothe had held a seat on the Supervisory
Board as an employee representative since October 22, 2021. Mr. Gerardo Scarpino, Executive Director of the
Volkswagen Group Works Council, was appointed by the court as his successor with effect from April 21, 2023.
The terms of office of Ms. Marianne Heiß and Mr. Wolfgang Porsche on the Supervisory Board of Volkswagen
AG ended with effect from the close of the Annual General Meeting of Volkswagen AG on May 10, 2023, as did
the term of office of Mr. Günther Horvath, which was limited by court appointment. The Annual General Meeting
elected Ms. Marianne Heiß, Mr. Wolfgang Porsche and Mr. Günther Horvath for another full term of office.
Ms. Simone Mahler, Chair of the joint Works Council of Volkswagen Financial Services AG and Volkswagen
Bank GmbH, resigned from the Supervisory Board of Volkswagen AG with effect from May 31, 2023. Simone
Mahler had held a seat on the Supervisory Board as an employee representative since May 12, 2022. Ms. Karina
Schnur, Chair of the General and Group Works Councils of MAN Truck & Bus SE, was appointed by the court as
her successor with effect from July 11, 2023.
Effective from December 31, 2023, Mr. Peter Mosch, Chair of the General Works Council of AUDI AG, resigned
from the Supervisory Board of Volkswagen AG. Mr. Mosch had held a seat on the Supervisory Board as an
employee representative since January 18, 2006. Ms. Rita Beck, Deputy Chair of the General Works Council of
AUDI AG, was appointed by the court as his successor with effect from January 9, 2024.
Effective from September 1, 2023, the Supervisory Board appointed Mr. Gernot Döllner as a member of the
Board of Management of Volkswagen AG. Mr. Döllner took over the Progressive brand group (formerly: Premium)
Board function, succeeding Markus Duesmann, who stepped down from the Board of Management by mutual
agreement with effect from the close of August 31, 2023.
Our sincere thanks go out to all of the departing members of the Supervisory Board and the Board of Manage-
ment for their work.
14
AUDIT OF THE ANNUAL AND CONSOLIDATED FINANCIAL STATEMENTS

In line with our proposal, the Annual General Meeting of Volkswagen AG on May 10, 2023 elected EY GmbH &
Co. KG Wirtschaftsprüfungsgesellschaft (EY) as auditors and Group auditors for fiscal year 2023. The auditors
confirmed the annual financial statements of Volkswagen AG, the consolidated financial statements of the
Volkswagen Group and the combined management report by issuing unqualified audit reports in each case. The
Audit Committee had also agreed with the auditor that the auditor would inform the Audit Committee if, while
conducting the audit, matters were identified that constituted an inaccuracy in the Declaration on the Code sub-
mitted by the Board of Management and Supervisory Board. The auditor did not inform the Audit Committee of
any such matters.
The Supervisory Board also commissioned EY to conduct an external audit of the content of the combined
separate nonfinancial report for 2023.
In addition, the auditors analyzed the risk early warning and monitoring system that is integrated into the Risk
Management System, concluding that the Board of Management had taken the measures required by section
91(2) of the AktG to ensure early detection of any risks endangering the continued existence of the Company.
The Report on Relationships of Volkswagen AG with Affiliated Companies as per section 312 of the AktG
(dependent company report) submitted by the Board of Management for the period from January 1 to December
31, 2023 was also audited by the auditors, who issued the following opinion: “In our opinion and in accordance
with our statutory audit, we certify that the factual disclosures provided in the report are correct and that the
Company’s consideration concerning legal transactions referred to in the report was not unduly high.”
The members of the Audit Committee and the members of the Supervisory Board were provided with the
documentation relating to the annual and consolidated financial statements, including the dependent company
report, the documentation relating to the combined management report, and also the audit reports prepared by
the auditors and the report from EY on the external audit of the content of the combined separate nonfinancial
report for 2023 in good time for their meetings on February 29, 2024 and March 1, 2024, respectively. The
auditors reported extensively at both meetings on the material findings of their audit and were available to
provide additional information. The Chair of the Audit Committee was also in close contact with the auditors,
including between the meetings and during the preparation of the Audit Committee meetings, about the prog-
ress of the audit, and reported to the Audit Committee on this. The Audit Committee and the auditor also consult
regularly without the Board of Management.
Taking into consideration the audit reports and the discussion with the auditors, and based on its own con-
clusions, the Audit Committee prepared the documents for the Supervisory Board’s examination of the con-
solidated financial statements, the annual financial statements of Volkswagen AG, the combined management
report, the dependent company report and the combined separate nonfinancial report for 2023, and reported on
these at the Supervisory Board meeting on March 1, 2024. Following this, the Audit Committee recommended
that the Supervisory Board approve the annual and consolidated financial statements. We examined the docu-
ments in depth in the knowledge and on the basis of the report by the Audit Committee and the audit report, as
well as in talks and discussions with the auditors. We came to the conclusion that the documents were drawn up
in accordance with generally accepted accounting principles and that the assessment of the position of the
Company and the Group presented by the Board of Management in the combined management report corre-
sponds to the assessment by the Supervisory Board.
15
We therefore concurred with the auditors’ findings and approved the annual financial statements and the
consolidated financial statements prepared by the Board of Management at our meeting on March 1, 2024,
which the auditors also attended for the agenda items relating to the annual and consolidated financial state-
ments, the dependent company report and the combined management report. The annual financial statements
are thus adopted. Upon completion of our examination of the dependent company report, there are no objections
to be raised to the concluding declaration by the Board of Management in the dependent company report. We
reviewed the proposal on the appropriation of net profit submitted by the Board of Management, taking into
account in particular the interests of the Company and its shareholders, and endorsed the proposal. EY con-
ducted an external limited assurance review of the content of the combined separate nonfinancial report for
2023 and issued an unqualified report. At our meeting on March 1, 2024, EY also took part in the discussions on
the agenda items relating to the combined separate nonfinancial report for 2023. Upon completion of its own
independent examination of the combined separate nonfinancial report for 2023, the Supervisory Board did not
have any objections. We also resolved that, together with the Board of Management, we would prepare the
remuneration report for fiscal year 2023. The Executive Committee prepared the resolution of the Supervisory
Board concerning the preparation of the remuneration report. As well as reviewing whether the remuneration
report contained all the disclosures required by law, EY went beyond statutory requirements to audit its content
and issued an unqualified report.
We would like to offer our warm thanks and particular appreciation to the Board of Management, the Works
Council, the management teams and all the employees of Volkswagen AG and its affiliated companies for their
work in the reporting year. 2023 was another year full of challenges to overcome, some of which were sub-
stantial. With hard work and a high level of personal commitment, they all contributed significantly to making
2023 a positive fiscal year for the Volkswagen Group.
Wolfsburg, March 1, 2024
Hans Dieter Pötsch

Chair of the Supervisory Board
16
Divisions
18 Brands and Business Fields
21 Volkswagen Passenger Cars
23 Škoda
25 SEAT/CUPRA
27 Volkswagen Commercial Vehicles
29 Audi
31 Porsche
33 TRATON GROUP
35 Volkswagen Group China
37 Volkswagen Financial Services
Divisions Brands and Business Fields
Brands and Business Fields

In 2023, the Volkswagen Group recorded growth in unit sales and sales revenue
year-on-year in a difficult market environment impacted by limited vehicle availability.
GROUP STRUCTURE
The Volkswagen Group consists of two divisions: the Automotive Division and the Financial Services Division.
The Automotive Division comprises the Passenger Cars, Commercial Vehicles and Power Engineering business
areas. Activities of the Automotive Division comprise in particular the development of vehicles, engines and
vehicle software, the production and sale of passenger cars, light commercial vehicles, trucks, buses and motor-
cycles, as well as businesses for genuine parts, large-bore diesel engines, turbomachinery and propulsion
components. Mobility solutions are gradually being added to the range. The Ducati brand is allocated to the Audi
brand and thus to the Passenger Cars Business Area. The Financial Services Division’s activities comprise dealer
and customer financing, leasing, direct banking and insurance activities, fleet management and mobility services.
REPORTING STRUCTURE OF THE VOLKSWAGEN GROUP
Automotive Financial Services

Division Division
Passenger Cars Commercial Power Engineering Dealer and customer financing

Business Area Vehicles Business Area Leasing
Volkswagen Business Area MAN Energy Direct bank
Passenger Cars TRATON Solutions Insurance
Škoda Commercial Vehicles Fleet management
SEAT Mobility services
Volkswagen Commercial
Vehicles
Tech. Components
Audi
Porsche Automotive
CARIAD
Battery
Others
18
In this chapter, we present the key volume and financial data relating to the Group brands and to Volkswagen
Financial Services. In light of the considerable importance of the development of business in the world’s largest
single market for the Volkswagen Group, we also report on business developments and the results of our
activities in China in this chapter.
The production figures and deliveries to customers are differentiated by vehicle brands and their models that
carry the corresponding brand logo. Unit sales figures contain vehicles sold by respective brand companies,
including models of other Group brands. In some cases, there are marked differences between delivery figures
and unit sales as a result of our business development in China.
KEY FIGURES BY BRAND GROUP AND BUSINESS FIELD
VEHICLE SALES SALES REVENUE OPERATING RESULT
Thousand vehicles/€ million 2023 2022 2023 20221 2023 20221
Core brand group 4,826 4,069 137,770 113,762 7,273 4,045

Progressive brand group 1,282 1,070 69,865 61,753 6,280 7,622
Sport Luxury brand group2 334 314 37,349 34,599 6,938 6,425
CARIAD – – 1,078 796 –2,392 –2,068
Battery – – 31 0 –417 –121
TRATON Commercial Vehicles 339 306 45,731 39,516 3,715 1,583
MAN Energy Solutions – – 4,044 3,565 369 284
Equity-accounted companies in China3 3,065 3,122 – – – –
Volkswagen Financial Services – – 50,765 43,953 3,253 5,584
Other4 –484 –400 –24,350 –18,895 –2,445 –845
Volkswagen Group before special items – – – – 22,576 22,509
Special items – – – – 0 –399
Volkswagen Group 9,362 8,481 322,284 279,050 22,576 22,109

2 Including Porsche Financial Services: sales revenue €40,530 (37,637) million, operating result €7,284 (6,772) million.
3 The sales revenue and operating result of the equity-accounted companies in China are not included in the consolidated figures; the share of the operating result generated by
these companies amounted to €2,621 (3,280) million.
4 In the operating result, mainly intragroup items recognized in profit or loss, in particular from the elimination of intercompany profits; the figure includes depreciation and
amortization of identifiable assets as part of purchase price allocation, as well as companies not allocated to the brands.
KEY FIGURES OF THE CORE BRAND GROUP
Volkswagen Passenger Cars 3,016 2,594 86,382 73,773 3,542 2,647

Škoda 1,056 863 26,536 21,026 1,773 628
SEAT 602 468 14,333 10,941 625 33
Volkswagen Commercial Vehicles 423 340 15,325 11,455 873 529
Tech. Components – – 21,282 17,966 582 130
Consolidation –270 –195 –26,088 –21,399 –121 78
Core brand group 4,826 4,069 137,770 113,762 7,273 4,045
19
KEY FIGURES BY DIVISION
Passenger Cars Business Area 9,023 8,175 218,380 189,312 14,704 14,603
Commercial Vehicles Business Area 339 306 45,731 39,516 3,714 1,588
Power Engineering Business Area – – 4,044 3,565 366 281
Automotive Division2 9,362 8,481 268,156 232,392 18,784 16,471
Financial Services Division – – 54,128 46,657 3,792 5,638
Volkswagen Group 9,362 8,481 322,284 279,050 22,576 22,109

KEY FIGURES BY MARKET

In fiscal year 2023, the Volkswagen Group was faced with a persistently challenging market environment. The
operating result (prior-year figure before special items) amounted to €22.6 (22.5) billion. While the fair value
measurement of derivatives to which hedge accounting is not applied had an adverse effect in the reporting year
(€–3.2 billion), it had had a positive effect in the previous year (€+1.8 billion). A year earlier, special items
resulting from the diesel issue had weighed on operating result in the amount of €–0.4 billion.
The Volkswagen Group’s unit sales in the reporting year stood at 9.4 (8.5) million vehicles. Sales revenue
increased by 15.5% to €322.3 billion. The higher volume, improved price positioning and mix effects had a posi-
tive impact.
In the Europe/Other markets region, unit sales increased by 19.3% year-on-year to 4.2 million vehicles. Together
with improved price positioning, this increased sales revenue to €187.9 (154.5) billion.
Unit sales in the North American markets increased by 24.2% to 1.1 million vehicles in the reporting year.
Driven mainly by higher volumes, sales revenue rose to €67.9 (59.9) billion.
On markets in the South America region, we sold 513 thousand vehicles in 2023, an increase of 5.3%
compared with 2022. Driven mainly by higher volumes, sales revenue increased by 10.7% to €17.1 billion.
In the Asia-Pacific region, the Volkswagen Group’s unit sales – including the Chinese joint ventures – came to
3.6 (3.6) million vehicles in 2023. Sales revenue amounted to €50.1 (51.4) billion. This figure does not include
the sales revenue of our equity-accounted Chinese joint ventures.
Hedging transactions relating to sales revenue in foreign currency had a negative impact of €–0.8 (–2.3) bil-
lion on the sales revenue of the Volkswagen Group in the reporting year.
KEY FIGURES BY MARKET
VEHICLE SALES SALES REVENUE
Thousand vehicles/€ million 2023 2022 2023 20221
Europe/Other Markets 4,169 3,495 187,949 154,514

North America 1,078 868 67,908 59,910
South America 513 487 17,139 15,476
Asia-Pacific2 3,603 3,632 50,109 51,443
Hedges on sales revenue – – –821 –2,294
Volkswagen Group2 9,362 8,481 322,284 279,050

2 The sales revenue of the joint venture companies in China is not included in the figures for the Group and the Asia-Pacific market.
20
Divisions Volkswagen Passenger Cars
The Volkswagen Passenger Cars brand celebrated the market debut of the
new Tiguan in fiscal year 2023. It also launched the all-electric ID.7 saloon.
The operating result improved year-on-year.
BUSINESS DEVELOPMENT
The Volkswagen Passenger Cars brand aims to move people. The centerpiece of the ACCELERATE 2030 stra-
tegy is a global initiative through which the brand aspires to transform itself into a technology and software
business focused on customer needs.
The high point of the Volkswagen Passenger Cars brand’s activities in fiscal year 2023 was the market debut
of the completely redeveloped bestselling Tiguan, now in its third generation. The interior, with a clearly struc-
tured digital cockpit, an infotainment screen, a head-up display and a driver experience switch, is intuitive and
the result of actual customer feedback. The new plug-in hybrid drives permit an all-electric range of up to
around 100 kilometers and fast DC charging. The new adaptive chassis control system DCC Pro – a piece of
technology from the premium segment – provides maximum comfort and agility. New generations of the popular
Passat and Touareg models were also launched in the reporting year.
In April 2023, the Volkswagen Passenger Cars brand celebrated the world premiere of the new ID.7, the
brand’s first global electric model in the upper mid-sized class. The fully electric saloon combines long ranges,
quick charging, a spacious interior and intuitive operation, making it the new benchmark for all-electric premium
models at Volkswagen. The innovative panoramic sunroof with “smart glass” can be switched between opaque
and transparent electrically by touch control. Impressive new all-electric concept vehicles were also unveiled:
the compact ID. 2all and the sporty ID. GTI Concept.
The Volkswagen Passenger Cars brand delivered 4.9 million vehicles globally in fiscal year 2023. This was
6.7% more than in the previous year. Growth was achieved above all in Western Europe (+14.7%), North America
(+17.0%) and South America (+15.9%).
The Volkswagen Passenger Cars brand sold 3.0 (2.6) million vehicles in the reporting year. ID. family models,
the Tiguan and the T-Roc were increasingly sought-after. The Taigo was also very popular. The difference between
deliveries and unit sales is due mainly to the fact that the vehicle-producing joint ventures in China are not
attributed to the companies in the Volkswagen Passenger Cars brand.
The Volkswagen Passenger Cars brand produced 4.9 (4.8) million vehicles worldwide in 2023. Volkswagen
do Brasil, the largest vehicle manufacturer in Brazil, reached the production milestone of 25 million vehicles in its
70th year of existence.
SALES REVENUE AND EARNINGS

The Volkswagen Passenger Cars brand increased its sales revenue by 17.1% year-on-year to €86.4 billion in
2023. The operating result (prior-year figure before special items) improved to €3.5 (2.6) billion. Higher volume
and price effects plus lower fixed costs had a positive impact, while a rise in product costs as well as the
deconsolidation of Volkswagen Group Rus weighed on the result. The operating return on sales (prior-year figure
before special items) amounted to 4.1 (3.6)%.
21
Divisions Volkswagen Passenger Cars
PRODUCTION VOLKSWAGEN PASSENGER CARS BRAND
Units 2023 2022 2023 2022 %
Tiguan 633,147 604,536 Deliveries (thousand units) 4,867 4,563 +6.7

Polo/Virtus/Nivus/Taigo 591,668 448,043 Vehicle sales 3,016 2,594 +16.3
Passat/Magotan 498,369 447,246 Production 4,859 4,811 +1.0
Jetta/Sagitar 381,663 292,038 Sales revenue (€ million) 86,382 73,773 +17.1
Golf 309,414 300,090 Operating result before
T-Roc 289,426 322,211 special items 3,542 2,647 +33.8
Lavida 271,309 377,284 Operating return on sales (%) 4.1 3.6
T-Cross/Tacqua/Taigun 261,519 315,036

Tharu/Taos 233,756 216,397
Atlas/Teramont 229,339 217,771
ID.4, ID.5 223,425 207,934
JETTA 170,521 148,666
Bora 149,740 210,896
ID.3 142,216 83,432
Lamando 106,023 99,966
Santana 90,623 111,422
Saveiro 68,334 46,282
Arteon/CC 60,467 69,627
up! 38,420 33,317
Touareg 34,577 31,254
Touran 33,983 27,403
ID.6 15,926 38,846
Sharan/Viloran 15,097 30,888
ID.7 8,592 –
Gol 1,386 122,575
Phideon 31 7,480
4,858,971 4,810,640
ID.7 DELIVERIES BY MARKET

in percent
 Europe/Other Markets 29.4%

 North America 10.3%
 South America 8.2%
 Asia-Pacific 52.2%
FURTHER INFORMATION www.volkswagen.com
22
Divisions Škoda
The Škoda brand presented the latest generations of the Superb and the Kodiaq
in 2023. Unit sales, sales revenue and the operating result were up year-on-year.
The Škoda models are synonymous with smart understatement, featuring a superior spacious interior, the
highest standards of functionality, excellent value for money and a distinctive design. Added to that are a num-
ber of “Simply Clever” innovations and new digital services, all aimed at making customers’ lives easier.
In the reporting year, Škoda unveiled the fourth generation of the Superb, which boasts a whole range of new
features. The flagship model of the Czech brand in the internal combustion engine segment continues to be
available as a saloon and an estate and is even more elegant, evocative and dynamic than its predecessor. The
Superb impresses with a streamlined design, a dynamic and sleek silhouette, crisp lines and striking lights. Now
longer and higher, it gives passengers more space and offers numerous Simply Clever details that increase both
comfort and convenience – and not only behind the wheel. The completely redesigned interior shows a clear
commitment to maximum comfort and the best possible user experience. Škoda also presented the second
generation of the Kodiaq in 2023. This SUV takes sustainability and efficiency to the next level and comes with a
new interior concept, the highlights of which are a 13-inch infotainment display, innovative digital dials with
haptic controls and new equipment packages. The five powertrain options range from 110 kW (150 PS) to
150 kW (204 PS). The Kodiaq is now available in a plug-in hybrid variant for the first time, offering an electric
range of up to around 100 km. The latest generation of LED matrix headlights and Dynamic Chassis Control are
also debuted in the new Kodiaq. The all-electric Enyaq iV was updated in the past fiscal year: new motors
increase the vehicle’s power to up to 250 kW (340 PS) and its range to up to 573 km. The charging speed was
also improved.
The Škoda brand delivered 0.9 (0.7) million vehicles worldwide in the reporting year. Sales in Western Europe
increased by 27.4%.
Škoda sold 1.1 (0.9) million vehicles in the past fiscal year. The Octavia and the all-electric Enyaq iV were
particularly popular with customers.
The Škoda brand produced 0.9 million vehicles worldwide in fiscal year 2023. This was 16.1% more than in
the previous year.

The Škoda brand’s sales revenue increased by 26.2% to €26.5 billion in fiscal year 2023. The operating result
improved to €1.8 (0.6) billion thanks to volume and price effects. Exchange rate effects and product costs, and
the deconsolidation of Volkswagen Group Rus had a negative impact. At 6.7 (3.0)%, the operating return on sales
more than doubled.
23
Divisions Škoda
PRODUCTION ŠKODA BRAND
Units 2023 2022 2023 2022 %
Octavia 205,764 141,499 Deliveries (thousand units) 867 731 +18.5

Rapid/Scala 172,661 148,895 Vehicle sales 1,056 863 +22.4
Fabia 114,335 118,827 Production 888 765 +16.1
Kodiaq 107,323 100,164 Sales revenue (€ million) 26,536 21,026 +26.2
Karoq/Kamiq 102,413 106,811 Operating result 1,773 628 x
Enyaq iV 86,732 57,213 Operating return on sales (%) 6.7 3.0
Superb 71,062 64,780
Kushaq 27,760 26,648
888,050 764,837
Kodiaq DELIVERIES BY MARKET

in percent

FURTHER INFORMATION www.skoda-auto.com
24
Divisions SEAT
SEAT is one company with two complementary brands: SEAT and CUPRA.
One of the high points of 2023 was the presentation of the all-electric CUPRA Tavascan.
Thanks to the success of CUPRA and SEAT’s growth, record earnings were achieved in
the reporting year.
The SEAT brand is a Spanish icon revered by millions of people. Founded over 70 years ago, the company offers
vehicles with efficient internal combustion engines in addition to mild hybrids and plug-in hybrids, with which it
wins over new customers. In 2023, SEAT launched two special editions of the Ibiza and the Arona featuring the
new Marina Pack, which improves the sustainability of both vehicles.
CUPRA is the unconventional challenger brand that brings together electrification and performance to
inspire the world from Barcelona. In the reporting year, CUPRA held the world premiere of the Tavascan, its fully
electric SUV coupé based on the Volkswagen Group’s MEB platform. The exterior design delivers athletic and
sporty proportions. From the front, the matrix LED headlights with a triangular eye signature are instantly
recognizable. Sports suspension with dynamic running gear technology, progressive steering and performance
tires translate into a sporty driving experience. The Tavascan will be available with two power outputs. CUPRA
also presented the concept vehicle DarkRebel in 2023. It embodies CUPRA’s highly provocative design language
and sets new benchmarks in design and performance. The DarkRebel is the first vehicle to be completely
designed in the virtual space. An all-electric, two-seater shooting brake sports car that reflects the boundary-
pushing passion and mindset of the CUPRA brand.
Deliveries to customers from SEAT and CUPRA surged by 34.6% to 519 thousand vehicles in 2023. This
increase was largely attributable to the strong performance of the CUPRA brand (+50.9% to 231 thousand
vehicles) and to SEAT’s return to growth (+24.0% to 288 thousand vehicles).
The company’s unit sales amounted to 602 thousand units in the reporting year. This was 28.5% more than in
the previous year. This figure also includes the A1 manufactured for Audi. Both CUPRA and SEAT registered
higher demand, their respective best-selling models being the CUPRA Formentor and the SEAT Arona.
SEAT and CUPRA produced 534 thousand vehicles in the reporting year. This was 27.0% more than in the
prior year.

The company’s sales revenue was up 31.0% to €14.3 billion in 2023. The operating result reached a record level
for a fiscal year at €625 (33) million; this result was mainly driven by the success of CUPRA, higher volumes and
positive effects from efficiency improvements. The operating return on sales improved to 4.4 (0.3)%.
25
Divisions SEAT
PRODUCTION SEAT
Units 2023 2022 2023 2022 %
SEAT Deliveries (thousand units) 519 386 +34.6

Arona 76,594 85,717 Vehicle sales 602 468 +28.5
Ibiza 74,355 60,385 Production 534 420 +27.0
Ateca 69,486 49,316 Sales revenue (€ million) 14,333 10,941 +31.0
Leon 40,862 36,247 Operating result 625 33 x
Tarraco 25,562 12,453 Operating return on sales (%) 4.4 0.3
Alhambra – 5,341
286,859 249,459
CUPRA
Formentor 124,670 105,568
Born 45,748 36,153
Leon 62,103 20,070
Ateca 14,228 8,841
246,749 170,632
SEAT and CUPRA 533,608 420,091
CUPRA Tavascan DELIVERIES BY MARKET

in percent

FURTHER INFORMATION www.seat.com
26
Divisions Volkswagen Commercial Vehicles
Volkswagen Commercial Vehicles recorded a successful year in 2023 and is preparing a

model initiative with the long-wheelbase version of the ID. Buzz, the California CONCEPT
and the new Transporter.
As a leading manufacturer of light commercial vehicles, Volkswagen Commercial Vehicles is making funda-
mental and sustainable changes to the way goods and services are distributed in cities in order to improve the
quality of life, especially in inner city areas. In this way, the brand keeps the world of tomorrow moving, with all of
its requirements regarding clean, intelligent and sustainable mobility. This is what Volkswagen Commercial
Vehicles stands for with its brand promise: we transport success, freedom and the future.
Following the successful rollout of the all-electric ID. Buzz in 2022, the Volkswagen Commercial Vehicles
brand celebrated the world premiere of the long-wheelbase version of the ID. Buzz in the reporting year at the
surfer hotspot Huntington Beach, on the Pacific Coast Highway near Los Angeles. Made in Germany for Europe
– and also for Canada and the United States. The VW Bus is making its comeback in North America as the large
six- and seven-seater ID. Buzz. The new panoramic roof, which can be darkened at the touch of a button, is
reminiscent of the legendary 1950s Samba Bus. The ID. Buzz again won many international prizes for Volks-
wagen Commercial Vehicles chosen by panels of experts, among them “Car of the Year Award 2023” from What
Car? (UK), “Best Cars” from auto, motor und sport magazine and “Company Car of the Year 2023” as best electric
van. At the Caravan Salon 2023 in Düsseldorf, Volkswagen Commercial Vehicles celebrated the world premiere
of the California CONCEPT that is based on the long-wheelbase version of the Multivan and is almost ready for
mass production. This is the first California model to enable electric travel thanks to the plug-in hybrid all-wheel
drive. Volkswagen Commercial Vehicles already started pre-sales of the new Transporter at the end of the year. It
will be significantly upgraded in all areas and together with the ID. Buzz and the Multivan creates the most
innovative “Bulli” range of all time. Like the new California, the new generation of the model series will celebrate
its world premiere in 2024.
Deliveries by Volkswagen Commercial Vehicles amounted to 409 thousand units (+24.6%) in the reporting
year. Sales in Western Europe (+21.7%), Central and Eastern Europe (+43.8%) and South America (+29.0%)
developed particularly encouragingly.
Volkswagen Commercial Vehicles sold 423 thousand vehicles in the reporting year, representing an increase
of 24.5% compared with the previous year. Nearly all models contributed to the increase.
In 2023, the Volkswagen Commercial Vehicles brand produced 398 thousand vehicles, 13.4% more than in
the previous year. The four millionth vehicle rolled off the production line at the production plant in Poznań,
Poland, which celebrated its 30th anniversary in 2023.

Volkswagen Commercial Vehicles increased sales revenue by 33.8% to €15.3 billion in fiscal year 2023. The
operating result improved to €873 (529) million. In addition to the higher volume, price effects had a particularly
positive impact. The operating return on sales rose to 5.7 (4.6)%.
27
Divisions Volkswagen Commercial Vehicles
PRODUCTION VOLKSWAGEN COMMERCIAL VEHICLES BRAND
Units 2023 2022 2023 2022 %
Transporter 81,535 67,508 Deliveries (thousand units) 409 329 +24.6

Caravelle/Multivan, Combi, California 81,509 80,698 Vehicle sales 423 340 +24.5
Crafter, Grand California 70,218 60,326 Production 398 351 +13.4
Caddy Combi 45,671 46,500 Sales revenue (€ million) 15,325 11,455 +33.8
Amarok 43,512 42,806 Operating result 873 529 +64.9
Caddy, Caddy California 40,629 42,352 Operating return on sales (%) 5.7 4.6
ID. Buzz 35,272 11,013
398,346 351,203
Model initiative DELIVERIES BY MARKET

in percent

FURTHER INFORMATION www.volkswagen-commercial-vehicles.com
28
Divisions Audi
The Progressive brand group posted a robust result for 2023 in a challenging
economic climate thanks to stable market performance and strong brands.
Audi presented the Q6 e-tron, its first all-electric model based on
the brand new Premium Platform Electric (PPE).
The Progressive brand group combines four strong brands from the progressive premium, luxury and supersport
segments: Audi, Bentley, Lamborghini and Ducati. Vorsprung is Audi’s global brand promise, and one which
means the brand with the four rings is consistently focusing on the premium mobility of the future: connected,
sustainable, electric, and autonomous. In developing and scaling up innovative technologies, Audi plays a leading
role within the Group, not least with the Premium Platform Electric (PPE) for all-electric premium vehicles.
In fiscal year 2023, the Audi brand brought the Q8 e-tron to the market. It is the successor to the Audi e-tron,
the brand’s electric pioneer. The A6 and A7 family, including the RS derivatives, and the Q8 with its internal com-
bustion engine were upgraded, getting a streamlined design and technology enhancements. The Audi brand also
gave a preview of the Q6 e-tron, the first production model based on the PPE platform. Boasting compelling
mileage and charging capacity, it also stands out for its systematically enhanced design language for electric
vehicles and, with its new electronics architecture, represents the technological spearhead of Audi’s portfolio.
Bentley revealed the limited-edition Continental GT Speed Le Mans Collection to mark the 20th anniversary
of the Continental GT. Lamborghini unveiled the new Revuelto in 2023, its first series hybrid and the Italian
automaker’s ticket into an electrified future.
The Progressive brand group delivered a total of 1.9 (1.6) million vehicles to customers in 2023. Dispropor-
tionate increases were recorded in Western Europe (+19.0%), Central and Eastern Europe (+25.3%) and North
America (+21.7%).
Unit sales at the Progressive brand group amounted to 1.3 (1.1) million vehicles in the reporting year. There
was particularly high demand for the Q5, A3 and the all-electric Q4 e-tron. The Chinese joint ventures sold a
further 668 (599) thousand locally produced Audi vehicles. Unit sales at the Lamborghini brand amounted to
10.6 thousand vehicles (+19.4%). Bentley sold 13.1 (15.5) thousand vehicles and Ducati 58.4 (65.0) thousand
motorcycles.
In 2023, Audi produced 2.0 (1.7) million units worldwide. Bentley produced 12.9 (16.4) thousand vehicles and
Lamborghini 9.8 (9.9) thousand. Ducati produced 55.2 (70.4) thousand motorcycles.

Sales revenue at the Progressive brand group climbed to €69.9 (61.8) billion in fiscal year 2023. The operating
result (prior-year figure before special items) declined to €6.3 (7.6) billion, which was mainly due to adverse
effects from commodity hedges to which hedge accounting is not applied. In addition, higher material costs
weighed on the operating result. The rise in volume at the Audi brand and the good results of the Bentley,
Lamborghini and Ducati brands had beneficial effects. The operating return on sales (prior-year figure before
special items) amounted to 9.0 (12.3)%.
29
Divisions Audi
AUDI PRODUCTION BENTLEY, LAMBORGHINI, DUCATI PRODUCTION
Units 2023 2022 Units 2023 2022
Q5 334,480 319,162 Bentley

A6 257,111 208,729 Bentayga 5,595 7,346
A3 246,279 210,341 Continental GT 4,168 4,793
A4 237,830 234,395 Flying Spur 3,178 4,226
Q3 233,472 239,340 12,941 16,365
Q4 e-tron 125,441 58,764 Lamborghini
Q2 94,406 88,372 Urus 5,895 5,751
A5 75,584 66,124 Huracán 3,705 3,443
Q7 74,891 52,514 Aventador, Revuelto 166 661
A1 64,859 58,777 9,766 9,855
Q8 e-tron 54,856 51,545
Q8 47,002 37,330 Ducati, motorcycles 55,226 70,389
A7 34,622 17,437
A8 20,442 18,398
e-tron GT 10,045 12,674 AUDI (PROGRESSIVE BRAND GROUP)
TT 9,530 8,126
Q5 e-tron 5,506 3,113
Q6 5,151 2,042
2023 2022 %
R8 2,127 1,097
Q6 e-tron 7 - Deliveries (thousand units) 1,919 1,639 +17.1
1,933,641 1,688,280 Audi 1,895 1,614 +17.4
Bentley 14 15 –10.6
Lamborghini 10 9 +9.5
Vehicle sales 1,282 1,070 +19.8
Production 1,956 1,715 +14.1
Sales revenue (€ million) 69,865 61,753 +13.1
Operating result before
special items 6,280 7,622 –17.6
Q6 e-tron concept car

DELIVERIES BY MARKET
in percent

FURTHER INFORMATION www.audi.com
30
INTERNAL
Divisions Porsche
Porsche celebrated two anniversaries in 2023: “75 years of Porsche sports cars” and
“60 years of the Porsche 911”. Particularly in its anniversary year, the iconic 911 sports car
helped to lift unit sales, sales revenue and earnings year-on-year.
Exclusivity and social acceptance, pioneering spirit and tradition, performance and sustainability, design and
functionality – these are the brand values of the sports car manufacturer Porsche.
For the Porsche brand, 2023 was marked by its 75th anniversary. The sports car history began in 1948 when
production of the 356 No. 1 Roadster started. In addition to the anniversary show at Porscheplatz in Stuttgart
and two special exhibitions at the Porsche Museum and in Berlin, numerous events to mark the anniversary were
held at various locations around the world.
On the occasion of its 75th anniversary, Porsche presented the Mission X concept car, a spectacular reinter-
pretation of a two-seater hypercar with Le Mans-style doors that open upwards to the front and a high-perfor-
mance, efficient electric powertrain. The Mission X represents the pinnacle of performance and modern sporty
luxury. The concept car is a technology beacon for the sports car of the future and provides critical impetus for
the evolutionary development of future vehicle concepts.
In the reporting year, Porsche also celebrated the 60th anniversary of the iconic 911 sports car with an exclu-
sive special edition built for maximum driving enjoyment: in a limited run of 1,963 vehicles, the 911 S/T com-
bines consistent lightweight design, characteristic GT agility and performance as well as an unfiltered acoustic
experience to recreate the essence of 60 years of the 911. In addition, Porsche debuted the new generation of
the Cayenne with a highly digitalized display and control concept, new chassis technology and innovative high-
tech features. High-resolution HD Matrix LED headlights provide for road illumination tailored to any driving
situation. An air quality system improves the air in the cabin for passengers. For the first time in the Cayenne, the
front passenger has their own infotainment display. With its extensively upgraded design and more powerful
family of powertrains, the Cayenne emphasizes its ambition to be the most engaging sports car in its segment.
The third generation of the Panamera model was also presented. The luxury saloon underscores its sporty
character with the new Porsche Active Ride chassis as well as even more powerful engines, including four
efficient e-hybrid powertrains that offer more power, greater range and improved efficiency.
Porsche (Sport Luxury brand group) delivered 320 thousand sports cars to customers in the reporting year;
this represented an increase of 3.3% compared with the previous year. The Other markets sales region recorded
the highest growth with an increase of 15.7%. Growth was also seen in Western Europe (+10.5%) and North
America (+8.8%). In China, 79 (93) thousand vehicles were handed over to customers.
In 2023, Porsche (Sport Luxury brand group) increased unit sales by 6.3% to 334 thousand vehicles. Demand
for the 911, 718 and Taycan series in particular was up on the previous year.
Despite the still challenging conditions, Porsche (Sport Luxury brand group) produced a total of 335 thou-
sand vehicles (–0.6%) in 2023.

Porsche (Sport Luxury brand group) generated sales revenue of €37.3 (+7.9%) billion in the reporting year. The
operating result increased to €6.9 billion (+8.0%) thanks primarily to higher volumes with positive effects
attributable to the product mix and pricing. In particular, higher expenditure for new products and innovations
and an increase in distribution expenses had an offsetting effect. The operating return on sales is unchanged at
18.6 (18.6)%.
31
Divisions Porsche
PRODUCTION PORSCHE (SPORT LUXURY BRAND GROUP) 1
Units 2023 2022 2023 20222 %
Cayenne 95,706 104,745 Deliveries (thousand units) 320 310 +3.3

Macan 87,334 99,468 Vehicle sales 334 314 +6.3
911 Coupé/Cabriolet 55,655 42,390 Production 335 338 –0.6
Taycan 39,397 37,577 Sales revenue (€ million) 37,349 34,599 +7.9
Panamera 33,689 35,258 Operating result 6,938 6,425 +8.0
718 Boxster/Cayman 23,605 18,085 Operating return on sales (%) 18.6 18.6
335,386 337,523
1 Including Porsche Financial Services: sales revenue €40,530 (37,637) million,
operating result €7,284 (6,772) million.
911 S/T DELIVERIES BY MARKET

in percent

FURTHER INFORMATION www.porsche.com
32
Divisions TRATON GROUP
The TRATON GROUP took a major step forward in e-mobility in fiscal year 2023,
also continuing to implement its TRATON Way Forward strategy for future success.
The TRATON Way Forward strategy focuses on three areas: being a responsible company, value creation and
TRATON Accelerated!; the company wants to play an active role in shaping the transportation and logistics eco-
system of the future.
TRATON established TRATON Charging Solutions to give drivers of battery-electric commercial vehicles easy
access to charging stations and thus facilitate the transition to e-mobility. The services provider offers custom-
ers services from contracting, invoicing and route planning, to utilization insights. TRATON’s Scania and MAN
brands can thus offer their customers access to Europe’s most extensive charging network, which currently com-
prises twelve countries. At the end of 2023, Milence, a joint venture between TRATON, Daimler Truck and the
Volvo Group, reached an important milestone in developing the charging infrastructure with the opening of the
first charging station in Venlo (Netherlands).
Scania reached key milestones on the road to a sustainable transport system in 2023, being with the opening
of a battery assembly plant at its headquarters in Södertälje (Sweden). To simplify the transition to battery-
electric trucks for freight forwarders, Scania and digital freight forwarder sennder formed the joint venture
company JUNA. A unique pay-per-use billing model reduces upfront costs for customers and lessens potential
residual value concerns. Access to guaranteed loads via a digital platform also creates commercial predictability.
Scania likewise made progress in decarbonizing its supply chains by placing its first order for green steel with
the supplier H2 Green Steel.
MAN also reached a significant milestone in the transition to zero-emission technologies. Launched on the
market in 2024, the new MAN eTruck is the brand’s first battery-electric long-haul truck. The ground-breaking
ceremony for large-scale battery production at the Nuremberg site was held in 2023. From 2025, up to 100,000
high-voltage battery systems per year will be manufactured there. Together with other industrial companies and
universities, MAN is working on the ATLAS-L4 research and development project to put self-driving trucks on
the road. In the ANITA research project, MAN is also working with Deutsche Bahn, the Fresenius University of
Applied Sciences and wireless technology specialist Götting KG to test the potential of self-driving trucks for
transporting goods between logistics hubs.
As part of an initiative, the North American brand Navistar set itself the goal of cutting its global emissions by
half before 2030 and becoming carbon neutral by 2050 in line with the Paris Climate Agreement. In the reporting
year, Navistar started production of the International S13 Integrated Powertrain at the company’s Huntsville
facility in the United States. Customers of Navistar’s International and IC Bus brands can now be offered
competitive bespoke credit and lease financing through the Group’s own financial services provider, Navistar
Financial.
Volkswagen Truck & Bus (VWTB) commenced series production of e-Delivery trucks in 2023. It thus follows
the TRATON GROUP’s strategy of regarding battery-electric drives as the core technology of alternative drive-
trains, supplemented by hydrogen drives in niche areas. As part of the internationalization plan, VWTB is further
expanding its presence in international markets and will be represented on four continents in the future.
33
Divisions TRATON GROUP
PRODUCTION TRATON
Units 2023 2022 2023 2022 %
Scania 102,283 88,142 Deliveries (thousand units) 338 305 +10.7

Trucks 97,065 82,827 Vehicle sales 339 306 +10.7
Buses 5,218 5,315 Production 339 318 +6.5
MAN 117,026 88,952 Sales revenue (€ million) 45,731 39,516 +15.7
Trucks 84,695 62,009 Operating result 3,715 1,583 x
Buses 5,780 4,675 Operating return on sales (%) 8.1 4.0
Light Commercial Vehicles 26,551 22,268
Navistar 86,740 82,071
Trucks 73,317 69,488
Buses 13,423 12,583
Volkswagen Truck & Bus 32,515 58,647
Trucks 28,161 50,075
Buses 4,354 8,572
TRATON 338,564 317,812

Unit sales of TRATON Commercial Vehicles in fiscal year 2023 rose to 339 (306) thousand vehicles and sales
revenue of €45.7 billion was up 15.7% on the comparative figure for 2022. The higher volume of new vehicles
and higher capacity utilization due to a significant increase in production figures meant that the operating result
more than doubled to €3.7 (1.6) billion. A positive product mix and improved price positioning also had a bene-
ficial effect on profit. The operating return on sales amounted to 8.1 (4.0)%.
Strong brands DELIVERIES BY MARKET

in percent

FURTHER INFORMATION www.traton.com
34
Divisions Volkswagen Group China
Volkswagen Group China
The Volkswagen Group showed its strengths in the fiercely competitive Chinese
market during fiscal year 2023. Deliveries were up year-on-year in all segments.
In 2023, Volkswagen Group China demonstrated the strength of its portfolio in a market environment that was
shaped by an intense price war with more than 100 local competitors. Rigorously following a sustainable busi-
ness model, Volkswagen Group China and its Chinese joint ventures delivered 3.2 million vehicles (including
imports) in the Chinese market in the reporting year, 1.6% more than in 2022. The market share stood at
14.5 (15.1)%.
In the premium and sports segment, Audi delivered 728,575 vehicles to customers in China, a significant
increase of 13.5% year-on-year.
Volkswagen Group China continues to press ahead with its e-mobility campaign in line with its systematic
approach of “In China for China”. In the battery-electric vehicle (BEV) segment, deliveries increased by 23% to
190,820 units. The main drivers of this success were the ID.3 and ID.4 models from the Volkswagen Passenger
Cars brand and the Audi e-tron models. Not only was the ID.3 one of the best-selling electric cars with around
75,000 units delivered, but it also topped the rankings for the compact car segment in the fourth quarter. The
ID.4 was in the top five in the compact SUV class thanks to deliveries of around 60,000. Deliveries of the ID.7
commenced in late 2023. The brand wishes to tap into the mid-sized segment with this model and reach more
customer groups in China. Audi’s e-tron models witnessed very strong growth in 2023, surging to over 30,000
units in the first full year of sales.
The internal combustion engine (ICE) segment continues to provide a robust foundation for the Volkswagen
Group’s long-term business development in China. Based on deliveries of 2,997,184 ICE vehicles, the Group
expanded its market share to over 20% in 2023. High unit sales and a good cost structure for the ICE models
enable Volkswagen Group China to build up its financial position for an accelerated transformation and take the
next leap in innovation in connection with its “In China for China” approach.
Volkswagen Group China systematically strengthened its development expertise in China in fiscal year 2023.
The newly established Volkswagen China Technology Company (VCTC) is the new center for development, inno-
vation and procurement for intelligent, fully connected electric vehicles (ICV). The aim is to reduce the time to
market for vehicles and components by 30% by implementing efficient development processes and using state-
of-the-art technologies. Further synergies will be leveraged through close dovetailing of development work with
the joint venture companies SAIC Volkswagen, FAW-Volkswagen and Volkswagen Anhui, and also with Gotion
(batteries). The partners Horizon Robotics (autonomous driving), ARK (user experience) and Thundersoft (info-
tainment) will also be incorporated in close cooperation with CARIAD China. Cooperation with local car manu-
facturers also continued in 2023. The Volkswagen Passenger Cars brand concluded a technological framework
agreement with XPeng. Audi and SAIC signed a memorandum to further expand their existing cooperation. Both
partnerships provide for the joint development of intelligent, fully connected electric vehicles exclusively for the
Chinese market.
35
Divisions Volkswagen Group China
EARNINGS
Thousand units 2023 2022 % € million 2023 2022
Deliveries 3,236 3,185 +1.6 Operating result (100%) 7,139 8,827

Vehicle sales1 3,065 3,122 –1.8 Operating result (proportionate) 2,621 3,280
Production 3,072 3,160 –2.8
1 Produced locally.
Our joint ventures produced a total of 3.1 (3.2) million vehicles in fiscal year 2023. These joint ventures produce
a mixture of established Group models and those specially modified for Chinese customers (e.g. with extended
wheelbases), as well as vehicles developed exclusively for the Chinese market (such as the Volkswagen Lamando,
Teramont, ID.6 X and ID.6 CROZZ).
The proportionate operating result of the joint ventures in the reporting year stood at €2.6 (3.3) billion. The
negative impacts of a highly competitive market environment were offset by cost optimization.
The figures of the Chinese joint venture companies are not included in the operating result of the Group as
they are accounted for using the equity method. Their profits are included solely in the Group’s financial result on
a proportionate basis.
ID.3 LOCAL PRODUCTION
Units 2023 2022
Volkswagen Passenger Cars 2,383,703 2,513,613

Audi 670,419 604,439
Škoda 18,365 41,936
Total 3,072,487 3,159,988
36
Divisions Volkswagen Financial Services
Volkswagen Financial Services recorded a solid year in 2023 despite multiple

macroeconomic uncertainties. The number of new contracts increased thanks
to improved vehicle availability.
STRUCTURE OF VOLKSWAGEN FINANCIAL SERVICES

Volkswagen Financial Services comprises dealer and customer financing, leasing, banking and insurance activi-
ties, fleet management and mobility services in 47 countries. The key companies are Volkswagen Financial Ser-
vices AG and its affiliated companies such as Volkswagen Leasing GmbH, as well as Volkswagen Bank GmbH,
Porsche Financial Services and the financial services companies in the United States and Canada, the only
exceptions being the financial services business of TRATON and of Porsche Holding Salzburg.
Volkswagen Financial Services AG achieved an excellent score of 12.4 in Sustainalytics’ first-ever ranking of its
sustainability risks. According to the institute, the score achieved by Volkswagen Financial Services AG puts it in
the top 3% of the over 200 companies rated. The analysis was carried out in the categories of Product Gover-
nance, Data Privacy and Data Security, Business Ethics, Human Capital and Corporate Governance.
Volkswagen Financial Services and the management and technology consultancy Sopra Steria set up the
joint venture MyDigitalCar GmbH in 2023. With the services offered, the joint venture partners will make a signifi-
cant contribution to optimizing economic efficiency in the area of vehicle management for companies by enabling
companies to register their vehicles digitally via a vehicle registration platform.
Volkswagen Financial Services and AMAG Leasing AG extended their collaboration in fleet business opera-
tions in Switzerland in 2023. As a result, Volkswagen Financial Services AG acquired a 50% stake in movon AG, a
subsidiary of AMAG Leasing AG that focuses on fleet leasing and full-service solutions for business customers.
The aims of the joint venture are to expand the range of products and services and to create digital tools for fleet
owners and dealers.
Volkswagen Financial Services and Pon Holdings (Pon) intensified their partnership in company bike leasing.
Within this framework, Volkswagen Financial Services AG acquired a 49% stake in the Pon bike leasing subsid-
iary Bike Mobility Services. The aim is to jointly expand in the growing bicycle and e-bike leasing business in
Europe and the USA.
As part of the “AllerVielfalt” project, the Alte Aller, an old branch of the River Aller in the District of Verden,
was reconnected to the main river in the reporting year. Initiated by the German Nature and Biodiversity
Conservation Union (NABU), the project is part of the federal government program “Germany’s Blue Belt”
(“Blaues Band Deutschland”) and aims to create near-natural structures in a project area of 2,350 hectares
(around 30 river kilometers). Volkswagen Financial Services donated €450,000 to cover NABU’s share, thereby
ensuring the important start-up financing for the project.
37
The main refinancing sources for Volkswagen Financial Services are money market and capital market instru-
ments, asset-backed securities (ABS) transactions, customer deposits from the direct banking business and
bank credit lines. Volkswagen Financial Services AG published its first “Green Finance Framework” in the
reporting year. The framework supports the current sustainability strategy of the automotive financial and mobil-
ity services provider with regard to its refinancing and thereby enables the company to tap into a new investor
base. The “Green Finance Framework” covers all refinancing products of Volkswagen Financial Services AG. The
funds generated under the framework will be used exclusively to refinance credit and leasing contracts for
battery-electric vehicles.
On the basis of the Green Finance Framework, Volkswagen Leasing GmbH placed three green bonds with a
total volume of €2 billion on the capital markets for the first time in September 2023. In December of the fiscal
year now ended, Volkswagen Financial Services N.V. also issued bonds amounting to 1.5 billion Swedish kronor
and 1 billion Norwegian kroner based on the Green Finance Framework.
Other bond transactions were conducted in currencies such as pounds sterling, Swedish kronor, South
Korean won and Japanese yen, among others. Furthermore, bonds were issued in Australia, Poland, Brazil and
Türkiye on the basis of local documentation requirements. In addition to this, private placements were issued in
various currencies.
Volkswagen Bank issued three unsecured bonds denominated in euro in the reporting year with a total
volume of €2.0 billion.
In fiscal year 2023, Volkswagen Leasing GmbH placed three ABS transactions secured by lease receivables
with a total volume of €2.75 billion. The issuances met the quality criteria of the STS Securitization Regulation
for particularly high-value securitizations and were oversubscribed several times.
Outside Germany, Volkswagen Financial Services issued ABS transactions in Brazil, Japan, the United
Kingdom and Australia.
In the US capital market, Volkswagen Group of America Finance, LLC placed bonds with a total volume of
USD 5.65 billion in September and November 2023. Notes with a volume of CAD 750 million were issued in the
Canadian refinancing market.
Bicycle leasing
38
In fiscal year 2023, the number of new financing, leasing, service and insurance contracts from Volks-
wagen Financial Services signed was up on the prior-year figure at 8.7 (7.8) million. At the end of the reporting
year, the total number of contracts stood at 22.3 (22.0) million. The number of contracts in the Customer
Financing/Leasing area fell by 1.5% to 10.2 million. The Service/Insurance area accounted for 12.1 million
contracts, 3.9% more than in the previous year. From January 1, 2024, other types of insurance contracts will be
taken into account; in this case, the number of contracts in the Service/Insurance area as of December 31, 2023
would have been 15.6 million and the total contract portfolio would have comprised 25.8 million contracts. With
credit eligibility criteria remaining unchanged, the penetration rate, expressed as the ratio of financed or leased
vehicles to relevant Group delivery volumes – including the Chinese joint ventures – increased to 32.6 (32.3)%.
On December 31, 2023, Volkswagen Bank managed 1.8 (1.3) million deposit accounts. Volkswagen Financial
Services employed 15,439 people worldwide, including 7,311 in Germany, as of year-end 2023.

Volkswagen Financial Services generated sales revenue of €50.8 billion in the reporting year, 15.5% more than in
the previous year. As expected, the operating result contracted to €3.3 (5.6) billion. In addition to higher interest
expenses, the decline was primarily attributable to adverse effects from derivatives, which had had a positive
effect in the prior year. Lower risk costs and strong demand for used vehicles had also had a positive impact in
the previous year.
VOLKSWAGEN FINANCIAL SERVICES
2023 20221 %
Number of contracts thousands 22,275 21,976 +1.4

Customer financing 5,299 5,557 –4.6
Leasing 4,888 4,783 +2.2
Service/Insurance 12,088 11,636 +3.9
Lease assets € million 63,884 57,906 +10.3
Receivables from € million
Customer financing 69,292 70,266 –1.4
Dealer financing 26,167 19,868 +31.7
Leasing agreements 53,771 47,446 +13.3
Direct banking deposits € million 37,531 25,431 +47.6
Total assets € million 267,777 239,400 +11.9
Equity € million 39,545 38,238 +3.4
Liabilities2 € million 219,180 190,588 +15.0
Equity ratio % 14.8 16.0
Return on equity before tax3 % 8.3 15.4
Leverage4 5.5 5.0
Operating result € million 3,253 5,584 –41.7
Earnings before tax € million 3,244 5,528 –41.3
Employees at Dec. 31 15,439 14,796 +4.3

2 Excluding provisions and deferred tax liabilities.
3 Earnings before tax as a percentage of average equity (continuing operations).
4 Liabilities as a percentage of equity.
F U R T H E R I N F O R M AT I O N
www.vwfs.com
39
Corporate G overnance
41 Group Corporate Governance Declaration
56 Members of the Board of Management
58 Members of the Supervisory Board and Composition of the Committees
61 Remuneration Report
Corporate Governance Group Corporate Governance Declaration
Group Corporate Governance

Declaration
The following chapter contains the content of the Group Corporate Governance Declaration
required by sections 289f and 315d of the HGB and the recommendations and principles of
the German Corporate Governance Code.
THE GERMAN CORPORATE GOVERNANCE CODE –

A BLUEPRINT FOR SUCCESSFUL CORPORATE GOVERNANCE
Corporate governance provides the regulatory framework for corporate management and supervision. This
includes a company’s organization and values, and the principles and guidelines for its business policy. The
German Corporate Governance Code (the Code) contains principles, recommendations and suggestions for
corporate management and supervision. Its principles, recommendations and suggestions were prepared by a
dedicated government commission on the basis of the material provisions and nationally and internationally
accepted standards of sound, responsible corporate governance. In the interests of best practice, the govern-
ment commission regularly reviews the Code’s relevance in light of current developments and updates it as
necessary. The Board of Management and the Supervisory Board of Volkswagen AG base their work on the prin-
ciples, recommendations and suggestions of the Code. We consider good corporate governance to be a key
prerequisite for achieving a lasting increase in the Company’s value. It helps strengthen the trust of our share-
holders, customers, employees, business partners and investors in our work and enables us to meet the steadily
increasing demand for information from national and international interest groups.
DECLARATION OF CONFORMITY
(valid as of the date of the declaration)
The Board of Management and the Supervisory Board of Volkswagen AG issued the annual declaration of
conformity with the Code as required by section 161 of the Aktiengesetz (AktG – German Stock Corporation Act)
on November 17, 2023 with the following wording:
“The Board of Management and the Supervisory Board declare the following:
The recommendations of the Government Commission of the German Corporate Governance Code in the version
dated 28 April 2022 (the Code) that was published by the German Ministry of Justice in the official section of the
Federal Gazette (Bundesanzeiger) on 27 June 2022 was complied with in the period from the last Declaration of
Conformity dated 11 November 2022 and will continue to be complied with, with the exception of the recom-
mendations listed below for the reasons stated there.
> a) Recommendation B.3 (Duration of first-time appointments to the Management Board)
As it has done in the past, the Supervisory Board will determine the duration of first-time appointments to the
Board of Management as it deems fit for each individual case and for the good of the company.
41
> b) Recommendation B.5 (Age limit for members of the Board of Management)
Pursuant to Recommendation B.5, an age limit is to be specified for members of the Board of Management and
disclosed in the Corporate Governance Declaration. This has been complied with. In September 2023, the
Supervisory Board re-appointed Dr Manfred Döss and in so doing exceeded the stipulated age limit by way of
exception. The Supervisory Board considered this exception to be in the interest of the company. The trans-
formation of the VOLKSWAGEN Group affects a large number of topics being addressed by the Integrity and
Legal Affairs division for which Dr Döss is responsible, for example with regard to autonomous vehicles and
ESG (environmental, social and governance) issues. Dr Döss has already positioned the VOLKSWAGEN Group
well in this respect. The renewed appointment of Dr Döss ensures that the Group will continue to tread this
path as effectively and efficiently as possible. The Supervisory Board otherwise adheres to the age limit
specified for members of the Board of Management. It cannot, however, be ruled out that legal commentators
would regard a company as having deviated from Recommendation B.5 even if it had exceeded a specific
applicable age limit only once while the age limit as such remained in force. As a precautionary measure, such
deviation is therefore being declared.
> c) Recommendation C.5 (Mandate ceiling regarding Board of Management mandate)
The Chair of the Supervisory Board is on the supervisory boards of three listed companies of the VOLKS-
WAGEN Group, namely VOLKSWAGEN AG (as Chair), Dr. Ing. h.c. F. Porsche AG and TRATON SE (as Chair), as
well as being on the Supervisory Board of Bertelsmann SE & Co. KGaA. He is also Chair of the Board of Man-
agement of Porsche Automobil Holding SE. Porsche Automobil Holding SE is not part of the same group as
VOLKSWAGEN AG, Dr. Ing. h.c. F. Porsche AG and TRATON SE within the meaning of German stock corporation
law. We are, however, confident that the Chair of the Supervisory Board of VOLKSWAGEN AG has sufficient
time at his disposal to fulfill the duties related to his mandates.
> d) Recommendation C.13 (Disclosure regarding election proposals)
Under this recommendation, certain circumstances shall be disclosed when the Supervisory Board makes
election proposals to the General Meeting, but the requirements are vague and the definitions unclear. Purely
as a precautionary measure, we therefore declare a deviation in this respect. Notwithstanding this, the Super-
visory Board will make every effort to satisfy the requirements of the recommendation.
> e) Recommendation G.6 (Predominance of long-term variable remuneration)
On 20 July 2022, Dr Ing. h.c. F. Porsche AG (Porsche AG) agreed upon a so-called IPO bonus with Dr Oliver
Blume in the event of the successful IPO of Porsche AG. Since an IPO of this nature is also in the interest of
VOLKSWAGEN AG, we are, as a precaution, treating the IPO bonus agreed upon with Porsche AG as part of
Mr Blume’s remuneration at VOLKSWAGEN AG (third-party remuneration arrangement). The Supervisory Board
of VOLKSWAGEN AG approved the third-party remuneration arrangement for Dr Blume. The IPO bonus was
awarded in the form of virtual shares. These virtual shares are converted into monetary sums in three tranches
over periods of one, two, and three years depending on the development of the share price of Porsche AG
shares during the relevant time period, and these monetary sums are then paid out to Dr Blume. As a pre-
caution, the Supervisory Board assumes that the first one and two-year tranches of the IPO bonus will be
allocated to the short-term variable remuneration of Dr Blume, whilst the last, three-year tranche of the IPO
bonus will be allocated to the long-term variable remuneration. This means that the total target value of the
short-term variable remuneration approved for Dr Blume for fiscal year 2022 exceeded the target value of the
long-term variable remuneration. In the current fiscal year 2023, the IPO bonus granted in fiscal year 2022 had
still not been fully settled. As a precautionary measure, we are therefore continuing to declare a deviation from
Recommendation G.6 in this respect. Nevertheless, the Board of Management remuneration for Dr Blume on
the whole continues to be oriented towards the company’s sustainable and long-term development. The
Supervisory Board deems the payment of the IPO bonus in three tranches over one, two, and three years to be a
purposeful and appropriate incentive for Dr Blume, which is not limited solely to work carried out in prepa-
ration for the IPO but which also takes into account how sustained the success of the IPO is.
> f) Recommendation G.10 sentence 2 (Four-year commitment period)
Dr Blume can have access to the third tranche of the IPO bonus previously described under e) as part of the
long-term variable remuneration after three years rather than after four.
42
> g) Recommendation G.13 sentence 1 (Severance cap)

At the end of July 2022, the Supervisory Board of VOLKSWAGEN AG resolved by mutual agreement with
Dr Diess to terminate his appointment as member and as Chair of the Board of Management with effect from
the close of 31 August 2022. According to the agreement reached with Dr Diess, his contract shall continue to
run until the end of its regular term, i.e. until the close of 24 October 2025, even following the premature
termination of his appointment, provided that Dr Diess does not resign at an earlier date. Dr Diess shall accord-
ingly not receive a severance payment but shall potentially receive his contractual remuneration for a period of
more than two years following his departure from the Board of Management. It is not clear to us whether this
recommendation refers only to severance payments or also to payments to a retired member of the Board of
Management due to a continuing contract of service. As a precautionary measure, we are therefore continuing
to declare a deviation from Recommendation G.13 sentence 1 in this respect.”
The current declaration of conformity and previous declarations of conformity are also published on our website
shown hereafter.
Our listed indirect subsidiaries Dr. Ing. h.c. F. Porsche AG and TRATON SE also issued a declaration of con-
formity with the German Corporate Governance Code. These can be accessed at the websites shown below.
The suggestions of the Code are complied with.
D EC L A R AT I O N O F C O N F O R M I T Y O F V O L KS WAG E N AG
www.volkswagen-group.com/declaration
D EC L A R AT I O N O F C O N F O R M I T Y BY D R . I N G . H .C . F. P O R S C H E AG
https://investorrelations.porsche.com/en/corporate-governance/
D EC L A R AT I O N O F C O N F O R M I T Y O F T R ATO N S E
https://ir.traton.com/websites/traton/English/5000/corporate-governance.html
BOARD OF MANAGEMENT
The Volkswagen AG Board of Management has sole responsibility for managing the Company in the Company’s
best interests, in accordance with the Articles of Association and the rules of procedure for the Board of Man-
agement issued by the Supervisory Board.
Accordingly, responsibilities in the Board of Management are currently divided among ten Board functions. In
addition to the “Chair of the Board of Management” function, the other Board functions have been “Technology”,
“Finance and Operations” (formerly “Finance”), “Human Resources and Trucks brand group” (formerly “Human
Resources and Truck & Bus”), “Integrity and Legal Affairs”, “Progressive brand group” (formerly “Premium”), “Sport
Luxury brand group” (formerly “Sport & Luxury”), “China”, “IT” and “Core brand group” (formerly “Volume”). The
Chair of the Board of Management is also responsible for the “Sport Luxury brand group” Board function.
Directly attached to the Board are a number of Group Management functions that act as an extension to the
Board functions. These comprise the Group Sales, Group Production, Group Procurement and Group Research
and Development functions.
Further information on the composition of the Board of Management can be found in the “Members of the
Board of Management” section.
Working procedures of the Board of Management

In accordance with Article 6 of the Articles of Association, Volkswagen AG’s Board of Management consists of at
least three people, with the precise number determined by the Supervisory Board. As of December 31, 2023,
there were nine members of the Board of Management.
The Board of Management generally meets weekly. Its rules of procedure require it to meet at least twice a
month. Meetings of the Board of Management are convened by the Chair of the Board of Management. The Chair
is required to convene a meeting if requested by any member of the Board of Management. The Chair of the
Board of Management chairs the Board of Management meetings. The full Board of Management decides on all
matters unless they have been assigned to a single member of the Board of Management by the rules of
43
procedure for the Board of Management or by a resolution of the Board of Management, on matters assigned to
the full Board of Management by law or by the Articles of Association, and in accordance with the rules of
procedure for the Board of Management on matters of general or fundamental importance. The Board of Man-
agement takes decisions after prior debate or – if no other Board of Management member objects – using the
written circulation procedure. Resolutions of the Board of Management are adopted by a majority vote. In the
event of a tie, the Chair of the Board of Management casts the deciding vote. The Board of Management is
quorate if at least half of the members of the Board of Management participate in passing the resolution. Absent
members of the Board of Management may participate in passing the resolution orally, in writing or via cus-
tomary communications media (e.g. by e-mail). Details of the responsibilities of the full Board of Management
and of meetings and resolutions of the Board of Management are governed by the rules of procedure for the
Board of Management issued by the Supervisory Board and published on Volkswagen AG’s website at
www.volkswagen-group.com/en/corporate-governance.
Each Board of Management member manages their area of responsibility independently, without prejudice to
the collective responsibility of the Board of Management. All Board of Management members must inform each
other of events within their remit.
All members of the Board of Management must immediately disclose conflicts of interest to the Chairman of
the Supervisory Board and the Chair of the Board of Management and inform the other members of the Board of
Management accordingly.
The Volkswagen Group companies are managed solely by their respective managements. The management
of each individual company takes into account not only the interest of its own company but also the interests of
the Group, the relevant brand group and the individual brands in accordance with the framework laid down by law.
Board of Management committees

Board of Management committees exist at Group level on the following areas: products, technologies, invest-
ments, digital transformation, integrity and compliance, risk management, human resources and management
issues. Alongside the responsible members of the Board of Management, the relevant central departments and
the relevant functions of the divisions are represented on the committees.
Cooperation with the Supervisory Board

The Supervisory Board of Volkswagen AG advises and monitors the Board of Management with regard to the
management of the Company. Through the requirement for the Supervisory Board to provide consent, it is
directly involved, especially in decisions of fundamental importance to the Company. In addition, the Supervisory
Board and the Board of Management regularly discuss factors affecting the strategic orientation of the Volks-
wagen Group, including the sustainability strategy. The two bodies jointly assess, at regular intervals, the
progress made in implementing the corporate strategy. The Board of Management reports to the Supervisory
Board regularly, promptly and comprehensively in both written and oral form on all issues of relevance for the
Company particularly with regard to strategy, planning, the development of the business, the risk situation, risk
management and compliance.
The Chair of the Board of Management is responsible for dealings with the Supervisory Board. The Chair is in
regular contact with the Chair of the Supervisory Board and reports to him on all matters of particular signifi-
cance without delay.
The Supervisory Board has set out the Board of Management’s obligations to provide detailed information
and reports in a comprehensive information policy; the information policy has been published as Annex II to the
rules of procedure for the Board of Management on Volkswagen AG’s website at www.volkswagen-group.com/
en/corporate-governance. The Board of Management must report conscientiously and faithfully to the Super-
visory Board or its committees. With the exception of the immediate reports from the Chair of the Board of Man-
agement to the Chair of the Supervisory Board on matters of particular importance, the Board of Management is
required to report to the Supervisory Board in writing as a rule.
44
The documents required for decision-making purposes must be provided to the Supervisory Board members in
good time in advance of the meeting. Further statements about the information provided to the Supervisory
Board by the Board of Management can be found in the Report of the Supervisory Board.
Related party transactions

The Audit Committee agreed on a suitable procedure with the Board of Management for ongoing monitoring of
the Volkswagen Group’s related party transactions. As part of this procedure, the Board of Management ensures
that related party transactions are generally at arm’s length using the best-price principle. In addition, all trans-
actions with the individual related parties are analyzed to determine whether they exceed the threshold of 1.5%
of the Volkswagen Group’s total fixed and current assets, above which obligations under the rules on related
party transactions apply (RPT threshold). In addition, Procurement reports all transactions in which the volume of
the contract exceeds the amount of €1 billion; in such cases, it is then checked separately whether the contrac-
tual partner is a related party within the meaning of the rules on related party transactions.
The Audit Committee continuously monitors the actions of the Board of Management. To this end, the Audit
Committee regularly engages the auditor, most recently for fiscal year 2023, to conduct spot checks of the
related parties with whom Volkswagen AG or other Volkswagen Group companies conduct transactions with a
total financial value in the fiscal year exceeding the RPT threshold. If and to the extent that the economic value of
the related party transactions exceeds the RPT threshold, these transactions are also checked to establish
whether they were conducted at arm’s length in accordance with proper business practice.
If a transaction between Volkswagen AG and a related party exceeds the RPT threshold, the Supervisory
Board’s approval is generally required except where exceptional circumstances exist in accordance with sec-
tion 111a(2) or (3) of the AktG. Insofar as the Supervisory Board’s approval is required, the Supervisory Board of
Volkswagen AG generally decides as a full Board. There are no plans to form a committee that decides on the
approval of related party transactions; however, the Supervisory Board reserves the right to establish such a
committee if required in individual cases in accordance with the provisions of the German Stock Corporation Act.
Supervisory Board members who are involved in the transaction as related parties or whose relationship with the
related party leads to concerns of a conflict of interest do not participate in decisions on the approval of related
party transactions.
The rules of procedure for the Board of Management of Volkswagen AG stipulate that transactions between
Volkswagen AG and a related party that is also a direct or indirect shareholder of Volkswagen AG and holds at
least 5% of the share capital are generally subject to the approval of the Supervisory Board even if the RPT
threshold is not exceeded. The Executive Committee decides on such approval.
Diversity concept and succession planning for the Board of Management

The Supervisory Board has laid down the following diversity concept for the composition of the Board of Man-
agement (section 289f(2) no. 6 HGB):
The Supervisory Board must also take diversity into account when considering who would be the best
persons to appoint to the Board of Management as a body. The Supervisory Board understands diversity, as an
assessment criterion, to mean in particular different yet complementary specialist profiles and professional and
general experience, also in the international domain, with both genders being appropriately represented. The
Supervisory Board will also take the following aspects into account in this regard, in particular:
> Members of the Board of Management should have many years of management experience.
> Members of the Board of Management should, if possible, have experience based on different training and
professional backgrounds.
> The Board of Management as a whole should have technical expertise, especially knowledge of and experi-
ence in the manufacture and sale of vehicles and engines of any kind as well as other technical products, and
experience in the international domain.
> The Board of Management as a whole should have many years of experience in research and development,
production, sales, finance and human resources management, as well as law and compliance.
45
> Efforts are made to achieve a higher proportion of women than the statutory minimum.
> The Board of Management should also have a sufficient mix of ages.
The aim of the diversity concept is for the Board of Management members to embody a range of expertise and per-
spectives. This diversity promotes a good understanding of Volkswagen AG’s organizational and business affairs.
Particularly, it enables the members of the Board of Management to be open to new ideas by avoiding group-
think. In this way, it contributes to the successful management of the Company. With regard to the participation of
women and men on the Board of Management, a mandatory participation requirement applies to Volkswagen AG.
In deciding who should be appointed to a specific Board of Management position, the Supervisory Board
takes into account the interests of the Company and all the circumstances of the specific case. In taking this
decision and in long-term succession planning, the Supervisory Board orients itself on the diversity concept. The
Supervisory Board is of the view that the diversity concept is essentially reflected by the current composition of
the Board of Management. The members of the Board of Management have many years of professional experi-
ence, particularly in an international context, and cover a broad spectrum of educational and professional back-
grounds. The Board of Management collectively has excellent technical expertise and many years of collective
experience in research and development, production, sales, finance and human resources management, as well
as law and compliance. In addition, the Board of Management has a sufficient mix of ages that corresponds to
the requirements set by the Supervisory Board in the diversity concept. The gender balance meets the legal
requirements (see also section “Disclosures required by the Führungspositionen-Gesetz” (FüPoG - Act on Equal
Participation of Women and Men in Leadership positions)).
Long-term succession planning within the meaning of Recommendation B.2 of the Code is achieved through
regular discussions between the Chair of the Board of Management and the Chair of the Supervisory Board as
well as regular discussions in the Executive Committee. The contract terms for existing Board of Management
members are discussed, along with potential extensions and potential successors. In particular, the discussions
look at what knowledge, experience and professional and personal competencies should be represented on the
Board of Management with regard to the corporate strategy and current challenges, and to what extent the
current composition of the Board of Management already reflects this. Long-term succession planning is based
on the corporate strategy and corporate culture and takes into account the diversity concept determined by the
Supervisory Board. In the rules of procedure for the Supervisory Board, the Supervisory Board specified the
following age limit for members of the Board of Management in accordance with Recommendation B.5 of the
Code: as a rule, members of the Board of Management should be appointed for a term of office ending no later
than their 65th birthday. Board of Management members may be appointed to serve beyond their 65th birthday
until no later than their 68th birthday, provided this is agreed by a two-thirds majority of the Supervisory Board.
SUPERVISORY BOARD
The Volkswagen AG Supervisory Board performs its role through its members working together. It advises and
monitors the Board of Management with regard to the management of the Company and, through the require-
ment for the Supervisory Board to provide consent, is directly involved in certain decisions of fundamental
importance to the Company.
Information on the composition of the Supervisory Board and the Supervisory Board committees and their
chairs as well as on the terms of office of the individual Supervisory Board members can be found in the
“Members of the Supervisory Board and Composition of the Committees” section. Further information on the
work of the Supervisory Board can be found in the Report of the Supervisory Board.
Overview
The Supervisory Board of Volkswagen AG consists of 20 members, half of whom are shareholder representatives.
In accordance with Article 11(1) of the Articles of Association of Volkswagen AG, the State of Lower Saxony is
entitled to appoint two of these shareholder representatives for as long as it directly or indirectly holds at least
15% of the Company’s ordinary shares. The remaining shareholder representatives on the Supervisory Board are
elected by the Annual General Meeting.
46
The other half of the Supervisory Board consists of employee representatives who are elected by the employees
in accordance with the Mitbestimmungsgesetz (MitbestG – German Codetermination Act). A total of seven of
these employee representatives are Company employees elected by the workforce; the other three employee
representatives are trade union representatives elected by the workforce.
The Chair of the Supervisory Board is generally a shareholder representative, and the Deputy Chair is gener-
ally an employee representative. Both are elected by the other members of the Supervisory Board.
The business of the Supervisory Board is managed by a dedicated office of the Supervisory Board Chair. The
Chair of the Supervisory Board ensures the independence of the office of the Supervisory Board Chair and its
staff and exercises the right to appoint and supervise staff in consultation with the responsible Board of Man-
agement members.
The Supervisory Board appoints the Board of Management members and, on the basis of the Executive Com-
mittee’s recommendations, decides on a clear and comprehensible system of remuneration for the Board of
Management members. It presents this system to the Annual General Meeting for approval every time there is a
material change, but at least once every four years.
Each member of the Supervisory Board of Volkswagen AG is obliged to act in the Company’s best interests.
Supervisory Board members are not permitted to delegate their responsibilities to others.
In accordance with the rules of procedure for the Supervisory Board, each Supervisory Board member is
obliged to disclose any conflicts of interest to the Chair of the Supervisory Board without delay. In its report to
the Annual General Meeting, the Supervisory Board informs the Annual General Meeting of any conflicts of
interest that have arisen and how these were dealt with. Material and not merely temporary conflicts of interest
on the part of a Supervisory Board member should result in a termination of the member’s mandate.
The rules of procedure for the Supervisory Board stipulate that Supervisory Board members should not hold
board or advisory positions at major competitors of Volkswagen AG or major competitors of a company depen-
dent on Volkswagen AG and should not be in a personal relationship involving a major competitor.
Members of the Supervisory Board receive appropriate support from the Company upon induction as well as
with respect to education and training. Education and training measures are outlined in the “Report of the Super-
visory Board”.
Working procedures of the Supervisory Board

As a rule, the Supervisory Board adopts its resolutions in meetings of all its members. It must hold at least two
meetings in both the first and second halves of the calendar year. The precise number of meetings and the main
topics discussed are outlined in the “Report of the Supervisory Board”.
The Chair of the Supervisory Board coordinates the work within the Supervisory Board. He represents the
interests of the Supervisory Board externally and represents the Company to the Board of Management on behalf
of the whole Supervisory Board. Within reason, the Chair of the Supervisory Board discusses Supervisory Board-
specific topics with investors and, in consultation with the Board of Management, may also discuss non-Super-
visory Board-specific topics. More information on these discussions with investors is provided in the “Report of
the Supervisory Board”.
To underline the importance of environmental sustainability, social responsibility and good corporate gover-
nance, the Supervisory Board has appointed an ESG (environmental, social and governance) officer. This role is
currently performed by Mr. Hans Dieter Pötsch.
The Supervisory Board meets regularly also without the Board of Management. Each Supervisory Board
meeting generally ends in a debate. Board of Management members are not present during this part of the
meeting. The Chair of the Supervisory Board convenes and chairs the Supervisory Board meetings. If the Chair is
unable to do so, the Deputy Chair performs these tasks. If the auditor is called to a meeting of the Supervisory
Board or one of its committees as an expert, members of the Board of Management do not attend such a meeting
if the Supervisory Board or the committee does not deem their attendance necessary.
The Supervisory Board is only quorate if at least ten members participate in passing the resolution. The Chair
of the Supervisory Board or of the relevant committee decides the form of the meeting and the voting procedure
for the Supervisory Board and its committees. Should the Chair so decide in individual cases, meetings may also
47
be held using telecommunications technology, or members may participate in meetings using this technology.
The Chair may also decide that members can participate in the Supervisory Board’s or its committees’ decision
making in writing, by telephone or in another, similar form. Supervisory Board resolutions require a majority of
votes cast, unless legislative provisions or the Articles of Association stipulate otherwise. Resolutions on con-
sent to establishing or relocating production sites require a two-thirds majority of the Supervisory Board mem-
bers. If a vote results in a tie on this item, the vote is repeated. If this vote is also tied, the Chair of the Supervisory
Board casts two votes. Minutes must be taken of each meeting of the Supervisory Board and its committees.
Minutes of a meeting must record the time and location of the meeting, the participants, the items on the agenda,
the material content of the discussions and the resolutions adopted.
In individual cases, the Supervisory Board and its committees may decide to call upon experts and other
appropriate individuals to advise on individual matters.
Further details on tasks, meetings, resolutions and working procedures of the Supervisory Board are
governed by the rules of procedure for the Supervisory Board issued by the Supervisory Board and published on
Volkswagen AG’s website at www.volkswagen-group.com/en/corporate-governance.
Supervisory Board committees

In order to discharge the duties entrusted to it, the Supervisory Board has established four committees: the
Executive Committee, the Nomination Committee, the Mediation Committee established in accordance with
section 27(3) of the Mitbestimmungsgesetz (MitbestG – German Codetermination Act) and the Audit Committee.
The Executive Committee is currently comprised of four shareholder representatives and four employee repre-
sentatives. The shareholder representatives on the Executive Committee make up the Nomination Committee.
The Mediation Committee is comprised of two shareholder representatives and two employee representatives,
and the Audit Committee is comprised of three shareholder representatives and three employee representatives.
Which tasks the Supervisory Board has generally transferred to the respective committees is described
below. This does not rule out that the Supervisory Board will not transfer other tasks to committees in individual
cases, where legally admissible.
At its meetings, the Executive Committee meticulously prepares the resolutions of the Supervisory Board,
discusses the composition of the Board of Management and takes decisions on matters such as contractual
issues concerning the Board of Management other than remuneration and consent to ancillary activities by
members of the Board of Management. The Executive Committee also exercises the function of a “Remuneration
Committee”, preparing the Supervisory Board’s decisions on questions about Board of Management remuner-
ation. The Executive Committee supports and advises the Chair of the Supervisory Board. It works with the Chair
of the Board of Management to ensure long-term succession planning for the Board of Management.
The Nomination Committee proposes suitable candidates for the Supervisory Board to recommend to the
Annual General Meeting for election. Before presenting such proposals, it ensures that the candidates can
commit the expected time to their role and identifies the personal and business relationships of the candidates
to Volkswagen AG and its Group companies, to Volkswagen AG’s corporate bodies and to shareholders who
directly or indirectly hold more than 10% of the voting shares in Volkswagen AG. In its proposals to the Super-
visory Board, the Nomination Committee also takes into account the requirement for the Supervisory Board to
adhere, in its proposals to the Annual General Meeting, to the specific targets it has set for the composition of
the Supervisory Board and to the profile of skills and expertise it has decided on for the Board as a whole; in so
doing, the Nomination Committee also particularly makes sure that there are no gaps in the Board’s skills and
expertise as a whole (Skill Gaps Assessment). The Nomination Committee furthermore takes into account the
diversity concept for the composition of the Supervisory Board.
The Mediation Committee has the task of submitting proposals to the Supervisory Board for an appointment
or revocation of appointment of Board of Management members if there is no majority for the relevant measure on
the Supervisory Board in the first vote. The majority involves at least two-thirds of all Supervisory Board members.
Among other things, the Audit Committee discusses the auditing of financial reporting, including the annual
and consolidated financial statements, the group management report and the separate nonfinancial statement,
including the sustainability report. In addition, the Audit Committee concerns itself with supervising the financial
48
reporting process, the audit of the financial statements, in particular the selection and independence of the
auditor, the quality of the audit, and any additional services provided by the auditor. Moreover, the Audit Com-
mittee concerns itself with compliance, the appropriateness and effectiveness of the risk management system
and internal control system, including the compliance management system and the internal audit system; it also
concerns itself with internal processes within the meaning of section 111a (2) of the AktG for regularly assessing
whether related party transactions were conducted in the ordinary course of business and at arm’s length. In
addition, the Audit Committee particularly concerns itself with the Volkswagen Group’s quarterly financial
reports and half-yearly financial report.
Further details on tasks, meetings, resolutions and working procedures of the Supervisory Board committees
are governed by the rules of procedure issued by the Supervisory Board for the respective Supervisory Board com-
mittees and published on Volkswagen AG’s website at www.volkswagen-group.com/en/corporate-governance.
Objectives for the composition of the Supervisory Board, profile of skills and expertise
and diversity concept
In view of the Company’s specific situation, its purpose, its size and the extent of its international activities, the
Supervisory Board of Volkswagen AG strives to achieve a composition that takes the Company's ownership
structure and the following aspects into account:
> At least three members of the Supervisory Board should be persons who embody the criterion of inter-
nationality to a particularly high degree.
> In addition, at least four of the shareholder representatives should be persons who, in line with the criteria of
Recommendations C.7 to C.9 of the Code, are independent within the meaning of Recommendation C.6 of the
Code.
> At least three of the seats on the Supervisory Board should be held by people who make a special contribution
to the diversity of the Board.
> Proposals for election should not normally include persons who have reached the age of 75 on the date of the
election.
The Supervisory Board is of the view that the above criteria have been met. Numerous members of the Super-
visory Board embody the criterion of internationality to a particularly high degree; various nationalities are
represented on the Supervisory Board and numerous members have international professional experience.
Several members of the Supervisory Board contribute to the Board’s diversity to a particularly high degree,
especially Ms. Hessa Sultan Al Jaber, Ms. Daniela Cavallo, Ms. Julia Willie Hamburg, Ms. Marianne Heiß,
Mr. Mansoor Ebrahim Al-Mahmoud and Mr. Matías Carnero Sojo. The Supervisory Board comprises members of
various generations. Independent Supervisory Board members within the meaning of Recommendation C.6 of
the Code currently comprise at least the following: Ms. Hessa Sultan Al Jaber, Ms. Julia Willie Hamburg,
Mr. Mansoor Ebrahim Al-Mahmoud and Mr. Stephan Weil.
With regard to the shareholder representatives’ independence from the Company and its Board of Manage-
ment, the shareholder representatives have come to the following assessment in accordance with C.7, 8 of the
Code:
Supervisory Board members Mr. Hans Michel Piëch, Mr. Ferdinand Oliver Porsche and Mr. Wolfgang Porsche
have been members of the Supervisory Board for more than 12 years and therefore fulfill one of the indicators set
out in C.7 of the Code regarding a lack of independence from the Company and its Board of Management.
However, considering all the circumstances of the case in hand, the shareholder representatives are of the
opinion that the aforementioned Supervisory Board members are nevertheless independent from the Company
and its Board of Management. This opinion is based in particular on the following reasons:
> Mr. Hans Michel Piëch, Mr. Ferdinand Oliver Porsche and Mr. Wolfgang Porsche, together with other family
shareholders, are indirectly controlling shareholders of Porsche Automobil Holding SE, which is the largest
single shareholder of Volkswagen AG. The management by the Board of Management of Volkswagen AG
therefore economically affects the personal assets of Mr. Hans Michel Piëch, Mr. Ferdinand Oliver Porsche and
Mr. Wolfgang Porsche.
49
> The composition of the Board of Management has changed fundamentally several times during the tenure of
Mr. Hans Michel Piëch, Mr. Ferdinand Oliver Porsche and Mr. Wolfgang Porsche. The incumbent Board of Man-
agement members have been in office for a maximum of just under six years. There are therefore no indications
that Mr. Hans Michel Piëch, Mr. Ferdinand Oliver Porsche and Mr. Wolfgang Porsche would stop behaving in an
impartial manner towards incumbent members of the Board of Management as a result of a long period of
collaboration. There is also no other evidence of “tunnel vision” on the part of Mr. Hans Michel Piëch,
Mr. Ferdinand Oliver Porsche and Mr. Wolfgang Porsche.
> Mr. Hans Michel Piëch, Mr. Ferdinand Oliver Porsche and Mr. Wolfgang Porsche are not financially dependent
on their remuneration as members of the Supervisory Board.
Aside from their Supervisory Board appointments, Mr. Hans Michel Piëch, Mr. Ferdinand Oliver Porsche and
Mr. Wolfgang Porsche have no personal relationship with the Company or the Board of Management that could
give rise to a material and not merely temporary conflict of interest. The Supervisory Board work of Mr. Hans
Michel Piëch, Mr. Ferdinand Oliver Porsche and Mr. Wolfgang Porsche of previous years has also not given rise to
any conflicts of interest.
The Supervisory Board member Mr. Hans Dieter Pötsch moved directly from the Board of Management to the
Supervisory Board upon his appointment by the court in autumn 2015. This move was less than two years prior
to his election as a Supervisory Board member by the subsequent Annual General Meeting in 2016, meaning that
one of the indicators of a lack of independence from the Company and Board of Management, set out in C.7 of
the Code, applies to Mr. Pötsch. It also cannot be ruled out that Mr. Pötsch still fulfills this requirement. However,
considering all the circumstances of the case in hand, the shareholder representatives are of the opinion that Mr.
Pötsch is nevertheless independent from the Company and its Board of Management: it is now more than eight
years since Mr. Pötsch’s move from the Board of Management to the Supervisory Board. Mr. Pötsch has already
been elected as a member of the Supervisory Board for a second time by the Annual General Meeting in July
2021. Since his transfer from the Board of Management to the Supervisory Board in October 2015, the com-
position of the Board of Management has also completely changed.
In addition, the Supervisory Board adopted the following profile of skills and expertise for the full Board: to
properly perform its supervisory and advisory duties, the Supervisory Board as a whole must collectively have
the required expertise, i.e. knowledge, skills and professional experience. For this, the members of the Super-
visory Board must collectively be familiar with the sector in which the Company operates – i.e. the automotive
industry – and be able to assess the business conducted by the Company. In addition, the Supervisory Board
members as a whole must collectively have expertise relating to sustainability issues relevant to the Company.
The key skills and expertise that the Supervisory Board must have collectively as a whole are, in particular,
knowledge, skills and professional experience
> in the manufacture and sale of all types of vehicles and engines or other technical products (vehicles – manu-
facture/sale)
> in the automotive industry and its transformation, particularly with regard to the topics of e-mobility and
mobility services, the business model and the markets, customer needs and product expertise (automotive
industry)
> in the field of research and development, particularly of technologies with relevance for the Company
(research/development)
> in the fields of digitalization and digital transformation, software, artificial intelligence, automation, infor-
mation technology and security (digitalization/IT)
> in management positions and supervisory bodies of companies, including holding companies and start-ups, or
large organizations (management/supervision)
> in the fields of law and compliance (law/compliance)
> in the field of sustainability, particularly with regard to environmental, social and governance aspects (ESG),
e.g. in resources, supply chains, energy supply, corporate social responsibility, sustainable technologies and
corresponding business models (sustainability/ESG)
50
> in finance, accounting and auditing, above all special knowledge and experience of the application of
accounting principles and internal control and risk management systems, sustainability reporting, the audit of
financial statements and the audit and assurance of sustainability reporting (financial experts) (finance/
accounting/auditing)
> in human resources (particularly the search for and selection of members of the Board of Management and the
succession process) and knowledge of incentive and remuneration systems for the Board of Management
(human resources)
> in codetermination, employee matters and the working environment in the Company (employee matters).
The Supervisory Board has also specified the following diversity concept for its composition:
> The Supervisory Board must be comprised such that its members collectively have the knowledge, skills, and
professional experience needed to properly perform their duties.
> It has therefore set targets for its composition that also take into account the recommendations of the German
Corporate Governance Code. The targets set by the Supervisory Board for its composition also describe the
concept through which the Supervisory Board as a whole strives to achieve a diverse composition (diversity
concept in accordance with section 289f(2) no. 6 of the HGB). Attention should also be generally paid to
diversity when seeking qualified individuals to best strengthen the specialist and managerial expertise of the
Supervisory Board as a whole in line with these targets. In preparing proposals for appointments to the Super-
visory Board, it should be considered in each case how the work of the Supervisory Board will benefit from a
diversity of expertise and perspectives among its members, from professional profiles, professional and
general experience that complement one another (including in the international domain) and from an appro-
priate gender balance. A wide range of experience and specialist knowledge should be represented on the
Supervisory Board. In addition, the Supervisory Board should collectively have an extensive range of opinions
and knowledge in order to develop a good understanding of the status quo and the longer-term opportunities
and risks in connection with the Company’s business activities.
> In proposing candidates to the Annual General Meeting for the election of shareholder representatives to the
Supervisory Board, the Supervisory Board should take its diversity concept into account in such a way that the
corresponding election of these candidates by the Annual General Meeting would contribute to the implemen-
tation of this concept. However, the Annual General Meeting is not obliged to accept the candidates nomi-
nated.
> The aim of the diversity concept is for the Supervisory Board members to embody a range of expertise and
perspectives. This diversity promotes a good understanding of Volkswagen AG’s organizational and business
affairs. It also enables the Supervisory Board members to challenge the Board of Management’s decisions
constructively and to be open to new ideas by avoiding groupthink. In this way, it contributes to the effective
supervision of the management.
The Supervisory Board and Nomination Committee, in particular, are called upon to implement the profile of
skills and expertise and the diversity concept within the context of their candidate proposals to the Annual
General Meeting. The Supervisory Board also recommends to employee representatives and unions (which have
the right to submit proposals in employee representative elections) and the State of Lower Saxony (which has a
right to appoint Supervisory Board members) that the diversity concept, composition targets and profile of skills
and expertise should be taken into account. The same applies to individuals entitled to make proposals should a
court-appointed replacement be necessary.
The current composition of the Supervisory Board implements both the diversity concept and the profile of
skills and expertise. The qualification matrix below shows the extent to which the profile of skills and expertise
has been implemented, and indicates which Supervisory Board member has which skills and expertise.
51
QUALIFICATION MATRIX 1
Vehicles –
Finance/
manufacture/ Automotive Research/ Digitalization/ Management/ Law/ Sustainability/ accounting/ Human Employee
sale industry development IT supervision compliance ESG auditing resources matters
Hessa Sultan
Al Jaber x x x x x x x
Mansoor
Ebrahim
Al-Mahmoud x x x x x
Rita Beck x x x x x
Harald Buck x x x x x x
Matías
Carnero Sojo x x x x x x
Daniela
Cavallo x x x x x x x
Julia Willie
Hamburg x x
Marianne
Heiß x x x x x x x x
Jörg Hofmann x x x x x
Arno
Homburg x x x x x x x x
Günther
Horvath x x x x
Daniela
Nowak x x x
Hans Michel
Piëch x x x x x
Hans Dieter
Pötsch x x x x x x x
Ferdinand
Oliver
Porsche x x x x x x
Wolfgang
Porsche x x x x x
Gerardo
Scarpino x x x x x
Karina Schnur x x x x x x x
Conny
Schönhardt x x x x x x
Stephan Weil x x x x x
1 The skills, knowledge and professional experience associated with the respective key words can be found in the profile of skills. A skill can be attributed to a Supervisory Board
member even if they have expertise in just one subsection of the skill, i.e. for skill in vehicles, for example, either in the area of manufacture or in sales. The allocation of
competencies is based on a self-assessment by the respective Supervisory Board member.
In addition, several Supervisory Board members, including Mr. Mansoor Al-Mahmoud, Ms. Marianne Heiß,
Mr. Ferdinand Oliver Porsche and Mr. Hans Dieter Pötsch, have expertise in both financial reporting, including
sustainability reporting, and auditing, including the audit and assurance of sustainability reporting.
As the long-standing CEO of the Qatar Investment Authority and its former Head of Risk Management, and
from his management roles at a bank and stock exchange, Mr. Al-Mahmoud has gained particular knowledge
and experience in the application of accounting principles and internal control and risk management systems as
well as in the field of auditing. This knowledge and experience also relate to sustainability reporting and the
auditing and assurance thereof: at the Qatar Investment Authority, Mr. Al-Mahmoud has reoriented the invest-
ment strategy toward investments with ESG goals and implemented a sustainability agenda, which was also
included in the Qatar Investment Authority’s sustainability reporting. Mr. Al-Mahmoud therefore also studies
52
companies’ sustainability reports in detail with a view to whether they fit the Qatar Investment Authority’s sus-
tainability strategy.
Ms. Heiß worked as a CFO for a long time and, prior to that, worked for audit and tax consulting firms for
several years; Mr. Ferdinand Oliver Porsche is a long-standing member of audit committees and worked for an
audit firm for several years; Mr. Pötsch is a long-standing member and chair of audit committees and worked for
many years as CFO of Volkswagen AG and previously as Head of Controlling at BMW AG. As part of their long-
standing work in audit committees, Ms. Heiß, Mr. Ferdinand Oliver Porsche and Mr. Pötsch have also been
involved in the auditing and assurance of nonfinancial statements, which relate to sustainability in the form of
important environmental and social issues. Ms. Heiß was also involved in sustainability reporting and the
auditing and assurance thereof as part of her former activities at BBDO Group Germany GmbH, and Mr. Pötsch as
part of his activities at Porsche Automobil Holding SE. Ms. Heiß is also an ESG expert on the Supervisory Board
of Porsche Automobil Holding SE. Ms. Heiß, Mr. Al-Mahmoud, Mr. Pötsch and Mr. Ferdinand Oliver Porsche track
and monitor the latest developments in the area of sustainability reporting and the auditing and assurance
thereof and contribute their expertise to Volkswagen AG’s Audit Committee.
Further details on the expertise of the Supervisory Board members can be found in their curricula vitae. The
curricula vitae of the members of the Supervisory Board, which are updated annually, are available online at
www.volkswagen-group.com/executive-bodies.
The Nomination Committee and Supervisory Board also took into account the diversity concept, specific
composition targets and profile of skills and expertise (in their latest valid versions) in its proposals to the Annual
General Meeting in fiscal year 2023 for the election of three Supervisory Board members. The composition
targets, diversity concept and profile of skills and expertise were also taken into account in the court appoint-
ment of two new Supervisory Board members as employee representatives in fiscal year 2023.
Self-evaluation of the Supervisory Board

On a regular basis every two years, the Supervisory Board internally evaluates how effectively the Board and its
committees are performing their tasks. This initially involves distributing a questionnaire to all Supervisory Board
members, in which they are able to give their view of the effectiveness of the work of the Supervisory Board and
its committees, the exchange of information with the Board of Management, and the depth and quality of the
presentations to and discussions in the Supervisory Board and may suggest possible improvements. In par-
ticular, the members of the Supervisory Board are also asked to make comparative observations with comparable
boards of other companies on which they also serve and, drawing on these, to make specific suggestions for
improvement as required. Following analysis of the questionnaires, the findings and potential improvements are
usually discussed at the next regular meeting of the full Board. Measures to improve the work of the Supervisory
Board are continuously developed and implemented on the basis of the findings. The Supervisory Board
members assess whether the measures have achieved the targeted improvements at the latest in the next self-
evaluation. The most recent internal self-evaluation took place from late 2023 to early 2024.
53
DISCLOSURES REQUIRED BY THE FÜHRUNGSPOSITIONEN-GESETZ

The statutory quota of at least 30% women and at least 30% men has applied to new appointments to the
Supervisory Board of Volkswagen AG since January 1, 2016 as required by the Gesetz für die gleichberechtigte
Teilhabe von Frauen und Männern an Führungspositionen in der Privatwirtschaft und im öffentlichen Dienst
(Führungspositionen-Gesetz, FüPoG – German Act on the Equal Participation of Women and Men in Leadership
Positions in the Private and Public Sectors). Shareholder and employee representatives have resolved that each
side will meet this quota separately. The shareholder representatives have met the quota of at least 30% women
and at least 30% men since the end of the 56th Annual General Meeting on June 22, 2016. The employee repre-
sentatives have met the quota since the end of the 57th Annual General Meeting on May 10, 2017. Both the
shareholder and the employee representatives also fulfilled the quota on December 31, 2023.
In line with the Gesetz zur Ergänzung und Änderung der Regelungen für die gleichberechtigte Teilhabe von
Frauen an Führungspositionen in der Privatwirtschaft und im öffentlichen Dienst (Führungspositionen-Gesetz II,
FüPoG II – Second Act on Equal Participation of Women and Men in Leadership Positions in the Private and
Public Sector), Volkswagen AG is subject to a mandatory participation requirement under which the Board of
Management must have at least one woman and at least one man. The participation requirement has applied to
the appointment of one or more members of the Board of Management since August 1, 2022. Volkswagen AG
complies with this participation requirement.
For the proportion of women in management in accordance with the Führungspositionen-Gesetz, Volks-
wagen AG has set itself the target of 16.5% women in the first level of management and 23.4% women in the
second level of management, each as a proportion of the active workforce, to be achieved by the end of 2025. As
of December 31, 2023, the proportion of women in the active workforce at the first level of management was
15.3 (14.2)% and at the second level of management it was 21.5 (19.7)%.
REMUNERATION REPORT
The remuneration systems for the members of the Board of Management and Supervisory Board and the Remu-
neration Report for fiscal year 2023 are available on the website www.volkswagen-group.com/remuneration.
Previous years’ remuneration reports can also be found at this address. The remuneration reports contain both
extensive explanations and descriptions of the remuneration systems for the members of the Board of Manage-
ment and Supervisory Board as well as information on and explanations of the individual remuneration of
members of the Board of Management and Supervisory Board.
CORPORATE PRACTICES APPLIED IN ADDITION TO STATUTORY REQUIREMENTS

Code of Conduct and Volkswagen Group Essentials
The Volkswagen Group’s Code of Conduct is the key instrument for reinforcing employees’ awareness of
responsible action and decision making. The Group’s underlying values and the foundation for its shared cor-
porate culture are defined by the seven Volkswagen Group Essentials: responsibility, honesty, bravery, diversity,
pride, solidarity and reliability.
54
Ethics, compliance and risk management

To foster trust in our Company as well as our products, services and innovations, it is essential that we act
honestly and with integrity at all times. In all lines of work and all functions we therefore invariably make deci-
sions that are in line with our corporate values, applicable national and international legislation, regulations and
in-house voluntary commitments. This includes the following areas:
> Integrity and compliance
Adherence to statutory provisions, internal company policies, ethical principles and our own values in order to
protect the Company and its brands.
> Whistleblower System
The whistleblower system is the central point of contact for reporting cases of rule-breaking by Group employ-
ees or by direct and indirect suppliers. This includes white collar crimes, acts of corruption, tax offenses,
environmental offenses, human rights violations, infringements of antitrust and competition legislation, money
laundering and terrorism financing, breaches of product safety and licensing regulations, and serious breaches
of data protection.
> Business and human rights
Volkswagen fully recognizes key international conventions and declarations, particularly the International Bill
of Human Rights and the Fundamental Conventions of the International Labour Organization (ILO). We align
our business activities with the United Nations Guiding Principles on Business and Human Rights (UN Global
Compact), which represent crucial pillars for our actions.
> Anti-Corruption
The Volkswagen Group has a zero-tolerance policy on active or passive corruption. This is anchored in both the
Group’s internal Code of Conduct and its Code of Conduct for Business Partners.
> Risk management and internal control system
A comprehensive risk management and internal control system (RMS/ICS) helps the Volkswagen Group deal
with risks in a responsible manner. The organizational design of the Volkswagen Group’s RMS/ICS is based on
the internationally recognized COSO framework for enterprise risk management (COSO: Committee of Spon-
soring Organizations of the Treadway Commission) and can be accessed on the COSO website. Uniform Group
principles are used as the basis for managing risks in a transparent and appropriate manner.
Voluntary commitments and principles

The Volkswagen Group has committed itself to sustainable, transparent and responsible corporate governance.
We align our activities with the principles, recommendations and suggestions of the German Corporate Gov-
ernance Code. We coordinate our sustainability activities across the entire Group and have put in place a
forward-looking system of risk management and a clear framework for dealing with environmental issues in a
future-oriented manner, for employee responsibility and for social commitment across our brands and in the
regions in which we operate.
Voluntary commitments and principles that apply across the Group are the basis and backbone of our sus-
tainability management. These documents are publicly accessible on the Volkswagen Group’s website in the
section entitled “Sustainability.”
55
MEMBERS OF THE BOARD OF MANAGEMENT

(appointments: as of December 31, 2023 or the date of departure from the Board of Management of Volkswagen AG)
DR. OLIVER BLUME (*1968) RALF BRANDSTÄTTER (*1968) DR. GERNOT DÖLLNER (*1969)
Chair (since September 1, 2022), China, Progressive brand group,
Sport Luxury brand group, Chair of the Board of Management (CEO) Chair of the Board of Management of AUDI AG
Chair of the Executive Board of of Volkswagen (China) Investment Co., Ltd. (since September 1, 2023)
Dr. Ing. h.c. F. Porsche AG, January 1, 2022 , appointed until 2026
1 September 1, 20231, appointed until 2026
April 13, 20181, appointed until 2028 Nationality: German Nationality: German
Nationality: German Appointments: Appointments:
Appointments:  CARIAD SE, Wolfsburg3  FC Bayern München AG, Munich (Deputy Chair)2
 CARIAD SE, Wolfsburg (Chair)3  Audi (China) Enterprise Management Co., Ltd.,  Audi (China) Enterprise Management Co., Ltd.,
Beijing3 Beijing (Chair)3
DR. ARNO ANTLITZ (*1970)  FAW-Volkswagen Automotive Co., Ltd.,  Automobili Lamborghini S.p.A.,
Finance and Operations, Changchun (Deputy Chair)2 Sant´Agata Bolognese (Chair)3
April 1, 2021 , appointed until 2027

1  Mobility Asia Smart Technology Co., Ltd., Beijing3  Bentley Motors Ltd., Crewe3
Nationality: German  SAIC Volkswagen Automotive Co., Ltd., Shanghai  Ducati Motor Holding S.p.A., Bologna (Chair)3
Appointments: (Deputy Chair) 2  FAW-Volkswagen Automotive Co., Ltd.,
 Dr. Ing. h.c. F. Porsche AG, Stuttgart3, 4  Volkswagen (Anhui) Automotive Co., Ltd., Hefei Changchun2
 PowerCo SE, Salzgitter 3 (Chair)3  SAIC Volkswagen Automotive Co., Ltd.,

 Volkswagen Financial Services AG,  Volkswagen Group (China) Technology Company, Shanghai2
Braunschweig (Chair) 3 Ltd., Hefei (Chair) 3  Volkswagen (China) Investment Co., Ltd., Beijing3
 Volkswagen Financial Services Europe AG,
Braunschweig (Chair)3 DR. JUR. MANFRED DÖSS (*1958)
 Porsche Austria GmbH, Salzburg (Deputy Chair)3 Integrity and Legal Affairs
 Porsche Holding Gesellschaft m.b.H., Salzburg February 1, 20221, appointed until 2028
(Deputy Chair)3 Nationality: German
 Porsche Retail GmbH, Salzburg (Deputy Chair) 3 Appointments:
 Volkswagen (China) Investment Co., Ltd., Beijing3  AUDI AG, Ingolstadt (Chair)3
 Volkswagen Group of America, Inc., Herndon, VA  TRATON SE, Munich3, 4
(Chair)3  Grizzlys Wolfsburg GmbH, Wolfsburg2
 Membership of statutory supervisory boards in 1 Beginning or period of membership in the

Germany. Board of Management.
 Comparable appointments in Germany and 2 Appointment outside the Group.
abroad. 3 Appointment within the Group.
4 Listed company.
56
MARKUS DUESMANN (*1969) THOMAS SCHÄFER (*1970) HAUKE STARS (*1967)
Progressive brand group, Core brand group, IT
Chair of the Board of Management of AUDI AG Chair of the Board of Management of the February 1, 20221, appointed until 2025
(until August 31, 2023) Volkswagen Passenger Cars brand, Nationality: German
April 1, 2020 – August 31, 20231 July 1, 20221, appointed until 2025 Appointments:
Nationality: German Nationality: German  AUDI AG, Ingolstadt3

Appointments (as of August 31, 2023): Appointments:  CARIAD SE, Wolfsburg3
 FC Bayern München AG, Munich (Deputy Chair) 2  FAW-Volkswagen Automotive Co., Ltd.,  Dr. Ing. h.c. F. Porsche AG, Stuttgart3, 4
 Audi (China) Enterprise Management Co., Ltd., Changchun2  PowerCo SE, Salzgitter3
Beijing (Chair) 3  SAIC Volkswagen Automotive Co., Ltd.,  RWE AG, Essen2, 4
 Automobili Lamborghini S.p.A., Shanghai2  Kühne + Nagel International AG, Schindellegi2, 4
Sant´Agata Bolognese (Chair) 3  SEAT, S.A., Martorell (Chair) 3
 Bentley Motors Ltd., Crewe3  Škoda Auto a.s., Mladá Boleslav (Chair)3
 Ducati Motor Holding S.p.A., Bologna (Chair)3  Volkswagen (China) Investment Co., Ltd.,
 FAW-Volkswagen Automotive Co., Ltd., Beijing (Chair)3
Changchun 2
 SAIC Volkswagen Automotive Co., Ltd., THOMAS SCHMALL-VON WESTERHOLT
Shanghai 2 (*1964)
 Volkswagen (China) Investment Co., Ltd., Beijing3 Technology,
Chair of the Board of Management of
GUNNAR KILIAN (*1975) Volkswagen Group Components,
Human Resources and Trucks brand group January 1, 20211, appointed until 2028
April 13, 20181, appointed until 2026 Nationality: German, Brazilian
Nationality: German Appointments:
Appointments:  PowerCo SE, Salzgitter (Chair)3

 AUDI AG, Ingolstadt3  Brose Sitech Sp. Z o.o., Polkowice2
 MAN Energy Solutions SE, Augsburg (Chair)3  Volkswagen Group (China) Technology
 MAN Truck & Bus SE, Munich 3 Company, Ltd., Hefei3
 PowerCo SE, Salzgitter3

 TRATON SE, Munich3, 4
 Volkswagen Group Services GmbH, Wolfsburg

(Chair)3
 Wolfsburg AG, Wolfsburg (Deputy Chair)2
 Autostadt GmbH, Wolfsburg (Chair)3

 FAW-Volkswagen Automotive Co., Ltd.,
Changchun2
 Scania AB, Södertälje3

 Scania CV AB, Södertälje3
 VfL Wolfsburg-Fußball GmbH, Wolfsburg3
 Volkswagen Immobilien GmbH, Wolfsburg
(Chair)3

Germany. Board of Management.
4 Listed company.
57
MEMBERS OF THE SUPERVISORY BOARD AND COMPOSITION OF THE COMMITTEES

(appointments: as of December 31, 2023 or the date of departure from the Supervisory Board of Volkswagen AG or the start date after December 31, 2023)
HANS DIETER PÖTSCH (*1951) DR. HESSA SULTAN AL JABER (*1959) HARALD BUCK (*1962)
Chair (since October 7, 2015), Former Minister of Information and Communications Chair of the General and Group Works Councils of
Chair of the Board of Management of Technology, Qatar Dr. Ing. h.c. F. Porsche AG
Porsche Automobil Holding SE June 22, 20161, elected until 2024 October 4, 20221, appointed until 2027
October 7, 2015 , elected until 2026

1 Nationality: Qatari Nationality: German
Nationality: Austrian Appointments: Appointments:
Appointments:  Malomatia Q.S.C, Doha (Chair) 2  Dr. Ing. h.c. F. Porsche AG, Stuttgart3, 4
 AUDI AG, Ingolstadt3  MEEZA QSTP–LLC (Public), Doha2, 4
 Bertelsmann Management SE, Gütersloh 2  Qatar Satellite Company (Es'hailSat), Doha MATÍAS CARNERO SOJO (*1968)
 Bertelsmann SE & Co. KGaA, Gütersloh2 (Chair)2 Chair of the General Works Council of SEAT, S.A.
 Dr. Ing. h.c. F. Porsche AG, Stuttgart 3, 4  Trio Investment, Doha (Chair) 2 April 1, 20211, appointed until 2027
 TRATON SE, Munich (Chair)3, 4 Nationality: Spanish
 Wolfsburg AG, Wolfsburg 2 MANSOOR EBRAHIM AL-MAHMOUD (*1974)
 Autostadt GmbH, Wolfsburg3 Chief Executive Officer of DANIELA CAVALLO (*1975)
 Porsche Austria Gesellschaft m.b.H., Salzburg Qatar Investment Authority Chair of the General and Group Works Councils
(Chair)3 May 12, 20221, elected until 2025 of Volkswagen AG
 Porsche Holding Gesellschaft m.b.H., Salzburg Nationality: Qatari May 11, 20211, appointed until 2027
(Chair)3 Appointments: Nationality: Italian, German
 Porsche Retail GmbH, Salzburg (Chair) 3  Harrods Ltd., London (Board member) 2 Appointments:
 VfL Wolfsburg-Fußball GmbH, Wolfsburg  Harrods Group (Holding) Ltd., London (Chair)2  PowerCo SE, Salzgitter (Deputy Chair)3
(Deputy Chair) 3  Qatar Airways, Doha (Deputy Chair) 2  TRATON SE, Munich3, 4
 Qatar National Bank, Doha (Board member)2, 4  Volkswagen Financial Services AG,
JÖRG HOFMANN (*1955)  Qatar Stock Exchange, Doha (Deputy Chair) 2 Braunschweig (Deputy Chair)3
Deputy Chair (since November 20, 2015),  Qatari Diar Real Estate Investment Company,  Wolfsburg AG, Wolfsburg2
IG Metall Doha (Board member) 2  Allianz für die Region GmbH, Braunschweig
November 20, 20151, appointed until 2027 (until May 31, 2023)2
Nationality: German RITA BECK (*1970)  Autostadt GmbH, Wolfsburg3
Deputy Chair of the Works Council  Brose Sitech Sp. Z o.o., Polkowice2
of AUDI AG, Ingolstadt plant  Porsche Holding Gesellschaft m.b.H., Salzburg3
January 9, 20241, appointed until 2027  SEAT, S.A., Martorell3
Nationality: German  Škoda Auto a.s., Mladá Boleslav3

Appointments (as of January 9, 2024):  VfL Wolfsburg-Fußball GmbH, Wolfsburg3
 AUDI AG, Ingolstadt 3  Volkswagen Group Services GmbH3
 CARIAD SE, Wolfsburg3

Germany. Supervisory Board.
4 Listed company.
58
JULIA WILLIE HAMBURG (*1986) SIMONE MAHLER (*1971) DR. JUR. HANS MICHEL PIËCH (*1942)
Minister of Education and Cultural Affairs for the Chair of the Joint Works Council of Supervisory Board
Federal State of Lower Saxony Volkswagen Financial Services AG and August 7, 20091, elected until 2024
November 8, 2022 , delegated until 2027

1 Volkswagen Bank GmbH Nationality: Austrian
Nationality: German May 12, 2022 - May 31, 20231 Appointments:
Nationality: German  AUDI AG, Ingolstadt3

MARIANNE HEIß (*1972) Appointments (as of May 31, 2023):  Dr. Ing. h.c. F. Porsche AG, Stuttgart3, 4
Chief Executive Officer of BBDO Group  EURO-Leasing GmbH, Sittensen 3  Porsche Automobil Holding SE, Stuttgart
Germany GmbH (until April 30, 2023)  Volkswagen Financial Services AG, (Deputy Chair)2, 4
Member of the Supervisory Board Braunschweig 3  Porsche Holding Gesellschaft m.b.H., Salzburg3
February 14, 20181, elected until 2028  Volkswagen Pension Trust e.V., Wolfsburg3  Schmittenhöhebahn AG, Zell am See2
Nationality: Austrian
Appointments: PETER MOSCH (*1972) DR. JUR. FERDINAND OLIVER PORSCHE
 AUDI AG, Ingolstadt 3 Chair of the General Works Council of AUDI AG (*1961)
 Flix SE, Munich2 (until September 30, 2023) Member of the Board of Management of Familie
 Porsche Automobil Holding SE, Stuttgart 2, 4 January 18, 2006 - December 31, 2023 1 Porsche AG Beteiligungsgesellschaft
Nationality: German Managing Director of Real Estate Holding GmbH,
DR.-ING. ARNO HOMBURG (*1968) Appointments (as of December 31, 2023): Managing Director of Neckar GmbH
Chair of the Board of Management of Volkswagen  AUDI AG, Ingolstadt (Deputy Chair)3 August 7, 20091, elected until 2024
Management Association e.V.  Audi Pensionskasse – Altersversorgung der Nationality: Austrian
May 12, 20221, appointed until 2027 AUTO UNION GmbH, VVaG, Ingolstadt3 Appointments:
Nationality: German  CARIAD SE, Wolfsburg (Deputy Chair) 3  AUDI AG, Ingolstadt3
Appointments:  Audi Stiftung für Umwelt GmbH, Ingolstadt3  Dr. Ing. h.c. F. Porsche AG, Stuttgart3, 4
 Volkswagen Pension Trust e.V., Wolfsburg 3  Porsche Automobil Holding SE, Stuttgart2, 4
DANIELA NOWAK (*1970)  Porsche Holding Gesellschaft m.b.H., Salzburg3
DR. GÜNTHER HORVATH (*1952) Chair of the Works Council of Volkswagen AG,  Porsche Lifestyle GmbH & Co. KG, Ludwigsburg3
Managing Director of Braunschweig plant
Dr. Günther J. Horvath Rechtsanwalt GmbH May 12, 20221, appointed until 2027
and self-employed attorney at Nationality: German
Dr. Günther J. Horvath Rechtsanwalt GmbH Appointments:
February 28, 20231, elected until 2028  Volkswagen Pension Trust e.V., Wolfsburg3
Nationality: Austrian
Appointments:
 Porsche Automobil Holding SE, Stuttgart2, 4

4 Listed company.
59
DR. RER. COMM. WOLFGANG PORSCHE KARINA SCHNUR (*1977) SUPERVISORY BOARD COMMITTEES
(*1943) Chair of the General and Group Works Councils of
Chair of the Supervisory Board of MAN Truck & Bus SE and Members of the Executive Committee
Porsche Automobil Holding SE; Chair of the Group Works Council of TRATON SE Hans Dieter Pötsch (Chair)
Chair of the Supervisory Board of July 11, 20231, appointed until 2027 Jörg Hofmann (Deputy Chair)
Dr. Ing. h.c. F. Porsche AG Nationality: German Rita Beck (since January 24, 2024)
April 24, 20081, elected until 2028 Appointments: Daniela Cavallo
Nationality: Austrian  MAN Truck & Bus SE, Munich 3 Peter Mosch (until December 31, 2023)
Appointments:  TRATON SE, Munich3, 4 Dr. Hans Michel Piëch
 AUDI AG, Ingolstadt 3  Rheinmetall MAN Military Vehicles GmbH, Dr. Wolfgang Porsche
 Dr. Ing. h.c. F. Porsche AG, Stuttgart (Chair)3, 4 Munich2 Gerardo Scarpino
 Porsche Automobil Holding SE, Stuttgart (Chair) 2, 4 Stephan Weil
 Familie Porsche AG Beteiligungsgesellschaft, CONNY SCHÖNHARDT (*1978)
Salzburg (Chair)2 Union Secretary and Head of the Mobility and Members of the Mediation Committee established
 Porsche Holding Gesellschaft m.b.H., Salzburg3 Vehicle Construction Unit attached to the in accordance with section 27(3) of the
 Schmittenhöhebahn AG, Zell am See 2 IG Metall Board Mitbestimmungsgesetz (German
June 21, 20191, appointed until 2027 Codetermination Act)
JENS ROTHE (*1970) Nationality: German Hans Dieter Pötsch (Chair)
Chair of the General Works Council Appointments: Jörg Hofmann (Deputy Chair)
of Volkswagen Sachsen GmbH  CARIAD SE, Wolfsburg 3 Daniela Cavallo
October 22, 2021 - March 3, 20231  PowerCo SE, Salzgitter3 Stephan Weil
Nationality: German  Volkswagen Bank GmbH, Braunschweig 3
Appointments (as of March 3, 2023): Members of the Audit Committee
 Volkswagen Sachsen GmbH, Zwickau STEPHAN WEIL (*1958) Mansoor Ebrahim Al-Mahmoud (Chair)
(Deputy Chair)3 Minister President of the Federal State of Daniela Cavallo (Deputy Chair)
Lower Saxony Marianne Heiß
GERARDO SCARPINO (*1962) February 19, 20131, delegated until 2027 Dr. Ferdinand Oliver Porsche
Executive Director of the Volkswagen Nationality: German Gerardo Scarpino
Group Works Council Conny Schönhardt
April 21, 2023 , appointed until 2027

1
Nationality: Italian Members of the Nomination Committee
Appointments: Hans Dieter Pötsch (Chair)
 CARIAD SE, Wolfsburg3 Dr. Hans Michel Piëch
Dr. Wolfgang Porsche
Stephan Weil

4 Listed company.
60
Corporate Governance Remuneration Report 2023
Remuneration Report 2023

The Board of Management and Supervisory Board of Volkswagen AG must prepare a
clear and understandable remuneration report in accordance with section 162 of the
Aktiengesetz (AktG – German Stock Corporation Act). In this report, we explain the main
features of the remuneration system for the members of the Board of Management and
Supervisory Board. The remuneration report also contains an individualized breakdown of
the remuneration components provided to current and former members of the
Board of Management and Supervisory Board.
A. REMUNERATION OF THE MEMBERS OF THE BOARD OF MANAGEMENT

In the reporting year, the Volkswagen Group’s business was impacted by the challenging global market environ-
ment, parts supply shortages and disruptions in the logistics chain. In this environment, the Group delivered
9.2 million units to customers. This was 11.8% more vehicles than in the previous year. While sales revenue rose
by 15.5%, the operating result of €22.6 billion was similar to the previous year’s.
I. Principles of Board of Management remuneration

The remuneration of the Board of Management is based on the remuneration system developed by the Super-
visory Board and adopted for the first time on December 14, 2020 with effect from January 1, 2021. The
remuneration system for the members of the Board of Management implements the requirements of the AktG as
amended by the Gesetz zur Umsetzung der zweiten Aktionärsrechterichtlinie (ARUG II – German Act on the
Implementation of the Second Shareholder Rights Directive) and takes into account the recommendations of the
German Corporate Governance Code (the Code).
On March 3, 2023, the Supervisory Board resolved to modify the remuneration system with effect from
January 1, 2023, particularly to heed the call by investors to give long-term variable remuneration more weight.
This led to the relative share of the fixed remuneration components being reduced and the relative share of the
long-term variable remuneration being increased. To reinforce the principle of pay for performance and imple-
ment investors’ requirements, it is also no longer possible to agree a special bonus with future effect. In addition,
the maximum target achievement levels for the annual bonus and the performance share plan as well as their
respective maximum payout amounts have been increased so that higher levels of target achievement are
appropriately rewarded. In this context, the maximum remuneration and the cap on cash remuneration have also
been increased to reflect current market conditions. The Annual General Meeting approved the modified remu-
neration system on May 10, 2023 with 98.82% of the votes cast.
The modified remuneration system has applied since January 1, 2023 to all Board of Management members
with service contracts newly concluded or renewed after the Annual General Meeting’s approval of the remu-
neration system on May 10, 2023. For the Board of Management members already appointed at the time of the
Annual General Meeting’s approval of the remuneration system on May 10, 2023, the new remuneration system
has also applied in principle since January 1, 2023. To implement the remuneration system, Volkswagen AG
reached an agreement with the members of the Board of Management on corresponding amendments to their
61
service contracts. For members of the Board of Management already appointed before the Supervisory Board’s
first resolution on a remuneration system in accordance with section 87a of the AktG on December 14, 2020 and
whose service contract has not been renewed since then, the following exceptions will continue to apply until
their contract is renewed: the performance share plan of the Board of Management members already appointed
before December 14, 2020 whose service contract has not yet been renewed continues to have only a three-year
performance period, but otherwise corresponds to the performance share plan described in the remuneration
system. Penalty and clawback rules will only apply to Board of Management members already appointed before
December 14, 2020 on renewal of their contracts. In fiscal year 2023, these exceptions only applied to
Mr. Markus Duesmann; Mr. Duesmann stepped down from the Board of Management in the course of the year.
The level of the Board of Management remuneration should be appropriate and attractive in the context of
the Company’s national and international peer group. Criteria include the tasks of the individual Board of
Management member, their personal performance, the economic situation, and the performance of and outlook
for the Volkswagen Group, as well as how customary the remuneration is when measured against the peer group
and the remuneration structure that applies to other areas of the Volkswagen Group. In this context, comparative
studies on remuneration are conducted on a regular basis.
In the Remuneration Report for fiscal year 2022, the Board of Management and Supervisory Board reported in
detail on the remuneration paid to members of the Board of Management in fiscal year 2022. The Annual General
Meeting on May 10, 2023 approved the Remuneration Report for fiscal year 2022 with a majority of 98.47% of
the votes cast. Comments by investors and investor representatives were taken into account in the preparation
of the Remuneration Report for fiscal year 2023, for example by clarifying possible achievement of targets or
adding explanations of the procedure in the event of early terminations or a change of control.
In this chapter, we provide an overview of the remuneration system for the Board of Management members in
fiscal year 2023 before going into the components of the remuneration in fiscal year 2023.
II. Overview of the remuneration components

The table below provides an overview of the components of the remuneration system applicable for fiscal year
2023 for the members of the Board of Management. The table also outlines the composition of the individual
remuneration components and explains their targets, particularly in respect of how the remuneration will pro-
mote the Company’s long-term performance. A more detailed description of the remuneration system applicable
for fiscal year 2023 for the members of the Board of Management is available at www.volkswagen-group.com/
remuneration.
62
REMUNERATION SYSTEM FOR 2023
Component Composition Target
Fixed remuneration components

Base salary  Twelve equal installments payable at month-end The basic remuneration and fringe
 Chair of the Board of Management: €2,600,000 (scope of activity: 100%)1; benefits are intended to reflect the tasks
Board of Management member: €1,500,000 (scope of activity: 100%) and responsibility of the Board of
Management members, provide a basic
Fringe benefits  Fringe benefit allowance (Chair of the Board of Management: €350,000; Board
income and prevent them from taking
of Management member: €175,000) covers certain benefits at the discretion of
inappropriate risks
the Board of Management member, for example:
o Company cars
o Preventive medical check-ups
o Allowances for health and long-term care insurance
o Accident insurance
 Crediting of benefits against the fringe benefit allowance where these are
subject to payroll tax
 Payment of the remaining amount
Occupational  Defined contribution plan by means of direct commitments to retirement, The occupational retirement provision is
retirement provision disability and surviving dependents’ benefits intended to provide Board of Management
 Normally when the members reach the age of 65 (or 63 in the case of Board of members with an adequate pension when
Management members who took office before January 1, 2020) they retire
 Annual pension contribution of up to 50% of the contractually agreed base
salary for the Chair of the Board of Management and up to 40% of the
contractually agreed base salary for regular members of the Board of
Management
Variable remuneration components
Annual bonus  Plan type: Target Bonus The annual bonus is designed to motivate
 Target amount for the Chair of the Board of Management: €3,500,000 (scope of Board of Management members to pursue
activity: 100%)1; target amount for a Board of Management member: ambitious targets
€1,500,000 (scope of activity: 100%) The financial performance targets support
 Minimum payment: €0 the strategic target of achieving
 Cap: 200% of the target amount competitive profitability
 Assessment period: fiscal year Integration of the sustainability targets
takes the importance of ESG factors into
 Performance criteria:
account.
o Financial subtargets:
 Operating result (OR) incl. Chinese joint ventures2 (proportionate) (50%) and
operating return on sales (50%)
 The Supervisory Board defines minimum, target and maximum values for the
financial subtargets for each fiscal year. The minimum corresponds to
subtarget achievement of 0% of the OR including Chinese joint ventures
(proportionate) or 50% of the operating return on sales, while the target
corresponds to a subtarget achievement of 100% in each case and the
maximum to subtarget achievement of 175%; interim values are interpolated
on a linear basis
 Overall financial target achievement = subtarget achievement
“operating result including Chinese joint ventures (proportionate)” x 50% +
“subtarget achievement operating return on sales” x 50%
o ESG factor:
 Subtargets of 50% each for the Environment (decarbonization index) and
Social (sentiment and diversity index) as well as the Governance factor of
between 0.9 and 1.1 (compliance and integrity, standard value of 1.0)
 The Supervisory Board defines minimum, target and maximum values for the
Environment and Social subtargets for each fiscal year. The minimum, target
and maximum values correspond to subtarget achievement of 0.7, 1.0 and
1.3 respectively; interim values are interpolated on a linear basis
 The Supervisory Board sets the Governance factor after the end of the fiscal
year taking into account the collective performance of the Board of
Management as a whole and the performance of each Board of Management
member individually
 Calculation of the ESG factor: (Environment subtarget achievement x 50% +
Social subtarget achievement x 50%) x Governance factor (0.9–1.1)
 Annual bonus payment amount = individual target amount x financial target
achievement x ESG factor
 Payment: in cash in the month following approval of the consolidated financial
statements for the fiscal year in question
1 Mr. Blume receives from Volkswagen AG 50% of the remuneration for the Chair of the Board of Management of Volkswagen AG and from Porsche AG 50% of the remuneration for
the Chair of the Executive Board of Porsche AG. The target amount for Mr. Blume thus corresponds to half of the target amount for a Chair of the Board of Management who
receives the full remuneration of a Chair of the Board of Management of Volkswagen AG.
2 Equity-accounted companies in China.
63
Long-term incentive  Plan type: phantom performance share plan The long-term incentive serves to align the
(LTI)  Performance period: measured forward over four years1 remuneration of the Board of Management
 Target amount for the Chair of the Board of Management: €5,900,000 (scope of members with the Company’s long-term
activity: 100%)2; target amount for a Board of Management member: performance. The EPS (earnings per share)
€2,500,000 (scope of activity: 100%) financial performance target in
conjunction with share price performance
 Minimum payment: €0
and the dividends paid, measured over
 Cap: 250% of the target amount
four years, ensures the long-term effect of
 The phantom performance shares are a purely mathematical construct and do the behavioral incentives and supports the
not confer any ownership or voting rights in Volkswagen AG strategic target of achieving competitive
 Allocation of performance shares: at the start of each fiscal year, the profitability.
individually agreed target amount is divided by the arithmetic mean of the
closing prices of Volkswagen’s preferred shares (German Securities
Identification Number: 766403) in the Xetra trading system of Deutsche Börse
AG on the last 30 trading days prior to January 1 in the respective performance
period (“initial reference price”)
 Target-setting: at the start of the performance period, the Supervisory Board
defines minimum, target and maximum values for EPS as presented in the
annual report as audited, fully diluted earnings per Volkswagen preferred share
from the Company’s continuing and discontinued operations; the EPS minimum
corresponds to target achievement of 50%, the EPS target corresponds to
target achievement of 100% and the EPS maximum corresponds to target
achievement of 175%
 Determination of one-quarter of the allocated performance shares at the end of
each fiscal year depending on EPS target achievement
 Calculation of the payment amount: fixed performance shares are multiplied by
the arithmetic mean of the closing prices of Volkswagen’s preferred shares in
the Xetra trading system of Deutsche Börse AG on the last 30 trading days prior
to the end of the performance period (“closing reference price”) and the
dividends paid out per Volkswagen preferred share during the performance
period (“dividend equivalent”)
 Payment: in cash in the month following approval of the consolidated financial
statements for the last fiscal year of the respective performance period
 If the service contract ends before the end of the performance period due to a
bad leaver case (extraordinary termination for cause or a breach of a
contractual or postcontractual restraint on competition), all performance
shares will be forfeited
Other benefits
Benefits agreed with  Only on the basis of a separate contractual agreement with the new Board of (Compensation) payments are designed to
new Board of Management member attract qualified candidates
Management  Payments to compensate for declining variable remuneration or other financial
members for a disadvantages
defined period of  Benefits in connection with a relocation
time or for the entire
term of their service
contracts
1 For the Board of Management members already appointed prior to December 14, 2020, a three-year performance period continues to apply until their contracts are renewed. In
all other respects, the performance share plan corresponds mutatis mutandis to that described for fiscal year 2023.
2 Mr. Blume receives from Volkswagen AG 50% of the remuneration for the Chair of the Board of Management of Volkswagen AG and from Porsche AG 50% of the remuneration for
the Chair of the Executive Board of Porsche AG. The target amount for Mr. Blume thus corresponds to half of the target amount for a Chair of the Board of Management who
receives the full remuneration of a Chair of the Board of Management of Volkswagen AG.
64
Other remuneration provisions

Penalty and  The Supervisory Board can reduce or request repayment of the annual bonus Penalty and clawback rules are intended
clawback rules1 and LTI by up to 100% in the event of relevant misconduct during the to counteract individual misconduct and
assessment period negligence on the part of the organization
 A clawback is not permissible if more than three years have elapsed since the
bonus was paid
Maximum  Relevant components are the base salary paid for the respective fiscal year, The aim of the maximum remuneration is
remuneration fringe benefits granted, the service cost in connection with the occupational to ensure that the remuneration of Board
retirement provision, the annual bonus granted for the respective fiscal year of Management members is not
and paid out in the following year, the performance share plan paid out in the inappropriately high when measured
respective fiscal year and for which the performance period ended immediately against the peer group
before the respective fiscal year, any benefits granted to new Board of
Management members and any special payment granted by third parties (e.g.
other Volkswagen Group companies) for the relevant fiscal year
 For the Chair of the Board of Management €15,000,000 (gross) per fiscal year
and for Board of Management members €8,500,000 (gross) per fiscal year
 If the maximum remuneration is exceeded, the annual bonus will be reduced; if
a reduction is not sufficient, the Supervisory Board may, at its discretion, reduce
other remuneration components or request repayment of remuneration paid out
Cap on cash  In addition to maximum remuneration The cap on cash remuneration is intended
remuneration  Cash remuneration includes the base salary paid in the respective fiscal year, to prevent unacceptably high
the annual bonus granted for the respective fiscal year and paid out in the disbursements in the individual fiscal year
following year, the performance share plan paid in the respective fiscal year
and for which the performance period ended immediately before the respective
fiscal year
 For the Chair of the Board of Management €12,500,000 (gross) per fiscal year
and for Board of Management members €7,000,000 (gross) per fiscal year
1 For the Board of Management members already appointed prior to December 14, 2020, penalty and clawback rules only apply once their contracts have been renewed.
III. Remuneration of the Board of Management members appointed in fiscal year 2023
1. Board of Management members in fiscal year 2023
The members of the Volkswagen AG Board of Management in fiscal year 2023 were as follows:
> Oliver Blume, member of the Board of Management since April 13, 2018, Chair of the Board of Management
since September 1, 2022, also Chair of the Executive Board of Dr. Ing. h.c. F. Porsche AG
> Arno Antlitz, member of the Board of Management since April 1, 2021
> Ralf Brandstätter, member of the Board of Management since January 1, 2022, also CEO of Volkswagen (China)
Investment Company Limited
> Gernot Döllner, member of the Board of Management since September 1, 2023, also Chair of the Board of
Management of AUDI AG
> Manfred Döss, member of the Board of Management since February 1, 2022
> Markus Duesmann, member of the Board of Management from April 1, 2020, also Chair of the Board of
Management of AUDI AG; stepped down from the Board of Management of Volkswagen AG and from the Board
of Management of AUDI AG effective August 31, 2023
> Gunnar Kilian, member of the Board of Management since April 13, 2018
> Thomas Schäfer, member of the Board of Management since July 1, 2022
> Thomas Schmall-von Westerholt, member of the Board of Management since January 1, 2021
> Hauke Stars, member of the Board of Management since February 1, 2022
Members generally do not receive additional remuneration for discharging other mandates on management bodies,
supervisory boards or similar, especially in other companies of the Volkswagen Group, as part of their Board of
Management mandate. If such remuneration is nevertheless granted, it is counted toward the remuneration for
their work as a member of the Board of Management of Volkswagen AG.
A different arrangement has been reached with Mr. Blume with regard to the performance of his duties as
Chair of the Executive Board of Dr. Ing. h.c. F. Porsche AG (Porsche AG): since January 1, 2023, Volkswagen AG
65
has granted Mr. Blume 50% of the remuneration for the Chair of the Board of Management based on a newly
concluded service contract; an exception is made for fringe benefits – in this respect, Mr. Blume receives the full
amount of the fringe benefit allowance for the Chair of the Board of Management of Volkswagen AG. However,
Porsche AG reimburses Volkswagen AG half of the expenses for fringe benefits. Since January 1, 2023,
Porsche AG has granted Mr. Blume 50% of the remuneration for the Chair of the Executive Board of Porsche AG.
This remuneration is based on the remuneration system for the members of the Executive Board of Porsche AG.
Mr. Blume receives from Porsche AG a base salary, one-year variable remuneration (STI) and multi-year variable
remuneration (LTI); Mr. Blume does not receive fringe benefits from Porsche AG. In addition, Porsche AG grants
Mr. Blume an occupational retirement provision in the form of a defined contribution plan. In preparation for the
IPO completed on September 29, 2022, Porsche AG agreed on an IPO bonus for Mr. Blume. This IPO bonus is
structured as a share plan with a one-, two- and three-year term, in each case starting from the time of the IPO.
Remuneration granted to Mr. Blume by Porsche AG is counted towards the cap on cash remuneration and
Mr. Blume’s maximum remuneration at Volkswagen AG. In the overview in the tables of the remuneration granted
and owed to Mr. Blume in fiscal year 2023, the remuneration components granted to Mr. Blume by Porsche AG
are included and shown separately.
A different arrangement has also been reached with Mr. Brandstätter for his work at Volkswagen (China)
Investment Company Limited: Mr. Brandstätter receives a separate remuneration for his work as CEO of Volks-
wagen (China) Investment Company Limited. Mr. Brandstätter’s contractual remuneration under his contract of
employment with Volkswagen AG is reduced accordingly for the duration of his work at Volkswagen (China)
Investment Company Limited.
2. Remuneration granted and owed in fiscal year 2023

In accordance with section 162(1) sentence 1 of the AktG, the remuneration report must report on the remu-
neration granted and owed to each individual member of the Board of Management in the last fiscal year. These
terms are understood as follows:
The term “granted” (gewährt) refers to the actual receipt (Zufluss) of the remuneration component.
The term “owed” (geschuldet) refers to all legally existing liabilities for remuneration components that are due
but have not yet been fulfilled.
2.1. Overview in the tables

The following tables show the remuneration actually received by members of the Board of Management in fiscal
year 2023. The time of actual payment is not relevant. The remuneration reported as granted in fiscal year
2023 thus consists of the base salary paid out in fiscal year 2023, the fringe benefits, the annual bonus paid in
the month following the approval of the Company’s consolidated financial statements for fiscal year 2023 and
the LTI for the performance period 2020–2022 paid in fiscal year 2023. The remuneration components granted
to Mr. Blume by Porsche AG are presented in the same way.
The relative shares shown in the tables relate to the remuneration components granted and owed in the
respective fiscal year in accordance with section 162(1) sentence 1 of the AktG. They thus include all benefits
actually received in the respective fiscal year, regardless of the fiscal year for which the Board of Management
members received them. The relative shares indicated here are thus not comparable with the respective relative
shares of fixed and variable remuneration components as part of total remuneration in the description of the
remuneration system according to section 87a(1) sentence 2 no. 3 of the AktG. The shares indicated in the
remuneration system relate to the targets agreed for the relevant fiscal year, irrespective of the time at which the
respective remuneration component was paid out.
Pension expense is reported as service cost within the meaning of IAS 19. The service cost in accordance
with IAS 19 does not constitute remuneration granted or owed within the meaning of section 162(1) sentence 1
of the AktG as it is not actually received by the Board of Management member in the reporting year.
Maximum remuneration corresponds to maximum remuneration within the meaning of section 87a(1) sen-
tence 2 no. 1 of the AktG in accordance with the remuneration system adopted by the Supervisory Board and
approved by the Annual General Meeting. As in the past, in addition to maximum remuneration, a limit on cash
66
remuneration, which includes the base salary paid out for the relevant fiscal year, the annual bonus granted for
the relevant fiscal year and paid out in the subsequent year, the performance share plan paid out in the relevant
fiscal year and for which the performance period ended immediately before the respective fiscal year has been
agreed with the members of the Board of Management.
On December 14, 2020, the Supervisory Board adopted a remuneration system for the members of the Board
of Management based for the first time on the requirements of ARUG II. Board of Management service contracts
newly agreed or renewed since that time also contain the penalty and clawback rules provided for in this remu-
neration system. Accordingly, only Mr. Duesmann’s service contract, which was concluded before December 13,
2020, does not contain a penalty and clawback provision. Mr. Duesmann stepped down from the Board of
Management with effect from August 31, 2023. Volkswagen AG did not make use of the existing penalty and
clawback rules in fiscal year 2023.
OLIVER BLUME1
Chair,
Sport Luxury brand group,
Chair of the Executive Board of Porsche AG
2023
€ %

Base salary
Volkswagen AG 1,300,000.00 14.9
Porsche AG 800,000.00 9.2
Fringe benefits
Volkswagen AG 358,521.00 4.1
Porsche AG – –
Total 2,458,521.00 28.2
One-year variable remuneration/annual bonus
Volkswagen AG 2,324,700.00 26.6
Porsche AG 1,388,800.00 15.9
Multi-year variable remuneration/long-term incentive (LTI)2
LTI (performance share plan) 2020–2022 1,914,757.98 21.9
Other remuneration
Special benefits paid to new Board of Management members – –
Porsche AG IPO bonus 636,827.00 7.3
Total remuneration granted and owed 8,723,605.98 100.0
Pension expenses
Volkswagen AG 663,530.00 x
Porsche AG 324,342.00 x
Total remuneration including pension expenses 9,711,477.98 x
Maximum remuneration 15,000,000.00 x
Clawback in accordance with section 162(1) sentence 2 no. 4 of the AktG – x
1 Mr. Blume receives from Volkswagen AG 50% of the remuneration for the Chair of the Board of Management of Volkswagen AG and from Porsche AG
50% of the remuneration for the Chair of the Executive Board of Porsche AG. The table shows the remuneration components granted to Mr. Blume
separately according to whether they were granted by Volkswagen AG or by Porsche AG.
2 The LTI paid out in fiscal year 2023 was for work performed in fiscal year 2020. Mr. Blume did not receive any long-term variable remuneration from
Porsche AG in fiscal year 2020 that would have to be counted towards the remuneration he receives from Volkswagen AG. Instead, Mr. Blume received
100% of the 2020 LTI from Volkswagen AG.
67
ARNO ANTLITZ
Finance and Operations
2023
€ %

Base salary 1,500,000.00 40.8
Fringe benefits 185,752.00 5.0
Total 1,685,752.00 45.8
One-year variable remuneration/annual bonus 1,992,600.00 54.2
Multi-year variable remuneration/long-term incentive (LTI)
LTI (performance share plan) 2020–2022 – –
Other remuneration
Pension expenses 602,272.00 x

Clawback in accordance with section 162(1) sentence 2 no. 4 of the AktG - x
RALF BRANDSTÄTTER
China,
Chair of the Board of Management (CEO) of
Volkswagen (China) Investment Co. Ltd.
2023
€ %

Base salary
VCIC1 1,350,000.00 32.0
Fringe benefits
VCIC2 696,628.00 16.5
Total 2,222,396.00 52.7
One-year variable remuneration/annual bonus
VCIC 1,793,340.00 42.5
Other remuneration
Pension expenses 599,577.00 –

1 Mr. Brandstätter receives 90% of the remuneration of a regular Board of Management member of Volkswagen AG from Volkswagen (China) Investment
Company Limited (VCIC) for his work as CEO of VCIC. VCIC accounts for Mr. Brandstätter as if he received his remuneration from Volkswagen AG in
Germany. These amounts are disclosed here. The actual gross expense incurred by VCIC may differ on account of Chinese tax law.
2 The fringe benefits presented by VCIC include, in particular, the benefits paid by VCIC for Mr. Brandstätter’s assignment to China (such as housing,
flight expenses). Assignment-specific fringe benefits are not counted against the fringe benefit allowance provided by VCIC.
68
GERNOT DÖLLNER
Progressive brand group,

Chair of the Board of Management of AUDI AG
(since September 1, 2023)
2023
€ %

Base salary 500,000.00 39.8
Total 590,885.00 47.1
One-year variable remuneration/annual bonus 664,200.00 52.9
Other remuneration

MANFRED DÖSS1
Integrity and Legal Affairs
2023
€ %

Base salary 1,125,000.00 40.8
Total 1,262,139.00 45.8
Other remuneration

1 Mr. Döss receives remuneration in the amount of 75% of the remuneration of a regular member of the Board of Management of Volkswagen AG.
69
MARKUS DUESMANN
Progressive brand group,

Chair of the Board of Management of AUDI AG
(until August 31, 2023)
2023
€ %

Base salary 1,000,000.00 29.4
Total 1,120,538.00 32.9
LTI (performance share plan) 2020–2022 957,403.83 28.1
Other remuneration
Total remuneration granted and owed1 3,406,341.83 100.0

1 Mr. Duesmann received remuneration of €75,000 from FC Bayern München AG in fiscal year 2023 for his mandate on its Supervisory Board
appointment. This remuneration was counted in full toward the reported variable remuneration granted by Volkswagen AG for fiscal year 2023.
Mr. Duesmann also received remuneration of €40,000 for a mandate on the Board of Directors of Bentley Motors Ltd. This remuneration was counted in
full toward the reported base salary granted by Volkswagen AG.
GUNNAR KILIAN
Human Resources and Trucks brand group
2023
€ %

Base salary 1,500,000.00 26.8
Total 1,685,026.00 30.1
LTI (performance share plan) 2020–2022 1,914,757.98 34.2
Other remuneration

70
THOMAS SCHÄFER
Core brand group,

Chair of the Board of Management of the
Volkswagen Passenger Cars brand
2023
€ %

Base salary 1,500,000.00 40.8
Total 1,685,978.00 45.8
Other remuneration

THOMAS SCHMALL-VON WESTERHOLT
Technology,
Chair of the Board of Management of
Volkswagen Group Components,
2023
€ %

Base salary 1,500,000.00 40.8
Total 1,686,694.00 45.8
Other remuneration

71
HAUKE STARS
IT
2023
€ %

Base salary 1,500,000.00 40.8
Total 1,683,558.00 45.8
Other remuneration

ANNUAL BONUS
Target value × Target achievement = Payout
ESG
OR Environment (E) Social (S) Governance (G)

½ (incl. China, + ½ RoS
× ½ Decarbon- + ½ Sentiment rating/
× Compliance/
proportionate) ization index Diversity index Integrity (CI)
(0 – 175% target achievement) multiplier (0.7 – 1.3) multiplier (0.9 – 1.1)

(Cap: 200% of the target value)
2.2 Explanation
2.2.1 Performance criteria for the variable remuneration
a) Performance criteria for the annual bonus
aa) Financial subtargets
The following overviews show the threshold values, target values and maximum values set by the Supervisory
Board for fiscal year 2023 for the financial subtargets operating result, including Chinese joint ventures (propor-
tionate), and operating return on sales (RoS), along with the actual figures and target achievement levels in
percent in fiscal year 2023.
72
COMPONENT 1: OPERATING RESULT INCLUDING CHINESE JOINT VENTURES

(PROPORTIONATE)
€ billion 2023
Maximum value (175%) 32.0

100% target level 20.0
Threshold value (0%) 12.0
Actual 25.2
Target achievement (in %) 132
COMPONENT 2: OPERATING RETURN ON SALES
% 2023

Threshold value (50%) 4.5
Actual 7.0
bb) ESG factor

The following overview shows the minimum values, target values and maximum values set by the Supervisory
Board for fiscal year 2023 for the environmental (decarbonization index) and social (sentiment rating and
diversity index) subtargets along with the actual figures and target achievement levels in fiscal year 2023. The
decarbonization index measures the emissions of CO2 and CO2 equivalents by the passenger car- and light
commercial vehicle-producing brands over the entire life cycle and documents the progress in improving our
carbon footprint. The sentiment rating is an important parameter of the opinion survey – an employee poll with
which the Group regularly gathers information regarding employee satisfaction. The diversity index is used
worldwide to determine the development of the proportion of women in management and the internationali-
zation of top management. The indicator provides incentives for an exemplary leadership and corporate culture.
The governance factor is a means for the Supervisory Board to express its satisfaction with the expected and
actual behavior of the Board of Management with regard to the criteria of integrity and compliance. As a rule, the
governance factor should be 1.0 and may only be reduced to 0.9 or raised to 1.1 in exceptional circumstances
based on a professional judgment of the Supervisory Board. For fiscal year 2023, the Supervisory Board has set
the governance factor at the standard value of 1.0 for all Board of Management members; it takes into account
and assesses the collective performance of the Board of Management as a whole and the performance of each
Management Board member individually.
ENVIRONMENTAL SOCIAL
Decarbonization index Sentiment rating Diversity index

in tCO2e/vehicle 2023 Points 2023 2023
Maximum value 42.1 Maximum value 82.5 142.0

100% target level 42.8 100% target level 78.5 137.0
Minimum value 45.0 Minimum value 74.5 132.0
Actual 43.9 Actual 82.5 154.0
Target achievement (factor) 0.9 Target achievement (factor) 1.3 1.3
73
LONG-TERM INCENTIVE (LTI): (PHANTOM) PERFORMANCE SHARE PLAN (PSP)
Granting of the LTI Performance period Payment of the LTI
EPS performance measurement

Target value in € Final number of (phantom)
Target achievement in percent
performance shares
÷ 175
Share price (beginning of

100
×
50
the performance period) Share price plus
dividends (end of
= 0 5 10 15 20 25 30 35 40
EPS per preferred share in € performance period)
Preliminary number
of (phantom) Measuring EPS performance =
performance shares over four years Payment in €
The illustration relates to the LTI with the performance period 2023–2025 and 2023–2026. The LTI with the per-
formance period 2020–2022 that was paid out in fiscal year 2023 and reported in this remuneration report as
remuneration granted and owed had a maximum value for the EPS performance measurement of 150%.
b) Performance criteria for the long-term incentive (LTI)

The four-year performance share plan has applied since January 1, 2021 to all Board of Management members
with service contracts newly concluded or renewed after the Supervisory Board resolution of December 14, 2020.
For the Board of Management members already appointed at the time of the Supervisory Board resolution of
December 14, 2020, a three-year performance period continues to apply until their contracts are renewed. In
fiscal year 2023, this concerned only Mr. Duesmann, who stepped down in the course of the year.
aa) Information on the performance shares
PERFORMANCE PERFORMANCE PERFORMANCE PERFORMANCE PERFORMANCE PERFORMANCE PERFORMANCE

PERIOD PERIOD PERIOD PERIOD PERIOD PERIOD PERIOD
2020–2022 2021–2023 2021–2024 2022–2024 2022–2025 2023–2025 2023–2026
Number of Number of Number of Number of Number of Number of Number of
performance shares performance shares performance shares performance shares performance shares performance shares performance shares
allocated at the allocated at the allocated at the allocated at the allocated at the allocated at the allocated at the
€ grant date grant date grant date grant date grant date grant date grant date
Oliver Blume 10,144 12,069 – 6,828 7,264 – 22,393

Arno Antlitz – – 9,052 – 10,242 – 18,977
Ralf
Brandstätter – – – – 10,242 – 18,977
Gernot
Döllner
(since
September 1,
2023) – – – – – – 6,326
Manfred
Döss – – – – 7,041 – 14,233
Markus
Duesmann
(until
August 31,
2023) 7,608 12,069 – 10,242 – 18,977 –
Gunnar Kilian 10,144 11,342 727 – 10,242 – 18,977
Thomas
Schäfer – – – – 5,121 – 18,977
Thomas
Schmall-von
Westerholt – – 12,069 – 10,242 – 18,977
Hauke Stars – – – – 9,388 – 18,977
Total 27,896 35,480 21,848 17,070 69,782 18,977 156,814
74
bb) EPS performance

The following overview shows the minimum value, target value and maximum value set by the Supervisory Board
at the beginning of the performance period for the performance share plan 2020–2022, which was paid out in
fiscal year 2023, along with the actual figure and target achievement level in percent.
PERFORMANCE PERIOD 2020–2022
€ 2020 2021 2022
Maximum value (150%) 30.0 30.0 30.0

100% target level 20.0 20.0 20.0
Minimum value (50%) 10.0 10.0 10.0
Actual 16.66 29.65 29.69
Target achievement (in %) 83 148 148
The following overviews show the minimum values, target values and maximum values set by the Supervisory
Board at the beginning of the performance periods 2021–2023 or 2021–2024, 2022–2024 or 2022–2025 and
2023–2025 or 2023–2026 along with the actual figures and target achievement levels attained in percent so far
for the individual years of the assessment period up to and including 2023. The performance share plans for the
performance periods 2021–2023 or 2021–2024, 2022–2024 or 2022–2025 and 2023–2025 or 2023–2026 were
not due in fiscal year 2023 and have not yet been paid out; they therefore do not constitute remuneration granted
or owed in fiscal year 2023.
€ 2021 2022 2023
Maximum value (150%) 30.0 30.0 30.0

100% target level 20.0 20.0 20.0
Minimum value (50%) 10.0 10.0 10.0
Actual 29.65 29.69 31.98
€ 2021 2022 2023
Maximum value (150%) 30.0 30.0 30.0

100% target level 20.0 20.0 20.0
Minimum value (50%) 10.0 10.0 10.0
Actual 29.65 29.69 31.98
75
€ 2022 2023
Maximum value (150%) 30.0 30.0

100% target level 20.0 20.0
Minimum value (50%) 10.0 10.0
Actual 29.69 31.98
Target achievement (in %) 148 150
€ 2022 2023
Maximum value (150%) 30.0 30.0

100% target level 20.0 20.0
Minimum value (50%) 10.0 10.0
Actual 29.69 31.98
Target achievement (in %) 148 150
€ 2023

Minimum value (50%) 18.0
Actual 31.98
€ 2023

Minimum value (50%) 18.0
Actual 31.98
76
cc) Reference prices/dividend equivalent for the performance periods

The relevant initial reference price, closing reference price and dividend equivalent for the performance period
2020–2022 can be found in the following overview.
PERFORMANCE
PERIOD
2020–2022
Initial reference price 177.44

Closing reference price 131.74
Dividend equivalent
2020 4.86
2021 4.86
2022 7.56
The following overview shows the initial reference price, closing reference price and dividend equivalent for
the performance share plans not yet due and not yet paid out for the performance periods 2021–2023 or
2021–2024, 2022–2024 or 2022–2025 and 2023–2025 or 2023–2026.
PERFORMANCE PERIOD
2021–2023 2021–2024 2022–2024 2022–2025 2023–2025 2023–2026
Initial reference price 149.14 149.14 175.75 175.75 131.74 131.74

Closing reference price 110.83 –1 –1 –1 –1 –1
Dividend equivalent
2021 4.86 4.86 – – – –
2022 7.56 7.56 7.56 7.56 – –
2023 27.82 27.82 27.82 27.82 27.82 27.82
1 Determined at the end of the performance period.
2.2.2 Conformity with the remuneration system

The remuneration granted and owed to the Board of Management members in fiscal year 2023 meets the
requirements of the remuneration system for the members of the Board of Management. There was no deviation
from the applicable remuneration system in fiscal year 2023. There was no need to reduce the payments related
to the annual bonus and performance share plan based on the maximum values of the individual remuneration
components being exceeded, as they did not exceed 200% of the target amount for the annual bonus or 250% of
the target amount for the performance share plan. The total remuneration granted and owed to the Board of
Management members in fiscal year 2023 did not exceed the maximum remuneration envisaged by the remu-
neration system. Since January 1, 2023, Volkswagen AG has granted Mr. Blume 50% of the remuneration for the
Chair of the Board of Management of Volkswagen AG on the basis of the newly concluded service contract. In
derogation of this, Volkswagen AG grants Mr. Blume the full amount of the fringe benefit allowance for the Chair
of the Board of Management of Volkswagen AG. Mr. Blume is also Chair of the Executive Board of Porsche AG.
Since January 1, 2023, Porsche AG has granted Mr. Blume 50% of the remuneration for a Chair of the Executive
Board of Porsche AG. In preparation for the IPO completed on September 29, 2022, Porsche AG agreed on an IPO
bonus for Mr. Blume. This IPO bonus is structured as a share plan with a one-, two- and three-year term, in each
case starting from the time of the IPO. Mr. Blume was allocated a total of 19,290 phantom preferred shares in
Porsche AG in fiscal year 2022, divided into three tranches of 6,430 phantom preferred shares each. Any remu-
neration granted and owed from this IPO bonus will be reported in the remuneration report for the fiscal year
77
in which the respective tranche is paid out to Mr. Blume. The first tranche was paid out in fiscal year 2023. As a
precaution, Volkswagen AG approved the remuneration from Porsche AG as a third-party remuneration arrange-
ment. The remuneration granted to Mr. Blume by Porsche AG is counted towards the maximum remuneration and
the cap on cash remuneration of Volkswagen AG.
2.2.3 Benefits and pension commitments in connection with termination of service

a) Benefits and pension commitments to Board of Management members for early termination of service
The remuneration system for the members of the Board of Management and the service contracts of the Board of
Management members provide for severance payments in the event that an appointment as member of the
Board of Management is revoked. In such cases – except where there is good cause entitling the Company to
terminate the service contract prematurely or where the appointment is revoked due to a gross breach of duty –
the Board of Management member receives a gross severance payment in the amount of the total remuneration
of the past financial year up to the end of the regular term of the appointment, for a maximum of two years,
calculated as of the date of the termination of the appointment as member of the Board of Management. Any
temporary benefits for new Board of Management members are excluded from the calculation. Should a Board of
Management member leave during the course of the first fiscal year of the appointment, the calculation may by
way of exception be based on the expected total remuneration for the current fiscal year. The severance payment
will be paid as a one-off payment or in a maximum of 24 monthly installments from the time of the termination of
the appointment as a member of the Company’s Board of Management. Contractual remuneration paid by the
Company for the period from the termination of the appointment until the end of the service contract will be
offset against the severance payment. Should Board of Management members take up other work after the
termination of their appointment, the amount of the severance payment will be reduced by the amount of the
income earned from that work. Should a post-contractual non-compete covenant be agreed, the severance
payment will be offset against the compensation received for observing the post-contractual non-compete
covenant.
The members of the Board of Management are also entitled to a pension and to a surviving dependents’
pension as well as the use of company cars for the period in which they receive their pension in the event of early
termination of their service on the Board of Management.
Also in the case of early termination, the variable remuneration components will generally be paid at the
contractually agreed maturity dates in accordance with the terms of the contract. There will be no early calcu-
lation and payout – except where the employment relationship ends due to permanent disability or death. The
remuneration system for members of the Board of Management does not include a commitment to grant shares
in Volkswagen AG.
PENSIONS OF THE MEMBERS OF THE BOARD OF MANAGEMENT IN 2023 IN ACCORDANCE

WITH IAS 19
Pension expenses in
€ Present value fiscal year 2023
Oliver Blume 3,975,429.00 663,530.00

Arno Antlitz 1,855,691.00 602,272.00
Ralf Brandstätter 1,371,141.00 599,577.00
Gernot Döllner (since September 1, 2023) 232,883.00 232,883.00
Manfred Döss 1,182,146.00 445,500.00
Markus Duesmann (until August 31, 2023) – 408,474.67
Gunnar Kilian 3,873,261.00 601,860.00
Thomas Schäfer 1,055,174.00 605,432.00
Thomas Schmall-von Westerholt 2,060,312.00 600,719.00
Hauke Stars 1,226,121.00 622,567.00
Total 16,832,158.00 5,382,814.67
78
In line with the recommendation under G.14 of the 2022 Code, the service contracts do not provide for change of
control clauses. Members of the Board of Management are therefore not entitled to payments agreed in the
event of a change of control or to other special benefits (for example a commitment to grant shares) from Volks-
wagen AG.
b) Pension commitments to Board of Management members for regular termination of service

In the event of regular termination of their service on the Board of Management, the members of the Board of
Management are entitled to a pension, including a surviving dependents’ pension, as well as the use of company
cars for the period in which they receive their pension. The agreed benefits are paid or made available when the
Board of Management member reaches the age of 65, or in Mr. Blume’s and Mr. Kilian’s case, when they reach the
age of 63.
The Board of Management members received a defined contribution plan, which is based in principle on a
works agreement that also applies to the employees of Volkswagen AG covered by collective agreements and
includes retirement, invalidity and surviving dependents’ benefits. A pension contribution in the amount of 40%
of the base salary is paid to Volkswagen Pension Trust e.V. at the end of the calendar year for each year they are
appointed to the Board of Management. Since fiscal year 2023, the pension contribution for Mr. Blume has been
50% of his base salary. No other changes were made to the defined contribution plans in fiscal year 2023. The
annual pension contributions result in modules of what is, in principle, a lifelong pension in line with the arrange-
ments that also apply to employees covered by collective agreements.
The individual pension modules vest immediately upon payment to Volkswagen Pension Trust e.V. Instead of
a lifelong pension, benefits can optionally be paid out as a lump sum or in installments when the beneficiary
reaches retirement age.
The overview on the previous page shows the pensions for the individual members of the Board of Manage-
ment in fiscal year 2023, indicating the present value and the pension expense for the Company during the last
fiscal year.
c) Benefits and pension commitments to Board of Management members who left in fiscal year 2023
In fiscal year 2023, Mr. Duesmann stepped down from the Board of Management. Mr. Duesmann was originally
appointed as a member of the Volkswagen AG Board of Management until the close of March 31, 2025 and had
additionally been appointed as a member of the Board of Management of AUDI AG and as its Chair. Volks-
wagen AG, AUDI AG and Mr. Duesmann have mutually terminated the appointment as a member of the Board of
Management of Volkswagen AG, the appointment as a member of the Board of Management of AUDI AG and the
appointment as Chair of the Board of Management of AUDI AG prematurely with effect from the close of
August 31, 2023. Due to this termination, Volkswagen AG and AUDI AG concluded a termination agreement with
Mr. Duesmann. The subject of this termination agreement included the continuation of the service contract
between Mr. Duesmann and Volkswagen AG until its regular termination date, i.e. until March 31, 2025. The
service contract between Mr. Duesmann and AUDI AG was terminated with effect from August 31, 2023. Volks-
wagen AG agreed to continue paying Mr. Duesmann his remuneration until the termination date of his service
contract. Variable remuneration components will be paid at the contractually agreed time; there will be no early
calculation and payout. The annual bonus will be based in each case on a Governance factor of 1.0. Mr. Dues-
mann does not receive a severance payment from Volkswagen AG in the form of a one-off payment. The maxi-
mum remuneration and the cap on cash remuneration continue to apply to the remuneration to be paid. From
April 1, 2025, Mr. Duesmann will be subject to a one-year post-contractual non-compete covenant, for which
Volkswagen AG will pay him gross monthly compensation of €187,500.
2.2.4 No clawback claims in fiscal year 2023

Volkswagen AG did not seek to claw back any variable remuneration components from individual Board of
Management members in fiscal year 2023. The prerequisites for a clawback claim did not apply.
79
IV. Remuneration of former Board of Management members

In accordance with section 162(1) sentence 1 of the AktG, the remuneration granted and owed to former
members of the Board of Management must also be reported.
1. Remuneration granted and owed in fiscal year 2023 (individualized)

Under section 162(5) sentence 2 of the AktG, the obligation to report individually on the remuneration granted
and owed to former Board of Management members also extends to remuneration granted and owed in the ten
years after their most recent term of office on the Board of Management or Supervisory Board at Volkswagen AG.
The following tables show the remuneration granted and owed in fiscal year 2023 to the individual former
members of the Board of Management who left after fiscal year 2013. As with the current Board of Management
members, the annual bonus paid at the beginning of 2024 to former Board of Management members for the
2023 fiscal year is counted as remuneration granted in fiscal year 2023.
2. Total remuneration granted to former Board of Management members

Section 162(5) sentence 2 of the AktG does not require the Company to report individually on the remuneration
granted and owed in 2023 to former members of the Board of Management whose most recent term of office on
the Board of Management or Supervisory Board at Volkswagen AG came to an end before the beginning of 2014
and who were then granted and owed remuneration for more than ten years after leaving Volkswagen AG. A total
of €8.1 million was granted and owed to such former Board of Management members and their surviving
dependents in fiscal year 2023. Obligations for pensions for this group of persons measured in accordance with
IAS 19 amounted to €91.2 million.
KARLHEINZ BLESSING
2023
€ %
Pension payments 189,505.92 9.0

Base salary – –
One-year variable remuneration/annual bonus – –
Multi-year variable remuneration/long-term incentive (LTI, performance share plan 2020–2022) 1,914,757.98 90.7
Severance payments – –
80
HERBERT DIESS
2023
€ %
Pension payments – –
Base salary 2,600,000.00 22.6
Pension expenses 1,309,315.00 x
MARKUS DUESMANN1
2023
€ %
Base salary 500,000.00 29.4
One-year variable remuneration/annual bonus 664,200.00 39.0
Multi-year variable remuneration/long-term incentive (LTI, performance share plan 2020–2022) 478,701.91 28.1
1 Mr. Duesmann was an active Board of Management member until the close of August 31, 2023. The table shows his remuneration after his departure from the Board of
Management.
FRANCISCO JAVIER GARCIA SANZ
2023
€ %

Base salary – –
Multi-year variable remuneration/long-term incentive (LTI, performance share plan 2020–2022) – –
Total remuneration granted and owed 788,508.12 100.0
81
JOCHEM HEIZMANN
2023
€ %

Base salary – –
CHRISTINE HOHMANN-DENNHARDT
2023
€ %

Base salary – –
MICHAEL MACHT
2023
€ %

Base salary – –
82
MATTHIAS MÜLLER
2023
€ %
Pension payments 1,266,360.48 64.5

Base salary – –
Multi-year variable remuneration/long-term incentive (LTI, performance share plan 2020–2022) 679,233.16 34.6
HORST NEUMANN
2023
€ %

Base salary – –
LEIF ÖSTLING
2023
€ %

Base salary – –
Fringe benefits – –
HANS DIETER PÖTSCH
2023
€ %

Base salary – –
83
ANDREAS RENSCHLER
2023
€ %

Base salary – –
ABRAHAM SCHOT
2023
€ %
Base salary – –
RUPERT STADLER
2023
€ %
Base salary – –
HILTRUD DOROTHEA WERNER
2023
€ %
Base salary – –
84
MARTIN WINTERKORN
2023
€ %
Pension payments 1,321,356.96 97.8

Base salary – –
FRANK WITTER
2023
€ %

Base salary – –
85
V. Comparative presentation
The following table shows a comparison of the year-on-year percentage change in the remuneration of current
and former Board of Management members with the earnings performance of Volkswagen AG and with the
average remuneration of employees on a full-time-equivalent basis. For members of the Board of Management,
the remuneration granted and owed in the reporting year is placed in relation to the equivalent figure for the
previous year.
Earnings performance is shown on the basis of Volkswagen AG’s net income or loss for the year. However, the
remuneration of the Board of Management members is based on Group KPIs. In order to demonstrate more trans-
parently how the remuneration of the Board of Management members has changed compared with earnings
performance, the earnings after tax, operating result and operating return on sales of the Volkswagen Group, as
reported in the consolidated financial statements, are also used in determining earnings performance. This
means that Group KPIs are not only applied in calculating the remuneration of the Board of Management mem-
bers but also in determining earnings performance. The Group KPIs used in determining earnings performance
show the overall effect of the business activities for which the Board of Management is responsible.
The comparison with the growth in average employee remuneration is based on the personnel expenses of
Volkswagen AG reported in the notes to the annual financial statements of Volkswagen AG, adjusted for the
remuneration of the members of the Board of Management. These adjusted personnel expenses are divided by
the number of full-time-equivalent employees of Volkswagen AG as of December 31, 2023, excluding the mem-
bers of the Board of Management.
VI. Peer group

The Supervisory Board regularly reviews and, if necessary, adjusts the level of the remuneration, the total
remuneration cap and the individual targets. Among other things, the Supervisory Board performs a vertical
comparison with the remuneration and employment terms of the Company’s employees and a horizontal
comparison with the remuneration and employment terms of other companies’ management board members.
The Supervisory Board conducts a comparison with what it considers to be a suitable peer group to assess
whether the specific total remuneration paid to the members of the Board of Management is customary when
measured against that paid in other companies. This peer group is regularly reviewed – most recently at the end
of 2023 – and adjusted if necessary. The peer group currently comprises the following companies: BMW, Mer-
cedes-Benz Group, Ford, General Motors, Stellantis, Nissan Motor Corporation, Toyota, BYD, Tesla (excluding CEO),
hp, IBM, Uber, SAP, Samsung, General Electric, Siemens, Hitachi and Boeing. The companies in the peer group
were chosen to reflect the Volkswagen Group’s strategic business fields. The peer group used up to and
including 2020 was revised and last adjusted following the adoption of the “TOGETHER 2025” strategy. To take
proper account of the evolution of the Group’s business model, in the view of the Supervisory Board, technology
and services companies, especially in the battery/electronics, IT/software and mobility services segments, have
also been included in the peer group along with the global automotive manufacturers. In addition, the peer group
includes selected global industrial corporations that, in the view of the Supervisory Board, appear comparable
with the Volkswagen Group in terms of their development focus, vertical integration, global orientation and level
of complexity. In the view of the Supervisory Board, the composition of this peer group is representative of the
Volkswagen Group’s specific competitive environment in the sales market and in the recruitment market for top
executives.
86
Annual change in % 2023 compared with 20221 2022 compared with 20211 2021 compared with 20201
Board of Management remuneration2

Oliver Blume +36.1 +49.1 +74.8
Arno Antlitz –3.5 +28.8 –
Ralf Brandstätter +3.8 – –
Gernot Döllner (since September 1, 2023) – – –
Manfred Döss +5.3 – –
Gunnar Kilian –1.6 +6.6 +128.3
Thomas Schäfer +92.9 – –
Thomas Schmall-von Westerholt –3.5 –3.4 –
Hauke Stars +5.2 – –
Karlheinz Blessing –30.2 +346.3 –83.0
Herbert Diess +12.5 +19.0 +40.1
Markus Duesmann (until August 31, 2023)3 +33.4 –3.5 –56.6
Francisco Javier Garcia Sanz –59.2 +56.5 –43.8
Jochem Heizmann –5.7 –31.4 –50.7
Christine Hohmann-Dennhardt +2.7 +2.0 +2.7
Michael Macht +1.6 –1.4 +0.6
Matthias Müller –72.6 +408.4 –71.4
Horst Neumann +3.0 +0.3 +0.1
Leif Östling +3.1 +1.0 +1.0
Hans Dieter Pötsch +3.3 +2.5 –1.5
Andreas Renschler –74.3 –0.5 –0.2
Abraham Schot –32.4 – –
Rupert Stadler +2,853.9 –99.8 –73.7
Hiltrud Dorothea Werner –37.6 –46.0 +6.6
Martin Winterkorn +9.2 +2.3 +0.2
Frank Witter –27.2 +22.2 –34.5
Earnings performance
Net income or loss for the year of Volkswagen AG –50.0 +208.8 –36.2
Earnings after tax of the Volkswagen Group +13.1 +2.6 +74.8
Operating result of the Volkswagen Group +2.1 +14.8 +99.2
Operating return on sales of the Volkswagen Group –8.9 +2.6 +79.1
Employees
Volkswagen AG employees –14.6 +26.9 +9.2
1 Under the transitional provision of section 26j(2) sentence 2 of the Einführungsgesetz zum Aktiengesetz (EGAktG – Introductory Act to the German Stock Corporation Act), the
comparative presentation is to be based on the average remuneration in the period since fiscal year 2020 only, rather than the average remuneration for the last five fiscal years;
this provision applies until the end of fiscal year 2025.
2 Remuneration “granted and owed” within the meaning of section 162(1) sentence 1 of the AktG.
3 Remuneration “granted and owed” for the full fiscal year 2023 as an active Board of Management member and after his departure from the Board of Management.
87
B. REMUNERATION OF THE MEMBERS OF THE SUPERVISORY BOARD

I. Principles of Supervisory Board remuneration
Following its regular review of Supervisory Board remuneration, the Supervisory Board proposed an adjustment
of the remuneration for the members of the Supervisory Board to the 2023 Annual General Meeting. The
proposed adjustment of the Supervisory Board remuneration system was approved by the Annual General
Meeting on May 10, 2023 with 99.99% of the votes cast. The remuneration of the members of the Supervisory
Board is governed by Article 17 of the Articles of Association of Volkswagen Aktiengesellschaft.
The remuneration of the members of the Supervisory Board of Volkswagen AG and remuneration for super-
visory board work at subsidiaries is comprised entirely of non-performance-related remuneration components.
II. Overview of remuneration

The members of the Supervisory Board of Volkswagen AG receive fixed remuneration of €170,000 per fiscal year.
The Chair of the Supervisory Board receives fixed remuneration of €510,000; the Deputy Chair receives fixed
remuneration of €340,000.
For their work in the Supervisory Board committees, the members of the Supervisory Board also receive
additional fixed remuneration of €75,000 per committee and fiscal year provided the committee met at least
once that year for the performance of its duties. Membership of the Nomination and Mediation Committees
established in accordance with section 27(3) of the Mitbestimmungsgesetz (MitbestG – German Codetermina-
tion Act) are not taken into account. Committee chairs receive double this amount, while the deputy chairs
receive one-and-a-half times the committee remuneration listed previously. Remuneration is paid for work on a
maximum of two committees, whereby the two most highly remunerated functions are taken into account if this
maximum is exceeded. Supervisory Board members who belonged to the Supervisory Board or one of its
committees for only part of the fiscal year receive remuneration on a pro rata temporis basis. Any value-added
tax incurred on the remuneration is reimbursed by the Company.
Supervisory Board members receive an attendance fee of €1,000 for attending a meeting of the Supervisory
Board or one of its committees; if several meetings take place on the same day, the attendance fee is paid only
once.
The remuneration and attendance fees are each payable after the end of the fiscal year.
The remuneration enables suitable, qualified candidates to be recruited to the Supervisory Board. As such,
the remuneration of the members of the Supervisory Board contributes to the ability of the Supervisory Board as
a whole to properly and competently perform its duties of monitoring and advising the Board of Management.
Restricting the payment to fixed remuneration is also appropriate to the duties of the Supervisory Board. The
restriction provides the Supervisory Board members with an incentive in their monitoring and advisory duties to
properly scrutinize the activities of the Board of Management without being guided primarily by the performance
of key operating ratios.
Former members of the Supervisory Board of Volkswagen AG do not receive any remuneration for the period
following the termination of office.
88
III. Other remuneration

Volkswagen AG reimburses Supervisory Board members for the expenses they incur in the course of their work.
In accordance with Article 17(7) sentence 2 of the Articles of Association of Volkswagen AG, the members of the
Supervisory Board were also covered in the reporting year by the directors and officers (D&O) insurance taken
out by the Company in their interest. The Company paid the premiums for the D&O insurance. There was a
deductible equal to the gross annual fixed remuneration amount for Supervisory Board members. There is no
voluntary commitment by members of the Supervisory Board to buy and hold shares of Volkswagen AG.
IV. Remuneration to Supervisory Board members in fiscal year 2023

1. Supervisory Board members in fiscal year 2023
The members of the Volkswagen AG Supervisory Board in office during the 2023 fiscal year are listed in the table
below.
2. Remuneration granted and owed

The following table shows the remuneration individually granted and owed to each of the Supervisory Board
members in fiscal year 2023. This is based on the same understanding of the term “granted and owed” as set out
in section “2. Remuneration granted and owed in fiscal year 2023” of this remuneration report. The remuneration
reported in the table therefore reflects the amounts actually received in fiscal year 2023.
89
REMUNERATION
FOR SERVING
ON THE
MEETING BOARDS OF
FIXED WORK IN ATTENDANCE OTHER GROUP
REMUNERATION COMMITTEES FEES TOTAL COMPANIES1
€ (%) 2023 2023 2023 2023 2023
Hans Dieter Pötsch 510,000.00 150,000.00 16,000.00 676,000.00 586,000.00

(75.4) (22.2) (2.4)
Jörg Hofmann1 340,000.00 112,500.00 15,000.00 467,500.00 –
(72.7) (24.1) (3.2)
Hessa Sultan Al Jaber 170,000.00 – 7,000.00 177,000.00 –
(96.0) (4.0)
Mansoor Ebrahim Al-Mahmoud 170,000.00 150,000.00 9,000.00 329,000.00 –
(51.7) (45.6) (2.7)
Harald Buck1 170,000.00 – 8,000.00 178,000.00 239,000.00
(95.5) (4.5)
Matías Carnero Sojo3 – – – – –
Daniela Cavallo1 170,000.00 187,500.00 17,000.00 374,500.00 89,658.00

(45.4) (50.1) (4.5)
Julia Willie Hamburg2 170,000.00 – 6,000.00 176,000.00 –
(96.6) (3.4)
Marianne Heiß 170,000.00 75,000.00 11,000.00 256,000.00 75,000.00
(66.4) (29.3) (4.3)
Arno Homburg1 170,000.00 – 7,000.00 177,000.00 –
(96.0) (4.0)
Günther Horvath (since February 28, 2023) 142,520.55 – 7,000.00 149,520.55 –
(95.3) (4.7)
Simone Mahler (until May 31, 2023)1 70,328.77 – 3,000.00 73,328.77 –
(95.9) (4.1)
Peter Mosch (until December 31, 2023)1 170,000.00 75,000.00 16,000.00 261,000.00 186,250.00
(65.1) (28.7) (6.1)
Daniela Nowak1 170,000.00 – 8,000.00 178,000.00 –
(95.5) (4.5)
Hans Michel Piëch 170,000.00 75,000.00 14,000.00 259,000.00 241,500.00
(65.6) (29.0) (5.4)
Ferdinand Oliver Porsche 170,000.00 75,000.00 11,000.00 256,000.00 291,500.00
(66.4) (29.3) (4.3)
Wolfgang Porsche 170,000.00 75,000.00 13,000.00 258,000.00 471,500.00
(65.9) (29.1) (5.0)
Jens Rothe (until March 3, 2023)1 28,876.71 25,479.45 4,000.00 58,356.16 –
(49.5) (43.7) (6.9)
Gerardo Scarpino (since April 21, 2023)1 118,301.37 99,863.01 12,000.00 230,164.38 2,500.00
(51.4) (43.4) (5.2)
Karina Schnur (since July 11, 2023)1 80,575.34 – 3,000.00 83,575.34 180,242.00
(96.4) (3.6)
Conny Schönhardt1 170,000.00 75,000.00 11,000.00 256,000.00 –
(66.4) (29.3) (4.3)
Stephan Weil2 170,000.00 75,000.00 14,000.00 259,000.00 –
(65.6) (29.0) (5.4)
Total 3,670,602.74 1,250,342.46 212,000.00 5,132,945.20 2,363,150.00
1 These employee representatives have stated that they will transfer their Supervisory Board remuneration to the Hans Böckler Foundation in accordance with the guidelines
issued by the Deutscher Gewerkschaftsbund (DGB –German Confederation of Trade Unions).
2 Under section 5(3) of the Niedersächsisches Ministergesetz (German Act Governing Ministers of the State of Lower Saxony), these members of the Supervisory Board are
obliged to transfer their Supervisory Board remuneration to the State of Lower Saxony as soon as and in so far as it exceeds €6,200 per annum. Remuneration is defined for this
purpose as Supervisory Board remuneration and attendance fees exceeding the amount of €200.
3 Mr. Carnero Sojo waived his remuneration for fiscal year 2023 in its entirety.
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V. Comparative presentation
The following table compares the year-on-year percentage change in the remuneration of the Supervisory Board
members with the earnings performance of Volkswagen AG and with the average remuneration of employees on
a full-time-equivalent basis.
Earnings performance is shown on the basis of Volkswagen AG’s net income or loss for the year. The Volks-
wagen Group’s earnings after tax are also used as a Group KPI.
The comparison with the growth in average employee remuneration is based on the personnel expenses of
Volkswagen AG reported in the notes to the annual financial statements of Volkswagen AG, adjusted for the
remuneration of the members of the Board of Management. These adjusted personnel expenses are divided by
the number of full-time-equivalent employees of Volkswagen AG as of December 31, 2023, excluding the mem-
bers of the Board of Management.
Annual change in % 2023 compared with 20221 2022 compared with 20211 2021 compared with 20201
Supervisory Board remuneration2

Hans Dieter Pötsch +35.3 +2.0 +1.5
Jörg Hofmann +49.8 +7.6 –3.0
Hessa Sultan Al Jaber +59.5 +4.7 –2.8
Mansoor Ebrahim Al-Mahmoud +189.2 – –
Harald Buck +105.4 – –
Matías Carnero Sojo – – –
Daniela Cavallo +23.9 +67.9 –
Julia Willie Hamburg +965.3 – –
Marianne Heiß +35.7 –0.7 +2.6
Arno Homburg +136.5 – –
Günther Horvath (since February 28, 2023) – – –
Simone Mahler (until May 31, 2023) –2.0 – –
Peter Mosch (until December 31, 2023) +11.7 +6.4 +2.1
Daniela Nowak +137.9 – –
Hans Michel Piëch +33.1 +5.4 +13.5
Ferdinand Oliver Porsche +37.6 –6.8 +3.1
Wolfgang Porsche +55.0 –2.3 +8.9
Jens Rothe (until March 3, 2023) –67.7 +754.5 –
Gerardo Scarpino (since April 21, 2023) – – –
Karina Schnur (since July 11, 2023) – – –
Conny Schönhardt +51.5 +4.3 –3.0
Stephan Weil +40.0 +13.5 –4.1
Earnings performance
Net income or loss for the year of Volkswagen AG –50.0 +208.8 –36.2
Earnings after tax of the Volkswagen Group +13.1 +2.6 +74.8
Employees
Volkswagen AG employees –14.6 +26.9 +9.2
1 Under the transitional provision of section 26j(2) sentence 2 of the Einführungsgesetz zum Aktiengesetz (EGAktG – Introductory Act to the German Stock Corporation Act), the
comparative presentation is to be based on the average remuneration in the period since fiscal year 2020 only, rather than the average remuneration for the last five fiscal years;
this provision applies until the end of fiscal year 2025.
2 Remuneration “granted and owed” within the meaning of section 162(1) sentence 1 of the AktG.
91
G roup Management Repor t
(Combined Management Report of the Volkswagen Group and Volkswagen AG)
93 Goals and Strategies

99 Internal Management System and Key Performance Indicators
102 Structure and Business Activities
106 Disclosures Required under Takeover Law
109 Business Development
125 Shares and Bonds
133 Results of Operations, Financial Position and Net Assets
152 Volkswagen AG (condensed, in accordance with the German Commercial Code)
157 Sustainable Value Enhancement
196 EU Taxonomy
213 Report on Expected Developments
222 Report on Risks and Opportunities
263 Outlook for 2024
Group Management Report Goals and Strategies
Goals and Strategies

With the Group strategy “NEW AUTO – Mobility for generations to come”, we are preparing
ourselves for the global changes in mobility and thus playing a substantial role in driving
Volkswagen’s transformation into a provider of sustainable mobility.
In the context of the fast-changing environment and the challenges resulting from it, the Group Board of Man-
agement adopted the Group strategy “NEW AUTO – Mobility for generations to come” in May 2021 with the
approval of the Supervisory Board. The strategy’s focus is the world of mobility in 2030.
As technology advances, the automotive industry is rapidly forging ahead with its transformation toward
e-mobility and digitalization. We therefore expect the market for electric vehicles to continue to grow in the next
few years, meaning that the cost-efficient and sustainable production of battery systems and the expansion of
the charging infrastructure will be crucial to success.
The shift to connected, intelligent and eventually self-driving vehicles will, however, bring more wide-
reaching changes for the automotive industry. Autonomous driving will change the customer’s mobility expe-
rience forever and lay the ground for new business models. Sources of revenue will gradually shift and will
expand beyond the core product of the automobile. Increasing software development capabilities in order to
excite customers with constantly improving digital functionality is the prerequisite for this.
In equal measure to technological trends, the global economic and geopolitical environment is also posing
increased challenges for the automotive industry. These include, for example, the economic influence of the
largest mobility market, China, the USA and Europe, and their diverging development.
Sustainability will continue to be a recurring theme in the business world and will gain further pertinence,
driven by the increasingly noticeable consequences of climate change, a greater consciousness of sustainable
lifestyles on the part of the customer and, not least, underlying factors such as the Paris Climate Agreement. As
we transition from automotive manufacturer to mobility group, we have reset our priorities with NEW AUTO and
are positioning ourselves for the future. We are keeping our aim of being a world-leading provider of sustainable
mobility firmly in our sights and making the Group more focused, efficient, innovative, customer-oriented and
sustainable, as well as systematically gearing it toward profitable growth.
To this end, we have established clearly defined Group initiatives across the brand groups, with a focus on our
central technology platforms: “Architecture”, “Software”, “Battery, Charging & Energy”, and “Volkswagen Group
Mobility”. Furthermore, base initiatives form the foundation for the Volkswagen Group’s strategic realignment.
These are “ESG, Decarbonization & Integrity”, “Business Model 2.0”, “North America (NAR) Region”, “China Region”,
“Group Steering Model”, “People & Transformation” and “Financing the Transformation”, which are described
below.
93
NEW AUTO FOCUSING ON THE TECHNOLOGY PLATFORMS
Core Progressive Sport Luxury Trucks
Architecture
Software
Battery, Charging & Energy
Volkswagen Group Mobility
The most important targets for each calendar year are defined and a Top 10 program is developed at Group level
so that the strategy can be implemented in operations throughout the year. Priorities in the Group’s Top 10
program for 2023 were financial robustness and planning, products, the China and North America regions,
software, technologies, battery and charging, mobility solutions, sustainability, and capital markets. This Top 10
program methodology has been adopted by many business units in their functional area strategies and is being
used to accelerate implementation of the strategy with a high level of focus.
To make the progress in our focus topics – consisting of the initiatives of the NEW AUTO strategy and the
objectives of the Group’s Top 10 program applicable to the fiscal year – as transparent as possible for manage-
ment and employees, the Group Board of Management decided to structure and regularly measure the strategic
objectives and milestones using the OKR (Objectives and Key Results) method. Accordingly, strategic objectives
and envisaged key results are defined for all focus topics. These are to be realized largely through time-limited
projects and work packages, each of which is measured by specific key performance indicators. The degree of
achievement is usually presented to the Board of Management three times a year. As such, the relevance of the
focus topics, and their objectives, milestones, projects and work packages, are regularly reviewed at Group level.
Their focus is continuously monitored and adjusted as necessary or integrated into standard operations.
We report on the main objectives and interim results achieved in the reporting year in the chapters “Internal
Management System and Key Performance Indicators”, “Structure and Business Activities” and “Sustainable
Value Enhancement”.
ARCHITECTURE
A future-oriented mechatronics platform will form the backbone for innovations, technology and lasting
competitiveness at Volkswagen. With the Scalable Systems Platform (SSP), we are creating the next generation
of an all-electric, fully digital and highly scalable mechatronics platform based on a standardized software
architecture. With this standardized platform, which can be scaled from the smallest vehicles all the way up to
the premium segment, the Volkswagen Group aims to rapidly and efficiently provide its customers with inno-
vative functions and technologies in their vehicles, across all brands. By reducing complexity and the number of
versions, the SSP will offer maximum synergies and make fast, regular technology updates possible, while
lowering investment costs and ensuring the necessary differentiation between the products of the individual
brands in the Group’s portfolio.
94
SOFTWARE
The purpose of the Group’s own software and technology company CARIAD is to create the technical basis for
data-based business models, new mobility services and automated driving (Level 4), and to leverage cross-
brand synergies. Here we are pursuing the following strategy: we intend to develop software for central control
points in the vehicle either in-house or together with third parties in strategic partnerships. CARIAD is collab-
orating with leading technology companies to integrate further innovative solutions.
Together with the Porsche and Audi brands, CARIAD is working to introduce the new E3 1.2 platform, which
optimizes the interaction between the hardware and the vehicle software and is also intended to serve as a key
lever for data-driven development and for the introduction of new services even after vehicle production has
begun.
In the long term, the standardized E3 2.0 software architecture is to form the basis of a complete digital
ecosystem, offering customers a wide range of software-based services throughout the entire product lifecycle.
The software-centric approach of the E³ 2.0 architecture constitutes a paradigm shift in vehicle development.
This is to form the basis for the Volkswagen Group’s software-defined vehicles. The aim is for every function that
is needed or requested, and for every service, to be customized for the customers in the various markets and to
be available for download at any time. This will also open up new sources of revenue for us.
Applications at various levels of automated driving (up to Level 4) are to be gradually introduced to the new
vehicle models in the Group brands. In this context, CARIAD is responsible for developing software and a tech-
nology stack for automated driving.
BATTERY, CHARGING & ENERGY – CELL AND BATTERY STRATEGY

The battery is a key component in an electric vehicle, and an important cost factor. The appeal and market
success of e-mobility is determined not only by the price, but also by the vehicle’s range and its charging speed.
In order to achieve our objective of transforming into a world-leading provider of sustainable mobility, we intend
to become a profit-generating expert across the entire battery life cycle. To this end, the Cell and Battery
Strategy tech initiative pools expertise across the Group and is driving the transformation process in cooperation
with our strategic partners.
The aspects covered include battery development, cell production, vertical integration, large-scale storage
systems and recycling. Our primary aim is to develop battery cell technology into a core competence in the
Group, and we are also working with partners to achieve this. At the heart of this strategy is the unified cell,
which can contain differing chemistries and is to be used in up to 80% of Group models by 2030. The economies
of scale this generates are expected to reduce costs by up to 50% and put us in a leading cost position. To cover
the high demand for battery cells, Volkswagen plans to build its own gigafactories around the world. The corner-
stone for these activities was laid in Salzgitter/Germany. Using the standard factory concept to optimize invest-
ment, further factories are to follow swiftly in Valencia/Spain and St. Thomas/Canada. The aim is to meet about
half of the rapidly growing need for battery cells ourselves by 2030.
BATTERY, CHARGING & ENERGY – CHARGING AND ENERGY SERVICES

A sustainable, stable charging and energy infrastructure is a key prerequisite for accelerating the transformation
to the battery-electric mobility of the future. It is therefore our intention to also become a comprehensive
charging and energy service provider in future and we are investing heavily in the worldwide development of an
open, fast-charging network. By 2025, we and our partners plan to create around 45,000 high-power charging
points in Europe, China and the USA. The product portfolio also includes the full range of charging solutions for
private customers and companies. In addition to our own wall box and flexible fast-charging station (Flexpole),
the focus is particularly on contract-based charging services and smart green electricity tariffs. The aim is for
charging processes to be controlled in such a way that they tap into renewable energy, thus reducing the
pressure on the power grids. In a next step, Volkswagen intends to use the electric vehicle as a mobile power
95
bank, and thus help to enable electric vehicles to act as additional storage units and become an active part of
the energy system in the future. In this way, Volkswagen wishes to make its customers part of the smart-
charging and energy ecosystem for decarbonized mobility. Our goal here is farsighted use of scarce resources in
the electric power industry.
VOLKSWAGEN GROUP MOBILITY

In keeping with its mission statement, “Mobility for generations to come”, the Volkswagen Group is developing
mobility solutions for the future, taking into account global trends and changes in customer needs. The Group
plans to bring together all of its brands’ mobility services on one mobility platform over the coming years.
Autonomous driving combined with new mobility solutions is expected to mark Volkswagen’s transformation
into a leading provider of sustainable mobility. A vehicle fleet covering all of the many services, from vehicle
rental to car subscription and ride pooling, is to ensure high availability, usage and profitability. With these solu-
tions, we plan to gain market shares and generate long-term competitive and attractive margins.
ESG, DECARBONIZATION AND INTEGRITY

ESG (Environmental, Social and Governance) refers to the basic principles of doing business sustainably. The
Group’s stakeholders (e.g. investors, employees, customers and non-government organizations) have high
expectations of the Company’s ESG performance, including in areas such as decarbonization, circular economy
and integrity, and also of its conduct as an employer and as part of society. The Group’s ESG performance
therefore directly affects its market capitalization, cost of capital and investing activities. We aim for a top
position relative to our competitors in sustainability ratings. We are committed to the Paris Climate Agreement
and align our own activities with the 1.5-degree target. We aim to achieve net carbon neutrality by 2050. By
2030, we have also set ourselves the target of reducing CO2 emissions from passenger cars and light com-
mercial vehicles over the total life cycle by 30% compared with 2018. As part of this effort, we are looking for
ways to increase the proportion of renewable energy sources used in the product emergence process and the
proportion of recyclable materials in our vehicles. We also wish to be perceived as a benchmark for ethical
corporate conduct. Volkswagen sees itself as an equal opportunities employer. The intention is therefore for at
least a fifth of Group management positions to be held by women by 2025, and for at least a quarter to be held
by international managers.
BUSINESS MODEL 2.0

The Business Model 2.0 base initiative is developing a Group-wide portfolio of services, the purpose of which is
to create a seamless and innovative product experience to connect brands, customers, dealerships, our partners
and whole markets. The aim is for the key technologies needed for this to be integrated into a majority of the
platform-based vehicles by 2030. Using connected vehicles, the Group’s brands are to be able in future to remain
in contact with their customers throughout the entire vehicle life cycle and thus to offer them services and
functions for their individual needs. This will allow us to build a competitive, data-driven service portfolio that
also maintains our strong position in the automotive market in future.
NORTH AMERICA (NAR) REGION

For the Volkswagen Group, the North America region, and particularly the USA, has great growth potential,
especially where e-mobility is concerned. We intend North America to become our third core region alongside
Europe and China by 2030. Our aim there is to achieve a very strong increase in total market share for the Volks-
wagen Group by then.
We aspire to further expand our presence in the region with strong brands and prepare ourselves for the
future with market-specific products.
96
We also wish to participate to a disproportionately high extent in the growth of the increasingly electrified
markets in the USA and Canada. We will therefore substantially expand our range of all-electric models across
the Group and develop models specifically for these markets. With our new vehicle brand Scout, we intend to
address the core segments of the North American electric vehicle market with tailor-made products. The pro-
portion of battery-electric vehicles in our sales in the USA and Canada is to increase to 55% by 2030.
In addition, we wish to maximize the potential for synergies in the region and build more expertise, industrial
capacity and vertical value chains in the North America region.
CHINA REGION
China is of major strategic significance to the Volkswagen Group as its largest single market. All key measures
are therefore brought together in this strategic base initiative in order to continue Volkswagen’s success story in
China. These include localized development activities that are tailored to the market (the in China for China
approach), competitive products, the deepening of our existing partnerships and forging of new ones, and a
comprehensive program of measures for achieving a permanent reduction of costs to safeguard long-term
profitability.
Our aim for 2030 is to take a leading role in China as an international mobility provider and manufacturer of
fully connected vehicles. As part of our localization strategy (in China for China), we therefore want to pool and
expand our local development capacity to a greater extent in the coming years. In so doing, we want to con-
siderably speed up the development of intelligent connected vehicles (ICVs) and be in a position to offer tailor-
made products to our Chinese customers faster. In the market for vehicles with conventional drive systems, we
want to further strengthen our share of the market with new vehicles and secure it for the long term, as these
vehicles’ high unit sales will also make a corresponding contribution to profitability in future.
GROUP STEERING MODEL

To achieve the objectives of the Group strategy and thereby safeguard the Volkswagen Group’s long-term
success, we are extensively optimizing our Group Steering Model. It is essential that we establish a consistently
high level of mechanisms that facilitate swift decision-making, the development and use of platform tech-
nologies and the exploitation of synergies, and that we constantly enhance these. The updated Group Steering
Model places the brand groups and technology platforms center stage in order to scale up the latter while
maximizing synergies across the entire Group product portfolio. A new strategy and product planning process
that has been optimized for efficiency is being developed on the basis of this approach. The package of mea-
sures for this initiative hones the definition of roles and responsibilities in the Group and improves transparency
in this respect both inside and outside the Company. It also promotes the entrepreneurship of the independent
units and brands and at the same time strengthens collaboration across the Group.
PEOPLE & TRANSFORMATION

As it becomes a global tech company, the Volkswagen Group will see the biggest transformation of its workforce
in its corporate history. To ensure the Group remains competitive in future, we need to attract top talent and
support existing employees by providing extensive training where required. Our aim is to retain staff for the long
term. It is therefore fundamental that we address the changing needs of our employees and offer them an out-
standing employee experience. To achieve our Group’s ambitious objectives, we must also create and promote
an environment for productive teams, resulting in a strong, sustainable and socially responsible corporate
culture that fosters a sense of belonging and loyalty to the Company. A further focus is on aligning the Company
with society and the environment.
97
FINANCING THE TRANSFORMATION

The transformation being driven by digitalization and electrification will require extensive investment. To meet
this need for financing, the “Financing the Transformation” base initiative aims to leverage even more Group-
wide synergies across all functional areas along the value chain, focusing on costs and efficiency. The Group has
therefore set itself the objective of lasting improvements to its fixed-cost structure, plant productivity, procure-
ment costs, distribution expenses and working capital management.
STRATEGIC FINANCIAL PERFORMANCE INDICATORS
2022 Target 2030
Operating return on sales 8.1% 9 to 11%

Automotive investment ratio 13.6% ~9%
Cash conversion rate in the Automotive Division1 29.2% >60%
~10% of
€43.0 billion2 consolidated
Net liquidity in the Automotive Division 15.4% sales revenue
Return on investment (ROI) in the Automotive Division 12.0% >18%
1 Net cash flow as a percentage of the operating result in the Automotive Division
2 Including cash inflows from the IPO of Dr. Ing. h.c. F. Porsche AG.
98
Group Management Report Internal Management System and Key Performance Indicators
Internal Management System and

Key Performance Indicators
This chapter describes how the Volkswagen Group is managed and the key performance
indicators used for this purpose. In addition to financial measures, our management system
also contains nonfinancial key performance indicators.
The Volkswagen Group’s performance and success are expressed in both financial and nonfinancial key perfor-
mance indicators.
In the following, we first describe the internal management process and then explain the Volkswagen Group’s
most significant performance indicators, known as the core performance indicators.
INTERNAL MANAGEMENT PROCESS IN THE VOLKSWAGEN GROUP

Consistent, close integration of the Group and brand strategies with the operational planning process ensures
transparency at the Volkswagen Group when it comes to the financial assessment and evaluation of strategic
decisions. The operational medium-term planning that is conducted once a year and generally covers a period of
five years is incorporated into the strategic planning as a key management element of the Group.
Medium-term planning forms the core of our operational planning and is used to formulate and safeguard the
requirements for realizing strategic projects designed to meet Group targets in both technical and economic terms
– and particularly in relation to earnings, cash flow and liquidity effects. In addition, this planning also serves as a
basis to coordinate all business areas with respect to the strategic action areas concerned, namely functions/pro-
cesses, products and markets.
When planning the Company’s future, the individual planning components are determined on the basis of the
timescale involved:
> The long-term unit sales plan, which sets out market and segment growth and then derives the Volkswagen
Group’s delivery volumes from this
> The product program as the strategic, long-term factor determining corporate policy
> Capacity and utilization planning for the individual sites
The coordinated results of the upstream planning processes are used as the basis for the medium-term finan-
cial planning: the Group’s financial planning, including the brands and business fields, comprises the income
statement, cash flow and balance sheet planning, profitability and liquidity, as well as the upfront investments
needed for alternative products and the implementation of strategic options in the future. The first year of the
medium-term planning period is fixed and a budget drawn up for the individual months. This is planned in detail
down to the level of the operating cost centers.
The budget is reviewed each month to establish the target achievement level. Key internal management
instruments comprise target/actual comparisons, prior-year comparisons, variance analyses and, where neces-
sary, action plans to ensure targets are met. For the current fiscal year, detailed revolving monthly forecasts are
prepared for the coming three months and the full year, taking into account the current risks and opportunities.
99
The focus of intrayear internal management is therefore on adapting ongoing activities. The current forecast
serves as the starting point for the subsequent medium-term and budget planning.
CORE PERFORMANCE INDICATORS IN THE VOLKSWAGEN GROUP

As part of our new leadership model, we have adjusted the core performance indicators in the Volkswagen
Group. These now include:
> Deliveries to customers
> Sales revenue
> Operating result
> Operating return on sales
> Automotive investment ratio
> Net cash flow in the Automotive Division
> Net liquidity in the Automotive Division
> Return on investment (ROI) in the Automotive Division (until 2023)
Deliveries to customers (including the Chinese joint ventures) are defined as handovers of new vehicles to the
end customer. This figure reflects the popularity of our products and is the measure we use to determine our
competitive position in the various markets. Deliveries are closely related to our goal of transforming the
Volkswagen Group into one of the world’s leading providers of sustainable mobility. One of the most important
prerequisites for the Company’s long-term success is a strong brand portfolio that – on the basis of outstanding
quality – offers tailor-made mobility solutions in the form of safe, connected, resource-efficient and thus largely
emission-free vehicles that meet the diverse needs of customers. Demand for our products and mobility services
guarantees not only unit sales and production, but also full utilization of our sites and the jobs of our employees.
The goals we are striving for cannot be achieved without a skilled, flexible and dedicated workforce along with a
consensus on shared values.
Sales revenue, which does not include the figures for our equity-accounted Chinese joint ventures, reflects
our market success in financial terms. Following adjustment for our use of resources, the operating result reflects
the Company’s actual business activity and documents the economic success of our core business. The oper-
ating return on sales is the ratio of the operating result to sales revenue.
The automotive investment ratio indicates the ratio of investment to sales revenue and is calculated by
adding the research and development ratio (R&D ratio) and the capex to sales revenue ratio. The research and
development ratio in the Automotive Division shows total research and development costs in relation to sales
revenue. Research and development costs comprise a range of expenses, from futurology to the development of
our marketable products. Particular emphasis is placed on the environmentally friendly orientation and digi-
talization of our product portfolio, the expansion of our battery expertise, the development of software and new
platforms and the creation of new technologies. The R&D ratio reflects the activities we have undertaken to
safeguard the Company’s future viability. The ratio of capex (investments in property, plant and equipment,
investment property and intangible assets, excluding capitalized development costs) to sales revenue in the
Automotive Division reflects both our innovative power and our future competitiveness. It shows our capital
expenditure – largely for modernizing, expanding, electrifying and digitalizing our product range and for environ-
mentally friendly drivetrains, as well as for adjusting production capacities and improving production processes
– in relation to the Automotive Division’s sales revenue.
100
Net cash flow in the Automotive Division represents the excess funds from operating activities available for
dividend payments, for example. It is calculated as cash flows from operating activities less cash flows from
investing activities attributable to operating activities.
Net liquidity in the Automotive Division is the total of cash, cash equivalents, securities, time deposits and
loans not financed by third-party borrowings. To safeguard our business activities, we have formulated the
strategic target that net liquidity in the Automotive Division should amount to approximately 10% of the consoli-
dated sales revenue.
We use the return on investment (ROI) to calculate the return on invested capital for a particular period in the
Automotive Division, including the equity-accounted Chinese joint ventures on a proportionate basis, by calcu-
lating the ratio of the operating result after tax to average invested capital. If the return on investment (ROI)
exceeds the market cost of capital, the value of the Company has increased. This is how we measure the finan-
cial success of our brands, locations and vehicle projects.
In our Financing the Transformation base initiative, we stepped up our activities to optimize net cash flow. To
achieve the strategic goals, performance programs have also been launched Group-wide in an effort to increase
efficiency and boost earnings.
101
Group Management Report Structure and Business Activities
Structure and Business Activities

This chapter describes the legal and organizational structure of the Volkswagen Group
and explains the material changes in 2023 with respect to equity investments.
OUTLINE OF THE LEGAL STRUCTURE OF THE GROUP

Volkswagen AG is the parent company of the Volkswagen Group. It develops vehicles and components for the
Group brands, but also produces and sells vehicles, in particular passenger cars and light commercial vehicles
for the Volkswagen Passenger Cars and Volkswagen Commercial Vehicles brands. In its capacity as parent com-
pany, Volkswagen AG holds direct or indirect interests in AUDI AG, SEAT S.A., Škoda Auto a.s., Dr. Ing. h.c. F.
Porsche AG, TRATON SE, Volkswagen Financial Services AG, Volkswagen Bank GmbH and a large number of
other companies in Germany and abroad. More detailed disclosures are contained in the list of shareholdings in
accordance with sections 285 and 313 of the Handelsgesetzbuch (HGB – German Commercial Code), which can
be accessed at www.volkswagen-group.com/investor-relations and is part of the annual financial statements.
Volkswagen AG is a vertically integrated energy supply company as defined by section 3 no. 38 of the Energie-
wirtschaftsgesetz (EnWG – German Energy Industry Act) and is therefore subject to the provisions of the EnWG.
In the electricity sector, Volkswagen AG generates, sells and distributes electricity as a group together with its
subsidiaries.
The Volkswagen AG Board of Management has sole responsibility for managing the Company. The Super-
visory Board appoints, monitors and advises the Board of Management; it is consulted directly on decisions that
are of fundamental significance for the Company.
ORGANIZATIONAL STRUCTURE OF THE GROUP

The Volkswagen Group is one of the leading multibrand groups in the automotive industry. The Company’s busi-
ness activities comprise the Automotive and Financial Services divisions. Our core brands within the Automotive
Division – with the exception of the Volkswagen Passenger Cars and Volkswagen Commercial Vehicles brands –
are independent legal entities.
The Automotive Division comprises the Passenger Cars, Commercial Vehicles and Power Engineering busi-
ness areas.
The Passenger Cars Business Area primarily consolidates the Volkswagen Group’s passenger car brands and
the Volkswagen Commercial Vehicles brand. Activities focus on the development of vehicles, engines and vehi-
cle software, the production and sale of passenger cars and light commercial vehicles, and the genuine parts
business. The product portfolio ranges from compact cars to luxury vehicles and also includes motorcycles, and
is supplemented by mobility solutions.
102
The Commercial Vehicles Business Area primarily comprises the development, production and sale of trucks and
buses, the corresponding genuine parts business and related services. The commercial vehicles portfolio ranges
from light vans to heavy trucks and buses. The collaboration between the commercial vehicle brands is coordi-
nated within TRATON SE.
The Power Engineering Business Area combines the large-bore diesel engines, turbomachinery and propul-
sion components businesses.
The Financial Services Division’s activities comprise dealer and customer financing, leasing, direct banking
and insurance activities, fleet management and mobility services.
With its brands, the Volkswagen Group is present in all of the markets around the world that are relevant for
the Group. The key sales markets currently include Western Europe, China, the USA, Brazil, Türkiye, Mexico,
Poland and Czech Republic.
Volkswagen AG and the Volkswagen Group are managed by the Volkswagen AG Board of Management in
accordance with the Volkswagen AG Articles of Association and the rules of procedure for Volkswagen AG’s
Board of Management issued by the Supervisory Board.
Accordingly, responsibilities in the Board of Management are currently divided among ten Board functions.
In addition to the “Chair of the Board of Management” function the other Board functions are “Technology”,
“Finance and Operations” (formerly “Finance”), “Human Resources and Trucks brand group” (formerly “Human
Resources and Truck & Bus”), “Integrity and Legal Affairs”, “Progressive brand group” (formerly “Premium”),
“Sport Luxury brand group” (formerly “Sport & Luxury”), “IT”, “China”, and “Core brand group” (formerly “Volume”).
The Chair of the Board of Management is also responsible for the “Sport Luxury brand group” Board function.
Directly attached to the Board are a number of Group Management functions that act as an extension to the
Board functions. These comprise the “Group Sales”, “Group Production”, “Group Procurement” and “Group Research
and Development” functions.
The allocation of responsibilities on the Board of Management is based on the rules of procedure decided by
the Supervisory Board. The way this is structured helps the Board of Management to focus on key tasks such as
strategy, central decisions on the Company’s direction, capital allocation and financial requirements. The task of
the extended board-level management functions is to leverage synergies in the Group and to connect the brands
and divisions.
Board of Management committees exist at Group level for the following areas: products, technologies, invest-
ments, digital transformation, integrity and compliance, risk management, human resources and management
issues. In addition to the responsible members of the Board of Management, the relevant central departments
and the relevant functions of the divisions are also represented on the committees. We are continually revising
and optimizing these and other top management committees in the Group in order to verify that they still align
with our corporate strategy and to further increase the efficiency of their decision making. This reduces com-
plexity and reinforces governance within the Group.
As part of the “Group Steering Model” base initiative from the NEW AUTO Group strategy, a new leadership
model for the Group was presented at the Capital Markets Day in June 2023 that will sharpen the focus on
customer orientation, entrepreneurship and team spirit. It follows the “value over volume” principle, prioritizing
sustainable value creation over volume growth. As part of this, the brand groups will receive a new steering
model. In addition, the brand positioning and the product range are to be sharpened. The realignment also
included a renaming of the brand groups: Volume has become Core, Premium is now called Progressive, Sport &
Luxury has been changed to Sport Luxury, and Truck & Bus to Trucks. The Core brand group comprises the
Volkswagen Passenger Cars, Škoda, SEAT/CUPRA and Volkswagen Commercial Vehicles brands. The Progres-
sive brand group comprises the Audi, Lamborghini, Bentley and Ducati brands. The Sport Luxury brand group
consists of the Porsche brand. The company responsible for this brand, Dr. Ing. h.c. F. Porsche AG (Porsche AG),
has been listed on the stock market since the end of September 2022. In the Trucks brand group, TRATON SE
acts as the umbrella for the Scania, MAN, Volkswagen Truck & Bus and Navistar commercial vehicles brands.
TRATON SE is also a listed company.
103
In addition to the strengthening of the brand groups, the reorganization and expansion of new units also enabled
substantial progress to be made with the “Architecture”, “Software”, “Battery, Charging & Energy”, and “Volks-
wagen Group Mobility” technology platforms in the reporting year. The structures and product processes at the
software subsidiary CARIAD will be optimized further.
We are convinced that our corporate structure, which efficiently connects not only the brand groups but also
the technology platforms, will enable us to make better use of existing expertise and economies of scale,
leverage synergies more systematically and accelerate decision making. Clear responsibilities and a high degree
of business responsibility in the brand groups and technology platforms will enable comprehensive imple-
mentation of the Group’s NEW AUTO strategy.
Each brand within the Volkswagen Group is managed by a brand board of management, which is responsible
for the brand's independent and self-contained development and business operations. To the extent permitted
by law, the board adheres to the Group targets and requirements laid down by the Board of Management of
Volkswagen AG, as well as with the agreements in the brand groups. This allows Group-wide interests to be
pursued, while at the same time safeguarding and reinforcing each brand’s specific characteristics. Matters that
are of importance to the Group as a whole are submitted to the Volkswagen AG Board of Management to be
agreed upon, to the extent permitted by law. The rights and obligations of the statutory bodies of the relevant
brand company thereby remain unaffected.
The Volkswagen Group companies are managed solely by their respective managements. The management of
each individual company takes into account not only the interest of its own company but also the interests of the
Group, the relevant brand group and the individual brands in accordance with the framework laid down by law.
MATERIAL CHANGES IN EQUITY INVESTMENTS

In May 2023, the Volkswagen Group completed the sale of its shares in OOO Volkswagen Group Rus (Volks-
wagen Group Rus), Kaluga/Russia, and that company's local subsidiaries (OOO Volkswagen Components and
Services, Kaluga/Russia, OOO Scania Leasing, Moscow/Russia, OOO Scania Finance, Moscow/Russia, OOO
Scania Insurance, Moscow/Russia) to OOO ART-FINANCE, Moscow/Russia, which is supported by the Russian
dealer AO Avilon Automotive Group, Moscow/Russia. With the registration of the transaction, also in May 2023,
ownership of the shares in Volkswagen Group Rus was transferred from the seller to the buyer. The transaction
comprises the production facilities in Kaluga, the importer network of the Group brands Volkswagen Passenger
Cars, Volkswagen Commercial Vehicles, Audi, Škoda, Bentley, Lamborghini and Ducati for possible after-sales
business and warehouse activities, as well as Scania's financial services activities, including all associated
employees.
V O L KS WAG E N AG S H A R E H O L D I N G S
www.volkswagen-group.com/investor-relations
104
LEGAL FACTORS INFLUENCING BUSINESS

Like other international companies, the business of Volkswagen companies is affected by numerous laws in
Germany and abroad. In particular, there are legal requirements relating to services, development, products,
production and distribution, as well as supervisory, data protection, financial, company, commercial, capital
market, anti-trust and tax regulations and regulations relating to labor, banking, state aid, energy, environmental
and insurance law.
GROUP CORPORATE GOVERNANCE DECLARATION

The Group Corporate Governance Declaration can be found in this annual report and is permanently available
on our website at www.volkswagen-group.com/en/corporate-governance.
G R O U P C O R P O R AT E G OV E R N A N C E D EC L A R AT I O N
www.volkswagen-group.com/en/corporate-governance
105
Group Management Report Disclosures Required under Takeover Law
Disclosures Required under

Takeover Law
This chapter contains the Volkswagen Group’s disclosures relating
to takeover law required by sections 289a and 315a of the HGB.
CAPITAL STRUCTURE
Volkswagen AG’s share capital amounted to €1,283,315,873.28 (€1,283,315,873.28) on December 31, 2023. It
was composed of 295,089,818 ordinary shares and 206,205,445 preferred shares. Each share conveys a notional
interest of €2.56 in the share capital.
SHAREHOLDER RIGHTS AND OBLIGATIONS

The shares convey pecuniary and administrative rights. The pecuniary rights include in particular the share-
holders’ right to participate in profits (section 58(4) of the Aktiengesetz (AktG – German Stock Corporation Act)),
the right to participate in liquidation proceeds (section 271 of the AktG) and preemptive rights to shares in the
event of capital increases (section 186 of the AktG), which can be disapplied by the General Meeting with the
approval of the Special Meeting of Preferred Shareholders, where appropriate. Administrative rights include the
right to attend the General Meeting, to speak there, to ask questions, to propose motions and to exercise voting
rights. Following a change in the law (section 118a of the AktG), General Meetings can be held without share-
holders or their proxies being present at the venue (virtual General Meeting). The holding of virtual General
Meetings must be provided for in the Articles of Association. The Annual General Meeting on May 10, 2023
therefore resolved to amend the Articles of Association (Article 19(3)) and to authorize the Board of Management
to provide for the option of holding any General Meetings within five years of the entry in the commercial register
of this change in the Articles of Association as a virtual General Meeting. Shareholders can enforce their
pecuniary and administrative rights in particular through actions seeking disclosure and actions for avoidance.
Each ordinary share grants the holder one vote at the General Meeting. The General Meeting elects share-
holder representatives to the Supervisory Board and elects the auditors; in particular, it resolves on the appro-
priation of net profit, formally approves the actions of the Board of Management and the Supervisory Board, and
resolves on amendments to the Articles of Association of Volkswagen AG, capital measures and authorizations
to purchase treasury shares; if required, it also resolves on the performance of a special audit, the removal before
the end of their term of office of Supervisory Board members elected by the General Meeting and the winding-up
of the Company.
Preferred shareholders generally have no voting rights. However, in the exceptional case that they are
granted voting rights by law (for example, when preferred share dividends were not paid in one year and not
compensated for in full in the following year), each preferred share also grants the holder one vote at the General
106
Meeting. Furthermore, preferred shares entitle the holder to a €0.06 higher dividend than ordinary shares (further
details on this right to preferred and additional dividends are specified in Article 27(2) of the Articles of Asso-
ciation of Volkswagen AG).
The Gesetz über die Überführung der Anteilsrechte an der Volkswagenwerk Gesellschaft mit beschränkter
Haftung in private Hand (VW-Gesetz – Act on the Privatization of Shares of Volkswagenwerk Gesellschaft mit
beschränkter Haftung) of July 21, 1960, as amended on July 30, 2009, includes various provisions in derogation
of the German Stock Corporation Act, for example on the exercising of voting rights by proxy (section 3 of the
VW-Gesetz) and on majority voting requirements at the General Meeting (section 4(3) of the VW-Gesetz).
In accordance with the Volkswagen AG Articles of Association (Article 11(1)), the State of Lower Saxony is
entitled to appoint two members of the Supervisory Board of Volkswagen AG for as long as it directly or indirectly
holds at least 15% of Volkswagen AG’s ordinary shares. In addition, resolutions by the General Meeting that are
required by law to be adopted by a qualified majority require a majority of more than four-fifths of the share
capital of the Company represented when the resolution is adopted (Article 25(2)), regardless of the provisions of
the VW-Gesetz.
SHAREHOLDINGS EXCEEDING 10% OF VOTING RIGHTS

Shareholdings in Volkswagen AG that exceed 10% of voting rights are shown in the notes to the annual financial
statements of Volkswagen AG, which are available online at www.volkswagen-group.com/presentations-and-
publications. The current notifications regarding changes in voting rights in accordance with the Wertpapier-
handelsgesetz (WpHG – German Securities Trading Act) are published at www.volkswagen-group.com/distri-
bution-of-voting-rights.
COMPOSITION OF THE SUPERVISORY BOARD

The Supervisory Board consists of 20 members, half of whom are shareholder representatives. In accordance
with Article 11(1) of the Articles of Association of Volkswagen AG, the State of Lower Saxony is entitled to
appoint two of these shareholder representatives for as long as it directly or indirectly holds at least 15% of the
Company’s ordinary shares. The remaining shareholder representatives on the Supervisory Board are elected by
the General Meeting.
The other half of the Supervisory Board consists of employee representatives elected by the employees in
accordance with the Mitbestimmungsgesetz (MitbestG – German Codetermination Act). A total of seven of these
employee representatives are Company employees elected by the workforce; the other three employee repre-
sentatives are trade union representatives elected by the workforce.
The Chairman of the Supervisory Board is generally a shareholder representative elected by the other mem-
bers of the Supervisory Board. In the event that a Supervisory Board vote is tied, the Chairman of the Supervisory
Board has a casting vote in accordance with the MitbestG.
The goals for the composition of the Supervisory Board and information about its composition are described
in the Group Corporate Governance Declaration.
STATUTORY REQUIREMENTS AND REQUIREMENTS OF THE ARTICLES OF ASSOCIATION WITH

REGARD TO THE APPOINTMENT AND REMOVAL OF BOARD OF MANAGEMENT MEMBERS AND TO
AMENDMENTS TO THE ARTICLES OF ASSOCIATION
The appointment and removal of members of the Board of Management are governed by sections 84 and 85 of
the AktG, which specify that members of the Board of Management are appointed by the Supervisory Board for a
maximum of five years. Board of Management members may be reappointed or have their term of office extended
for a maximum of five years in each case. In addition, Article 6 of the Articles of Association of Volkswagen AG
states that the number of Board of Management members is stipulated by the Supervisory Board and that the
Board of Management must consist of at least three persons. The members of the Volkswagen AG Board of
Management must include at least one woman and at least one man.
The General Meeting resolves amendments to the Articles of Association (section 119(1) of the AktG). In
accordance with section 4(3) of the VW-Gesetz as amended on July 30, 2009 and Article 25(2) of the Articles of
107
Association of Volkswagen AG, General Meeting resolutions to amend the Articles of Association require a
majority of more than four-fifths of the share capital represented.
POWERS OF THE BOARD OF MANAGEMENT, IN PARTICULAR CONCERNING THE ISSUE OF NEW

SHARES AND THE REPURCHASE OF TREASURY SHARES
Under German stock corporation law, the General Meeting can authorize the Board of Management to issue new
shares for a maximum period of five years. A provision in the Articles of Association is required for this. It can also
authorize the Board of Management to issue bonds on the basis of which new shares are to be issued, also for a
maximum period of five years. The General Meeting also decides the extent to which shareholders have pre-
emptive rights to the new shares or bonds. The maximum amount of authorized share capital or contingent
capital available for these purposes is determined by Article 4 of the Articles of Association of Volkswagen AG,
as amended.
At the Annual General Meeting on May 10, 2023, a resolution was passed authorizing the Board of Manage-
ment to increase the Company’s share capital, subject to the consent of the Supervisory Board, on one or more
occasions by a total of up to €227.5 million (corresponding to around 89 million shares) before May 9, 2028 by
issuing new nonvoting preferred shares against cash contributions.
Further details regarding the option of issuing new shares and how these shares may be used can be found in
the notes to the consolidated financial statements.
MATERIAL AGREEMENTS OF THE PARENT COMPANY IN THE EVENT OF A CHANGE OF CONTROL

FOLLOWING A TAKEOVER BID
At the end of fiscal year 2019, a banking syndicate granted Volkswagen AG a syndicated line of credit amounting
to €10.0 billion, which currently runs until December 2026. With the line of credit, the syndicate members were
granted the right to call their portion of the syndicated line of credit in the two forms of a change of control
described below. Firstly, a call right exists if one individual or several individuals acting jointly, who as of the date
of this agreement exercise control over the Company, have legal or economic ownership of shares that together
make up more than 90% of the voting rights of the Company. Secondly, a call right also exists if one individual or
several individuals acting jointly, who as of the date of this agreement do not exercise control over the Company,
obtain control over the Company. Such a call right does not exist, however, if one shareholder or several share-
holders of Porsche Automobil Holding SE or one or several legal entities from the Porsche or Piëch family directly
or indirectly obtain control over the Company.
Volkswagen AG and the Ford Motor Company entered into a Master Collaboration Agreement in January 2019.
This agreement sets out a framework of obligations, which are to apply to the further cooperation agreements
entered into between the parties, including those entered into in fiscal year 2021. It also covers the Development
Agreement concluded in January 2019 for the development of the next-generation Amarok. The Master Collab-
oration Agreement provides for a right of termination with immediate effect in the event of a change of control. A
change of control has been defined to mean a change affecting more than 50% of the voting capital of one of the
companies or a change in the ability to directly or indirectly control the management of a company through its
decision-making bodies. The right of termination must be exercised within 90 days of the company becoming
aware of a change of control.
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Group Management Report Business Development
Business Development
The world economy recorded positive growth in fiscal year 2023. Global demand
for vehicles was noticeably higher than in the previous year. Amid a challenging market
environment, the Volkswagen Group delivered 9.2 million vehicles to customers.
DEVELOPMENTS IN THE GLOBAL ECONOMY

The Russia-Ukraine conflict led to increased uncertainty in respect of developments in the global economy and
prompted large sections of the community of Western states to impose sanctions on Russia, ranging from
extensive trade embargoes to the partial exclusion of Russia from the global financial system. Russia itself, in its
role as an energy exporter, restricted gas deliveries to Europe. The resulting shortage of supply led particularly in
2022 to rising prices on energy and commodity markets. While prices dropped in the reporting year as a result of
weakening momentum in the global economy, they remain at a relatively high level in some cases. Furthermore,
salary trends in the overheated labor markets, among other factors, pose the threat of continued high inflation.
After the slump in global economic output in 2020 and the incipient recovery due to baseline and catch-up
effects in 2021, followed by a further normalization of economic activity in 2022 despite the Russia-Ukraine
conflict, the global economy recorded positive overall growth of +2.7 (+3.1)% in 2023. The slowdown in economic
momentum versus the previous year was mainly due to weaker growth in the advanced economies, whereas the
overall rate of change in the emerging markets increased somewhat. At national level, developments depended
on the one hand on the intensity with which central banks had to tighten monetary policy to curb the higher
inflation – mainly by raising interest rates and reducing bond holdings – which had a negative impact on con-
sumer spending and investment activity. On the other hand, the extent to which national economies were affected
by the consequences of the Russia-Ukraine conflict was a decisive factor. Prices for energy and many other raw
materials were lower than in the previous year, and shortages of intermediate products and commodities eased
somewhat. Global trade in goods expressed in nominal terms decreased in the reporting year.
Europe/Other Markets
The economy in Western Europe recorded positive, yet low overall growth of +0.4 (+3.5)% in 2023. This trend
was seen in many countries in Northern and Southern Europe. The main reasons for this were the momentary
and in some cases significant increases in energy and commodity prices, which had substantially pushed up
inflation rates in the previous year and thus had a negative impact on consumer confidence. Business sentiment
also deteriorated on average across all sectors. In addition, the restrictive monetary policy measures taken to
rein in inflation impacted both consumer spending and investment.
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ECONOMIC GROWTH
Percentage change in GDP
 Global economy
 Western Europe
 Germany
 USA
 China
10.0
5.0
0.0
-5.0
-10.0
2019 2020 2021 2022 2023
The economies in Central and Eastern Europe recorded real growth in absolute gross domestic product (GDP) of
+2.6 (+1.1)% in the reporting year. While economic output in Central Europe saw positive, albeit less dynamic
growth of +1.7 (+4.5)%, GDP in the Eastern Europe region rose again in 2023 compared with the prior year for the
first time since the outbreak of the Russia-Ukraine conflict, with a growth rate of +3.6 (–2.8)%. Inflation rates
across the entire Central and Eastern Europe region declined on average in the reporting year, but remained at a
high level.
In Türkiye, economic output for the year 2023 as a whole rose by +3.8 (+5.3)% amid very high inflation and a
fall in the value of the local currency. South Africa saw slight GDP growth of +0.6 (+1.9)% in the reporting year,
amid persistent structural deficits and political challenges.
Germany
Germany’s economic output recorded a negative growth rate of –0.2 (+1.9)% in the reporting year. Compared
with the prior year, the seasonally adjusted unemployment figures rose on average. After reaching historically
high levels in 2022, monthly inflation rates fell on average over the year, but remained relatively high.
North America
US economic output grew by +2.4 (+1.9)% in the reporting year. In view of high inflation and the tight labor
market, the US Federal Reserve maintained its restrictive monetary policy and raised its key interest rate four
times over the course of the reporting year. Unemployment remained at a low level in the reporting year. GDP
rose by +1.1 (+3.8)% in neighboring Canada and by +3.3 (+3.9)% in Mexico.
South America
Brazil’s economy posted GDP growth of +3.0 (+3.1)% in 2023. Argentina registered a negative economic per-
formance with a year-on-year decline in GDP of –1.7 (+5.0)% amid very high inflation and continued depreciation
of the local currency.
110
EXCHANGE RATE MOVEMENTS FROM DECEMBER 2022 TO DECEMBER 2023

Index based on month-end prices: as of December 31, 2022 = 100
 EUR to GBP
 EUR to USD
 EUR to CNY
 EUR to JPY
120
110
100
90
D J F M A M J J A S O N D
Asia-Pacific
China’s economic output rose faster in the reporting year at +5.4 (+3.0)% compared with the previous year,
positively influenced by the revocation of the zero-Covid strategy by the Chinese government. India registered
strong growth of +6.9 (+7.3)%. Japan recorded positive growth of +1.9 (+0.9)% year-on-year.
TRENDS IN THE MARKETS FOR PASSENGER CARS AND LIGHT COMMERCIAL VEHICLES
In fiscal year 2023, the volume of the passenger car market worldwide was noticeably higher than in the prior
year at 76.6 million vehicles. Most markets registered growth, which together with weak prior-year figures was
attributable to the fact that shortages and disruption in global supply chains eased restricting vehicle availability
to a lesser extent. While the supply situation for intermediates improved compared with 2022, the trend in new
registrations in individual markets dampened at the end of the previous year, partly as a consequence of the
Russia-Ukraine conflict and pull-forward effects generated by state subsidies expiring.
Significant or strong growth was recorded in the overall markets of the Western Europe, Central and Eastern
Europe, Middle East and North America regions. The markets of the South America region were slightly higher
and the markets of the Asia-Pacific region noticeably higher than the prior-year level. The market in Africa fell
slightly short of the prior-year volume.
In the reporting year, the global volume of new registrations for light commercial vehicles was on a level with
the previous year (–0.2%).
Sector-specific environment
Along with fiscal policy measures, the sector-specific environment was considerably affected by the economic
situation, which contributed to the mixed trends in unit sales in the markets in the fiscal year now ended. While
real purchasing power fell in many places and vehicle prices stagnated at a high level, it was possible to reduce
the backlog of orders on a large scale due to increased vehicle availability worldwide. The fiscal policy measures
included tax cuts or increases, the introduction, expiry and adjustment of incentive programs and sales incen-
tives, as well as import duties. In addition, non-tariff trade barriers to protect the respective domestic automotive
industries made the movement of vehicles, parts and components more difficult.
111
In Western Europe, the number of new passenger car registrations in the reporting year was significantly higher
than the previous year’s weak level, increasing by 13.8% to 11.6 million vehicles. The performance of the large
individual passenger car markets was consistently positive in fiscal year 2023: France (+16.1%), the United
Kingdom (+17.9%), Italy (+18.8%) and Spain (+15.8%) significantly exceeded their respective prior-year levels.
The volume of new registrations for light commercial vehicles in Western Europe was significantly higher
than in the previous year, increasing by 16.3%.
The passenger car market volume in the Central and Eastern Europe region increased strongly by 23.6% in
fiscal year 2023 to 2.3 million vehicles after a very strong dip in the previous year. The number of sales was also
predominantly positive in the individual markets of Central Europe. The Czech Republic and Poland recorded
significant growth of 15.3% and 13.0%, respectively.
The market volume of light commercial vehicles in Central and Eastern Europe in the reporting year was
noticeably higher than the previous year’s figure (+7.3%).
The volume of the passenger car market in Türkiye in the reporting year was up more than 50% on the prior-
year level. In South Africa, the growth trend that had persisted since 2021 came to an end, with the number of
passenger car sales falling slightly by 3.8%.
The volume of new registrations of light commercial vehicles in Türkiye was very strongly (+38.1%) and in
South Africa significantly (+16.5%) higher in the reporting year than the 2022 level.
Germany
At 2.8 million units, the total number of new passenger car registrations in Germany in fiscal year 2023 was
noticeably higher than the weak prior-year level (+7.3%). Shortages and disruption in global supply chains eased,
improving vehicle availability and allowing the backlog of orders from the previous year to be cleared. The
number of passenger cars produced rose by 18.3% to 4.1 million vehicles and exports of passenger cars grew by
17.5% to 3.1 million units.
The number of sales of light commercial vehicles in Germany in the reporting year was significantly up on the
2022 figure (+15.7%).
North America
At 18.6 million vehicles, sales of passenger cars and light commercial vehicles (up to 6.35 tonnes) in the North
America region in fiscal year 2023 were significantly higher than in the prior year (+13.1%). Market growth in the
USA, which increased by 12.3% to 15.6 million units, was slightly below the average for this region. The Canadian
automotive market also registered a significant increase in sales figures to 1.7 million units (+12.5%) in the
reporting year, while new registrations of passenger cars and light commercial vehicles in Mexico saw a strong
rise of 25.1% year-on-year to 1.4 million vehicles.
South America
In the South America region, the volume of new passenger car and light commercial vehicle registrations in the
reporting year was slightly higher than the prior-year level at 3.7 million units, continuing the positive growth
trend that had begun in 2021. In Brazil, the number of new vehicle registrations was significantly higher than the
prior-year figure at 2.2 million units (+11.0%). In the Argentinian market, demand for passenger cars and light
commercial vehicles in the reporting year also rose significantly by 11.7% to 425 thousand units.
Asia-Pacific
In the Asia-Pacific region, the volume of the passenger car market in fiscal year 2023 was noticeably higher than
the previous year’s figure at 36.2 million units (+6.6%). The increased demand for passenger cars in the region
was primarily determined by the trend in the Chinese passenger car market. Here, state subsidies and incentive
programs expired at the end of 2022, causing pull-forward effects in vehicle purchases and consequently
reducing the number of vehicle registrations at the beginning of 2023. Since then, demand has recovered, partly
as a result of discounts and continuing regional incentive programs, while competition has intensified. Overall,
112
the volume of demand in China totaled 22.2 million units (+5.5%), noticeably higher than the previous year’s
level. In India, passenger car sales also rose noticeably by 9.9% year-on-year to 4.0 million units. New registra-
tions in the Japanese passenger car market in the reporting year were significantly up on the prior-year level at
4.0 million units (+15.4%).
The volume of demand for light commercial vehicles in the Asia-Pacific region in 2023 was noticeably lower
than the previous year’s level (–7.1%). Registration volumes in China, the region’s dominant market and the
largest market worldwide, experienced a slight rise of 1.4% compared to the prior year. The number of new vehi-
cle registrations in India was slightly below the prior-year level (–3.8%); in Japan this figure was slightly higher
than in the previous year (+4.2%).
TRENDS IN THE MARKETS FOR COMMERCIAL VEHICLES

In the markets that are relevant for the Volkswagen Group, demand for mid-sized and heavy trucks with a gross
weight of more than six tonnes experienced noticeable growth in fiscal year 2023 versus the comparison period
(+8.5%). Global truck markets grew significantly, due in particular to a recovery of the Chinese market following
the end of the country’s zero-Covid strategy.
In the 27 EU states excluding Malta, but including the United Kingdom, Norway and Switzerland (EU27+3),
the number of new truck registrations was significantly up on the prior-year level, increasing by 15.1% to a total
of 387 thousand vehicles. Growth could be observed in many truck markets in the region, albeit to differing
degrees. The noticeable market recovery seen in 2022 accelerated during the reporting year to a significant level
of growth. New registrations in Germany, the largest market in this region, were up strongly on the previous year
(+23.6%). The United Kingdom recorded a significant increase of 13.6%, and demand in France was also signifi-
cantly higher than in the previous year (+10.7%). Türkiye recorded a strong rise in new registrations of 17.8%. In
the South African market, demand rose noticeably (+9.3%). The truck market in North America is divided into
weight classes 1 to 8. In the segments relevant for Volkswagen – Class 6 to 8 (8.85 tonnes or heavier) – new
registrations were noticeably higher (+9.7%) than the previous year’s figure. In Brazil, the largest market in the
South America region, demand for trucks in the reporting year was significantly down on the previous year
(–16.5%) due to the introduction of a new emissions standard at the beginning of 2023.
Demand in the bus markets relevant for the Volkswagen Group was strongly higher than in the previous year
(+23.2%). Total demand for buses in the EU27+3 markets in the reporting year was up significantly on the
previous year (+18.7%), with the picture varying from country to country. The school bus segment in the USA and
Canada recorded a strong increase (+22.6%) compared with the prior year. Demand for buses in Mexico was
even much stronger than in the previous year (+70.3%). In Brazil, demand was significantly higher than the prior-
year level (+17.7%).
TRENDS IN THE MARKETS FOR POWER ENGINEERING

The markets for power engineering are influenced by varying regional and economic factors. Consequently, the
business growth trends of the respective markets develop mostly independently of one another.
In 2023, the marine market remained at a similar level to the previous year. Demand in merchant shipping
was mostly stable despite higher ship prices, and long waiting times due to high shipyard utilization rates. In this
segment, in particular the market for tankers recorded a positive trend while the markets for container ships,
LNG tankers and bulk cargo carriers saw a year-on-year decline. The market for cruise ships remained at a stable
level overall due to positive developments in the last quarter of the reporting year. By contrast, the market for
passenger ferries contracted. The special market for government vessels, which is funded by state investment,
continued to be active due to the current geopolitical situation. The uncertainty regarding future fuel and
emissions regulations persisted in the marine market in 2023, but in general a clear trend towards new fuel
technologies was confirmed. Owing to the continued uncertainty about future fuels, demand regarding dual-fuel
engines and retrofits increased in particular in the market for two-stroke engines.
113
There was reticence in the market for energy generation in 2023, particularly in Europe. This was due to the gas
supply issues and the continued lack of a finalized framework for the future operation of power plants on the part
of policymakers. The current focus on the expansion of renewable energy sources was reflected in corresponding
potential in the demand for grid balancing facilities. Such facilities are used to meet power requirements if the
share of renewables is not sufficient to ensure security of supply. A very positive trend was observed in the
demand for power-to-methane plants. In the engines segment, there is a continuously rising demand for flexible
dual-fuel engines. There is also a clear demand on the market for engines that can be converted for use with
synthetic fuels such as hydrogen and green ammonia. Demand for new energy solutions such as hydrogen and
long-term energy storage continued to be strong, with a clear trend towards greater flexibility and decentralized
availability. However, the risks of a continued lack of price stability in the markets and the bottlenecks in supply
chains were undiminished in the reporting period, as was the strong competitive and price pressure.
There was more movement in the turbomachinery market than in the previous year. Prices for raw materials
continued to be high, leading to solid demand in the raw materials and processing industry for production
facilities with turbo compressors. Sales of turbo compressors for oil and gas production were up year-on-year,
bolstered by the persistently high demand for security of supply, as well as by an investment backlog. Among the
new business fields, in the area of decarbonization sales of turbomachinery were up year-on-year. Demand for
steam turbines used for power generation and gas turbines used for decentralized, industrial combined-heat-
and-power installations was lower than in the previous year.
In 2023, the after-sales market for engines in the marine and power plant business was at the same high level
as in the previous year.
In the after-sales market for turbomachinery, demand in the reporting year was up on the prior-year level.
TRENDS IN THE MARKETS FOR FINANCIAL SERVICES

Demand for automotive financial services was at a high level in fiscal year 2023; however, higher interest rates
put pressure on demand for financial services in almost all regions.
The European passenger car market was still affected by shortages in the reporting year. Vehicle deliveries
nevertheless increased and were up on the prior-year period. Demand for financial services products also grew;
however, as a percentage of vehicle deliveries, the figure was down on the equivalent figure for 2022. The posi-
tive trend in the financing of used vehicles continued. The sale of after-sales products such as servicing, main-
tenance and spare parts agreements continued to expand.
In Germany, the persistent challenges presented by parts supply in vehicle production and by logistics chains
continued to impact vehicle sales and the financial services business. Nevertheless, the increase in deliveries of
new vehicles led to a higher volume of contracts in 2023. New vehicle penetration was down on the comparative
figure for 2022, however. New contracts for used vehicles were on a level with the previous year. The number of
new after-sales contracts increased and in the reporting year was above the level seen in 2022.
The Turkish market experienced considerable volatility. A combination of sharp interest rate hikes, the weak
currency, persistently high inflation and a refinancing environment that continued to be challenging kept lending
practices restrictive. Used cars continued to command high prices, despite the first signs of a decline.
In South Africa, financed vehicle purchases remained at a comparatively low level due to the subdued eco-
nomic conditions, higher vehicle prices and increased energy prices. However, inflation eased, and after increasing
interest rates ten times in succession from November 2021 onwards, the South African Reserve Bank did not
raise interest rates again.
Compared with the previous year, the markets in the North America region developed positively on the whole
in 2023, with demand for vehicles rising. Despite higher interest rates, new vehicle penetration in the USA and
Canada was also above the previous year’s level, particularly in the leasing business. In Mexico, meanwhile, the
114
penetration of leasing and financing contracts declined. The number of new contracts for after-sales products
was up year-on-year throughout the entire region.
In the South America region, the positive growth trend in the volume of new vehicle sales continued. The
market for financial services benefited from increased deliveries and growth was registered in the number of
financing contracts. In Argentina, the level of financing contracts was stable in spite of challenging macro-
economic conditions. In Brazil, the number of new contracts rose thanks to the range of attractive financial
services offered. The number of car subscriptions entered into also rose.
The Chinese automotive market witnessed a rise in demand for electrified and used vehicles. This in turn also
affected demand for automotive financial services. At the same time, banks with attractive products are gaining
a foothold in the market. In Japan, there was a positive trend in demand for automotive financial services thanks
to a rise in vehicle availability. Interest rates that were relatively low by international comparison and attractive
financial service offerings in many places were key features of this market.
The financial services business in the market for heavy commercial vehicles was slightly up on the prior-year
level in fiscal year 2023. The lengthy delivery times for commercial vehicles are gradually beginning to return to
normal. The borrowing habits of commercial vehicle customers changed due to the rise in interest rates: the
decision on financing is moving closer to the time of vehicle delivery because customers are counting on falling
interest rates.
NEW GROUP MODELS IN 2023

The Volkswagen Group offers a broad portfolio of products covering almost all key segments and body types so
that its customers can choose the right vehicle for their needs. In fiscal year 2023, we added further attractive
vehicles, not only systematically expanding our portfolio of all-electric and hybrid vehicles, but also bringing
compelling products with conventional combustion engines onto the market.
The Volkswagen Passenger Cars brand expanded its portfolio of all-electric vehicles in 2023, adding a further
product line with the new ID.7 saloon, crowned “German Car of the Year 2024”. The second generation of the
ID.3 was given an extensive facelift, whilst the Touareg also benefited from a product upgrade. In China, the
upgraded Tharu and T-Roc came onto the market amongst the vehicles with conventional drive systems. The
newly developed Lavida XR saloon and the all-electric ID.7 VIZZION rounded off the range of new products. In
the United States, the Atlas SUV was upgraded. The Track, a particularly attractive entry-level model from the
important Polo product line, was launched in Brazil.
At Volkswagen Commercial Vehicles, the all-electric ID. Buzz product line was expanded in 2023 with the
addition of the ID. Buzz Pro and ID. Buzz Cargo derivatives for commercial use.
In the reporting year, Audi launched the Q8 e-tron, the successor to its electric pioneer, the Audi e-tron. Of the
vehicles with conventional drive systems, the A6 and A7 model ranges and the Q8 also received an upgrade.
Bentley completed its Mulliner line, rolling out the luxury flagship Bentayga EWB Mulliner. The Continen-
tal GT, Flying Spur and Bentayga model lines were all updated. A strictly limited number of the new Grand Tourer
Bentley Batur was also available.
Lamborghini unveiled the Revuelto, its first hybrid super sports car. The Huracán Sterrato also came on the
market.
Porsche expanded its 911 series in 2023 to include the new Carrera T and Dakar models. The third generation
of the Cayenne SUV received an extensive product upgrade, thus increasing the number of hybrid vehicles in the
product line to three models.
The TRATON Group moved ahead with the electrification and digitalization of its model range in 2023.
Scania rolled out all-electric solutions for regional distribution transport which use battery cells developed in
partnership with Northvolt. Smart Dash, a new digital cockpit from Scania, was also launched.
115
Navistar electrified American school transportation with the CE school bus from IC Bus.
In 2023, Volkswagen Truck & Bus adapted its models in line with Brazil’s new emissions legislation and rolled
out its first zero-emission vehicle in South America, the eDelivery.
Ducati presented the new Panigale V4 R, the Monster SP and the Multistrada V4 Rally. The Streetfighter and
the Diavel are now also available as V4 models. The second generation of the Scrambler family ushered in three
new models: the Icon, Full Throttle and Nightshift.
VOLKSWAGEN GROUP DELIVERIES

The Volkswagen Group delivered 9,239,512 vehicles to customers worldwide in fiscal year 2023. This was
11.8% or 976,751 units more than in the previous year, which had suffered in particular from the limited
availability of Group models caused by the continued shortage of semiconductors, and from the Russia-Ukraine
conflict. Parts supply shortages continued to have an adverse effect in the reporting year. In addition, disruptions
in logistics chains had a negative effect; however, this effect diminished in the course of the year. Sales of both
passenger cars and commercial vehicles were up year-on-year. In the following, we report separately on deliv-
eries in the Passenger Cars Business Area and the Commercial Vehicles Business Area.
VOLKSWAGEN GROUP DELIVERIES 1
2023 2022 %
Passenger Cars 8,901,338 7,957,274 +11.9

Commercial Vehicles 338,174 305,487 +10.7
Total 9,239,512 8,262,761 +11.8
1 The figures include the equity-accounted Chinese joint ventures. Prior-year deliveries have been updated to reflect subsequent statistical trends.
GLOBAL DELIVERIES BY THE PASSENGER CARS BUSINESS AREA

With its passenger car brands, the Volkswagen Group is present in all relevant automotive markets around the
world. The key sales markets currently include Western Europe, China, the USA, Brazil, Türkiye, Mexico, Poland
and Czech Republic.
Sales of Volkswagen Group passenger cars and light commercial vehicles worldwide increased to 8,901,338
units in fiscal year 2023. This was 11.9% or 944,064 vehicles more than in the previous year, which had suffered
in particular from the limited availability of Group models caused by the continued shortage of semiconductors,
and from the Russia-Ukraine conflict. Parts supply shortages continued to have an adverse effect in the
reporting year. In addition, disruptions in logistics chains had a negative effect; however, this effect diminished in
the course of the year. With the exception of Bentley, all Volkswagen Group brands delivered more vehicles to
customers than in the previous year. We recorded an increase in deliveries to customers in all major individual
markets as well as in all sales regions around the world.
The Group’s e-mobility campaign continued to move ahead successfully; we delivered 771,062 all-electric
vehicles to customers worldwide in the reporting year. This was 198,590 or 34.7% more units than in the pre-
vious year. Their share of the Group’s total deliveries rose to 8.3 (6.9)%. Deliveries to customers of our plug-in
hybrid models amounted to 256,449 (+4.4%). Total electric vehicle deliveries went up by 25.6% and their share of
total Group deliveries rose year-on-year to 11.1 (9.9)%. The Group’s most successful all-electric vehicles
included the ID.4 and ID.3 from Volkswagen Passenger Cars, the Škoda Enyaq iV, the CUPRA Born, the ID. Buzz
from Volkswagen Commercial Vehicles, the Audi Q4 e-tron and Audi Q8 e-tron, as well as the Porsche Taycan
and Taycan Cross Turismo.
In an overall global market that saw noticeable growth, we achieved a passenger car market share of 11.1
(11.0)%.
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VOLKSWAGEN GROUP DELIVERIES BY MONTH

Vehicles in thousands
 2023
 2022
1,100
1,000
900
800
700
600
500
400
J F M A M J J A S O N D
The table at the end of this section gives an overview of passenger car deliveries to customers of the Volks-
wagen Group in the regions and the key individual markets. The sales figures for Group models in these markets
and regions are explained below.
Deliveries in Europe/Other Markets

In Western Europe, the Volkswagen Group delivered 3,141,434 vehicles to customers in 2023 in an overall
market experiencing significant growth. This was 20.1% more than in the weak prior-year, which had suffered in
particular from the limited availability of Group models caused by the continued shortage of semiconductors,
and from the Russia-Ukraine conflict. Parts supply shortages continued to have an adverse effect in the
reporting year. In addition, disruptions in logistics chains had a negative effect; however, this effect diminished in
the course of the year.
Customer interest in the Volkswagen Group’s electrified vehicles was strongest in Western Europe, where we
delivered almost three-quarters of our plug-in hybrids and more than half of our all-electric models to customers
in fiscal year 2023. In this region, electrified vehicles accounted for 19.8 (19.1)% of the Group’s total deliveries;
the share of all-electric vehicles stood at 14.0 (12.6)%. The Group models with the highest sales volume were
the T-Roc, Polo, Tiguan and Golf from the Volkswagen Passenger Cars brand. Other models that witnessed
encouraging demand included the ID.4, Taigo, Passat Estate and ID.3 from Volkswagen Passenger Cars, the
Octavia Combi, Enyaq iV and Kamiq from Škoda, the Arona and Ibiza from SEAT, the CUPRA Formentor, CUPRA
Born and CUPRA Leon, the ID. Buzz from Volkswagen Commercial Vehicles, the A3 Sportback, A1 Sportback, Q2,
Q3 Sportback and Q4 e-tron from Audi, as well as the Porsche Macan and the Porsche 911 coupé. In the
reporting year, the ID.3, ID.7 and the Touareg from the Volkswagen Passenger Cars brand, the Audi Q8 e-tron and
the Porsche Cayenne were among the models that were successfully introduced to the market as new or
successor models. The Volkswagen Group’s share of the passenger car market in Western Europe increased to
24.5 (23.3)%.
In the Central and Eastern Europe region, the number of vehicles handed over to customers in 2023 was up
13.3% year-on-year. The market as a whole recorded strong volume growth at the same time. Demand devel-
oped encouragingly for a number of models, including the Taigo from Volkswagen Passenger Cars, as well as for
the Škoda Octavia and Škoda Kamiq. The Volkswagen Group’s share of the passenger car market in the Central
and Eastern Europe region declined to 19.4 (21.5)%.
117
WORLDWIDE DELIVERIES OF THE MOST SUCCESSFUL GROUP MODEL RANGES IN 2023

Vehicles in thousands
Tiguan 499
Passat 490
Polo 441
Jetta 362
Q5 332
T-Roc 312
Lavida 290
Golf 289
In Türkiye, where the overall passenger car market expanded very strongly, the Volkswagen Group delivered
61.6% more vehicles to customers in the past fiscal year than in 2022. The Polo from Volkswagen Passenger
Cars was the most sought-after Group model. In the South African market, the number of Group models sold
decreased by 3.2%, while the overall market likewise narrowed slightly. The Polo from the Volkswagen Passen-
ger Cars brand was also the most sought-after Group model in this region.
Deliveries in Germany
In Germany, the number of vehicles delivered to Volkswagen Group customers in an overall market registering
noticeable growth was up 14.4% in 2023 on the weak prior-year period, which had suffered in particular from
the limited availability of Group models attributable to the continued shortage of semiconductors, and from the
Russia-Ukraine conflict. Parts supply shortages continued to have an adverse effect in the reporting year. In
addition, disruptions in logistics chains had a negative effect; however, this effect diminished in the course of the
year.
The Group models with the highest sales volume were the T-Roc, Golf, Passat and Tiguan from the Volks-
wagen Passenger Cars brand. In addition, models such as the ID.4 and ID.5 from Volkswagen Passenger Cars,
Škoda’s Octavia Combi and Enyaq iV, SEAT’s Arona, the CUPRA Born and CUPRA Leon, the ID. Buzz from
Volkswagen Commercial Vehicles, and the A4 Avant, Q2, Q4 e-tron and A1 Sportback from the Audi brand all
saw encouraging demand. Seven Group models led the Kraftfahrt-Bundesamt (KBA – German Federal Motor
Transport Authority) registration statistics in their respective segments: the Golf, T-Roc, Tiguan, Passat, Audi A6,
Multivan/Transporter and Porsche 911. The Golf was again the most popular passenger car in Germany in terms
of registrations in 2023.
Deliveries in North America

In the reporting year, the number of Volkswagen Group models delivered to customers in North America increased
by 18.4% year-on-year in an overall market experiencing significant growth. The share of all-electric vehicles in
the Group’s total deliveries rose to 8.5 (5.9)% in this region. The Tiguan Allspace and Taos from Volkswagen
Passenger Cars were the most sought-after Group models in North America, along with the Audi Q5. The Atlas
from Volkswagen Passenger Cars, the Audi Q8 e-tron and the Porsche Cayenne were among the successor
models that were successfully launched on the market during the reporting year. The Group’s share of the market
in this region amounted to 4.8 (4.6)%.
118
In fiscal year 2023, the Volkswagen Group delivered 13.3% more vehicles to customers in the significantly
expanding US market than in the previous year, in which parts supply shortages in particular had likewise had an
adverse effect. The Group models to record the greatest increases in absolute terms included the ID.4 from
Volkswagen Passenger Cars as well as the Audi Q5 and the Audi Q7. In addition, the Atlas from Volkswagen
Passenger Cars, the Audi Q4 e-tron and the Porsche Macan, among others, performed encouragingly. The vol-
ume of all-electric vehicles delivered in the United States went up by 60.8% year-on-year to 71,041 units.
In Canada, the number of vehicles delivered to Volkswagen Group customers was up 28.1% in the reporting
year compared with 2022. The market as a whole recorded significant growth at the same time. The Group
models with the highest volume of demand were the Tiguan Allspace and the Taos from the Volkswagen Pas-
senger Cars brand, along with the Audi Q5.
In Mexico, where the market as a whole saw strong growth, we sold 37.3% more vehicles to customers in the
past fiscal year than in 2022. Demand developed encouragingly for, among others, the Taos, Virtus and Jetta
from Volkswagen Passenger Cars.
Deliveries in South America

In the South American market for passenger cars and light commercial vehicles, which was slightly higher than
in the previous year, the number of Group models handed over to customers in 2023 was up 17.2% on the prior-
year figure. The Polo, T-Cross and Nivus from Volkswagen Passenger Cars were the Group models with the
highest sales volumes. The new Polo Track was successfully introduced to the market in the reporting year. The
Group’s share of the market in South America rose to 12.6 (11.1)%.
In the Brazilian market, which performed significantly better than in the previous year, the Volkswagen Group
delivered 28.4% more vehicles to customers in the reporting year. The development of the sales of the Polo,
Saveiro and Virtus models from Volkswagen Passenger Cars was particularly encouraging.
In Argentina, the number of Volkswagen Group vehicles handed over to customers in 2023 increased by
20.0% year-on-year in an overall market exhibiting significant growth. Group models with the highest sales
volume were the Taos from Volkswagen Passenger Cars and the Amarok from Volkswagen Commercial Vehicles.
Deliveries in the Asia-Pacific region

In the past fiscal year, the Volkswagen Group saw deliveries to customers in the Asia-Pacific region rise by 2.3%
compared with 2022 in a market that experienced noticeable growth overall. The Group’s share of the passenger
car market in this region amounted to 9.9 (10.3)%.
In China, the overall market volume likewise recorded noticeable growth compared with the previous year, in
which parts supply shortages, in particular of semiconductors, and local lockdowns intended to curb the spread
of the SARS-CoV-2 virus had an adverse effect. The Volkswagen Group delivered 1.6% more vehicles to
customers there than in 2022. In addition to parts supply shortages, the increasing intensity of competition,
especially for electrified vehicles, had a negative impact in the reporting year. The number of all-electric vehicles
delivered to customers in China was 23.2% higher year-on-year at 191,781 units. Their share of the Group’s total
deliveries in China rose to 5.9 (4.9)%. The Group models with the highest sales volume were the Lavida, Sagitar,
Passat and Magotan from Volkswagen Passenger Cars and the Audi A6. In addition, the Tiguan Allspace, Tyron,
ID.3 and Tavendor from Volkswagen Passenger Cars and the Q4 e-tron, A7 saloon, Q7, Q5 e-tron and Q6 from
Audi saw an encouraging increase in demand. The Tharu, T-Roc, Lavida XR and ID.7 VIZZION from Volkswagen
Passenger Cars, the Audi Q3 and the Porsche Cayenne, among others, were introduced to the market as new or
successor models in the reporting year.
119
In the Indian passenger car market, which registered noticeable growth, the Volkswagen Group recorded a 4.0%
year-on-year increase in demand in fiscal year 2023. The Taigun from the Volkswagen Passenger Cars brand as
well as the Kushaq from Škoda were the most sought-after Group models there. In addition, the Virtus from
Volkswagen Passenger Cars and the Kodiaq from Škoda, which were introduced to the market as new or suc-
cessor models during the previous year, saw encouraging development in demand.
In Japan, the number of Group vehicles delivered to customers in 2023 was up 7.4% year-on-year in an
overall market that performed significantly better than in the previous year. The Group models with the highest
sales volume were the T-Roc, the Golf and the T-Cross from the Volkswagen Passenger Cars brand.
PASSENGER CAR DELIVERIES TO CUSTOMERS BY MARKET 1
DELIVERIES (UNITS) CHANGE
2023 2022 (%)
Europe/Other Markets 3,953,397 3,297,388 +19.9

Western Europe 3,141,434 2,615,863 +20.1
of which: Germany 1,141,418 998,000 +14.4
France 263,643 211,430 +24.7
United Kingdom 489,088 377,449 +29.6
Italy 269,479 223,864 +20.4
Spain 232,483 192,310 +20.9
Central and Eastern Europe 474,357 418,513 +13.3
of which: Czech Republic 123,471 103,223 +19.6
Russia 3,504 41,864 –91.6
Poland 140,518 112,389 +25.0
Other Markets 337,606 263,012 +28.4
of which: Türkiye 166,001 102,735 +61.6
South Africa 69,150 71,437 –3.2
North America 899,652 759,791 +18.4
of which: USA 639,622 564,705 +13.3
Canada 110,019 85,860 +28.1
Mexico 150,011 109,226 +37.3
South America 465,842 397,539 +17.2
of which: Brazil 356,682 277,806 +28.4
Argentina 57,931 48,263 +20.0
Asia-Pacific 3,582,447 3,502,556 +2.3
of which: China 3,233,933 3,182,428 +1.6
India 101,553 97,610 +4.0
Japan 65,635 61,112 +7.4
Worldwide 8,901,338 7,957,274 +11.9
Volkswagen Passenger Cars 4,866,803 4,563,327 +6.7
Škoda 866,820 731,262 +18.5
SEAT 519,176 385,591 +34.6
Volkswagen Commercial Vehicles 409,406 328,572 +24.6
Audi 1,895,240 1,614,231 +17.4
Lamborghini 10,112 9,233 +9.5
Bentley 13,560 15,174 –10.6
Porsche 320,221 309,884 +3.3
1 The figures include the equity-accounted Chinese joint ventures. Prior-year deliveries have been updated to reflect subsequent statistical trends.
120
COMMERCIAL VEHICLE DELIVERIES

In fiscal year 2023, the Volkswagen Group delivered +10.7% more commercial vehicles to customers worldwide
than in the previous year. We handed over a total of 338,174 commercial vehicles to customers. Trucks accounted
for 281,280 units (+10.6%) and buses for 30,267 (+2.2%). Deliveries of the MAN TGE van series saw a strong
increase compared with the prior-year period, rising to 26,627 (+23.4%) vehicles. Due to the very high order
backlog, a further stabilization of supply chains and higher production volume, the deliveries increased signifi-
cantly in the reporting year.
In the 27 EU states excluding Malta, but including the United Kingdom, Norway and Switzerland (EU27+3)
sales in the reporting year were up by 34.8% on the same period of the previous year and amounted to a total of
155,726 units, of which 123,525 were trucks and 6,308 were buses. Here, the MAN brand delivered 25,893
vehicles from the MAN TGE van series.
In fiscal year 2023, deliveries in Türkiye were much stronger than in the previous year, at 5,737 (4,413)
vehicles. Trucks accounted for 5,126 units and buses for 292 units, while 319 vehicles from the MAN TGE van
series were sold. In South Africa, deliveries of Volkswagen Group commercial vehicles increased by 32.9% year-
on-year to a total of 4,891 units; of this figure 4,407 were trucks and 484 were buses.
Sales in North America rose to 93,430 (82,828) vehicles in the reporting year; this included 78,277 trucks and
15,153 buses.
Deliveries in South America decreased to a total of 52,330 vehicles (–31.3%) in 2023, of which 46,083 were
trucks and 6,247 were buses. Due to the introduction of a new emissions standard at the beginning of 2023,
sales in Brazil, the biggest market in this region, were down by 30.3% in the reporting year, falling to 41,578
units. Of the units delivered, 36,671 were trucks and 4,907 were buses.
In the Asia-Pacific region, the Volkswagen Group sold 12,057 vehicles in the reporting year, including 11,077
trucks and 937 buses. Overall, this was 5.4% more than in the previous year.
COMMERCIAL VEHICLE DELIVERIES TO CUSTOMERS BY MARKET 1
DELIVERIES (UNITS) CHANGE
2023 2022 (%)
Europe/Other Markets 180,357 135,063 +33.5

of which: EU27+3 155,726 115,535 +34.8
of which: Germany 43,711 31,642 +38.1
Türkiye 5,737 4,413 +30.0
South Africa 4,891 3,681 +32.9
North America 93,430 82,828 +12.8
of which: USA 73,473 66,403 +10.6
Mexico 14,478 11,131 +30.1
South America 52,330 76,152 –31.3
of which: Brazil 41,578 59,630 –30.3
Asia-Pacific 12,057 11,444 +5.4
Worldwide 338,174 305,487 +10.7
Scania 96,568 85,232 +13.3
MAN 115,653 84,372 +37.1
Navistar 88,880 81,892 +8.5
Volkswagen Truck & Bus 37,073 53,991 –31.3
1 Prior-year deliveries have been updated to reflect subsequent statistical trends.
121
DELIVERIES IN THE POWER ENGINEERING SEGMENT

Orders in the Power Engineering segment are usually part of major investment projects. Lead times typically
range from just under one year to several years, and partial deliveries as construction progresses are common.
Accordingly, there is a time lag between incoming orders and sales revenue from the new construction business.
In 2023, sales revenue in the Power Engineering segment was largely driven by Engines & Marine Systems
and Turbomachinery, which together generated more than three quarters of overall sales revenue.
ORDERS RECEIVED IN THE PASSENGER CARS SEGMENT IN WESTERN EUROPE

Orders received in Western Europe in the reporting year were down 15.7% on the 2022 level. Demand for models
with combustion engine or plug-in hybrid drivetrains performed somewhat better by comparison – in some
markets such as the United Kingdom and Spain, orders increased year-on-year. For battery-electric vehicles by
contrast, there was a stronger decrease in orders for battery-electric vehicles than in the prior year. The buyer
reluctance seen across the industry, partly due to worsening underlying economic conditions and the expiry of
state subsidies, contributed to lower demand in key markets.
ORDERS RECEIVED FOR COMMERCIAL VEHICLES

Orders received for mid-sized and heavy trucks, for buses and for commercial vehicles from the MAN TGE van
series declined by 21% year-on-year to 264,798 vehicles in 2023. Prevailing uncertainty about economic
development and more difficult financing conditions led to a normalization of demand, particularly in Europe. In
North America, incoming orders were down sharply on the previous year, due mainly to continuing restrictive
order acceptance caused by the very high order backlog. Incoming orders in South America were strongly below
the prior-year figure as a result of pull-forward effects in connection with the introduction of a new emissions
standard in Brazil at the beginning of 2023. The MAN TGE van series segment likewise recorded a significant
downturn.
Order intake in the bus business recorded a noticeable decrease year-on-year. A noticeably higher order
intake was recorded in the EU27+3 region. This is attributable, among other things, to the continued slow
recovery in the coach market. In contrast, incoming orders in South America were sharply below the previous
year’s figures.
ORDERS RECEIVED IN THE POWER ENGINEERING SEGMENT

The long-term performance of the Power Engineering business is determined by the macroeconomic environ-
ment. Individual major orders lead to fluctuations in incoming orders during the year that do not correlate with
these long-term trends.
Orders received in the Power Engineering segment in 2023 amounted to €5.0 (4.3) billion. Engines & Marine
Systems and Turbomachinery generated more than three quarters of the order volume in a persistently difficult
market environment.
In the marine business, for example, twelve 32/44CR engines and twenty-four 175D engines were ordered
for six ships in 2023. In the power plant business, orders were secured for 81 engines and component sets for 22
completely knocked down engines of different types with an aggregate output of 1,409 MW. For turbomachinery,
we received several orders for new applications which were driven by the energy transition and decarbonization
such as carbon capture and storage in the Netherlands and a large-scale heat pump for Denmark. A further order
was also placed for compression of hydrogen from electrolysis installations for use in industrial processes. We
also recorded successes for remote-controlled machinery trains in the North Sea equipped with digital packages
and a major order for eleven compressors on a floating oil and gas production facility.
122
VOLKSWAGEN GROUP FINANCIAL SERVICES

The activities in the Financial Services Division cover the Volkswagen Group’s dealer and customer financing,
leasing, banking and insurance activities, fleet management and mobility services. The division comprises
Volkswagen Financial Services and the financial services activities of Scania, Navistar and Porsche Holding
Salzburg and also extends to the contracts concluded by our international joint ventures.
The Financial Services Division’s products and services were popular in fiscal year 2023. However, limited
vehicle availability caused by parts supply shortages and disruptions in logistics chains weighed on demand.
The number of new financing, leasing, service and insurance contracts signed worldwide increased by 11.3% to
9.5 million. The ratio of leased and financed vehicles to Group deliveries (penetration rate) in the Financial Ser-
vices Division’s markets stood at 32.8% in the reporting year, on a level with the previous year. The total number
of contracts stood at 24.6 (24.5) million on December 31, 2023.
At 6.9 million, the number of new contracts signed was up 12.0% on the previous year’s figure in the Europe/
Other Markets region even though the financial services business was impacted by limited vehicle availability in
2023. The total number of contracts at the end of the reporting year was 18.4 (18.1) million, putting it on
a level with the figure for December 31, 2022. The customer financing/leasing area was responsible for
7.1 (7.2) million of these contracts.
The number of new contracts signed in North America in 2023 increased to 1.0 (0.8) million. At 2.9 (3.0) mil-
lion, the number of contracts as of December 31, 2023 was on a level with the end of the previous year. The
customer financing/leasing area recorded 1.6 (1.7) million contracts.
In the South America region, 543 (360) thousand new contracts were concluded in the reporting year.
Compared with December 31, 2022, the total number of contracts at the end of the reporting year rose to
933 (828) thousand. Existing contracts mainly related to the customer financing/leasing area.
The number of new contracts signed in the Asia-Pacific region in 2023 declined to 1.0 (1.2) million, falling
short of the comparative prior-year figure. At the end of December 2023, the total number of contracts stood at
2.4 (2.6) million. The customer financing/leasing area was responsible for 1.5 (1.6) million of these contracts.
SALES TO THE DEALER ORGANIZATION

The Volkswagen Group’s unit sales to the dealer organization increased in the reporting year by 10.4% to
9,362,441 units (including the equity-accounted companies in China). The prior-year figure had been impacted
in particular by the limited vehicle availability due to bottlenecks in the supply of parts caused by the shortage of
semiconductors and the Russia-Ukraine conflict. Persistent parts supply shortages had a negative effect in the
reporting year and disruption in the global logistics chains also led to delays, though these eased as the year
progressed. Unit sales outside Germany rose by 9.5% to 8,184,399 vehicles. Growth was seen above all in the
United States, the United Kingdom and Türkiye, while fewer vehicles were sold in China. Unit sales in Germany
increased by 17.2% year-on-year. The proportion of the Group’s total unit sales attributable to Germany
increased to 12.6 (11.9)%.
The Tiguan, Polo, Passat, Jetta, T-Roc, Golf and T-Cross from the Volkswagen Passenger Cars brand were our
biggest sellers last year. The largest increases in unit sales were recorded for the Polo, ID.3, Jetta and Passat
models from the Volkswagen Passenger Cars brand, the Q4 e-tron, A6 and Q5 from Audi, the SEAT Leon and the
Škoda Octavia. The Porsche 911 and the ID. Buzz also achieved a strong growth rate.
123
PRODUCTION
The Volkswagen Group produced 9,309,273 vehicles (including the equity-accounted companies in China) in the
period from January to December 2023, 6.8% more than in the comparative prior-year period, which had seen
production being halted due to the disruption of supply chains caused by the Russia-Ukraine conflict and the
Covid-19 pandemic. Parts supply shortages impacted production in fiscal year 2023. Production in Germany
increased by 16.2% to 1,914,368 vehicles. The proportion of the Group’s total production accounted for by
Germany increased to 20.6 (18.9)%.
INVENTORIES
Global inventories of new vehicles at Group companies and in the dealer organization were higher at the end of
the reporting year than at year-end 2022. The effect of disruption in the logistics chains continued to have a
negative impact in the reporting year which eased as the year progressed.
EMPLOYEES
Including the Chinese joint ventures, the Volkswagen Group employed an average of 678,825 people in fiscal
year 2023, an increase of 1.4% year-on-year. In Germany, we employed 296,134 people on average; at
43.6 (43.3)%, their share of the total headcount was on a level with the previous year.
The number of active employees in the Volkswagen Group rose by 1.2% to 654,359 as of December 31, 2023.
In addition, 12,585 employees were in the passive phase of their partial retirement and 17,081 young people
were in vocational traineeships. At the end of the reporting year, the Volkswagen Group had a total of 684,025
employees worldwide. This represented an increase of 1.2% since the end of 2022. The workforce in Germany
rose to 298,687 people (+1.6%) and the workforce outside Germany – including the sale of OOO Volkswagen
Group Rus, Kaluga/Russia – increased to 385,338 (+0.9%).
EMPLOYEES BY DIVISION/BUSINESS AREA

as of December 31, 2023
 Passenger Cars 543,745

 Commercial Vehicles 106,250
 Power Engineering 15,478
 Financial Services 18,552
124
Group Management Report Shares and Bonds
Shares and Bonds

The intensifying competition in the automotive sector with increasingly aggressive pricing,
particularly in China, put pressure on the price of Volkswagen AG’s ordinary and preferred
shares in the reporting year.
EQUITY MARKETS AND PERFORMANCE OF THE PRICE OF VOLKSWAGEN’S SHARES

In fiscal year 2023, thanks to positive economic data, the international stock markets initially continued the
upward trend that they had begun in October 2022 and recorded significant gains. Over time, however, hopes
that national central banks would ease back on the pace of interest rate increases changed to growing concerns
about further hikes to rein in persistently high inflation. What is more, the crisis in the international banking
sector triggered by the higher interest rates deeply unsettled the financial markets, a situation that was exacer-
bated among other things by the debt ceiling debates in the United States. Encouraging economic and corporate
data initially bolstered the stock markets as the year progressed, before prices came under pressure again. By the
end of the reporting year, prices had recovered once more in anticipation of interest rate cuts in the year 2024.
The German stock market index (DAX) got off to a tremendous start in 2023, initially recording significant
gains over the 2022 year-end closing price. Sentiment brightened on the back of falling energy prices, expec-
tations of declining inflation rates and improved leading economic indicators. However, in the months that
followed, stock prices were hit by continued interest rate hikes on the part of the European Central Bank in light
of continued high inflationary pressure. The DAX transitioned into sideways movement. As the year went on, the
turbulence at several international banks triggered by rising interest rates and the US debt ceiling dispute had an
adverse effect on share prices. This was compounded by economic woes caused among other things by the
muted economic data coming from China. Supported by receding inflation and speculation about interest rate
cuts, market sentiment improved in the last trading weeks of the reporting year, with the DAX rising to a new
record high in mid-December and ending 2023 up 20.3% on the previous year’s level.
The prices of Volkswagen AG’s preferred and ordinary shares initially developed very positively at the
beginning of the reporting year. The sound results for the 2022 fiscal year published at the beginning of March
2023, the dividend proposed for 2022 and a favorable outlook for 2023 caused a temporary rally. The investment
plans announced when the annual report was presented were received critically by the capital markets due to
the high level of capital required for the transformation of the company. The intensifying competition in the auto-
motive sector likewise acted as a damper on the share price. Price cuts by competitors, especially for electric
vehicles, and concerns about increasingly aggressive pricing generated further uncertainty among investors.
Declining market shares in China combined with the assessment by market participants regarding the Group’s
high dependence on developments in this country also weighed on the share price. Expectations of falling
margins in the automotive industry and lower demand for electric vehicles, which led to stiffer competition,
125
PRICE DEVELOPMENT FROM DECEMBER 2022 TO DECEMBER 2023

Index based on month-end prices: December 31, 2022 = 100
 Volkswagen ordinary share –19.8%

 Volkswagen preferred share –4.0%
 DAX +20.3%
 EURO STOXX Automobiles & Parts +19.7%
140
120
100
80
60
D J F M A M J J A S O N D
initially pushed down prices further. Buoyed by a positive overall market environment, the shares then regained
some ground before stabilizing at a low level in the last trading weeks of the year. The 2023 year-end closing
price was down 4.0% for the preferred share and 19.8% for the ordinary share compared with the prior-year
figure. Assuming that the regular dividend (before deduction of taxes) was reinvested in Volkswagen shares at
the time of distribution, the total return on the preferred shares was +3.1% and the total return on the ordinary
shares was –15.1%. The return on the preferred shares was therefore lower than that of the benchmark indices,
DAX and EURO STOXX Automobiles & Parts.
VOLKSWAGEN SHARE KEY FIGURES AND MARKET INDICES

FROM JANUARY 1 TO DECEMBER 31, 2023
High Low Closing
Ordinary share Price (€) 181.65 106.40 118.45

Date Mar. 3 Oct. 27 Dec. 29
Preferred share Price (€) 142.20 99.14 111.80
Date Mar. 3 Oct. 30 Dec. 29
DAX Price 16,794 14,069 16,752
Date Dec. 11 Jan. 2 Dec. 29
EURO STOXX Automobiles & Parts Price 634 522 606
Date Jul. 28 Jan. 2 Dec. 29
126
CAPITAL MARKETS DAY

At the Capital Markets Day held in June 2023, the Volkswagen Group presented the Group’s newly focused
strategic alignment to the over 200 international financial analysts, institutional investors and representatives of
rating agencies and banks in attendance. Its core element is a new leadership model based on customer orien-
tation, entrepreneurship and team spirit. The “value over volume” principle thereby prioritizes sustainable value
creation over volume growth. The shift in focus will give the brand groups a new steering model and sharpen brand
positioning and the product range. Responsibility for return targets has been transferred to the brands, which
will each implement an earnings improvement program to shore up profitability and cash flows and reduce
capital intensity. The Group will reposition the “Architecture”, “Software”, “Battery, Charging & Energy” and
“Volkswagen Group Mobility” technology platforms so that their economies of scale can be leveraged for the
strengthened brands. Regionally, the Group is focusing its investments on the world’s most attractive profit
pools. In this context, the refined strategies for the important growth markets of China and North America were
also presented. In addition, Volkswagen has updated its medium-term and strategic financial targets. Along with
the presentations and discussions with the members of the Group Board of Management, visitors to the Capital
Markets Day had the chance to experience the Group’s vehicles and technologies for themselves. The Volks-
wagen Group also gave the general public the opportunity to follow the event online via a live webcast, with
some 16,000 internal and external viewers watching the presentations live.
Capital Markets Day was the start of deeper dialogue with the capital markets. Further events are planned for
the coming years at which investors and analysts will be briefed in detail on the strategies for the brand groups,
technology areas and regional strategies.
DIVIDEND POLICY
Our dividend policy matches our financial strategy. In the interests of all stakeholders, we aim for continuous
dividend growth that allows our shareholders to participate appropriately in our business success. The proposed
dividend therefore reflects our financial management objectives – in particular, ensuring a solid financial founda-
tion as part of the implementation of our strategy.
The current dividend proposal can be found in the chapter entitled “Volkswagen AG (condensed, in accor-
dance with the German Commercial Code)” of this annual report. The Board of Management and Supervisory
Board of Volkswagen AG are proposing a dividend of €9.00 per ordinary share and €9.06 per preferred share for
fiscal year 2023. On this basis, the total dividend amounts to €4.5 (4.4) billion. The payout ratio is based on the
Group’s earnings after tax attributable to Volkswagen AG shareholders. This amounts to 28.3% for the reporting
year and stood at 29.4% for the previous year; the special dividend due to the IPO of Porsche AG is not included
in either of these figures. We strive to achieve a payout ratio of at least 30%.
DIVIDEND YIELD
Based on the dividend proposal for the reporting year, the dividend yield on Volkswagen ordinary shares is
7.6 (5.9)%, measured by the closing price on the last trading day in 2023. The dividend yield on preferred shares
is 8.1 (7.5)%.
127
EARNINGS PER SHARE

Basic earnings per ordinary share were €31.92 (29.66) in fiscal year 2023. Basic earnings per preferred share
were €31.98 (29.72). In accordance with IAS 33, the calculation is based on the weighted average number of
ordinary and preferred shares outstanding in the reporting year. Since the number of basic and diluted shares is
identical, basic earnings per share correspond to diluted earnings per share.
See also “Earnings per share” in the notes to the 2023 consolidated financial statements for the calculation of
earnings per share.
SHAREHOLDER STRUCTURE AS OF DECEMBER 31, 2023

At the end of the reporting year, Volkswagen AG’s subscribed capital amounted to €1,283,315,873.28. The chart
below shows the shareholder structure of Volkswagen AG as of December 31, 2023.
SHAREHOLDER STRUCTURE AS OF DECEMBER 31, 2023

as a percentage of subscribed capital
 Porsche Automobil Holding SE 31.9%

 Foreign institutional investors 20.0%
 Qatar Holding LLC 10.0%
 State of Lower Saxony 11.8%
 Private shareholders/Others 24.1%
 German institutional investors 2.2%
The distribution of voting rights for the 295,089,818 ordinary shares was as follows at the reporting date:
Porsche Automobil Holding SE, Stuttgart, held 53.3% of the voting rights. The second-largest shareholder was
the State of Lower Saxony, which held 20.0% of the voting rights. Qatar Holding LLC was the third-largest
shareholder with 17.0%. The remaining 9.7% of ordinary shares were in free float.
Notifications of changes in voting rights in accordance with the Wertpapierhandelsgesetz (WpHG – German
Securities Trading Act) are published on our website at www.volkswagen-group.com/distribution-of-voting-rights.
VOLKSWAGEN SHARE DATA
Ordinary share Preferred share
ISIN DE0007664005 DE0007664039

WKN 766400 766403
Deutsche Börse/Bloomberg VOW VOW3
Reuters VOWG.DE VOWG_p.DE
DAX, CDAX, EURO STOXX, EURO STOXX 50,
CDAX, Prime All Share, MSCI Euro, EURO STOXX Automobiles & Parts,
Primary market indices S&P Global 100 Index Prime All Share, MSCI Euro
Exchanges Berlin, Dusseldorf, Frankfurt, Hamburg, Hanover, Munich, Stuttgart, Xetra
128
VOLKSWAGEN SHARE KEY FIGURES
Dividend development 2023 2022 2021 2020 2019
Number of no-par value shares at Dec. 31

Ordinary shares thousands 295,090 295,090 295,090 295,090 295,090
Preferred shares thousands 206,205 206,205 206,205 206,205 206,205
Dividend1
per ordinary share € 9.00 8.70 7.50 4.80 4.80
per preferred share € 9.06 8.76 7.56 4.86 4.86
Dividend paid1 € million 4,524 4,374 3,772 2,419 2,419
on ordinary shares € million 2,656 2,567 2,213 1,416 1,416
on preferred shares € million 1,868 1,806 1,559 1,002 1,002
Share price development2 2023 20223 2021 2020 2019
Ordinary share
Closing € 118.45 147.65 258.40 170.10 173.25
Price performance % –19.8 –42.9 +51.9 –1.8 +24.6
Annual high € 181.65 279.40 327.20 183.10 182.50
Annual low € 106.40 145.00 165.70 101.50 135.60
Preferred share
Closing € 111.80 116.42 177.48 152.42 176.24
Price performance % –4.0 –34.4 +16.4 –13.5 +26.9
Annual high € 142.20 193.10 246.55 185.52 184.24
Annual low € 99.14 114.88 144.80 87.20 134.76
Beta factor4 factor 1.13 1.15 1.16 1.26 1.17
Market capitalization at Dec. 31 € billion 58.0 67.6 112.8 81.6 87.5
Equity attributable to Volkswagen AG
shareholders and hybrid capital investors
at Dec. 31 € billion 175.7 165.4 144.4 127.0 121.8
Ratio of market capitalization to equity factor 0.33 0.41 0.78 0.64 0.72
Key figures per share 2023 20223 2021 2020 2019
Earnings per ordinary share 5
basic € 31.92 29.66 29.59 16.60 26.60

diluted € 31.92 29.66 29.59 16.60 26.60
shareholders and hybrid capital investors
at Dec. 31 € 350.48 329.90 288.15 253.44 242.93
Price/earnings ratio6
Ordinary share factor 3.7 5.0 8.7 10.2 6.5
Preferred share factor 3.5 3.9 6.0 9.1 6.6
Dividend yield7
Ordinary share % 7.6 5.9 2.9 2.8 2.8
Preferred share % 8.1 7.5 4.3 3.2 2.8
Stock exchange turnover8 2023 2022 2021 2020 2019
Turnover of Volkswagen ordinary shares € billion 1.4 2.7 6.1 3.1 3.3
million shares 10.2 13.5 23.3 21.6 20.9
Turnover of Volkswagen preferred shares € billion 31.4 44.9 58.8 49.8 41.0
million shares 263.2 302.2 300.4 361.2 266.0
Volkswagen share of total DAX turnover % 4.1 4.7 6.6 4.7 4.6
1 Figures for the years 2019 to 2022 relate to dividends paid in the following year. For 2021, the figures exclude the special dividend due to the IPO of Porsche AG. For 2023, the
figures relate to the proposed dividend.
2 Xetra prices.
4 For the calculation see chapter “Results of Operations, Financial Position and Net Assets” of this annual report, prior-year figures adjusted.
5 For the calculation see “Earnings per share” in the notes to the consolidated financial statements.
6 Ratio of year-end-closing price to earnings per share.
7 Dividend per share based on the year-end-closing price.
8 Order book turnover on the Xetra electronic trading platform (Deutsche Börse).
129
REFINANCING STRUCTURE OF THE VOLKSWAGEN GROUP

Commercial paper Bonds Asset-backed

7% 62% securities
31%
Money and capital
market instruments
≤ 1 year > 1 to < 5 years ≥ 5 years

28% 56% 16%
Maturities
EUR USD Others

61% 19% 20%
Currencies
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
REFINANCING
The Volkswagen Group further diversified its refinancing activities in 2023 and carried out several successful
transactions in the international capital markets amid a challenging market environment.
With the growing electrification of the vehicle portfolio, sustainable financial instruments are an increasing
focus of the refinancing strategy. In March 2023, Volkswagen International Finance N.V. placed two green bonds
with a total volume of €1.75 billion. In August 2023, the company successfully issued its first green hybrid notes
with a total principal amount of €1.75 billion after duly calling a hybrid note with a principal amount of €750 mil-
lion to be redeemed as of September 4, 2023. These green bonds are based on the Volkswagen Group’s Green
Finance Framework presented in November 2022. This allows the Company to refinance capital expenditures
that are aligned with the EU Taxonomy, whereby Volkswagen will limit itself to all-electric vehicles. Volkswagen
Financial Services AG also published its first Green Finance Framework in August 2023, which is to be used exclu-
sively for refinancing financial products for all-electric vehicles. In September 2023, Volkswagen Leasing GmbH
placed its first green bonds on the capital market with a total volume of €2.0 billion.
In the US capital market, Volkswagen Group of America Finance, LLC placed bonds with a total volume of
USD 5.65 billion in September and November 2023. Notes with a volume of CAD 750 million were issued in the
Canadian refinancing market.
The Volkswagen Group was active locally on the Chinese capital market for the first time through Volkswagen
International Finance N.V. and issued what is known as a Panda bond worth CNY 1.5 billion in September 2023.
In May and November 2023, TRATON Finance Luxembourg S.A., an indirect subsidiary of TRATON SE, issued
bonds in three tranches with a total volume of €1.75 billion.
130
In addition to this, the Volkswagen Group issued private placements in various currencies.
As well as the green bonds, official euro benchmark bonds were issued for a further €2.0 billion for the Finan-
cial Services Division. Securities were also issued in various currencies and regions.
Alongside the placement of senior, unsecured bonds, asset-backed securities (ABS) transactions were another
element of our refinancing activities. In Europe, public ABS transactions with a total volume of €2.75 billion were
placed. Public ABS transactions were also issued in the United Kingdom, Australia, Japan and Brazil.
The Volkswagen Group was also actively involved in the commercial paper market with several issuing com-
panies.
The proportion of fixed-rate instruments in the past year was about 2.5 times as high as the proportion of
floating-rate instruments.
In our refinancing arrangements, we generally aim to exclude interest rate and currency risk as far as possible
with the simultaneous use of derivatives.
The following table shows which financial instruments were utilized on the money and capital markets as of
December 31, 2023 and illustrates the financial flexibility of the Volkswagen Group:
Authorized Amount utilized

volume on Dec. 31, 2023
Financial instruments € billion € billion
Commercial paper 40.3 10.4

Bonds 192.4 98.6
of which hybrid issues 14.9
Asset-backed securities 104.3 48.2
Volkswagen AG’s syndicated credit line of €10.0 billion agreed in December 2019 was unused at the end of 2023.
Of the syndicated credit lines with a total of €15.1 billion at other Group companies, €0.1 billion has been
drawn down. The Volkswagen Group continued to have bilateral confirmed credit lines with national and inter-
national banks in various countries for a total of €6.2 billion, of which €0.3 billion was drawn down.
131
RATINGS
In November 2023, rating agency Standard & Poor’s confirmed its short-term and long-term ratings for Volks-
wagen AG, Volkswagen Financial Services AG and Volkswagen Bank GmbH at A–2 and BBB+ respectively. The
outlook for all companies remains unchanged at “stable”. In September 2023, Standard & Poor’s also issued a
short-term rating of A–2 for TRATON SE. In November 2023, the short- and long-term ratings for TRATON SE
were confirmed at A–2 and BBB respectively with a “stable” outlook.
In July and October 2023, Moody’s Investors Service confirmed the short-term and long-term ratings for
Volkswagen AG and Volkswagen Financial Services AG at P–2 and A3, respectively, and those for Volkswagen
Bank GmbH at P–1 and A1. The outlook was left unchanged at “stable”. For TRATON SE, the long-term rating of
Baa2 with an outlook of “stable” was confirmed in September 2023. TRATON SE was also given a short-term
rating of P–2.
VOLKSWAGEN
FINANCIAL VOLKSWAGEN
VOLKSWAGEN AG SERVICES AG BANK GMBH TRATON SE
2023 2022 2023 2022 2023 2022 2023 2022
Standard & Poor’s

short-term A–2 A–2 A–2 A–2 A–2 A–2 A–2 –
long-term BBB+ BBB+ BBB+ BBB+ BBB+ BBB+ BBB BBB
outlook stable stable stable stable stable stable stable stable
Moody’s Investors Service
short-term P–2 P–2 P–2 P–2 P–1 P–1 P–2 –
long-term A3 A3 A3 A3 A1 A1 Baa2 Baa2
outlook stable stable stable stable stable stable stable stable
ESG RATINGS
Analysts and investors are referring increasingly to companies’ sustainability profiles as well when making their
recommendations and decisions. They draw on ESG ratings, among other things, to evaluate a company’s environ-
mental, social and governance performance. At the same time, these ratings are instrumental in determining
whether we are meeting our goal in relation to the Group’s NEW AUTO strategy, and they are used to establish
internal measures.
In fiscal year 2023, our ESG rating from ISS ESG improved from C to C+ compared with the previous year. In
the Sustainalytics rating, the Volkswagen Group remained stable with a “medium risk” score. Volkswagen also
retained its B rating from MSCI and kept its score of A– in the CDP Climate Rating in 2023. Volkswagen reported
key information as part of the Water Disclosure Project (WDP) but did not undergo rating in 2023.
132
Group Management Report Results of Operations, Financial Position and Net Assets
Results of Operations, Financial

Position and Net Assets
Against the backdrop of a challenging market environment and intensifying competition
in the automotive sector, the Volkswagen Group generated significantly higher sales
revenue in the reporting year while maintaining its operating result at the same level
as in the previous year.
The Volkswagen Group’s segment reporting comprises the four reportable segments of Passenger Cars and
Light Commercial Vehicles, Commercial Vehicles, Power Engineering and Financial Services, in compliance with
IFRS 8 and in line with the Group’s internal financial management and reporting structures.
The reconciliation covers activities and other operations that do not, by definition, constitute segments.
These include the unallocated Group financing activities. Consolidation adjustments between the segments
(including the holding company functions) are also contained in the reconciliation. The purchase price alloca-
tions for Porsche Holding Salzburg and Porsche, Scania, MAN and Navistar are allocated to their corresponding
segments.
The Automotive Division comprises the Passenger Cars and Light Commercial Vehicles segment, the Com-
mercial Vehicles segment and the Power Engineering segment, as well as the figures from the reconciliation. The
Passenger Cars and Light Commercial Vehicles segment is combined with the reconciliation to form the Pas-
senger Cars Business Area, while the Commercial Vehicles and Power Engineering segments are identical to the
business areas of the same name. The Financial Services Division corresponds to the Financial Services segment.
At Volkswagen, segment profit or loss is measured on the basis of the operating result.
KEY FIGURES FOR 2023 BY SEGMENT
Passenger Cars
and Light
Commercial Commercial Power Financial Volkswagen
€ million Vehicles Vehicles Engineering Services Total segments Reconciliation Group
Sales revenue 245,680 45,731 4,044 54,128 349,584 – 27,300 322,284

Segment profit or loss
(operating result) 19,474 3,714 366 3,792 27,345 – 4,769 22,576
as a percentage of sales
revenue 7.9 8.1 9.0 7.0 7.0
Capex, including capitalized
development costs 22,636 2,205 134 282 25,257 538 25,795
133
IFRS 17 – INSURANCE CONTRACTS

IFRS 17 specifies new accounting rules for insurance contracts. First-time application resulted in an insignificant
change in equity as of January 1, 2023 and January 1, 2022, respectively. This is due primarily to the changed
system for calculating provisions related to the insurance business. In addition, netting cash flows when mea-
suring the provisions also led to a reduction of €0.7 billion each in assets and provisions related to the insurance
business as of January 1, 2023. The change in the system for recognizing income and expenses has no material
effect on the income statement. Prior-year figures have been adjusted accordingly.
SCOUT MOTORS INC.

Under the Volkswagen Group’s North America strategy, Scout Motors Inc., Arlington, Virginia/USA, a wholly owned
subsidiary of Volkswagen Finance Luxemburg, Strassen/Luxembourg, was established in fiscal year 2022. A new
vehicle brand is to be created under the name of Scout to distribute electrified all-terrain vehicles and pickups in
the USA from 2026. In order to finance the creation of the Scout brand, as well as vehicle development and
production planning, an amount of around USD 493 million was contributed to the company in fiscal year 2023.
The company has been included in the Volkswagen consolidated financial statements since January 1, 2023.
ACQUISITION OF SHARES IN XPENG INC.

On December 6, 2023, Volkswagen acquired 4.99% of the ordinary shares of the electric vehicle company
XPeng Inc., Cayman Islands, (XPeng) at a purchase price totaling USD 706 million. The realization of a forward
purchase transaction dating from July 26, 2023 resulted in a non-cash gain of €74.2 million in fiscal year 2023,
which is recognized in the other financial result. Along with the agreement to acquire the shares, a technological
framework agreement was signed with Guangdong Xiaopeng Motors Technology Co. Ltd., Guangzhou/China, a
subsidiary of XPeng, for the joint development of electric vehicles in China, among other things. The equity
investment in XPeng is measured at fair value through other comprehensive income.
HORIZON ROBOTICS INC.

On December 7, 2023, Volkswagen acquired preferred shares of Horizon Robotics Inc., Cayman Islands (Horizon
Robotics), a leading provider of energy-efficient computing platforms for autonomous driving in China, from
Horizon Robotics at a purchase price of USD 200 million and issued a convertible loan to Horizon Robotics in an
amount of USD 800 million. Both investments are classified as debt instruments in the financial statements and
measured at fair value through profit or loss. The measurement resulted in non-cash gains of €0.7 million in
fiscal year 2023, which are recognized in the other financial result.
To promote the development of highly automated and autonomous driving in China, Volkswagen has also
agreed the establishment of a joint venture with Horizon Robotics. On December 14, 2023, Volkswagen invested
an amount of CNY 2 billion to this end in exchange for an interest of 60% in the new company, CARIZON (Beijing)
Technology Company Limited, Beijing/China (CARIZON). In addition, Volkswagen has undertaken to make future
capital contributions of up to CNY 8.4 billion to the joint venture.
SALE OF OOO VOLKSWAGEN GROUP RUS

On May 18, 2023, the Volkswagen Group completed the sale of its shares in OOO Volkswagen Group Rus (Volks-
wagen Group Rus), Kaluga/Russia, and that company’s local subsidiaries (OOO Volkswagen Components and
Services, Kaluga/Russia, OOO Scania Leasing, Moscow/Russia, OOO Scania Finance, Moscow/Russia, OOO Scania
Insurance, Moscow/Russia) to OOO ART-FINANCE, Moscow/Russia, which is supported by the Russian dealer
134
AO Avilon Automotive Group, Moscow/Russia. On registration of the transaction on May 22, 2023, ownership of
the shares in Volkswagen Group Rus was transferred from the seller to the buyer. The transaction comprises the
production facilities in Kaluga, the importer structure of the Group brands Volkswagen Passenger Cars, Volks-
wagen Commercial Vehicles, Audi, Škoda, Bentley, Lamborghini and Ducati for potential after-sales business and
the warehouse activities, as well as Scania’s financial services activities, including all associated employees.
In this context, the Volkswagen Group had already made significant impairments in fiscal year 2022 and
recognized appropriate provisions. The selling price amounted to €0.1 billion. The deconsolidation of the
affected companies resulted in a loss of €0.4 billion in fiscal year 2023, which is reported in the other operating
result. This result is split between the Automotive Division (€–0.4 billion) and the Financial Services Division
(€0.1 billion). The loss is mainly attributable to the realization of currency translation effects of €–0.3 billion,
which have been reclassified from the currency translation reserve to other operating expenses.
EQUITY INVESTMENTS HELD FOR SALE

The assets and liabilities held for sale of the Russian subsidiaries of Volkswagen Financial Services and Porsche,
as well as those of MAN Energy Solutions in connection with the gas turbine business were recognized in accor-
dance with IFRS 5 at the lower of their carrying amount and fair value less expected disposal costs.
SPECIAL ITEMS
Special items consist of certain items in the financial statements whose separate disclosure the Board of Man-
agement believes can enable a better assessment of our economic performance.
No material special items in connection with the diesel issue were recognized in fiscal year 2023.
INCOME STATEMENT BY DIVISION
VOLKSWAGEN GROUP AUTOMOTIVE1 FINANCIAL SERVICES
€ million 2023 2022 2

2023 2022 2
2023 20222
Sales revenue 322,284 279,050 268,156 232,392 54,128 46,657

Cost of sales – 261,262 – 226,866 – 214,996 – 189,572 – 46,266 – 37,294
Gross profit 61,022 52,184 53,160 42,820 7,862 9,363
Distribution expenses – 21,340 – 19,840 – 20,308 – 18,794 – 1,032 – 1,046
Administrative expenses – 12,724 – 11,655 – 10,007 – 9,074 – 2,717 – 2,582
Net other operating result – 4,382 1,421 – 4,061 1,518 – 321 – 97
Operating result 22,576 22,109 18,784 16,471 3,792 5,638
Operating return on sales (%) 7.0 7.9 7.0 7.1 7.0 12.1
Share of profits and losses of equity-
accounted investments 2,291 2,403 2,236 2,287 55 116
Interest result and Other financial result – 1,673 – 2,442 – 1,602 – 2,283 – 71 – 159
Financial result 618 – 40 635 3 – 17 – 43
Earnings before tax 23,194 22,070 19,419 16,474 3,775 5,595
Income tax expense – 5,266 – 6,217 – 4,182 – 4,249 – 1,084 – 1,969
Earnings after tax 17,928 15,852 15,236 12,226 2,692 3,627
Noncontrolling interests 1,329 395 1,209 270 120 125
Earnings attributable to Volkswagen AG hybrid
capital investors 586 576 586 576 0 0
Earnings attributable to Volkswagen AG
shareholders 16,013 14,881 13,442 11,380 2,572 3,502
135
SHARE OF SALES REVENUE BY DIVISION/

SHARE OF SALES REVENUE BY MARKET 2023 BUSINESS AREA 2023
in percent in percent
 Europe (excluding Germany)/  Passenger Cars 68%

Other Markets 40%  Commercial Vehicles 14%
 Germany 18%  Power Engineering 1%
 North America 21%  Financial Services 17%
 South America 5%
 Asia-Pacific 16%
RESULTS OF OPERATIONS
Results of operations of the Group
In the period from January to December 2023, the Volkswagen Group’s sales revenue amounted to €322.3 bil-
lion, up 15.5% on the prior-year figure. This was mainly attributable to a rise in volume and beneficial changes in
the price positioning and in the mix. These factors were offset by exchange rate effects. The prior-year period
had been impacted to an even greater extent by limited vehicle availability due to parts supply shortages. The
Volkswagen Group generated 81.5 (82.6)% of its sales revenue abroad. Gross profit increased by €8.8 billion to
€61.0 billion. The gross margin was 18.9 (18.7)%.
In fiscal year 2023, the Volkswagen Group’s operating result of €22.6 (22.1) billion was on a level with the
previous year. The operating return on sales was 7.0 (7.9)%. In particular, higher vehicle sales and improved price
positioning were set against a rise in product costs (in particular for commodities). The fair value measurement of
derivatives to which hedge accounting is not applied (especially commodity hedges) had a negative effect
of €–3.2 billion on the operating result in the period from January to December 2023; it had boosted the Group’s
earnings by €1.8 billion in the prior-year period, as had beneficial effects of €0.8 billion from derivatives in the
Financial Services Division. The deconsolidation of Volkswagen Group Rus and its subsidiaries led to a loss of
€0.4 billion in 2023. In the previous year, the result had been impacted mainly by expenses relating to loss
allowances and risk provisions due to the direct impact of the Russia-Ukraine conflict and special items in
connection with the diesel issue. The financial result increased by €0.7 billion to €0.6 billion. The share of the
result of equity-accounted investments was slightly below that of the prior year. In the interest result, higher
interest income was not sufficient to offset the rise in interest expenses resulting primarily from changes in the
interest rates used to measure provisions. The other financial result was affected in the reporting year among
other things by adverse exchange rate effects, especially as a result of the sharp depreciation of the Argentinian
peso. This was set against lower non-cash expenses from adjustments to the carrying amounts of investees
because of changes in share prices and impairment tests, and against positive net income from securities and
funds. In the prior-year period, the impairment loss recognized on the equity investment in Argo AI and changes
in share prices affecting net income from securities and funds, particularly as a result of the Russia-Ukraine
conflict, had both had a negative impact.
The Volkswagen Group’s earnings before tax were up €1.1 billion to €23.2 billion in fiscal year 2023. The return
on sales before tax declined to 7.2 (7.9)%. Income taxes resulted in an expense of €5.3 (6.2) billion, which in turn
led to a tax rate of 22.7 (28.2)%. Earnings after tax were noticeably up on the previous year, at €17.9 (15.9) billion.
136
Results of operations in the Automotive Division

The Automotive Division generated sales revenue of €268.2 (232.4) billion in the reporting year. Higher vehicle
sales together with improvements in the price positioning and in the mix offset adverse exchange rate effects. In
the prior-year period, the adverse impact had by parts supply shortages had been even stronger. Sales revenue
in the Passenger Cars, Commercial Vehicles and Power Engineering Business Areas was significantly up on the
respective prior-year values. As our Chinese joint ventures are accounted for using the equity method, the Group’s
business performance in the Chinese passenger car market is essentially reflected in the Group’s sales revenue
only through deliveries of vehicles and vehicle parts.
Cost of sales was up, primarily because of higher volumes, a rise in product costs (in particular for com-
modities), and an increase in research and development costs recognized in profit or loss; these changes were
set against lower depreciation charges of around €1.4 billion following the reassessment and extension of the
useful lives of certain items of property, plant and equipment. The ratio of cost of sales to sales revenue declined
in the reporting year. Since research and development costs and sales revenue increased by similar percentages
in the Automotive Division in the reporting year, their ratio to each other – the research and development ratio
(R&D ratio) – was on a level with 2022 at 8.1 (8.1)%. The automotive investment ratio, which combines the R&D
and capex ratios, amounted to 13.5 (13.6)% in fiscal year 2023.
In the period from January to December 2023, there was a year-on-year increase in distribution expenses due
to factors such as higher logistics costs, as well as in administrative expenses; their respective share of sales
revenue went down. The other operating result stood at €–4.1 (1.5) billion. Fiscal year 2023 was weighed down
by adverse effects from the fair value measurement of derivatives to which hedge accounting is not applied,
especially for commodities. These factors had had a positive impact in the prior-year period.
In the period from January to December 2023, the Automotive Division’s operating result amounted to
€18.8 billion, up €2.3 billion on the previous year. The rise is primarily attributable to a rise in vehicle sales and
improvements in the price positioning. Effects from the measurement of derivatives to which hedge accounting
is not applied, higher product costs, in particular for commodities, and negative exchange rate trends weighed
on the operating result. The prior-year period had been marked by positive effects from the fair value mea-
surement of derivatives to which hedge accounting is not applied and by expenses in connection with the
Russia-Ukraine conflict. The operating return on sales stood at 7.0 (7.1)%. Our operating result largely benefits
RESULTS OF OPERATIONS IN THE PASSENGER CARS, COMMERCIAL VEHICLES AND

POWER ENGINEERING BUSINESS AREAS FROM JANUARY 1 TO DECEMBER 31
€ million 2023 20221
Passenger Cars
Sales revenue 218,380 189,312
Operating result 14,704 14,603
Commercial Vehicles
Power Engineering
Operating result 366 281
137
from the business performance of our equity-accounted Chinese joint ventures only through deliveries of vehi-
cles and vehicle parts and through license income, as these joint ventures are included in the financial result.
Results of operations in the Financial Services Division

In the period from January to December 2023, the Financial Services Division’s sales revenue amounted to
€54.1 billion, an increase of 16.0% over the prior-year figure. Compared with the previous year, cost of sales
increased faster than sales revenue, driven in particular by a very strong rise in interest expenses and higher
depreciation of the residual values of leased vehicles. As a result, gross profit went down by €1.5 billion to
€7.9 billion.
The Financial Services Division’s operating result of €3.8 (5.6) billion was down on the previous year. The
decline was mainly the result of higher interest expenses. In addition, derivatives, which had had a beneficial
effect in the previous year, had a negative impact in the reporting year. The prior year had been weighed down
especially by expenses relating to loss allowances as a direct impact of the Russia-Ukraine conflict. The oper-
ating return on sales decreased to 7.0 (12.1)%. The return on equity before tax was 8.8 (14.1)%.
Principles and goals of financial management

Financial management in the Volkswagen Group covers liquidity management, the management of currency,
interest rate and commodity price risks, and credit and country risk management. It is performed centrally for all
Group companies by Group Treasury, based on internal guidelines and risk parameters. Some functions of the
MAN Energy Solutions, Porsche AG, Porsche Holding Salzburg and TRATON GROUP subgroups and of the
Financial Services Division are included in the financial management and, in addition, have their own financial
management structures.
The goal of financial management is to ensure that the Volkswagen Group remains solvent at all times and, at
the same time, to generate an adequate return from the investment of surplus funds. We use a liquidity pooling
system to optimize the use of existing liquidity between the significant companies. Among other features of this
system, the balances, either positive or negative, accumulating in cash pooling accounts are swept daily into a
regional target account and thus pooled. The overriding aim of currency, interest rate and commodity risk
management is to hedge, using derivative financial instruments and commodity forwards, the prices on which
investment, production and sales plans are based when making planning assumptions and to mitigate interest
rate risks incurred in financing transactions. In the management of credit and country risk, diversification is used
to limit the Volkswagen Group’s exposure to the so-called counterparty risk. To achieve this, counterparty risk
management imposes internal limits on the volume of business allowed per counterparty when financial
transactions are entered into. Various credit rating criteria are applied in this process. These focus primarily on
the capital resources of potential counterparties, as well as the ratings awarded by independent agencies. The
relevant risk limits and the authorized financial instruments, hedging methods and hedging horizons are
approved by the Group Board of Management Committee for Risk Management. For additional information on
the principles and goals of financial management, please refer to the chapter on “Financial risk management and
financial instruments” in the notes to the consolidated financial statements.
138
FINANCIAL POSITION
Financial position of the Group
In the period from January to December 2023, the Volkswagen Group recorded gross cash flow of €48.5 (49.3)
billion. The non-cash measurement effects in connection with hedging transactions, which are included in
earnings, must be eliminated from the cash flow statement. Cash outflows of around €1.5 billion for tax pay-
ments relating to prior assessment periods had an adverse impact. The change in working capital amounted to
€–29.1 (–20.8) billion, driven primarily by a higher increase in receivables and lease assets and a smaller rise in
liabilities compared to the prior year. A smaller increase in inventories and higher other provisions had an
offsetting effect. Cash outflows resulting from the diesel issue were lower than in 2022. Cash flows from oper-
ating activities went down by €9.1 billion to €19.4 billion in fiscal year 2023.
The Volkswagen Group’s investing activities attributable to operating activities grew by €2.6 billion to
€28.0 billion in the reporting year, mainly as a result of higher investments in capex and additions to capitalized
development costs. In the previous year, this item had included the full portion of the purchase price payable by
Volkswagen for the acquisition of Europcar, which was contributed to Green Mobility Holding and amounted to
€1.7 billion.
The Volkswagen Group’s financing activities produced a cash inflow of €16.0 (4.2) billion. Financing activities
primarily include the issuance and redemption of bonds as well as changes in other financial liabilities. This also
included the issuance of green hybrid notes with a total nominal value of €1.75 billion, which were successfully
placed in August 2023. The redemption of the hybrid note of €0.75 billion called as of September 2023 reduced
cash flows from financing activities accordingly. Financing activities also included cash inflows and outflows in
connection with the IPO of Porsche AG completed in 2022 (primarily the payment of a special dividend to the
shareholders of Volkswagen AG) and the dividend to the shareholders of Volkswagen AG; together, these
amounted to around €11 billion. At the end of December 2023, the Volkswagen Group reported cash and cash
equivalents of €43.5 (29.7) billion in its cash flow statement.
At the end of fiscal year 2023, the Volkswagen Group’s net liquidity stood at €–147.4 billion, compared with
€–125.8 billion on December 31, 2022.
Financial position of the Automotive Division

In the reporting year, the Automotive Division’s gross cash flow was €35.8 billion, an earnings-related rise of
€2.6 billion compared with the previous year. The non-cash measurement effects in connection with hedging
transactions, which are included in earnings, must be eliminated from the cash flow statement. Cash outflows of
around €1.5 billion for tax payments relating to prior assessment periods had an adverse impact. The change in
working capital amounted to €2.1 (–3.3) billion. The year-on-year change was primarily attributable to a smaller
rise in inventories and higher other provisions. These effects were set against a smaller increase in liabilities than
in the previous year. As a consequence, cash flows from operating activities in an amount of €37.9 billion were
26.7% higher than in the previous year.
In the period from January to December 2023, investing activities attributable to operating activities
amounting to €27.2 (25.1) billion were up on the prior-year figure. Within this figure, investments in property,
plant and equipment, investment property and intangible assets, excluding capitalized development costs
(capex) increased by €1.6 billion to €14.4 billion. The ratio of capex to sales revenue was 5.4 (5.5)%.
139
CASH FLOW STATEMENT BY DIVISION
€ million 2023 20222 2023 20222 2023 20222
Cash and cash equivalents at beginning of period 29,738 39,123 23,042 24,899 6,695 14,224
Earnings before tax 23,194 22,070 19,419 16,474 3,775 5,595
Income taxes paid – 7,716 – 4,416 – 6,328 – 3,562 – 1,389 – 854
Depreciation and amortization expense3 28,282 30,670 17,729 20,854 10,552 9,816
Change in pension provisions 262 898 251 857 11 41
Share of the result of equity-accounted investments 271 568 244 639 27 – 71
Other non-cash income/expense and reclassifications4 4,161 – 509 4,474 – 2,086 – 313 1,577
Gross cash flow 48,453 49,280 35,789 33,177 12,665 16,104
Change in working capital – 29,097 – 20,784 2,062 – 3,312 – 31,160 – 17,472
Change in inventories – 2,071 – 8,385 – 651 – 8,262 – 1,419 – 123
Change in receivables – 4,361 – 3,065 – 1,250 – 526 – 3,111 – 2,539
Change in liabilities 5,272 8,713 3,179 8,179 2,094 535
Change in other provisions 358 – 3,042 236 – 2,950 123 – 92
Change in lease assets (excluding depreciation) – 14,964 – 8,711 558 406 – 15,522 – 9,117
Change in financial services receivables – 13,332 – 6,294 –8 – 158 – 13,324 – 6,136
Cash flows from operating activities 19,356 28,496 37,851 29,865 – 18,495 – 1,369
Cash flows from investing activities attributable to operating
activities – 28,031 – 25,454 – 27,153 – 25,058 – 878 – 396
of which: investments in property, plant and equipment,
investment property and intangible assets,
excluding capitalized development costs (capex) – 14,653 – 12,948 – 14,371 – 12,731 – 282 – 217
capitalized development costs – 11,142 – 9,723 – 11,142 – 9,723 – –
acquisition and disposal of equity investments – 2,738 – 3,219 – 2,115 – 2,997 – 622 – 222
Net cash flow5 – 8,675 3,042 10,698 4,807 – 19,373 – 1,765
Change in investments in securities and time deposits, as well
as in loans 8,219 – 16,368 9,512 – 15,052 – 1,293 – 1,316
Cash flows from investing activities – 19,812 – 41,822 – 17,641 – 40,110 – 2,171 – 1,712
Cash flows from financing activities 16,008 4,225 – 12,927 8,621 28,934 – 4,396
of which: capital transactions with noncontrolling interests –8 16,198 –8 16,198 – –
capital contributions/capital redemptions 1,003 – 235 – 2,919 – 235 3,922 –0
Effect of exchange rate changes on cash and cash equivalents – 1,765 – 285 – 1,620 – 233 – 145 – 52
Change of loss allowance within cash and cash equivalents –2 1 –2 1 0 –0
Net change in cash and cash equivalents 13,785 – 9,385 5,661 – 1,856 8,124 – 7,529
Cash and cash equivalents at Dec. 316 43,522 29,738 28,704 23,042 14,819 6,695
Securities and time deposits, as well as loans 41,858 49,771 20,994 30,891 20,864 18,880
Gross liquidity 85,380 79,509 49,698 53,934 35,683 25,575
Total third-party borrowings – 232,813 – 205,312 – 9,409 – 10,919 – 223,404 – 194,393
Net liquidity at Dec. 317 – 147,433 – 125,803 40,289 43,015 – 187,722 – 168,818
3 Net of impairment reversals.
4 These relate mainly to the fair value measurement of financial instruments and the reclassification of gains/losses on disposal of noncurrent assets and equity investments to
investing activities.
5 Net cash flow: cash flows from operating activities, net of cash flows from investing activities attributable to operating activities (investing activities excluding change in
investments in securities, time deposits and loans).
6 Cash and cash equivalents comprise cash at banks, checks, cash-in-hand and call deposits.
7 The total of cash, cash equivalents, securities and time deposits, as well as loans to affiliates and joint ventures net of third-party borrowings (noncurrent and current financial
liabilities).
140
FINANCIAL POSITION IN THE PASSENGER CARS, COMMERCIAL VEHICLES AND

POWER ENGINEERING BUSINESS AREAS FROM JANUARY 1 TO DECEMBER 31
€ million 2023 20221
Passenger Cars
Gross cash flow 30,102 28,753
Change in working capital 2,833 – 457
Cash flows from operating activities 32,935 28,296
Cash flows from investing activities attributable to operating activities – 25,223 – 23,060
Net cash flow 7,712 5,236
Commercial Vehicles
Change in working capital – 682 – 2,877
Cash flows from investing activities attributable to operating activities – 1,800 – 1,953
Net cash flow 2,732 – 752
Power Engineering
Gross cash flow 472 345
Change in working capital – 88 23
Cash flows from operating activities 384 368
Cash flows from investing activities attributable to operating activities – 130 – 44
Net cash flow 254 323
A considerable portion of capex was above all allocated to our production facilities and to models that we
launched in 2023 or are planning to launch in 2024. They relate to both new vehicles to expand our model range
and product upgrades for established models. Other investment priorities include the electrification and digi-
talization of our products, technologies of the future and enhancements to the modular and all-electric toolkits
and platforms. Additions to capitalized development costs rose by €1.4 billion to €11.1 billion in the reporting
year. The “Acquisition and disposal of equity investments” item amounted to €–2.1 (–3.0) billion; it included pri-
marily strategic investments in a variety of companies, in particular XPeng. In the previous year, this had included
the full portion of the purchase price payable by Volkswagen for the acquisition of Europcar, which was con-
tributed to Green Mobility Holding and amounted to €1.7 billion.
The Automotive Division’s investing activities also include the convertible loan granted to Horizon Robotics.
In the period from January to December 2023, the Automotive Division’s net cash flow of €10.7 billion was
€5.9 billion up on the prior-year figure. The cash conversion rate, which is the ratio of the Automotive Division’s
net cash flow to operating result, stood at 57.0 (29.2)% at the end of 2023.
In fiscal year 2023, the Automotive Division’s financing activities led to a cash outflow of €12.9 billion, com-
pared with a cash inflow of €8.6 billion in the previous year. These mainly reflect the cash inflows and outflows in
connection with the IPO of Porsche AG completed in the previous year (primarily the payment of a special
dividend to the shareholders of Volkswagen AG) as well as the dividend distributed to the shareholders of
Volkswagen AG from the appropriation of net profit for fiscal year 2022 and the redemption of the hybrid note
called as of September 2023. A cash inflow was generated in fiscal year 2023 by the green hybrid notes with a
total nominal value of €1.75 billion that were successfully placed via Volkswagen International Finance N.V. in
August 2023. These notes comprise a €1.0 billion note with a coupon of 7.5%, which is noncallable for five years,
141
AUTOMOTIVE DIVISION NET CASH FLOW 2023

€ billion
40
2.1 –14.4
35.8
35
30
25 –11.1
20
15
–2.1
10.7
0.4
10
Gross cash flow Change in Capex Capitalized M&A Other Net cash flow
working capital development costs
and a €0.75 billion note with a coupon of 7.875%, which is noncallable for nine years. Both notes are perpetual
and increase net liquidity and equity by the nominal amount less transaction and other costs. Financing activities
also include the issuance and redemption of bonds and changes in other financial liabilities.
Despite the cash outflows due to the special dividend in connection with Porsche AG’s IPO, the Automotive
Division’s net liquidity was robust, at €40.3 billion, on December 31, 2023, compared with €43.0 billion at the
end of 2022. The Automotive Division’s net liquidity as a proportion of consolidated sales revenue decreased to
12.5 (15.4)% in the reporting year, mainly because sales revenue rose faster than net liquidity.
Financial position in the Financial Services Division

In fiscal year 2023, the Financial Services Division recorded a gross cash flow of €12.7 billion, down €3.4 billion
on the prior-year figure for reasons such as lower earnings. The change in working capital amounted to €–31.2
(–17.5) billion. Higher growth in lease assets and receivables and a rise in inventories led to a higher level of funds
tied up in working capital than in the previous year. This was offset by a larger increase in liabilities. Conse-
quently, cash flows from operating activities decreased by €17.1 billion to €–18.5 billion.
Investing activities attributable to operating activities amounted to €0.9 (0.4) billion.
The Financial Services Division’s financing activities generated a cash inflow of €28.9 billion in the reporting
year. This figure relates primarily to the issuance and redemption of bonds and to other financial liabilities. In the
prior-year period, there had been a cash outflow of €4.4 billion.
On December 31, 2023, the Financial Services Division’s negative net liquidity, which is common in the
industry, was €–187.7 billion as against €–168.8 billion at the end of 2022.
142
NET ASSETS
Consolidated balance sheet structure
At the end of the reporting year, the Volkswagen Group had total assets of €600.3 billion, 6.4% more than at the
end of 2022. Total assets as of the reporting date reflected the implementation of the new guidance on accounting
for insurance contracts (IFRS 17), which led to a decrease in total assets and liabilities. A corresponding retro-
spective adjustment was made to the 2022 year-end figure. Equity was up by €11.6 billion to €189.9 billion,
mainly because of the encouraging earnings. The equity ratio of 31.6 (31.6)% was on a level with the figure
recorded at the end of the previous year.
On December 31, 2023, the Group had off-balance-sheet commitments in the form of contingent liabilities in
the amount of €10.4 (10.6) billion and in the form of financial guarantees in the amount of €0.9 (1.2) billion. In
addition, there were other financial obligations of €38.2 (35.4) billion. The contingent liabilities relate primarily to
legal risks in connection with the diesel issue, as well as to potential liabilities from tax risks in the Commercial
Vehicles Business Area in Brazil. Other financial obligations primarily result from purchase commitments for
property, plant and equipment and services, irrevocable credit commitments to customers and from develop-
ment and supply contracts. In addition to the other financial obligations, there are purchase commitments for
inventories with a short turnover period, which arise primarily from the Master Collaboration Agreement with
Ford Motor Company for the joint development of vans and mid-sized pickups for the global market. Moreover,
there are long-term purchase obligations under battery purchase agreements with Northvolt Group companies.
Automotive Division balance sheet structure

The noticeable increase in the Automotive Division’s intangible assets at the end of 2023 as against Decem-
ber 31, 2022 was driven in particular by a rise in capitalized development costs. Property, plant and equipment
was up slightly, with investments in property, plant and equipment set against lower depreciation. Equity-
accounted investments declined for reasons that included dividend resolutions as well as impairment losses as a
result of changes in share prices and in response to impairment tests. The intragroup reclassification of the
equity investment in Europcar, which is held via Green Mobility Holding, to the Financial Services Division also
contributed to this downturn. Noncurrent other receivables and financial assets decreased, due mainly to a
decline in positive effects from the measurement of derivatives compared to year-end 2022. Total noncurrent
assets amounted to €186.0 (178.7) billion, driven by higher volumes.
Current assets stood at €120.2 (122.7) billion on December 31, 2023, down from the prior-year figure.
Current other receivables and financial assets went up, buoyed primarily by the volume-related rise in trade
receivables. Total securities were down €10.7 billion to €22.2 billion, while cash and cash equivalents in the
Automotive Division increased by €5.7 billion to €28.7 billion at the end of December 2023. The “Assets held for
sale” item comprises the carrying amounts of the assets of subsidiaries of Porsche earmarked for divestment, as
well as assets of MAN Energy Solutions. The “Liabilities held for sale” item comprises the carrying amounts of
the corresponding liabilities.
143
CONSOLIDATED BALANCE SHEET BY DIVISION AS OF DECEMBER 31
€ million 2023 20222 2023 20222 2023 20222
Assets
Noncurrent assets 360,694 339,853 186,042 178,667 174,653 161,187
Intangible assets 89,109 83,241 88,504 82,846 605 394
Property, plant and equipment 66,880 63,890 65,918 62,908 962 982
Lease assets 64,094 59,380 377 1,279 63,717 58,100
Financial services receivables 94,474 86,944 – 726 – 767 95,200 87,711
Investments, equity-accounted investments
and other equity investments, other
receivables and financial assets 46,137 46,399 31,969 32,400 14,168 13,999
Current assets 239,644 224,159 120,204 122,730 119,439 101,430
Inventories 53,601 52,274 48,692 48,768 4,909 3,506
Financial services receivables 66,381 61,549 – 832 – 799 67,213 62,348
Other receivables and financial assets 49,250 43,226 21,348 18,764 27,902 24,462
Marketable securities and time deposits 26,772 37,206 22,211 32,867 4,561 4,338
Cash and cash equivalents 43,449 29,172 28,698 23,034 14,751 6,137
Assets held for sale 190 733 88 95 103 638
Total assets 600,338 564,013 306,246 301,396 294,092 262,616
Equity and liabilities

Equity 189,912 178,328 146,305 135,954 43,607 42,375
shareholders 160,539 151,255 117,489 109,565 43,050 41,690
Equity attributable to Volkswagen AG hybrid
capital investors 15,155 14,121 15,155 14,121 0 0
shareholders and hybrid capital investors 175,694 165,376 132,644 123,686 43,050 41,690
Noncontrolling interests 14,218 12,952 13,661 12,267 557 684
Noncurrent liabilities 204,552 202,961 86,868 88,316 117,684 114,646
Financial liabilities 122,323 121,737 18,046 21,871 104,277 99,866
Provisions for pensions 29,672 27,553 29,174 27,104 498 449
Other liabilities 52,557 53,671 39,648 39,341 12,908 14,330
Current liabilities 205,874 182,723 73,073 77,127 132,801 105,596
Financial liabilities 110,476 83,448 – 8,637 – 10,953 119,113 94,401
Trade payables 30,901 28,738 26,836 26,106 4,064 2,631
Other liabilities 64,467 70,380 54,869 61,961 9,597 8,418
Liabilities associated with assets held for sale 31 158 5 12 26 146
Total equity and liabilities 600,338 564,013 306,246 301,396 294,092 262,616
1 Including allocation of consolidation adjustments between the Automotive and Financial Services divisions, primarily intragroup loans.
144
CONSOLIDATED BALANCE SHEET STRUCTURE 2023

in percent
Noncurrent assets Current assets

60.1 (60.3) 39.9 (39.7)
Total assets
Equity Noncurrent liabilities Current liabilities

31.6 (31.6) 34.1 (36.0) 34.3 (32.4)
Total equity
and liabilities
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
At €146.3 billion, the Automotive Division’s equity on December 31, 2023 was 7.6% higher than at the end
of 2022. The main contributing factors were encouraging earnings in the reporting year and the green hybrid
notes issued in August 2023. The dividend distributed to the shareholders of Volkswagen AG, adverse currency
translation effects, higher actuarial losses from the remeasurement of pension plans because of the change in
the discount rate, and the redemption of the hybrid note called as of September 2023 resulted in a reduction in
equity. Noncontrolling interests, which increased noticeably, were mostly attributable to the noncontrolling
interest shareholders of the Porsche AG Group and of the TRATON Group. The equity ratio climbed to
47.8 (45.1)%.
Noncurrent liabilities were on a level with the previous year, amounting to €86.9 (88.3) billion at the end of
the reporting year. The noncurrent financial liabilities included in this item decreased, mainly because of reclas-
sifications from noncurrent to current liabilities reflecting shorter remaining maturities. Pension provisions
increased, driven primarily by actuarial remeasurement following a change in the discount rate.
At €73.1 (77.1) billion, current liabilities on December 31, 2023 were also down on the previous year. Current
financial liabilities amounted to €–8.6 (–11.0) billion. The figures for the Automotive Division also contain the
elimination of intragroup transactions between the Automotive and Financial Services divisions. As the current
financial liabilities for the primary Automotive Division were lower than the loans granted to the Financial
Services Division, a negative amount was disclosed in both periods. Current other liabilities were down, primarily
because of the special dividend, which was resolved in connection with the IPO of Porsche AG in Decem-
ber 2022 and distributed in January 2023. This was offset by the netting of the right to payment from Porsche SE
arising from the second tranche of the ordinary shares of Porsche AG.
At the end of fiscal year 2023, the Automotive Division had total assets of €306.2 billion, 1.6% more than at
the end of 2022.
Financial Services Division balance sheet structure

On December 31, 2023, the Financial Services Division’s total assets were €294.1 billion, 12.0% more than at the
end of 2022. The figure as of the reporting date reflects the implementation of the new guidance on accounting
for insurance contracts (IFRS 17), which led to a decrease in total assets and liabilities. A corresponding retro-
spective adjustment was made to the previous year-end figure.
145
BALANCE SHEET STRUCTURE OF THE PASSENGER CARS, COMMERCIAL VEHICLES AND

POWER ENGINEERING BUSINESS AREAS
€ million Dec. 31, 2023 Dec. 31, 20221
Passenger Cars
Noncurrent assets 149,881 142,467
Current assets 100,013 105,055
Total assets 249,894 247,522
Equity 127,684 119,654
Noncurrent liabilities 69,259 71,632
Current liabilities 52,952 56,236
Commercial Vehicles
Total assets 50,767 48,804
Equity 15,918 13,804
Power Engineering
Total assets 5,585 5,070
Equity 2,703 2,495
Noncurrent liabilities 532 432
Noncurrent assets grew to €174.7 (161.2) billion. The equity-accounted investments included in this item were
up for reasons that included the intragroup transfer of the equity investment in Europcar, which is held via Green
Mobility Holding to the Financial Services Division. Noncurrent financial services receivables were higher than in
the prior-year period.
Current assets climbed by 17.8% to €119.4 billion. The current other receivables and financial assets included
in this item were higher than at the end of 2022, due among other factors to the rise in trade receivables. At the
end of fiscal year 2023, the Financial Services Division held cash and cash equivalents of €14.8 (6.1) billion. The
“Assets held for sale” item comprises the carrying amounts of the assets of subsidiaries of Volkswagen Finan-
cial Services and Porsche earmarked for divestment. The “Liabilities held for sale” item comprises the carrying
amounts of the corresponding liabilities.
On December 31, 2023, the Financial Services Division accounted for 49.0 (46.6)% of the Volkswagen Group’s
assets.
Equity in the Financial Services Division stood at €43.6 billion at the end of 2023, 2.9% more than at the end
of the previous year’s reporting date. The equity ratio dropped to 14.8 (16.1)%.
Noncurrent liabilities in the Financial Services Division increased to €117.7 (114.6) billion compared with
December 31, 2022. The noncurrent financial liabilities included in this item increased. Current liabilities rose,
driven above all by higher current financial liabilities. Other current liabilities and trade payables were likewise
up on the previous year.
Deposits from the direct banking business amounted to €38.8 billion on December 31, 2023, compared with
€26.7 billion at the end of 2022.
146
RETURN ON INVESTMENT (ROI) AND VALUE CONTRIBUTION

The central focus of the Volkswagen Group’s financial target system is to continuously and sustainably increase
the value of the Company. In order to make efficient use of resources in the Automotive Division and to measure
the success of this, we have been using a value-based management system for a number of years, with return on
investment (ROI) as a relative indicator and value contribution1, a key performance indicator linked to the cost of
capital, as an absolute performance measure.
The return on investment serves as a constant target in strategic and operational management. If the return
on investment exceeds the market cost of capital, there is an increase in the value of the invested capital and a
positive value contribution. The concept of value-based management makes it possible to assess the success of
the Automotive Division and individual business units. It also enables the earning power of our products, product
lines and projects – such as new plants – to be measured.
Components of value contribution

Value contribution is calculated on the basis of the operating result after tax and the opportunity cost of invested
capital.
The operating result shows the economic performance of the Automotive Division and is initially a pre-tax
figure. Based on our companies’ income tax rates, which vary from country to country, we assume an overall
average tax rate of 30% when calculating the operating result after tax.
The cost of capital is multiplied by the average invested capital to give the opportunity cost of capital.
Invested capital is calculated as total operating assets reported in the balance sheet (property, plant and
equipment, intangible assets, lease assets, inventories and receivables) less non-interest-bearing liabilities
(trade payables and payments on account received). Average invested capital is derived from the balance at the
beginning and the end of the reporting year.
As the concept of value-based management only comprises our operating activities, assets relating to
investments in subsidiaries and associates and the investment of cash funds are not included when calculating
invested capital. Interest charged on these assets is reported in the financial result.
1 The value contribution corresponds to the Economic Value Added (EVA®). EVA® is a registered trademark of the consulting firm Stern Value Management.
147
Determining the current cost of capital

The cost of capital is the weighted average of the required rates of return on equity and debt.
The cost of equity is determined using the Capital Asset Pricing Model (CAPM). This model uses the yield on
long-term risk-free Bunds, increased by the risk premium attaching to investments in the equity market. The risk
premium comprises a general market risk and a specific business risk. The general risk premium of 7.5% reflects
the general risk of a capital investment in the equity market. The specific business risk – price fluctuations in
Volkswagen preferred shares – is modeled in comparison to the MSCI World Index when calculating the beta
factor. The MSCI World Index is a global capital market benchmark for investors.
The analysis period for the beta factor calculation spans five years with annual beta figures calculated on a
weekly basis followed by the subsequent calculation of the average. A beta factor of 1.13 (1.15) was determined
for 2023.
The cost of debt is based on the average yield for long-term corporate bonds. As borrowing costs are tax-
deductible, the cost of debt is adjusted to account for the tax rate of 30%.
A weighting on the basis of a fixed ratio for the fair values of equity and debt results in an effective cost of
capital for the Automotive Division of 8.5 (8.3) % for 2023.
COST OF CAPITAL AFTER TAX IN THE AUTOMOTIVE DIVISION
% 2023 2022
Risk-free rate 2.7 2.0

Market risk premium 7.5 7.5
Volkswagen-specific risk premium 1.0 1.1
(Volkswagen beta factor)1 (1.13) (1.15)
Cost of equity after tax 11.2 10.7
Cost of debt 4.3 5.0
Tax –1.3 –1.5
Cost of debt after tax 3.0 3.5
Proportion of equity 66.7 66.7
Proportion of debt 33.3 33.3
Cost of capital after tax 8.5 8.3
1 Prior-year figure adjusted.
148
Return on investment (ROI) and value contribution in the reporting year

At €15,218 (14,080) million for fiscal year 2023, the operating result after tax for the Automotive Division,
including the proportionate operating result of the equity-accounted Chinese joint ventures, was up on the prior-
year figure. Higher vehicle sales and improved price positioning were set against a rise in product costs (in
particular for commodities). In addition, the fair value measurement of derivatives to which hedge accounting
is not applied (especially commodity hedges) had a negative effect on the operating result in the reporting year
(€–3.2 billion), in contrast to the prior-year period, when it had boosted earnings by €1.8 billion. The effect of
purchase price allocation on earnings and assets is not taken into account as this cannot be influenced by man-
agement in the course of business operations.
At €123,887 (117,402) million, invested capital increased noticeably in the reporting year compared with the
prior year. The return on investment (ROI) is the return on invested capital for a particular period based on the
operating result after tax. Due to the improved operating result, the ROI of 12.3 (12.0)% exceeded both the prior-
year figure and our minimum required rate of return on invested capital of 9%.
At €10,491 (9,701) million, the opportunity cost of capital – invested capital multiplied by the cost of capital –
was noticeably up on the previous year. Improvements in the operating result after tax, net of the opportunity
cost of invested capital, led to a positive value contribution of €4,727 (4,379) million.
More information on value-based management is contained in our publication entitled “Financial Control
System of the Volkswagen Group”, which can be downloaded from our Investor Relations website: www.volks-
wagen-group.com/more-publications.
RETURN ON INVESTMENT (ROI) AND VALUE CONTRIBUTION IN THE AUTOMOTIVE DIVISION 1
€ million 2023 20222
Operating result after tax 15,218 14,080

Invested capital (average) 123,887 117,402
Cost of capital in % 8.5 8.3
Cost of invested capital 10,491 9,701
Value contribution 4,727 4,379
1 Including proportionate inclusion of the Chinese joint ventures (including the relevant sales and component companies) and allocation of consolidation adjustments between
the Automotive and Financial Services Divisions.
149
SUMMARY OF BUSINESS DEVELOPMENT AND ECONOMIC POSITION

In view of the political and economic developments in 2023 and the transformation of the industry, the Board of
Management of Volkswagen AG considers business development and the economic position challenging, but
positive overall.
In the reporting year, the Volkswagen Group’s business was impacted by the challenging global market environ-
ment, parts supply shortages and disruptions in the logistics chain. In this environment, we delivered 9.2 million
vehicles to customers in the past fiscal year, which was within the corridor we last forecast.
Group sales revenue increased by 15.5% and was thus at the upper end of the expected corridor.
At €22.6 billion, the operating result was in the range of our adjusted forecast and thus level with the prior-
year figure before special items.
Research and development costs reflect our activities undertaken to safeguard the Company’s future via-
bility. The R&D ratio in the Automotive Division was in the range of our adjusted expectations at 8.1%.
The ratio of capex to sales revenue for the Automotive Division was below the forecast corridor at 5.4%.
Net cash flow of €10.7 billion was more than double the prior-year level and thus higher than our adjusted
forecast. Above all, a stronger-than-expected reduction in inventories also had a positive effect at the end of the
reporting year.
On December 31, 2023, net liquidity had reached a solid level of €40.3 billion, which was at the upper end of
our expected range.
The return on investment (ROI) in the Automotive Division was 12.3%, which was within the forecast corridor
and, as expected, thus exceeded our minimum required rate of return on invested capital.
150
FORECAST VERSUS ACTUAL FIGURES
Original Forecast Adjusted Forecast

Actual 20221 for 2023 for 2023 Actual 2023
Deliveries to customers (units) 8.3 million ~9.5 million 9.0–9.5 million 9.2 million
Volkswagen Group
Sales revenue €279.0 billion 10–15% increase 10–15% increase €322.3 billion
Operating return on sales before special items 8.1% 7.5–8.5% in forecast range 7.0%
Operating return on sales 7.9% 7.5–8.5% in forecast range 7.0%
Operating result before special items €22.5 billion in forecast range ~€22.5 billion €22.6 billion
Operating result 22.1 billion in forecast range ~€22.5 billion €22.6 billion
Passenger Cars Business Area
Operating return on sales before special items 7.9% 8.0–9.0% 6.5–7.5% 6.7%
Operating return on sales 7.7% 8.0–9.0% 6.5–7.5% 6.7%
Operating result before special items €15.0 billion in forecast range in forecast range €14.7 billion
Operating result €14.6 billion in forecast range in forecast range €14.7 billion
Commercial Vehicles Business Area
Operating return on sales 4.0% 6.0–7.0% 7.0–8.0% 8.1%
Operating result €1.6 billion in forecast range in forecast range €3.7 billion
Power Engineering Business Area
Sales revenue €3.6 billion slight increase noticeable increase €4.0 billion
positive low three- positive mid three-
Operating result €281 million digit-million euro range digit-million euro range €366 million
Sales revenue €46.7 billion strong increase significant increase €54.1 billion
Operating result €5.6 billion ~€3.5 billion ~€4 billion €3.8 billion
R&D ratio in the Automotive Division 8.1% ~8.0% 8.0–8.5% 8.1%
Ratio of capex to sales revenue
in the Automotive Division 5.5% ~6.5% 6.0–6.5% 5.4%
significant to
Net cash flow in the Automotive Division €4.8 billion very strong increase strong increase €10.7 billion
Net liquidity in the Automotive Division €43.0 billion €35–40 billion €35–40 billion €40.3 billion
Return on investment (ROI)
in the Automotive Division 12.0% 12–15% 12–15% 12.3%
151
Group Management Report Volkswagen AG
Volkswagen AG
(C O ND E N S ED, I N AC C O R DA NC E W I T H T H E G E R M A N C O M M E RC I AL C O DE )
Fiscal year 2023 was impacted by the challenging global market environment and the
transformation of the industry.
ANNUAL RESULT
No material special items in connection with the diesel issue were recognized in fiscal year 2023.
In the fiscal year under review, the Russia-Ukraine conflict negatively affected Volkswagen AG in an amount
of €0.1 billion (previous year: approximately €1 billion). This arose from the loss on the disposal of the shares in
OOO Volkswagen Group Rus, Kaluga, which was reported in the financial result.
Sales increased by 16.3% year-on-year to €92.4 billion in 2023, driven particularly by higher sales volumes
and a more favorable price-product mix. Sales generated abroad accounted for a share of €53.6 billion or 58.0%.
Cost of sales increased by 9.1% to €86.7 billion due to higher vehicle sales in the reporting year, among other
reasons.
Gross profit on sales rose accordingly to €5.7 (–0.0) billion.
INCOME STATEMENT OF VOLKSWAGEN AG
€ million 2023 2022
Sales 92,413 79,491

Cost of sales –86,748 –79,499
Gross profit on sales 5,665 –8
Distribution, general and administrative expenses –7,452 –7,292
Net other operating result 64 1,997
Financial result1 9,091 16,825
Taxes on income –1,125 955
Earnings after tax 6,243 12,477
Net income for the fiscal year 6,243 12,477
Retained profits brought forward 2 5,774
Release of/appropriation to revenue reserves –1,720 –6,230
Net retained profits 4,526 12,021
1 Including write-downs of financial assets.
152
The net other operating result amounted to €0.1 billion in the reporting year, down €1.9 billion on the previous
year. This decline was driven in particular by negative measurement effects and the profit or loss from the settle-
ment of hedging transactions that was less positive than in the prior year.
A reassessment and extension of the useful lives of certain items of property, plant and equipment gave rise
to a positive effect on profit or loss of around €0.4 billion in the 2023 reporting year.
The financial result fell by €7.7 billion to €9.1 billion, mainly because of lower income from profit transfers. In
the previous year, this item had included income of €13.2 billion from profit transferred by Porsche Holding
Stuttgart GmbH, Stuttgart, in connection with the IPO of Porsche AG.
Taxes on income amounted to €-1.1 (1.0) billion. The higher tax expenses in the reporting year were due
mainly to foreign withholding tax and to tax expenses for prior years.
Net income for fiscal year 2023 amounted to €6.2 (12.5) billion.
NET ASSETS AND FINANCIAL POSITION

Total assets amounted to €197.8 billion on December 31, 2023, down €27.5 billion on the comparative 2022
figure. Intangible assets and property, plant and equipment were up by €0.6 billion because investments
exceeded depreciation and amortization charges. Financial assets rose to €145.5 (138.9) billion as a result of a
number of capital increases.
To finance the restructuring of companies of Volkswagen Financial Services under company law, Volks-
wagen AG paid contributions of €3.8 billion to the capital reserves of Volkswagen Financial Services AG, Braun-
schweig, in the reporting year. To finance the capital requirements of CARIAD SE, Wolfsburg, Volkswagen AG
paid contributions of €1.5 billion to the capital reserves of Porsche Siebte Vermögensverwaltung GmbH, Wolfs-
burg (Porsche Siebte). In addition, PowerCo SE, Salzgitter, made contributions of €0.6 billion to the capital
reserves of Porsche Siebte to finance the set-up of battery cell production. To finance the acquisition of an invest-
ment in the electric vehicle company XPeng Inc., Cayman Islands, Volkswagen AG paid contributions of €0.7 bil-
lion to the capital reserves of Volkswagen Finance Luxemburg S.A., Strassen (Volkswagen Finance Luxembourg)
in the reporting year. Also in the reporting year, Volkswagen AG paid further contributions totaling €0.5 billion to
the capital reserves of Volkswagen Finance Luxembourg to finance the establishment of business operations at
Scout Motors Inc., Arlington, Virginia. On June 7, 2023, the shareholders’ meeting of Volkswagen Vermögens-
verwaltungs-GmbH, Wolfsburg, resolved to reduce the company’s capital reserves by €0.7 billion, which was
paid out to Volkswagen AG in the reporting year.
Fixed assets accounted for a share of 78.7 (65.9)% of total assets.
BALANCE SHEET OF VOLKSWAGEN AG AS OF DECEMBER 31
€ million 2023 2022
Fixed assets 155,652 148,516

Inventories 6,786 7,816
Receivables1 28,336 59,773
Cash-in-hand and bank balances 6,980 9,122
Total assets 197,754 225,227
Equity 42,193 40,323
Special tax-allowable reserves 17 17
Long-term debt 29,101 33,717
Medium-term debt 44,101 38,647
Short-term debt 82,342 112,523
1 Including prepaid expenses.
153
Current assets (including prepaid expenses) amounted to €42.1 (76.7) billion as of December 31, 2023. Inven-
tories were down by €1.0 billion to €6.8 billion. In addition to the decrease in raw materials, consumables and
supplies, which is largely attributable to a reduction in precious metals due to volume and price effects, finished
goods and purchased merchandise in particular fell as transport capacity returned to normal levels. Receivables
and other assets declined to €28.3 (59.8) billion. Their decrease is attributable to lower receivables from loans
and receivables from profit transfers from subsidiaries and a decline in time deposits with maturities of more than
three months without call right. Cash instruments were down, driven particularly by the decrease in restricted
short-term time deposits at the reporting date.
Equity at the end of the reporting year was €42.2 (40.3) billion. The equity ratio was 21.3 (17.9)%.
Other provisions decreased by €0.5 billion to €17.1 (17.7) billion, due mainly to the reduction in provisions for
litigation risks and other provisions. Provisions for pensions fell by €0.7 billion to €24.6 billion, particularly as a
result of a change in measurement inputs, and provisions for taxes decreased by €0.9 billion to €2.5 billion.
The €27.2 billion decrease in liabilities, including deferred income, to €111.4 billion was mainly the result of
lower loan liabilities to affiliated companies and the liabilities for the special dividend in connection with the IPO
of Porsche AG, Stuttgart, included in the prior-year figure.
Volkswagen AG’s cash funds, comprising cash instruments with a maturity of less than three months, less
bank liabilities repayable on demand and cash pooling liabilities, deteriorated year-on-year from €–1.2 billion to
€–4.4 billion. The interest-bearing portion of debt amounted to €92.3 (107.7) billion. In our assessment, given
the context created by political and economic developments in 2023 and the transformation of the industry, the
economic position of Volkswagen AG is challenging, but just as positive overall as that of the Volkswagen Group.
DIVIDEND POLICY
Our dividend policy matches our financial strategy. In the interests of all stakeholders, we aim for continuous
dividend growth that allows our shareholders to participate appropriately in our business success. The proposed
dividend therefore reflects our financial management objectives – in particular, ensuring a solid financial foun-
dation as part of the implementation of our strategy.
In our Group strategy, we have set ourselves the goal of achieving a payout ratio of at least 30%. The payout
ratio is based on the Group’s earnings after tax attributable to Volkswagen AG shareholders. This amounts to
28.3% for the reporting year and stood at 29.4% in the previous year.
SPECIAL DIVIDEND FOLLOWING PORSCHE AG IPO

The resolution of the extraordinary General Meeting of Volkswagen AG on December 16, 2022 gave rise to the
obligation to pay a special dividend and led to a total obligation to the shareholders of Volkswagen AG amounting
to €9.6 billion. The cash outflow was slated for January 9, 2023 and occurred on that day.
DIVIDEND PROPOSAL
In fiscal year 2023, net retained profits amounted to €4.5 billion. The Board of Management and Supervisory
Board are proposing to pay a total dividend of €4.5 billion, i.e. €9.00 per ordinary share and €9.06 per preferred
share.
154
PROPOSAL ON THE APPROPRIATION OF NET PROFIT
€ 2023
Dividend payout on subscribed capital (€1,283 million) 4,524,029,693.70

of which: ordinary shares 2,655,808,362.00
preferred shares 1,868,221,331.70
Balance (carried forward to new account) 1,492,829.91
Net retained profits 4,525,522,523.61
EMPLOYEE PAY AND BENEFITS AT VOLKSWAGEN AG
€ million 2023 % 2022 %
Direct pay including cash benefits 8,595 69.5 8,231 56.7

Social security contributions 1,591 12.9 1,510 10.4
Compensated absence 1,273 10.3 1,208 8.3
Retirement benefits 910 7.4 3,557 24.5
Total expense 12,369 100.0 14,506 100.0
VEHICLE SALES
Volkswagen AG sold a total of 2,162,652 (1,882,535) vehicles in fiscal year 2023. The prior year had been
impacted in particular by the limited vehicle availability due to parts supply shortages caused by the shortage of
semiconductors and the Russia-Ukraine conflict. Persistent parts supply shortages had a negative effect in the
reporting year and disruption in the logistics chains also led to delays, though these eased as the year pro-
gressed. Vehicles sold abroad accounted for a share of 64.1 (64.1)%.
PRODUCTION
Volkswagen AG manufactured a total of 816,016 vehicles (+22%) in the reporting year at its vehicle production
plants in Wolfsburg, Hanover and Emden. Parts supply shortages restricted production in fiscal year 2023.
EMPLOYEES
As of December 31, 2023, a total of 116,063 (116,677) people were employed at the sites of Volkswagen AG,
excluding staff employed at subsidiaries; of this figure, 4,374 (4,452) were vocational trainees. 7,724 (7,528)
employees were in the passive phase of their partial retirement.
Female employees accounted for 18.6 (18.3)% of the workforce. Volkswagen AG employed 8,110 (7,908)
part-time workers. The percentage of foreign employees was 6.4 (6.5)%. In the reporting year, 83.2 (83.3)% of the
employees in Volkswagen AG’s production area had completed vocational or additional training. The proportion
of graduates was 22.8 (21.9)% in the same year. The average age of employees in fiscal year 2023 was
45.1 (45.1) years.
155
RESEARCH AND DEVELOPMENT

Volkswagen AG’s research and development costs as defined in the German Commercial Code amounted to
€4.7 (4.6) billion in the reporting year. 15,422 (+2.5%) people were employed in this area at the end of the reporting
year.
BUSINESS DEVELOPMENT OF VOLKSWAGEN AG

As the parent of the Volkswagen Group, Volkswagen AG is fundamentally subject to the same expected develop-
ments and risks and opportunities. The forecast is explained in the chapter entitled “Report on Expected Devel-
opments” and the risks and opportunities in the chapter entitled “Report on Risks and Opportunities” of this
annual report.
RISKS ARISING FROM FINANCIAL INSTRUMENTS

Risks for Volkswagen AG arising from the use of financial instruments are generally the same as those to which
the Volkswagen Group is exposed. An explanation of these risks can be found in the chapter “Report on Risks
and Opportunities” of this annual report.
DEPENDENT COMPANY REPORT

The Board of Management of Volkswagen AG has submitted to the Supervisory Board the report required by sec-
tion 312 of AktG and issued the following concluding declaration:
“We declare that Volkswagen AG received appropriate consideration in the period from January 1 to Decem-
ber 31, 2023 for all transactions entered into with affiliated companies within the meaning of section 312 of the
AktG. This assessment is based on the circumstances known to us at the date of the reportable transactions.”
The Annual Financial Statements of Volkswagen AG (in accordance with the German Commercial Code) can be accessed from the electronic company register
at www.unternehmensregister.de.
156
Group Management Report Sustainable Value Enhancement
Sustainable Value Enhancement

Our goal is to run our business responsibly along the entire value chain. Everyone should
benefit from this – our customers, our employees, the environment and society. Even in our
Group strategy “NEW AUTO – Mobility for generations to come”, we aim to make mobility
sustainable for present and future generations.
The main financial performance indicators for the Volkswagen Group are described in the “Results of Operations,
Financial Position and Net Assets” chapter. Nonfinancial key performance indicators also provide information on
the efficiency of our Company’s value drivers. These include the processes in the areas of research and devel-
opment, procurement, technology, production, marketing and sales, human resources, information technology
and quality assurance. In all of these processes, we are aware of our responsibility towards our customers, our
employees, the environment and society. In this chapter we provide examples of how we want to increase the
value of our Company in a sustainable way.
SUSTAINABILITY
Sustainability means maintaining intact environmental, social and economic systems with long-term viability at
a global, regional and local level. The Volkswagen Group can influence these systems in various ways, and actively
takes responsibility to make a contribution to their sustainability. We have thus developed a sustainable style of
company management and put in place the necessary management structures.
We have also anchored our goal to sustainably shape mobility for present and future generations in our Group
strategy NEW AUTO. Especially the Group’s “ESG, Decarbonization and Integrity” base initiative will drive this
topic further.
The materiality process is used to identify and evaluate the most important sustainability issues for the Group.
Based on the business model of Volkswagen AG and its social impacts, the focus is on key ESG requirements,
stakeholder expectations and adherence to legal regulations and internationally established reporting
standards.
The Company conducted a materiality analysis in 2022. In reviewing potentially material issues, we con-
sidered both external and internal company perspectives. As a result of this process, the focus areas of decar-
bonization, circular economy, supply chain and human rights, people & transformation, diversity, and integrity
were classified as material by the Group Sustainability Steering Committee. The focus topics identified were
reviewed in 2023, taking into account the requirements of the Lieferkettensorgfaltspflichtengesetz (LkSG –
German Supply Chain Due Diligence Act) and changes in the material ESG ratings. As a result of this, the six
focus areas were reconfirmed. They cover most of the requirements formulated in the ESG ratings for assess-
ment criteria applied. Wherever this is already possible, each focus area is linked to clear goals and milestones,
KPIs and appropriate packages of measures. ESG-related KPIs such as the decarbonization index and the
diversity index are already today reflected in the remuneration of members of the Board of Management.
157
Decarbonization
The decarbonization of the Group and in particular its portfolio of products is a major part of the NEW AUTO
Group strategy, where it has been defined as one of the focus areas in the base initiative. We have established
the decarbonization index (DKI) as a key performance indicator: the decarbonization index measures the emis-
sions of CO2 and CO2 equivalents (jointly referred to as CO2e) by the brands that produce passenger cars and
light commercial vehicles in the regions of Europe (EU27, United Kingdom, Norway and Iceland), China (including
the Chinese joint ventures) and the USA over the entire life cycle. In this index, the use phase is calculated over
200,000 km and with reference to region-specific fleet values without statutory flexibilities. The CO2e intensity
of the charging current of the electric vehicles is also calculated based on region-specific electricity mixes. Our
vehicle life cycle assessments, which are used as the data basis for calculating supply chain and recycling
emissions, have been verified externally and independently in accordance with ISO 14040 and ISO 14044. The
DKI gives us an informative measuring tool that makes our progress and interim results public and verifiable.
The DKI calculation methodology is regularly adapted according to internal and external requirements, such
as new test cycles for fleet emissions. Published DKI values can therefore also be adjusted to the new method-
ology and thus changed to facilitate the presentation of a time series that is methodologically consistent. The
Greenhouse Gas Protocol requires the recalculation of corporate emissions in the event of material new infor-
mation or if changes occur. There may be various reasons to remeasure previous years’ emissions to enable a fair
comparison with current emissions. These may include structural changes in the Company, for example. At the
Volkswagen Group, changes to the calculation are decided on annually in a set process. Based on these deci-
sions, we are currently working on recalculating historical emissions for the base years used in the current
climate protection targets and on having these audited.
By 2030, the DKI is to be reduced by 30% compared with the base year 2018, and emissions offsetting will
not be included in the figure. In the reporting year, the DKI value averaged 47.3 t CO2e/vehicle. This represents a
reduction of 0.5 t CO2e/vehicle compared with the figure adjusted for 2022 due to a change in the assumption
on which the calculation is based, for example the first-time inclusion of region-specific life cycle assessments
for Chinese models.
Circular economy
The finite nature of natural resources and the social and environmental consequences of mining raw materials
make decoupling economic growth from resource consumption and the development of a circular economy key
sustainability topics. Policymakers at both international and national level have addressed these challenges and
made it their mission to regulate markets more aggressively in the future in an effort to speed up the trans-
formation towards resource efficiency and a circular economy. Another important driver of the circular economy
is the progress in decarbonization at the Volkswagen Group. The growing use of secondary materials and estab-
lishment of closed material cycles can help to further reduce our CO2 emissions. Recognizing the importance of
the topic, Volkswagen anchored the topic of circular economy in the NEW AUTO Group strategy through its “ESG,
Decarbonization and Integrity” base initiative.
The Volkswagen Group created and implemented concepts for the reconditioning and recycling of vehicle
components from an early stage. These concepts are being constantly refined and are also adapted to the
requirements of e-mobility. To intensify our efforts for a transition to a loop-oriented and resource-conserving
approach to doing business, we have pooled expertise within the Group and are working on projects and
measures on a cross-brand basis.
We are stepping up efforts to use recyclable materials in our vehicle projects. These currently include raw
materials from production residues as well as renewable raw materials or natural fibers such as flax, cotton,
wood and cellulose, provided they comply with all the technical requirements. In the future, the use of raw
materials from end-of-life vehicles will be increasingly taken into account.
158
To preserve recyclable materials from electric vehicles, Volkswagen opened the Group’s first pilot facility for
recycling high-voltage vehicle batteries at the Salzgitter site in early 2021. The objective is industrialized
recovery of valuable raw materials such as lithium, nickel, manganese and cobalt.
More information on the focus areas can be found in the sections on integrity and compliance, procurement,
production and employees, as well as in our Group Sustainability Report for fiscal year 2023.
Management and coordination

The Volkswagen Group has established a Group-wide sustainability management. The related structures, pro-
cesses and responsibilities are codified in a specific Group policy. We view sustainability management as a
continuous improvement process. The core elements include assumption of cross-functional overall respon-
sibility for sustainability by the Chair of the Board of Management of Volkswagen AG as well as specification of
the competence of the responsible Board members for specific sustainability management concepts and the
newly appointed Chief Sustainability Officer at Group level. Sustainability is part of the Top 10 program at Group
level and is managed through the strategic management structure of the NEW AUTO strategy. The content is
regularly evaluated and reported to the Board of Management.
UN Global Compact
Volkswagen AG is a participant in the UN Global Compact (UNGC), the world’s largest initiative for sustainable
corporate governance, and is involved in national and international initiatives together with other companies
from the Group such as AUDI AG, MAN Truck & Bus SE, Porsche AG, Scania AB and TRATON SE. Fund managers
in the capital markets view membership of the UNGC as an important factor when deciding to invest in shares
and bonds. ESG funds have become very popular in recent years and indispensable for stakeholders. As part of
the annual Communication on Progress, the Volkswagen Group and its brands report on their progress in
implementing the ten UNGC principles and their activities to support the Sustainable Development Goals
(SDGs).
Strategic stakeholder management

Our stakeholders are individuals, groups, or organizations who have an influence on or are influenced by the
course or the result of corporate decisions. Our customers and employees are at the center of our stakeholder
network. Based on continuous stakeholder analysis, we have also identified eight more stakeholder groups.
Some of the Group’s bodies – currently including the Supervisory Board and Works Council – perform an over-
sight and advisory role and also act as interfaces between internal and external stakeholder groups.
We understand stakeholder management as systematic interaction with key interest and stakeholder groups
within society on the key topics and objectives of our NEW AUTO Group strategy. Our goal is an open, con-
structive and also critical exchange with the stakeholder groups shown in the following chart. We aim to pro-
mote implementation of their requirements and expectations and to actively shape central strategic issues.
After restarting our interaction activities in 2022, we began to restructure our stakeholder management in the
reporting year with the aim of listening to and integrating the suggestions and recommendations of our stake-
holders even more effectively in future. Alongside the traditional forms of interaction, which include surveys and
regular dialog with our stakeholders, new formats are to be added to create opportunities for interactive and
transparent discussion of important, strategic and socially relevant sustainability topics.
159
VOLKSWAGEN GROUP STAKEHOLDERS
Media
Residents & Academia &

Local Experts
authorities
Customers
Supe
Works uncil
1
rvisory Boar
Volkswagen
Co
NGOs & 2 3
Charitable Group Competitors
associations
d
Employees
Business
Policy partners &
makers Suppliers
Owners,
Investors &
Analysts
Sustainability Council
At Group level, the Sustainability Council has a prominent position. This advisory body provides assistance to the
Volkswagen Group with important, strategic sustainability issues and is made up of internationally renowned
experts from the academic world, politics and society. It establishes its own working methods and areas of focus
independently, has far-reaching rights for the purposes of exchanging information, consultation and initiating
action, and consults regularly with the Board of Management, top management and the employee represent-
tatives. The term of office of the existing members expired at the end of 2022. In the reporting year, we began to
reorganize the strategy and composition of the Sustainability Council. Further information is available on the
Sustainability Council’s website at www.volkswagen-group.com/sustainability-council.
Corporate citizenship
As a globally operating company and good corporate citizen, we aim to be a source of economic impetus for
local structural development and equal opportunities. We have always believed in the importance of recognizing
our social responsibilities toward our stakeholders. The main focus of our corporate social engagement activities
is on supporting future, environmental, educational and community projects at many of our sites across the
world.
Environmental Strategy
As one of the largest automobile manufacturers, Volkswagen takes responsibility for the environmental impact of
its activities. Based on the NEW AUTO Group strategy, we have put greater focus on our environmental targets.
With our environmental mission statement goTOzero, we aspire to reduce environmental impact along the entire
life cycle – from raw material extraction until end-of-life – for all our products and mobility solutions in order to
keep ecosystems intact. Compliance with environmental regulations, standards and voluntary commitments is a
basic prerequisite of our actions.
160
Our focus is on four prioritized action areas:

> Climate
We are committed to the Paris Climate Agreement and are aiming for the 1.5-degree target. We consistently
focus on the electrification of our products, decarbonization of our entire value chain and expansion of renew-
able energy generation to supply our sites and customers. We intend to be a net-carbon-neutral company by
2050 at the latest.
> Resources
We reduce the volumes of primary raw materials needed by using recycled material and renewable raw
materials. We maximize our energy and resource efficiency and establish loops for materials and water.
Together with our business partners we cut down on the amount of natural resources utilized throughout our
supply chain.
> Ecosystems
We reduce harmful emissions in air, soil and water. We mitigate the impact of our business operations on bio-
diversity and ecosystems and support projects to conserve these.
> Environmental compliance
Where integrity and compliance are concerned, we aim to be a role model for a modern, transparent, successful
enterprise. We use effective environmental compliance management systems to identify and manage environ-
mental risks and opportunities throughout the lifetime of our mobility solutions. We conduct open dialog with
our stakeholders and incorporate their expectations into our decisions.
Organization of environmental protection

Volkswagen has created an environmental policy that sets out guidelines for environmental decision-making, for
the management of projects and for the Group’s environmental stewardship. Thus, parameters are set for the
conduct and working methods of management and staff in five areas: management behavior, compliance,
environmental protection, collaboration with stakeholders and continuous improvement.
The Board of Management of Volkswagen AG is the highest internal decision-making body for environmental
issues. Both it and the brands’ boards of management take not only business, but also social and environmental
criteria into account when making key company decisions. The Group-wide management of environmental
protection is the responsibility of the Group Steering Committee for the Environment and Energy. Other bodies
take responsibility for steering key individual aspects. They include the Group CO₂ Steering Committee and the
Group Steering Committee for Fleet Compliance.
The Volkswagen Group coordinates the activities of the brands, which in turn steer the measures in the
regions. The brands and companies are responsible for their own environmental organization. They base their
own environmental protection activities on the targets, guidelines and principles that apply throughout the
Group.
Achieving compliance with environmental laws and regulations at all of our sites is a top priority for Volks-
wagen. Furthermore, we are guided by Company standards and targets. We regularly train our employees on
environmental protection and environmental compliance. The intention of our environmental compliance
management systems is to ensure that environmental aspects and obligations are given appropriate consider-
ation in our business operations. Disregard for environmental obligations, fraud and misconduct are treated as a
severe compliance violation and penalized accordingly. Compliance with our Environmental Policy Statement
and with other Group environmental requirements is evaluated annually and reported to the Board of Man-
agement of Volkswagen AG and the respective brand boards of management.
161
HOLISTIC INTEGRITY AND COMPLIANCE MANAGEMENT SYSTEM

Integrity and compliance are major priorities in the Volkswagen Group. We firmly believe that, for long-term
commercial success, it is important that each and every individual complies with laws, regulations and commit-
ments. Compliant behavior must be a matter of course for all Group employees. This is why integrity and compli-
ance remain key elements of our Group's NEW AUTO strategy and a focus topic in matters of sustainability.
Our objective is to be a role model and deepen the trust of our employees, customers, shareholders and
partners in our Company. Our regulations, processes and corporate culture are designed in such a way that all
employees are able to act with integrity and comply with the rules at all times. As performance indicators,
integrity and compliance must have the same strategic and operational priority in our Company as sales revenue,
profit, product quality and employer attractiveness.
With the Together4Integrity (T4I) program, we have built a holistic integrity and compliance management
system (ICMS) for all Group and brand companies, which brings together virtually all the Company’s integrity and
compliance activities under one roof. This system was set up in line with the five internationally recognized ECI
(Ethics and Compliance Initiative) principles: strategy, risk management, a culture of integrity, a speak-up
environment and resolute accountability. The aim of T4I is not only to strengthen uniform corporate governance
throughout the Group in relation to integrity and compliance, but also to advance the culture of integrity. This
includes steadfastness in adhering to principles of integrity regardless of economic or social pressures. T4I and
the ICMS therefore contribute significantly to increasing sustainability in the Volkswagen Group. Implementation
by 2025 was originally planned. However, given that the roll-out had already made more progress than expected
at the beginning of the reporting year and that the consistently high approval scores for the question on integrity
in the annual Stimmungsbarometer employee survey pointed to the program’s success, we decided in the
reporting year to bring the centralized management and control of the program to an early end during 2023.
Responsibility for continuing to implement the measures and embedding them now lies with the Group brands
and companies and with the responsible Group departments.
Focus areas
Compliance with the rules must be a matter of course for all employees of the Volkswagen Group. The Group
Integrity & Compliance organization provides support with this worldwide in the form of programs, guidelines,
processes and practical advice. It helps the Group and brand companies to comply with the rules when carrying
out their business activities and to comply with the relevant laws and internal regulations. Among other things,
its work concentrates on anti-corruption and preventing embezzlement, fraud and money laundering.
The starting point for this is the Internal Compliance Risk Assessment (ICRA), which identifies compliance
risks in the Group. Compliance measures are developed and defined for each controlled company on the basis of
the risk profiles derived from the ICRA, which the companies have to implement depending on their risk clas-
sification. The ICRA also sets standards relating to the Code of Conduct (CoC), the whistleblower system, com-
pliance training and communication.
HR (Human Resources) Compliance Policies and Procedures

The aim of this key initiative is the integration of integrity and compliance into the standard HR processes such
as recruitment, training, promotion and remuneration (bonus payments). Integrity and compliance are also a
compulsory topic in annual employee appraisals and are a component of the training measures for employees
across all levels of the Company.
162
REPORTING CHANNELS IN THE WHISTLEBLOWER SYSTEM
External reporting channel

Ombudspersons (external lawyers)
Whistleblower
internal and external
Reporting channels in the Volkswagen Group
Online reporting channel, 24/7 hotline,
e-mail, by post, in person
Awareness-raising and Communication

The Code of Conduct (CoC) forms the basis for integrity and compliance in the Volkswagen Group. It serves as
the main tool for reinforcing awareness of responsible conduct and decision-making and can be used as an aid
and as a way of finding the right contact persons. The CoC is binding for all employees and has been part of
every employment contract since 2019. We and our employees undergo regular mandatory training on its key
contents.
Events in the departments round off the offerings of the Group Integrity & Compliance organization. The com-
munication team regularly examines practical compliance tasks and case studies. Awareness-raising on
compliance topics is supported by information and communication activities such as awareness campaigns, film
and dialogue formats, newsletters and interactive games.
The Compliance Infopoint has established itself as the central help center. The team there answers com-
pliance-related questions, establishes internal guidelines and directives and gives advice on process standards.
Training Courses and Standards

With the ICMS, the Group Integrity & Compliance organization sets uniform standards for compliance training
across the Group. This is to enable brands and companies to provide their employees with a consistent quality of
risk-based and target group-specific training that includes predetermined core content. The training courses
address two key topics: the Code of Conduct and anti-corruption.
Protection and Prevention: the Whistleblower System

The whistleblower system is the central point of contact for reporting cases of rule-breaking by Group employ-
ees or by direct and indirect suppliers. This includes white collar crimes, acts of corruption, tax offenses, environ-
mental offenses, human rights violations, infringements of antitrust and competition legislation, money
laundering and terrorism financing, breaches of product safety and licensing regulations, and serious breaches
of data privacy. Employees and third parties can report misconduct at any time and in many languages. A wide
range of channels is available for this purpose, and the information can be lodged completely anonymously, if
preferred. The aim is to use binding principles and a clearly governed process to avert damage to the Company
and its employees.
M&A and NCS Compliance

In the event of planned mergers and acquisitions (M&A transactions), we audit the relevant companies for com-
mercial risks such as corruption, breaches of trust or fraud, and for human rights risks. This also applies to joint
ventures and to industrialization and cooperation projects with external partners. The analyses provide recom-
mendations for the mitigation of the risks identified. The Group Integrity & Compliance organization also
supports compliance management in non-controlled shareholdings (NCS), i.e. companies that are not controlled
by a Volkswagen Group company as the majority shareholder. This includes the Chinese joint ventures.
163
Business Partner Due Diligence

In the business partner due diligence process, the integrity of business partners and suppliers is reviewed,
especially with regard to corruption risks and compliance with ethical standards. The aim is to identify these
risks at an early stage, to avoid such business partners, and to define measures to minimize risk and implement
these with the business partner. If this is not possible, we refrain from entering the business relationship or
terminate it as the law allows.
Product Compliance
The product compliance management system (PCMS) helps our products comply with the legal and regulatory
requirements of the exporting and importing country, internal and external standards, contractually agreed cus-
tomer requirements and externally communicated voluntary commitments over their life cycle.
Environmental Compliance
Statutory environmental regulations and voluntary commitments are binding at all locations and in all business
fields. The Group’s environmental policy and the environmental compliance management system stipulate the
relevant requirements and responsibilities. They apply to all strategy, planning and decision-making processes in
the Group brands and companies. This includes a system of key indicators to determine progress in meeting
environmental targets in the fields of renewable energy, CO2 emissions and resource efficiency.
Anti-Corruption
The Volkswagen Group has a zero-tolerance policy on active or passive corruption. This is anchored in both our
internal Code of Conduct and our Code of Conduct for Business Partners. Our investigation offices look into and
process any reported violations of our principles, and sanctions are imposed on the employees concerned.
Tackling corruption also includes developing and implementing mandatory training for employees in divisions or
companies with a high risk exposure.
For more information on integrity and compliance, as well as the topic of business and human rights, please see
our 2023 Group Sustainability Report.
W H I S T L E B LOW E R SYS T E M
www.volkswagen-group.com/whistleblowersystem
Phone: +49 5361 9 46300
E-mail: io@volkswagen.de
164
CO 2 EMISSIONS OF THE VOLKSWAGEN GROUP‘S EUROPEAN (EU27+2) NEW PASSENGER CAR FLEET
in grams per kilometer (WLTP)
2
2023 119
2
2022 119
2021¹ 119
2020 100
2019 124
0 20 40 60 80 100 120 140 160
1 The European Commission switched its calculation of CO2 fleet emissions from NEDC to WLTP in 2021.
2 Subject to confirmation of CO2 data within the scope of official publication by the European Commission.
RESEARCH AND DEVELOPMENT

Forward-looking mobility solutions with brand-defining products and services would be unthinkable without
innovation. This makes our research and development work essential for sustainably increasing the value of the
Company.
Together with our Group brands, we have launched measures based on our NEW AUTO strategy to link
development activities across the Group. At the heart of this is an efficient, cross-brand development alliance
characterized by a close network of our experts, collaboration on an equal footing, an innovative working
environment and the pooling of development activities. The aim is to make use of synergies across the Group
and act as a role model for the environment, safety and integrity. The development alliance plays a major part in
driving the Volkswagen Group’s transformation and helping to make it fit for the future.
In view of this strategic focus, we concentrated in the reporting year on continuing to develop forward-
looking mobility solutions, establishing technological expertise to strengthen our competitiveness, expanding
our range of products and services and improving the functionality, quality, safety and environmental compat-
ibility of our products and services.
CO 2 fleet emissions
We use the strategic indicator of CO2 fleet emissions in Europe and the United States to evaluate the effective-
ness of our measures to reduce CO2 emissions emitted by our vehicles.
The Volkswagen Group’s new passenger car fleet in the 27 EU member states excluding Malta but including
Norway and Iceland (EU27+2) emitted an average of 119 g CO2/km (WLTP – Worldwide Harmonized Light Vehi-
cles Test Procedure)1 in the reporting year in accordance with the statutory measurement bases. The statutory
target is 122 g CO2/km (WLTP)1. The Volkswagen Group thus more than met the EU’s CO2 fleet target. All figures
are subject to confirmation of CO2 data within the scope of official publication by the European Commission. The
targets will be tightened as from 2025: the European Commission has thus set a target of a 15% reduction in CO2
emissions compared with 2021, which corresponds to a CO2 target of less than 100 g CO2/km for our new pas-
senger car fleet in the EU. A reduction of 55% has been defined for 2030, equivalent to a CO2 target of less than
50 g CO2/km. We assume that our new passenger car fleet in the EU will meet the target for 2025 and more than
meet the target for 2030. A CO2 reduction target of 100% for passenger cars has been set for 2035.
165
CO2 EMISSIONS OF VOLKSWAGEN GROUP PASSENGER CARS AND LIGHT COMMERCIAL VEHICLES
UNDER GHG STANDARDS IN THE USA
in grams per kilometer for the model year
1
2023 133
2
2022 142
2021 146
2020 152
2019 144
0 20 40 60 80 100 120 140 160
1 Subject to submission of the final MY report MY23 and subsequent recognition by EPA and CARB (internal data as of September 2023).
2 Subject to recognition by EPA and CARB (final MY report MY22 submitted but not yet confirmed).
The Volkswagen Group’s new light commercial vehicles fleet in the EU emitted an average of 187 g CO2/km
(WLTP)1 in the reporting year according to the statutory measurement bases. The statutory target is
204 g CO2/km (WLTP)1. The Volkswagen Group thus more than met the EU’s CO2 fleet target. All figures are
subject to confirmation of CO2 data within the scope of official publication by the European Commission. The
targets will be tightened as from 2025: the European Commission has thus stipulated a 15% reduction of CO2
emissions compared with 2021, which corresponds to a CO2 target of less than 180 g CO2/km for our new light
commercial vehicle fleet in the EU. A reduction of 50% has been defined for 2030, equivalent to a CO2 target of
less than 105 g CO2/km. We assume that our new light commercial vehicles fleet in the EU will meet this target
for 2025 and more than meet the target for 2030. A CO2 reduction target of 100% for light commercial vehicles
has been set for 2035. In the United Kingdom and Switzerland/Liechtenstein markets, the Volkswagen Group’s
new passenger car fleet met the statutory requirements for the reporting year. The Volkswagen Group’s new light
commercial vehicle fleet met the statutory requirements for the reporting year in the United Kingdom but fell just
short of those for Switzerland.
In the United States, the emission pool – comprising the Group brands Volkswagen Passenger Cars, Audi,
Lamborghini, Bentley and Porsche – commits to the Greenhouse Gas (GHG) and Corporate Average Fuel
Economy (CAFE) regulations. Due to a model year – the accounting period used in the USA – differing in length
from the calendar year, internal calculations are used to determine the figures for the current and preceding
model year. The average GHG CO2 value (internal data as of September 2023) for the passenger car and light
commercial vehicle fleets in model year 2023 is 133 g CO2/km (model year 2022: 142 g CO2/km). The statutory
target is 122 g CO2/km (model year 2022: 136 g CO2/km). Compliance with the statutory requirements of the
GHG and CAFE regulations together with externally acquired credits enabled the Volkswagen Group to comply
with the applicable requirements – subject to recognition by the authorities. The figure given for model year
2023 is also subject to recognition by the Environmental Protection Agency (EPA). For 2025, we anticipate a
CO2 target in the USA of approximately 110 g CO2/km and expect to meet this target. For 2030, we aim to
increase the share of electric vehicles in our new vehicle fleet to significantly more than 50%, which would put us
within the target range of the current administration.
166
Fuel and drivetrain strategy

With a view to the legal regulations on emissions, we are currently developing a forward-looking vehicle and
drivetrain portfolio: we have set ourselves the objective of increasing drive system efficiency with each new
model generation – irrespective of whether it is a combustion engine, a hybrid or a purely electric drive system.
The Volkswagen Group closely coordinates technology and product planning with its brands so as to avoid
breaches of fleet fuel consumption limits. As part of our electrification campaign, we aim to offer our customers
worldwide around 50 completely battery-electric models by 2030. By then, more than half of our new vehicles
worldwide are to be fully electric. By 2030, the Volkswagen Group aims to have electrified its entire model
portfolio, from high-volume models to premium vehicles. To this end, in addition to the Modular Electric Drive
Toolkit (MEB), we have also developed an all-electric platform for our premium and sports brands – the Premium
Platform Electric (PPE). Furthermore, we are currently concentrating our energies on designing the Scalable
Systems Platform (SSP), the successor platform for our future all-electric vehicles, in the Architecture tech-
nology initiative within the Group's NEW AUTO strategy. The strategic goals of this SSP platform are to further
reduce variance by consistently enhancing synergies and thus tapping into considerable savings potential.
To offer sustainable, affordable mobility in the future for as many people around the world as possible, we
offer a range of drivetrains with a focus on electrification. From today’s perspective, conventional combustion
engines will still continue to make up a large share of the drive portfolio in the coming years. In the interest of
using resources responsibly, it is therefore essential to further enhance this engine segment and systematically
consolidate it for specific markets. Powertrain measures such as significantly more sophisticated exhaust gas
purification or mild hybridization of our vehicles, as well as vehicle measures such as optimized aerodynamics or
reduced rolling resistance will be necessary to fulfill future emissions standards. We are preparing intensively for
this as we develop our product portfolio.
It is more important to us than ever to rigorously pursue the modular approach. We are reducing the number
of individual modules so that we can make a large product portfolio economically viable. For example, we are
reducing the number of versions of conventional combustion engines in the Group in the long term as part of our
transformation towards e-mobility. This will create capacity for the development and production of new electric
drives.
Life cycle engineering and recycling

Technological innovation for reducing fuel consumption is not enough on its own to minimize the effect of
vehicles on the environment. We consider the environmental impact caused by our products throughout the
entire vehicle life cycle and at all stages of the value chain. This includes the manufacturing process with the
associated extraction of raw materials, the production of materials, the processes at our suppliers and our own
production operations at our sites, the use phase with the resulting vehicle emissions and the necessary supply
of fuel and charging current, and ultimately the recycling of the vehicle at the end of its life cycle. Using life cycle
engineering, we identify the stages of the life cycle at which improvements will have the greatest effect and
develop appropriate solutions. Recycling, for example, is an important means of reducing environmental impact
and conserving resources. When developing new vehicles, we therefore pay attention to the recyclability of the
required materials and give recommendations that enable good separability of materials. We require the use of
secondary materials, if these meet the same quality standards as primary materials. Under the European
Directive on end-of-life vehicles, passenger cars and light commercial vehicles must be 85% recyclable and 95%
recoverable. Our vehicles registered in Europe comply with these standards. We use the life cycle approach to
monitor our climate protection targets as well. For this purpose, we have developed the decarbonization index
(DKI) as a parameter, which also recognizes the emissions of an average Group passenger car throughout its life
cycle.
167
Leveraging synergies increases efficiency

When developing vehicles, we cooperate closely with our brands to leverage synergies. The joint strategy of our
development alliance involves, for example, making the Group more competitive and viable in the long term by
deploying resources more effectively and efficiently in the research and development of new mobility-related
technologies, products and services. In our Group-wide development alliance, the brands therefore not only
work with each other, but also for each other on key technologies, forming cross-brand networks of expertise to
address topics of importance for the future.
The Volkswagen Group further streamlined its innovation portfolio, gearing it towards multibrand technol-
ogies of the future in order to provide effective support for the brands’ capacity for innovation. In the reporting
year, the new leading roles assigned to the brands in Technical Development in 2020 to increase efficiency and
leverage synergies in module variance, components, parts and processes were applied to advance development
to ensure the consistency of the innovation process.
We coordinate the use of modules centrally to reduce costs, capital expenditure and complexity. We are
seeking to reduce expenditure in the modular toolkits, while at the same time facilitating widespread electri-
fication and a focus on autonomous systems. We wish to achieve this through a considerable reduction in com-
plexity using streamlined platforms that synergize but do not overlap. To this end, the individual Group brands
draw on the modular toolkits, thus creating synergies between the various models of a product line, as well as
across the product lines. By optimizing the toolkits, we are giving ourselves the financial leeway needed for
developments in topics of importance for the future.
Connectivity and automated driving

The mobility of people and goods is a prerequisite for economic growth and social development. But natural
resources are dwindling and climate change is advancing. Customers call for comprehensive mobility concepts
to minimize the environmental impact. Such solutions need to be efficient, sustainable, crisis-proof, customer-
oriented and accessible anytime and anywhere.
We are researching and developing such concepts in our Group-wide alliance: when shaping the future of
mobility, we are looking not only at the automobile and related services, but at all modes of transport, transport
infrastructures and people’s mobility habits. Digital connectivity and automated driving allow for completely
new approaches to solving problems. They can help us play our part in a comprehensive mobility system for the
future and drive forward our industry’s transformation.
New software solutions are the basis for this. This is why the Volkswagen Group has declared software devel-
opment to be one of its target core competencies in its NEW AUTO strategy. Our software subsidiary CARIAD is
responsible for this. It is to develop a sustainable, convenient, connected, safe automotive experience for the
customers of our Group brands. CARIAD aims to provide answers to the strategic aspects of digitalization and
pool the Group's software expertise.
CARIAD’s developers work in innovation centers at sites in Germany, Europe, China and the USA. The German
parent company CARIAD SE employs around 6,000 specialists who are developing the following solutions in the
Group:
> VW.OS, a uniform software platform for all Group vehicles
> Uniform end-to-end electronics architectures
> Connection to a uniform cloud platform
> An infotainment platform with an application store for third-party providers
> Driver assistance systems, automated parking functions and highly automated driving for private mobility
> A data marketplace
> New mobility services and digital business models
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In 2023, the focus for CARIAD’s developer teams, together with the Audi and Porsche brands, was on delivering
the software for the new E³ 1.2 architecture, which optimizes the harmonization of hardware with the vehicle
software from CARIAD. This is designed not only to improve the performance of vehicle computers but also to
act as a key lever for the introduction of new services – even after vehicle production has begun.
CARIAD already supplies updatable software and updates for current vehicle generations, brands and
markets, for example as part of its E³ 1.1 architecture, with the goal of making the software secure and traceable.
In the long term, CARIAD is to pool all of its solutions in an enhanced, scalable software platform that will be
made available to the Group brands, from the volume segment up to the premium platform. This is expected to
generate economies of scale and to lower the cost of growing software requirements in the vehicle for all brands.
In 2023, CARIAD started to realign itself with an extensive transformation program. A new Board of Management
team began by implementing a five-point plan. The aim is to accelerate the development and delivery of soft-
ware for the platforms. The reorganization will also lead to even closer collaboration between CARIAD and the
Group brands. In 2023, for example, CARIAD, together with the Volkswagen Group, presented a new approach to
the development of its E³ 2.0 architecture. This is to form the basis for software-defined vehicles (SDV). In
addition, the development of architecture for two Audi and Volkswagen vehicle projects will be bundled in future
in a specially created SDV Hub. Further changes as part of the transformation program are set to materialize in
2024.
E³ 2.0 is also set to pave the way for the autonomous driving functions of the future. The development of
autonomous driving is a core element of the NEW AUTO strategy, with CARIAD responsible for developing
partially and highly automated driving functions (up to Level 4) for the Volkswagen Group’s brands. These appli-
cations will be progressively introduced in the new vehicle models at different performance levels. Volkswagen
Commercial Vehicles is responsible specifically for the areas of Mobility as a Service and Transportation as a
Service (MaaS/TaaS). The strategic technology initiative Volkswagen Group Mobility is promoting autonomous
driving in conjunction with new service models, i.e. shared mobility in these areas using robotic shuttles and
vans.
CARIAD and Volkswagen Commercial Vehicles will continue to drive the future rollout of automated and
autonomous drive technologies together with development partners.
Pooling strengths with strategic alliances

The aim of our NEW AUTO strategy is to transform our core business activities and to expand the mobility
solutions business area at the same time. It is decisive to the success of this plan that we place our innovative
strength on even broader foundations.
Within the Volkswagen Group, we combine our technological innovation activities in the Volkswagen Group
Innovation unit. At seven locations worldwide in the USA, Europe and Asia, employees are working on sustain-
able solutions for urban and interurban mobility systems in line with our motto “Mobility for generations to
come”. Technologies and activities that are ready for pre-development are regularly transferred from Volkswagen
Group Innovation to our Group brands to ensure that the areas of digitalization, sustainability and e-mobility
receive continuous support in innovative projects. In this way, we are creating an agile innovation structure that
allows us to initiate new milestone projects with innovative international partners, even at short notice.
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Growth in the mobility sector is strongly defined through regional innovation activities. Volkswagen therefore
concentrates its strategic venture-capital activities and partnerships in the Group’s international innovation
ecosystem. This helps us to identify the regional needs of customers more precisely, to adjust our product range
accordingly and to establish competitive cost structures. In doing so, we rely to a greater extent than in the past
on partnerships, acquisitions and venture-capital investments and manage investment selection centrally so as
to generate maximum value for the Group and its brands. It is against this backdrop that we formed an alliance
with Ford Motor Company. At the beginning of June 2020, Ford Motor Company and Volkswagen AG signed
additional contracts within their existing global alliance for light commercial vehicles and electrification. Among
other things, these contracts define the basis for a total of three vehicle projects: a city van (Ford Tourneo
Connect based on the Volkswagen Caddy), a mid-size pickup (Volkswagen Amarok based on the Ford Ranger)
and a one-tonne cargo van. The Ford Tourneo Connect and the Amarok have been on the market since 2022. The
New Transporter will celebrate its world premiere in 2024. In addition, Ford will use the Modular Electric Drive
Toolkit (MEB) developed by Volkswagen for two electric volume models. The aim of the cooperation is to place
both Volkswagen and Ford in a position that enables them to improve their competitiveness, tailor their products
to better meet the needs of customers worldwide and at the same time to leverage synergies related to cost and
investment.
To design the framework conditions for the approval and introduction of our own self-driving system, we are
actively involved in public projects. The experience we are gathering here benefits the Group brands and thus
our customers.
The software subsidiary CARIAD is responsible throughout the Group for developing automated driving func-
tions for our brands’ customers. In the Automated Driving Alliance, CARIAD and Bosch are striving to make
partially and highly automated driving suitable for the volume segment. The aim is to provide functions for Group
vehicles that allow drivers to take their hands off the steering wheel at times if regulations allow this. In the
alliance, both companies are jointly developing Level 2 hands-free systems for driving in cities, the countryside
and on the highway, and a Level 3 system which will enable drivers to look away from the task of driving on the
highway at times and perform certain other tasks.
CARIAD is using a local partnership with Horizon Robotics to further consolidate development expertise in
highly automated driving functions in the Chinese market. The companies also plan to develop specially modi-
fied high-tech semiconductor chips, so-called systems on a chip (SoCs), as part of a joint venture to implement
key functions and features for highly automated driving on a single chip and to integrate these chips into the
Group’s hardware and software architecture.
CARIAD entered into a new partnership in China with the software provider ThunderSoft in 2023. The focus
of the joint venture is a new customer experience when it comes to infotainment and connectivity.
Over and above this, CARIAD is committed to open collaboration in the global developer community. For
example, as a strategic member of the Software Defined Vehicle working group run by the Eclipse Foundation
open-source community, CARIAD is involved in developing automotive software more efficiently and promoting
innovation.
170
Key R&D figures

In fiscal year 2023, we filed 5,792 (5,305) patent applications worldwide for employee inventions, the majority of
them in Germany. The fact that an ever-increasing share of these patents is for important cutting-edge fields
underscores our Company’s innovative power. These fields include driver assistance systems and automation,
digitalization, connectivity and alternative drive systems.
The Automotive Division’s total research and development costs in the reporting year amounted to €21.8
(18.9) billion and were 15.2% higher than in the previous year; their share of the Automotive Division’s sales
revenue – the R&D ratio – was unchanged at 8.1 (8.1)%. In addition to new models, our activities focused above
all on the electrification of our vehicle portfolio, digitalization, new technologies and enhancements of our modu-
lar and all-electric toolkits and platforms. The capitalization ratio was 51.2 (51.4)%. Research and development
expenditure recognized in profit or loss in accordance with the IFRSs increased to €15.8 (14.3) billion.
As of December 31, 2023, our Research and Development departments – including the equity-accounted
Chinese joint ventures – employed 59,626 people (+1.2%) Group-wide, corresponding to 8.7% of the total work-
force.
RESEARCH AND DEVELOPMENT COSTS IN THE AUTOMOTIVE DIVISION
€ million 2023 2022
Total research and development costs 21,779 18,908

of which capitalized development costs 11,142 9,723
Capitalization ratio in % 51.2 51.4
Amortization of capitalized development costs 5,187 5,144
Research and development costs recognized in profit or loss 15,824 14,329
Sales revenue1 268,156 232,392

Total research and development costs 21,779 18,908
R&D ratio 8.1 8.1
1 Prior-year figure adjusted (see disclosures on IFRS 17).
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PROCUREMENT
The main task for Procurement is to help steer the Company’s success in the areas of efficiency, sustainability
and resilience. 2023 was mainly devoted to safeguarding the supply of vehicle parts and optimizing costs in
order to make a contribution to the Group’s result. The previous year’s rising energy prices again resulted in
catch-up effects at our suppliers in the reporting year. Dealing with supplier requirements so as to safeguard the
supply of our components was therefore a key task for Group Procurement.
Procurement strategy
The procurement organizations at the Volkswagen Group are an integral part of the NEW AUTO Group strategy. A
key task is to strengthen the procurement network and intensify cooperation across brands and regions. Making
use of global synergies also creates potential for a long-term reduction in costs for raw materials, components
and services.
The frequency, duration and intensity of crises and the supply chain disruption they entail have risen signifi-
cantly since the beginning of the 2020s. As a consequence, the procurement organizations intend to work
together with internal interface partners and suppliers to strengthen supply resilience. By establishing strategies
and tools and providing additional capacity for strategic and risk analyses, the aim is to enable forward-looking
and comprehensive monitoring of supply chains in line with defined criteria, such as political influencing factors,
economic developments, or environmental risks.
The transformation of the automotive industry toward e-mobility means that the procurement organizations
must adapt their supplier network. The way in which the Volkswagen Group works with these suppliers will be
shaped on an individual basis through strategic partnerships, treating the transformation as a joint undertaking.
Expansion of partnerships is generally another area of focus in Procurement, both internally in the form of collab-
oration across brands and departments and externally with the Volkswagen Group’s suppliers. Digitalization and
efficient processes are the foundation for all such strategic measures. The roll-out of a new digital supplier plat-
form for interaction and the successful connection of the cross-sectoral data network Catena-X in 2022 were
particularly noteworthy in this regard.
E-mobility
As technology advances, the automotive industry is rapidly forging ahead with its transformation toward
e-mobility. A key task for Procurement is to safeguard supplies in order to meet the constantly growing require-
ments brought about by this change in a way that is sustainable and cost-efficient. Sustainable actions, trans-
parent supply streams, and energy- and carbon-optimized supply chains are important elements of our contract
awards. We support our partners with active management of the supplier transformation, as the industry moves
from combustion-engine to all-electric vehicles, and with a lasting reduction in CO2 emissions along the entire
supply chain. To put our Company in a leading cost position, we award Group contracts that pool global demand
from the markets of Europe, North and South America, and Asia-Pacific. To reduce economic and geopolitical
risks, we use diversified supply chains in conjunction with a dual-supplier strategy as well as localization of the
supplier portfolio for all core components of our all-electric vehicle fleet.
Digitalization of supply
We are working to implement a completely digitalized supply chain. This is intended to help us to safeguard
supply and leverage synergies throughout the Group. We are therefore creating a shared database and using
innovative technologies to enable efficient, networked collaboration in real time – both within the Group and
with our partners. The Procurement division aims to standardize transactions with our suppliers in the future and
automate them where possible. This will not only reduce transaction costs but will also accelerate business
processes. The integration of Catena-X, the data network for the automotive industry, is one important part of
172
this. It will allow possible supply risks to be identified at an earlier stage and appropriate measures and alterna-
tives to be jointly developed faster. We are following the implementation of Procurement’s digitalization strategy
with the specific aim of not only eliminating the weaknesses of Procurement’s IT system environment but also
increasing the organization’s effectiveness, efficiency and future viability. The initial systems or modules such as
a cloud-based module for automating procurement activities in the vehicle project phase and an acclaimed
online negotiation tool have already been implemented and integrated into the existing system environment.
Structure of key purchasing markets

Procurement at the Volkswagen Group is responsible for ensuring cost-efficient, resilient and sustainable supply
chains. Procurement is organized at a global level, with a presence in the most important purchasing markets
around the world. Alongside local bodies and decision-making structures, Group Procurement manages the
brands and regions. This helps us to jointly implement potential cost savings and to control risks. Organized net-
working of the procurement organization in the brands will enable us to leverage Group-wide synergies and
purchase production materials, investments in property, plant and equipment, and services worldwide at the
quality required and on the best possible terms. In addition to the brands’ procurement units, Procurement
operates regional offices in strategic purchasing markets. Working together in the procurement organization,
these constantly identify and qualify new local suppliers.
Supply chain management in Procurement

Supply chain management activities at Procurement are focused on safeguarding supplies during start-up
phases and for series production. This entails providing support in our suppliers’ industrialization processes,
monitoring series production and managing supply crises, which may arise, for example, as a result of geo-
political crises such as the Russia-Ukraine conflict or natural disasters such as the flooding in Slovenia. By intro-
ducing strategic semiconductor purchasing, the Volkswagen Group is realigning the procurement of these
electronic components for the future. The procurement organization therefore intends to assume direct negoti-
ating responsibility for strategically important semiconductor volumes so as to safeguard long-term supply and
ensure competitiveness.
Even in the early stages of new projects, we conduct audits to ensure that our suppliers will be able to deliver.
Furthermore, we provide support for purchased parts along the individual project milestones up to the start of
production. Complex components in particular frequently require onsite support from our supplier management
team. Finally, an acceptance test of production capacities is carried out to facilitate the timely start of series
production of the vehicles at our plants.
In addition, regular checks are carried out during series production, for example related to the continuous
matching of demand and capacity or possible capacity adjustments at suppliers. This also safeguards the capac-
ity at suppliers when using existing components in new projects.
Thanks to our established crisis management structure and global supplier network, we are able to overcome
complex challenges along the supply chain and have access to a wide range of locations and technologies.
Cross-divisional work among Procurement, Quality Assurance, Development, Production and Logistics largely
prevented looming losses due to supply risks and, in cases where a reaction was required, maintained pro-
duction capability. Nevertheless, the precarious situation in global supply chains resulted in limited vehicle avail-
ability for customers, albeit to a lesser degree than in the prior year.
Sustainability in supplier relationships

Successful relationships with our business partners are based on respecting human rights, compliance with
occupational health and safety standards, active environmental protection and combating corruption. These
sustainability standards are defined in the contractually binding Volkswagen Group Requirements for
Sustainability in Relations with Business Partners (Code of Conduct for Business Partners), updated in 2023. The
173
Code of Conduct for Business Partners also sets out the expectation that business partners will pass on the
requirements formulated therein along the supply chain. We review compliance with the requirements, which
has been an explicit condition for the award of contracts since 2019, using sustainability ratings (S-rating) for
relevant companies and suppliers. The relevance of a business partner for this rating depends, among other
things, on the size of the company or the risk exposure arising from the type of service provided.
In our sustainability rating, we determine the sustainability performance of our suppliers by means of self-
disclosures and in a risk-based evaluation process involving audits. In the reporting year, we received 10,912
S-ratings for suppliers. The proportion of revenue contributed by suppliers with a positive S-rating amounts to
79% of the total procurement volume. Both the validation of the questionnaire and the performance of the audits
are carried out by selected service providers. As a rule, contracts are not awarded to suppliers who fail to meet
our requirements concerning compliance with sustainability standards. Tying award decisions to sustainability
criteria is one of the strongest levers for enforcing these. We address existing sustainability risks and violations
of sustainability principles by systematically defining and implementing measures to correct these; this also
includes the upstream supply chain. To enable continuous supplier development, we invite our suppliers to
attend sustainability training courses and workshops on specific topics at selected sites or online and also offer
web-based training. In the reporting year, over 7,700 suppliers received such training.
With regard to decarbonization, the Volkswagen Group is striving to continuously reduce greenhouse gas
emissions or avoid them altogether over the entire life cycle of a vehicle. The Group’s transformation into a
provider of sustainable mobility solutions and in particular the trend towards e-mobility are shifting the action
required from the service life of the vehicle to supply chains and the manufacture of vehicles and components as
well as the disposal thereof following the vehicle’s use phase. We are aware of our social responsibility and are
committed to the Paris Climate Agreement. In the Modular Electric Drive Toolkit (MEB), we have incorporated the
use of renewable energy, among other things, into the contracts with cell manufacturers. For new vehicle
projects, CO2 emissions will be a technical feature for relevant components for the Volkswagen Group in the
future. This means our suppliers will be given binding CO2 targets, with which they must be able to demonstrate
compliance at any time. One example is the Scalable Systems Platform (SSP), the new mechatronics platform on
which the batteries have a CO2 limit. To be able to achieve these limits, suppliers need to implement measures in
their own production processes and upstream chains – for example, the use of renewable electricity. Measures
like these are designed to reduce the carbon footprint of many electric vehicle models. For the ID. models, the
Volkswagen Passenger Cars brand uses additional sustainable components, including battery cases and wheel
rims made of CO2-reduced aluminum. In this way, the ID. family’s carbon footprint is to be improved by around
two tonnes per vehicle by 2025.
In our sustainable supply management, we are also involved in protecting groups of people who may be
subject to a high risk of potential human rights violations at any point in our supply chain. We implemented a
Human Rights Focus System in 2022 to achieve greater impact in this context. Our aim here is to identify and
work on issues that can be associated with human rights and environmental risks and that require more in-depth
analysis. The aim is to implement suitable prevention and remedial measures that take into account the diverse
and often structural causes of human rights violations. We continued to implement our activities as part of the
raw materials due diligence management system in 2023 to manage the sometimes extensive risks in the
upstream raw material supply chains. The management system currently comprises 18 high-risk raw materials,
for which we use risk-based specific measures to identify, measure and, in particular, reduce sustainability risks.
For our battery suppliers, transparency requirements constitute an important basis for responsible raw material
purchasing. Within the framework of these contractual requirements, we ask, for example, that our battery sup-
pliers disclose their entire upstream supply chain before we award new contracts.
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For more information on human rights, please see the section on Supply Chain and Human Rights in our 2023
Group Sustainability Report.
TECHNOLOGY
The “Technology” Board function is divided into four pillars, the so-called tech stacks. These encompass all
activities related to the development, manufacture and procurement of battery cells and systems as part of the
“Cell and Battery Strategy” tech initiative, all Group-wide topics in the “Charging and Energy Services” tech
initiative, the activities of Volkswagen Group Components and the marketing of Volkswagen platforms and com-
ponents to third parties (Platform Business).
Cross-brand management of technology activities and a value creation strategy coordinated throughout the
Group are designed to improve the Group’s future viability and competitiveness. Synergies are to be leveraged
across both traditional technologies and future areas to advance the transition to e-mobility.
The Volkswagen Group formalized its objectives for “Battery, Charging & Energy” by 2030 in its technology
roadmap. With the battery roadmap, we aim to substantially reduce the complexity and cost of this key technol-
ogy so as to make electric vehicles attractive and affordable for as many people as possible.
Battery
Our battery activities pillar is divided into two areas: the Center of Excellence and PowerCo. The responsibilities
of the Center of Excellence include Group-wide product management, procurement and quality assurance for the
battery cell and battery system, and closed-loop recycling. PowerCo will be an important cell supplier for the
Group in the future.
In 2022, Volkswagen founded PowerCo SE, its own battery company, which will bundle the Group’s global
cell production activities. From the new European battery hub in Salzgitter, this company will manage the devel-
opment of international factory operations, continuous development of cell technology, vertical integration of the
value chain and supplies of machinery and equipment to factories. PowerCo’s approach is based on two key
concepts with which it aims to set future industry standards: a unified cell enables flexible use of different
battery chemicals and is intended to be used in up to 80% of all Group models in future. The second key concept
is the standard factory, which aims to enable the rapid rollout of in-house production with standardized build-
ings, equipment, IT and infrastructure and will thus be quickly and flexibly adaptable to future innovations.
The Group’s first own cell factory based on this model is being built in Salzgitter and is due to open in 2025.
The first machinery for cell production was delivered and installed in 2023. Alongside Salzgitter, a second cell
factory is being built in Valencia, Spain. In 2023, PowerCo also took the decision to build another cell factory in
St. Thomas, Canada. Each factory is to operate on renewable power and be designed for future closed-loop
recycling.
Vertical integration of value creation is a major component of the battery strategy. By building up its own cell
production, Volkswagen will progressively take charge of further stages of the value chain so that it can exercise
greater influence over the availability, cost and sustainability of key raw materials and other items. The supply of
raw materials is being safeguarded using a three-part strategy: long-term supply contracts, investment with
partners, and procurement on the commodity spot market, backed up by financial hedging.
Cathode materials have a key role to play in the transformation to e-mobility as a driving cost factor and main
component in batteries. PowerCo and the Belgian materials technology group Umicore have formed the joint
venture IONWAY, which aims to supply cathode and primary materials to the European cell factories starting in
2025. The partners aim to be producing materials for 160 GWh of cell capacity per year by the end of the decade.
The planned cathode factory will be built in Nysa/Poland.
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Charging and Energy

Since 2021, the Charging and Energy area has played a key role in the Volkswagen Group’s e-mobility strategy
with the aim of becoming a leading provider of a smart charging and energy ecosystem.
As part of the strategic alignment, the Group is focusing on two key areas. Firstly, sales of electric vehicles are
being underpinned by the development of a global fast-charging infrastructure. In Europe, the Group and its
brands are involved in the pan-European joint venture IONITY, the Ewiva joint venture in Italy and other
partnerships. By 2025, the number of public fast-charging points in Europe is to increase to 18,000. At the same
time, both the North American charging network Electrify America – already one of the largest public charging
networks in the USA – is to be expanded to 8,000 fast-charging points and CAMS in China is to be enlarged to
17,000 fast-charging points. Secondly, the Group is opening up new business models involving smart charging
and energy solutions. The Group operates as one of the largest vehicle-charging subscription providers in Europe
with its charging and energy brand Elli. Its charging network offers access to over 600,000 charging points
Europe-wide with approximately 35,000 fast-charging points in 27 countries. In addition, Elli’s product portfolio
also includes the full range of charging solutions for private customers and companies, from the Company’s own
wall box to the flexible fast-charging station Flexpole and smart charging solutions. As part of a pilot project
involving the smart control of stationary batteries, Elli also began trading electricity in 2023. This makes
Volkswagen the first automotive group to trade on the EPEX Spot power exchange.
Volkswagen Group Components

The independent corporate entity Volkswagen Group Components, under the umbrella of Volkswagen AG, forms
the third pillar of the “Technology” Board function. Some 70,000 staff with expertise in developing and manufac-
turing vehicle components work worldwide in more than 60 plants at 45 sites.
The product portfolio is focused on technical components such as chassis, axle systems, steering, transmis-
sion, electric drives, thermal management systems in the electric drivetrain and battery systems.
With its entry into e-mobility, Volkswagen Group Components were able to work systematically on optimizing
the electric drivetrain thanks to close cooperation between product management and development. In 2023, it
debuted the new, highly efficient APP550 electric drive, which features both higher performance and improved
efficiency. The new powertrain was developed by Volkswagen Group Components together with Technical
Development at Volkswagen Passenger Cars and is being used for the first time in the Volkswagen ID.7. It is
produced at Volkswagen’s site in Kassel.
Platform Business
The fourth pillar of the “Technology” Board function is Platform Business (third-party business), which pools
Group-wide responsibility for the sale of platforms and components to external companies. This organizational
unit is responsible for the successful initiation, acquisition (including contract design) and support of customer
projects including the related order processing (logistics, billing). In the cooperation project with Ford, the
necessary cross-brand structures and processes have been created within the Volkswagen organization so that
other external customers can also be efficiently served in the future. Ford plans to produce approximately
1.2 million MEB-based vehicles for the European market by the end of the decade. In 2023, the automaker
presented the Ford Explorer, the first model based on the MEB. Volkswagen is also continuing to explore a supply
agreement with Indian automaker Mahindra for MEB components such as electric motors and battery cells.
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PRODUCTION
Our international cross-brand production network covers all stages in the process from the supplier to the fac-
tory and assembly line, and from the factory to dealers and customers. Its enduring efficiency is a prerequisite for
our competitiveness. To be able to meet the challenges of the future, we rely on holistic optimizations, forward-
looking innovations, robust supply streams and structures, and flexibility in the production network. At 9.31
million vehicles, the Volkswagen Group’s global vehicle production in fiscal year 2023, including the Chinese
joint ventures, was 6.8% up on the prior-year figure. Productivity, including the Chinese joint ventures, increased
by 2.5% compared with the previous year.
Both the parts shortages and the disruption of supply chains, most recently caused by the flooding in
Slovenia, restricted production in the Volkswagen Group in 2023. The supply and production situation eased
toward the end of the reporting year.
one.PRODUCTION production strategy

Production is supporting the NEW AUTO Group strategy with its one.PRODUCTION functional area strategy. We
are sharpening our focus in the transformation of our production and logistics, whereby our aim is to minimize
expenditure, streamline processes and strengthen the team.
The overarching aim is to increase productivity and profitability. This will enable us to manufacture high-
quality products at our sites that give customers maximum benefit at competitive prices. We are adopting a
cross-brand approach for the thematic focus of our activities in order to pool the strengths and potential of our
global production and logistics across brands and take advantage of the resulting synergies.
Our strategy process is based on a scenario methodology. As part of this, the strategic orientation of pro-
duction is checked at regular intervals to verify that it is up to date. This provides the thematic framework for the
topics being focused on in the year in question. These range from people-related subjects such as skills fore-
casts, to efficient and resilient processes, safeguarding the achievement of cost targets, digitalization and the
environment, and the production and logistics network.
Global production network

The Group’s production network encompasses 115 production sites, including our Chinese joint ventures. 70 of
these sites are vehicle production plants. Standardizing production with uniform product concepts, plants,
operating equipment and production processes within a product family is a key factor in our forward-looking
production. We are constantly enhancing our production concepts and aligning them with new technologies to
achieve ambitious targets in the individual projects. In a challenging environment, the Volkswagen Group
succeeded in starting up 44 vehicle projects in 2023, 16 of which were new products or successor products and
28 were product upgrades and derivatives.
The flexible production capacities provided by our platforms allow us to respond to changing market require-
ments, make needs-based use of the production network, and leverage synergies across brands through multi-
brand sites. Of the 45 vehicle production plants for passenger cars and light commercial vehicles, almost half are
already multibrand sites. Models for this approach within the Group are the Bratislava and Zwickau sites. In
Bratislava, vehicles of the Volkswagen Passenger Cars, Škoda, Audi and Porsche brands are produced on the
joint Modular Longitudinal Toolkit (MLB) and Modular Transversal Toolkit (MQB) platforms. At present, we are
manufacturing vehicles of the Volkswagen Passenger Cars, Audi and CUPRA brands on the joint Modular Electric
Drive Toolkit (MEB) platforms in Zwickau.
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VEHICLE PRODUCTION SITES OF THE VOLKSWAGEN GROUP

Share of total production 2023 in percent
Europe
32 locations
North America (51%)
8 locations Asia
(8%)
20 locations
(34%)
South America
6 locations
(5%)
South Africa
4 locations
(2%)
With its NEW AUTO Group strategy, the Volkswagen Group is pursuing the goal of becoming one of the world’s
leading providers of sustainable mobility. The focus here is on mobility solutions that are innovative, efficient,
sustainable and customer-oriented, as well as geared towards profitable growth. The introduction of the MEB
served as a basis for this, and complements our portfolio with additional battery-electric vehicles. We have been
manufacturing battery-electric vehicles based on the MEB in Zwickau, the Volkswagen Group’s first fully
electrified car factory, since 2019. One example is the ID.3 from the Volkswagen Passenger Cars brand. From
2021, the portfolio of the MEB platform in Zwickau was expanded through the addition of the CUPRA Born, the
Audi Q4 e-tron and the ID.5 from Volkswagen Passenger Cars. Since 2023, Volkswagen has also been manu-
facturing the ID.7 on the MEB platform in Emden. Furthermore, we use the all-electric platform for premium and
sports brands – the Premium Platform Electric (PPE) – to leverage synergies in production across the brands.
This meant that electric vehicles were manufactured at 18 sites across the global production network as of year-
end 2023.
New technologies and digitalization

As part of the one.PRODUCTION strategy, the Group has developed the “Operating System 2030+” approach – a
cross-brand vision for the factory of the future. An important dimension of this, and a prerequisite for achieving it,
is digitalization towards autonomous factories. The digital transformation is thus shaping the future devel-
opment of our process landscape and data ecosystem. The corresponding switch to value stream- and product-
oriented software development within the Group is bringing greater focus and speed to the implementation of
solutions. Overall, more than 69 new applications are already available for use in the production and logistics
processes. Examples range from virtual training courses for new vehicle start-ups to the identification and
implementation of potential energy savings and the use of artificial intelligence for parts supply by the Sched-
uling departments. The applications are now being rolled out to over 40 plants via the Digital Production
Platform (DPP) jointly developed with our strategic partner Amazon Web Services (AWS).
In 2023, Volkswagen continued its commitment to Catena-X, the first open and collaborative data space for
the automotive industry. With Catena-X, Volkswagen is shaping the future of the automotive supply chain in
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conjunction with other manufacturers and suppliers worldwide. The aim is to build a global data ecosystem for
the automotive industry with shared values regarding collaboration, data sovereignty, trust and cooperation.
Material traceability along with overarching demand and capacity management and comprehensive bottleneck
management are some examples of how we intend to increase the efficiency of our plants and meet future
supply chain requirements at the same time. We began using the first applications for partner data management
in the supply chain in 2023. Further solutions, for instance for quality cycles and managing shortages of
materials, are to follow in 2024.
In the Volkswagen Group, digital and innovative technologies are systematically validated and their use for
production and logistics is piloted and rolled out. This is to enable the Group to exploit potential for cost savings
in the value chain and realize more flexible implementation options, as well as quality improvements. The goal of
the digital transformation in production and logistics is to simplify the entire process chain, make the best
possible use of new technologies and establish autonomous processes. Fields of innovation in 2023 included
computer vision, augmented reality, process mining, AI robotics and what is known as generative artificial intel-
ligence (GenAI). For example, artificial intelligence is being used on Volkswagen’s proprietary computer vision
platform to perform tasks such as complex image evaluations within the operational production process, and is
continuously transferred to other sites across the brands. Opportunities to use GenAI are also being evaluated
and tested across departments and brands.
Zero Impact Factory

We are planning the production of tomorrow with our one.PRODUCTION functional area strategy. The use of
resources and emission levels at Volkswagen Group sites require particular attention. In the Zero Impact Factory
program, we are developing specific steps towards more sustainable production, guided by the vision of a
factory that has no adverse environmental impact. The brands have been using the measurement methods and
management tools developed for this since 2022. These enable us to record and reduce the quantitative
environmental impact of our production sites, particularly in the areas requiring action of climate protection and
energy, emissions, water and waste. We are also focusing on qualitative aspects such as the appearance of our
factories, our commitment to biodiversity, protection of the soil, a functioning environmental compliance man-
agement system, improvement of our resource efficiency, and environmentally friendly mobility management for
employee and goods transport. A further important milestone was reached in 2023. As part of an internal test
phase, we are now measuring 22 quantitative environmental indicators – including CO2 emissions, solvent
emissions, freshwater requirements, wastewater loads and different types of waste – at all sites where we
produce passenger cars and light commercial vehicles and are converting these into impact points on the basis
of their environmental relevance. This makes it possible to compare the environmental impacts with one another
and means we can implement reduction measures targeted at precisely those areas in which the greatest
positive impact for the environment can be achieved. We use a site checklist to continuously review the status of
implementation of a further 143 environmental criteria. Examples of these include projects and measures geared
towards maintaining biodiversity, establishing environmentally friendly employee mobility, and promoting the
circular economy.
From 2025, the Zero Impact Factory method is to replace the existing KPI system, which measures the reduc-
tion of the environmental impact of production (UEP). This represents a shift away from steering based on indi-
cators that are purely performance-based and vehicle-specific to a reduction in the environmental impact of our
production in absolute terms. Our goal is to achieve Zero Impact status for all of our manufacturing plants for
passenger cars and light commercial vehicles by 2050.
To support programs such as these, a management system developed in-house started being introduced at
all production sites worldwide in mid-2019, linking the main compliance issues with key environmental
management issues. This environmental compliance management system (ECMS) provides the foundation for
compliance with all external and internal rules and regulations relating to the environment.
ECMS implementation was initially concentrated on the major production and development locations, and
was extended in a second step to include Group companies whose business activities entail a lower environ-
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mental risk. We continued to actively support, monitor and track the rollout and advisory process in the reporting
year.
We are encouraging networking and communication between the brands worldwide in order to leverage
synergies. Our environmental experts meet regularly in working groups. In addition, we provide our managers
and employees with specific training on the topic of environmental protection.
We record and catalog measures in an IT system and make these available for a Group-wide exchange of best
practices. In the reporting year, approximately 1,540 implemented measures in the area of environment and
energy were tracked and documented via the Maßnahmen@Web system. They serve to improve infrastructure
and production processes for passenger cars and light commercial vehicles and are incorporated into the
decarbonization index (DKI), for example. These activities may have a positive effect on the Group’s environ-
mental indicators and are often beneficial from an economic perspective.
Zero Impact Logistics

In the joint Zero Impact Logistics initiative, the Group and brand logistics departments work together to achieve
the goals of the goTOzero environmental mission statement. By continuously optimizing the transport network
and logistics processes – for example by means of digitalization – we can avoid unnecessary shipments and
reduce emissions. In addition, the use of new low-emission technologies for transporting production materials
and vehicles is examined, piloted and accelerated.
The measures the Volkswagen Group is taking to achieve carbon-neutral logistics in the future also include,
for example, moving shipments from road to rail and almost complete avoidance of CO2 through the use of green
electricity in rail transport in Germany and other countries in collaboration with railway companies. Volkswagen
also transports high-voltage batteries for electric vehicles in an environmentally conscious and efficient manner,
for example at the Volkswagen component site in Braunschweig. Here, the batteries are loaded fully auto-
matically onto trains that run on renewable power, which then take them to the Volkswagen plant in Zwickau.
Group Logistics uses two roll-on/roll-off charter ships powered by low-pollution liquefied natural gas (LNG)
to transport vehicles across the North Atlantic. At the end of 2023, it started the gradual introduction of four
more LNG-powered car freighters, and is thus progressively replacing conventionally operated ships. Compared
to other LNG-fueled marine engines, Group Logistics’ charter ships are more climate-friendly because the high-
pressure technology of the two-stroke engines from MAN Energy Solutions allows almost no methane to escape.
In principle, the dual-fuel engines will also enable non-fossil fuels – such as biogas (bio-LNG), e-gas (synthetic
gas) from renewables and biofuel – to be used in future. This will allow carbon emissions to be reduced even
further. In the long term, Group Logistics also sees further potential to reduce the level of CO2 with other
alternative fuels.
Group Logistics permanently operates two charter ships powered by biofuel on European sea routes. This fuel
produces less CO2 than conventional fossil fuels, it is made from used cooking oils and fats. These waste and
residual materials that stem, for example, from the catering and food industries, cannot be used for further
processing into food or animal feed.
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SALES AND MARKETING

We regard ourselves as an innovative and sustainable mobility provider for all commercial and private customers
worldwide – with a product portfolio encompassing our successful brands and innovative financial services.
Together with their sales partners and importers, our passenger car brands agreed on a procedure for
integrating state-of-the-art products and services into the sales network. The priority thereby is the safe and
legally compliant handling of customer data and the way in which this is processed for digital products and
services or in connection with the vehicle purchase. The legal requirements for handling customer data have
been tightened in many countries. At the same time, the Group is launching a growing number of vehicles that
are connected to the internet where available and depending on a vehicle’s features. We are increasingly
investing in distribution systems and processes with the goal of further digitalizing and improving the individual
customer experience in all distribution channels. The Volkswagen Group’s financial strength and profitability is
attributable to an extensive portfolio of strong brands. We want to continuously sharpen the brand profiles and
to distinguish as clearly as possible between the customer segments served by the brands, supplementing them
as required with tailored solutions. Our aim is to achieve high market saturation with great efficiency and a low
level of brand cannibalization. To this end, we have established automobile-specific customer segmentation to
steer and improve the positioning of our brands, which we consistently apply throughout the strategy and
product process.
As part of our NEW AUTO strategy, we have introduced strategic base initiatives for China as the largest
single market and North America as the market with the greatest growth potential due to their considerable
strategic importance for the Volkswagen Group. We have used the Group strategy as the foundation for our new
functional area strategy called NEW SALES 2030, which forms the basis for transforming our sales activities in
the direction of a mobility provider. The aim of NEW SALES 2030 is to enable us to provide an even more flexible
and targeted response to our customers’ wishes and leverage additional revenue potential, for example through
digital business models.
With regard to its NEW AUTO strategy, Volkswagen hit another milestone as part of the “Volkswagen Group
Mobility” tech initiative in July 2022 with the closing of the transaction with Europcar. This successful joint
acquisition with two consortium partners is important in helping to drive the growth of the Volkswagen Group in
vehicle-on-demand (VoD) services. Europcar is to become a cornerstone of a product portfolio that will cover
customers’ mobility needs from vehicle sharing for a few hours to subscription for multiple months. Our
expectation is that most people will still prefer individual mobility by 2030 but the focus will be more on using
and less on owning vehicles. The Volkswagen Group is aiming to participate in the global market for mobility
services, which is expected to grow rapidly.
Also in the area of sales and marketing, we are aware of our responsibility towards the climate and the
environment. In addition to the broad range of all-electric vehicles and hybrid models, we kicked off the
goTOzero retail project that is focused on decarbonizing our entire sales network and increasing its ESG
performance, helping our sales partners to move over to a climate-neutral business model. As a result, the
carbon footprint of our sales network is to be reduced by at least 30% by 2030 compared with 2020. In order to
identify and successfully implement the right measures, we have produced manuals, training courses and
marketing materials for our partners. In addition, a certification model has been established for the entire sales
network in response to both regulatory requirements and customer expectations.
Customer satisfaction, customer loyalty and customer conquest

The Volkswagen Group aims its sales activities at exciting its customers. This is our top priority, as satisfied
customers remain loyal to our brands and recommend our products and services to others. For this we measure
customer satisfaction with our brands at different customer contact points and make it a subject of discussion at
Board committee meetings. In addition to satisfaction with our products and services, we value our customers’
emotional connection to our brands. It is important for us to retain customers and win new ones. To measure our
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success in this area, we compile and analyze strategic indicators for the passenger car-producing brands: the
loyalty rate represents the proportion of customers of our passenger car brands who have bought another Group
model. Thanks to their faithful customers, the Volkswagen Passenger Cars and Porsche brands have remained in
the upper loyalty rankings of the core European markets in comparison with their competitors for a number of
years. Audi and Škoda also have above-average customer loyalty ratings. Compared to other manufacturer
groups, the Volkswagen Group continues to hold a top spot in the core European markets in terms of loyalty. The
conquest rate shows the share of newly acquired passenger car customers as a proportion of a brand-specific
selection of competitors. The Volkswagen Passenger Cars and Audi brands improved their conquest rates in
2023, while the figures for Škoda and Porsche were on a level with the previous year.
In the core European markets, brand image and confidence in the Volkswagen Passenger Cars brand
stabilized above the level for the market as a whole in 2023. Audi and Porsche continue to occupy top places in
the image ranking.
E-mobility and digitalization in Group Sales

As part of our electrification campaign, we aim to offer our customers worldwide around 50 completely battery-
electric vehicles by 2030. This campaign will be complemented by vehicle-related, customer-focused offerings,
such as customized charging infrastructure solutions and mobile online services. The Volkswagen Group is thus
transforming from an automotive manufacturer into a mobility service provider. This poses new challenges for
Sales.
Digitalization provides many opportunities for Sales, including improved customer contact. Our actions are
guided by a clearly defined strategy that requires extensive cooperation between the brands and markets to
achieve the greatest possible synergies. Our aim here is to create a completely new product experience for the
customers of our brands – one which impresses with a seamless communication process, from the initial interest
in purchasing a vehicle, to servicing and ultimately to the sale of the used car. In doing so, we are opening up
new business models relating to the connected vehicle – in particular with regard to mobility and other services.
Vehicles are becoming an integral part of the customer’s digital world of experience.
We also align our internal processes and structures to the methods and new forms of working created by
digital innovation. This results in project teams operating across different business areas, new forms of cooper-
ation, a more intensive relationship with the international start-up scene, a consolidation of venture capital
expertise – as a form of supporting innovative ideas and business models – and new lean systems and cloud-
based IT solutions.
Car subscription
Volkswagen Financial Services AG expanded the portfolio of mobility services offered by the Volkswagen Group
and its brands in 2023. Progress has been made particularly in the collaboration with the Europcar Mobility
Group (EMG). Numerous joint projects worldwide are currently being worked on, from mobility services for fleet
customers to cooperation on the marketing of used vehicles.
The Volkswagen Financial Services AG mobility platform is continuously enlarging its portfolio of mobility
services for the Group brands. Its solutions offer the use of vehicles for anything from minutes to years.
Particularly noteworthy is the expansion of flexible subscription products, which progressed as planned in 2023.
In Germany, the portfolio was expanded to include the Škoda brand. September 2023 saw the launch of the
Volkswagen Abonnement, a subscription service also offered through EMG for the Volkswagen Passenger Cars
brand in France.
Fleet customer business

Business relationships with fleet customers are often long-term partnerships. In a volatile environment, this
customer group provides greater stability for sales of well-equipped, profitable vehicle models than the private
customer segment.
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The Volkswagen Group has an established base of business fleet customers, especially in Germany and the rest
of Europe. Our extensive product range enables us to satisfy their individual mobility needs from a single source.
In an overall passenger car market in Germany that grew by 7.3% in the reporting year, business fleet
customers accounted for 21.4 (18.8)% of total registrations. The Volkswagen Group’s share of this customer
segment increased to 47.0 (43.5)%. Outside Germany, the Group’s share of registrations by fleet customers in
Europe was 27.6 (25.7)%. This shows that fleet customers’ confidence in the Group remains at a high level. We
were able to consolidate our strong market position in the fleet customer business in Europe.
After Sales and Service

In the after-sales business, we regard ourselves as a complete provider of all products and services relevant to
customers. Together with our partners, our mission is to ensure lifelong mobility for our customers and vehicles.
We are therefore continuously expanding our portfolio of tailor-made offers and services with the aim of
improving customer experience and the satisfaction of our customers. The partner businesses also offer a com-
prehensive portfolio of services in all vehicle classes.
In After Sales, we are supporting the changing world of mobility and our systematic focus on e-mobility by
developing new services and innovative concepts. As the Group transforms from vehicle manufacturer to a
leading, global provider of sustainable mobility, our software company CARIAD is working on the development of
the future software architecture for our vehicles. With the resulting connectivity services, we will also be able to
generate synergies in After Sales across all the Volkswagen Group’s brands and take advantage of new
opportunities to boost customer loyalty.
In addition to individual service, the timely provision of genuine parts is essential to assure passenger car
customer satisfaction in After Sales. The genuine parts supplied by our passenger car brands and the expertise of
the service centers stand for the quality, safety and value retention of our customers’ vehicles. With our global
after sales network including more than 130 of our own warehouses, we are creating the prerequisites to supply
almost all our authorized service facilities around the world within 24 hours. Owing to disruptions in supply
chains we were unable to fully guarantee in-time delivery of replacement parts in certain cases during the
reporting year.
In the Digital After Sales project, we are modernizing processes and IT systems in After Sales. By adopting an
approach that focuses product and service development on the individual needs of both dealers and customers,
we aim to reduce the time needed for administrative tasks at the dealers through automated, interrelated ser-
vices and also to stabilize existing IT systems and boost efficiency. In addition, innovative digital after-sales
services will improve the customer experience.
Around the world, our commercial vehicles business also prides itself on products of quality and on customer
focus. Our range of trucks, buses and engines is complemented by services that aim to guarantee fuel efficiency,
reliability and wide vehicle availability. By offering vehicles equipped with an all-electric or hybrid drive system,
we take into account both customers’ wishes and our responsibility to contribute to emission-free transport-
tation. Workshop service and service contracts are intended to offer customers a high degree of certainty, in
addition to a high level of quality. We are reducing servicing times and costs with a view to the vehicles’ total
operating costs.
In the Power Engineering segment, we help our customers to secure the availability of machinery with MAN
PrimeServ. The global network of more than 100 PrimeServ locations stands for excellent customer focus and
offers, among other things, replacement parts of genuine-part quality, qualified technical service and long-term
maintenance contracts.
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QUALITY
The quality of our products and services plays a key role in maintaining customer satisfaction. Customers are
satisfied and loyal particularly when their expectations of a product or service are met or even exceeded. Appeal,
reliability and service determine quality as it is perceived by the customer throughout the entire product expe-
rience. Our objective is to positively surprise our customers and inspire enthusiasm in all areas, and thus to win
them over with our quality.
Digitalization was once again the beating heart of our work in the past fiscal year: we are continuously
sharpening our focus on software-based system development, which is a critical factor for success in respect of
customer satisfaction. Consistent application of the “Automotive SPICE” process assessment model that we use
to improve our processes is particularly important in our activities. It is a key building block for meeting the
requirements of our customers, as well as those of the regulatory and legislative bodies.
Volkswagen has been implementing cybersecurity measures across the Company for some time now. For
example, we have an independent cybersecurity network in place across all regions and Group brands and
monitor potential cyber risks. This enables us to act fast when potential threats arise. Since June 2022, the
UNECE (United Nations Economic Commission for Europe) has provided for corresponding certification and
homologation to ensure that companies can guarantee that these aspects are dealt with properly so as to
protect the users of our vehicles from potential attacks. Our Group pursues the goal of implementing standards
in the areas of both accident prevention and security. We are continuously refining the established processes
within the framework of an Automotive Cyber Security Management System in keeping with the requirements of
the UNECE regulation. In this context, Volkswagen is implementing comprehensive measures across depart-
ments throughout the Group.
Strategy of Group Quality

We review our functional area strategy New Quality periodically and coordinate it with the brands. We align our
activities with our goal expressed in the new motto: “We strive for outstanding products, services and customer
satisfaction.” The NEW AUTO Group strategy sets new parameters for transforming the Group into a software-
oriented mobility provider. Based on this, our quality strategy focuses primarily on achieving maximum levels of
customer satisfaction throughout the entire customer experience – from ordering through to the digital eco-
system and up to the product as well as aftersales and customer service. Group Quality and the brands’ quality
organizations play an active role at all stages of product emergence and testing, making an important contri-
bution to successful product launches, high customer satisfaction and low warranty and ex gratia repair costs.
We have defined “warranty and ex gratia repair payments per vehicle after 12 months in service” as a strategic
indicator at the top level of consideration for the major passenger car-producing brands. This shows all warranty
and ex gratia repair payments for the vehicles produced worldwide in each production year, expressed in euros
per vehicle. All vehicles from the Volkswagen Passenger Cars, Volkswagen Commercial Vehicles, Škoda,
SEAT/CUPRA, Audi and Porsche brands are included in this figure. Extraordinary items resulting from initiatives
such as recalls to assure product safety or comply with laws are not taken into account. While the figures
starting from the 2017 production year remained at a constant low level, they have increased since the 2020
production year due to the growing use of new technologies in the vehicle and rising complexity. Actions were
taken to reduce these figures and have proven effective.
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Legal and regulatory compliance

The legal and regulatory compliance of our products is paramount in our work. In our processes we employ the
principle of multiple-party verification, which involves mutual support and control between the business units.
Among other things, software development is accompanied by quality milestones at all brands. This principle
applies to all systems, components and parts that directly influence a vehicle’s safety, type approval and func-
tioning and therefore require particular vigilance. At the series production stage, we see to it that the conformity
checks on our products are carried out and assessed with the participation of all business units involved. This
applies particularly to checks related to emissions and fuel consumption.
We are also dedicating attention to our quality management system, reinforcing the interdisciplinary, pro-
cess-driven approach throughout the Group. The quality management system in the Volkswagen Group is based
on the ISO 9001 standard and the official type approval requirements. These standards and requirements must
be complied with for us to obtain type approval for the manufacture and sale of our vehicles. We conducted
numerous system audits in the reporting year to verify that our sites and brands continue to comply with these
requirements. Particular focus was placed on assessing the risk of non-compliance with defined processes. Our
quality management consultants pay attention to ensuring that these and other new requirements, as well as
official regulations, are implemented and complied with; they are coordinated and supported in this endeavor by
a central office in Group Quality.
Observing regional requirements

We use a variety of feedback instruments, such as specific customer surveys, to collect information on region-
specific customer requirements. In addition, we monitor relevant internet forums and social media postings
worldwide to obtain direct customer feedback and identify sentiment and trends at an early stage.
In order to be able to make the perceived quality of our vehicles commensurate with that of our competitors,
we take the needs of our regional customers into account in our vehicle audits. Every brand works together with
the individual regions to decide how its product is to be positioned there. In this way, we strengthen the brands’
responsibility. Consistent quality benchmarks apply across all brands and regions to ensure that we obtain
comparable results from the vehicle audit. We are continually adapting these in line with changing requirements.
For more than 40 years now, we have been deploying auditors around the world to assess, from the customer’s
perspective, the vehicles that are ready for delivery and to ensure that these vehicles comply with the
benchmarks defined.
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EMPLOYEES
The Volkswagen Group is one of the world’s largest private employers. On December 31, 2023, we employed a
total of 684,025 people, which includes the Chinese joint ventures. This figure represents a 1.2% increase com-
pared with the end of 2022. The ratio of Group employees in Germany to those abroad remained largely stable
over the past year; at the end of 2023, 298,687 (293,862) employees worked in Germany.
EMPLOYEES BY MARKET
in percent, as of December 31, 2023
 Europe (excluding Germany)/

Other Markets 29%
 Germany 44%
 North America 7%
 South America 5%
 Asia-Pacific 16%
Human resources strategy and principles of the human resources policy

For the Volkswagen Group the transformation of the workforce is defined as a focus topic in the Group’s NEW
AUTO strategy. We have also embedded the topic in our Group-wide “People & Transformation” initiative. The
Group People Strategy Transform to Tech will play a key role in this context for our three brand groups – Core,
Progressive and Sport Luxury. This strategy also enables the Volkswagen Group to continue with key, successful
approaches in human resources policy. These include the pronounced stakeholder focus in corporate gover-
nance, comprehensive participation rights for employees, forward-looking training opportunities, the principle of
long-term service through systematic employee retention and remuneration that is fair and transparent.
At the same time, the Group People Strategy is setting innovative trends. Employee experience is to be
improved systematically, the teams strengthened as the most important units in the company’s organization, and
modern forms of working, such as agile methods, are to be developed. Our aim is to become more attractive as
an employer and take the performance of our organization to the next level.
In our Group People Strategy we have identified different dimensions with which we aim to address employ-
ees’ needs and expectations in a holistic manner. Together, these four dimensions make up the work experience,
job satisfaction and, ultimately, the success of the work and the Group’s integration into society.
1) “Me” (Me@Volkswagen): We strive to systematically improve the employee experience and ensure that all
employees have the best possible conditions in which to do their job. Starting with availability of contem-
porary, task-specific work equipment and tools, this also entails avoidance of red tape and overly complex
process steps and includes state-of-the-art workspaces, opportunities for 360-degree feedback, individual
health coaching, and training opportunities tailored to the individual.
2) „My team“ (Teams@Volkswagen): As our transformation takes shape, the way in which teams in the Volks-
wagen Group collaborate changes fundamentally. Hybrid, digital and agile forms of collaboration become more
important. They require office environments and working methods to adapt and facilitate collaborative, flexible
work. The same applies to opportunities for digital collaboration.
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3) “All of us at Volkswagen” (All of us@Volkswagen): The seven Volkswagen Group Essentials define the shared
underlying values across all of the Group’s brands and companies: We take on responsibility for the environ-
ment and society, We are honest and speak up when something is wrong, We break new ground, We live
diversity, We are proud of the work we do, We not me, We keep our word. Our corporate culture aims to create
a sense of belonging for our workforce – an important aspect that is gaining in significance particularly in
times of change and in an increasingly diverse environment. We believe in the importance of fair remuneration,
which underscores our image of ourselves as an attractive employer. It is designed to motivate and to express
our appreciation for the performance of each individual. In addition, we need to empower our leaders to
support the transformation in a goal-oriented way and act as role models. Group-wide activities such as team
dialogue and the role model program are designed to encourage employees to discuss the Group Essentials
and incorporate them into all work processes. In the role model program, managers from all brands strive to
improve the corporate culture together with their staff.
4) “Volkswagen in society” (We@Volkswagen and the world around us): We are aware that without long-term
social legitimacy at our locations and in our markets, we will not be able to carry forward our business model in
times of accelerated changes in values – this applies from an economic, environmental and social perspective.
We see our employees as representatives of the Volkswagen Group who communicate our values to society.
Together with them, we also assume responsibility above and beyond our core business – such as through
foundation work and corporate volunteering (employee engagement). The topics of our social commitment
range from education to culture, diversity, a culture of remembrance, climate action and environmental protec-
tion, and various local commitments.
The transformation has put us on a long-term path of change and renewal. It is important for us to regularly
review whether we are maintaining the course we have set and achieving our objectives. The following strategic
key performance indicators help us measure our progress and take remedial action if necessary:
> Internal employer attractiveness: This indicator is determined by asking respondents, as part of the Stim-
mungsbarometer (opinion survey), whether they perceive the respective company as an attractive employer.
The opinion survey is conducted for the majority of our Group workforce. The target for 2025 is 89.1 out of a
possible total of 100 index points. A score of 86.0 index points was achieved in the reporting year, meaning
that the target for 2023 of 88.8 index points was missed. 86.6 points were achieved in the previous year. For
Volkswagen AG, the score for 2023 was 84.7 (87.1) index points.
> Diversity index: As part of our Group-wide diversity management system, we report in this strategic indicator
on trends in the proportion of women in management and the internationalization of top management as a
percentage of the global active workforce (total workforce excluding vocational trainees and employees in the
passive phase of their partial retirement), excluding employees in the withdrawal phase of their time asset
bonds. In particular, this indicator underpins the objective of the Group People Strategy, which is aimed at
contributing to an exemplary leadership and corporate culture. The proportion of women in management,
comprised of management, senior management and top management (including Group Board of Management
members), amounted to 19.2% in 2023 and was 1.9 percentage points up on the prior-year level. We aim to
raise this figure to 20.2% by 2025. Our goal is to increase the level of internationalization in top management,
the uppermost of our three management tiers, to 25.0% by 2025; in the past fiscal year this was 25.6 (23.4)%.
The figures for the proportion of women in management and the internationalization of top management are
placed equally weighted in the diversity index and the figures for the year 2016 set to an index value of 100.
For 2023 we had planned to increase this index to 142. This target was exceeded with a score of 154 (140).
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> Implementation status of strategic HR planning: Strategic HR planning supplements operational HR planning
by adding a qualitative, long-term and strategic planning perspective. It allows business units to identify
qualitative and quantitative surpluses and shortfalls at an early stage and develop necessary qualification,
training and restructuring requirements designed to help support the transformation. To map progress in
strategic HR planning, we measure the percentage of the active workforce considered in the strategic HR
planning from 2023. The data collected showed a coverage of 34.3%, which was just under the target of 35%.
> Number of training hours per employee: Due to the transformation in the automotive industry, we are facing the
biggest process of expertise and cultural change in the history of the Group. As a result, individual oppor-
tunities for change for employees are becoming an increasingly important success factor. Through economies
of scale in connection with digitalization and through use of the learning platform Degreed, which is to be
gradually rolled out across the Group, Volkswagen is improving the access to training opportunities. The goal
is to increase the average number of training hours per employee in the Volkswagen Group – based on the
active workforce (excluding employees in the withdrawal phase of their time asset bonds) – by 35% by 2030 to
30 hours per year. The baseline value is 22.3 hours and represents the average for the base years 2015 to
2019. These years were chosen as the baseline due to the outbreak of the Covid-19 pandemic, which tempo-
rarily curtailed training activities in 2020 and 2021. The target figure for the reporting year was 24.0 hours.
With an average of 22.1 hours per employee, the target has not been met.
Training and professional development

At Volkswagen, our capacity for innovation and our competitive position largely depend on the commitment and
knowledge of our employees, particularly during the transformation.
Volkswagen Group employees have access to a wide range of training measures organized according to
vocational groups. These comprise all employees whose tasks are based on similar technical skills and who
require related expertise in order to perform their jobs. A skills profile lays down the specialist and interdisci-
plinary skills for each job and serves as a guide for training measures. Formats range from further training in
general Company-related topics to specific training or personal development programs. Thanks to these oppor-
tunities, Volkswagen employees are able to further develop and steadily deepen their knowledge throughout
their working lives. The range of learning opportunities is being expanded continuously.
Degreed, the innovative learning platform that we have implemented, opens up diverse training opportunities
for our employees. The platform creates a simple, customized learning experience and is aimed at supporting the
results of strategic HR planning with appropriate training programs. Another focus is developing important and
specific skills, for example in areas such as data analytics, software development, leadership, machine learning
and artificial intelligence. In addition, Volkswagen’s Faculty 73 program is providing in-house training for the
software developers who are needed for the digital transformation. The graduates from this program largely
work in departments at Group IT, brand IT, Technical Development and CARIAD. The fifth year of this innovative
transformation program started in November 2023. The program is designed for employees and also external
applicants with an affinity for IT and an interest in software development.
Volkswagen AG, CARIAD and Škoda are also supporting the innovative programming schools in Wolfsburg,
Berlin and Prague in cooperation with the non-profit École 42. In 2023, an average of 882 students in Berlin,
Wolfsburg and Prague were learning from and with each other in this innovative training approach.
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AGE STRUCTURE IN YEARS OF EMPLOYEES

as of December 31, 2023; in percent
 < 20 2%
 20-29 15%
 30-39 31%
 40-49 26%
 50-59 21%
 60 + 6%
Vocational training and cooperative education

The core components of training at Volkswagen are vocational training and cooperative education (dual study
programs combining university studies with on-the-job training). As of the end of 2023, the Volkswagen Group
trained 17,081 young people. We have introduced the principle of dual vocational training at many of the Group’s
international locations over the past few years and are continuously working on improvements. Once a year,
Volkswagen honors its highest-achieving vocational trainees in the Group with the Best Apprentice Award. Even
after their vocational training has been completed, young people at the start of their careers are encouraged to
continue their professional development in our Company.
Development of university graduates

Volkswagen offers two structured entry and development programs for university graduates and young profess-
sionals. In the StartUp Direct trainee program, graduate trainees gain an overview of the Company while working
in their own department and also take part in supplementary training measures. University graduates interested
in working internationally can participate in the StartUp Cross program. The aim here is to get to know the Com-
pany in all its diversity and to build up a broad network. During their participation in the program, young pro-
fessionals become familiarized with several locations in Germany and other countries by working in various
departments. Both programs also include several weeks’ experience working in production.
Increasing attractiveness as an employer and development programs for specific target groups
A human resources policy that promotes a work-life balance is a major component of Volkswagen’s attract-
tiveness as an employer; in particular, it contributes to greater gender equality. We are working continuously to
develop family-friendly working time models and to increase the number of women in management positions.
For Volkswagen AG, we have also set targets for the proportion of women in management in accordance with
German legislation. In line with the Gesetz zur gleichberechtigten Teilhabe von Frauen und Männern an Füh-
rungspositionen (German Act on the Equal Participation of Women and Men in Leadership Positions) and section
76(4) of the Aktiengesetz (AktG – German Stock Corporation Act), Volkswagen AG set targets for the period until
the end of 2025 of 16.5% for the proportion of women in the active workforce at the first level of management
(senior management, top management and brand Board of Management) and 23.4% for the second level (man-
agement). As of December 31, 2023, the proportion of women in the active workforce (excluding employees in
the withdrawal phase of their time asset bonds) at the first level of management was 15.3% and at the second
level of management it was 21.5%. The Group Board of Management and Supervisory Board are regularly informed
of the figures achieved and the current target paths.
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PROPORTION OF WOMEN IN THE VOLKSWAGEN GROUP

as of December 31
% 2023 2022
Employees 18.7 18.1

Vocational trainees1 20.6 20.3
Total management 18.7 16.8
Management 21.0 18.8
Senior management 14.5 13.5
Top management 11.1 9.8
1
Excluding Scania and Navistar
In order to encourage women with great potential to advance within the Company, we have set targets relating
to the development of the proportion of women in management for every Board of Management business area at
Volkswagen AG. This approach is supported by many different measures ranging from cross-brand mentoring
programs to agreement on target quotas for the management selection procedure and targets for the share of
women among external hires.
The Group also has a large number of collective regulations in place to make it easier for employees to
balance the demands and needs of work and home life and allow staff to arrange their own individual working
model. In addition to flexible working hours and the use of working time accounts and flextime, these include
variable part-time work and shift models, leave of absence enabling employees to care for family members, the
possibility to convert salary components into paid leave, childcare services that are associated with the com-
pany or are company-owned, and remote working. “Meine AusZeit” is a program offered by Volkswagen AG that
allows employees to take a self-financed leave of absence with an upfront payment from the Company.
Hybrid working – a combination of remote working and working onsite – gives employees greater flexibility in
terms of when and where they work and is increasingly becoming the norm for the Volkswagen Group. To
strengthen collaboration between teams in this changed environment, we offer accompanying knowledge trans-
fer and training formats on the topic of virtual and hybrid collaboration.
The use of hybrid collaboration also poses new requirements for the design of office spaces. Against this
backdrop, we are currently testing desk-sharing models in various office environments (for example at
Volkswagen AG, Audi and Porsche) with the aim of designing more modern workplaces at Volkswagen. At
production sites, too, we are investing in contemporary working environments. At our Wolfsburg site, for
example, we are gradually modernizing several hundred social spaces, including with financial support from the
modernization fund. Plants and departments can apply to the modernization fund, which distributes an average
of €25 million each year. The fund has a total volume of €125 million, spread over five years.
The Volkswagen Group attaches particular importance to its employees being able to act with agility and
entrepreneurial drive. Together with 30 publicly traded large companies from Germany, Austria and Switzerland,
we developed a skills matrix for training and professional development in the area of agile business processes
under the umbrella of the DACH30 initiative. As part of these endeavors, the Volkswagen Group Academy set up
an agility training portfolio.
Preventive healthcare and occupational safety

In addition to complying with legal requirements, we aim to protect and promote physical and mental health,
taking into account psychosocial risks and their effects. We believe in providing employees with health care that
is above the standard set by law in the country in question.
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Employee participation
Codetermination and employee participation are important pillars of our human resources strategy. Volkswagen
aims to promote high levels of expertise and a strong sense of team spirit. This includes employees’ opinions,
assessments and criticism being heard.
We brief our employees extensively on upcoming changes so as to involve them in strategic decision-making
as early as possible. When shaping labor relations to embody cooperation and social peace, we are guided by
universal human rights and the standards of the International Labour Organization (ILO). Building on these prin-
ciples, we have agreed various charters and declarations with the European and Global Group Works Council
which set out the principles of labor policy in the Volkswagen Group as well as employee rights.
Employee participation in the Company’s success through the issuance of treasury shares in the form of an
employee share program is not currently offered.
By means of the opinion survey (Stimmungsbarometer), the Company regularly gathers information regarding
employee satisfaction and also surveys employees on our corporate culture. Based on the results, follow-up
processes are implemented in which measures are developed and executed. The 2023 opinion survey covered
129 companies in 48 countries. Of the 588,072 employees in the companies surveyed, 464,749 participated.
This was a participation rate of 79%. The sentiment rating calculated from 22 questions is the main parameter of
the opinion survey and is used to help determine Board of Management remuneration, among other things. It is
calculated from the total of all the related answers in the survey and, in 2023, stood at 82.5 out of a possible
total of 100 index points. The score achieved in 2023 was thus just above the previous year’s figure, which
amounted to 82.4 points.
In addition, we also encourage employee involvement by means of Idea Management. Employees have the
opportunity to put their creativity and knowledge to use by contributing their ideas for making improvements,
thus contributing to streamlining workflows, further enhancing ergonomics in the workplace, reducing costs and
continuously increasing efficiency. The system also provides monetary incentives by offering set rewards.
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INFORMATION TECHNOLOGY (IT)

The Volkswagen Group is continuing to drive its transformation into a provider of sustainable mobility. IT is playing
an ever more important role in this – used in our vehicles, across the Company and in opening up new business
models.
Digitalized supply chains, automated and AI-optimized production processes, data-driven management of
the sustainability targets and a seamless integration of analogue and digital customer experience are elements
of this transformation.
Based on an in-depth review of the situation, the “IT” Board function has developed the NEW IT functional
area strategy – a vision focused on the following topics:
> Updating, delivering and constantly improving highly automated enterprise processes and systems by means
of a high-performance IT infrastructure with a cost-effective cloud-first approach that is resilient to cyber
threats and designed to ensure data protection.
> Through agile development, the customer-centric development of IT products and digital services will facili-
tate continuous improvement and refinement and lead more swiftly to measurable business benefit.
> The systematic use and provision of data across the entire organization to optimize products, processes and
corporate governance. Data is set to become a value driver for innovations, new business models, personalized
customer contact and better corporate management across all brands and companies, whilst adhering to the
relevant and applicable data protection requirements.
With the NEW IT strategy, the IT and data organization have been geared to the requirements of the coming
years. Sprints focused on business impact and speed will drive the IT strategy in a consistent direction. The
introduction of a new agile product organization will significantly accelerate the development and provision of
digital products. IT and the Board functions will work together on new digital products in cross-functional teams,
taking an agile and customer-centric approach with short development cycles. Systematically modularizing
large IT programs using such sprints will significantly reduce the complexity of these projects. This will not only
make the projects more efficient and faster to implement but deliver results and business benefits sooner.
By forging ties between the “IT” Board function and the chief information officers (CIOs) of the Core, Pro-
gressive and Sport Luxury brand groups and of Volkswagen Financial Services AG, we aim to ensure a uniform,
strategic focus and to help promote the leveraging of synergies and the use of economies of scale. The system-
atic identification and Group-wide sharing of best practices – projects that have already been successfully
implemented at individual brands or companies – provides for effective knowledge transfer within the Company,
conserves resources and generates greater speed and efficiency. Creating transparency around IT costs across
the brands and therefore throughout the Group is an essential factor in making strategic decisions for the future.
A 50% reduction in the IT committee landscape also serves to accelerate this decision-making.
The availability of the IT infrastructure for all brands and companies is a high priority. The provision of state-
of-the-art IT applications for digital collaboration and the expansion of options for conducting business on
mobile devices are designed to improve productivity in the long term. Building on the rollout of Microsoft 365,
even more functions for simple, digital collaboration throughout the Group were implemented in the reporting
year. Furthermore, the implementation of a comprehensive Group-wide data strategy enables the generation of
overarching benefits through data-based solutions and artificial intelligence. The expansion of strategic IT
partnerships and cross-brand partner and resource management also secures external capacity.
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Software development
The “IT” Board function is responsible for swiftly developing software and IT solutions for the Group based on the
Group’s needs. Part of this development work takes place in the Software Development Centers (SDCs) around
the world. The strategic goal is to safeguard and successively increase the proportion of in-house services relating
to software products for critical business processes.
The optimization of processes and the definition of standards for software development remain at the
forefront of our activities. Among other things, this entails international, data-driven management of activities in
the SDCs, strategic alignment of the business-critical enterprise systems in accordance with the NEW IT strategy
and safeguarding intellectual property in the form of software product source codes.
Use of digitalization and IT solutions

The Board of Management continuously monitors and supports the digital transformation. The Group Board of
Management Committee for Digital Transformation addresses the digital transformation of business processes
across brands and business units. It manages the IT project portfolio and fosters the digital cultural change as
well as innovations and synergies between the Group and the brands.
Volkswagen embraces digitalization in the Company; its in-house Software Innovation Centers (SICs) are just
one example of this. They act as centers of innovation and expertise, piloting new technologies with their know-
how to fulfill the requirements of the different business areas in the Group, developing applications relevant for
the Company and making these available for productive use within the organization. Here, Group IT, research
institutes, educational institutions (such as universities), technology partners and policymakers work closely
together on future trends in information technology. The SICs also use their network with start-ups to adapt
innovative solutions to Volkswagen’s needs. This allows the experience and strategic expertise of a large com-
pany like Volkswagen to be combined with the pragmatism, the innovative ideas for new areas of business and
the speed of young start-ups.
Highly specialized experts at the Data:Lab in Munich and Wolfsburg are involved in machine learning and AI
solutions that have great potential, for example in production, logistics and quality assurance. The objective is
improved human-machine collaboration to optimize processes, minimize errors and automate possible repetitive
tasks, freeing up capacity for more valuable work. In the medium and long term, the aim is to enable cost
savings, increased product quality and improved competitiveness.
The focus is on innovation projects such as Smart Quality Analytics (SQA) – an IT system used among other
things to digitalize the analysis of field data. For quality assurance purposes, SQA records and analyzes the data
from connected customer vehicles. This includes data from control units as well as error messages from
workshops. Other projects are working on optimizing the order of individual working steps in vehicle
manufacture (for example a painting sequence) to reduce production times and improve the use of resources.
In the field of machine learning, work is being carried out on smart management of energy use to generate
sustainable energy savings and CO2 reductions, for example in compressed air control systems. In addition, the
SDCs are used to transfer knowledge throughout the entire Company on topics such as advanced data analytics
(process for the systematic analysis of data in electronic form) and block chain (distributed ledger technologies)
to make these new technologies available to the Group. Advanced data analytics are helping to optimize the
storage of replacement parts in the after-sales business, for example. Likewise, numerous bot projects are being
implemented to automate business processes (robotic process automation).
193
Production processes are also safeguarded by artificial intelligence and camera systems (computer vision). The
systems and equipment in the factories are linked together in an integrated overall system. In conjunction with
the different departments, Group IT is also contributing its expertise to the field of research and development,
one example being EU projects. Digitalized work tools such as the “virtual concept vehicle” make the product
development process faster, more efficient and more cost-effective, for example by replacing physical compo-
nents with virtual components generated on the computer.
IT security
Safeguarding data and information throughout the Volkswagen Group worldwide is one of the main tasks of IT
and was continued in fiscal year 2023 with the Group Information Security Program. The objective of the pro-
gram is to create uniform processes and solutions across the Group to further enhance information security. The
findings and solutions are being implemented within the Group successively. The main focus is on topics that
could one day pose information security risks for the Group and that need to be specially safeguarded as part of
the Group’s digital transformation strategy. The program’s content and orientation are reviewed annually and
updated if necessary.
We are one of the first vehicle manufacturers to require our suppliers to have passed TISAX (Trusted Infor-
mation Security Assessment Exchange) certification. This sends out a signal regarding the security of cross-
company information and data. TISAX certification is an assessment method developed by the German Associ-
ation of the Automotive Industry and is based on the international industry standard and the requirements of the
automotive world. The aim is for sensitive data and information to be dealt with securely by our suppliers.
The task of automotive cybersecurity is to avert cyberattacks on our vehicles throughout the entire product
life cycle, as well as on the digital vehicle ecosystem. The Group policies in the Volkswagen Group based on the
legal requirements of the UNECE (United Nations Economic Commission for Europe) regulation have been imple-
mented. Brand-specific organizational guidelines are being specified and implemented on this basis, taking the
organizational circumstances into account.
To protect our customers against cyberattacks, and to implement our solutions in conformity with national
and international legislation, we have established integrated, cross-brand, cross-regional security management
systems for information and cybersecurity. The cybersecurity management system required by UNECE Regula-
tion 155 received UNECE CSMS certification in 2021 and undergoes annual monitoring audits (most recently in
mid-2023). Safeguarding the complete life cycle of our vehicles and digital mobility services has been part of
standard operations since 2022.
Key central information security processes have been audited and certified in line with the international ISO
27001 framework. This is the most important cross-sectoral standard for information security and is our basis for
building an appropriate information security management system for handling all sensitive information in the
Group. This information security management system is being gradually expanded. It is audited annually and
recertified at required intervals.
In recent years, the introduction of the data protection management system and the data protection manage-
ment organization has thus established the infrastructure for implementing and complying with data protection
requirements at Volkswagen AG in the long term. Increasing digitalization and interconnectedness of business
processes, new legislative initiatives with data protection relevance, and the sharp rise in the extent of inter-
national data protection legislation continue to require a high level of attention to ensure ongoing compliance
with data protection requirements. Continuously raising awareness among the workforce and further standard-
izing and automating processes remain the focus of activities. Compliance requirements are already being
integrated into the design of IT solutions and infrastructure decisions.
194
SEPARATE NONFINANCIAL GROUP REPORT

The combined separate nonfinancial report of Volkswagen AG and the Volkswagen Group in accordance with
sections 289b and 315b of the Handelsgesetzbuch (HGB – German Commercial Code) for fiscal year 2023
will be available on the website www.volkswagen-group.com/nichtfinanzieller-bericht-2023 in German and at
www.volkswagen-group.com/nonfinancial-report-2023 in English by no later than April 30, 2024.
REPORT ON POST BALANCE SHEET DATE EVENTS

There were no significant events after the end of fiscal year 2023.
195
Group Management Report EU Taxonomy
EU Taxonomy
Doing business in an environmentally sustainable way is one of the central challenges
of our time. The EU has defined criteria for determining the degree of a company's
environmental sustainability. With our taxonomy-aligned investments in development
activities and in property, plant and equipment, we are today already shaping the future
in an environmentally sustainable way as envisaged by the EU Taxonomy.
BACKGROUND AND OBJECTIVES

As part of the European Green Deal, the European Union (EU) has placed the topics of climate protection, the
environment and sustainability at the heart of its political agenda in order to achieve climate neutrality by the
year 2050. The finance sector is expected to make an important contribution to realizing this objective. In this
context, the EU published the “Strategy for Financing the Transition to a Sustainable Economy” in 2021. Aimed at
supporting the financing of the transition to a sustainable economy, the published strategy contains proposals
relating to transition finance, inclusiveness, resilience and contribution of the financial system, and global ambi-
tion. It is based on the EU’s action plan on Financing Sustainable Growth of 2018. In addition to “Disclosures”
and “Tools”, another key module is the EU Taxonomy (Regulation (EU) 2020/852 and associated delegated acts).
The EU Taxonomy is a classification system for sustainable economic activities. An economic activity is con-
sidered taxonomy-eligible if it is listed in the EU Taxonomy and can therefore potentially contribute to realizing at
least one of the following six environmental objectives:
> Climate change mitigation
> Climate change adaptation

> Sustainable use and protection of water and marine resources
> Transition to a circular economy
> Pollution prevention and control

> Protection and restoration of biodiversity and ecosystems.
An activity is only considered environmentally sustainable, i.e. taxonomy-aligned, if it meets all three of the fol-
lowing conditions:
> The activity makes a substantial contribution to one of the environmental objectives by meeting the screening
criteria defined for this economic activity, e.g. level of CO2 emissions for the climate change mitigation environ-
mental objective.
> The activity meets the Do-No-Significant-Harm (DNSH) criteria defined for this economic activity. These are
designed to prevent significant harm to one or more of the other environmental objectives, e.g. from the pro-
duction process or by the product.
> The activity is carried out in compliance with the minimum safeguards, which apply to all economic activities
and relate primarily to human rights and social and labor standards.
196
The Volkswagen Group supports the EU’s overarching goal. We are committed to the Paris Climate Agreement
and align our own activities with the 1.5 degree goal. We aim to achieve net carbon neutrality by 2050.
REPORTING FOR FISCAL YEAR 2023

The Volkswagen Group is required by the EU Taxonomy to report on all of the environmental objectives for the
first time in fiscal year 2023. Following climate change mitigation and climate change adaptation, definitions
have now been assigned to the four remaining environmental objectives, these being sustainable use and pro-
tection of water and marine resources, transition to a circular economy, pollution prevention and control, and
protection and restoration of biodiversity and ecosystems. The figures reported on sales revenue, capital expen-
diture and operating expenditure relate to the companies consolidated in the Volkswagen Group’s financial
statements. Volumes and financial data for our Chinese joint ventures are therefore excluded.
The wording and terminology used in the EU Taxonomy are still subject to some uncertainty in interpretation,
which could lead to changes in the reporting when it is subsequently clarified by the EU. Ultimately, there is a
risk that the key performance indicators presented as taxonomy-aligned would need to be assessed differently.
Our interpretation is set out below.
ECONOMIC ACTIVITIES OF THE VOLKSWAGEN GROUP

With the Group strategy “NEW AUTO – Mobility for generations to come”, we are preparing ourselves for the
global changes in mobility and thus playing a substantial role in driving Volkswagen’s transformation into a
provider of sustainable mobility. In this context, we pay particular attention to the use of resources and the emis-
sions of our product portfolio, as well as those of our sites.
The Volkswagen Group’s activities in its vehicle-related business with passenger cars, light commercial
vehicles, trucks, buses and motorcycles cover the development, production and sale of vehicles and extend to
our financial services and other vehicle-related products and services. Activities in these areas are suited under
the EU Taxonomy to making a substantial contribution to the environmental objective of climate change miti-
gation by increasing clean or climate-neutral mobility.
The Volkswagen Group’s activities in the Power Engineering Business Area comprise the development,
design, production, sale and servicing of machinery and equipment. These activities also fall under the environ-
mental objective of climate change mitigation.
An analysis of our economic activities in the context of the EU Taxonomy has not revealed any activities that
contribute specifically to one of the other five environmental objectives.
The table below sets out the allocation of our activities in the vehicle-related business and in Power Engi-
neering to the economic activities listed in the EU Taxonomy under the environmental objective of climate
change mitigation. Changes may be made to the economic activities in future as the rules around the EU
Taxonomy dynamically evolve.
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Economic activity in accordance with the EU Taxonomy Description of economic activity Allocation in the Volkswagen Group
Environmental objective: climate change mitigation

3. Manufacturing
3.2 Manufacture of equipment for the production Manufacture of equipment for the production Power Engineering
and use of hydrogen and use of hydrogen
3.3 Manufacture of low-carbon technologies for Manufacture, repair, maintenance, retrofitting, Vehicle-related business
transport repurposing and upgrade of low-carbon vehicles,
rolling stock and vessels.
3.6 Manufacture of other low-carbon technologies Manufacture of technologies aimed at Power Engineering
substantial greenhouse gas emission reductions
in other sectors of the economy, where those
technologies do not fall under other economic
activities in the manufacturing sector.
3.18 Manufacture of automotive and mobility Manufacture, repair, maintenance, retrofitting, Vehicle-related business
components repurposing and upgrade of automotive and
mobility systems and components that are
essential for delivering and improving the
environmental performance of the vehicle.
9. Professional, scientific and technical activities
9.1 Close to market research, development and Research, applied research and experimental Power Engineering
innovation development of solutions, processes,
technologies, business models and other
products dedicated to the reduction, avoidance
or removal of greenhouse gas emissions for
which the ability to reduce, remove or avoid
greenhouse gas emissions in the target
economic activities has at least been
demonstrated in a relevant environment,
corresponding to at least Technology Readiness
Level 6.
Economic activities in vehicle-related business

Economic activity 3.3 Manufacture of low-carbon technologies for transport
We allocate all activities in our vehicle-related business associated with the development, production, sale
(including financial services), operation and servicing of vehicles to this economic activity. This includes all pas-
senger cars, light commercial vehicles, trucks, buses and motorcycles manufactured by us, irrespective of their
powertrain technology, and also includes genuine parts.
In our vehicle-related business, we have detailed the vehicles manufactured by us by model and powertrain
technology and analyzed the CO2 emissions associated with them in accordance with the current regulations. In
this way, we have identified those vehicles among all of our taxonomy-eligible vehicles that meet the screening
criteria and with which the substantial contribution to climate change mitigation is measured. These include all
of the Volkswagen Group’s all-electric vehicles (BEVs). Until December 31, 2025, they also include passenger cars
and light commercial vehicles with CO2 emissions of less than 50 g/km in accordance with the WLTP. This encom-
passes the majority of our plug-in hybrids. Buses meeting the Euro 6 standard (Stage E) were also included until
December 31, 2022.
Economic activity 3.18 Manufacture of automotive and mobility components

This economic activity was added to the EU Taxonomy in the reporting period to enable those components that
play a key role in reducing greenhouse gas emissions also to be taken into account. To this activity, we allocate
the sale to third parties of motors and powertrains produced by us for all-electric vehicles; this primarily com-
prises the sale of these components to our Chinese joint ventures.
198
At this stage, other activities that are directly associated with the primary vehicle-related business and that in
our view should also be allocated to these economic activities have not yet been included or have been inter-
preted as not yet being taxonomy-eligible. This is because, as the rules of the EU Taxonomy currently stand, it is
still unclear where to record them in accordance with the EU Taxonomy. These activities particularly include the
sale of additional engines and powertrains, as well as parts deliveries, the sale of non-Group products and
production under license by third parties. Based on current assumptions, hedging transactions and individual
activities that we present primarily under Other sales revenue in the consolidated financial statements cannot be
classified as economic activities under the EU Taxonomy, and we have therefore initially classified them as not
being taxonomy-eligible.
Economic activities in Power Engineering

In the Power Engineering Business Area, we have analyzed our activities with respect to their classification under
the EU Taxonomy and, with the exception of the business of building new heavy fuel oil engines and individual
components for the extraction and processing of fossil fuels, have identified them as taxonomy-eligible. To
enable us to also demonstrate the substantial contribution made by individual activities to climate change miti-
gation, we have developed a systematic method of calculating life-cycle greenhouse gas (GHG) emissions that is
based on parameters and is suitable for the building of both individual machines and systems. This approach has
been verified for some first projects by an independent third party and will be extended to other applications in
future.
Economic activity 3.2 Manufacture of equipment for the production and use of hydrogen
Our activities in relation to the manufacture of equipment for the production of hydrogen are taxonomy-eligible:
they include the electrolyzers we manufacture and the complete hydrogen systems we build. To meet the
substantial contribution criteria, evidence of the life-cycle GHG emissions of the hydrogen later produced by the
equipment’s user must also be provided. This depends on the source of the energy used for electrolysis.
The manufacture of equipment for the use of hydrogen, which is required for a hydrogen-based supply of
energy and raw materials, makes a substantial contribution to climate change mitigation. This equipment includes
the compressors we manufacture for the transport, compression, or liquefaction of hydrogen, tanks and equip-
ment for the storage of hydrogen, and reactors and equipment for processing hydrogen into hydrogen-based
synthetic fuels.
Economic activity 3.6 Manufacture of other low-carbon technologies

The description of this economic activity means that only those technologies manufactured for the purpose of
reducing greenhouse gas emissions substantially in other sectors of the economy are taxonomy-eligible. At
Volkswagen, this comprises all new-build activities that enable the use of gas and climate-neutral synthetic
fuels (e.g. manufacturing of gas and dual-fuel engines), all industrial solutions for energy storage and sector
coupling (e.g. heat pumps) and all carbon capture, utilization and storage (CCUS) technology. These activities are
rounded off by the service and after-sales business, comprising the upgrading and modernization of existing
equipment. For example, we retrofit existing maritime fleets with technology that makes it possible to reduce
CO2 emissions.
To count as a substantial contribution to economic activity 3.6, we must demonstrate that the use of the
product reported here enables substantial life-cycle GHG emission savings compared to the best-performing
alternative available on the market. Examining the life-cycle GHG emissions of the product itself does not
suffice; the difference from the emissions of the alternative technology must also be calculated and evaluated.
For this purpose, we apply the systematic method based on parameters that is used to calculate life-cycle GHG
emissions to the CCUS industrial solutions, large-scale heat pumps, energy storage systems and paper industry
applications manufactured by us.
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Economic activity 9.1 Close to market research, development and innovation

The description of this economic activity includes applied research in technologies for the reduction or avoid-
ance of greenhouse gas emissions. We allocate our licensing business to this economic activity. In the course of
such business we provide our development services in the form of production documents, based on which our
licensees are authorized to manufacture corresponding gas and/or dual-fuel engines.
DO NO SIGNIFICANT HARM (DNSH)

The DNSH criteria were analyzed in the reporting year for economic activities covered by 3.3 Manufacture of
low-carbon technologies for transport, 3.18 Manufacture of automotive and mobility components, 3.2 Manufac-
ture of equipment for the production and use of hydrogen and 3.6 Manufacture of other low-carbon technol-
ogies.
In the vehicle-related business, an analysis was performed largely at the level of the production sites where
passenger cars, light commercial vehicles, trucks, buses and components are or will be produced that meet the
screening criteria for the substantial contribution of economic activities 3.3 Manufacture of low-carbon technol-
ogies for transport and 3.18 Manufacture of automotive and mobility components, or that are to meet them in
future according to our five-year planning, and based on current regulations. Of the approximately 40 sites
included, the majority are located in the EU, with some in the United Kingdom, Türkiye, South Africa, the USA,
Mexico, Brazil, Argentina, China and India. We also included the sites that manufacture specific components for
electric vehicles.
For the Power Engineering Business Area, an analysis was performed largely at the level of the production
sites that produce relevant components for systems or are responsible for supply chains that meet the screening
criteria for the substantial contribution of economic activities 3.2 Manufacture of equipment for the production
and use of hydrogen and 3.6 Manufacture of other low-carbon technologies, or that are to meet them in future
according to our five-year planning. These comprise five sites in Germany, one in Switzerland and one in Sweden.
The wording and terminology used in the EU Taxonomy are subject to some uncertainty in interpretation. To
some extent, the Taxonomy goes beyond the regulations to be applied in regular business operations. In addition,
the application of the EU Taxonomy to sites outside the EU leads to particular challenges due to the possibility of
diverging legislation. Below, we set out our interpretation and describe the main analyses we used to examine
whether there was any significant harm to the other environmental objectives. Our assessments confirmed that
we met the requirements of the DNSH criteria in the reporting year in the vehicle-related business at the sites
producing passenger cars, light commercial vehicles and components, at the sites of the European truck and bus
brands, and in the Power Engineering Business Area.
Climate change adaptation

We performed a climate risk and vulnerability assessment to identify which production sites may be affected by
physical climate risks. The physical climate risks we identified were assessed on the basis of the lifetime of the
relevant fixed asset.
Volkswagen’s climate-based DNSH assessment is based on the Representative Concentration Pathway
(RCP8.5) and on the Shared Socioeconomic Pathway (SSP5-8.5) scenario to the year 2050 and thus assumes the
highest concentration of CO2 according to the Intergovernmental Panel on Climate Change (IPCC). The relevance
of the identified threats was assessed for the local environment and, if appropriate, the measures needed to
mitigate the risk were developed.
200
Sustainable use and protection of water and marine resources

We evaluated our economic activities with respect to the sustainable use and protection of water and marine
resources looking at the three following criteria: preserving water quality, avoiding water stress, and an environ-
mental compatibility assessment (EIA or comparable process). Risks identified in an EIA are examined during the
approval process and, if relevant, result in measures and regulatory requirements. We based the analysis pri-
marily on ISO 14001 certificates, information from site approvals and other external data sources related to sites
with a high risk exposure.
Transition to a circular economy

Environmentally compatible waste management in the manufacturing process, reuse and use of secondary raw
materials and a long product lifespan are major aspects of Volkswagen’s environmental management system.
Volkswagen defines guidelines on the circular economy in its environmental principles, in its overall factory
white paper and in its goTOzero strategy.
The product-related requirements for passenger cars and light commercial vehicles are taken into account
through implementation of the statutory end-of-life vehicle requirements in conjunction with the type approval
of the vehicle models. In addition to this, each brand has targets and measures for the use of recycled materials
in new vehicles.
For trucks and buses, a review was conducted at the level of each brand to establish the extent to which local
legislation or internal rules and regulations cover the specific requirements.
In the Power Engineering Business Area, a major lever for the circular economy can be found particularly in a
long product lifespan, supported among other things by our retrofitting business.
Pollution prevention and control

To be considered environmentally sustainable, an economic activity may not significantly increase air, water or
soil pollutant emissions as compared with the situation before the activity started.
Overall, the automotive sector is already tightly regulated, as demonstrated for example by the publicly
accessible Global Automotive Declarable Substance List (GADSL). Approval and monitoring processes have
been implemented with the aim of ensuring compliance with the legal requirements and internal rules and
regulations applicable to regular business operations. In this context, we also already consider the use of alter-
native substances in our analyses and assessments.
In July 2023, the European Commission revised the DNSH criterion of the EU Taxonomy. There is room for
interpretation as to the effect that the changed requirements will have on internal processes related to the
assessment of substitution options for substances of very high concern (SVHC) in the 2023 reporting year.
In the vehicle-related business, standards and processes stipulating in principle that SVHCs should be
avoided and substituted are already in place. On this basis, our analyses look at the substances contained in the
process materials used in production and in the vehicle-related components of our all-electric vehicles, and at
the suppliers of these materials and components, in order to assess whether the SVHCs can be substituted,
taking into account factors such as technical and economic criteria. We use pilot projects to test the processes
and documentation for assessing substitution options in accordance with the amended EU Taxonomy require-
ments. It has not yet been possible to verify whether the sites of the truck and bus brands that operate only
outside the European Economic Area comply with the new regulations due to factors such as the inadequate
lead time for implementation.
In the Power Engineering Business Area, the corresponding processes include surveys relating to the substi-
tution assessments and guidelines for performing these assessments.
201
Protection and restoration of biodiversity and ecosystems.

In order to verify adherence to the requirements on biodiversity and ecosystems, the relevant areas were
identified. Where biodiversity-sensitive areas are located close to a production site, we checked whether a
nature conservation assessment had been performed and whether nature conservation measures had been
defined in the environmental approvals and subsequently implemented. We also checked whether changes had
occurred in an area’s conservation status.
MINIMUM SAFEGUARDS
The minimum safeguards consist of the OECD Guidelines for Multinational Enterprises, the United Nations
Guiding Principles on Business and Human Rights, the Fundamental Conventions of the International Labour
Organization (ILO) and the International Bill of Human Rights. The assessments confirm that we meet the
requirements of the minimum safeguards in the reporting year.
As a business with a global presence, the Volkswagen Group accepts its corporate responsibility for human
rights, fully recognizes these conventions and declarations and reaffirms its agreement with the contents and
principles stated therein. In 2022, the Volkswagen Group appointed a Human Rights Officer, whose duties relate
primarily to monitoring, checking and advising within the meaning of the Lieferkettensorgfaltspflichtengesetz
(LkSG – German Supply Chain Due Diligence Act).
The LkSG imposes certain due diligence obligations designed to avoid risks associated with human rights
and the environment. These obligations include the performance of risk analyses, the integration of preventive
measures, remedial measures and the provision of a complaints mechanism. The due diligence obligations apply
both to the Volkswagen Group's own business area and to the Group's supply chain. In the reporting year, the
departments responsible performed a risk analysis using questionnaire-based surveys of the Group companies
of the Volkswagen Group's own business area; this included all sites that were also examined under the DNSH
criteria. The companies were given risk-specific measures to counteract the risks identified in the analysis, and
were required to implement these. For risks that are already known, we have begun to revise and initiate
preventive measures and to supplement these with other measures where appropriate. The status of
implementation of the respective measures is continuously monitored by the Group. If infringements of the
frameworks are identified, remedial measures must be initiated and checked for their effectiveness.
Relationships with our business partners are based on agreements such as the Code of Conduct for Business
Partners. We review compliance by the relevant suppliers with the binding requirements defined in the Code
using sustainability ratings. We address existing sustainability risks and violations of sustainability principles by
systematically defining and allocating packages of measures to correct the violations; we also apply this
approach to the upstream supply chain. In addition, we also conducted training for suppliers and on-site audits
at suppliers with a high risk exposure in the reporting period. We implemented a Human-Rights-Focus-System in
2022 to comply with international frameworks and requirements and specifically the LkSG. The system aims to
identify particularly high risks in our supply chain in connection with human rights violations and the
environment and to manage these appropriately.
KEY PERFORMANCE INDICATORS IN ACCORDANCE WITH THE EU TAXONOMY REGULATION

The EU Taxonomy defines sales revenue, capital expenditure and operating expenditure as the key performance
indicators that must be reported on. We explain these below. The tables required by the EU Taxonomy are
included at the end of the section.
The financial figures relevant for the Volkswagen Group are taken from the IFRS consolidated financial state-
ments for fiscal year 2023. As we differentiate between economic activities, we have avoided double counting.
Where possible, the figures within an economic activity have been allocated directly. In our vehicle-related
business, for example, we compiled the financial figures based on the vehicle model and powertrain technology.
This applies both to the vehicles themselves and to the corresponding financial services and other services and
activities. Only where this was not possible for capital expenditure and operating expenditure were allocation
202
formulas used based on the planned vehicle volumes. In the Power Engineering Business Area, we used allo-
cation formulas based on planned sales revenue. This data and planning form part of the medium-term financial
planning for the next five years on which the Board of Management and Supervisory Board have passed a
resolution.
Sales revenue
The definition of turnover in the EU Taxonomy corresponds to the sales revenue reported in the IFRS consoli-
dated financial statements. This amounted to €322.3 billion in fiscal year 2023 (see also note on “Sales revenue”
in the notes to the consolidated financial statements; the prior-year figures were adjusted – see disclosures on
IFRS 17).
Of this total, €294.0 billion, or 91.2% of Group sales, was attributable to economic activity 3.3 Manufacture of
low-carbon technologies for transport, and was classified as taxonomy-eligible. This includes sales revenue after
sales allowances from the sale of new and used vehicles including motorcycles, from genuine parts, from the
rental and lease business, and from interest and similar income, as well as sales revenue directly related to the
vehicles, such as workshop and other services.
Economic activity 3.18 Manufacture of automotive and mobility components accounted for taxonomy-
eligible sales revenue of €165 million or 0.1% of Group sales. This includes the sale of all-electric vehicle motors
and powertrains to third parties.
Of the taxonomy-eligible sales revenue from economic activity 3.3 Manufacture of low-carbon technologies
for transport, €36.6 billion met the screening criteria used to measure the substantial contribution to climate
change mitigation. This includes all of our all-electric vehicles and a large proportion of our plug-in hybrids. In
2023, there were 799 thousand such vehicles, around one third more than in the previous year. Their share of the
relevant sales volume – excluding the vehicles from the Chinese joint ventures – rose to 12.7 (11.1)%. Passenger
cars and light commercial vehicles made up the bulk at 797 thousand vehicles; trucks and buses were down
compared with the previous year, when buses that met the requirements of the Euro-6 E standard were still
counted. Sales of all-electric vehicles (BEV) increased very sharply compared with the prior year. In addition, the
taxonomy-eligible sales revenue from economic activity 3.18 Manufacture of automotive and mobility compo-
nents met the screening criteria used to measure the substantial contribution to climate change mitigation.
Taking into account the DNSH criteria and minimum safeguards, €36.5 (26.1) billion of the sales revenue
generated from our vehicle-related business, equating to 11.3 (9.4)% of consolidated sales revenue, was
taxonomy-aligned. Of this figure, €165 million related to economic activity 3.18 Manufacture of automotive and
mobility components, which is being reported for the first time, while €27.8 billion or 8.6% of consolidated sales
revenue was attributable to our BEV models.
In the Power Engineering Business Area, our activities that fall under economic activity 3.2 Manufacture of
equipment for the production and use of hydrogen generated completely taxonomy-aligned sales revenue of
€28 million (previous year: €18 million). The increase in taxonomy-aligned sales revenue is attributable to the
expansion of the business. Most of our taxonomy-eligible sales revenue in the Power Engineering Business Area
was attributable to economic activity 3.6 Manufacture of other low-carbon technologies (€3.1 billion),
€68 million of which is taxonomy-aligned. In the reporting year, the complex evidential requirements were
fulfilled for a portion of the activities for the first time. A further €58 million was contributed to taxonomy-eligible
sales revenue by economic activity 9.1 Close to market research, development and innovation.
Of the Volkswagen Group’s total sales revenue in fiscal year 2023,

> €297.4 (256.9) billion, or 92.3 (92.0)%, was taxonomy-eligible sales revenue and
> €36.6 (26.1) billion, or 11.4 (9.4)%, was taxonomy-aligned sales revenue.
203
SALES REVENUE 2023
C O M P L I-
SUBSTANTIAL C O M P L I- A N C E W IT H
CONTRIBUTION TO A N C E W IT H M IN IM U M
CLIMATE CHANGE DNSH SAFE- TAXONOMY-ALIGNED
SALES REVENUE MITIGATION C R ITERIA GUARD S SALES REVENUE
Economic activities € million %1 € million %1 Y/N Y/N € million %1
A. Taxonomy-eligible activities 297,359 92.3 36,847 11.4 Y/N Y 36,644 11.4

Vehicle-related business
3.3 Manufacture of low-carbon
technologies for transport 294,049 91.2 36,586 11.4 Y/N Y 36,383 11.3
of which taxonomy-aligned BEVs 27,759 8.6
3.18 Manufacture of automotive and
mobility components 165 0.1 165 0.1 Y Y 165 0.1
Power Engineering
3.2 Manufacture of equipment for the
production and use of hydrogen 28 0.0 28 0.0 Y Y 28 0.0
3.6 Manufacture of other low-carbon
technologies 3,059 0.9 68 0.0 Y Y 68 0.0
9.1 Close to market research,
development and innovation 58 0.0 - - - - - -
B. Taxonomy-non-eligible activities 24,925 7.7
Total (A + B) 322,284
1 All percentages relate to the Group’s total sales revenue.
204
Capital expenditure
Capital expenditure for the purposes of the EU Taxonomy refers to the following items in the IFRS consolidated
financial statements: additions to intangible assets, additions to property, plant and equipment, and additions to
lease assets and investment property. These are reported in the notes to the 2023 consolidated financial state-
ments in the notes on “Intangible assets”, “Property, plant and equipment” and “Lease assets and investment prop-
erty”. Additions from business combinations, each of which is reported under “Changes in consolidated Group”,
are also included. By contrast, additions to goodwill are not included in the calculation.
In fiscal year 2023, additions in the Volkswagen Group as defined above amounted to
> €12.3 billion from intangible assets,
> €14.8 billion from property, plant and equipment and
> €33.0 billion from lease assets (mainly vehicle leasing business) and investment property.
Other additions to be included resulted from changes in the consolidated Group, amounting to €1.4 billion in
fiscal year 2023. Total capital expenditure to be included in accordance with the EU Taxonomy therefore came to
€61.5 billion.
All capital expenditure attributable to our vehicle-related business is associated with economic activity 3.3
Manufacture of low-carbon technologies for transport. Taxonomy-eligible capital expenditure for the vehicle-
related business amounted to €61.1 billion, or 99.4% of the Group’s capital expenditure.
To determine the substantial contribution in the vehicle-related business, we compiled the financial figures
based on the vehicle model and powertrain technology in the same way as for sales revenue. Where possible,
capital expenditure was directly attributed to vehicles. It was included if the vehicles in question make a
substantial contribution to the climate change mitigation objective. Any capital expenditure directly attributable
to vehicles that do not meet the screening criteria was not included. Capital expenditure that was not clearly
attributable to a particular vehicle was taken into account on a proportionate basis using allocation formulas. In
our vehicle-related business, we developed allocation formulas based on planned vehicle volumes for the Group
companies. In the sales companies, for example, we used allocation formulas related either to individual brands
or to all brands, depending on the primary business activity, while site-based allocation formulas were used for
production companies. This means that capital expenditure was counted in full via the allocation formulas for
sites that according to our medium-term planning will produce only vehicles meeting the screening criteria for
the substantial contribution in the next five years. In contrast, capital expenditure on sites that only produce
vehicles not meeting the screening criteria was not counted under the allocation formula. Calculated in this way,
capital expenditure relating to vehicles that meet the screening criteria for the substantial contribution
amounted to €20.1 billion.
Taking into account the DNSH criteria and minimum safeguards, capital expenditure of €20.0 (16.9) billion
was taxonomy-aligned. This represented 32.6 (34.5) % of the Group’s total capital expenditure. Of this figure,
€5.9 billion was attributable to intangible assets, €6.3 billion to property, plant and equipment and €7.9 billion to
lease assets and investment property. The figure includes additions to capitalized development costs of
€4.9 billion and additions to property, plant and equipment of €6.1 billion for our all-electric vehicles (BEV). The
increase in taxonomy-aligned capital expenditure of €3.1 billion is attributable to the growing number of environ-
mentally sustainable vehicle projects under the EU Taxonomy.
In the reporting period, we refinanced taxonomy-aligned capital expenditure from fiscal years 2021 and 2022
based on the Green Finance Framework updated in October 2022 by issuing green bonds in the amount of
€3.5 billion. Only capital expenditure in connection with all-electric vehicles was included here.
205
In 2022, Scania issued a green bond totaling SEK 3.0 billion to finance research and development activities
relating to all-electric vehicles. The remaining €91 million was used in the reporting period; of this amount,
€46 million was attributable to taxonomy-aligned capital expenditure. Adjusted for this figure, taxonomy-aligned
capital expenditure attributable to the vehicle-related business accounted for 32.5 (34.3)% of total capital
expenditure in accordance with the EU Taxonomy.
€37 million of the taxonomy-eligible capital expenditure in the Power Engineering Business Area is attributable
to economic activity 3.2 Manufacture of equipment for the production and use of hydrogen and €85 million is
attributable to economic activity 3.6 Manufacture of other low-carbon technologies. For the latter, capital
expenditure was broken down based on planned sales revenue.
Taxonomy-aligned capital expenditure for the manufacture of equipment for the production and use of
hydrogen was disclosed in the amount of €37 million, half of which was attributable to intangible assets and half
to property, plant and equipment. Capital expenditure amounting to €24 million for the manufacture of other
low-carbon technologies was disclosed as taxonomy-aligned, more than 90% of this was attributable to
property, plant and equipment.
Of the Volkswagen Group’s total capital expenditure in fiscal year 2023,

> €61.3 (48.9) billion, or 99.6 (99.6)%, was taxonomy-eligible capital expenditure and
> €20.1 (16.9) billion, or 32.7 (34.5)%, was taxonomy-aligned capital expenditure.
CAPITAL EXPENDITURE 2023
C O M P L I-
CONTRIBUTION TO A N C E W IT H M IN IM U M
CLIMATE CHANGE DNSH SAFE- TAXONOMY-ALIGNED
CAPITAL EXPENDITURE MITIGATION C R ITERIA GUARD S CAPITAL EXPENDITURE

of which additions to capitalized
development costs for BEVs 4,920 8.0
of which additions to
property, plant and equipment for
BEVs 6,107 9.9
mobility components - - - - - - - -
Power Engineering
technologies 85 0.1 24 0.0 Y Y 24 0.0
development and innovation - - - - - - - -
B. Taxonomy-non-eligible activities 221 0.4
Total (A + B) 61,472
1 All percentages relate to the Group’s total capital expenditure.
206
Operating expenditure
The operating expenditure reported by us for the purposes of the EU Taxonomy comprises both non-capitalized
research and development costs, which can be taken from the note on “Intangible assets”, and the expenditure
for short-term leases recognized in our consolidated financial statements, which can be found in the note on
“IFRS 16 (Leases)”, as well as expenditure for maintenance and repairs.
The allocation of operating expenditure to the economic activities followed the same logic as that described
for capital expenditure.
All operating expenditure attributable to the vehicle-related business is associated with economic activity 3.3
Manufacture of low-carbon technologies for transport and has been classified as taxonomy-eligible.
Where possible, non-capitalized research and development costs were directly attributed to vehicles. They
were included if the vehicles in question make a substantial contribution to the climate change mitigation
objective. We did not include any non-capitalized research and development costs directly attributable to
vehicles that do not meet the screening criteria. Non-capitalized research and development costs that were not
clearly attributable to a particular vehicle were taken into account on a proportionate basis using allocation
formulas. For these and other operating expenses, allocation formulas were used, similarly to capital expen-
diture. Of the taxonomy-aligned operating expenditure of €5.7 (4.9) billion, around 85% was attributable to non-
capitalized research and development costs. The absolute value of the increase in taxonomy-aligned operating
expenditure is attributable to the growing number of environmentally sustainable vehicle projects under the EU
Taxonomy.
Including the share of the bond issued by Scania attributable to taxonomy-aligned operating expenditure, the
share of taxonomy-aligned operating expenditure declined from 43.2 (42.7)% to 42.9 (42.0)% of total operating
expenditure in accordance with the EU Taxonomy.
€9 million of the taxonomy-eligible operating expenditure in the Power Engineering Business Area is attributable
to economic activity 3.2 Manufacture of equipment for the production and use of hydrogen and €219 million is
attributable to economic activity 3.6 Manufacture of other low-carbon technologies. For the latter, operating
expenditure that could not be directly allocated was broken down based on planned sales revenue.
Taxonomy-aligned operating expenditure for the manufacture of equipment for the production and use of
hydrogen was disclosed in the amount of €9 (4) million and was attributable to non-capitalized research and
development costs. €61 million of the operating expenditure was disclosed for the manufacture of other low-
carbon technologies, nearly two-thirds of which was attributable to non-capitalized research and development
costs. Operating expenditure that could not be directly allocated was broken down on the basis of the planned
taxonomy-aligned sales revenue.
207
OPERATING EXPENDITURE 2023
C O M P L I-
CONTRIBUTION TO A N C E W IT H M IN IM U M TAXONOMY-ALIGNED
OPERATING CLIMATE CHANGE DNSH SAFE- OPERATING
EXPENDITURE MITIGATION C R ITERIA GUARD S EXPENDITURE

mobility components - - - - - - - -
Power Engineering
technologies 219 1.6 61 0.5 Y Y 61 0.5
development and innovation - - - - - - - -
B. Taxonomy-non-eligible activities 145 1.1
Total (A + B) 13,265
1 All percentages relate to the Group’s total operating expenditure.
208
CAPEX PLAN UNDER THE EU TAXONOMY

The EU Taxonomy requires the reporting to state the extent to which taxonomy-aligned capital and operating
expenditures a) relate to assets or processes associated with environmentally sustainable economic activities or
b) are part of a plan to expand taxonomy-aligned economic activities or to allow taxonomy-eligible economic
activities to become taxonomy-aligned (CapEx plan). A CapEx plan under the EU Taxonomy shows the total
capital expense, i.e. the sum of capital and operating expenditures expected to be incurred in the reporting
period and during the five-year medium-term planning in order to expand taxonomy-aligned economic activities
or allow taxonomy-eligible economic activities to become taxonomy-aligned.
For the vehicle-related business, the CapEx plan drawn up under the EU Taxonomy relates to economic activity
3.3 Manufacture of low-carbon technologies for transport within the climate change mitigation environmental
objective.
Additions from lease assets (mainly vehicle leasing business) are based on existing environmentally sustain-
able activities and have therefore not been included in the CapEx plan. We allocated additions from intangible
assets and property, plant and equipment, as well as non-capitalized research and development costs to the
CapEx plan if they allow taxonomy-eligible economic activities to become taxonomy-aligned or lead to the
expansion of taxonomy-aligned economic activities. For this, we compared the average taxonomy-aligned pro-
duction volume from the medium-term planning with the taxonomy-aligned vehicles from the reporting period
and allocated the taxonomy-aligned capital expenditure according to this ratio, whereby we also took into
account the share exceeding the current taxonomy-aligned production volume.
As a result, €8 (9) billion of the taxonomy-aligned capital expenditure and €3 (3) billion of the taxonomy-
aligned operating expenditure in the reporting period is attributable to the CapEx plan under the EU Taxonomy.
The total capital expense from the CapEx plan under the EU Taxonomy that is expected to be incurred in the
reporting period and during the five-year medium-term planning amounts to €90 (100) billion.
In the Power Engineering Business Area, the CapEx plan under the EU Taxonomy relates to economic activity 3.2
Manufacture of equipment for the production and use of hydrogen, and economic activity 3.6 Manufacture of other
low-carbon technologies, both of which are listed in the climate change mitigation environmental objecttive.
In respect of the manufacture of equipment for the production and use of hydrogen, we allocated
€36 (26) million of the taxonomy-aligned capital expenditure and €8 (4) million of the taxonomy-aligned oper-
ating expenditure to the CapEx plan based on the ratio of sales revenue in the reporting period to the average
sales revenue envisaged in the medium-term planning. The total capital expense from this CapEx plan under the
EU Taxonomy that is expected to be incurred in the reporting period and during the medium-term planning
amounts to approximately €455 (300) million.
In respect of the manufacture of other low-carbon technologies, we allocated €23 million of the taxonomy-
aligned capital expenditure and €37 million of the taxonomy-aligned operating expenditure to the CapEx plan
based on the ratio of sales revenue in the reporting period to the average sales revenue envisaged in the medium-
term planning. The total capital expense from this CapEx plan under the EU Taxonomy that is expected to be
incurred in the reporting period and during the medium-term planning amounts to approximately €380 million.
209
TABULAR PRESENTATION IN ACCORDANCE WITH THE EU TAXONOMY
SALES REVENUE 2023
CRITERIA FOR A SIGNIFICANT CONTRIBUTION DNSH CRITERIA (DO NO SIGNIFICANT HARM)
(A.2) proportion of sales

Taxonomy-aligned (A.1)
Minimum safeguards
or taxonomy-eligible
Transition activities
Proportion of sales
activities category
Circular economy
Circular economy
Climate change
Climate change
Climate change
Climate change
Sales revenue
revenue 2023
revenue 2022
Biodiversity
Biodiversity
adaptation
adaptation
mitigation
mitigation
Pollution
Pollution
category
Enabling
Water
Water
Code
Y; N; Y; N; Y; N; Y; N; Y; N; Y; N;
Economic activities € million %1 N/EL2 N/EL2 N/EL2 N/EL2 N/EL2 N/EL2 Y/N Y/N Y/N Y/N Y/N Y/N Y/N %1 E T
A. Taxonomy-eligible activities
A.1 Environmentally sustainable activities (taxonomy-

aligned)
Manufacture of low-carbon technologies for transport CCM 3.3 36,383 11.3 Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y 9.4 E
Manufacture of automotive and mobility components CCM 3.18 165 0.1 Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y - E
Manufacture of equipment for the production and use of

hydrogen CCM 3.2 28 0.0 Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y 0.0 E
Manufacture of other low-carbon technologies CCM 3.6 68 0.0 Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y - E
Sales revenue from environmentally sustainable

activities
(taxonomy-aligned) (A.1) 36,644 11.4 11.4 – – – – – Y Y Y Y Y Y 9.4
Of which enabling activities 36,644 11.4 11.4 – – – – – Y Y Y Y Y Y 9.4 E
Of which transition activities - - - – – – – – – -
A.2 Taxonomy-eligible but not environmentally sustainable
activities (activities that are not taxonomy-aligned) EL; N/EL3 EL; N/EL3 EL; N/EL3 EL; N/EL3 EL; N/EL3 EL; N/EL3
Manufacture of low-carbon technologies for transport CCM 3.3 257,666 80.0 EL N/EL N/EL N/EL N/EL N/EL 81.8
Manufacture of other low-carbon technologies CCM 3.6 2,991 0.9 EL N/EL N/EL N/EL N/EL N/EL 0.9
Close to market research, development and innovation CCM 9.1 58 0.0 EL N/EL N/EL N/EL N/EL N/EL 0.0
Sales revenue from taxonomy-eligible but not

environmentally sustainable activities (activities that are not
taxonomy-aligned) (A.2) 260,715 80.9 80.9 – – – – – 82.7
Sales revenue from taxonomy-eligible activities (A.1 + 297,359 92.3 92.3

A.2) – – – – – 92.0
B. Taxonomy-non-eligible activities
Sales revenue from activities that are not taxonomy- 24,925 7.7
eligible (B)
Total (A + B) 322,284 100.0
1 All percentages relate to the Group’s total sales revenue.

2 Y: Yes, taxonomy-eligible activity and taxonomy-aligned with the relevant environmental objective; N: No, taxonomy-eligible activity but not taxonomy-aligned with the relevant environmental objective; N/EL: ‘Not eligible’, activity not taxonomy-eligible for the
relevant environmental objective.
3 EL: Taxonomy-eligible activity for the relevant objective; N/EL: Activity that is not taxonomy-eligible for the relevant objective.
210
CAPITAL EXPENDITURE 2023
Minimum safeguards
Proportion of CapEx
activities category
(A.2) proportion of
Circular economy
Circular economy
Climate change
Climate change
Climate change
Climate change
CapEx 2022
Biodiversity
Biodiversity
adaptation
adaptation
mitigation
mitigation
Pollution
Pollution
category
Enabling
CapEx
Water
Water
Code
2023
Y; N; Y; N; Y; N; Y; N; Y; N; Y; N;

aligned)

CapEx from environmentally sustainable activities

Manufacture of other low-carbon technologies CCM 3.6 60 0.1 EL N/EL N/EL N/EL N/EL N/EL 0.1
CapEx from taxonomy-eligible but not environmentally

sustainable activities (activities that are not taxonomy-
aligned) (A.2) 41,160 67.0 67.0 – – – – – 65.1
CapEx from taxonomy-eligible activities (A.1 + A.2) 61,250 99.6 99.6 – – – – – 99.6
CapEx from activities that are not taxonomy-eligible (B) 221 0.4
Total (A + B) 61,472 100.0
1 All percentages relate to the Group’s total capital expenditure.

211
OPERATING EXPENDITURE 2023
(A.2) proportion of OpEx

Minimum safeguards
Proportion of OpEx
activities category
Circular economy
Circular economy
Climate change
Climate change
Climate change
Climate change
Biodiversity
Biodiversity
adaptation
adaptation
mitigation
mitigation
Pollution
Pollution
category
Enabling
Water
Water
OpEx
Code
2023
2022
Y; N; Y; N; Y; N; Y; N; Y; N; Y; N;

aligned)

OpEx from environmentally sustainable activities

Manufacture of other low-carbon technologies CCM 3.6 158 1.2 EL N/EL N/EL N/EL N/EL N/EL 1.7
OpEx from taxonomy-eligible but not environmentally 7,314 55.1 55.1

sustainable activities (activities that are not taxonomy-
aligned) (A.2) – – – – – 56.1
OpEx from taxonomy-eligible activities (A.1 + A.2) 13,120 98.9 98.9 – – – – – 98.9
OpEx from activities that are not taxonomy-eligible (B) 145 1.1
Total (A + B) 13,265 100.0
1 All percentages relate to the Group’s total operating expenditure.

212
Group Management Report Report on Expected Developments
Report on Expected Developments

The global economy is expected to grow in 2024, albeit at a slower pace. Global demand for
passenger cars will probably vary from region to region and increase slightly year-on-year.
In the following, we describe the expected development of the Volkswagen Group and the general framework for
its business activities. Risks and opportunities that could represent a departure from the forecast trends are
presented in the Report on Risks and Opportunities.
Our assumptions are based on current estimates by third-party institutions. These include economic research
institutes, banks, multinational organizations and consulting firms.
DEVELOPMENTS IN THE GLOBAL ECONOMY

Our planning is based on the assumption that global economic output will grow overall in 2024 compared with
2023, albeit at a slower pace. The persistently high inflation in major economic regions and the resulting restric-
tive monetary policy measures taken by central banks are expected to continue to dampen consumer demand.
We continue to believe that risks will arise from protectionist tendencies, turbulence in the financial markets and
structural deficits in individual countries. In addition, continuing geopolitical tensions and conflicts are weighing
on growth prospects; risks are associated in particular with the Russia-Ukraine conflict and the confrontations in
the Middle East. We assume that both the advanced economies and the emerging markets will show positive
momentum on average, but with below-average growth in gross domestic product (GDP).
We also expect the global economy to recover in 2025 and continue a path of stable growth until 2028.
In Western Europe, we expect a comparatively low rate of economic growth in 2024. The relatively high overall
level of inflation, albeit projected to taper off further as the year goes on, poses a major challenge for consumers
and companies alike, as do the relatively high interest rates. It is therefore possible that the European Central
Bank (ECB) might make the first cuts in key rates of interest as early as 2024 to support the eurozone economy.
We likewise anticipate a higher growth rate compared with the prior year in Central Europe in 2024 with
continuing but less dynamic price increases. Meanwhile, economic output in Eastern Europe should recover
further following the heavy slump in 2022 as a result of the Russia Ukraine conflict and the relatively strong
increase in 2023.
For Türkiye we expect positive, albeit slower GDP growth than in the reporting year given high inflation and a
weak local currency. The South African economy will probably be characterized by political uncertainty and
213
social tensions again in 2024 resulting from high unemployment, among other factors. Growth is expected to be
higher than in the previous year but remain at a low level.
Germany
We expect only low growth in GDP in Germany in 2024. Meanwhile, averaged over the year, we anticipate that
inflation will fall further but remain relatively high. The labor market situation is likely to deteriorate.
North America
We anticipate subdued economic growth in the USA in 2024, accompanied by a worsening labor market
situation. Similarly to the ECB, it is possible that the US Federal Reserve might start cutting its key interest rate
as early as 2024. Further inflationary trends will play a decisive role in possible adjustments to the key rate, as
will developments in the labor market and in the general economic situation. Economic growth in Canada is
likely to be at a relatively low level, while economic output in Mexico is expected to expand at a somewhat faster
pace by comparison.
South America
In all probability, the Brazilian economy will record a slightly positive rate of growth in 2024. In Argentina,
economic output is likely to deteriorate further with very high and rising inflation levels and depreciation of the
local currency.
Asia-Pacific
The Chinese economy is expected to grow at a relatively high level in 2024, albeit at a somewhat lower rate than
in the reporting year. We likewise expect a relatively high rate of positive GDP growth for the Indian economy in
2024. Japan is expected to post only low growth in economic output.
TRENDS IN THE MARKETS FOR PASSENGER CARS AND LIGHT COMMERCIAL VEHICLES
The trend in the automotive industry closely follows global economic developments. We assume that competi-
tion in the international automotive markets will intensify further. Crisis-related disruption to the global supply
chain and the resulting impact on vehicle availability may weigh on the volume of new registrations. Uncertainty
may also arise from shortages of intermediates and commodities. These may be further exacerbated by the con-
sequences of the Russia-Ukraine conflict and the confrontations in the Middle East and may, in particular, lead to
rising prices for materials and a declining availability of energy.
We predict that trends in the markets for passenger cars in the individual regions will be mixed but pre-
dominantly positive in 2024. Overall, the global volume of new car sales is expected to be slightly higher than in
the previous year. We are forecasting growing demand for passenger cars worldwide in the period from 2025 to
2028.
Trends in the markets for light commercial vehicles in the individual regions will be mixed; on the whole, we
expect the sales volume for 2024 to be slightly above the previous year’s figure. For the years 2025 to 2028, we
expect demand for light commercial vehicles to increase globally.
For 2024, we anticipate that the volume of new passenger car registrations in Western Europe will be slightly
higher than that recorded in the reporting year. Limited vehicle availability as a result of the shortages of inter-
mediates and commodities may continue to weigh on the volume of new registrations. For the major individual
markets of France, the United Kingdom, Italy and Spain, we expect growth in 2024 to varying degrees between
slight and noticeable.
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For light commercial vehicles, we expect the volume of new registrations in Western Europe in 2024 to be
noticeably up on the previous year’s level. Limited vehicle availability as a result of the shortages of intermedi-
ates and commodities may continue to weigh on the volume of new registrations. We expect a noticeable to
significant increase in France and the United Kingdom. In Italy, we anticipate that registrations will fall slightly,
whereas we expect slight growth in Spain.
Sales of passenger cars in 2024 are expected to significantly exceed the prior-year figures overall in markets
in Central and Eastern Europe – subject to the further development of the Russia-Ukraine conflict. We expect a
mixed development in the major markets of this region.
Subject to the further development of the Russia-Ukraine conflict, registrations of light commercial vehicles
in the markets of Central and Eastern Europe are expected to fall slightly short of the prior-year figures in 2024.
The volume of new registrations for passenger cars in Türkiye in 2024 is projected to fall considerably short of
the previous year’s high level. In South Africa, the market volume is likely to be up noticeably year-on-year.
The volume of new registrations for light commercial vehicles in 2024 is expected to fall very sharply in
Türkiye but to be noticeably above the prior-year figure in South Africa.
Germany
In the German passenger car market, we expect the volume of new registrations in 2024 to be slightly up on the
prior-year level.
We anticipate that the number of registrations of light commercial vehicles in 2024 will also be slightly up on
the previous year’s figure.
North America
The sales volume in the markets for passenger cars and light commercial vehicles (up to 6.35 tonnes) in North
America overall and in the USA in 2024 is forecast to be slightly higher than the level seen in the previous year.
Demand will probably remain highest for models in the SUV and pickup segments. New registrations of all-
electric vehicles are also expected to increase strongly. In Canada, too, a slight increase is expected in the
number of new registrations compared to the previous year. For Mexico, we also expect a slight increase in new
registrations compared with the reporting year.
South America
Owing to their dependence on demand for raw materials worldwide, the South American markets for passenger
cars and light commercial vehicles are heavily influenced by developments in the global economy. We anticipate
a slight increase overall in new registrations in the South American markets in 2024 compared with the previous
year. The market volume in Brazil is expected to increase noticeably compared with 2023. We anticipate that the
volume of new registrations in Argentina will be slightly lower year-on-year.
Asia-Pacific
The passenger car markets in the Asia-Pacific region are expected to be slightly up on the prior-year level in
2024. We estimate that the market volume in China will also be slightly higher than the comparative figure for
2023. Plug-in hybrid models with long ranges are likely to be increasingly in demand. A weaker than expected
economic recovery or worsening geopolitical tensions may have adverse effects. In particular, the trade dispute
between China and the United States is likely to continue to weigh on business and consumer confidence, as
long as there is no resolution in sight. We project that the Indian and Japanese markets will remain at the prior-
year level.
The volume of new registrations for light commercial vehicles in the Asia-Pacific region in 2024 will probably
be slightly higher than the previous year’s figure. We are expecting demand in the Chinese market to be slightly
lower than the prior-year level. For India, we are forecasting that the volume in 2024 will be on a level with the
reporting year. In the Japanese market, we estimate that volumes will be slightly lower year-on-year.
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TRENDS IN THE MARKETS FOR COMMERCIAL VEHICLES

For 2024, we expect to see a noticeable downward trend in new registrations for mid-sized and heavy trucks
with a gross weight of more than six tonnes compared with the previous year in the markets that are relevant for
the Volkswagen Group, with variations from region to region.
A noticeable decline in the market is expected in the 27 EU countries excluding Malta, but plus the United
Kingdom, Norway and Switzerland (EU27+3). A large part of the pent-up demand for trucks from recent years
was already met in the reporting year, meaning that demand will return to normal in 2024. We anticipate that
Türkiye will see a significant drop in demand. In South Africa, we expect demand to be on a level with the
previous year. The truck market in North America is divided into weight classes 1 to 8. We expect a noticeable
decrease in new registrations in the segments relevant for Volkswagen – Class 6 to 8 (8.85 tonnes or heavier).
After a weak 2023 impacted by new emissions legislation, we estimate that demand in Brazil will pick up again
and be noticeably higher than in the previous year.
On average, we anticipate that the relevant truck markets will remain at a steady level for the years 2025 to
2028.
A noticeable year-on-year increase in demand is anticipated for 2024 in the bus markets relevant for the
Volkswagen Group, whereby this will vary depending on the region. In the EU27+3 region, we expect demand on
a level with the previous year. We forecast a significant increase in demand for school buses in the USA and
Canada. For the bus market in Mexico, we anticipate a significant decline in volumes on account of the very strong
trend in the reporting year. New registrations in Brazil will probably be on a level with the prior-year figure.
Overall, we expect demand for buses to be steady on average across the relevant markets for the period from
2025 to 2028.
TRENDS IN THE MARKETS FOR POWER ENGINEERING

For 2024, we generally expect the market environment in the Power Engineering Business Area to remain chal-
lenging. The current geopolitical situation and the development of energy and commodity prices will continue to
generate uncertainty in virtually all markets.
The market volume in merchant shipping in 2024 is expected to remain at a stable level compared with the
reporting year. Rising demand for new bulk carriers and tankers is anticipated, while demand for container ships
and LNG tankers is expected to be at a lower level. The areas outside merchant shipping are likely to reach a
higher level than in 2023. We expect to see an improvement in the cruise ship business due to the renewed rise
in demand for travel activities. The passenger ferry market is also expected to grow. We continue to anticipate a
stable high level of demand for government vessels. In the offshore sector, further new order volumes for special
applications are expected, such as for special offshore ships for wind turbines. Overall, we predict that the
marine market will reach a similar level to that seen in the 2023 reporting year, with sustained competitive and
price pressure. The general focus will continue to be on building new highly efficient ships that meet future
emissions targets.
The market for power generation will remain in upheaval in 2024. Uncertainty in relation to sustainable and
future-proof power generation will be prevalent, particularly in countries that have established clear climate-
neutrality targets. In these countries, the framework conditions required to expand the infrastructure for carbon-
neutral fuels are often not yet fully developed. This remains a reason for cautious investment behavior. In the
core business, we see a need for decentralized, hydrogen-ready power plants, primarily in Europe. Outside
Europe, demand for ammonia-capable engines will increase. With an increasing proportion of renewable energy
in the distribution networks, a further rise in demand for balancing facilities is expected around the world. These
are used to meet power requirements if darkness and lack of wind mean that the share of renewables is not
sufficient to ensure security of supply. A positive trend in demand for large electrolyzers as well as for power-to-
methane and power-to-methanol plants continues to be expected. We see a very dynamic global competitive
environment in these areas with new providers and international partnerships. Alongside the risks posed by a
continued lack of price stability in the markets and by bottlenecks in supply chains, we expect strong competi-
tion and price pressure – both in the core business and for power-to-X solutions.
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In turbomachinery, we expect sustained demand in 2024 for new applications relating to the energy transition
and climate protection. Our traditional business will decline somewhat from a high level, primarily in oil and gas
production. We nevertheless expect that the production plants will continue to be well utilized, assuming the
level of competition seen to date is sustained.
Both in the after-sales market for engines in the marine and power plant business and in the after-sales
market for turbomachinery, we anticipate continued robust demand in 2024 albeit below the level of the
reporting year, with the fraught geopolitical situation generating uncertainty.
For the period 2025 to 2028, we expect to see growing demand in the power engineering markets. However,
the extent and timing of this growth will vary in the individual business fields. It also remains to be seen how long
the markets will be adversely affected by the major influential factors of global conflicts and energy sector
trends.
TRENDS IN THE MARKETS FOR FINANCIAL SERVICES

We assume that automotive financial services will prove highly important to global vehicle sales in 2024. The
continuing shortages of intermediates and commodities may generate uncertainty, exacerbated by the conse-
quences of the Russia-Ukraine conflict and the confrontations in the Middle East. Furthermore, the increased
interest rates could put pressure on the demand for financial services. We expect demand to rise in emerging
markets where market penetration has so far been low. Regions with established automotive financial services
markets will probably see a continuation of the trend towards achieving mobility at the lowest possible total
cost. The shift from financing to lease contracts that has begun in the European financial services business with
individual customers will continue. Integrated end-to-end solutions, which include mobility-related service
modules such as insurance and innovative packages of services, are likely to become increasingly important.
Additionally, we expect that demand will increase for new forms of mobility, such as rental and car subscription
services, and for integrated mobility services, for example parking, refueling and charging. We anticipate an
increase in the importance of direct business between manufacturers and customers. The seamless integration
of financial services into the online vehicle offering will become increasingly important in the promotion of this
type of business. We estimate that this trend will also persist in the years 2025 to 2028.
In the mid-sized and heavy commercial vehicles category, we are seeing rising demand for financial services
products in the emerging markets. In these countries in particular, financing solutions support vehicle sales and
are thus an essential component of the sales process. In the developed markets, we expect to see increased
demand for telematics services and services aimed at reducing total cost of ownership in 2024. This trend is also
expected to persist in the period 2025 to 2028.
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EXCHANGE RATE TRENDS

In 2023, the euro appreciated slightly against the US dollar on an annual average. This followed a prior year in
which the euro had been relatively weak due to the high uncertainty surrounding developments in the global
economy. The euro also appreciated slightly against sterling on an annual average basis. Changes in the euro
against the currencies of the emerging markets were mixed. In particular, the Argentinian peso and Turkish lira
lost value against the European single currency due to the persistent, extremely high rates of inflation. Against
the Brazilian real, the euro’s value was virtually unchanged on an annual average. By contrast, the Mexican peso
was on average significantly stronger against the European single currency than in the year 2022. The Chinese
renminbi, the currencies of several emerging markets in Asia, and the South African rand depreciated against the
euro year-on-year. For 2024, we expect the euro to appreciate slightly against the US dollar and to remain at a
similar level against sterling as in the reporting year. We assume that the Chinese renminbi, Brazilian real,
Mexican peso, South African rand and Turkish lira will depreciate to varying degrees. Due to the difficult eco-
nomic situation in Argentina and the uncertainty following the presidential election, the Argentinian peso is
expected to depreciate sharply. For 2025 to 2028, we expect that the euro will be stable against the key cur-
rencies, while the comparative weakness of the currencies in the aforementioned emerging markets will
probably continue. However, there is still a general event risk, defined as the risk arising from unforeseeable
market developments.
INTEREST RATE TRENDS

The turnaround in monetary policy, which began in many countries in 2022 due to the persistently high inflation
rates – partly as a result of the Russia-Ukraine conflict – continued in the reporting year. Global interest rates
rose further in fiscal year 2023. National central banks in nearly all of the major Western industrialized nations
made corresponding adjustments to their key interest rates to further moderate the in some cases persistent and
comparatively high rates of inflation. Interest rates were also raised in many emerging markets. Whether there
will be further changes in key interest rates in 2024 in the respective countries will depend firstly on the devel-
opment of inflation and secondly on the scale of a possible economic downturn. Overall, we expect a relatively
slight increase in interest rates on average in 2024 compared to 2023. For the years 2025 to 2028, we estimate
that interest rates will persist at a relatively high level.
COMMODITY PRICE TRENDS

Following a year of relatively high volatility and price increases for many raw and input materials in 2022 due to
the Russia-Ukraine conflict, the commodity markets largely eased in fiscal year 2023. Overall, commodity prices
were at a lower level compared with 2022. Compared with the previous year as a whole, the average prices for
the commodities coking coal, cobalt, lithium, crude oil, nickel, aluminum and natural rubber fell significantly. The
average decline in prices for the commodities copper and lead were less pronounced by comparison. Averaged
over the year, the prices of the precious metals rhodium and palladium also recorded a significant decline, while
the price of platinum remained stable compared with the prior year. For 2024, we expect prices for some com-
modities to continue to fall due to the technological transformation and as a result of surplus supplies. For the
majority of commodities, however, we expect prices to rise given the anticipated recovery in the global economy.
We anticipate continued volatility in the commodity markets for the period from 2025 to 2028.
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MODEL INNOVATIONS IN 2024

The Volkswagen Passenger Cars brand will bring the all-electric ID.7 Tourer to the market in 2024. The T-Cross
and Tiguan models will receive a product upgrade. The ninth generation of the Passat, which is based on the
enhanced Modular Transverse Toolkit (MQB Evo), will also launch. An update to the latest generation of the
iconic Golf will mark the 50th anniversary of the bestseller.
Škoda will introduce the new Kodiaq and the fourth generation of the Superb in 2024. The Octavia will
receive a product upgrade. The brand will also present the all-electric Elroq in the second half of the year.
The CUPRA brand will introduce the sporty Tavascan SUV, its second all-electric model after the Born.
CUPRA will also present the electrified Terramar SUV. The Formentor will be available with a new generation of
plug-in hybrid drives, offering ranges up to approximately 100 km in electric mode. The Born will receive a prod-
uct upgrade.
SEAT will upgrade the Leon in both the 5-door and Estate versions. A new generation of plug-in hybrid drives
enables longer ranges in electric mode. The Arona product line will gain a limited FR edition.
Audi is presenting a wide range of new models in 2024 – most notably the all-electric Q6 e-tron and A6 e-
tron, which are launching on the electric PPE platform. Among combustion-engine vehicles, the updated A5
family and the Q5 will follow in the second half of the year. The A3 model range already received an extensive
update at the beginning of the year.
Porsche is planning updated versions of several model lines in 2024 including the Macan and the Panamera,
as well as the introduction of other product highlights.
Bentley will expand its portfolio of hybrid vehicles in 2024.
With the California CONCEPT, Volkswagen Commercial Vehicles was already looking ahead to the New
California in 2023, which is set to arrive on the market in 2024.
The TRATON GROUP will continue to advance e-mobility and autonomous driving.
MAN will bring its first all-electric long-haul trucks to the market in 2024 – the MAN eTGX for long-distance
transport and the MAN eTGS for delivery traffic.
Volkswagen Truck & Bus will introduce its eDelivery model to further markets.
Navistar is implementing the integrated 13-liter powertrain across a broad product portfolio – the second
brand in the TRATON GROUP to do so.
Alongside the DesertX Rally, Ducati is introducing the Hypermotard 698 Mono with a powerful new single-
cylinder engine in 2024. The Multistrada V4 S Grand Tour and the sporty Multistrada V4 RS will join the popular
Multistrada family.
INVESTMENT AND FINANCIAL PLANNING

To meet people’s needs for individual, sustainable, fully connected mobility and thus increase the Volkswagen
Group’s future viability, we will continue to mobilize our strengths in innovation and technology and push Volks-
wagen’s transformation into becoming a provider of sustainable mobility. We aim to use our economies of scale
and maximize synergies.
In our current planning for 2024, most of the capex (investments in property, plant and equipment, invest-
ment property and intangible assets, excluding capitalized development costs) will be spent on new products,
the ongoing electrification of our sites and model portfolio, and the further development of our platforms.
Examples include the all-electric platform for our volume brands – the Modular Electric Drive Toolkit (MEB) – and
the Premium Platform Electric (PPE) for our vehicles in the premium and sports segment. With the Scalable
Systems Platform (SSP), we are also developing a successor platform that is meant to combine the requirements
of the volume, premium and luxury brands and generate high levels of synergy in the future. We are also placing
emphasis on the growing digitalization of our vehicles and sites and increasing our capital expenditure on these.
There will also be a strong focus on creating battery manufacturing capacity with the aim of establishing a
battery supply chain under our own control. This particularly applies to the North American market, where we
219
have significantly expanded our activities by launching the new Scout brand. Attention will also be directed
towards a growing presence in the Chinese market, where we will also increase our local activities.
Besides capex, investing activities will also cover additions to capitalized development costs. Like capex,
they reflect, among other things, upfront expenditures in connection with updating and electrifying the model
range as well as for digitalization and technologies of the future. Also included are the services of CARIAD, which
is the company synergistically developing the software architecture of the future for Group brand vehicles.
With the investments in our facilities and models, as well as in the development of electrified drives, plat-
forms and in digitalization, we are laying the foundation for profitable, sustainable growth at Volkswagen. These
investments also include commitments arising from decisions taken in previous fiscal years. The Automotive
investment ratio is expected to be between 13.5% and 14.5% in 2024.
We aim to finance the investments in our Automotive Division from our own capital resources and expect
cash flows from operating activities to exceed the Automotive Division’s investment requirements. We expect
net cash flow for 2024 to be between €4.5 and €6.5 billion. This will include in particular investments for the
future and cash outflows from mergers and acquisitions for the battery business field, which represent a vital
pillar of the Volkswagen Group’s transformation. Net liquidity in the Automotive Division in 2024 is expected to
be between €39 billion and €41 billion.
These plans are based on the Volkswagen Group’s current structures.
Our equity-accounted joint ventures in China are not included in the figures above. For 2024, these joint
ventures plan to invest in e-mobility, further optimization of the model portfolio, the development of new mobility
solutions and digitalization. Their capex will probably exceed the 2023 level and be financed from the com-
panies’ own funds.
In the Financial Services Division, we are planning lower investment in 2024 than in the previous year. We
expect the development of lease assets and of receivables from leasing, customer and dealer financing to lead to
funds tied up in working capital, of which almost half will be financed from the gross cash flow. As is common in
the sector, the remaining funding requirements will be met primarily through unsecured bonds on the money and
capital markets, the issuing of asset-backed securities, customer deposits from the direct banking business, and
through the use of international credit lines.
SUMMARY OF EXPECTED DEVELOPMENTS

tive monetary policy measures taken by central banks are expected to dampen consumer demand. We continue
to believe that risks will arise from protectionist tendencies, turbulence in the financial markets and structural
deficits in individual countries. In addition, continuing geopolitical tensions and conflicts are weighing on
growth prospects; risks are associated in particular with the Russia-Ukraine conflict and the confrontations in
The trend in the automotive industry closely follows global economic developments. We assume that
competition in the international automotive markets will intensify further. Crisis-related disruption to the global
supply chain and the resulting impact on vehicle availability may weigh on the volume of new registrations.
Uncertainty may also arise from shortages of intermediates and commodities. These may be further exacerbated
by the consequences of the Russia-Ukraine conflict and the confrontations in the Middle East and may, in
particular, lead to rising prices for materials and a declining availability of energy.
220
We predict that trends in the markets for passenger cars in the individual regions will be mixed but pre-
dominantly positive in 2024. Overall, the global volume of new car sales is expected to be slightly higher than in
the previous year. For 2024, we anticipate that the volume of new passenger car registrations in Western Europe
will be slightly higher than that recorded in the reporting year. In the German passenger car market, we expect
the volume of new registrations in 2024 to also be slightly up on the prior-year level. Sales of passenger cars in
2024 are expected to significantly exceed the prior-year figures overall in markets in Central and Eastern
Europe – subject to the further development of the Russia-Ukraine conflict. The volume of sales in the markets
for passenger cars and light commercial vehicles (up to 6.35 tonnes) in North America in 2024 is forecast to be
slightly higher than the level seen the previous year. We also anticipate a slight increase in new registrations in
the South American markets in 2024 compared with the previous year. Likewise, the passenger car markets in
the Asia-Pacific region are expected to be slightly up on the prior-year level in 2024.
expect the sales volume for 2024 to be slightly above the previous year’s figure.
the Volkswagen Group, with variations from region to region. A noticeable year-on-year increase in demand is
anticipated for 2024 in the bus markets relevant for the Volkswagen Group, whereby this will vary depending on
the region.
We assume that automotive financial services will prove highly important to global vehicle sales in 2024.
In a challenging market environment, we anticipate that deliveries to customers by the Volkswagen Group in
2024 will increase by up to 3% compared to the previous year.
Challenges will arise in particular from the economic situation, the increasing intensity of competition, vola-
tile commodity, energy and foreign exchange markets, and more stringent emissions-related requirements.
We expect the sales revenue of the Volkswagen Group and the Passenger Cars Business Area to exceed the
previous year’s figure by up to 5% in 2024. The operating return on sales for the Volkswagen Group and the Pas-
senger Cars Business Area is likely to be between 7.0% and 7.5%. For the Commercial Vehicles Business Area, we
anticipate an operating return on sales of 8.5% to 9.5%, also amid a year-on-year increase of up to 5% in sales
revenue. In the Power Engineering Business Area, we expect sales revenue to be up to 2% above the prior-year
figure and operating profit to be in the low three-digit-million euro range. For the Financial Services Division, we
forecast an increase of 3–7% in sales revenue compared with the prior year and an operating result in the range
of €4.0 billion.
In the Automotive Division, we are assuming an investment ratio of between 13.5% and 14.5% in 2024. We
expect net cash flow in 2024 to be between €4.5 billion and €6.5 billion. This will include in particular invest-
ments for the future and cash outflows from mergers and acquisitions for the battery business field, which are a
vital pillar of the Volkswagen Group’s transformation. Net liquidity in the Automotive Division in 2024 is expected
to be between €39 billion and €41 billion. Our goal remains unchanged, namely, to continue with our robust
financing and liquidity policy.
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Group Management Report Report on Risks and Opportunities
Report on Risks and Opportunities

( C O N TA I N S T H E R E P O R T I N A C C O R D A N C E W I T H S E C T I O N 2 8 9 ( 4 ) O F T H E H G B )
Promptly identifying the risks and opportunities arising from our business activities and
taking a forward-looking approach to managing them is crucial to our Company’s long-term
success. A comprehensive risk management system and an internal control system help
the Volkswagen Group deal with risks in a responsible manner.
In this section, we first explain the objective and structure of the Volkswagen Group’s Risk Management System
(RMS) and Internal Control System (ICS) and describe these systems, also with regard to the financial reporting
process. We then outline the main risks and opportunities arising in our business activities.
OBJECTIVE OF THE RISK MANAGEMENT SYSTEM AND INTERNAL CONTROL SYSTEM

Only by promptly identifying, accurately assessing and effectively and efficiently managing the risks and oppor-
tunities arising from our business activities can we ensure the Volkswagen Group’s long-term success. The aim
of the RMS and the ICS is to identify potential risks at an early stage so that suitable countermeasures can be
taken to avert the threat of loss to the Company, and any risks that might jeopardize its continued existence can
be ruled out.
Assessing the likelihood of occurrence and extent of future events and developments is, by its nature, subject
to uncertainty. We are therefore aware that even the best RMS cannot foresee all potential risks and even the
best ICS can never completely prevent irregular acts.
STRUCTURE OF THE RISK MANAGEMENT SYSTEM AND INTERNAL CONTROL SYSTEM

The organizational design of the Volkswagen Group’s RMS and ICS is based on the internationally recognized
COSO framework for enterprise risk management (COSO: Committee of Sponsoring Organizations of the Tread-
way Commission). The purpose of structuring the RMS/ICS in accordance with the COSO framework for enter-
prise risk management is so that potential risk areas are covered in full. Uniform Group principles are used as the
basis for managing risks in a standardized manner. Opportunities are not recorded in the RMS processes.
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THE VOLKSWAGEN THREE LINES MODEL
Supervisory Board/Board of Management
Management Internal Audit
1st line 2nd line 3rd line

Companies and Risk Management, Group Internal Audit
business units Compliance, etc.
Key Accountability, Delegation, Direction, Alignment, Communication,

Reporting Resources, Oversight Coordination, Collaboration
Another key element of the RMS and ICS at Volkswagen is the Three Lines Model, which is required by, among
other bodies, the European Confederation of Institutes of Internal Auditing (ECIIA). In line with this model, the
Volkswagen Group’s RMS and ICS has three lines designed to protect the Company from significant risks
occurring.
The minimum requirements for the RMS and ICS, including the Three Lines Model, are set out in guidelines for
the entire Group and are regularly reviewed and refined. In addition, regular training is offered on the RMS and
ICS.
A separate Group Board of Management Committee for Risk Management deals with the key aspects of the
RMS and ICS every quarter. Its tasks are as follows:
> to further increase transparency in relation to significant risks to the Group and their management,
> to discuss specific issues where these constitute a significant risk to the Group,
> to make recommendations on the further development of the RMS and ICS,
> to support the open approach to dealing with risks and promote an open risk culture.
First line: Operational risk management and ICS

The first line comprises the operational risk management and internal control systems at the individual Group
companies and business units. The RMS and ICS are integral parts of the Volkswagen Group’s structure and
workflows. Events that may give rise to risk are identified and assessed locally in the divisions and at the Group
companies. Countermeasures are introduced, the remaining potential impact is assessed, and, if necessary, the
information incorporated into the planning in a timely manner. Material risks are reported to the relevant com-
mittees on an ad hoc basis. The results of the operational risk management process are incorporated into plan-
ning and financial control on an ongoing basis. The targets agreed in the planning rounds are therefore con-
tinually reviewed in revolving planning updates. At the same time, the results of risk mitigation measures are
promptly incorporated into the monthly forecasts regarding further business development. This means that the
Board of Management also has access to an overall picture of the current risk situation via the documented
reporting channels during the year.
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CALCULATION OF THE RISK SCORE
Risk Score
= Likelihood of occurence × Potential extent of damage
Score Score
Score Score +
= Prob
× Mat
+ Rep Req
Second line: Group Risk Management and ICS

Each quarter, in addition to the ongoing operational risk management, the Group Risk Management department
sends standardized surveys regarding the risk situation and the implementation of countermeasures – through
the quarterly risk process (QRP) – to all Group brands and significant Group companies. The risks are identified
and approved in a multiple-party verification process and then checked for plausibility by Group Risk Man-
agement.
A score is calculated for each risk by multiplying the likelihood of occurrence (Prob) by the potential extent of
the damage. This enables comparison of the risks. The extent of the damage is calculated from the criteria of
financial loss (Mat) and reputational damage (Rep) and the potential threat to adherence to external legal
requirements (Req). A score between 0 and 10 is assigned to each of these criteria. The measures taken to
manage and control risk are taken into account in the risk assessment (net perspective).
The score for a likelihood of occurrence of more than 50% in the analysis period is classified as high; for a
medium classification, the likelihood of occurrence is at least 25%. For the criterion of financial loss, the score
rises in line with the loss; the highest score of 10 is reached when the potential loss is upwards of €1 billion. The
criterion of reputational damage can have characteristics ranging from local erosion of confidence and loss of trust
at local level to loss of reputation at regional or international level. The potential threat to adherence to external
legal requirements is classified based on the potential impact on the local company, the brand or the Group.
In addition to strategic, operational and reporting risks, risks arising from potential compliance violations
(compliance risks) and from sustainability issues (ESG) are also integrated into this process.
Volkswagen Financial Services AG and Volkswagen Bank GmbH have implemented their own RMS and ICS
processes and regularly report to Group Risk Management.
To review the Volkswagen Group’s risk-bearing capacity, Group Risk Management uses the risk reports for a
regular comparison of the aggregated risk situation and risk-bearing capacity. A simulation is used to check
whether individual risks might become a going-concern risk if they are aggregated. There were no indications of
insufficient risk-bearing capacity at the Volkswagen Group in the 2023 fiscal year.
Risk reporting to the committees of Volkswagen AG depends on materiality thresholds. Risks with a risk score
of 40 or more or potential financial loss of €1 billion or more are presented quarterly to the Board of Management
and the Audit Committee of the Supervisory Board of Volkswagen AG. In addition, the reporting includes all risks
from the QRP with a risk score of 20.
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In addition, significant changes to the risk situation that can arise in the short term, for instance from unexpected
external events, are reported to the Board of Management as required. This is necessary if the risk may lead to
potential financial loss of €1 billion or more and the likelihood of occurrence is estimated at greater than 50%.
In recent years, a standardized ICS to better protect against process risks has also been developed and put in
place in significant companies. It continues to be introduced at further companies each year. The ICS thereby
goes significantly beyond the requirements for the accounting-related ICS. In 25 catalogs of controls, the Group
companies within its scope are presented with requirements in respect of the process risks and control objec-
tives to be covered in order to protect the value chain in a standardized manner.
In addition to financial reporting issues, for example, they address process risks in development or produc-
tion, as well as in the areas of compliance and sustainability. The catalogs of controls are checked at regular
intervals to verify that they are up to date and are regularly expanded.
Key controls to cover process risks and control objectives are also tested for their effectiveness; any signifi-
cant weaknesses identified are reported to the responsible bodies at Volkswagen AG and resolved in the
departments.
Like the QRP, the standardized ICS is supported by the Risk Radar IT system.
We regularly optimize the RMS and ICS as part of our continuous monitoring and improvement processes. In
the process, we give equal consideration to both internal and external requirements. As a component of the RMS,
our Compliance Management System (CMS) is also subject to these control and adjustment mechanisms. Exter-
nal experts assist in the continuous enhancement of our RMS, CMS and ICS on a case-by-case basis.
Third line: Review by Group Internal Audit

Group Internal Audit helps the Board of Management to monitor the various divisions and corporate units within
the Group. It regularly checks the risk early warning system and the structure and implementation of the RMS,
ICS and compliance management system (CMS) as part of its independent audit procedures. The audit plan
adopted by the Board of Management includes the first and second lines, i.e. the risk-mitigating functions in
addition to the operational units.
RISK EARLY WARNING SYSTEM

The requirements for a risk early warning system are met by means of the RMS and ICS elements described
above (first and second line). The Company’s risk situation is ascertained, assessed and documented and
therefore also complies with legal requirements. Independently of this, the external auditors check both the
processes and procedures implemented in this respect and the adequacy of the documentation on an annual
basis. The plausibility and adequacy of the risk reports are examined via spot checks in detailed interviews with
the divisions and companies concerned. The auditor examines the risk early warning system integrated in the
Risk Management System with respect to its fundamental suitability to being able to identify risks that might
jeopardize the Company's continued existence at an early stage and assesses the functionality of the risk early
warning and monitoring system in accordance with section 317(4) of the HGB.
In addition, scheduled examinations as part of the audit of the annual financial statements are conducted at
companies in the Financial Services Division. As a credit institution, Volkswagen Bank GmbH, including its
subsidiaries, is subject to supervision by the European Central Bank, while Volkswagen Leasing GmbH as a
financial services institution and Volkswagen Versicherung AG as an insurance company are subject to super-
vision by the relevant division of the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin – the German
Federal Financial Supervisory Authority). As part of the scheduled supervisory process and unscheduled audits,
the competent supervisory authority assesses whether the requirements, strategies, processes and mechanisms
ensure solid risk management and solid risk cover. Furthermore, the Prüfungsverband deutscher Banken
(Auditing Association of German Banks) audits Volkswagen Bank GmbH from time to time.
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Volkswagen Financial Services AG operates a risk early warning and management system. Its aim is to ensure
that the locally applicable regulatory requirements are adhered to and at the same time to enable appropriate
and effective risk management at Group level. Important components of it are regularly reviewed as part of the
audit of the annual financial statements.
MONITORING THE EFFECTIVENESS OF THE RISK MANAGEMENT SYSTEM AND THE INTERNAL
CONTROL SYSTEM
Reporting to the Board of Management and Supervisory Board of Volkswagen AG includes the results of the con-
tinuous monitoring and improvement of the RMS and ICS along with the evaluation of the Company-wide risk
situation based on the QRP and the presentation of the results of the internal control process based on the
standardized ICS and downstream control systems at individual brands.
On this basis, an overall conclusion is reached once a year on the adequacy and effectiveness of our RMS,
CMS and ICS at a Volkswagen AG Board of Management meeting. The Board of Management has received no
information to indicate that our RMS or ICS as a whole were inadequate or ineffective in fiscal year 2023.
Nevertheless, there are inherent limits to the effectiveness of any risk management, compliance management
and control system. Even a system judged to be adequate and effective cannot, for example, ensure that all
actually materializing risks will be identified in advance or that any process disruptions will be ruled out under all
circumstances.
THE RISK MANAGEMENT AND INTEGRATED INTERNAL CONTROL SYSTEM IN THE CONTEXT OF
THE FINANCIAL REPORTING PROCESS
The accounting-related part of the RMS and ICS that is relevant for the financial statements of Volkswagen AG
and the Volkswagen Group as well as its subsidiaries comprises measures intended to ensure that the infor-
mation required for the preparation of the financial statements of Volkswagen AG, the consolidated financial
statements and the combined management report of the Volkswagen Group and Volkswagen AG is complete,
accurate and transmitted in a timely manner. These measures are designed to minimize the risk of material mis-
statement in the accounts and in external reporting.
Main features of the Risk Management and integrated Internal Control System in the context of the
financial reporting process
The Volkswagen Group’s accounting is essentially organized along decentralized lines. For the most part,
accounting duties are performed by the consolidated companies themselves or entrusted to the Group’s shared
service centers. In principle, the financial statements of Volkswagen AG and its subsidiaries prepared in accor-
dance with the IFRSs and the Volkswagen IFRS Accounting Manual are transmitted to the Group in encrypted
form. A standard market product is used for encryption.
The aim of the Volkswagen IFRS Accounting Manual, which has been prepared taking into consideration
external expert opinions, is to ensure the application and assessment of uniform accounting policies based on the
requirements applicable to the parent. In particular, it includes more detailed guidance on the application of legal
requirements and industry-specific issues. Components of the reporting packages that are required to be
prepared by the Group companies are also set out in detail there, and requirements have been established for the
presentation and settlement of intragroup transactions and the balance reconciliation process that is based on
these.
Control activities at Group level include analyzing and, if necessary, adjusting the data reported in the finan-
cial statements presented by the subsidiaries, taking into account the reports submitted by the auditors and the
outcome of the meetings on the financial statements with representatives of the individual companies. These
discussions address both the plausibility of the single-entity financial statements and specific significant issues
at the subsidiaries. Alongside plausibility checks, other control mechanisms applied during the preparation of
the single-entity and consolidated financial statements of Volkswagen AG include the clear delineation of areas
of responsibility and the application of the "four eyes" principle.
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The effectiveness of the Internal Control System in the context of the accounting process is systematically
assessed in significant companies as part of the standardized ICS. This begins with a risk analysis and definition
of controls with the aim of identifying significant risks for the financial reporting process. Regular tests based on
samples are performed to evaluate the effectiveness of the controls. These form the basis for a self-evaluation of
whether the controls are appropriately designed and effective.
The combined management report of the Volkswagen Group and Volkswagen AG is prepared – in accordance
with the applicable requirements and regulations – centrally but with the involvement of and in consultation
with the Group units and companies.
In addition, the accounting-related Internal Control System is independently reviewed by Group Internal Audit
in Germany and abroad.
Integrated consolidation and planning system

The Volkswagen consolidation and corporate management system (VoKUs) enables the Volkswagen Group to
consolidate and analyze both Financial Reporting’s backward-looking data and Controlling’s forward-looking
data. VoKUs offers centralized master data management, uniform reporting, an authorization concept and the
required flexibility with regard to changes to the legal environment, providing a technical platform that benefits
Group Financial Reporting and Group Controlling in equal measure. To verify data consistency, VoKUs has a
multi-level validation system that primarily checks content plausibility between the balance sheet, the income
statement and the notes.
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AVERAGE SCORES OF THE RISK CATEGORIES
10
9
1 Risks from the
macroeconomy,
high 8 the sector, markets
and sales
> 50 %
7
2 Research and
6 26
1 development risks
Likelihood of occurrence
5 4 3 Operational risks
4 Environmental
3 and social risks
medium
4
≥ 25 % 5 Legal risks
6 Financial risks
3
7 Risks from
5 mergers &
acquisitions and/
2 or other strategic
low partnerships/
< 25% investments
1
1 2 3 4 5 6 7 8 9 10 12 14 16 18 20
low medium high
Potential extent of damage

(weighted score resulting from financial loss, reputational damage and
potential risk of non-compliance with external legal requirements)
RISKS AND OPPORTUNITIES

In this section, we outline the main risks and opportunities arising in our business activities. In order to provide a
better overview, we have grouped the risks and opportunities into categories. At the beginning of each risk
category, we state the most significant risks in order of their importance as identified using the risk score from
the QRP. We then describe the individual risks in no particular order. Unless explicitly mentioned, there were no
material changes to the specific risks and opportunities compared with the previous year even though the
weighting of individual risks has changed.
The assessment of the Volkswagen Group’s risk categories and the reports to the Board of Management
include amongst other items all risks reported to the Group Risk Management department with a risk score of 20
or more for the units included from the QRP. The risk categories are plotted based on the average scores. In the
reporting year, no risks with such scores were reported for the “Risks from mergers & acquisitions and/or other
strategic partnerships/investments” risk category.
We use analyses of the competition and the competitive environment in addition to market studies to identify
not only risks but also opportunities that have a positive impact on the design of our products, the efficiency
with which they are produced, their success in the market and our cost structure. Where they can be assessed,
risks and opportunities that we expect to occur are already reflected in our medium-term planning and our
forecast. The following therefore reports on internal and external developments as risks and opportunities that,
based on existing information, may result in a negative or positive deviation from our forecast or targets.
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Risks and opportunities from the macroeconomy, the sector, markets and sales
For this risk category, the likelihood of occurrence is classified as high (previous year: high) and the potential
extent of damage is classified as medium (previous year: medium).
The most significant risks from the QRP arise from a negative influence on markets and unit sales driven
among other factors by restrictions on trade and increasingly protectionist tendencies.
Macroeconomic risks and opportunities

We believe risks that could prevent or slow positive growth in global economic output arise primarily from a
further escalation of the Russia-Ukraine conflict, the confrontations in the Middle East, turbulence in the
financial, energy and other commodity markets, and supply shortages in connection with imbalances between
supply and demand. These risks also arise from increasingly protectionist tendencies and structural deficits
which pose a threat to the performance of individual advanced economies and emerging markets. In addition,
there are increasing environmental challenges that affect individual countries and regions to varying degrees.
The worldwide transition from an expansionary to a more restrictive monetary policy together with persistently
high inflation also presents risks for the macroeconomic environment. High private- and public-sector debt in
many countries is clouding the outlook for growth and may likewise cause markets to respond negatively. Demo-
graphic change may also inhibit growth. A decline in growth in key countries and regions often has an immediate
impact on the state of the global economy and therefore poses a central risk.
The economic development of some emerging economies is being hampered primarily by dependence on
energy and commodity prices and capital inflows, but also by socio-political tensions. Corruption, ineffective
government structures and a lack of legal certainty can also pose risks.
Geopolitical tensions and conflicts, along with signs of fragmentation in the global economy, are a further
major risk factor to the performance of individual countries and regions. In light of the existing, strong global
interdependence, local developments could also have adverse effects on the world economy. Any escalation of
the conflicts in the Middle East or Africa, and particularly of the conflict between Russia and Ukraine since
February 2022, for example, could cause upheaval on the global energy and other commodity markets and
exacerbate migration trends. An aggravation of the situation in East Asia could also put a strain on the global
economy. The same applies to violent conflicts, terrorist activities, cyberattacks and the spread of infectious
diseases, which may suddenly result in unexpected market reactions.
Overall, we expect the world economy to grow with a weaker momentum in 2024. However, due to the risk
factors mentioned, as well as cyclical and structural aspects, a slump in global economic growth or a period of
below-average growth rates is also possible.
The macroeconomic environment may also give rise to opportunities for the Volkswagen Group if actual
developments turn out to be more positive than expected.
Sector-specific risks and market opportunities/potential

Western Europe, especially Germany, and China are our main sales markets. A drop in demand in these regions
due to the economic climate would have a particularly strong impact on the Company’s earnings including
financial services. We counter this risk with a clear, customer-oriented, innovative and synergistic product and
pricing policy. To diversify our main sales markets, we are pursuing a long-term growth strategy in the USA.
Outside the current main sales markets, delivery volumes are spread widely across the key regions: Central
and Eastern Europe, North America and South America. In addition, we either already have a strong presence in
numerous existing and developing markets or are working systematically towards this goal. Particularly in
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smaller markets with growth potential, we are increasing our presence with the help of strategic partnerships in
order to cater to local requirements.
The growth markets of Central and Eastern Europe, South America and Asia are particularly important to the
Volkswagen Group. These markets harbor considerable potential; however, the underlying conditions in some
countries in these regions make it difficult to increase unit sales figures there. Examples of these are customs
regulations regarding the proportion of local production and minimum requirements (homologation, registra-
tions), as well as various trade barriers. At the same time, wherever the economic and regulatory situation
permits, there are opportunities above and beyond current projections. These arise from faster growth in the
emerging markets where vehicle densities are currently still low.
Price pressure in established automotive markets for new and used vehicles as a result of high market satu-
ration is a further risk for the Volkswagen Group as a supplier of volume and premium models. Competitive
pressures are also likely to remain high in the future. Individual manufacturers may respond by offering incen-
tives in order to meet their sales targets, putting the entire sector under additional pressure.
There is a risk that excess capacity in global automotive production may lead to a rise in inventories and
therefore an increase in tied-up capital. With a decline in demand for vehicles and genuine parts, automotive
manufacturers may adjust their capacities or intensify measures to promote sales. This would lead to additional
costs and greater price pressure.
Supply chain disruption may give rise to the risk of underutilization of capacity in global automobile pro-
duction, meaning that existing demand can in some instances not be met and instead moves on.
The demand that built up in individual established markets in times of crisis could result in a significant
recovery if the economic environment eases more quickly than expected.
In Europe, there is a risk that further municipalities and cities will impose a driving ban on vehicles with com-
bustion engines in order to comply with emission limits. China imposed a so-called “new energy vehicle quota”
in 2019, which means that battery-electric vehicles, plug-in hybrids and fuel cell vehicles will have to account
for a certain proportion of a manufacturer’s new passenger car fleet. In the United States, California has for some
years imposed a regulation followed by other US states that tightens the legal requirements on manufacturers
each year for the sale of zero-emission vehicles. To ensure compliance with emissions standards, we contin-
uously tailor our range of vehicle models and engines to the conditions in the relevant markets. These require-
ments may lead to higher costs and consequently to price increases and declines in volumes.
Economic performance may vary from region to region. The resulting risks for our trading and sales com-
panies, such as in relation to efficient inventory management and a profitable dealer network, are substantial
and are being responded to with appropriate measures on their part. However, financing business activities
through bank loans remains difficult. Our financial services companies offer dealers financing on attractive
terms with the aim of strengthening their business models and reducing operational risk. We have installed a
comprehensive liquidity risk management system so that we can promptly counteract any liquidity bottlenecks
at the dealership end that could hinder smooth business operations.
We continue to approve loans for vehicle financing on the basis of the same cautious principles applied in the
past, for example by taking into account the regulatory requirements of section 25a(1) of the Kreditwesengesetz
(KWG – German Banking Act); in particular, this counters the risk of loan defaults.
Volkswagen maintains a selective distribution system. Within the European Union, dealers and service part-
ners are selected – where permissible – using qualitative and quantitative-qualitative criteria in accordance with
the provisions of EU Regulations 461/2010 and 720/2022. The previously relevant EU Regulation 330/2010
was revised by the European Commission and replaced by the new, successor EU Regulation 720/2022, which
230
entered into force on June 1, 2022. As things stand at present, this revised EU regulation does not require any
changes to be made to the current distribution system of Volkswagen AG.
On April 17, 2023, the European Commission adopted Regulation (EU) 2023/822, which extends the block
exemption for the vehicle sector technically expiring on May 31, 2023 (MVBER – Regulation (EU) 461/2010) by
five years. However, in view of the aforementioned extension, the European Commission also issued Communi-
cation (EU) C/2023/2335 amending the “Supplementary guidelines on vertical restraints in agreements for the
sale and repair of motor vehicles and for the distribution of spare parts for motor vehicles” that accompany
Regulation (EU) No 461/2010 to allow for the environmental and digital transformation taking place in the
vehicle sector. In the updated guidelines, the European Commission no longer focuses solely on “technical infor-
mation”, but refers only in general terms to “input”, which in addition to technical information will in future
include tools, training and vehicle-generated data. The guidelines also expressly clarify that if vehicle manu-
facturers unilaterally withhold a particular input, including vehicle-generated data, this may be considered abuse
under Article 102 of the TFEU. It is not yet possible to predict whether and to what extent Volkswagen AG will be
affected by these types of claims from independent operators and what economic impact these claims may
have.
Competition law requirements, including the Block Exemption Regulation 461/2010 and EU Regulations
2018/858 and 2021/1244, aim to ensure and promote effective competition in the motor vehicle aftermarket.
Volkswagen AG, too, is exposed to this competitive pressure and associated risks in respect of its servicing and
maintenance offering.
In Germany, legislation entered into force on December 2, 2020 to restrict or abolish design protection for
repair parts through the introduction of a repair clause. In addition, the European Commission is evaluating the
market with regard to existing design protection and has presented a draft to amend the directive on the legal
protection of designs and models. A possible restriction or abolition of design protection for visible replacement
parts, including at European level, could adversely affect the Volkswagen Group’s genuine parts business.
The automotive industry is facing a process of transformation with far-reaching changes. Electric drives, con-
nected vehicles and autonomous driving are associated with both opportunities and risks for our vehicle sales,
our after-sales business and our dealerships. In particular, more rapidly evolving customer requirements, swift
implementation of legislative initiatives, including in connection with the achievement of climate protection
targets, and the market entry of new competitors from outside the industry will require changed products at a
faster pace of innovation as well as adjustments to business models and cost structures. There is uncertainty
regarding the widespread use of electric vehicles and the availability of the necessary charging infrastructure.
There is also a risk of freight deliveries worldwide being shifted from trucks to other means of transport, and
of demand for the Group’s commercial vehicles falling as a result.
Below, we outline the regions and markets with the greatest growth potential for the Volkswagen Group.
> China
Demand for vehicles is expected to increase in the coming years due to the need for individual mobility. This
also affects e-mobility, a market that is already dominated by high-volume domestic manufacturers, among
others. It is also expected that demand will shift from the coastal metropolises to the country’s interior and
that competitive pressure from local manufacturers will generally increase. In order to leverage the consider-
able opportunities offered by this market – especially with regard to e-mobility – and to defend our strong
market position in China over the long term, we are continuously expanding our product range to include
models that have been specially developed for this market. We are increasingly forging partnerships and
further expanding our production capacity in this growing market, for example with the new plants for electric
vehicles in Anhui and Changchun.
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> India
The demand for new vehicles is likely to increase over the coming years in this important future market, partly
due to demographic change. The Volkswagen Group has consolidated its activities in India and launched a
model initiative with new models tailored to customers’ needs: the Taigun from the Volkswagen Passenger
Cars brand and the Škoda Kushaq and Slavia.
> USA
In the saturated US market, the proportion of light trucks (particularly SUVs and pickups) is likely to further
increase slightly in the coming years. In addition, the electrification of mobility is expected to accelerate due to
support measures and legally prescribed fleet emission and fuel consumption targets. The latter factors still
depend, however, on which administration is in office. In the USA, Volkswagen Group of America is steadfast in
its pursuit to become a full-fledged volume supplier and expand its market share. The expansion of local pro-
duction capacity – including production for electric vehicles since 2022 – will allow the Group to better serve
the market in the North America region. We are also working intensively on offering additional products
specifically tailored to the US market. By developing and producing an all-electric pick-up and a robust SUV,
the Volkswagen Group plans to tap into the electric vehicle market with the US brand icon Scout.
> Brazil
Due to the need for individual mobility, demand for vehicles in Brazil is expected to increase in the coming
years, particularly in the low-price, small-vehicle segments. Given existing trade barriers, local production is an
important factor in ensuring competitiveness. The growing number of automobile manufacturers with local
production has resulted in a sharp increase in price pressure and competition. To strengthen our competitive
position in Brazil, we offer vehicles tailored specially to this market that are locally produced, such as the
Saveiro and the Nivus.
> Middle East
Political and economic uncertainty in the region are increasingly taking their toll on the passenger car markets.
In spite of this volatility, the Middle East region offers short-term and long-term growth potential. We aim to
leverage the potential for growth with a range of vehicles that has been specifically tailored to this market,
without having our own production facilities there.
Power Engineering
Global economic trends such as digitalization and the increasing interest in emissions-reducing technologies
associated with decarbonization will continue. Growing global energy needs call for innovation in the industry
and a growing willingness on the part of governments to invest in line with the global climate policy.
The development of the marine market continues to carry risk given the current uncertainty regarding future
fuel and emissions regulations. The continuing uncertain geopolitical and macroeconomic situation holds addi-
tional risks, but also offers opportunities, for example in the navy and offshore wind energy business.
In turbomachinery, there is the risk that planned projects and orders will be scaled back or postponed due to
negative developments in sales markets or individual applications.
These risks are countered by constantly monitoring the markets, focusing on less strongly affected market
segments, working closely with all business partners such as customers and licensees, and introducing new and
improved technologies.
We are working systematically to leverage market opportunities across the world, for example by positioning
ourselves as a solution provider for reduced-CO2 drive and energy generation technologies such as large-scale
heat pumps, storage technologies and hydrogen production or carbon dioxide capture. Moreover, significant
potential can be leveraged in the medium term by enhancing our after-sales business through the introduction of
new digital products and the expansion of our service network. The requirements for occupational safety, which
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will continue to increase in the future, the availability of the plants that are already in operation, their efficient
operation and the increase in environmental compatibility, together with the large number of engines and plants,
will provide the basis for growth. Digital service solutions, for instance for remote plant surveillance, offer further
growth potential.
As part of the capital goods industry, the Power Engineering business is affected by fluctuations in the
investment climate. Even minor changes in growth rates or growth forecasts, resulting from geopolitical uncer-
tainties or volatile commodities and foreign exchange markets, for example, carry the risk of significant changes
in demand or the cancellation of already existing orders.
The measures we use to counter the substantial economic and extraordinary risks include flexible production
concepts and cost flexibility by means of temporary external personnel, working time accounts and Kurzarbeit
(short-time working), and the necessary structural adjustments.
Sales risks
There is a risk that the Volkswagen Group could experience decreases in demand, possibly exacerbated by media
reports or insufficient communication. Other potential consequences include lower margins in the new and used
car businesses and a temporary increase in funds tied up in working capital.
The Volkswagen Group’s multibrand strategy may weaken individual Group brands if there are overlaps in
customer segments or the product portfolio. This effect may be reinforced by the Volkswagen Group’s common-
parts strategy, as this strategy means that, in some cases, the differences in product substance between the
brands are small. As a result, there could be a risk of internal cannibalization between the Group brands, higher
marketing costs, or repositioning expenses. By sharpening the brand identities, we are working to minimize these
risks.
The fleet customer business continues to be characterized by increasing concentration and internationali-
zation, accompanied by the risk that the loss of individual fleet customers may result in relatively high volume
losses. Viewed over an extended period, the fleet customer business is more stable than the business with retail
customers. The Volkswagen Group is well positioned with its broad portfolio of products and drive systems, as
well as its target-group-focused customer care, and counteracts a concentration of default risks at individual
fleet customers or markets. The consistently high market share in Europe shows that fleet customers still have
confidence in the Group.
Consumer demand is shaped not only by real factors such as disposable income, but also by psychological
factors that cannot be planned for. For example, households’ worries about the future economic situation may
lead to unexpected buyer reluctance. This is particularly the case in saturated automotive markets such as
Western Europe, where demand could drop as a result of owners holding on to their existing vehicles for longer.
We are countering the risk of buyer reluctance with our attractive range of models and our strict policy of cus-
tomer orientation.
A combination of buyer reluctance in some markets as a result of the crisis, and increases in some vehicle
taxes based on CO2 emissions – which have already been observed in many European countries – may shift
demand towards smaller segments and engines, for example. We counter the risk that such a shift will negatively
impact the Volkswagen Group’s financial situation by constantly developing new, fuel-efficient vehicles and
alternative drive technologies, based on our drivetrain, fuel and mobility strategies.
Automotive markets around the world are exposed to risks from government intervention such as tax
increases, which curb private consumption, and from restrictions on trade and protectionist tendencies such as
tariffs and sanctions. Furthermore, there are future risks from the sale of electrified vehicles if the minimum
requirements for local content under free trade agreements cannot be achieved. Sales incentives may lead to
shifts in the timing of demand.
Furthermore, government regulations aimed at protecting human rights are putting increased pressure on
companies to create greater transparency in their international supply chains. While companies are implementing
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extensive measures in this regard, there is still a risk that complete transparency cannot be achieved. This may
even lead to restrictions on imports of products suspected of being linked to human rights violations – either the
products themselves or constituent parts.
Commercial vehicles are capital goods: even minor changes in growth rates or growth forecasts may sig-
nificantly affect transport requirements and thus demand. The resulting risk of production fluctuations calls for a
high degree of flexibility from the manufacturers. Although production volumes are significantly lower, the com-
plexity of the trucks and buses range does in fact significantly exceed the already very high complexity of the
passenger cars range. Key factors for commercial vehicle customers are total cost of ownership, vehicle reli-
ability and the service provided. Furthermore, customers are increasingly interested in additional services such
as freight optimization and fleet utilization, which we offer in the commercial vehicle segment through the digital
brand RIO, for example.
Power Engineering’s two-stroke engines are produced exclusively by licensees, particularly in South Korea,
China and Japan. There is a slight uptrend in global demand for merchant ships; however, the volatility in new
shipbuilding orders poses the risk of declining license revenues. Due to changes in the competitive environment,
especially in China, there is also the risk of losing market share.
Russia-Ukraine conflict and confrontations in the Middle East

The ongoing Russia-Ukraine conflict and the confrontations in the Middle East represent a risk to the perfor-
mance of the global economy, to growth in the industry and to the business activities of the Volkswagen Group,
in particular as a result of rising prices and declining availability of energy.
The Volkswagen Group does not have any material subsidiaries or equity investments in these regions.
In relation to the results of operations, financial position and net assets of the Volkswagen Group, the busi-
ness activities of the Volkswagen Group in these regions are insignificant.
Other factors
In addition to the risks outlined in the individual risk categories, there are other factors that cannot be predicted
and whose repercussions are therefore difficult to control. Should these transpire, they could have an adverse
effect on the further development of the Volkswagen Group. In particular, such occurrences include natural
disasters, climate-induced extreme weather events, pandemics (such as the spread of the SARS-CoV-2 virus
including its variants), violent conflicts (such as the current Russia-Ukraine conflict and the confrontations in the
Middle East), terrorist attacks and interruptions to the energy supply.
Research and development risks

For this risk category, the likelihood of occurrence is classified as high (previous year: high) and the potential
The most significant risks from the QRP result from the inability to develop products in line with demand and
requirements, especially with regard to e-mobility and digitalization.
Risks arising from research and development

The automotive industry is undergoing a fundamental transformation process. For multinational corporations
like Volkswagen, this means risks in the areas of customer/market, technological advancements and legislation.
One risk posed is the implementation of ever more stringent emission and fuel consumption regulations, such as
C6 in China or Euro-7 in Europe from 2025. New test procedures and test cycles (e.g. the Worldwide Harmonized
Light Vehicles Test Procedure, WLTP), and their progressive tightening, as well as compliance with approval
processes (homologation) are becoming increasingly complex and time-consuming. The test specifications and
homologation procedures also vary greatly from country to country.
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On a national and international level, there are numerous legal requirements regarding the use, handling and
storage of substances and mixtures (including restrictions concerning chemicals, heavy metals, biocides, persis-
tent organic pollutants) as well as reporting obligations. There is therefore a risk of non-conformity in the
manufacture, procurement and introduction of products such as automobiles or replacement parts.
The economic success and competitiveness of the Volkswagen Group depend on how swiftly we are able to
tailor our portfolio of products and services to changing conditions. Given the intensity of competition and speed
of technological development, for example in the fields of digitalization and automated driving, there is a risk of
failing to identify relevant trends early enough to respond accordingly.
We use the latest findings from the world of physics and other areas of science to plot our course. In addition,
we conduct research such as trend analyses and customer surveys and examine the relevance of the results for
our customers. We counter the risk that it may not be possible to develop modules, vehicles, or services – espe-
cially in relation to e-mobility, digitalization and software – within the specified time frame, to the required quality
standards, or in line with cost specifications, by continuously and systematically monitoring the progress of all
projects.
To reduce the risk of patent infringements, we conduct thorough analyses of third-party industrial property
rights; increasingly also in relation to communication technologies.
We regularly compare the results of all these analyses with the respective project targets; in the event of any
discrepancies, we introduce appropriate countermeasures. Our end-to-end project organization fosters cooper-
ation across all of the departments involved in the process, ensuring that specific requirements are incorporated
into the development process as early as possible and that their implementation is planned in good time.
Risks and opportunities from the modular toolkit strategy

We are continuously expanding our modular toolkits, focusing on future customer requirements, legal require-
ments and infrastructural requirements.
However, with higher volumes there is a higher risk that supply chain disruption – for example due to parts
supply shortages – or quality problems may affect an increasing number of vehicles.
The Modular Transverse Toolkit (MQB) is an extremely flexible vehicle architecture that was created to allow
conceptual dimensions – such as the wheelbase, track width, wheel size and seat position – to be harmonized
throughout the Group and utilized flexibly. Other dimensions, for example the distance from the pedals to the
middle of the front wheels, are always the same, ensuring a uniform system in the front end of the car. Thanks to
the resulting synergies, we are able to reduce both development costs and the necessary one-time expenses, as
well as manufacturing times. The toolkits also allow us to produce different models from different brands in
varying quantities, using the same equipment in a single plant. This means that our capacities can be used with
greater flexibility throughout the entire Group, enabling us to achieve efficiency gains.
We have also transferred this principle of standardization with maximum flexibility to the Modular Electric
Drive Toolkit (MEB) and Premium Platform Electric (PPE) concepts developed for all-electric drives. The syner-
gies and efficiency gains offered by the modular toolkit strategy are enabling us to bring e-mobility into mass
production worldwide with the MEB- and PPE-based vehicles. In future, we aim to reinforce these synergistic
effects by combining the MEB and PPE in the Scalable Systems Platform (SSP).
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Operational risks and opportunities

For this risk category, the likelihood of occurrence is classified as medium (previous year: high) and the potential
The most significant risks from the QRP lie particularly in cybersecurity and new regulatory requirements
regarding IT, as well as in volatile procurement markets, here primarily in relation to the supply of parts, and in
quality problems.
Risks from extraordinary events in the Volkswagen Group’s procurement and production network
Extraordinary events beyond our control including natural disasters, climate-induced extreme weather events,
pandemics and other events, for example violent confrontations – such as the Russia-Ukraine conflict or the con-
frontations in the Middle East – fires, explosions, or the leakage of substances hazardous to health or the environ-
ment, may result in supply risks in procurement and heavily impair production. As a consequence, bottlenecks or
even outages in production may occur, thus preventing the planned production volumes from being achieved.
Early warning systems help to identify supply risks and prevent assembly line stoppages. We keep global and
local risks under constant observation so as to be able to respond quickly to effects throughout the entire supply
chain. In addition, measures to counteract further risks include comprehensive safety and emergency response
concepts such as fire prevention, property protection, hazardous goods management and task forces, and we
take out corresponding insurance coverage where this makes economic sense.
Due to the uncertainty arising from the further development of the Russia-Ukraine conflict and associated
sanctions, and the further development of the energy market, there is a risk throughout the entire automotive
industry that in spite of preventive measures, looming supply breakdowns may not be recognized early enough
and production cannot be maintained in full despite effective countermeasures.
Countermeasures may include finding alternatives where suppliers are unavailable and organizing special
processes. Procurement, in collaboration with all Group departments and the supplier network, was able to put
these measures to the test in 2023, particularly in securing purchased parts from flooded areas of Slovakia.
Risks and opportunities from Procurement and Technology

Current trends in the automotive industry such as e-mobility and automated driving are resulting in an increased
need for financing among suppliers, presenting them with considerable challenges. These are being exacerbated
by the current commodity price situation and the limited availability of semiconductors. The supplier risk
management department in Procurement at the Volkswagen Group evaluates in particular the financial situation
of suppliers, before they are entrusted with the implementation of projects. Procurement takes into account the
recommendations of the supplier risk management department.
The risk of supply shortages and disruption to supply continues to exist, particularly given the current global
geopolitical and macroeconomic situation. Examples include the continuing constraints in the supply of
semiconductor components and the direct and indirect effects of the Russia-Ukraine conflict, including potential
temporary interruptions to the energy supply.
Supply risks are identified in Procurement by means of early warning systems and task force and mitigation
structures have been created to reduce these risks. In addition, strategic measures are to be taken to avoid future
impacts in the long term.
The sharp increase in commodity and energy prices resulting from the global economic trends and crises of
recent years plus the significant rise in personnel costs is impacting the financial situation of many suppliers.
Furthermore, the rapid rise in financing costs combined with more restrictive lending is placing additional
burdens on suppliers and limiting their ability to finance new projects and capacity adjustments. This, too, is
giving rise to the risk of bottlenecks and disruptions in supplies.
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Procurement employees specialized in restructuring and supply reliability constantly monitor the financial situ-
ation of our suppliers throughout the world, taking measures designed to counter the risk of possible supply
disruptions.
Demand for resources, possible speculations on the market and current trends in the automotive industry,
such as the growing share of electrified vehicles, may affect the availability and prices of certain raw materials.
Trends in raw materials and demand are continuously analyzed and assessed on an interdisciplinary basis to
enable steps to be taken at an early stage in the event of potential bottlenecks.
The risks in battery cell production relate particularly to the rising demand for battery cells and the resulting
reliance on suppliers, from technological change and from the service life of battery cells. Additional risks may
arise from long-term ties to cell manufacturers and the direct responsibility of Volkswagen in the supply chain.
To counter these risks, the Volkswagen Group maintains multiple strategic supplier relationships while extending
the scope of its own activities along the value chain (raw material extraction, cell production) at the same time.
Commodity risks can be partially mitigated through backward integration of the value chain. For example,
partnerships and long-term supply agreements with commodity suppliers can be used to ensure the supply of
the relevant material while also achieving competitive prices.
Quality problems may necessitate technical intervention involving a substantial financial outlay if the cost
cannot be passed on to the supplier or can only be passed on to a limited extent. Assuring quality is of
fundamental importance, all the more so in the US, Brazilian, Indian and Chinese markets, for which we develop
vehicles specific to the country and where local manufacturers and suppliers are established, particularly as it
may be difficult to predict the impact of regulations or official measures. We constantly analyze the conditions
specific to each market and adapt our quality requirements to their individual needs. We counter the local risks
we identify by continuously developing measures and implementing them locally, thereby preventing quality
defects in the supply chain from arising.
It is not possible at present to rule out the possibility of a further increase in recalls of various models pro-
duced by a variety of manufacturers in which certain airbags manufactured by Takata were installed. This could
also affect Volkswagen Group models.
Specialists in Procurement systematically investigate risks resulting from antitrust violations by suppliers and
file claims for any losses that may arise.
Risks in the supply chain may also arise from the non-fulfillment of statutory duty of care in respect of human
rights and the environment, which might lead, for example, to supply shortages in production or to sanctions in
sales. The requirements are compared with existing processes with the help of gap analyses, and processes are
developed and implemented to fill in any gaps. In order to meet our duty of care in respect of human rights, and
to identify, counteract and prevent the associated risks in the value chain, we developed and implemented a
responsible supply chain system in 2022.
Production risks
Production risks for the Volkswagen Group arise in particular from the overarching framework, from supply risks,
from internal, strategic and operational challenges and from sales risks. Countermeasures and precautions are
taken in accordance with the principles of risk management so as to mitigate each of the risks identified.
Risks arising from the overarching framework include in particular potential disruption to our own operating
ability or to the supply of inputs crucial for operation that is caused by extreme weather events in the form of
flooding and drought, severe storms or similar. These may lead to production stoppages with financial ramifi-
cations for the Group. The Group manages these risks by systematically analyzing the impacts of climate change
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on its production sites and using the findings to develop specific countermeasures for the individual locations
and risk type.
Other overarching risks may arise as a result of social and political changes as well as from other failure of
critical infrastructure – for example in the form of supply risks. Here the Volkswagen Group reduces its risk by
taking measures to lower consumption and by making its use of raw materials more flexible, provided this is
economically viable. In addition, we prepare compensatory measures between locations that reduce the
economic effects of risks for the Group as a whole. Internally, the trend away from conventional vehicles with
combustion engines and towards a higher share of electric vehicles is giving rise to production risks. In individual
cases, an uneven transition to e-mobility may lead to temporary gaps in capacity utilization. In principle, the
international production network enables us to respond flexibly at the sites and adjust capacity utilization
between production facilities by means of “turntable concepts”. The diversity of our models, the reduced product
life cycles and the use of complex processes and technical systems have increased the risk of a delay to the start
of production of a vehicle in recent years. We address this risk by drawing on the experience of past production
starts and identifying weaknesses at an early stage so as to ensure – to the highest degree possible – that
production volumes and quality standards are met during the start of production of our vehicles throughout the
Group. At an operational level, machine and system failures pose a risk in production. Our comprehensive pre-
ventive maintenance concepts and emergency response concepts can prevent these failures or mitigate their
impact.
In unit sales, risks arise from fluctuations in demand as regards volumes and vehicle characteristics. Pro-
duction risks arising from fluctuations in production volumes affecting vehicle models concern in particular
utilization of production capacity. This is planned several years in advance based on long-term sales planning for
all vehicle projects. The risk is that market momentum and changes in demand will not be forecast correctly. If
forecasts are too optimistic, there is a risk that capacity will not be fully utilized. However, forecasts that are too
pessimistic pose a risk of undercapacity, as a result of which it may not be possible to meet customer demand.
As a countermeasure, the initial investment can be focused on a certain minimum number of units so that the full
planned number of units or a higher number of units can be covered with flexible additional investments. In
addition, turntable concepts help us to adjust capacity utilization between production facilities. Flexible working
time models allow us to stabilize employee productivity when the number of production units fluctuates. The
availability of buildable orders for production poses another risk to unit sales. Legal changes, for instance in the
context of the changeover to the WLTP test procedure or new cybersecurity requirements in accordance with the
UNECE regulation, may impact production. For one thing, a temporary reduction in the range causes demand to
focus on the available variants. For another, gaps in production can occur if model variants have not been
approved. In such cases, until official approval is granted, production can be stabilized by producing and
temporarily storing vehicles, including customer-specific vehicles. The resulting tied-up capital and the avail-
ability of storage areas are limiting factors, however. There is a risk that a backlog will be created due to the slow
outflow of built vehicles, which will also limit the number of production units. We counteract this risk by taking
specific measures to speed up the process up to the end customer and through early contractual commitment of
transport capacity.
Risks arising from long-term production

In the case of large projects within the Power Engineering Business Area, risks may arise that are often only
identified over the course of the project. They may result in particular from contract design errors, inaccurate or
incomplete information used in costing, post-contract changes in the economic and technical environment,
weaknesses in project management, quality defects and unnoticed product malfunctions, product emergence, or
poor performance by subcontractors. Most notably, omissions at the start of a project, overshooting of the
development budget or timeframe, and legislative changes are usually difficult to correct or compensate for and
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often entail substantial additional expenses. The current disproportionate increases in commodity prices, energy
prices and freight rates, and the limited availability of semiconductor products, may have a detrimental impact
on production costs and revenue recognition.
The aim is to identify these risks at an early stage and to take appropriate measures to eliminate or minimize
them in advance, particularly during the bidding and planning phase of large upcoming projects. This is done by
constantly optimizing the project control process across all project phases and by using a lessons-learned
process and regular project reviews.
Quality risks
We strive to identify and rectify quality problems at an early stage during the development of our products to
avoid, among other things, delays to the start of production. As we are using an increasing number of modular
components as part of our platform strategy, it is particularly important when malfunctions do occur to identify
the cause quickly and eliminate the faults. Nonconformity of internally or externally sourced parts, components
or functions may necessitate time-consuming and cost-intensive measures, leading to recalls and therefore
damage to the Volkswagen Group’s image. In addition, the resulting financial impact may exceed provisions. To
meet our customers’ expectations and minimize warranty and ex gratia repair costs, we are continuously opti-
mizing the processes at our brands with which we can prevent these faults.
If quality management is ineffective, there is a risk of losing ISO 9001 and KBA certification. This would lead
directly to a loss of type approval from one or more authorities. We counter this risk by continuously training the
Group’s system auditors, while our quality management system and process quality undergo internal audits.
We also check the conformity of series products (CoP – conformity of production) in vehicle production plants
as part of system audits with a CoP component. Further risks are associated with discrepancies identified in con-
formity of production measurements and in-service-conformity (ISC) measurements. We have established an
effective system for monitoring the conformity of CoP and ISC measurements for manufactured vehicles. To
ensure that the results of the emissions CoP and ISC measurements are analyzed systematically, we have imple-
mented an IT system throughout the Group. This is used for status reporting and documenting the results of the
series of measurements.
Vehicle registration and operation criteria are defined and monitored by national and, in some cases, inter-
national authorities. Furthermore, several countries have special – and in some cases new – rules aimed at
protecting customers in their dealings with vehicle manufacturers. We have established quality processes so
that the Volkswagen Group brands and their products fulfill all respective applicable requirements and local
authorities receive timely notification of all issues requiring reporting. By doing so, we reduce the risk of
customer complaints or other negative consequences.
With the increasing technical complexity of vehicles due to their internal and external connectivity, and the
platforms and toolkit systems in use across brands, the quality of the parts and software components supplied
must be assured. This is lending ever greater importance to cybersecurity. To better monitor and manage the risk
of cyberattacks on our vehicles in the future, we continuously optimize the Automotive Cyber Security Man-
agement Systems in all Group brands and exchange information about processes and products across the
brands. In addition to mastering the complexity resulting from ever-increasing cybersecurity requirements, the
focus here is primarily on protecting customers and our products. Harmonized processes across the Group, such
as the car security incident process, enable a fast reaction speed across the brands in the event of an attack so
that any weaknesses in our products can be promptly eliminated. The Automotive Cyber Security Management
System is an integral part of our quality management system, which helps us leverage synergies with already
existing structures. This approach serves to fulfil the legal requirements of the UNECE regulation on cyber-
security.
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We have established the Ausschuss Produktsicherheit (APS – Product Safety Committee) to comprehensively
evaluate and efficiently resolve product safety risks for customers as the product users and have set out its
responsibilities and processes in Group policies. The Group brands and companies implement these policies in
the form of in-house regulations. In the event of safety defects, doubts about compliance with legal require-
ments, or quality issues relating to the brand image, the APS examines the matter concerned and decides on an
appropriate response. In this context, the APS is also responsible for managing related inquiries from authorities.
The cross-divisional Car Security Board (CSB) provides support with regard to cybersecurity issues.
We have also created and established central units within the organization, which are responsible for man-
aging incoming information on APS- and CSB-related topics. We have established a universal, transparent man-
agement and tracking system to follow up on all such information across the Group without employee involve-
ment, right through to the APS decision. In addition, numerous events and training courses are held to improve
awareness of safety risks and products’ legal conformity among all employees. These activities aim to avoid risks
from delayed, lacking, or incomplete reporting and preliminary analyses. The entire APS process is, moreover,
subject to regular review in the form of internal and external audits aimed at ensuring compliance with the require-
ments and thus also minimizing risks arising from the decision-making process on the part of the APS or CSB.
IT risks
At Volkswagen, a global provider of sustainable mobility, the information technology (IT) used in all business
units Group-wide is assuming an ever more important role. IT risks exist in relation to the three protective goals
of confidentiality, integrity and availability, and comprise in particular unauthorized access to, modification and
extraction of sensitive electronic corporate or customer data as well as limited systems availability as a conse-
quence of downtime, disasters and the volatile geopolitical situation. Proper handling of data is a key factor for
data integrity, and for the functionality of error-free systems.
The high standards we set for the quality of our products also apply to the way in which we handle our cus-
tomers’ and employees’ data. There is a risk of cyberattacks, particularly on our digital offerings. Legal regu-
lations including the UNECE cybersecurity regulation (R155) define the requirements for our vehicle and soft-
ware development. These also have a large impact on our IT systems. We therefore work on an interdisciplinary
basis to protect our connected vehicles and mobility services. Our guiding principles are data security, trans-
parency, informational self-determination and the safety and security of the customer when using our services.
We counter the risk of unauthorized access to, modification or extraction of corporate and customer data
through risk-based use of IT security technologies such as modern security systems for detecting malware and
malicious behavior.
We achieve additional protection by restricting the allocation of access rights to systems and central adminis-
tration, including periodic identity checks. Based on business impact analyses, we counter data destruction or
disruption to operation by designing systems with redundancy and implementing backup strategies.
Identified IT-related risks are regularly assessed using the methodology specified by the Group and reported
to the Board of Management. Risk mitigation is followed up at top management level. This includes, for example,
business-critical IT systems used across the Group or sensitive data such as vehicle or customer data.
An overarching committee with members from Information Security, Data Protection, Group Security, Legal
Affairs and other parties involved handles interdisciplinary information security and reports directly to the Group
Board of Management. This enables a rapid response and the efficient coordination of measures. This tactical
set-up has proven valuable in practice, as demonstrated, among other things, by the rapid management of a
major incident that occurred in September 2023. The technical measures are complemented by a wide range of
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awareness-raising measures and training courses for employees as well as crisis simulations that create and
deepen awareness of information security and train on how to act correctly in the event of an emergency.
We use market-leading technologies that are customary on the market and state of the art to protect our IT
landscape, adhering to standards applicable throughout the Company. We future-proof our IT through continual
standardization and updates. Continuously increasing automation enhances process reliability and the quality of
processing.
The further development and Group-wide use of IT governance processes, particularly the further standardi-
zation of the risk management process for IT and information security, also help to identify weaknesses at an
early stage and to reduce or avoid risks effectively.
Another focus is the continuous advancement of Group-wide security measures to detect, avert and deal with
cyberthreats. Artificial intelligence is playing an increasingly important role in this context.
Risks from media impact

The image of the Volkswagen Group and its brands is one of the most important assets and forms the basis for
long-term business success. Our policy and strategic orientation on issues such as integrity, ethics, sustain-
ability and climate protection are in the public focus. One of the basic principles of running our business is
therefore to continuously check and pay particular attention to compliance with legal requirements and ethical
principles. However, we are aware that misconduct or criminal acts by individuals and the resulting reputational
damage can never be fully prevented. In addition, media reactions can have a negative effect on the image of the
Volkswagen Group and its brands. This impact also depends significantly on the effectiveness of our communi-
cation during times of crisis.
Environmental and social risks

For this risk category, the likelihood of occurrence is classified as high (previous year: medium) and the potential
extent of damage is classified as medium (previous year: high).
The most significant risks from the QRP arise from non-fulfillment of CO2-related requirements.
Personnel risks
We use a range of instruments to counter economic risks as well as changes in the market and the competitive
situation and shortages of supplier components. These help the Volkswagen Group to remain flexible in terms of
staff deployment when faced with a fluctuating order situation – whether orders are in decline, or there is an
increase in demand for our products. These instruments include time accounts to which hours are added when
overtime is necessary and from which hours are deducted in quiet periods, enabling our factories to adjust their
capacity to production volume with measures such as extra shifts, closure days, flexible shift models and legally
regulated instruments such as Kurzarbeit (short-time working). The use of temporary workers also allows us to
be more flexible in our planning. All of these measures help the Volkswagen Group to generally maintain a stable
permanent workforce, even when orders fluctuate.
The technical expertise and individual commitment of employees are indispensable prerequisites for the
success of the Volkswagen Group. We counter the risk of not being able to develop sufficient expertise in the
Company’s different vocational groups with our strategically oriented and holistic human resource development,
which gives all employees attractive training and development opportunities. By boosting our training programs,
particularly at our international locations, we are able to adequately address the challenges of technological
change and the structural transformation of the automotive industry.
To counter the potential risk of a shortage of skilled specialists – especially in the areas of digitalization and
IT – we continuously expand our recruitment tools. Our systematic talent relationship management, for example,
enables us to make contact with talented candidates from strategically relevant target groups at an early stage
and to build a long-term relationship between them and the Group. In addition to the standard dual vocational
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training, programs such as our Studium im Praxisverbund integrated degree, Faculty 73 traineeship scheme, and
the Volkswagen-sponsored non-profit École 42 in Wolfsburg, Berlin and Prague, ensure a pipeline of highly
qualified and motivated employees. By systematically increasing our attractiveness as an employer, we are able
to gain talented people in areas that are crucial for the future, such as electrical engineering, chemistry or infor-
mation technology. With tools such as these, we want to ensure that our demand for qualified new staff is
covered, even amid a shortage of skilled labor.
We counter the risks associated with employee fluctuation and loss of knowledge as a result of retirement
with intensive, department-specific succession planning and training.
The advancing digitalization of our human resources processes entails risks arising from the processing of
personal data, but also system-based improvements so that Volkswagen can ensure compliance with data pro-
tection laws when processing personal data. Volkswagen is aware of its responsibility in the processing of this
data. To make processing compliant with data protection requirements, we address risks as part of our data pro-
tection management system by implementing a wide range of measures.
The basis of successful occupational health and safety is complying with legal requirements, identifying and
assessing work-related risks, determining appropriate measures and monitoring their effectiveness. This makes
a positive contribution to maintaining the health of our employees as part of society. Ensuring a safe and healthy
working environment is an important element of corporate sustainability, particularly during our transformation.
It is also a major component of employer attractiveness, as it helps to effectively reduce the associated risks and
minimize process disruptions and production stoppages.
Environmental protection regulations

The specific emission targets for all new passenger car and light commercial vehicle fleets for brands and
groups in the EU for 2020 and subsequent years are set out in Regulation (EU) No 2019/631. This regulation is a
material component of the European climate protection policy and therefore forms the key regulatory framework
for product design and marketing by all vehicle manufacturers selling in the European market.
Adopted and published by the EU in 2019, the regulation states that, from 2021 onward, the average
emissions of European passenger car fleets must be no higher than 95 g CO2/km. Up to and including 2020,
European fleet legislation was complied with on the basis of the New European Driving Cycle (NEDC). From
2021 onward, the NEDC target value was replaced by a WLTP target value through a process defined by law-
makers; this change has not led to additional tightening of the target value. A similar approach applies to light
commercial vehicles, where a target of 147 g CO2/km has applied to the entire fleet since 2021.
The targets will be tightened as from 2025: for new European passenger car fleets, a reduction of 15% in CO2
emissions will therefore be required from 2025 and a reduction of 55% from 2030. For new light commercial
vehicle fleets, the required reductions will be 15% from 2025 and 50% from 2030. For 2035, a CO2 reduction
target of 100% will then apply to new passenger car and light commercial vehicle fleets. In each case, the
starting point is the WLTP fleet value in 2021. These targets can only be achieved through a growing proportion
of electric vehicles within the fleet.
If the respective fleet-wide target is not fulfilled, the Commission may impose an excess emissions premium,
amounting to €95 per excess gram of CO2 per newly registered vehicle.
At the same time, regulations governing fleet fuel consumption of new vehicles are also being developed or
introduced outside the EU27 (plus Norway and Iceland), for example in Brazil, Canada, China, India, Japan,
Mexico, Saudi Arabia, South Korea, Switzerland, Taiwan, the United Kingdom and the USA. Fuel consumption
regulations in China are being gradually tightened with a fleet average target of 4.6 l/100 km for 2025. More
stringent rules are expected for the period after 2025. In addition to this legislation on fleet consumption, a new
energy vehicle quota applies in China. This requires every manufacturer to increase the share of electric vehicles
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in its total production or import volumes. For 2023, this quota was 18% and had to be fulfilled through battery-
electric vehicles, plug-in hybrids, or fuel cell vehicles. The quota will be increased further for 2024 and 2025.
There is no indication as to possible targets after 2025.
In the USA, the annual CO2 and efficiency targets to be fulfilled by the fleet for new passenger cars and light
commercial vehicles are defined by the Greenhouse Gas legislation (GHG) and Corporate Average Fuel Economy
legislation (CAFE). In December 2021, the current administration published new CO2 fleet targets for the period
from 2022 to 2026. The industry-wide fleet average for passenger cars and light commercial vehicles is to
reduce from 137 g CO2/km in 2022 to 106 g CO2/km in 2026, reversing the relaxation of the targets by the pre-
vious government. The same applies to the CAFE efficiency targets for 2024 to 2026, which were announced in
spring 2022. The fleet targets to be achieved will therefore become more stringent each year in the period up to
2026. The current government has set a goal for 50% of new vehicle sales to be electric by 2030. This is expected
to be reflected in ambitious targets in future GHG and CAFE regulations. In addition to this, in California and the
other user states in the US, the regulations of the Californian zero-emission vehicle mandate must be adhered to,
which prescribes annually increasing electrification rates for the new vehicle fleet. The aim is to fully electrify
passenger cars and light commercial vehicles by 2035.
The tightening of fleet-based CO2 emissions and fuel consumption regulations makes it necessary to use the
latest mobility technologies in all affected markets. Above all, electrified and also purely electric drivetrains are
becoming increasingly common. The Volkswagen Group closely coordinates technology and product planning
with its brands so as to avoid breaches of fleet values, for example, which would entail severe payment obliga-
tions. Whether the Group meets its fleet targets depends crucially on its technological and financial capabilities,
which are reflected in, for example, our drivetrain and fuel strategy.
Alongside technical and portfolio electrification measures, it is also possible to use local statutory mecha-
nisms such as the creation of emission pools in Europe, for example, or the trading of emission credits in the
United States and China. Legislation provides further region-specific flexibility to aid target achievement. For
example:
> Additional innovative technologies in the vehicle that apply outside the test cycle to reduce consumption (eco-
innovations and off-cycle credits) can be taken into consideration
> Particularly efficient vehicles qualify for super-credits
> Special rules are in place for small-series producers and niche manufacturers
The Real Driving Emissions (RDE) Regulation for passenger cars and light commercial vehicles is another of the
main European regulations. New, uniform limits for nitrogen oxide and particulate emissions in real road traffic
have applied to new vehicle types across the EU since September 2017. This makes the RDE test procedure
fundamentally different from the Euro-6 standard still in force, which stipulates that the limits on the chassis
dynamometer are authoritative. The RDE regulation is intended primarily to improve air quality in urban areas
and areas close to traffic, leading to stricter requirements for exhaust gas aftertreatment in passenger cars and
light commercial vehicles. Stricter RDE processes and requirements have resulted in certain challenges, for
example relating to test criteria and homologation. The debate on successor emissions legislation (Euro-7)
began at European level in late 2022 and ended in late 2023 with a compromise reached during the trilogue
negotiations. The final regulation is not expected to be published in the Official Journal until the second quarter
of 2024. It is anticipated that this successor regulation will enter into force in the second half of the decade.
The other main EU regulations affecting the automotive industry include:
> the Car Labeling Directive (1999/94/EC), which will be brought into line with Regulation (EU) 2017/1151;
> the Fuel Quality Directive (FQD – 2009/30/EC) updating the fuel quality specifications and introducing energy
efficiency specifications for fuel production;
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> the Renewable Energy Directive (RED – EU 2023/2413) introducing sustainability criteria, which contains
higher quotas for advanced biofuels and e-fuels (RFNBOs);
> the proposal for revision (COM/2021/563) of the Energy Taxation Directive (2003/96/EC) updating the mini-
mum tax rates for all energy products and electricity.
Commercial vehicles are increasingly subject to ever stricter environmental regulations all around the world,
particularly to regulations relating to climate change and vehicle emissions. With the revised Regulation (EU)
2019/1242, the European Union set manufacturers of heavy-duty vehicles with a permitted gross weight of over
16 tonnes very ambitious targets for reducing CO2 emissions in Europe within the next decade. The target set for
2025 of reducing CO2 emissions of heavy-duty vehicles by 15% has been reaffirmed. The new CO2 emissions
targets proposed for the same vehicle category nevertheless aim for a 45% reduction by 2030 (previously 30%)
and a 65% reduction by 2035 based on a reference figure from the period July 2019 to June 2020. Furthermore,
the European Commission intends to extend the targets to additional vehicle groups (all medium- and heavy-
duty vehicles over 5 tonnes, including buses; work vehicles and special-purpose vehicles have yet to be
excluded). The Commission has also proposed that all new city buses in Europe should be emission-free by
2030. If emissions exceed these targets, fines amounting to €4,250 per excess gram of CO2/tonne-kilometer
(tkm) per vehicle could be imposed from 2025 onwards. The European Council and the Parliament have finalized
their positions on the Commission’s proposal to revise the Regulation setting CO2 emission performance stan-
dards for heavy-duty vehicles. The EU institutions hope to reach a compromise in the upcoming trilogue
negotiations.
In the European Green Deal, the Commission defined the goal of achieving climate neutrality by 2050.
Targeting an ambitious reduction in EU CO2 emissions of at least 55% (previously 40%) compared to 1990 levels
by 2030, this represents a big challenge for the entire transport sector. The revision of CO2 emission require-
ments for heavy-duty vehicles in 2023 and the compromise negotiated at the end of 2023 between repre-
sentatives of the European Parliament and the EU member states for a new Euro-7 standard on the usual air
pollutants could further exacerbate these challenges.
New regulations to reduce air pollutant emissions were introduced for commercial vehicle manufacturers in
Brazil at the beginning of 2023. In the United States, emission regulations for CO2 and nitrogen oxide (NOx) are
also likely to be tightened further for heavy-duty vehicles. CO2 reductions based on 2016 emission levels have
already been defined for 2024 and 2027. The United States has also adopted a new NOx regulation that is due to
enter into force in 2024 and 2027, respectively. In mid-2023, China set new targets for reducing CO2 emissions
for all heavy-duty vehicles.
Adapting commercial vehicles to new emission standards is complex and expensive, especially given the
often contradictory regulations applicable to CO2 and other pollutant emissions from internal combustion engines.
To meet the targets for the different markets, it is imperative to reduce CO2 and exhaust gas emissions through
new technologies. This is why we are making substantial investments in climate-friendly alternative drive sys-
tems – especially battery-electric commercial vehicles and buses.
The debate around driving bans for diesel vehicles in Germany has lost some of its heat given the strong
improvements in air quality measurements. There were only two cities that failed to comply with the air pollutant
limits for nitrogen dioxide (NO2) immissions in 2022. In some cases, these issues have been, and continue to be,
the subject of legal proceedings. Individual cities throughout Germany have already imposed zonal traffic bans
for older vehicles such as Euro-4/IV diesel. It is argued that only driving bans for diesel vehicles can bring about
the necessary short-term reduction in NO2 immissions. The aforementioned debate could negatively affect sales
of diesel vehicles and result in financial liabilities and possible official requirements.
Local bans on the use of diesel vehicles are already also in place in a number of other countries, though these
mainly affect older vehicles with lower emissions standards. Regulations in Belgium that successively ban older
vehicles from larger cities are one example. In addition to major cities such as Paris and London, countries are
also discussing future bans on vehicles with internal combustion engines.
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A number of special environmental protection requirements apply to the Power Engineering segment. For example,
the International Maritime Organization has issued the International Convention for the Prevention of Pollution
from Ships (MARPOL – MARine POLlution), which applies to ship engines. The permitted emissions are being
lowered in phases under MARPOL ANNEX VI. A reduction of the sulfur content in marine fuel has been imple-
mented globally in recent years. Particularly stringent environmental regulations apply in emission control areas
in Europe and the USA/Canada. Expansion to further regions such as the Mediterranean or Japan is being
planned; other regions or territories such as the Black Sea, Alaska, Australia or South Korea are also in dis-
cussion. Moreover, emission limits are in force under Regulation (EU) 2016/1628 and in accordance with the
regulations of the US Environmental Protection Agency (EPA), for example.
We are pushing for a maritime energy transition in specialist bodies and also promote this to the general
public. In a first step, we are supporting the switch to liquefied natural gas (LNG) as a fuel for maritime appli-
cations, and offer dual fuel and gas-powered engines for new and retrofitted vessels. For long-term, climate-
neutral operation of seagoing vessels, we advocate power-to-X technology, in which excess sustainably gene-
rated electricity is converted into carbon-neutral gas or liquid fuel, especially hydrogen, methanol or ammonia.
As regards stationary equipment, there are a number of national rules in place worldwide that limit the
emissions permitted in each case. On December 18, 2008, the World Bank Group set limits for gas and diesel
engines in its Environmental, Health, and Safety Guidelines for Thermal Power Plants. These guidelines, which
are currently being revised, are required to be applied in countries that have adopted no national requirements of
their own or have requirements that are less stringent. In addition, the United Nations adopted the Convention
on Long-range Transboundary Air Pollution back in 1979, setting upper limits on total emissions as well as
nitrogen oxide for the signatory states (including all EU states, other countries in Eastern Europe, the USA and
Canada). These are also due for revision. Enhancements to the product portfolio in the Power Engineering seg-
ment focus on improving the efficiency and emissions reduction of equipment and systems. While adhering to
current and future emissions requirements, we are advancing innovative energy solutions to actively shape the
climate transition.
Legal risks
For this risk category, the likelihood of occurrence is classified as low (previous year: medium) and the potential
extent of damage is classified as high (previous year: high).
The most significant risks from the QRP are associated with the diesel issue.
Litigation
Volkswagen AG and the companies in which it is directly or indirectly invested are involved in a substantial
number of legal disputes and governmental proceedings in Germany and abroad. Such legal disputes and other
proceedings occur, among other things, in connection with products and services or in relation to employees,
public authorities, dealers, investors, customers, suppliers, or other contracting parties. For the companies in
question, these disputes and proceedings may result in payments such as fines or in other obligations or conse-
quences. In particular, substantial compensatory or punitive damages may have to be paid and cost-intensive
measures may have to be implemented. In this context, specific estimation of the objectively likely consequences
is often possible only to a very limited extent, if at all.
Various legal proceedings are pending worldwide, particularly in the USA, in which customers are asserting
purported product-related claims, either individually or in class actions. These claims are as a rule based on
alleged vehicle defects, including defects alleged in vehicle parts supplied to the Volkswagen Group.
Compliance with legal or regulatory requirements is another area in which risks may arise. This is particularly
true in gray areas where Volkswagen and the relevant public authorities may interpret the law differently.
245
In connection with their business activities, Volkswagen Group companies engage in constant dialogue with
regulatory agencies, including the Kraftfahrt-Bundesamt (KBA – German Federal Motor Transport Authority). It is
not possible to predict with assurance how government regulators will assess certain issues of fact and law in a
particular situation. For this reason, the possibility that certain vehicle characteristics and/or type approval
aspects may in particular ultimately be deemed deficient or impermissible cannot be ruled out. This is funda-
mentally a question of the regulatory agency’s specific evaluation in a concrete situation.
A comparable challenge results from the tension between divergent national and international statutory or
regulatory requirements regarding obligations to transfer information or documents, on the one hand, and
privacy mandates under national and international data protection law on the other. Volkswagen is advised by
outside law firms on these issues so as to preclude compliance violations as far as possible despite the some-
times unclear state of the law.
Litigation may furthermore result from demands for more extensive climate protection measures or from
allegedly incomplete disclosures regarding the impact of climate change. The response of the Volkswagen Group
to this risk includes, among other things, certification of its self-imposed decarbonization targets through inde-
pendent and internationally respected organizations and systematic alignment of its non-financial reporting
with the requirements of the law and the capital markets.
Risks may also result from actions for infringement of intellectual property, including infringement of patents,
brands, or other third-party rights, particularly in Germany, before the Unified Patent Court and in the United
States. If Volkswagen is alleged or determined to have violated third-party intellectual property rights, it may for
instance have to pay damages, modify manufacturing processes, or redesign products, and may be barred from
selling certain products; this may result in delivery and production restrictions or interruptions.
Criminal acts by individuals, which even the best compliance management system can never completely
prevent, are another potential source of legal risks.
Appropriate insurance has been taken out to cover these risks where they were sufficiently definite and such
coverage was economically sensible. Where necessary based on the information currently available, identified
and correspondingly measurable risks have been reflected by recognizing provisions in amounts considered
appropriate or disclosing contingent liabilities, as the case may be. As some risks cannot be assessed or can only
be assessed to a limited extent, the possibility of material loss or damage not covered by the insured amounts or
by provisions cannot be ruled out. This is, for instance, the case with regard to the legal risks assessed in
connection with the diesel issue.
Unless otherwise explicitly stated, the amounts disclosed for the litigation being reported on refer only to the
respective principal claim. Ancillary claims, such as for interest and litigation expense, are generally not con-
sidered.
Diesel issue
On September 18, 2015, the US Environmental Protection Agency (EPA) publicly announced in a “Notice of Vio-
lation” that irregularities in relation to nitrogen oxide (NOx) emissions had been discovered in emissions tests on
certain Volkswagen Group vehicles with 2.0 l diesel engines in the USA. In this context, Volkswagen AG
announced that noticeable discrepancies between the figures recorded in testing and those measured in actual
road use had been identified in type EA 189 diesel engines and that this engine type had been installed in
roughly eleven million vehicles worldwide. On November 2, 2015, the EPA issued a “Notice of Violation” alleging
that irregularities had also been discovered in the software installed in US vehicles with type V6 3.0 l diesel
engines.
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The so-called diesel issue is rooted in a modification of parts of the software of the relevant engine control units
– which, according to Volkswagen AG’s legal position, is only unlawful under US law – for the type EA 189 diesel
engines that Volkswagen AG was developing at that time. This software function was developed and
implemented from 2006 on without knowledge at the level of the Board of Management. Members of the Board
of Management did not learn of the development and implementation of this software function until the summer
of 2015.
There are furthermore no findings that, following the publication in May 2014 of the study by the Inter-
national Council on Clean Transportation, an unlawful “defeat device” under US law was disclosed to the persons
responsible for preparing the 2014 annual and consolidated financial statements as the cause of the high NOx
emissions in certain US vehicles with 2.0 l type EA 189 diesel engines. Rather, at the time the 2014 annual and
consolidated financial statements were being prepared, the persons responsible for preparing these financial
statements remained under the impression that the issue could be resolved with comparatively little expense. In
the course of the summer of 2015, however, it became progressively apparent to individual members of Volks-
wagen AG’s Board of Management that the cause of the discrepancies in the USA was a modification of parts of
the software of the engine control unit that was later identified as an unlawful “defeat device” as defined by US
law. This culminated in Volkswagen's disclosure of a “defeat device” to the EPA and the California Air Resources
Board (CARB), a department of the Environmental Protection Agency of the State of California, on September 3,
2015. According to the assessment at the time by the responsible persons dealing with the matter, the
magnitude of the costs expected to result for the Volkswagen Group (recall costs, retrofitting costs, and financial
penalties) was not fundamentally dissimilar to that in previous cases involving other vehicle manufacturers. It
therefore appeared to be manageable overall considering the business activities of the Volkswagen Group. This
assessment by Volkswagen AG was based, among other things, on the advice of a law firm engaged in the USA
for regulatory approval issues, according to which similar cases had in the past been amicably resolved with the
US authorities. The EPA’s publication of the “Notice of Violation” on September 18, 2015, which the Board of
Management had not expected, especially at that time, then presented the situation in an entirely different light.
The AUDI AG Board of Management members in office at the time in question have likewise stated that they
had no knowledge of the use of “defeat device” software that was prohibited by US law in the type V6 3.0 l TDI
engines until the EPA issued its November 2015 “Notice of Violation.”
Within the Volkswagen Group, Volkswagen AG has development responsibility for the four-cylinder diesel
engines and AUDI AG has development responsibility for the six- and eight-cylinder diesel engines.
As a consequence of the diesel issue, numerous judicial and regulatory proceedings were initiated in various
countries. Volkswagen has in the interim succeeded in making substantial progress and ending many of these
proceedings. In the USA, Volkswagen AG and certain affiliates reached settlement agreements with various
government authorities and private plaintiffs, the latter represented by a Plaintiffs’ Steering Committee in a
multidistrict litigation in the US state of California. The agreements in question include various partial consent
decrees as well as a plea agreement that resolved certain civil claims as well as criminal charges under US
federal law and the laws of certain US states in connection with the diesel issue. Although Volkswagen is firmly
committed to fulfilling the obligations arising from these agreements, a breach of these obligations cannot be
completely ruled out. In the event of a violation, significant penalties could be imposed as stipulated in the
agreements, in addition to the possibility of further monetary fines, criminal sanctions and injunctive relief.
In agreement with the respective responsible authorities, the Volkswagen Group is making technical mea-
sures available worldwide for virtually all diesel vehicles with type EA 189 engines. For all clusters (groups of
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vehicles) within its jurisdiction, the KBA determined that implementation of the technical measures would not
result in any adverse changes in fuel consumption, CO2 emissions, engine output, maximum torque, and noise
emissions.
Following the studies carried out by AUDI AG to check all relevant diesel concepts for possible irregularities
and retrofit potential, measures proposed by AUDI AG have been adopted and mandated by the KBA in various
recall orders pertaining to vehicle models with V6 and V8 TDI engines. AUDI AG continues to anticipate that the
total cost, including recall expenses, of the ongoing largely software-based retrofit program that began in July
2017 will be manageable and has recognized corresponding balance-sheet risk provisions. AUDI AG has in the
meantime developed software updates for many of the affected powertrains and, after approval by the KBA,
already installed these updates in the vehicles of a large number of affected customers. KBA approval is still
expected for the small number of software updates that are still pending.
In connection with the diesel issue, potential consequences for Volkswagen’s results of operations, financial
position and net assets could emerge primarily in the following legal areas:
1. Criminal and administrative proceedings worldwide (excluding the USA/Canada)

Criminal investigations, regulatory offense proceedings, and/or administrative proceedings have been com-
menced in some countries. Criminal investigations into the core factual issues are being conducted by the
Offices of the Public Prosecutor in Braunschweig and Munich.
In January 2021, the criminal proceedings regarding alleged market manipulation relating to capital market
disclosure obligations in connection with the diesel issue were terminated by the Braunschweig Regional Court
provisionally as regards the former Chair of the Board of Management and definitively as regards the corre-
sponding regulatory offense proceeding against Volkswagen AG. Pursuant to a motion filed by the Braunschweig
Office of the Public Prosecutor, the Braunschweig Regional Court reopened the proceedings against the former
Chair of the Board of Management in December 2023. This case will move forward; the Braunschweig Regional
Court has as yet set no date for commencement of the trial.
In September 2020, the Braunschweig Regional Court allowed the indictment of the same former Chair of the
Board of Management of Volkswagen AG to proceed on charges that include fraud in connection with the diesel
issue involving type EA 189 engines. The proceedings against this former Chair of the Board of Management of
Volkswagen AG have since been severed from the other cases. The trial of the other defendants began in
September 2021.
The Braunschweig Office of the Public Prosecutor conducted investigations on suspicion of fraud in connec-
tion with type EA 288 engines. The proceedings against the accused employees and against Volkswagen AG
were terminated in late 2022 and early 2023, definitively against payment of a sum set by the court in the case
of three of the accused persons and provisionally as regards four others.
In June 2020, the Munich II Regional Court accepted the substantially unchanged indictment of the Munich II
Office of the Public Prosecutor, which also named a former Chair of the Board of Management of AUDI AG, and
opened the main trial proceedings on charges of, among other things, fraud in connection with the diesel issue
involving 3.0 l and 4.2 l TDI engines. The trial before the Munich II Regional Court concluded in June 2023; the
former Chair of the Board of Management of AUDI AG and the other two defendants were sentenced to prison
terms, the enforcement of which was in each case suspended subject to probation. The conditions of probation
include the payment of sums set by the court. The judgment is not yet final. All three defendants have filed
appeals on issues of law. The Office of the Public Prosecutor has likewise appealed the judgment against one of
the defendants. In April 2023, the Munich II Regional Court had previously terminated the proceedings against
an additional former defendant against payment of a sum set by the court.
In August 2020, the Munich II Office of the Public Prosecutor issued a further indictment charging three
former members of the Board of Management of AUDI AG and others with, among other things, fraud in
connection with the diesel issue involving 3.0 l and 4.2 l TDI engines. The Munich II Regional Court has not yet
decided whether to accept the indictment.
As the type approval authority of proper jurisdiction, the KBA is moreover continuously testing Audi, Volks-
wagen, and Porsche brand vehicles for problematic functions. If certain functions are deemed impermissible by
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the KBA, the affected vehicles are recalled pursuant to a recall order or they are brought back into compliance by
means of a voluntary service measure.
In judgments rendered in July and November 2022, the European Court of Justice (ECJ) ruled that a so-called
thermal window (i.e. a temperature-dependent exhaust gas recirculation) in the range of 15°C and 33°C outside
temperature represents a defeat device. In this context, the ECJ developed a new, unwritten criterion according
to which a thermal window, even if it serves to prevent sudden and extraordinary damage, is impermissible if it is
active “for most of the year under real driving conditions prevalent in the territory of the European Union.” The
KBA commenced formal administrative proceedings relating to certain first and second generation type EA 896
engines that were installed in certain older vehicle models as well as to individual vehicle models with type
EA 189 engines. In July and October 2023, the KBA issued two administrative rulings against AUDI AG in which
it ruled that the originally incorporated thermal window version failed to meet the ECJ’s new vehicle engineering
criterion in some of the affected vehicles. AUDI AG has appealed the rulings, and they are therefore not final. The
KBA issued corresponding administrative rulings against Porsche AG in December 2023 and against Volks-
wagen AG in January 2024. Porsche AG and Volkswagen AG have appealed the rulings. The Volkswagen Group
had previously already begun rolling out software updates that modify the thermal window in accordance with
the ECJ’s new vehicle engineering criterion and will continue to do so.
In a trial level decision rendered in late February 2023, the Schleswig Administrative Court upheld a lawsuit
brought by Deutsche Umwelthilfe (DUH – Environmental Action Germany) against the KBA and invalidated the
notice of approval for a software update for certain older Golf Plus model vehicles to the extent this notice
classified the thermal window feature, the altitude correction feature, and the taxi switch feature as permissible
deactivation devices (defeat devices). Altitude correction refers to altitude-dependent exhaust gas recirculation.
The taxi switch modifies exhaust gas recirculation when a vehicle with a running engine stands motionless for a
certain period of time. Volkswagen AG is involved in the litigation as an interested party summoned. In late April
2023, Volkswagen AG and the KBA filed appeals against the judgment of the Schleswig Administrative Court.
This decision is thus not legally final. DUH has filed two additional lawsuits with the Schleswig Administrative
Court. The first action contests the notices of approval for further Audi and Porsche brand vehicles equipped
with type EA 189 engines as well as with selected V-TDI engines; the second action is directed against all Group
diesel vehicles with the Euro-5 and Euro-6b/c exhaust emission standard. In the first action, the Schleswig
Administrative Court issued a judgment in January 2024 that extended its initial February 2023 decision to
additional vehicles with type EA 189 engines and invalidated the KBA’s notices of approval for these vehicles.
The court granted both leave to appeal (on points of fact and law) and to leap-frog appeal (on points of law). This
decision is thus not legally final.
Moreover, additional administrative proceedings relating to the diesel issue are ongoing in other jurisdictions.
The companies of the Volkswagen Group are cooperating with the government authorities.
Risks may furthermore result from possible decisions by the European Court of Justice construing EU type
approval provisions.
Whether the criminal and administrative proceedings will ultimately result in fines or other consequences for
the Company, and if so what amounts these may entail, is currently subject to estimation risks. According to
Volkswagen’s estimates, the likelihood that a sanction will be imposed is 50% or less in the majority of these
proceedings. Contingent liabilities have therefore been disclosed where the amount of such liabilities could be
measured and the likelihood of a sanction being imposed was assessed at not less than 10%.
2. Product-related lawsuits worldwide (excluding the USA/Canada)

A general possibility exists that customers in the affected markets will file civil lawsuits or that importers and
dealers will assert recourse claims against Volkswagen AG and other Volkswagen Group companies. Besides
individual lawsuits, various forms of collective actions (i.e. assertion of individual claims by plaintiffs acting
jointly or as representatives of a class) are available in various jurisdictions. Furthermore, in a number of markets
249
it is possible for consumer and/or environmental organizations to bring suit to enforce alleged rights to injunctive
relief, declaratory judgment, or damages.
Customer class action lawsuits and actions brought by consumer and/or environmental organizations were
pending in the reporting year against Volkswagen AG and other Volkswagen Group companies in a number of
countries including Belgium, Brazil, England and Wales, France, Germany, Italy, the Netherlands, Portugal, and
South Africa. These actions asserted alleged rights to damages and other relief. The pending actions included in
particular the following:
Pending in Belgium is a class action filed by the Belgian consumer organization Test Aankoop VZW seeking
repayment of the purchase price or damages in the alternative; an opt-out mechanism has been held to apply to
this action. Given the opt-out rule, the class action potentially covers all vehicles with type EA 189 engines
purchased by consumers on the Belgian market after September 1, 2014, unless the right to opt out is actively
exercised. In July 2023, a trial level judgment was rendered in this class action by which Volkswagen AG was
ordered to pay 5% of the purchase price, or 5% of the difference between the purchase price and the resale price,
if a consumer had purchased a vehicle with a type EA 189 engine between September 1, 2014 and Septem-
ber 22, 2015, had not installed the software update, and was able to produce the relevant evidentiary docu-
mentation. The judgment is not yet final.
In Brazil, two consumer protection class actions are pending. In the first class action, which pertains to some
17 thousand Amarok vehicles, the Superior Court of Justice in August 2022 rejected in part the appeal filed by
Volkswagen do Brasil against the May 2019 judgment at the first appeals level that had initially reduced the
damage liability of Volkswagen do Brasil considerably to around BRL 172 million. Following Volkswagen do
Brasil’s appeal, the Superior Court of Justice vacated its own prior decision in its entirety. The case was
remanded to the lower appellate court for rehearing of certain issues. Volkswagen do Brasil is permitted to intro-
duce new evidence. The judgment is enforceable, but remains non-final. In the second class action, which
pertains to roughly 67 thousand later generation Amarok vehicles, the appeal filed by the plaintiff against the
October 2021 trial court judgment dismissing its complaint was rejected by the appellate court in June 2023.
The plaintiff has appealed this decision to the Superior Court of Justice.
financialright GmbH originally filed consolidated actions before various German courts asserting roughly
45 thousand claims assigned to it by customers in Germany, Slovenia, and Switzerland against Volkswagen
Group companies; the Bundesgerichtshof (BGH – Federal Court of Justice) has since affirmed the permissibility
of financialright GmbH’s business model. Following the withdrawal of numerous motions for relief, approximately
9 thousand claims are currently still pending. Provisions were recognized to account for the possibility that
objectively valuable claims may again be raised in or out of court.
Actions were filed in late 2021 in courts in England and Wales against Volkswagen AG, Volkswagen Financial
Services (UK) Limited, and other Volkswagen Group companies in connection with certain diesel vehicles leased
or sold in England, Wales, and Northern Ireland since 2009 and various other diesel engine types. These actions
are in a very early procedural stage. No Group company has as yet been formally served with a complete state-
ment of the grounds of the complaint, and a number of the plaintiffs’ claims have yet to be specified in detail.
In France, a class action is pending that was filed by the French consumer organization Confédération de la
Consommation, du Logement et du Cadre de Vie (CLCV) against Volkswagen Group Automotive Retail France,
Volkswagen Group France, and Volkswagen AG for up to 1 million French owners and lessees of vehicles with
type EA 189 engines. This is an opt-in class action in which CLCV is primarily seeking rescission without
compensation for use of the vehicle or, in the alternative, damages amounting to 20-30% of the purchase price.
In Italy, a trial level judgment in favor of the plaintiffs was rendered by the Venice Regional Court in July 2021
in the class action brought by the consumer association Altroconsumo on behalf of Italian customers; the judg-
ment required Volkswagen AG and Volkswagen Group Italia to pay damages to some 63 thousand consumers in
250
an aggregate amount of roughly €185 million. The judgment was largely overturned pursuant to the appeal filed
by Volkswagen AG and Volkswagen Group Italia. Per this decision, the consumers validly registered in the class
action will receive merely €300 each.
In the Netherlands, an opt-out class action is pending that was brought by Stichting Volkswagen Car Claim
seeking declaratory rulings for up to 201 thousand customers. A declaratory judgment partially granting the
relief sought was issued in July 2021. In the opinion of the court, Volkswagen AG and the other defendant Group
companies acted unlawfully with respect to the original engine management software. The court moreover held
that consumers are entitled to a purchase price reduction from the defendant dealerships. No specific payment
obligations result from the declaratory judgment. Any individual claims would then have to be established
afterwards in separate proceedings. Volkswagen AG and the other defendant Group companies appealed the
decision. Furthermore, an opt-out class action lawsuit brought by the Diesel Emissions Justice Foundation
(DEJF) seeking monetary damages on behalf of Dutch consumers is also pending; the action involves vehicles
with type EA 189 engines, among others. The trial court rendered an interlocutory judgment in March 2022
holding the new class action regime – which permits damage awards in addition to declaratory judgment on the
existence of claims – to be inapplicable to the instant lawsuit. The interlocutory judgment further finds that the
Amsterdam court lacks jurisdiction to hear lawsuits brought by consumers outside the Netherlands. The DJEF
filed what was originally a comprehensive appeal against this judgment, but limited its appeal in the reporting
year solely to the issue of the applicability of the new class action regime; hence the court’s decision that it lacks
jurisdiction to hear lawsuits brought by consumers outside the Netherlands is final and binding. The court
suspended further trial level proceedings pending a decision by the appellate court.
In Portugal, a Portuguese consumer organization had filed an opt-out class action potentially affecting up to
approximately 70 thousand vehicles with type EA 189 engines. In July 2023, the Supreme Court dismissed the
class action as inadmissible because the plaintiff consumer organization lacked standing to sue. The judgment
became final in September 2023.
In South Africa, an opt-out class action seeking damages is pending; the action pertains to some 80 thou-
sand vehicles, including vehicles with type EA 189 engines.
Furthermore, individual lawsuits and similar proceedings are pending against Volkswagen AG and other
Volkswagen Group companies in various countries; most of these lawsuits are seeking damages or rescission of
the purchase contract.
In Germany, roughly 25 thousand individual lawsuits relating to various diesel engine types are currently
pending against Volkswagen AG or other Group companies, with the plaintiffs suing for damages or rescission of
the contract in most cases.
In 2020, the BGH issued a series of fundamental judgments deciding legal issues of major importance for the
litigation still pending with regard to vehicles with type EA 189 engines. The BGH held that buyers who had
purchased vehicles prior to public disclosure of the diesel issue could return their vehicles to Volkswagen AG and
receive a refund of the purchase price paid, less a deduction for the benefit derived from using the vehicle. How-
ever, buyers had no tort-based claim for damages if they purchased their vehicles after the ad hoc announce-
ment of September 22, 2015 or if they raise claims based solely on a temperature-dependent exhaust gas
recirculation (so-called thermal window) in the engine. In February 2022, the BGH issued further fundamental
judgments concerning vehicles with EA 189 motors affirming that buyers of new vehicles of the Volkswagen
brand were entitled to residual damage claims against Volkswagen AG after the knowledge-based limitation
period has expired; the BGH had previously held that purchasers of used cars lacked such claims. The BGH held
that buyers must return their vehicles in order to claim payment and that such payment was reduced by the
benefit derived from using the vehicle and by the dealer profit margin. In an additional fundamental judgment
rendered in July 2022 concerning vehicles with EA 189 engines, the BGH held that buyers of new vehicles of
other Group brands have no claim for residual damages against Volkswagen AG.
In late June 2023, the BGH handed down judgments in lawsuits against Volkswagen AG and AUDI AG posing
the issue as to how the case law of the ECJ on the potential claims of buyers under European type approval law
251
should be implemented in German law. The BGH held that the negligent use of an impermissible defeat device
may in principle entitle plaintiffs to differential damages in tort amounting to 5% to 15% of their vehicle’s pur-
chase price. Whether this claim is given in a particular instance is for the appeals courts to determine. The BGH
stated that, when deciding whether a deactivation device was impermissible, it did not matter whether the limits
in the NEDC testing procedure would be complied with even when system functioning was modified. The BGH
held that liability does not arise where the manufacturer is not at fault, e.g. because the relevant public authority
had approved the deactivation device in its specific configuration and taking account of identified combinations
of deactivation devices, or would have done so upon request. Where a claim for differential damages exists in
principle, the buyer must furthermore accept an offset for the benefit derived from using the vehicle and for the
vehicle’s value to the extent these exceed the vehicle’s diminished value. An implemented software update may
also potentially mitigate damages.
Volkswagen estimates the likelihood that the plaintiffs will prevail to be 50% or less in the great majority of
cases: customer class actions, complaints filed by consumer and/or environmental organizations, and individual
lawsuits. Contingent liabilities are disclosed for these proceedings where the amount of such liabilities can be
measured and the chance that the plaintiff will prevail was assessed as not remote. Given the early stage of the
proceedings, it is in some cases not yet possible to quantify the realistic risk exposure. Furthermore, provisions
were recognized to the extent necessary based on the current assessment.
At this time, it cannot be estimated how many customers will choose to file lawsuits in the future in addition
to those already pending and what prospect of success such lawsuits might have.
3. Lawsuits filed by investors worldwide (excluding the USA/Canada)

Investors from Germany and abroad have filed claims for damages against Volkswagen AG – in some cases
along with Porsche Automobil Holding SE (Porsche SE) as joint and several debtors – based on purported losses
due to alleged misconduct in capital market communications in connection with the diesel issue.
Almost all investor lawsuits are now pending before the Braunschweig Regional Court or the Braunschweig
Higher Regional Court. In August 2016, the Braunschweig Regional Court issued an order referring common
questions of law and fact relevant to the investor lawsuits pending in Braunschweig to the Higher Regional Court
in Braunschweig for binding declaratory rulings pursuant to the Kapitalanleger-Musterverfahrensgesetz
(KapMuG – German Capital Investor Model Declaratory Judgment Act). The investor lawsuits pending against
Volkswagen AG in Germany are stayed pending resolution of the common issues, unless the cases can be
dismissed for reasons independent of the common issues that are to be adjudicated in the model case pro-
ceedings. The resolution in the model case proceedings of the common questions of law and fact will be binding
for the pending cases that have been stayed as described. The model case plaintiff is Deka Investment GmbH.
Oral argument in the model case proceedings before the Braunschweig Higher Regional Court began in
September 2018. The Braunschweig Higher Regional Court issued several notification rulings stating its position
on certain legal issues of fundamental importance for the litigation. In July 2023, the Braunschweig Higher
Regional Court issued an order for the taking of evidence including the examination of numerous persons as well
as the production and consultation of documents and records. The mandated taking of evidence focuses initially
on whether the Board of Management of Volkswagen AG or individual members thereof and/or individual
members of Volkswagen AG’s Ad Hoc Disclosure Clearing Office (the persons with ad hoc disclosure respon-
sibility in the court’s view) had or, as Volkswagen AG’s state of knowledge indicates, lacked knowledge of the
installation of deactivation devices prohibited under US law in Volkswagen AG vehicles, as well as on the
conceptions of these persons regarding the potential share price impact of the information that each respec-
tively possessed. Volkswagen AG has the burden of proof on some issues. The taking of testimony commenced
in September 2023. To date, none of the witnesses examined has testified to having personal knowledge or to
knowledge on the part of persons with ad hoc disclosure responsibility. Several witnesses invoked a privilege
against giving testimony. In some cases (not as to persons with ad hoc disclosure responsibility), the Braun-
schweig Higher Regional Court affirmed a comprehensive right to refuse to testify. The implications of the refusal
to testify given Volkswagen AG’s burden of proof cannot be assessed abstractly. Pursuant to § 286 of the Code
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of Civil Procedure, the Braunschweig Higher Regional Court must decide at its discretion and conviction, taking
account of the entire content of the hearings and the results of the evidence taken.
Further investor lawsuits are pending before the Stuttgart Regional Court against Volkswagen AG, in some
cases along with Porsche SE as joint and several debtor. An additional investor action for model declaratory
judgment was filed with the Stuttgart Higher Regional Court against Porsche SE; Volkswagen AG is involved in
this action as a third party intervening in support of a party to the dispute. The Wolverhampton City Council,
Administrating Authority for the West Midlands Metropolitan Authorities Pension Fund, was appointed model
case plaintiff. The Stuttgart Higher Regional Court rendered a model declaratory judgment in late March 2023.
Based on the determinations made in the model declaratory judgment and the current substantive status of the
underlying actions, all of the suspended investor lawsuits against Porsche SE would in effect have to be dis-
missed. The model declaratory judgment is not yet final. The model case plaintiff, several interested parties
summoned, and Porsche SE petitioned the BGH for review on points of law. Volkswagen AG joined the pro-
ceedings as a third-party supporting the petition for review of Porsche SE.
Excluding the United States and Canada, claims in connection with the diesel issue totaling roughly €9.2 bil-
lion are currently pending worldwide against Volkswagen AG in the form of investor lawsuits, judicial appli-
cations for dunning and conciliation procedures, and claims under the KapMuG. To date, claims in the high triple-
digit-millions range have been withdrawn or finally and conclusively dismissed. Volkswagen AG remains of the
opinion that it duly complied with its capital market obligations. Therefore, no provisions have been recognized
for these investor lawsuits. Contingent liabilities have been disclosed where the chance of success was
estimated to be not less than 10%.
4. Proceedings in the USA/Canada

In the USA and Canada, the matters described in the EPA’s “Notices of Violation” are the subject of various types
of lawsuits and requests for information that have been filed against Volkswagen AG and other Volkswagen
Group companies, in particular by customers, investors, and various government agencies in the United States
and Canada.
In November 2023, Volkswagen reached a settlement agreement resolving the environmental claims brought
by the Attorney General of the State of Texas and various Texas municipalities against Volkswagen AG, Volks-
wagen Group of America, Inc., and certain affiliates. The settlement agreement became final in January 2024
after it was approved by the court. In November 2023, Volkswagen also finalized a settlement agreement
resolving the environmental claims brought by two municipalities (Hillsborough County/Florida and Salt Lake
County/Utah) against Volkswagen Group of America, Inc. and certain affiliates.
In March 2019, the US Securities and Exchange Commission (SEC) filed a lawsuit against, among others,
Volkswagen AG, Volkswagen Group of America Finance, LLC, and VW Credit, Inc., asserting claims under US
federal securities law based, among other things, on alleged misstatements and omissions in connection with
the offer and sale of certain bonds and asset-backed securities. In August 2020, the US District Court for the
Northern District of California dismissed, among other things, all claims against VW Credit, Inc. relating to asset-
backed securities. In September 2020, the SEC filed an amended complaint that, among other things, removed
the dismissed claims.
In line with IAS 37.92, no statements have been made concerning estimates of financial impact or regarding
uncertainty as to the amount or maturity of provisions and contingent liabilities in relation to proceedings in the
USA/Canada. This is so as to not compromise the results of the proceedings or the interests of the Company.
5. Special audit
In a November 2017 ruling, the Higher Regional Court of Celle ordered, upon the request of three US funds, the
appointment of a special auditor for Volkswagen AG. The special auditor was supposed to examine whether the
members of the Board of Management and Supervisory Board of Volkswagen AG breached their duties in con-
nection with the diesel issue from June 22, 2006 onwards and, if so, whether this resulted in damages for
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Volkswagen AG. Volkswagen AG had filed a constitutional complaint with the German Federal Constitutional
Court against this decision, which was originally unappealable as formal matter. Volkswagen AG also filed a con-
stitutional complaint against the subsequent (and likewise formally unappealable) decision by the Higher
Regional Court of Celle to appoint a special auditor other than the one initially appointed. Following November
2022 rulings by the Federal Constitutional Court that upheld both of the constitutional complaints and
remanded the cases to the Celle Higher Regional Court, the Higher Regional Court directed that extensive evi-
dence be taken in the case concerning the order for a special audit. Proceedings in the case concerning the
replacement of the special auditor were suspended until the completion of the taking of evidence. Volks-
wagen AG had in addition previously filed an action before the Braunschweig Regional Court seeking to enjoin
the special auditor from performing the audit as long as he had not furnished sufficient proof of his inde-
pendence. The Braunschweig Regional Court dismissed the action for injunctive relief in the summer of 2022;
Volkswagen AG then appealed this decision to the Braunschweig Higher Regional Court.
A second motion seeking appointment of a special auditor for Volkswagen AG to examine matters relating to
the diesel issue was filed with the Regional Court of Hanover. The proceedings in this matter were resumed after
initially being stayed pending the decision of the Federal Constitutional Court in the first special audit case.
6. Risk assessment regarding the diesel issue

An amount of around €0.9 (1.4) billion has been included in the provisions for litigation and legal risks as of
December 31, 2023 to account for the currently known legal risks related to the diesel issue based on the
presently available information and the current assessments. Where adequately measurable at this stage, con-
tingent liabilities relating to the diesel issue have been disclosed in the notes in an aggregate amount of
€4.0 (4.2) billion, whereby roughly €3.8 (3.6) billion of this amount results from lawsuits filed by investors in
Germany. The provisions recognized, the contingent liabilities disclosed, and the other latent legal risks in the
context of the diesel issue are in part subject to substantial estimation risks given the complexity of the indi-
vidual relevant factors, the ongoing coordination with the authorities, and the fact that the fact-finding efforts
have not yet been concluded. Should these legal or estimation risks materialize, this could result in further sub-
stantial financial charges. In particular, adjustment of the provisions recognized in light of knowledge acquired or
events occurring in the future cannot be ruled out.
In line with IAS 37.92, no further statements have been made concerning estimates of financial impact or
regarding uncertainty as to the amount or maturity of provisions and contingent liabilities in relation to the diesel
issue. This is so as to not compromise the results of the proceedings or the interests of the Company.
Additional important legal cases

In 2011, ARFB Anlegerschutz UG (haftungsbeschränkt) filed a claim for damages against Volkswagen AG and
Porsche SE for allegedly violating disclosure requirements under capital market law in connection with the
acquisition of ordinary shares in Volkswagen AG by Porsche SE in 2008. The damages being sought based on
allegedly assigned rights currently amount to approximately €2.26 billion. In late September 2022 the 1st Anti-
trust Chamber of the Higher Regional Court of Celle issued a model case ruling by which all of the plaintiffs'
objects of declaratory judgment were either dismissed or declared to be irrelevant. The legal positions of the
model case defendants were thus upheld in their entirety. Two appeals alleging error of law in the model case
ruling have been received, one of which is also directed against Volkswagen AG.
In Brazil, the Brazilian tax authorities commenced tax proceedings against Volkswagen Truck & Bus (formerly:
MAN Latin America); at issue in these proceedings are the tax consequences of the acquisition structure chosen
for Volkswagen Truck & Bus in 2009. In December 2017, an adverse administrative appeal ruling was rendered
against Volkswagen Truck & Bus. Volkswagen Truck & Bus challenged this ruling before the regular court in 2018.
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Estimation of the risk in the event the tax authorities prevail on all points is subject to uncertainty because of
differences in the amount of penalties and interest that might then apply under Brazilian law. However, a positive
outcome for Volkswagen Truck & Bus remains the expectation. Should this not occur, a risk of about BRL 3.4 bil-
lion could result for the contested period from 2009 onwards; this amount has been included in contingent
liabilities in the notes.
After Volkswagen do Brasil had successfully brought an action in the Brazilian courts against what was held to
constitute unconstitutional double taxation of vehicles on the part of the Brazilian federal government, Volks-
wagen do Brasil received a refund of the excess amount paid from the state of Brazil. In December 2023, the
Brazilian dealership association Associação Brasileira Dos Distribuidores Volkswagen (Assobrav) and individual
dealers, among others, filed lawsuits against Volkswagen do Brasil alleging that the dealers were at least
partially entitled to the refunded amount. Eight such actions are pending. The lawsuit brought by Assobrav with
a provisionally estimated amount in dispute of roughly BRL 2.4 billion is by far the largest of these actions. In
January 2024, the court dismissed the dealership association’s lawsuit in its entirety. Assobrav can appeal the
dismissal; the judgment is not yet final.
In 2011, the European Commission conducted searches at European truck manufacturers for suspected unlawful
exchange of information during the period from 1997 to 2011; in November 2014, the Commission issued a
statement of objections to MAN, Scania, and the other truck manufacturers concerned. In its settlement decision
of July 2016, the European Commission assessed fines against five European truck manufacturers. MAN’s fine
was waived in full as the company had informed the European Commission about the irregularities as a key
witness. In September 2017, the European Commission fined Scania €0.88 billion. In a judgment rendered in
February 2022, the European General Court (Court of First Instance) rejected in its entirety the appeal filed by
Scania in this connection. Scania’s April 2022 appeal against this judgment was rejected in full by the European
Court of Justice, the court of last resort, in February 2024. Furthermore, antitrust lawsuits seeking damages have
been received from customers. As is the case in any antitrust proceedings, this may result in further lawsuits for
damages. No provisions have been recognized for a large number of these legal disputes as they are not
expected to result in final damage awards at the highest appeals level. For those actions in which, after re-
assessing the risks, the final outcome at the highest appeals level appears more likely than not to result in the
payment of damages by MAN or Scania, provisions have been recognized in an amount of €89 million. Contin-
gent liabilities have not been disclosed as their quantification is not currently possible. This applies in particular
to the proceedings that are currently in an early stage – including those as to which the process of expert
assessment is still in an early stage.
In July 2021, the European Commission assessed a fine totaling roughly €502 million against Volks-
wagen AG, AUDI AG, and Dr. Ing. h.c. F. Porsche AG pursuant to a settlement decision. Volkswagen declined to
file an appeal, hence the decision became final in 2021. The subject matter scope of the decision is limited to the
cooperation of German automobile manufacturers on individual technical questions in connection with the
development and introduction of SCR (selective catalytic reduction) systems for passenger cars that were sold in
the European Economic Area. The manufacturers are not charged with any other misconduct such as price fixing
or allocating markets and customers. Following the European Commission’s July 2021 administrative fine
decision, several class actions were filed in the United Kingdom beginning in late 2021 against Volkswagen AG,
among others. Service of the complaints is expected in the course of 2024. Neither provisions nor contingent
liabilities have been stated as a realistic estimate of risk exposure is not possible at the present stage of the
proceedings. After analyzing potential violations based on the facts of the EU case, the Korean competition
authority KFTC issued its administrative fine decision in April 2023. No fine was imposed on Volkswagen AG,
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and Porsche AG is not affected by the decision. A fine equaling just under €3 million was assessed against
AUDI AG. AUDI AG and Volkswagen AG have appealed the decision to the relevant court in Seoul/Korea. The
Turkish competition authorities, who investigated similar matters, issued a final decision in January 2022 in
which they determined anticompetitive behavior to allegedly exist, but found that it had no effect on Türkiye, for
which reason they refrained from imposing fines on the German automakers. The written grounds of the final
decision are not yet available. Volkswagen AG, AUDI AG, and Porsche AG have filed appeals. Based on com-
parable matters, the Chinese competition authority has instituted proceedings against Volkswagen AG, AUDI AG,
and Porsche AG, among others, and issued requests for information.
In March 2022, the European Commission and the Competition and Markets Authority (CMA), the English
antitrust authorities, searched the premises of various automotive manufacturers and automotive industry
organizations and/or served them with formal requests for information. In the Volkswagen Group, the investi-
gation affects Volkswagen Group UK, which was searched by the CMA, and Volkswagen AG, which has received
a Group-wide information request from the European Commission. The investigation relates to European,
Japanese, and Korean manufacturers as well as national organizations operating in such countries and the
European organization European Automobile Manufacturers' Association (ACEA), which are suspected of having
agreed from 2001/2002 to the initiation of the proceedings to avoid paying for the services of recycling com-
panies that dispose of end-of-life vehicles (ELV) (specifically passenger cars and vans up to 3.75 tons). Also
alleged is an agreement to refrain from competitive use of ELV issues, that is, not to publicize relevant recycling
data (recyclates, recyclability, recovery) for competitive purposes. The violation under investigation is alleged to
have taken place in particular in the “ACEA” Working Group Recycling and related sub-groups thereof. Volks-
wagen AG is responding to the European Commission’s information requests. Volkswagen Group UK is cooper-
ating with the CMA. In this matter, CMA furthermore issued requests for information to Volkswagen AG. In
July 2022, Volkswagen AG filed an action for judicial review challenging the CMA's requests for information in
particular because Volkswagen AG believes that they exceed the CMA's jurisdiction. In February 2023, the court
granted the claim. The CMA appealed this judgment in April 2023, and in January 2024 the appellate court ruled
in the CMA’s favor. Volkswagen AG is considering whether to appeal this decision. Concurrent therewith, Volks-
wagen AG continues to examine the possibilities for reasonable cooperation with the CMA.
In addition, a few national and international authorities initiated antitrust investigations. Volkswagen is
cooperating closely with the responsible authorities in these investigations. An assessment of the underlying
situation is not possible at this early stage.
Porsche AG has discovered potential regulatory issues relating to vehicles for various markets worldwide. There
are questions as to the permissibility of specific hardware and software components used in type approval
measurements. Differences compared with production versions may also have occurred in certain cases. Based
on the information presently available, current production is not affected, however. The issues are unrelated to
the defeat devices that were at the root of the diesel issue. A large number of the issues have already been
completed.
In November 2021, three claimants accompanied by Greenpeace filed a lawsuit against Volkswagen AG before
the Braunschweig Regional Court. Among other things, the action sought to compel Volkswagen to initially
reduce in stages and by 2029 completely cease its production and placement into the stream of commerce of
vehicles with internal combustion engines as well as to reduce greenhouse gas emissions from development,
production, and marketing (including third party vehicle use). The lawsuit further sought to compel Volkswagen
to exercise influence over Group companies, subsidiaries, and joint ventures so as to cause them to fulfill these
demands as well. In February 2023, the Braunschweig Regional Court dismissed the action as unfounded. In
addition, another action with similar requests for relief and by and large the same rationale has been filed
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against Volkswagen AG by an organic farmer with the support of Greenpeace before the Detmold Regional
Court. This action was likewise dismissed as unfounded by the Detmold Regional Court in February 2023. The
plaintiffs filed appeals against the judgments dismissing their complaints (appeals filed in March 2023 with the
Braunschweig Higher Regional Court and in April 2023 with the Hamm Higher Regional Court).
In Russia, Automobile Plant GAZ LLC (GAZ) had initially filed several judicial proceedings against Volkswagen AG
and others in the reporting year alleging damage claims totaling around RUB 44 billion. In this connection, GAZ
applied for and in some cases initially obtained protective measures relating to the shares in Volkswagen Group
Rus OOO (VGR) as well as to the movable and immovable property of VGR; the courts have since either rejected
or vacated these measures. GAZ had appealed these decisions rejecting or vacating protective measures relative
to the movable and immovable property of VGR; these appeals have since been finally and conclusively rejected.
In May 2023, Volkswagen AG completed the sale of its shares in VGR and its local subsidiaries to Art-Finance
LLC; thereby transferring title to the shares in VGR and its local subsidiaries to the buyer upon registration of the
transaction. VGR was renamed AGR LLC in June 2023. In fulfillment of a court-confirmed settlement, GAZ has
since withdrawn its complaint in the first lawsuit, thus terminating these proceedings. Volkswagen AG continues
to defend the remaining second lawsuit, in which it is the sole defendant and alleged claims of approximately
RUB 28.5 billion are at stake.
Provisions were recognized by Volkswagen Bank GmbH and Volkswagen Leasing GmbH for possible claims in
connection with financial services provided to consumers. These relate to actions involving certain features of
customer loan and leasing agreements that may toll the running of the statutory cancellation time periods.
regarding uncertainty as to the amount or maturity of provisions and contingent liabilities in relation to addi-
tional important legal cases. This is so as to not compromise the results of the proceedings or the interests of the
Company.
Tax risks
Volkswagen AG and its subsidiaries have operations worldwide and are audited by local tax authorities on an
ongoing basis. Amendments to tax laws and changes in legal precedent and their interpretation by the tax
authorities in the respective countries may lead to tax payments that differ from the estimates made in the
financial statements. Risks arise particularly from tax assessment of the cross-border supply of intragroup goods
and services. Through organizational measures, such as the implementation of an advance pricing agreement, as
well as the monitoring of transfer prices, Volkswagen constantly monitors the development of tax risks, as well
as the impact thereof on the consolidated financial statements.
Tax provisions were recognized for potential future retrospective tax payments, while other provisions were
recognized for ancillary tax payments arising in this connection.
The Volkswagen Group is aware of its social responsibility to comply with tax regulations (tax compliance)
and is committed to being a responsible and reliable taxpayer (tax governance).
The organizational principles relating to the Volkswagen Group’s tax affairs are set out in the Group’s Tax
Policy, which is reviewed annually to verify that it is up to date. This policy also contains uniform requirements for
the implementation of a Group-wide Tax Compliance Management System, which must be followed by the Group
companies and serves to monitor adherence to tax regulations. The organizational principles defined therein are
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designed to ensure that tax-related financial and regulatory as well as any resulting reputational risks can be
identified and evaluated. These risks are communicated, proactively managed and monitored, and are compre-
hensively incorporated into our risk management processes and systems.
The Board of Management has also published its tax strategy principles, which focus in particular on correct
fulfillment of tax obligations. Among other things, these principles require Group companies to conduct trans-
actions with each other at arm’s length in order to satisfy relevant OECD guidelines for multinational enterprises.
Inappropriate legal arrangements, and particularly an “aggressive” tax strategy muste be avoided.
Financial risks
For this risk category, the likelihood of occurrence is classified as high and the potential extent of damage is clas-
sified as medium. No risks with a score of more than 20 were reported for this risk category in the previous year.
The most significant risks from the QRP arise in particular from volatile foreign exchange markets.
Strategies for hedging financial risks

In the course of our business activities, financial risks may arise from changes in interest rates, exchange rates,
raw material prices, or share and fund prices – but also from unforeseeable events such as the Russia-Ukraine
conflict and the confrontations in the Middle East. Management of these financial risks and of liquidity risks is
the central responsibility of the Group Treasury department, which reduces these risks using nonderivative and
derivative financial instruments. The Board of Management is informed of the current risk situation at regular
intervals.
Interest rate risk refers to potential losses that could arise as a result of changes in market interest rates. It
occurs because of interest rate mismatches between asset and liability items in a portfolio or on the balance
sheet. We hedge interest rate risk – where appropriate in combination with currency risk – and risks arising from
fluctuations in the value of financial instruments by means of interest rate swaps, cross-currency interest rate
swaps and other interest rate contracts with generally matching amounts and maturities. The principle of
matching amounts and maturities applies to financing arrangements within the Volkswagen Group in the Auto-
motive Division. In the Financial Services Division, the risk of changes in the interest rate is managed on the basis
of limits using interest rate derivatives as part of the defined risk strategy.
Foreign currency risk is reduced in particular through natural hedging, i.e. by adapting our production
capacity at our locations around the world, establishing new production facilities in the most important currency
regions and also procuring a large percentage of components locally. We hedge the residual exchange rate risk
using hedging instruments. These mainly comprise currency forwards and currency options. We use these trans-
actions to limit the exchange rate risk associated with forecasted cash flows from operating activities, intragroup
financing and liquidity positions in currencies other than the respective functional currency, for example as a
result of restrictions on capital movements. The currency forwards and currency options can have a term of up to
ten years. We use these to hedge our principal foreign currency risks, mostly against the euro and primarily in
Australian dollars, Brazilian real, Canadian dollars, Chinese renminbi, Czech koruna, Hong Kong dollars, Hungarian
forints, Indian rupees, Japanese yen, Mexican pesos, Norwegian kroner, Polish zloty, pounds sterling, Singapore
dollars, South African rand, South Korean won, Swedish kronor, Swiss francs, Taiwan dollars and US dollars.
At year-end 2023, there were no more hedges for the Russian ruble.
The hedging of commodity prices entails risks relating to the availability of raw materials and price trends.
Particularly against the backdrop of the Russia-Ukraine conflict and the confrontations in the Middle East, we
continuously analyze potential risks arising from changes in commodity and energy prices in the market so that
immediate action can be taken whenever these arise. We limit these risks particularly by entering into forward
transactions and swaps. We have used appropriate contracts to hedge some of our requirements for com-
modities such as aluminum, coal, copper and lead over a period of up to six years. We have also entered into
258
price hedges for cobalt, lithium and coal with maximum terms of less than three years. In the case of nickel, the
strategic hedging horizon is up to ten years, although existing hedges focus particularly on the next six years.
Appropriate contracts have also been put in place to hedge prices of electricity and gas deliveries.
The precious metals platinum, palladium and rhodium have shorter hedging periods, generally amounting to
a maximum of up to three years. For selected commodities, this may also involve increases in physical invent-
tories. We have also entered into transactions for emission allowances to hedge the prices of a portion of the CO2
emissions generated beyond the free allocations as part of the European Union Emissions Trading System (EU
ETS) over the coming years.
Special funds, in which we invest surplus liquidity, entail equity price risks and fund price risks in particular.
We reduce these risks through the diversified investment of funds and through minimum values set out in the
respective investment guidelines. In addition, exchange rates are hedged when market conditions are appropri-
ate.
In the notes to the consolidated financial statements we explain our hedging policy, the hedging rules and
the default and liquidity risks, and quantify the hedging transactions mentioned. We also disclose information on
market risk within the meaning of IFRS 7 in the same section.
Risks arising from financial instruments

Channeling excess liquidity into investments and entering into derivatives contracts gives rise to counterparty
risk. Partial or complete failure by a counterparty to perform its obligation to pay interest and repay principal, for
example, would have a negative impact on the Volkswagen Group’s earnings and liquidity. We counter this risk
through our counterparty risk management, which we describe in more detail in the section entitled “Principles
and Goals of Financial Management” in the “Results of Operations, Financial Position and Net Assets” chapter.
The financial instruments held for hedging purposes give rise to both counterparty risks and balance sheet risks,
which we limit using hedge accounting.
By diversifying when selecting business partners, we work to limit the impact of a default and keep the Volks-
wagen Group solvent at all times, even in the event of a default by individual counterparties.
The use of financial instruments may result in losses if the hedging exchange rates are less favorable than the
rates achievable on the market at the maturity of the financial instrument.
Risks arising from trade receivables and from financial services are explained in more detail in the notes to
the consolidated financial statements.
Liquidity risk
Volkswagen is reliant on its ability to adequately cover its financing needs. There is a potential liquidity risk that
we will be unable to cover existing capital requirements by raising funds or unable to finance the Group on
reasonable terms, which in turn can have a substantially negative impact on Volkswagen’s business position,
earnings, financial position and net assets.
In principle, the Automotive Division and Financial Services Division refinance themselves independently of
one another. However, they are subject to very similar refinancing risks. In the Automotive Division, the Com-
pany’s solvency is primarily safeguarded through retained, non-distributed earnings, by drawing down on credit
lines and by issuing financial instruments on the money and capital markets. The capital requirements of the
financial services business are covered mainly by raising funds in the national and international financial mar-
kets, as well as through customer deposits from the direct banking business.
One of the ways in which Volkswagen finances its projects is with loans provided by national development
banks such as Kreditanstalt für Wiederaufbau (KfW) or Banco Nacional de Desenvolvimento Econômico e Social
(BNDES), or by supranational development banks.
259
In addition to fully committed credit lines, uncommitted credit lines from commercial banks supplement our
broadly diversified refinancing structure.
Financing opportunities can be hindered by worsening financial and general market conditions – also as a
consequence of geopolitical tensions and conflicts such as the Russia-Ukraine conflict or the confrontations in
the Middle East – and by a worsening credit profile and outlook or a downgrade or withdrawal of the credit
rating. The increasing relevance of ESG ratings to investors is also of growing significance in this context. In such
cases, there is a risk of a fall in demand from market participants for securities issued by Volkswagen, which may
additionally have a detrimental effect on the interest rates payable and restrict access to the capital market.
Risks and opportunities in the financial services business

While carrying out our financial services activities, we are primarily exposed to residual value risks and credit
risks.
A residual value risk arises when the expected fair value for the disposal of the lease or finance asset may be
lower than the residual value set at contract conclusion. However, there is also a possibility that disposal of the
asset will generate more income than calculated for the residual value.
Referring to the bearer of residual value risk, a distinction is made between direct and indirect residual value
risks. A direct residual value risk means that our financial services companies directly bear this risk (as outlined
in the contract). An indirect residual value risk occurs when, based on a residual value guarantee, the residual
value risk has passed to a third party, such as a dealer. In such cases, there is an initial counterparty default risk
associated with this third party (the residual value guarantor). If the guarantor defaults, the residual value risk
passes to our financial services companies.
Management of the residual value risk is based on a defined control cycle, which ensures that risks are fully
assessed, monitored, responded to and communicated. This process structure enables us to manage residual
risks professionally and also to systematically improve and enhance the way we handle residual value risks.
As part of our risk management efforts, the appropriateness of the risk provision is assessed regularly, as is
the residual value risk potential. In the process, we compare the contractually agreed residual values with the
obtainable fair values. These are determined utilizing data from external service providers and our own mar-
keting data. We do not take possible gains on residual market values into account when recognizing risk pro-
visions. Based on the resulting potential residual value risk, a variety of measures are initiated in order to limit
this risk. With regard to new business, the residual value recommendation must take into account current market
circumstances and factors that might have an influence in future.
Credit risk describes the risk of losses due to defaults in customer transactions, specifically by the borrower
or lessee. Default occurs when the borrower or lessee is unable or unwilling to make the payments due. This
includes late or partial payment of interest and principal on the part of the contracting party.
Credit checks on borrowers are the primary basis for lending decisions. Rating and scoring systems are used
to provide an objective decision-making basis for granting loans and leases and for recognizing risk provisions.
An opportunity may arise if the losses from the lending and leasing business are lower than the previously
calculated expected losses and the risk provision recognized on this basis. Particularly in those countries in
which we take a conservative approach to risk due to the uncertain economic situation, the realized losses may
be lower than the expected losses if the economy stabilizes and borrowers’ credit ratings improve as a result.
Risks are managed and monitored within the framework of corresponding processes relating to economic
circumstances and collateral, adherence to limits, contractual obligations, and conditions stipulated both by
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outside parties and the company itself. As such, commitments are managed according to the degree of risk
involved (standard, intensified and problem loan management).
More information on risks in the financial services business can be found in the 2023 annual reports of Volks-
wagen Financial Services AG and Volkswagen Bank GmbH.
Opportunities and risks from mergers & acquisitions and/or other strategic
partnerships/investments
No risks with a score of 20 or more were reported for this risk category in the reporting year.
Opportunities and risks from partnerships

As part of our NEW AUTO strategy, we are stepping up our efforts to forge partnerships, both for the transforma-
tion of our core business and for the establishment of the new mobility solutions business.
In the field of battery cells, risks could arise from potential disagreement with our partners, possible delays in
battery cell development or delayed battery cell production.
Close interaction with partners in the field of e-mobility in the form of partnerships and joint ventures sup-
ports technological change. Examples include the development of a comprehensive charging infrastructure. This
cooperation involves risks such as an increased coordination workload, more complex decision-making proces-
ses and the loss of expertise. At the same time, opportunities are presented by the pooling of specialist knowl-
edge, by horizontal and vertical integration and by better use of resources. Volkswagen has therefore created
various teams in Group Components to closely support all such partnerships.
The marketing of the Modular Electric Drive Toolkit to third parties, for example as part of the strategic alli-
ance with Ford, could result in damage claims in the event of problems with procurement, production and quality.
We are concentrating to a greater extent on partnerships, acquisitions, and venture capital investments. Our
intent here is to generate maximum value for the Group and its brands and to enable us to expand our expertise,
particularly in new areas of business. Our innovative presence in the markets supports this process. We enter
into partnerships at a local level to help us identify regional customer needs more accurately, establish
competitive cost structures and thus develop and offer market-driven products. At the same time, partnerships
are associated with the risk that the interests of our business partners might differ from our own or that common
goals cannot be reached. Furthermore, specific risks and expenses may arise from the provision of data and sys-
tems in new development partnerships in a way that meets the requirements of the relevant jurisdictions (e.g.
national data protection law) and roles (e.g. the need-to-know principle of the Volkswagen Group). To mitigate
the aforementioned risks, development partnerships receive not only technical support but also assistance on
legal and IT-related aspects.
Volkswagen owns a large number of patents and other industrial property rights and copyrights. Patent and
licensing infringements may also arise in partnerships and thus result in the unauthorized disclosure of com-
pany-specific expertise. Volkswagen monitors the sales markets and also protects its expertise with legal action.
Risks arising from the recoverability of goodwill or brand names and from equity investments
For the goodwill recognized in the financial statements and for brand names, as well as for equity investments,
there is a risk that the carrying amount of goodwill may be higher than the recoverable amount and that an
impairment loss must therefore be recognized. Volkswagen tests at least once a year on the basis of underlying
cash-generating units, whether the value of the goodwill or the brand names could have been impaired. We also
regularly test the equity investments for impairment. The possible consequences of climate change and future
regulatory requirements, especially where associated with the transformation of our business towards e-
mobility, and the potential effects of these, are taken into account in our medium-term planning and thus in the
261
calculation of future cash flows, including in impairment tests. If there are objective indications that the
recoverable amount of the asset concerned is lower than the carrying amount, Volkswagen recognizes this as a
non-cash impairment. An impairment can be caused, for example, by an increase in interest rates or deteriorating
business prospects.
Risks from the disposal of equity investments

An unexpected need for funding may lead to a situation in which assets have to be sold for a lower amount not
equivalent to their value.
OVERALL ASSESSMENT OF THE RISK AND OPPORTUNITY POSITION

The Volkswagen Group’s overall risk and opportunity position results from the specific risks and opportunities
shown above. We have established a comprehensive risk management system to ensure that these risks are
controlled. The most significant risks to the Volkswagen Group across all risk categories arise from a negative
trend in markets and unit sales, with regard to quality and cybersecurity, and from an inability to develop prod-
ucts in line with demand and requirements, especially in view of e-mobility and digitalization. The Volkswagen
Group continues to be exposed to risks from the diesel issue. In 2024, an adverse effect may result from the
continued limited availability of parts, energy and other raw materials, as well as from geopolitical tensions and
conflicts, including from the Russia-Ukraine conflict and the confrontations in the Middle East. Taking into
account all the information known to us at present, no risks exist which could pose a threat to the continued
existence of significant Group companies or the Volkswagen Group.
This annual report contains forward-looking statements on the business development of the Volkswagen Group. These statements are based on assumptions relating to the development
of the economic, political and legal environment in individual countries, economic regions and markets, and in particular for the automotive industry, which we have made on the basis of
the information available to us and which we consider to be realistic at the time of going to press. The estimates given entail a degree of risk, and actual developments may differ from
those forecast. Any changes in significant parameters relating to our key sales markets, or any significant shifts in exchange rates, energy and other commodities or the supply of parts
relevant to the Volkswagen Group will have a corresponding effect on the development of our business. In addition, there may be departures from our expected business development if
the assessments of the factors influencing sustainable value enhancement and of risks and opportunities presented in this annual report develop in a way other than we are currently
expecting, or if additional risks and opportunities or other factors emerge that affect the development of our business.
262
Group Management Report Outlook for 2024
Outlook for 2024
tive monetary policy measures taken by central banks are expected to dampen consumer demand. We continue
to believe that risks will arise from protectionist tendencies, turbulence in the financial markets and structural
deficits in individual countries. In addition, continuing geopolitical tensions and conflicts are weighing on
growth prospects; risks are associated in particular with the Russia-Ukraine conflict and the confrontations in
The trend in the automotive industry closely follows global economic developments. We assume that com-
petition in the international automotive markets will intensify further. Crisis-related disruption to the global
supply chain and the resulting impact on vehicle availability may weigh on the volume of new registrations.
Uncertainty may also arise from shortages of intermediates and commodities. These may be further exacerbated
by the consequences of the Russia-Ukraine conflict and the confrontations in the Middle East and may, in partic-
ular, lead to rising prices for materials and a declining availability of energy.
We predict that trends in the markets for passenger cars in the individual regions will be mixed but predomi-
nantly positive in 2024. Overall, the global volume of new car sales is expected to be slightly higher than in the
previous year. For 2024, we anticipate that the volume of new passenger car registrations in Western Europe will
be slightly higher than that recorded in the reporting year. In the German passenger car market, we expect the
volume of new registrations in 2024 to also be slightly up on the prior-year level. Sales of passenger cars in 2024
are expected to significantly exceed the prior-year figures overall in markets in Central and Eastern Europe
– subject to the further development of the Russia-Ukraine conflict. The volume of sales in the markets for pas-
senger cars and light commercial vehicles (up to 6.35 tonnes) in North America in 2024 is forecast to be slightly
higher than the level seen the previous year. We also anticipate a slight increase in new registrations in the South
American markets in 2024 compared with the previous year. Likewise, the passenger car markets in the Asia-
Pacific region are expected to be slightly up on the prior-year level in 2024.
expect the sales volume for 2024 to be slightly above the previous year’s figure.
263
Group Management Report Outlook for 2024
the Volkswagen Group, with variations from region to region. A noticeable year-on-year increase in demand is
anticipated for 2024 in the bus markets relevant for the Volkswagen Group, whereby this will vary depending on
the region.
We assume that automotive financial services will prove highly important to global vehicle sales in 2024.
In a challenging market environment, we anticipate that deliveries to customers by the Volkswagen Group in
2024 will increase by up to 3% compared to the previous year.
Challenges will arise in particular from the economic situation, the increasing intensity of competition,
volatile commodity, energy and foreign exchange markets, and more stringent emissions-related requirements.
We expect the sales revenue of the Volkswagen Group and the Passenger Cars Business Area to exceed the
previous year’s figure by up to 5% in 2024. The operating return on sales for the Volkswagen Group and the Pas-
senger Cars Business Area is likely to be between 7.0% and 7.5%. For the Commercial Vehicles Business Area, we
anticipate an operating return on sales of 8.5% to 9.5%, also amid a year-on-year increase of up to 5% in sales
revenue. In the Power Engineering Business Area, we expect sales revenue to be up to 2% above the prior-year
figure and operating profit to be in the low three-digit-million euro range. For the Financial Services Division, we
forecast an increase of 3–7% in sales revenue compared with the prior year and an operating result in the range
of €4.0 billion.
In the Automotive Division, we are assuming an investment ratio of between 13.5% and 14.5% in 2024. We
expect net cash flow in 2024 to be between €4.5 billion and €6.5 billion. This will include in particular invest-
ments for the future and cash outflows from mergers and acquisitions for the battery business field, which are a
vital pillar of the Volkswagen Group’s transformation. Net liquidity in the Automotive Division in 2024 is expected
to be between €39 billion and €41 billion. Our goal remains unchanged, namely, to continue with our robust
financing and liquidity policy.
Wolfsburg, February 20, 2024

The Board of Management
264
Consolidated Financial
S tatements
267 Income Statement
268 Statement of Comprehensive Income
270 Balance Sheet
272 Statement of Changes in Equity
273 Cash flow statement
274 Notes
442 Responsibility Statement


Consolidated Financial Statements
267 Income Statement 333 22. Marketable securities and time deposits
268 Statement of Comprehensive Income 333 23. Cash and cash equivalents
270 Balance Sheet 334 24. Equity
272 Statement of Changes in Equity 336 25. Noncurrent and current financial liabilities
273 Cash flow statement 337 26. Noncurrent and current other
financial liabilities
Notes
338 27. Noncurrent and current other liabilities
274 Basis of presentation 338 28. Tax liabilities
274 Effects of new and amended IFRSs 339 29. P
rovisions for pensions and other
276 New and amended IFRSs not applied post-employment benefits
277 Key events 346 30. Noncurrent and current other provisions
284 Effects of climate change 347 31. Trade payables
285 Basis of consolidation 348 Other disclosures
297 Currency translation 348 32. IAS 23 (Borrowing costs)
298 Accounting policies 348 33. IFRS 16 (Leases)
309 Segment reporting 353 34. IFRS 7 (Financial instruments)
312 Income statement disclosures 366 35. Cash flow statement
312 1. Sales revenue 368 36. Financial risk management and financial
313 2. Cost of sales instruments
313 3. Distribution expenses 393 37. Capital management
313 4. Administrative expenses 395 38. Contingent liabilities
314 5. Other operating income 396 39. Litigation
315 6. Other operating expenses 409 40. Other financial obligations
315 7. S
hare of the result of equity-accounted 410 41. Total fee of the Group auditor
investments 410 42. Personnel expenses
316 8. Interest result 411 43. A
verage number of employees during
316 9. Other financial result the year
317 10. Income tax income/expense 411 44. Events after the balance sheet date
321 11. Earnings per share 412 45. R
emuneration based on performance shares
322 Balance sheet disclosures 414 46. R
elated party disclosures in accordance
322 12. Intangible assets with IAS 24
325 13. Property, plant and equipment 419 47. N
otices and disclosure of changes
327 14. Lease assets and investment property regarding the ownership of voting rights
328 15. Equity-accounted investments and other in Volkswagen AG in accordance with the
equity investments Wertpapierhandelsgesetz (WpHG – German
330 16. N
oncurrent and current financial services securities trading act)
receivables 441 48. G
erman Corporate Governance Code
330 17. N
oncurrent and current other 441 49. R
emuneration of the Board of Management
financial assets and the Supervisory Board
331 18. Noncurrent and current other receivables 442 Responsibility Statement
332 19. Tax assets 443 Independent Auditor’s Report
332 20. Inventories
333 21. Trade receivables 457 Independent Auditor’s Report
Consolidated Financial Statements Income Statement
Income Statement
of the Volkswagen Group for the period January 1 to December 31, 2023
€ million Note 2023 2022¹
Sales revenue 1 322,284 279,050

Cost of sales 2 –261,262 –226,866
Gross result 61,022 52,184
Distribution expenses 3 –21,340 –19,840
Administrative expenses 4 –12,724 –11,655
Other operating income 5 15,152 19,234
Other operating expenses 6 –19,534 –17,813
Share of the result of equity-accounted investments 7 2,291 2,403
Interest income 8 2,658 1,325
Interest expenses 8 –3,592 –408
Other financial result 9 –739 –3,359
Financial result 618 –40
Earnings before tax 23,194 22,070
Income tax income/expense 10 –5,266 –6,217
Current –6,791 –5,263
Deferred 1,526 –954
of which attributable to
Noncontrolling interests 1,329 395
Volkswagen AG hybrid capital investors 586 576
Volkswagen AG shareholders 16,013 14,881
Basic/diluted earnings per ordinary share in € 11 31.92 29.66

Basic/diluted earnings per preferred share in € 11 31.98 29.72
1 Prior-year figures adjusted (see disclosures on IFRS 17 in the “Effects of new and amended IFRSs” section).
267
Consolidated Financial Statements Statement of Comprehensive Income
Statement of Comprehensive
Income
Changes in comprehensive income for the period January 1 to December 31, 2023
Income
Income attributable to Income
attributable to Volkswagen AG attributable to
Volkswagen AG hybrid capital noncontrolling
€ million Total shareholders investors interests
Earnings after tax 17,928 16,013 586 1,329

Pension plan remeasurements recognized in other comprehensive income
Pension plan remeasurements recognized in other comprehensive income, before
tax –1,871 –1,763 – –107
Deferred taxes relating to pension plan remeasurements recognized in other com-
prehensive income 642 610 – 32
Pension plan remeasurements recognized in other comprehensive income, net of tax –1,229 –1,153 – –76
Fair value valuation of equity instruments that will not be reclassified to profit or
loss
loss, before tax –96 –97 – 1
Deferred taxes relating to fair value valuation of equity instruments that will not be
reclassified to profit or loss 22 23 – 0
Fair Value valuation of equity instruments that will not be reclassified to profit or
loss, net of tax –73 –74 – 1
Share of other comprehensive income of equity-accounted investments that will not
be reclassified to profit or loss, net of tax –7 –7 – 0
Items that will not be reclassified to profit or loss –1,309 –1,234 – –74
Exchange differences on translating foreign operations
Gains/losses on currency translation recognized in other comprehensive income –1,653 –1,556 – –97
Transferred to profit or loss 395 395 – –
Exchange differences on translating foreign operations, before tax –1,258 –1,160 – –97
Deferred taxes relating to exchange differences on translating foreign operations –3 –3 – –
Exchange differences on translating foreign operations, net of tax –1,260 –1,163 – –97
Hedging
Fair value changes recognized in other comprehensive income (OCI I) 747 428 – 320
Transferred to profit or loss or inventories (OCI I) –748 –674 – –75
Cash flow hedges (OCI I), before tax –1 –246 – 245
Deferred taxes relating to cash flow hedges (OCI I) 20 95 – –75
Cash flow hedges (OCI I), net of tax 19 –151 – 170
Fair value changes recognized in other comprehensive income (OCI II) –404 –359 – –45
Transferred to profit or loss or inventories (OCI II) 1,055 915 – 140
Cash flow hedges (OCI II), before tax 651 556 – 95
Deferred taxes relating to cash flow hedges (OCI II) –184 –155 – –29
Cash flow hedges (OCI II), net of tax 467 401 – 66
Fair value valuation of debt instruments that may be reclassified to profit or loss
Fair value changes recognized in other comprehensive income 176 176 – –
Transferred to profit or loss –6 –6 – –
Fair value valuation of debt instruments that may be reclassified to profit or loss,
before tax 170 170 – –
Deferred taxes relating to fair value valuation of debt instruments recognized in
other comprehensive income –44 –44 – –
Fair value valuation of debt instruments that may be reclassified to profit or loss, net
of tax 126 126 – –
Share of other comprehensive income of equity-accounted investments that may be
reclassified to profit or loss, net of tax –382 –381 – –1
Items that may be reclassified to profit or loss –1,030 –1,168 – 138
Other comprehensive income, before tax –2,792 –2,929 – 136
Deferred taxes relating to other comprehensive income 454 526 – –73
Other comprehensive income, net of tax –2,339 –2,402 – 64
Total comprehensive income 15,589 13,611 586 1,393
268
Consolidated Financial Statements Statement of Comprehensive Income
Changes in comprehensive income for the period January 1 to December 31, 20221
Income
Income attributable to Income
attributable to Volkswagen AG attributable to
Volkswagen AG hybrid capital noncontrolling
€ million Total shareholders investors interests
Earnings after tax 15,852 14,881 576 395

Pension plan remeasurements recognized in other comprehensive income
Pension plan remeasurements recognized in other comprehensive income, before
tax 14,880 14,793 – 87
Deferred taxes relating to pension plan remeasurements recognized in other com-
prehensive income –4,572 –4,550 – –22
Pension plan remeasurements recognized in other comprehensive income, net of tax 10,308 10,243 – 65
loss
loss, before tax² –475 –422 – –52
Deferred taxes relating to fair value valuation of equity instruments that will not be
reclassified to profit or loss² 35 29 – 5
Fair Value valuation of equity instruments that will not be reclassified to profit or
loss, net of tax –440 –393 – –47
Share of other comprehensive income of equity-accounted investments that will not
be reclassified to profit or loss, net of tax 11 11 – 0
Items that will not be reclassified to profit or loss 9,879 9,860 – 19
Exchange differences on translating foreign operations
Gains/losses on currency translation recognized in other comprehensive income 100 256 – –156
Exchange differences on translating foreign operations, before tax 160 316 – –156
Deferred taxes relating to exchange differences on translating foreign operations 5 5 – –
Exchange differences on translating foreign operations, net of tax 164 321 – –156
Hedging
Fair value changes recognized in other comprehensive income (OCI I) 2,203 1,675 – 528
Transferred to profit or loss or inventories (OCI I) 1,094 1,045 – 48
Cash flow hedges (OCI I), before tax 3,297 2,720 – 577
Deferred taxes relating to cash flow hedges (OCI I) –976 –800 – –176
Cash flow hedges (OCI I), net of tax 2,321 1,920 – 401
Fair value changes recognized in other comprehensive income (OCI II) –2,058 –2,002 – –56
Transferred to profit or loss or inventories (OCI II) 753 730 – 22
Cash flow hedges (OCI II), before tax –1,305 –1,272 – –34
Deferred taxes relating to cash flow hedges (OCI II) 398 387 – 11
Cash flow hedges (OCI II), net of tax –908 –885 – –23
Fair value valuation of debt instruments that may be reclassified to profit or loss
Fair value changes recognized in other comprehensive income –430 –430 – –
Fair value valuation of debt instruments that may be reclassified to profit or loss,
before tax –430 –430 – –
Deferred taxes relating to fair value valuation of debt instruments recognized in
other comprehensive income 118 118 – –
Fair value valuation of debt instruments that may be reclassified to profit or loss, net
of tax –312 –312 – –
Share of other comprehensive income of equity-accounted investments that may be
reclassified to profit or loss, net of tax 314 314 – 0
Items that may be reclassified to profit or loss 1,580 1,358 – 222
Other comprehensive income, before tax 16,452 16,030 – 422
Deferred taxes relating to other comprehensive income –4,993 –4,811 – –182
Other comprehensive income, net of tax 11,459 11,218 – 241
Total comprehensive income 27,312 26,100 576 636
2 As from the first quarter of 2023, deferred taxes are reported separately. The prior-year figures were adjusted accordingly.
269
Consolidated Financial Statements Balance Sheet
Balance Sheet
of the Volkswagen Group as of December 31, 2023
€ million Note Dec. 31, 2023 Dec. 31, 2022¹
Assets
Noncurrent assets
Intangible assets 12 89,109 83,241
Property, plant and equipment 13, 33 66,880 63,890
Lease assets 14, 33 64,094 59,380
Investment property 14 632 610
Equity-accounted investments 15 12,239 12,668
Other equity investments 15 4,431 3,489
Financial services receivables 16 94,474 86,944
Other financial assets 17 11,757 13,832
Other receivables 18 2,702 2,477
Tax receivables 19 437 394
Deferred tax assets 19 13,940 12,929
360,694 339,853
Current assets
Inventories 20 53,601 52,274
Trade receivables 21 21,849 18,534
Financial services receivables 16 66,381 61,549
Other financial assets 17 16,953 15,148
Other receivables 18 8,799 7,813
Tax receivables 19 1,649 1,732
Marketable securities and time deposits 22 26,772 37,206
Cash and cash equivalents 23 43,449 29,172
Assets held for sale 190 733
239,644 224,159
Total assets 600,338 564,013
270
Consolidated Financial Statements Balance Sheet
€ million Note Dec. 31, 2023 Dec. 31, 2022¹
Equity and liabilities

Equity 24
Subscribed capital 1,283 1,283
Capital reserve 14,551 14,551
Retained earnings 147,830 137,272
Other reserves –3,125 –1,851
Equity attributable to Volkswagen AG hybrid capital investors 15,155 14,121
Equity attributable to Volkswagen AG shareholders and hybrid capital investors 175,694 165,376
Noncontrolling interests 14,218 12,952
189,912 178,328
Noncurrent liabilities
Financial liabilities 25 122,323 121,737
Other financial liabilities 26 6,968 8,188
Other liabilities 27 9,885 9,144
Deferred tax liabilities 28 9,781 10,736
Provisions for pensions 29 29,672 27,553
Provisions for taxes 28 4,287 4,320
Other provisions 30 21,636 21,283
204,552 202,961
Current liabilities
Financial liabilities 25 110,476 83,448
Trade payables 31 30,901 28,738
Tax payables 28 556 726
Other financial liabilities 26 14,022 19,807
Other liabilities 27 24,345 22,665
Provisions for taxes 28 1,663 2,586
Other provisions 30 23,881 24,596
Liabilities associated with assets held for sale 31 158
205,874 182,723
Total equity and liabilities 600,338 564,013
271
Consolidated Financial Statements Statement of Changes in Equity
Statement of Changes in Equity

OTHER RESERVES
HEDGING
Equity
Equity attributable to
attributable to Volkswagen AG
Currency Cash flow Deferred costs Equity- Volkswagen AG shareholders
Subscribed Capital Retained translation hedges of hedging Equity and debt accounted hybrid capital and hybrid Noncontrolling
€ million capital reserve earnings reserve (OCI I) (OCI II) instruments investments investors capital investors interests Total equity
Unadjusted balance at Jan. 1, 2022 1,283 14,551 117,342 –2,351 –635 –367 –355 541 14,439 144,449 1,705 146,154
Changes in accounting policy
to reflect IFRS 17 – – –11 – – – – 1 – –11 – –11
Balance at Jan. 1, 2022 1,283 14,551 117,331 –2,351 –635 –367 –355 542 14,439 144,438 1,705 146,143
Earnings after tax – – 14,881 – – – – – 576 15,457 395 15,852
Other comprehensive income, net of tax – – 10,243 321 1,920 –885 –705 325 – 11,218 241 11,459
Total comprehensive income – – 25,124 321 1,920 –885 –705 325 576 26,676 636 27,312
Disposal of equity instruments – – –58 – – – 58 – – – – –
Capital increases/Capital decreases – – – – – – – – –337 –337 103 –234
Dividends payment – – –13,327 – – – – – –557 –13,884 –257 –14,141
Capital transactions involving a change
in ownership interest – – 8,148 –226 338 174 –3 0 – 8,432 10,796 19,228
Other changes – – 54 – – – – –3 – 51 –30 21
Balance at Dec. 31, 2022¹ 1,283 14,551 137,272 –2,256 1,623 –1,077 –1,005 864 14,121 165,376 12,952 178,328
Unadjusted balance at Jan. 1, 2023 1,283 14,551 137,267 –2,256 1,623 –1,077 –1,005 870 14,121 165,378 12,950 178,327
Changes in accounting policy
to reflect IFRS 17 – – 5 – – – – –7 – –1 2 1
Balance at Jan. 1, 2023 1,283 14,551 137,272 –2,256 1,623 –1,077 –1,005 864 14,121 165,376 12,952 178,328
Earnings after tax – – 16,013 – – – – – 586 16,599 1,329 17,928
Other comprehensive income, net of tax – – –1,153 –1,163 –151 401 52 –388 – –2,402 64 –2,339
Total comprehensive income – – 14,860 –1,163 –151 401 52 –388 586 14,197 1,393 15,589
Disposal of equity instruments – – 13 – – – –13 – – – – –
Capital increases/Capital decreases – – – – – – – – 1,004 1,004 3 1,008
Dividends payment – – –4,374 – – – – – –556 –4,930 –54 –4,984
Capital transactions involving a change
in ownership interest – – –42 –11 – – – – – –54 –27 –80
Other changes – – 100 – – – – – – 100 –50 51
Balance at Dec. 31, 2023 1,283 14,551 147,830 –3,431 1,472 –676 –966 476 15,155 175,694 14,218 189,912
Explanatory notes on equity are presented in the note relating to equity.

272
Consolidated Financial Statements Cash flow Statement
Cash flow Statement

€ million 2023 2022²
Cash and cash equivalents at beginning of period 29,738 39,123

Income taxes paid –7,716 –4,416
Depreciation and amortization of, and impairment losses on, intangible assets, property, plant and equipment,
and investment property¹ 11,727 13,364
Amortization of and impairment losses on capitalized development costs¹ 5,184 5,144
Impairment losses on equity investments¹ 717 2,185
Depreciation of and impairment losses on lease assets¹ 10,655 9,977
Gain/loss on disposal of noncurrent assets and equity investments 208 30
Share of the result of equity-accounted investments 271 568
Other non-cash expense/income 3,953 –539
Change in inventories –2,071 –8,385
Change in receivables (excluding financial services) –4,361 –3,065
Change in liabilities (excluding financial liabilities) 5,272 8,713
Change in provisions 620 –2,144
Change in lease assets –14,964 –8,711
Change in financial services receivables –13,332 –6,294
Investments in intangible assets (excluding development costs), property, plant and equipment, and investment
property –14,653 –12,948
Additions to capitalized development costs –11,142 –9,723
Acquisition of subsidiaries –675 –1,122
Acquisition of other equity investments –2,041 –2,504
Disposal of subsidiaries –63 372
Disposal of other equity investments 41 35
Proceeds from disposal of intangible assets, property, plant and equipment, and investment property 501 437
Change in investments in securities and time deposits 11,273 –14,885
Change in loans –3,054 –1,483
Cash flows from investing activities –19,812 –41,822
Capital contributions/capital redemptions 1,003 –235
Dividends paid –11,732 –4,362
Capital transactions with noncontrolling interest shareholders –8 16,198
Proceeds from issuance of bonds 37,740 23,876
Repayments of bonds –32,582 –25,638
Changes in other financial liabilities 22,776 –4,366
Repayments of lease liabilities –1,190 –1,248
Cash flows from financing activities 16,008 4,225
Effect of exchange rate changes on cash and cash equivalents –1,764 –285
Change of loss allowance within cash and cash equivalents –2 1
Net change in cash and cash equivalents 13,785 –9,385
Cash and cash equivalents at end of period 43,522 29,738
Cash and cash equivalents at end of period 43,522 29,738

Securities and time deposits and loans 41,858 49,771
Gross liquidity 85,380 79,509
Total third-party borrowings –232,813 –205,312
Net liquidity –147,433 –125,803
1 Net of impairment reversals.

Explanatory notes on the cash flow statement are presented in the section relating to the cash flow statement.
273
Consolidated Financial Statements Notes
Notes
to the Consolidated Financial Statements of the Volkswagen Group
Basis of presentation
Volkswagen AG is domiciled in Wolfsburg, Germany, and entered in the commercial register at the Braunschweig
Local Court under No. HRB 100484. The fiscal year corresponds to the calendar year.
In accordance with Regulation No. 1606/2002 of the European Parliament and of the Council, Volkswagen AG
prepared its consolidated financial statements for 2023 in compliance with the International Financial Reporting
Standards (IFRSs), as adopted by the European Union. All the IFRSs adopted by the EU and required to be applied
have been complied with.
The accounting policies applied in the previous year were generally retained.
The only changes required resulted from new or amended standards.
Moreover, all the provisions of German commercial law that Volkswagen is additionally required to apply, as
well as the German Corporate Governance Code, have been complied with in the preparation of the consolidated
financial statements.
The consolidated financial statements were prepared in euros. Unless otherwise stated, all amounts are given
in millions of euros (€ million).
All figures shown are rounded, so minor discrepancies may arise from addition of these amounts.
The income statement was prepared using the internationally accepted cost of sales method.
Preparation of the consolidated financial statements in accordance with the aforementioned standards
requires management to make estimates that affect the reported amounts of certain items in the consolidated
balance sheet and in the consolidated income statement, as well as the related disclosure of contingent assets
and liabilities. The consolidated financial statements provide a true and fair view of the net assets, financial posi-
tion and results of operations as well as the cash flows of the Volkswagen Group.
The Board of Management completed preparation of the consolidated financial statements on February 20,
2024. On that date, the period ended in which adjusting events after the reporting period are recognized.
Effects of new and amended IFRSs

Volkswagen AG has applied all accounting pronouncements adopted by the EU and effective for periods begin-
ning in fiscal year 2023.
Amendments to IAS 12 have had to be applied since January 1, 2023; they result from an agreement made by
around 140 countries to implement global minimum taxation (Pillar Two). A temporary exemption from accounting
for deferred taxes was embedded in IAS 12, which applies if the deferred taxes arise from the implementation of
Pillar Two by the countries concerned. More information on Pillar Two can be found in the “Income tax income/
expense” section.
Also applicable since January 1, 2023 are amendments to IAS 12 that relate to deferred taxes on right-of-use
assets and lease liabilities as well as decommissioning and restoration liabilities. They require deferred taxes to
be recognized when the relevant assets and liabilities are initially recognized.
In addition to this, amendments were made to IAS 1 that have also been applicable since January 1, 2023.
Essentially, these amendments are aimed at making disclosures on accounting policies more company-specific
and therefore more useful for decision-making by narrowing the definition of materiality. The Volkswagen Group’s
disclosures on accounting policies have been revised against this backdrop. In particular, generally worded disclo-
sures derived from the IFRS standards have been reduced to a minimum.
274
Furthermore, amendments to IAS 8 have been in force since January 1, 2023, which provide greater clarity on the
distinction between changes in accounting policies and changes in accounting estimates.
The amendments referred to above do not materially affect the Volkswagen Group’s net assets, financial posi-
tion and results of operations.
IFRS 17 – INSURANCE CONTRACTS

IFRS 17 specifies new accounting rules for insurance contracts. The Volkswagen Group applied IFRS 17 as of
January 1, 2023 for the first time. The transition was conducted using the full retrospective approach, unless
using that approach was impracticable. This was the case when not all of the required historical information, in
particular for multiyear contracts, was available without undue cost and effort. In these instances, the
Volkswagen Group generally used the modified retrospective approach.
The Volkswagen Group mainly conducts primary insurance and reinsurance business in the warranty and repair
cost insurance class and reinsurance business in the residual debt insurance class. In addition, there are vehicle
liability insurance portfolios, although almost all of them are in the process of being wound down.
Liabilities are mainly measured using the general measurement model. The data required for this purpose is
determined using common actuarial methods, such as the chain ladder method.
The Volkswagen Group uses the bottom-up approach to calculate the discount rate. For the insurance business,
the risk-free yield curve is generally derived from overnight index swaps of the currency in which the underlying
insurance contracts have been entered into.
For contracts with the primary purpose of providing services at a fixed price (referred to as fixed-fee service
contracts), the Volkswagen Group exercises the option to present these service contracts in accordance with
IFRS 15. Similarly, for loan agreements that transfer a significant insurance risk of the borrower, the option to ac-
count for them under IFRS 9 has been exercised.
First-time application resulted in an insignificant change in equity as of January 1, 2023 and January 1, 2022,
respectively. This is due primarily to the changed methodology for calculating liabilities related to the insurance
business. In addition, netting cash flows when measuring the liabilities also led to an equal reduction of €0.7 bil-
lion in assets and liabilities related to the insurance business. The change in the methodology for recognizing
income and expenses does not have any material effect on the income statement. Prior-year figures have been
adjusted accordingly.
275
New and amended IFRSs not applied

In its 2023 consolidated financial statements, Volkswagen AG did not apply the following accounting pronounce-
ments that have been adopted by the IASB until December 31, 2023, but were not yet required to be applied for
the fiscal year.
Published by the Application Adopted by

Standard/Interpretation IASB mandatory1 the EU Expected impact
IFRS 16 Sale and leaseback transactions Sept. 22, 2022 Jan. 1, 2024 Yes No material impact
Classification of liabilities as
IAS 1 current or non-current Jan. 23, 2020 Jan. 1, 2024 Yes No material impact
Non-current liabilities with
IAS 1 Covenants Oct. 31, 2022 Jan. 1, 2024 Yes No material impact
IAS 7 /
IFRS 7 Reverse factoring agreements May 25, 2023 Jan. 1, 2024 No Additional notes disclosure
Currency translation if currency is
IAS 21 inconvertible Aug. 15, 2023 Jan. 1, 2025 No No material impact
1 Effective date from Volkswagen AG’s perspective.
276
Key events
DIESEL ISSUE
lation” that irregularities in relation to nitrogen oxide (NO x) emissions had been discovered in emissions tests on
road use had been identified in type EA 189 diesel engines and that this engine type had been installed in roughly
eleven million vehicles worldwide. On November 2, 2015, the EPA issued a “Notice of Violation” alleging that
irregularities had also been discovered in the software installed in US vehicles with type V6 3.0 l diesel engines.
The so-called diesel issue is rooted in a modification of parts of the software of the relevant engine control
units – which, according to Volkswagen AG’s legal position, is only unlawful under US law – for the type EA 189
diesel engines that Volkswagen AG was developing at that time. This software function was developed and
implemented from 2006 on without knowledge at the level of the Board of Management. Members of the Board of
Management did not learn of the development and implementation of this software function until the summer of
2015.
There are furthermore no findings that, following the publication in May 2014 of the study by the International
Council on Clean Transportation, an unlawful “defeat device” under US law was disclosed to the persons respon-
sible for preparing the 2014 annual and consolidated financial statements as the cause of the high NO x emissions
in certain US vehicles with 2.0 l type EA 189 diesel engines. Rather, at the time the 2014 annual and consolidated
financial statements were being prepared, the persons responsible for preparing these financial statements
remained under the impression that the issue could be resolved with comparatively little expense.
In the course of the summer of 2015, however, it became progressively apparent to individual members of
Volkswagen AG’s Board of Management that the cause of the discrepancies in the USA was a modification of parts
of the software of the engine control unit that was later identified as an unlawful “defeat device” as defined by US
law. This culminated in Volkswagen's disclosure of a “defeat device” to the EPA and the California Air Resources
Board (CARB), a department of the Environmental Protection Agency of the State of California, on September 3,
2015. According to the assessment at the time by the responsible persons dealing with the matter, the magnitude
of the costs expected to result for the Volkswagen Group (recall costs, retrofitting costs, and financial penalties)
was not fundamentally dissimilar to that in previous cases involving other vehicle manufacturers. It therefore
appeared to be manageable overall considering the business activities of the Volkswagen Group. This assessment
by Volkswagen AG was based, among other things, on the advice of a law firm engaged in the USA for regulatory
approval issues, according to which similar cases had in the past been amicably resolved with the US authorities.
The EPA’s publication of the “Notice of Violation” on September 18, 2015, which the Board of Management had
not expected, especially at that time, then presented the situation in an entirely different light.
In fiscal year 2023, there were no material special items in connection with the diesel issue.
Further information on the litigation in connection with the diesel issue can be found in the “Litigation” section.
277
ANTITRUST INVESTIGATIONS
In 2011, the European Commission conducted searches at European truck manufacturers for suspected unlawful
exchange of information during the period from 1997 to 2011; in November 2014, the Commission issued a state-
ment of objections to MAN, Scania, and the other truck manufacturers concerned. In its settlement decision of
July 2016, the European Commission assessed fines against five European truck manufacturers. MAN’s fine was
waived in full as the company had informed the European Commission about the irregularities as a key witness.
In September 2017, the European Commission fined Scania €0.88 billion. In a judgment rendered in February
2022, the European General Court (Court of First Instance) rejected in its entirety the appeal filed by Scania in this
connection. Scania’s April 2022 appeal against this judgment was rejected in full by the European Court of Justice,
the court of last resort, in February 2024.
Furthermore, antitrust lawsuits seeking damages have been received from customers. As is the case in any
antitrust proceedings, this may result in further lawsuits for damages. No provisions have been recognized for a
large number of these legal disputes as they are not expected to result in final damage awards at the highest
appeals level. For those actions in which, after re-assessing the risks, the final outcome at the highest appeals
level appears more likely than not to result in the payment of damages by MAN or Scania, provisions have been
recognized in an amount of €89 million. Contingent liabilities have not been disclosed as their quantification is
not currently possible. This applies in particular to the proceedings that are currently in an early stage – including
those as to which the process of expert assessment is still in an early stage.
In March 2022, the European Commission and the Competition and Markets Authority (CMA), the English antitrust
authorities, searched the premises of various automotive manufacturers and automotive industry organizations
and/or served them with formal requests for information. In the Volkswagen Group, the investigation affects
Volkswagen Group UK, which was searched by the CMA, and Volkswagen AG, which has received a Group-wide
information request from the European Commission. The investigation relates to European, Japanese, and Korean
manufacturers as well as national organizations operating in such countries and the European organization Euro-
pean Automobile Manufacturers' Association (ACEA), which are suspected of having agreed from 2001/2002 to
the initiation of the proceedings to avoid paying for the services of recycling companies that dispose of end-of-
life vehicles (ELV) (specifically passenger cars and vans up to 3.75 tons). Also alleged is an agreement to refrain
from competitive use of ELV issues, that is, not to publicize relevant recycling data (recyclates, recyclability,
recovery) for competitive purposes. The violation under investigation is alleged to have taken place in particular
in the “ACEA” Working Group Recycling and related sub-groups thereof. Volkswagen AG is responding to the
European Commission’s information requests. Volkswagen Group UK is cooperating with the CMA. In this matter,
CMA furthermore issued requests for information to Volkswagen AG. In July 2022, Volkswagen AG filed an action
for judicial review challenging the CMA's requests for information in particular because Volkswagen AG believes
that they exceed the CMA's jurisdiction. In February 2023, the court granted the claim. The CMA appealed this
judgment in April 2023, and in January 2024 the appellate court ruled in the CMA’s favor. Volkswagen AG is
considering whether to appeal this decision. Concurrent therewith, Volkswagen AG continues to examine the
possibilities for reasonable cooperation with the CMA.
In addition, a few national and international authorities initiated antitrust investigations. Volkswagen is coop-
erating closely with the responsible authorities in these investigations. An assessment of the underlying situation
is not possible at this early stage.
278
RUSSIA-UKRAINE CONFLICT
The start of the Russia-Ukraine conflict in February 2022 led not only to a humanitarian crisis but also brought
market upheaval around the world. There have been substantial price rises, particularly on the energy and com-
modity markets, and significant increases in interest and inflation rates have been observed internationally. There
were some signs of normalization in the markets during the course of fiscal year 2023.
Against the backdrop of the Russia-Ukraine conflict and the resulting consequences, Volkswagen had decided
to suspend vehicle production in Russia for the time being. Vehicle exports to Russia have also been halted. In
addition, the respective sanction requirements must also be complied with in relation to parts supplies and the
provision of technical information.
There was again no easing of the Russia-Ukraine conflict in fiscal year 2023. For this reason, the discontinua-
tion of business activities in Russia continued to take concrete shape in the Volkswagen Group. In this context,
further sales negotiations with a number of investors continued or were concluded.
On May 18, 2023, the Volkswagen Group completed the sale of its shares in OOO Volkswagen Group Rus
(Volkswagen Group Rus), Kaluga/Russia, and that company’s local subsidiaries (OOO Volkswagen Components
and Services, Kaluga/Russia, OOO Scania Leasing, Moscow/Russia, OOO Scania Finance, Moscow/ Russia, OOO
Scania Insurance, Moscow/Russia) to OOO ART-FINANCE, Moscow/Russia, which is supported by the Russian
dealer AO Avilon Automotive Group, Moscow/Russia. On registration of the transaction on May 22, 2023, owner-
ship of the shares in Volkswagen Group Rus was transferred from the seller to the buyer. The transaction comprises
the production facilities in Kaluga, the importer structure of the Group brands Volkswagen Passenger Cars,
Volkswagen Commercial Vehicles, Audi, Škoda, Bentley, Lamborghini and Ducati for potential after-sales business
and the warehouse activities, as well as Scania’s financial services activities, including all associated employees.
In this context, the Volkswagen Group had already made significant impairments in fiscal year 2022 and rec-
ognized appropriate provisions. The selling price amounted to €0.1 billion. The deconsolidation of the affected
companies resulted in a loss of €0.4 billion in fiscal year 2023, which is reported in the other operating result.
This result is split between the Automotive Division (€– 0.4 billion) and the Financial Services Division (€0.1 billion).
The loss is mainly attributable to the realization of currency translation effects of €– 0.3 billion, which have been
reclassified from the currency translation reserve to other operating expenses.
Apart from winding down Volkswagen Group Rus and its subsidiaries, no additional material expenses were rec-
ognized in connection with the Russia-Ukraine conflict in fiscal year 2023.
For information on other subsidiaries of the Volkswagen Group being wound down, please refer to the note
entitled “IFRS 5 – Noncurrent Assets Held for Sale”.
Please also refer to the comments in the 2023 group management report, specifically in the chapters entitled
Business Development, Results of Operations, Financial Position and Net Assets, Report on Expected Develop-
ments and Report on Risks and Opportunities.
279
MATERIAL TRANSACTIONS OF THE CURRENT FISCAL YEAR
SCOUT MOTORS INC.

Under the Volkswagen Group’s North America strategy, Scout Motors Inc., Arlington, Virginia/USA, a wholly
owned subsidiary of Volkswagen Finance Luxemburg, Strassen/Luxembourg, was established in fiscal year 2022.
A new vehicle brand is to be created under the name of Scout to distribute electrified all-terrain vehicles and
pickups will be distributed in the USA from 2026. In order to finance the creation of the Scout brand, as well as
vehicle development and production planning, an amount of USD 493 million was contributed to the company in
fiscal year 2023. The company has been included in the Volkswagen consolidated financial statements since
January 1, 2023.
ARGO AI
The process of winding down Argo AI, LLC, Pittsburgh/USA (Argo AI) was initiated in the third quarter of 2022. In
this context, Volkswagen contributed USD 60 million to the company in the first half of 2023. The contribution
was written down in full. In the previous year, an expense of €1.9 billion had been recognized from the full impair-
ment of the equity investment in Argo AI in the other financial result.
QUANTUMSCAPE CORPORATION
In fiscal years 2020 and 2021, the Volkswagen Group acquired new shares in QuantumScape Corporation, San
José/USA (QuantumScape) through forward purchase agreements resulting from a capital increase. Due to Quan-
tumScape’s simultaneous listing on the New York Stock Exchange, the forward purchase agreements had to be
measured at the respective closing prices. As a consequence, a non-cash gain of €1.4 billion was recognized in
the financial result in fiscal year 2020 and a non-cash expense of €0.6 billion in fiscal year 2021. In total, there
was a non-cash increase of €0.8 billion.
Due to the share price performance, the Volkswagen Group conducted an impairment test on the shares in
QuantumScape. The carrying amount was adjusted on the basis of the impairment test. This adjustment led to a
non-cash expense of €0.3 billion in the second quarter of 2023. An additional adjustment of €0.1 billion was iden-
tified in the third quarter of 2023. In total, a non-cash expense of €0.4 billion was recognized in fiscal year 2023;
it is presented in the other financial result.
XPENG INC.
On December 6, 2023, Volkswagen acquired 4.99% of the ordinary shares of the electric vehicle company
XPeng Inc., Cayman Islands (XPeng), at a purchase price totaling USD 706 million. The realization of a forward
transaction dating from July 26, 2023 resulted in a non-cash gain of €74.2 million in fiscal year 2023, which was
recognized in the other financial result under gains and losses from fair value changes of hedging instruments/
derivatives not included in hedge accounting. Along with the agreement to acquire the shares, a technological
framework agreement was signed with Guangdong Xiaopeng Motors Technology Co. Ltd., Guangzhou/China, a
subsidiary of XPeng, for the joint development of electric vehicles in China, among other things.
The investment in XPeng is measured at fair value through other comprehensive income.
280
AUDI FAW NEV CO.

On September 27, 2023, the shareholders AUDI AG, Ingolstadt, Volkswagen (China) Investment Co., Ltd., Bei-
jing/China and China FAW Corporation Limited, Changchun/China resolved amendments to the Articles of Asso-
ciation of Audi FAW NEV Co., Ltd., Changchun/China (Audi FAW NEV Co.), effective from October 1, 2023. With
equity interests unchanged, the amendments led to a loss of control over the company by the Volkswagen Group
and resulted in its deconsolidation. The company has since October 1, 2023 been jointly controlled within the
meaning of IFRS 11. The investment in Audi FAW NEV Co. will consequently be included in the consolidated
financial statements as a joint venture using the equity method. As a result of the change to the way the invest-
ment is accounted for, the cash and cash equivalents previously reported declined by a low three-digit million-
Euro amount. Other than that, there were no material effects on the Volkswagen Group’s net assets, financial
position and results of operations.
HORIZON ROBOTICS INC.

On December 7, 2023, Volkswagen acquired preferred shares of Horizon Robotics Inc., Cayman Islands (Horizon
Robotics), a leading provider of energy-efficient computing platforms for autonomous driving in China, from Hori-
zon Robotics at a purchase price of USD 200 million and issued a convertible loan to Horizon Robotics in an
amount of USD 800 million. Both investments are classified as debt instruments in the financial statements and
measured at fair value through profit or loss. The measurement resulted in non-cash gains of €0.7 million in fiscal
year 2023, which are recognized in the other financial result under gains and losses from marketable securities
and loans.
To promote the development of highly automated and autonomous driving in China, Volkswagen has also
agreed the establishment of a joint venture with Horizon Robotics. On December 14, 2023, Volkswagen invested
an amount of CNY 2 billion to this end in exchange for an ownership interest of 60% in the new company, CARIZON
(Beijing) Technology Company Limited, Beijing/China (CARIZON). In addition, Volkswagen has committed to con-
tribute capital in the future of up to CNY 8.4 billion to the joint venture.
281
MATERIAL TRANSACTIONS OF THE PREVIOUS FISCAL YEAR
IPO OF PORSCHE AG
On September 28, 2022, as part of the IPO of Dr. Ing. h.c. F. Porsche AG, Stuttgart (Porsche AG), a total of 25% of
the preferred shares of Porsche AG (including additional allocations) in an amount of around €9.4 billion were
successfully placed with investors. The non-voting preferred shares of Porsche AG have been traded on the
Regulated Market of the Frankfurt Stock Exchange since September 29, 2022. Since the end of the stabilization
period on October 11, 2022, the free float of the preferred shares has been 24.2% of the preferred share capital
of Porsche AG.
In connection with the IPO, Volkswagen additionally sold an interest of 25% of Porsche AG’s ordinary shares
plus one ordinary share to Porsche Automobil Holding SE, Stuttgart (Porsche SE) at a purchase price of around
€10.1 billion. The purchase of the ordinary shares was completed in two tranches.
The cash inflow for the preferred shares and the first tranche of the ordinary shares occurred at the beginning
of the fourth quarter of 2022.
to €9.6 billion. The cash outflow was slated for January 9, 2023 and occurred on that day.
Volkswagen AG and Porsche SE agreed to offset the obligation to pay a special dividend to Porsche SE against
Volkswagen AG’s claim to the payment of the purchase price still outstanding for the second tranche of ordinary
shares. In the consolidated financial statements as of December 31, 2022, the purchase price receivable of
€3.0 billion for the second tranche and the dividend liability of €3.1 billion were therefore presented on a net basis.
Upon payment of the special dividend on January 9, 2023, the netting process was completed.
The employees of Volkswagen AG, Volkswagen Sachsen GmbH and Porsche AG participated in the economic
success of the placement of the preferred shares and the sale of ordinary shares in Porsche AG by way of a one-
off payment. The total bonus for employees, which was recognized through profit or loss in fiscal year 2022,
amounted to €0.5 billion in the Volkswagen Group.
For more detailed information, please refer to the disclosures provided in the consolidated financial statements
as of December 31, 2022.
282
ACQUISITION OF EUROPCAR
In 2021, together with investment firm Attestor Limited and Pon Holdings B.V., Volkswagen made a joint public
takeover offer for the shares of Europcar Mobility Group S.A., Paris/France (Europcar) through the consortium
company Green Mobility Holding S.A. (GMH) based in Strassen/Luxembourg. The European Commission issued
final antitrust approval at the end of May 2022. During the extended offer period, the French Financial Markets
Authority gave Europcar shareholders the opportunity to tender their shares to the consortium company. In total,
93.6% of Europcar’s shareholders accepted the offer. The consortium jointly assumed control of Europcar in mid-
June 2022. Because the acceptance rate was over 90%, a squeeze-out was initiated for the remaining Europcar
shares in July 2022, and the company was delisted. Since July 13, 2022, the consortium company has held 100%
of the shares in Europcar. The purchase price was 51 cents per Europcar share.
At the end of June 2022, the entire portion of the purchase price attributable to Volkswagen, amounting to
€1.7 billion, was contributed to GMH. Since joint control has been contractually agreed, the company, in which
Volkswagen holds 66% of the shares, will be accounted for using the equity method in the Volkswagen consoli-
dated financial statements. In addition, Volkswagen is the writer of put options held by the other members of the
consortium, and the other members have granted Volkswagen call options on their shares in the consortium com-
pany. The long-term extension of the Attestor options was arranged in December 2022. The measurement of the
options led to a total non-cash expense of €0.3 billion in the previous year, which was recognized in the financial
result.
The completion of the Europcar transaction marks another important milestone for Volkswagen in the Group’s
Mobility Solutions initiative under the NEW AUTO strategy. With this transaction, the Volkswagen Group intends
to secure a significant share of the global market for mobility services. Europcar Mobility Group is to become one
of the cornerstones of the mobility platform planned by Volkswagen.
283
Effects of climate change

Against the backdrop of climate change and the resulting stricter emissions regulations, the transformation of the
automotive industry towards e-mobility and further digitalization continues to make progress. In its NEW AUTO
strategy, the Volkswagen Group has again stepped up the pace of its transformation towards e-mobility.
In the preparation of the consolidated financial statements, the Board of Management took into account the
potential effects of climate changes and future regulatory requirements, and especially the corresponding trans-
formation towards e-mobility. Potential effects, especially on noncurrent assets, provisions for emissions levies
and future cash flows were, as far as possible, incorporated as part of the significant estimates and assumptions
included in the consolidated financial statements. The Volkswagen Group aims to increase the share of all-electric
vehicles as a proportion of total deliveries from 8.3% in 2023 to more than 50% in 2030.
The Group aims to offer its customers worldwide around 50 completely battery-electric models by 2030. The
effects of the transformation towards e-mobility and the planned increase in the share of all-electric vehicles
planned in this context are taken into account in compiling the medium-term planning and therefore in the calcu-
lation of future cash flows for determining recoverable amounts in impairment tests of goodwill and intangible
assets with indefinite useful lives, especially when planning future vehicle models, development costs and pro-
duction facilities. An amount in the low triple-digit billion euro range has been earmarked for this purpose in the
medium-term planning. In addition, Volkswagen regularly assesses whether these developments give rise to the
need for ad hoc impairment tests or for adjustments to the useful lives of other noncurrent non-financial assets.
No material effects on the useful lives of capitalized development costs or property, plant and equipment were
identified, given the periods under consideration for the regulatory requirements and due to the parallel production
of battery-electric vehicles and vehicles with combustion engines in the coming years. With reference to increas-
ingly stringent emissions regulations, it is ensured that the various international regulations are taken into account
and that any obligations are recognized appropriately. This did not result in any material effects on the consoli-
dated financial statements. The increase in development costs in the areas of e-mobility and digitalization have,
however, led to a corresponding increase in internally generated intangible assets. For more information, please
refer to the “Accounting policies” section.
For a detailed presentation of how sustainability is taken into account within the Group strategy, in the man-
agement of the Group and in Group planning, please refer to the sections entitled “Goals and Strategies” and “Sus-
tainable Value Enhancement” in the group management report.
284
Basis of consolidation
In addition to Volkswagen AG, the consolidated financial statements comprise all significant German and non-
German subsidiaries, including structured entities that are controlled directly or indirectly by Volkswagen AG. The
structured entities are used primarily to enter into asset-backed securities transactions to refinance the financial
services business and to invest surplus liquidity in special securities funds.
Subsidiaries whose business is dormant or insignificant, both individually and in the aggregate, for the fair
presentation of the net assets, financial position and results of operations as well as the cash flows of the
Volkswagen Group are not consolidated. They are carried in the consolidated financial statements at cost net of
any impairment losses and reversals of impairment losses required to be recognized.
Significant companies where Volkswagen AG is able, directly or indirectly, to significantly influence financial
and operating policy decisions (associates), or that are directly or indirectly jointly controlled (joint ventures), are
accounted for using the equity method. Joint ventures also include companies in which the Volkswagen Group
holds the majority of voting rights, but whose articles of association or partnership agreements stipulate that
important decisions may only be resolved unanimously. Insignificant associates and joint ventures are carried at
cost net of any impairment losses and reversals of impairment losses required to be recognized.
The composition of the Volkswagen Group is shown in the following table:
2023 2022
Volkswagen AG and consolidated subsidiaries

Germany 143 149
Abroad 810 797
Subsidiaries carried at cost
Germany 91 86
Abroad 287 290
At equity accounted associates and joint ventures and at fair value accounted other equity investments
Germany 50 45
Abroad 111 102
Associates and joint ventures carried at cost
Germany 52 51
Abroad 56 48
1,600 1,568
The list of all shareholdings that forms part of the annual financial statements of Volkswagen AG can be down-
loaded from the electronic companies register at www.unternehmensregister.de and from www.volkswagen-
group.com/investor-relations.
285
The following consolidated German subsidiaries with the legal form of a corporation or partnership have met the
criteria set out in section 264(3) or section 264b of the Handelsgesetzbuch (HGB – German Commercial Code)
and have as far as possible exercised the option not to publish annual financial statements:
 AUDI AG, Ingolstadt
 Audi Berlin GmbH, Berlin
 Audi Frankfurt GmbH, Frankfurt am Main
 Audi Hamburg GmbH, Hamburg
 Audi Hannover GmbH, Hanover
 Audi Leipzig GmbH, Leipzig
 Audi München GmbH, Munich
 Audi Sport GmbH, Neckarsulm
 Audi Stuttgart GmbH, Stuttgart
 Auto & Service PIA GmbH, Munich
 Autostadt GmbH, Wolfsburg
 Bugatti Engineering GmbH, Wolfsburg
 CARIAD SE, Wolfsburg
 dx.one GmbH, Wolfsburg
 Eberhardt Kraftfahrzeug GmbH + Co. KG, Ulm
 GETAS Verwaltung GmbH & Co. Objekt Augsburg KG, Pullach i. Isartal
 GETAS Verwaltung GmbH & Co. Objekt Heinrich-von-Buz-Straße KG, Pullach i. Isartal
 HABAMO Verwaltung GmbH & Co. Objekt Sterkrade KG, Pullach i. Isartal
 Haberl Beteiligungs-GmbH, Munich
 Held & Ströhle GmbH & Co. KG, Ulm
 H-Tec SYSTEMS GmbH, Augsburg
 MAHAG Automobilhandel und Service GmbH & Co. oHG, Munich
 MAHAG GmbH, Munich
 MAHAG Sportwagen Zentrum Albrechtstraße GmbH, Munich
 MAN Energy Solutions SE, Augsburg
 MOIA GmbH, Berlin
 MOIA Operations Germany GmbH, Hanover
 Porsche Holding Stuttgart GmbH, Stuttgart
 Porsche Niederlassung Mannheim GmbH, Mannheim
 Porsche Siebte Vermögensverwaltung GmbH, Wolfsburg
 PowerCo SE, Salzgitter
 PZ Leipzig GmbH, Leipzig
 Schwaba GmbH, Augsburg
 SEAT Deutschland Niederlassung GmbH, Weiterstadt
 SKODA AUTO Deutschland GmbH, Weiterstadt
 SZM Sportwagen Zentrum München GmbH, Munich
 VfL Wolfsburg-Fußball GmbH, Wolfsburg
 VGRB GmbH, Berlin
 VGRD GmbH, Wolfsburg
 VGRDD GmbH, Dresden
 VGRHH GmbH, Hamburg
 Volkswagen ADMT Hannover GmbH, Hanover
 Volkswagen AirService GmbH, Braunschweig
 Volkswagen Automobile Berlin GmbH, Berlin
 Volkswagen Automobile Chemnitz GmbH, Chemnitz
 Volkswagen Automobile Frankfurt GmbH, Frankfurt am Main
286
 Volkswagen Automobile Hamburg GmbH, Hamburg

 Volkswagen Automobile Hannover GmbH, Hanover
 VOLKSWAGEN Automobile Leipzig GmbH, Leipzig
 Volkswagen Automobile Rhein-Neckar GmbH, Mannheim
 Volkswagen Automobile Stuttgart GmbH, Stuttgart
 Volkswagen Beteiligungsverwaltung GmbH, Wolfsburg
 Volkswagen Deutschland GmbH & Co. KG, Wolfsburg
 Volkswagen Deutschland Verwaltungs GmbH, Wolfsburg
 Volkswagen Gebrauchtfahrzeughandels und Service GmbH, Langenhagen
 Volkswagen Group IT Solutions GmbH, Wolfsburg
 Volkswagen Group Real Estate GmbH & Co. KG, Wolfsburg
 Volkswagen Group Services GmbH, Wolfsburg
 Volkswagen Immobilien GmbH, Wolfsburg
 Volkswagen Konzernlogistik GmbH & Co. OHG, Wolfsburg
 Volkswagen Leasingobjekt GmbH, Braunschweig
 Volkswagen Original Teile Logistik GmbH & Co. KG, Baunatal
 Volkswagen Osnabrück GmbH, Osnabrück
 Volkswagen Sachsen GmbH, Zwickau
 Volkswagen Sechste Leasingobjekt GmbH, Braunschweig
 Volkswagen Software Asset Management GmbH, Wolfsburg
 Volkswagen Vermögensverwaltungs-GmbH, Wolfsburg
 Volkswagen Zubehör GmbH, Dreieich
287
CONSOLIDATED SUBSIDIARIES
The fiscal year’s changes in the consolidated Group are shown in the following table:
Number Germany Abroad
Initially consolidated
Subsidiaries previously carried at cost 2 20
Newly acquired subsidiaries – –
Newly formed subsidiaries – 15
Other – 1
2 36
Deconsolidated
Mergers 6 9
Liquidations – 6
Sales/other 1 9
7 24
The initial consolidation or deconsolidation of these subsidiaries, either individually or collectively, did not have a
significant effect on the presentation of the net assets, financial position and results of operations. The unconsol-
idated structured entities are immaterial from a Group perspective. In particular, they do not give rise to any sig-
nificant risks to the Group.
288
INVESTMENTS IN ASSOCIATES
From a Group perspective, the associates QuantumScape, Gotion High-Tech Co., Ltd., Hefei/China (Gotion),
Northvolt AB, Stockholm/Sweden (Northvolt AB), and Sinotruk (Hong Kong) Ltd., Hongkong/China (Sinotruk),
were material as of the balance sheet date.
QuantumScape
QuantumScape is a US-based start-up for lithium-metal solid state batteries. A strategic partnership has been set
up between Group companies and QuantumScape for the future joint production of battery cells. QuantumScape’s
principal place of business is in San José/USA.
As of December 31, 2023, the quoted market price of the shares in QuantumScape amounted to €541 million
(previous year: €453 million).
Gotion
Gotion is a Chinese technology company that engages primarily in research and development, production and
sales of lithium-ion batteries and in electric transmission and transformation businesses. Group companies and
Gotion have agreed upon a strategic framework for cooperation in the development, manufacture and distribution
of battery cells. Gotion’s principal place of business is in Hefei/China.
As of December 31, 2023, the quoted market price of the shares in Gotion amounted to €1.2 billion (previous
year: €1.8 billion).
Northvolt AB
Northvolt AB develops and produces lithium-ion batteries. Battery purchase agreements are in place between
Group companies and Northvolt AB. Northvolt AB’s principal place of business is in Stockholm/Sweden.
Sinotruk
Sinotruk is one of the largest truck manufacturers in the Chinese market. Sinotruk’s principal place of business is
in Hongkong/China.
As of December 31, 2023, the quoted market price of the shares in Sinotruk amounted to €1,222 million (pre-
vious year: €903 million).
289
SU M M A R I Z E D F I N A N C I A L I N F O R M A T I O N O N M A T E R I A L A SSO C I A T E S O N A 1 0 0 % B A SI S
€ million QuantumScape¹ Gotion² Northvolt AB³ Sinotruk⁴
2023
Equity interest in % 17 25 23 25
Noncurrent assets 404 5,675 3,580 4,072

Current assets 1,072 5,628 3,306 10,165
Noncurrent liabilities 100 2,763 3,362 154
Current liabilities 44 5,202 462 8,414
Net assets 1,332 3,337 3,063 5,669
Sales revenue – 3,183 102 9,836

Earnings after tax from continuing operations –413 75 –271 425
Earnings after tax from discontinued operations – – – –
Other comprehensive income 15 –16 79 –2
Total comprehensive income –398 59 –192 423
Dividends received⁵ – – – 25
2022
Equity interest in % 20 25 23 25
Noncurrent assets 387 3,823 2,137 4,150

Current assets 1,194 4,936 2,905 10,393
Noncurrent liabilities 113 1,653 1,323 180
Current liabilities 47 3,774 248 8,258
Net assets 1,422 3,332 3,471 6,105
Sales revenue – 1,985 67 7,863

Earnings after tax from continuing operations –398 35 –65 309
Earnings after tax from discontinued operations – – – –
Other comprehensive income –24 –21 16 5
Total comprehensive income –422 14 –49 314
Dividends received⁵ – 6 – 54
1 Balance sheet amounts refer to the September 30 reporting date and income statement amounts refer to the period from October 1 to September 30.
2 Balance sheet amounts refer to the September 30 reporting date and income statement amounts refer to the period from October 1 to September 30. Balance sheet amounts
of the previous year refer to the September 30 reporting date and income statement amounts of the previous year refer to the period from January 1 to September 30.
3 The financial information presented refers to fiscal year 2022. The prior-year financial information presented refers to fiscal year 2021.
4 Balance sheet amounts refer to the June 30 reporting date and income statement amounts refer to the period from July 1 to June 30.
5 Proportionate dividends are shown net of withholding tax.
290
RECONCILIATION OF THE FINANCIAL INFORMATIO N TO THE CARRYING AMOUNT OF THE

EQUITY-ACCOUNTED INVESTMENTS
€ million QuantumScape Gotion Northvolt AB2 Sinotruk
2023
Net assets at January 1 1,422 3,332 3,471 6,105
Profit or loss –413 75 –271 425
Other comprehensive income 15 –16 79 –2
Changes in share capital 0 0 0 –
Changes in reserves 416 110 25 –7
Foreign exchange differences –108 –165 –241 –735
Dividends¹ – – – –118
Net assets at December 31 1,332 3,337 3,063 5,669
Proportionate equity 233 782 703 1,417
Consolidation/Goodwill/Others 394 120 –10 –504
Carrying amount of equity-accounted investments 626 902 693 913
2022
Net assets at January 1 1,432 2,725 1,109 5,539
Profit or loss –398 35 –65 309
Other comprehensive income –24 –21 16 5
Changes in share capital 0 16 0 –
Changes in reserves 132 630 2,463 –74
Foreign exchange differences 279 –30 –53 565
Dividends¹ – –24 – –238
Net assets at December 31 1,422 3,332 3,471 6,105
Proportionate equity 281 790 818 1,526
Consolidation/Goodwill/Others 842 231 93 –682
Carrying amount of equity-accounted investments 1,123 1,021 911 845
1 Dividends are shown before withholding tax.

2 The financial information presented refers to fiscal year 2022. The prior-year financial information presented refers to fiscal year 2021.
SU M M A R I Z E D F I N A N C I A L I N F O R M A T I O N O N I N D I V I D U A L LY I M M A T E R I A L A S SO C I A T E S O N
THE BASIS OF THE VOLKSWAGEN GROUP’S PROPORTIONATE INTEREST
€ million 2023 2022
Earnings after tax from continuing operations –17 –32

Earnings after tax from discontinued operations – –
Other comprehensive income 0 16
Total comprehensive income –16 –16
Carrying amount of equity-accounted investments 1,965 1,440
There were no unrecognized losses relating to investments in associates in the fiscal year (previous year: €2 mil-
lion). Financial guarantees have been issued to associates in an amount of €1 million (previous year: €1 million).
291
INTERESTS IN JOINT VENTURES

From a Group perspective, the joint ventures FAW-Volkswagen Automotive Company Ltd., Changchun/China,
SAIC-Volkswagen Automotive Company Ltd., Shanghai/China, and SAIC-Volkswagen Sales Company Ltd.,
Shanghai/China, were material at the reporting date.
FAW-Volkswagen Automotive Company

FAW-Volkswagen Automotive Company develops, produces and sells passenger cars. There is an agreement in
place between Group companies and the joint venture partner China FAW Corporation Limited regarding a long-
term strategic partnership. The principal place of business is in Changchun/China.
SAIC-Volkswagen Automotive Company

SAIC-Volkswagen Automotive Company develops and produces passenger cars. There is an agreement in place
between Group companies and the joint venture partner Shanghai Automotive Industry Corporation regarding a
long-term strategic partnership. The principal place of business is in Shanghai/China.
SAIC-Volkswagen Sales Company

SAIC-Volkswagen Sales Company sells passenger cars for SAIC-Volkswagen Automotive Company. There is an
agreement in place between Group companies and the joint venture partner Shanghai Automotive Industry Cor-
poration regarding a long-term strategic partnership. The principal place of business is in Shanghai/China.
292
SU M M A R I Z E D F I N A N C I A L I N F O R M A T I O N O N T H E M A T E R I A L J O I N T V E N T U R E S O N A
100% BASIS
FAW-Volkswagen SAIC-Volkswagen
Automotive Automotive SAIC-Volkswagen
€ million Company Company1 Sales Company
2023
Equity interest in % 40 50 30
Noncurrent assets 9,465 6,006 820

Current assets 17,346 7,369 4,229
of which cash and cash equivalents 12,319 2,029 330
Noncurrent liabilities 727 528 103
of which financial liabilities² 11 2 21
Current liabilities 17,808 10,759 4,617
of which financial liabilities² 12 1,394 21
Net assets 8,276 2,088 329
Sales revenue 46,846 18,728 21,754

Depreciation and amortization 1,857 1,406 34
Interest income 196 28 5
Interest expenses 5 37 2
Earnings before tax from continuing operations 4,918 293 433
Income tax expense 1,294 –64 109
Earnings after tax from continuing operations 3,624 357 324
Earnings after tax from discontinued operations – – –
Other comprehensive income –152 –13 –
Total comprehensive income 3,472 344 324
Dividends received³ 1,407 548 105
2022
Equity interest in % 40 50 30
Noncurrent assets 11,021 7,003 937

Current assets 13,941 6,459 3,656
of which cash and cash equivalents 8,355 1,243 525
Noncurrent liabilities 1,112 593 128
of which financial liabilities² 25 2 24
Current liabilities 14,832 9,831 4,091
of which financial liabilities² 30 2,135 13
Net assets 9,018 3,039 374
Sales revenue 47,986 22,844 25,112

Depreciation and amortization 2,333 1,899 25
Interest income 316 45 7
Interest expenses 2 24 3
Earnings before tax from continuing operations 5,711 1,391 453
Income tax expense 1,510 80 126
Earnings after tax from continuing operations 4,201 1,311 328
Earnings after tax from discontinued operations – – –
Other comprehensive income 161 26 –
Total comprehensive income 4,361 1,337 328
Dividends received³ 1,527 683 100
1 SAIC-Volkswagen Sales Company sells passenger cars for SAIC-Volkswagen Automotive Company. Therefore, the sales revenue reported for SAIC-Volkswagen Automotive
Company was mostly generated from its business with SAIC-Volkswagen Sales Company.
2 Excluding trade liabilities.
3 Proportionate dividends are shown net of withholding tax.
293
RECONCILIATION OF THE FINANCIAL INFORMATIO N TO THE CARRYING AMOUNT OF THE

FAW-Volkswagen SAIC-Volkswagen
Automotive Automotive SAIC-Volkswagen
€ million Company Company Sales Company
2023
Net assets at January 1 9,018 3,039 374
Profit or loss 3,624 357 324
Other comprehensive income –152 –13 –
Changes in share capital – – –
Changes in reserves – – –
Foreign exchange differences –534 –149 –17
Dividends¹ –3,681 –1,145 –351
Net assets at December 31 8,276 2,088 329
Proportionate equity 3,310 1,044 99
Consolidation/Goodwill/Others –738 –463 –
Carrying amount of equity-accounted investments 2,572 581 99
2022
Net assets at January 1 8,724 3,202 392
Profit or loss 4,201 1,311 328
Other comprehensive income 161 26 –
Changes in share capital – – –
Changes in reserves – – –
Dividends¹ –4,001 –1,427 –334
Net assets at December 31 9,018 3,039 374
Proportionate equity 3,607 1,519 112
Consolidation/Goodwill/Others –824 –891 –
Carrying amount of equity-accounted investments 2,783 628 112
SU M M A R I Z E D F I N A N C I A L I N F O R M A T I O N O N I N D I V I D U A L LY I M M A T E R I A L J O I N T V E N T U R E S
O N T H E B A S I S O F T H E V O L K S W A G E N G R O U P ’ S P R O P O R T I O N A T E I N T E R E ST
€ million 2023 2022¹
Earnings after tax from continuing operations 332 197

Earnings after tax from discontinued operations – –
Other comprehensive income –90 346
Total comprehensive income 242 543
Carrying amount of equity-accounted investments 3,887 3,436
The carrying amount of equity-accounted investments includes the equity investment in GMH.
There were no unrecognized losses relating to investments in joint ventures in the fiscal year and the previous
year. Contingent liabilities to joint ventures amounted to €219 million (previous year: €236 million), while financial
guarantees stood at €70 million (previous year: €70 million). Cash funds of joint ventures amounting to €150 mil-
lion (previous year: €172 million) are deposited as collateral for asset-backed securities transactions and are
therefore not freely available.
294
IFRS 5 – NONCURRENT ASSETS HELD FOR SALE
Assets and disposal groups held for sale of the current fiscal year
The intention resolved at Dr. Ing. h.c. F. Porsche AG, Stuttgart (Porsche AG) in September 2022 to sell two Rus-
sian sales companies in the Passenger Cars and Light Commercial Vehicles segment, OOO Porsche Russland,
Moscow/Russia, and OOO Porsche Center Moscow, Moscow/Russia, as well as one company assigned to the
Financial Services segment, OOO Porsche Financial Services Russland, Moscow/Russia, continues to be in place.
In view of the change in external conditions, the disposal project is expected to be completed within fiscal year
2024. An impairment loss of €25 million was recognized for the disposal group as of December 31, 2022. Another
minor impairment loss and offsetting currency translation effects were identified as of December 31, 2023; they
are recognized in the other operating result.
It was resolved in the fourth quarter of 2022 to sell the following fully consolidated subsidiaries allocated to the
Financial Services segment: OOO Volkswagen Bank RUS, Moscow/Russia, OOO Volkswagen Group Finanz, Mos-
cow/Russia, and OOO Volkswagen Financial Services RUS, Moscow/Russia. Once the resolution had been
passed by the competent bodies, the implementation of a disposal plan was started and expected to be com-
pleted in 2023. However, it could not be finalized as an approval by the Russian authorities was still outstanding
as of December 31, 2023. It is expected that the outstanding approval will ultimately be granted and the disposal
plan therefore completed in the first half of 2024. Impairment losses of €186 million were recognized in this con-
text in the period up to December 31, 2023. The companies, OOO Volkswagen Group Finanz, Moscow/Russia,
and OOO Volkswagen Financial Services RUS, Moscow/Russia, were sold after the end of the fiscal year, on Jan-
uary 18, 2024.
On December 15, 2022, the Supervisory Board of Volkswagen AG resolved to sell the MAN ES gas turbine busi-
ness of MAN Energy Solutions SE, Augsburg, and MAN Energy Solutions Schweiz AG, Zurich/Switzerland, by way
of an asset deal to CSIC Longjiang GH Gas Turbine Co. Ltd., Harbin/China, and its subsidiaries under German and
Swiss law. Following approval by the competent authorities, the transaction is expected to be completed within
fiscal year 2024.
In accordance with IFRS 5, the assets and liabilities held for sale were recognized at the lower of their carrying
amount and fair value less expected costs of disposal.
295
The main groups of assets and liabilities classified as held for sale in the Volkswagen Group as of December 31,
2023, are shown below.
€ million Dec. 31, 2023
Intangible assets 53
Property, plant and equipment 27
Lease assets 5
Inventories 0
Trade receivables 2
Cash and securities 73
Other assets 30
Assets held for sale 190
Financial liabilities 15
Provisions 4
Other liabilities 12
Liabilities associated with assets held for sale 31
The cumulative income and expenses in connection with the disposal groups held for sale are recognized in other
comprehensive income; they amount to €– 289 million.
Transactions completed in the current fiscal year

On March 3, 2023, the Supervisory Board of the Volkswagen Group resolved to sell OOO Volkswagen Group Rus,
Kaluga/Russia, and its subsidiaries, OOO Scania Finance, Moscow/Russia, OOO Scania Insurance, Moscow/Rus-
sia, and OOO Scania Leasing, Moscow/Russia. These companies were consequently classified as a disposal group
held for sale as of March 31, 2023. The sale was completed in May 2023. Additional disclosures can be found in
the “Key events” section.
EURO-Leasing GmbH, Sittensen, a fully consolidated subsidiary of Volkswagen Financial Services AG, trans-
ferred its passenger cars business to a shelf company acquired in the fiscal year. Subsequently, 51% of the shares
in the company, which was renamed Euromobil GmbH, Sittensen, was sold to Europcar Mobility Group,
Paris/France. The removal of Euromobil GmbH from full consolidation, the sale of the shares and the remeasure-
ment of the remaining 49% interest resulted in a gain of €13 million, which is reported in other operating income.
The transaction was finally completed in the fourth quarter of 2023.
296
Currency translation
As standard, the Volkswagen Group uses the exchange rates of an external market data provider for translation.
All exchange rates are based on the respective euro translation rates, from which all non-euro rate combinations
are derived.
The rates applied are presented in the following table:
BALANCE SHEET MIDDLE RATE INCOME STATEMENT

ON DECEMBER 31 AVERAGE RATE
€1 = 2023 2022 2023 2022
Argentina ARS 894.99391 188.75869 317.91705 136.67276

Australia AUD 1.62920 1.57060 1.62859 1.51749
Brazil BRL 5.37495 5.64440 5.40306 5.44441
Canada CAD 1.46810 1.44395 1.45957 1.37048
Czech Republic CZK 24.71800 24.14500 24.00353 24.55830
India INR 92.11700 88.16400 89.33732 82.73456
Japan JPY 156.79000 140.66500 151.93821 138.02361
Mexico MXN 18.76890 20.88790 19.19575 21.21209
People’s Republic of China CNY 7.87000 7.36605 7.65984 7.08135
Poland PLN 4.34090 4.68600 4.54402 4.68566
Republic of Korea KRW 1,440.71500 1,338.29500 1,413.50465 1,358.19726
Russia RUB 99.96610 76.28680 92.29940 73.27417
South Africa ZAR 20.44415 18.07945 19.95520 17.20322
Sweden SEK 11.08735 11.07865 11.47160 10.62776
United Kingdom GBP 0.86910 0.88680 0.87001 0.85256
USA USD 1.10770 1.06770 1.08170 1.05409
297
Accounting policies
MEASUREMENT PRINCIPLES
With certain exceptions, such as financial instruments measured at fair value and provisions for pensions and
other post-employment benefits, items in the Volkswagen Group are accounted for under the historical cost con-
vention (cost model). The methods used to measure the individual items are explained in more detail below.
INTANGIBLE ASSETS
Intangible assets are accounted for under the cost model.
Purchased intangible assets are recognized at cost and – if they have finite useful lives – amortized over their
useful lives using the straight-line method. This relates in particular to software, which is normally amortized over
three years, or licenses, which are normally amortized over the term of the license.
Development costs for future series products and other internally generated intangible assets are capitalized,
provided the cash-generating unit to which the respective intangible asset is attributable is not impaired and the
other criteria for recognition as assets are met.
The costs are amortized using the straight-line method from the start of use (e.g. start of production) over the
expected life cycle of the models, powertrains or software developed – generally between three and nine years.
Amortization charges on intangible assets are allocated to the relevant functional areas in the income state-
ment.
Brand names from business combinations usually have an indefinite useful life and are therefore not amortized.
An indefinite useful life is usually the result of a brand’s further use and maintenance.
Goodwill, intangible assets with indefinite useful lives and intangible assets that are not yet available for use
are tested for impairment at least once a year. Assets in use and other intangible assets with finite useful lives are
tested for impairment only if there are specific indications that they may be impaired. To determine the recoverable
amount of goodwill and intangible assets with indefinite and finite useful lives, the respective brand is normally
the cash-generating unit that is used as the testing level. Measurement of value in use is based on management’s
current medium-term planning (referred to as budget planning round). The planning period generally covers five
years. This planning is based on expectations regarding future global economic trends and on assumptions
derived from those trends about the markets for passenger cars and commercial vehicles, expected trends in the
Volkswagen Group’s market shares, the timing and cost of the development of vehicle models and the amount of
investments in production facilities, as well as changes in price and cost structures, taking particular account of
the transformation to e-mobility and an increase in regulatory requirements. The planning for the Financial Ser-
vices segment is likewise prepared on the basis of these expectations, and also reflects the relevant market pen-
etration rates of expected vehicle sales with finance or lease agreements and other services, as well as regulatory
requirements. The planning for the Power Engineering segment reflects expectations about trends in the various
individual markets. The planning includes reasonable assumptions about macroeconomic trends (exchange rate,
interest rate and commodity price trends) and historical developments.
The Volkswagen Group’s planning is based on the assumption that global economic output will grow overall in
2024 albeit at a slower pace. The persistently high inflation in many regions and the resulting restrictive monetary
policy measures taken by central banks are expected to have an increasingly adverse effect on consumer spending.
Risks will continue to arise from protectionist tendencies, turbulence in the financial markets and structural defi-
cits in individual countries. In addition, continuing geopolitical tensions and conflicts are weighing on growth pro-
spects; risks are associated in particular with the Russia-Ukraine conflict and the confrontations in the Middle
East. It is, however, assumed that both the advanced economies and the emerging markets will show positive
momentum on average, even with below-average growth in gross domestic product. Moreover, the global econ-
omy is expected to recover in 2025 and continue a path of stable growth until 2028.
298
The Volkswagen Group’s automotive market and volume planning reflects the above regional differentiation and
takes account of the impact of regional conflicts. The Volkswagen Group aims to increase the share of all-electric
vehicles as a proportion of total deliveries from 8.3% in 2023 to more than 50% in 2030. The negative impact on
earnings expected to arise from 2024 onward from higher material costs and more stringent emission and fuel
consumption legislation is to be more than offset by improvements in pricing and the product mix as well as cor-
responding programs to increase efficiency. In addition, the planning is based on the assumption that the supply
situation for intermediates and commodities will improve from fiscal year 2024 onward.
For information on the assumptions in the detailed planning period, please refer to the notes on management
estimates and judgment. Further details can be found in the Report on Expected Developments, which is part of
the management report. The planning assumptions are adapted to reflect the current state of knowledge.
The estimation of cash flows is generally based on the expected growth trends for the markets concerned. The
estimates for the cash flows following the end of the planning period are generally based on a growth rate of up
to 1% p.a. (previous year: up to 1% p.a.) in the Passenger Cars segment, and on a growth rate of up to 1% p.a.
(previous year: up to 1% p.a.) in the Power Engineering and Commercial Vehicles segments.
Value in use is determined for the purpose of impairment testing of goodwill, indefinite-lived intangible assets
and finite-lived intangible assets – mainly capitalized development costs – using the following pretax weighted
average cost of capital (WACC) rates, which are adjusted if necessary for country-specific discount factors:
WACC 2023 2022
Passenger Cars segment 10.7% 10.2%

Commercial Vehicles segment 12.1% 13.4%
Power Engineering segment 15.7% 14.2%
The WACC rates are calculated based on the risk-free rate of interest, a market risk premium and the cost of debt.
Additionally, specific peer group information on beta factors and leverage is taken into account. The composition
of the peer groups used to determine beta factors and leverage is continuously reviewed and adjusted if necessary.
PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is accounted for under the cost model. Investment grants received are generally
deducted from cost. Special operational equipment is reported under other equipment, operating and office
equipment. Property, plant and equipment is depreciated using the straight-line method over its estimated useful
life.
299
Depreciation is based mainly on the following useful lives:
Useful life
Buildings 20 to 50 years
Site improvements 10 to 20 years
Technical equipment and machinery 6 to 12 years
Other equipment, operating and office equipment, including special operational equipment 3 to 15 years
Value in use of property, plant and equipment is determined using the principles described for intangible assets.
The cost of capital for product-specific tools and other investments is the same as the cost of capital for intangible
assets given above for each segment.
LEASES
The right-of-use assets for leases are reported in the balance sheet under those items in which the assets under-
lying the lease would have been recognized if the Volkswagen Group had been their beneficial owner. For this
reason, the right-of-use assets are presented under noncurrent assets, mostly in property, plant and equipment,
as of the balance sheet date.
Practical expedients are allowed for short-term and low-value leases; the Volkswagen Group makes use of this
option and therefore does not recognize right-of-use assets or liabilities for these types of leases. In this respect,
the lease payments are recognized as expenses in the income statement. Leases are accounted for being as of low
value if the value of the leased asset when new is no higher than €5,000. Furthermore, the accounting rules of
IFRS 16 are not applied to leases of intangible assets.
A large number of leases contain extension and termination options.
LEASE ASSETS
Vehicles leased out under operating leases are recognized at cost and depreciated to their estimated residual
value using the straight-line method over the term of the lease. The forecast residual values are adjusted to
include constantly updated internal and external information on residual values, depending on specific local fac-
tors and experience in the marketing of used cars. This requires management to make assumptions in particular
about vehicle supply and demand in the future, as well as about vehicle price trends. Such assumptions are based
either on qualified estimates or on data published by external experts. Qualified estimates are based on external
data – if available – that reflects additional information that is available from within the company, such as histor-
ical experience and current sales data.
INVESTMENT PROPERTY
Real estate and buildings held in order to obtain rental income (investment property) are accounted for under the
cost model; the depreciation method and the useful lives applied to depreciation generally correspond to those
of the property, plant and equipment used by the Company itself. The fair value of investment property is dis-
closed in the notes. Fair value is generally estimated using an investment method based on internal calculations.
This involves determining the income value for a specific building on the basis of gross income, taking into
account additional factors such as land value, remaining useful life and a multiplier specific to property.
300
CAPITALIZATION OF BORROWING COSTS

Borrowing costs of qualifying assets are capitalized as part of the cost of these assets. A qualifying asset is an
asset that necessarily takes at least a year to get ready for its intended use.
The cost of shares in associates and joint ventures is accounted for using the equity method. Testing the net
investment for impairment, the recoverable amount is determined using the principles described for indefinite-
lived intangible assets.
FINANCIAL INSTRUMENTS
Regular way purchases or sales of financial instruments are accounted for at the settlement date – that is, at the
date on which the asset is delivered.
In the Volkswagen Group, financial assets and liabilities are allocated to the “at amortized cost” and “at fair
value” categories.
FINANCIAL ASSETS AND LIABILITIES AT AMORTIZED COST

Financial assets measured at amortized cost using the effective interest method relate to
 receivables from financing business;
 trade receivables;
 other receivables and financial assets;
 time deposits;
 cash and cash equivalents.
In contrast, financial liabilities measured at amortized cost using the effective interest method consist of
 trade payables;
 other financial liabilities;
 liabilities to banks;
 commercial paper and notes;
 loans.
For reasons of materiality, discounting or unwinding of discounting is not applied to current receivables and lia-
bilities (due within one year).
FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE

Financial assets measured at fair value through other comprehensive income relate firstly to non-derivative
financial assets with contractual cash flows that relate solely to payments of principal and interest on the princi-
pal amount outstanding (debt instruments) that are held with the aim of both collecting contractual cash flows
and selling financial assets (“hold and sell” business model). Certain changes in the fair value of these debt
instruments (impairment losses, foreign exchange gains and losses, interest calculated using the effective inter-
est method) are recognized immediately in profit or loss.
Secondly, those equity instruments not held for trading (“hold” business model) are measured at fair value
through other comprehensive income. Here, Volkswagen exercises the option to recognize changes in fair value
always through other comprehensive income.
301
At Volkswagen, the category of financial assets at fair value through profit or loss primarily comprises
 hedging relationships to which hedge accounting is not applied and
 investment fund units.
All financial liabilities at fair value through profit or loss relate to derivatives not designated as hedging instru-
ments in hedge accounting.
Fair value generally corresponds to the market or quoted market price. If no active market exists, fair value is
determined using other observable inputs as far as possible. If no observable inputs are available, fair value is
determined using valuation techniques, such as by discounting the future cash flows at the market interest rate,
or by using recognized option pricing models, and, as far as possible, verified by confirmations from the banks that
handle the transactions.
In the case of current financial receivables and liabilities, amortized cost generally corresponds to the principal
or repayment amount.
The fair value option for financial assets and financial liabilities is not used in the Volkswagen Group.
Shares in subsidiaries, associates and joint ventures that are neither consolidated for reasons of materiality nor
accounted for using the equity method do not fall within the scope of IFRS 9 and IFRS 7.
DERIVATIVES AND HEDGE ACCOUNTING

Volkswagen Group companies use derivatives to hedge balance sheet items and future cash flows (hedged items).
Appropriate derivatives such as swaps, forward transactions and options are used as hedging instruments.
The accounting treatment of changes in the fair value of hedging instruments depends on the nature of the
hedging relationship. In the case of hedges against the risk of change in the fair value of balance sheet items (fair
value hedges), both the hedging instrument and the hedged risk portion of the hedged item are measured at fair
value. If appropriate, several risk portions of the hedged items are combined into one portfolio. In a portfolio fair
value hedge, changes in fair values are recognized on the basis of the individual transaction in the same way as in
fair value hedging. Gains or losses from the measurement of hedging instruments and hedged items are recog-
nized in profit or loss. In addition to the guidance of IFRS 9, the Volkswagen Group applies the guidance of IAS 39
on portfolio hedging to hedge the interest rate risk in the Financial Services Division.
In the case of hedges of future cash flows (cash flow hedges), the hedging instruments are also measured at fair
value. The designated effective portion of the hedging instrument is accounted for through OCI I and the non-
designated portion through OCI II. They are only recognized in the income statement or reclassified to inventories
when the hedged item is realized. The ineffective portion of cash flow hedges is recognized through profit or loss
immediately.
Derivatives used by the Volkswagen Group for financial management purposes to hedge against interest rate,
foreign currency, commodity price, equity price, or fund price risks, but that do not meet the strict hedge account-
ing criteria of IFRS 9, are classified as financial assets or liabilities at fair value through profit or loss (referred to
below as derivatives to which hedge accounting is not applied). This also applies to options on shares. External
hedging instruments of intragroup hedged items that are subsequently eliminated in the consolidated financial
statements are also assigned to this category as a general rule. Assets and liabilities measured at fair value through
profit or loss consist of derivatives or components of derivatives that are not included in hedge accounting. These
relate for example to the non-designated currency forwards used to hedge sales revenue, interest rate hedges,
commodity forwards and swaps and currency forwards relating to commodity forwards and swaps.
302
IMPAIRMENT LOSSES ON FINANCIAL INSTRUMENTS

Financial assets are exposed to default risk, which is taken into account by recognizing loss allowances or, if
losses have already been incurred, by recognizing impairment losses. Default risk on loans and receivables in the
financial services segment is accounted for by recognizing specific loss allowances and general loss allowances.
In particular, a loss allowance is recognized on these financial assets in the amount of the expected loss in
accordance with Group-wide standards. The actual specific loss allowances for the losses incurred are then
charged to this loss allowance. A potential impairment is assumed not only for a number of situations such as
delayed payment over a period of more than 90 days, the institution of enforcement measures, the threat of insol-
vency or overindebtedness, application for or the opening of bankruptcy proceedings, or the failure of reorganiza-
tion measures, but also for receivables that are not past due.
Insignificant receivables and significant individual receivables for which there is no indication of impairment
are grouped into homogeneous portfolios on the basis of comparable credit risk features and allocated by risk
class. Average historical default probabilities in combination with forward-looking parameters for the respective
portfolio are then used to calculate the amount of the impairment loss.
Credit risks must be considered for all financial assets measured at amortized cost or fair value through other
comprehensive income (debt instruments), as well as for contract assets in accordance with IFRS 15 and lease
receivables within the scope of IFRS 16. The rules on impairment also apply to risks from irrevocable credit com-
mitments not recognized in the balance sheet and to the measurement of financial guarantees.
As a matter of principle, a simplified process, which takes historical default rates and forward-looking infor-
mation into account, and specific loss allowances are used to account for impairment losses on receivables out-
side the Financial Services segment.
DEFERRED TAXES
The tax consequences of dividend payments are generally not taken into account until the resolution on appro-
priation of earnings available for distribution has been adopted.
Deferred tax assets that are unlikely to be realized within a clearly predictable period are reduced by loss
allowances.
Deferred tax assets for tax loss carryforwards are usually measured on the basis of future taxable income over
a planning period of five fiscal years.
INVENTORIES
Raw materials, consumables and supplies, merchandise, work in progress and self-produced finished goods re-
ported in inventories are carried at the lower of cost or net realizable value. Borrowing costs are not capitalized.
The measurement of same or similar inventories is generally based on the weighted average method.
SHARE-BASED PAYMENT
Share-based payment in the Volkswagen Group comprises cash-settled performance share plans that are recog-
nized in accordance with IFRS 2.
303
OTHER PROVISIONS
Provisions not resulting in an outflow of resources within one year are recognized at their settlement value dis-
counted to the balance sheet date. Discounting is based on market interest rates. An average discount rate of
2.87% (previous year: 3.16%) was used in the Eurozone. The settlement value also reflects cost increases
expected.
OTHER LIABILITIES (NOT WITHIN THE SCOPE OF A SPECIFIC IFRS)

Other noncurrent liabilities outside the scope of a specific IFRS are carried at amortized cost in the balance sheet.
Differences between historical cost and the repayment amount are amortized using the effective interest method.
Other current liabilities outside the scope of a specific IFRS are recognized at their repayment or settlement
amount.
REVENUE AND EXPENSE RECOGNITION

Sales revenue, interest and commission income from financial services and other operating income are recognized
only when the relevant services have been rendered or the goods have been delivered, i.e. when the customer has
obtained control of the goods or services. Where new and used vehicles and original parts are sold, the Company’s
performance generally occurs upon delivery, because that is the point when control is transferred, and the inven-
tory risk and, for deliveries to a dealer, generally also the pricing decision pass to the customer. Revenue is
reported net of sales allowances (discounts, customer bonuses, or rebates). The Volkswagen Group measures
sales allowances and other variable consideration on the basis of experience and by taking account of current
circumstances. Vehicles are normally sold to dealers on payment terms. A trade receivable is recognized for the
period between vehicle delivery and receipt of payment. Any financing component included in the transaction is
only recognized if the period between the transfer of the goods and the payment of consideration is longer than
one year and the amount to be accrued is significant.
Income from financing and finance lease agreements is recognized using the effective interest method. If non-
interest-bearing or low-interest vehicle financing arrangements are agreed, sales revenue for the vehicles is
reduced by the interest benefits granted. Sales revenue from operate leases is recognized over the term of the
contract on a straight line basis.
In contracts under which the goods or services are transferred over a period of time, revenue is recognized,
depending on the type of goods or services provided, either according to the stage of completion or, to simplify,
on a straight-line basis; the latter is only allowed if revenue recognition on a straight-line basis does not differ
materially from recognition according to the stage of completion. As a rule, the stage of completion is determined
as the proportion that contract costs incurred by the end of the reporting period bear to the estimated total con-
tract costs (cost-to-cost method). Contract costs incurred generally represent the best way to measure the stage
of completion for the performance obligation. If the outcome of a performance obligation satisfied over time is not
sufficiently certain, but the Company expects, as a minimum, to recover its costs, revenue is only recognized in the
amount of contract costs incurred (zero profit margin method). Since long-term construction contracts invariably
give rise to contingent receivables from customers for the period to completion or payment by the customer, con-
tract assets are recognized for the corresponding amounts. A trade receivable is recognized as soon as the Com-
pany has transferred the goods or services in full.
If services are sold to the customer at the same time as the vehicle, and the customer pays for them in advance,
the Group recognizes a corresponding contract liability until the services have been transferred. Examples of ser-
vices that customers pay for in advance are servicing, maintenance and certain warranty contracts as well as
mobile online services. For extended warranties granted to all customers for a particular model, a provision is nor-
mally recognized in the same way as for statutory warranties. If the warranty is optional for the customer or
includes an additional service component, the related sales revenue is deferred and recognized over the term of
the warranty.
304
Income from the sale of assets for which a Group company has a buyback obligation is recognized only when the
assets have definitively left the Group. If a fixed repurchase price was agreed when the contract was entered into,
the difference between the selling price and the present value of the repurchase price is recognized ratably as
income over the term of the contract. Prior to that time, the assets are carried as inventories in the case of short
contract terms and as lease assets in the case of long contract terms.
Sales revenue is generally determined on the basis of the price stated in the contract. If variable consideration
(e.g. volume-based bonus payments) has been agreed in a contract, the large number of contracts involved means
that revenue has to be estimated using the expected value method. In exceptional cases, the most probable
amount method may also be used. Once the expected sales revenue has been estimated, an additional check is
carried out to determine whether there is any uncertainty that necessitates the reversal of the revenue initially
recognized so that it can be virtually ruled out that sales revenue subsequently has to be adjusted downward.
Provisions for reimbursements arise mainly from dealer bonuses.
In multiple element arrangements, the transaction price is allocated to the different performance obligations
of the contract on the basis of relative standalone selling prices. In the Automotive Division, non-vehicle-related
services are generally measured at their standalone selling prices for reasons of materiality.
Cost of sales includes the costs incurred to generate the sales revenue and the cost of goods purchased for
resale. This item also includes the costs of additions to warranty provisions. Research and development costs not
eligible for capitalization in the period and amortization of development costs are likewise carried under cost of
sales. Reflecting the presentation of interest and commission income in sales revenue, the interest and commis-
sion expenses attributable to the financial services business are presented in cost of sales.
GOVERNMENT GRANTS
Government grants related to assets are deducted when arriving at the carrying amount of the asset and are
recognized in profit or loss over the life of the depreciable asset as a reduced depreciation expense.
Government grants related to income, i.e. that compensate the Group for expenses incurred, are generally rec-
ognized in profit or loss for the period and allocated to those items in which the expenses to be compensated by
the grants are also recognized. Grants in the form of nonmonetary assets (e.g. the use of land free of charge or the
transfer of resources free of charge) are disclosed as a memo item.
305
ESTIMATES AND ASSUMPTIONS BY MANAGEMENT

Preparation of the consolidated financial statements requires management to make certain estimates and
assumptions that affect the reported amounts of assets and liabilities, and income and expenses, as well as the
related disclosure of contingent assets and liabilities of the reporting period. The estimates and assumptions
relate largely to the following matters:
The impairment testing of nonfinancial assets (especially goodwill, brand names, capitalized development
costs and special operational equipment) and equity-accounted investments, or investments accounted at cost,
and the measurement of options on shares in companies that are not traded in an active market require assump-
tions about the future cash flows during the planning period, and possibly beyond it, as well as about the discount
rate to be applied. The estimates made in order to separate cash flows mainly relate to future market shares, the
trend in the respective markets and the profitability of the Volkswagen Group’s products. When determining cash
flows for conducting impairment tests on companies or equity investments with new technology operations, it is
of particular importance to assess whether these new technologies are technically feasible and have the potential
for industrial use. The recoverability of the Group’s lease assets depends in particular on the residual value of the
leased vehicles after expiration of the lease term, because this represents a significant portion of the expected
cash flows. More detailed information on impairment tests and the measurement parameters used for those tests
can be found in the explanations above regarding intangible assets.
If there are no observable market inputs, the fair values of assets acquired and liabilities assumed in a business
combination are measured using recognized valuation techniques, such as the relief-from-royalty method or the
residual method.
Impairment testing of financial assets requires estimates about the extent and probability of occurrence of
future events. As far as possible, estimates are derived from experience taking into account current market data
as well as rating categories and scoring information. The sections entitled “IFRS 7 (Financial Instruments)” and
“Financial risk management and financial instruments” contain further details on how to determine loss allow-
ances.
Accounting for provisions is also based on estimates of the extent and probability of occurrence of future
events, as well as estimates of the discount rate. As far as possible, these are also based on experience or external
opinions. The assumptions applied in the measurement of pension provisions are described in the “Provisions for
pensions and other post-employment benefits” section. Actuarial gains or losses arising from changes in meas-
urement inputs are recognized in other comprehensive income and therefore do not affect profit or loss reported
in the income statement. Any change in the estimates of the amount of other provisions is always recognized in
profit or loss. The provisions are regularly adjusted to reflect new information obtained. The use of expected values
invariably means that unused provisions are reversed or additional amounts have to be recognized for provisions.
Similarly to expenses for the recognition of provisions, income from the reversal of provisions is allocated to the
respective functions. Warranty claims from sales transactions are calculated on the basis of losses to date, esti-
mated future losses and the policy on ex gratia arrangements. In addition, assumptions must be made about the
nature and extent of future warranty and ex gratia claims.
For the provisions recognized in connection with the diesel issue, assumptions were made in particular for
working hours, material costs and hourly wage rates, depending on the series, model year and country concerned.
In addition, assumptions were made for future resale prices of repurchased vehicles. These assumptions are based
on qualified estimates, which are based, in turn, upon external data, and also reflect additional information avail-
able internally, such as values derived from past experience. Further information on the legal proceedings and on
the legal risks associated with the diesel issue can be found in the “Litigation” section.
306
Tax provisions were recognized for potential future retrospective tax payments, while other provisions were rec-
ognized for ancillary tax payments arising in this connection.
Volkswagen AG and its subsidiaries have operations worldwide and are audited by local tax authorities on an
ongoing basis. Amendments to tax laws and changes in legal precedent and their interpretation by the tax
authorities in the respective countries may lead to tax payments that differ from the estimates made in the finan-
cial statements.
The measurement of the tax provision is based on the most likely exposure resulting from this risk materializing.
Volkswagen decides whether to account for multiple tax uncertainties separately or in groups on the merits of
each individual case considered, depending on which type of presentation is better suited to predicting the extent
to which the tax risk will materialize. The pricing of individual products and services is complex, especially in rela-
tion to contracts for the cross-border supply of intragroup goods and services, because it is in many cases not
possible to observe market prices for internally generated products, or the use of market prices for similar products
is subject to uncertainty because they are not comparable. In these cases, prices – including for tax purposes – are
determined on the basis of standardized, generally accepted valuation techniques.
If actual developments differ from the assumptions made for recognizing the provisions, the figures actually
recorded may differ compared to the estimates expected originally.
An overview of other provisions can be found in the “Noncurrent and current other provisions” section.
Government grants are recognized based on an assessment as to whether there is reasonable assurance that
the Group companies will fulfill the conditions for awarding the grants and that the grants will in fact be awarded.
This assessment is based on the nature of the legal entitlement and past experience.
Estimates of the useful life of finite-lived assets are based on experience and are reviewed regularly. Where
estimates are modified the residual useful life is adjusted and an impairment loss is recognized, if necessary. As
part of this review, the useful lives of certain items of property, plant and equipment were reassessed and extended
in January 2023. These adjustments had a positive effect on the operating result in an amount of around €1.4 bil-
lion in 2023. A positive effect of around €0.8 billion is expected in 2024.
Estimates of lease terms under IFRS 16 are based on the non-cancelable period of a lease and an assessment
of whether existing extension and termination options will be exercised. The determination of the lease term and
the discount rates used impacts on the amounts to be recognized for right-of-use assets and lease liabilities.
Measuring deferred tax assets requires assumptions regarding future taxable income and the timing of the
realization of deferred tax assets.
The estimates and assumptions are based on underlying assumptions that reflect the current state of available
knowledge. Specifically, the expected future development of business was based on the circumstances known at
the date of preparation of these consolidated financial statements and a realistic assessment of the future devel-
opment of the global and sector-specific environment. Estimates and assumptions remain subject to a high degree
of uncertainty because future business developments are subject to uncertainties that in part cannot be influenced
by the Group. This applies in particular to short- and medium-term cash flow forecasts and to the discount rates
used.
Developments in this environment that differ from the assumptions and that cannot be influenced by manage-
ment could result in amounts that differ from the original estimates. If actual developments differ from the
expected developments, the underlying assumptions and, if necessary, the carrying amounts of the assets and
liabilities affected are adjusted.
Following the slump in global economic output in 2020 and the incipient recovery due to base and catch-up
effects in 2021 and the continuing normalization of economic activity in 2022, despite the Russia-Ukraine conflict,
the global economy recorded positive overall growth of 2.7% in fiscal year 2023 (previous year: growth of 3.1%).
The slowdown in economic momentum compared with the previous year was mainly due to weaker growth in the
advanced economies, whereas the overall rate of change in the emerging markets increased somewhat.
307
The Volkswagen Group’s planning is based on the assumption that global economic output will grow overall in
2024 albeit at a slower pace. The persistently high inflation in many regions and the resulting restrictive monetary
policy measures taken by central banks are expected to have an increasingly adverse effect on consumer spend-
ing. Risks will continue to arise from protectionist tendencies, turbulence in the financial markets and structural
deficits in individual countries. In addition, continuing geopolitical tensions and conflicts are weighing on growth
prospects; risks are associated in particular with the Russia-Ukraine conflict and the confrontations in the Middle
East. It is, however, assumed that both the advanced economies and the emerging markets will show positive
momentum on average, even with below-average growth in gross domestic product. Moreover, the global econ-
omy is expected to recover in 2025 and continue a path of stable growth until 2028.
Estimates and assumptions by management were based in particular on assumptions relating to the develop-
ment of the general economic environment, the automotive markets and the legal environment. These and further
assumptions are explained in detail in the Report on Expected Developments, which is part of the group manage-
ment report.
308
Segment reporting
Segments are identified on the basis of the Volkswagen Group’s internal management and reporting. In line with
the Group’s multibrand strategy, each of its brands (operating segments) is managed by its own Board of Man-
agement. The Group targets and requirements laid down by the Board of Management of Volkswagen AG must
be complied with. Segment reporting comprises four reportable segments: Passenger Cars and Light Commercial
Vehicles, Commercial Vehicles, Power Engineering and Financial Services.
The activities of the Passenger Cars and Light Commercial Vehicles segment cover the development of vehi-
cles, engines and vehicle software, the production and sale of passenger cars and light commercial vehicles, and
the corresponding genuine parts business. In the Passenger Cars and Light Commercial Vehicles reporting seg-
ment, the individual brands are combined into a single reportable segment, in particular as a response to the high
degree of technological and economic interlinking in the production network. Furthermore, there is collaboration
within key areas such as procurement, research and development or treasury.
The Commercial Vehicles segment primarily comprises the development, production and sale of trucks and
buses, the corresponding genuine parts business and related services. As in the case of the passenger car brands,
there is collaboration within the areas procurement, development and sales. The aim is to create closer coopera-
tion within the business areas.
The Power Engineering segment combines the large-bore diesel engines, turbomachinery and propulsion com-
ponents businesses.
The activities of the Financial Services segment comprise dealership and customer financing, leasing, direct
banking and insurance activities, fleet management and mobility services. In this segment, activities are combined
for reporting purposes taking into particular account the comparability of the type of services and of the regulatory
environment.
Purchase price allocation for companies acquired is allocated directly to the corresponding segments.
At Volkswagen, segment profit or loss is measured on the basis of the operating result.
In segment reporting, the share of the result of joint ventures is contained in the result of equity-accounted
investments in the corresponding segments.
The reconciliation contains activities and other operations that by definition do not constitute segments. It also
includes the unallocated Group financing activities. Consolidation adjustments between the segments are also
contained in the reconciliation.
Investments in intangible assets, property, plant and equipment, and investment property are reported net of
investments in right-of-use assets from leases.
As a matter of principle, business relationships between the companies within the segments of the Volkswagen
Group are transacted at arm’s length prices.
309
REPORTING SEGMENTS 2023
Passenger
Cars
and Light
Commercial Commercial Power Financial Total Reconcilia- Volkswagen
€ million Vehicles Vehicles Engineering Services segments tion Group
Sales revenue from external customers 223,152 44,725 4,043 49,998 321,918 366 322,284
Intersegment sales revenue 22,528 1,007 1 4,130 27,665 –27,665 –
Total sales revenue 245,680 45,731 4,044 54,128 349,584 –27,300 322,284
Depreciation and amortization 14,555 2,740 134 9,970 27,400 –617 26,783
Impairment losses 298 57 9 879 1,242 479 1,721
Reversal of impairment losses 38 5 – 444 486 0 486
Segment result (operating result) 19,474 3,714 366 3,792 27,345 –4,769 22,576
Share of the result of
equity-accounted investments 2,112 124 0 55 2,291 – 2,291
Interest result and other financial result 8,248 –458 23 –71 7,741 –9,414 –1,673
Equity-accounted investments 8,476 1,234 17 2,512 12,239 – 12,239
Investments in intangible assets,
property, plant and equipment,
and investment property 22,636 2,205 134 282 25,257 538 25,795
REPORTING SEGMENTS 20221
Passenger
Cars
and Light
Commercial Commercial Power Financial Total Reconcilia- Volkswagen
€ million Vehicles Vehicles Engineering Services segments tion Group
Sales revenue from external customers 193,074 38,346 3,564 43,667 278,651 399 279,050
Intersegment sales revenue 17,304 1,170 1 2,990 21,466 –21,466 –
Total sales revenue 210,378 39,516 3,565 46,657 300,116 –21,067 279,050
Depreciation and amortization 16,004 2,885 148 9,870 28,907 –656 28,251
Impairment losses 2,501 34 2 371 2,908 3 2,911
Reversal of impairment losses 60 4 2 557 623 – 623
Segment result (operating result) 17,156 1,588 281 5,638 24,662 –2,553 22,109
Share of the result of
equity-accounted investments 2,186 97 3 116 2,403 – 2,403
Interest result and other financial result 2,277 98 –4 –159 2,213 –4,655 –2,442
Equity-accounted investments 10,731 1,084 18 836 12,668 – 12,668
Investments in intangible assets,
property, plant and equipment,
and investment property 20,125 1,907 84 217 22,334 338 22,672
310
RECONCILIATION
€ million 2023 2022¹
Segment sales revenue 349,584 300,116

Unallocated activities 1,599 1,405
Group financing 24 27
Consolidation/Holding company function –28,923 –22,498
Group sales revenue 322,284 279,050
Segment result (operating result) 27,345 24,662

Unallocated activities 114 –2
Group financing 10 –37
Consolidation/Holding company function –4,894 –2,514
Financial result 618 –40
Consolidated result before tax 23,194 22,070
BY REGION 2023
Europe/
Other North South Asia- Hedges sales
€ million Germany markets¹ America America Pacific revenue Total
Sales revenue from external customers 59,646 128,303 67,908 17,139 50,109 –821 322,284
Intangible assets, property, plant
and equipment, lease assets and
investment property 126,254 51,605 33,520 4,586 4,750 – 220,715
1 Excluding Germany.
BY REGION 20222
Europe/
Other North South Asia- Hedges sales
€ million Germany markets¹ America America Pacific revenue Total
Sales revenue from external customers 49,042 105,472 59,910 15,476 51,443 –2,294 279,050
Intangible assets, property, plant
and equipment, lease assets and
investment property 119,386 47,661 32,517 2,709 4,848 – 207,121
1 Excluding Germany.
Allocation of sales revenue to the regions follows the destination principle.

The allocation of interregional intragroup transactions regarding the segment assets has been presented uni-
formly according to the economic ownership.
311
Income statement disclosures
1. Sales revenue
ST R U C T U R E O F G R O U P S A L E S R E V E N U E 2 0 2 3
Passenger Cars
and Light
Commercial Commercial Power Financial Total Seg- Volkswagen
€ million Vehicles Vehicles Engineering Services ments Reconciliation Group
Vehicles 191,217 31,224 – – 222,441 –19,325 203,115

Genuine parts 16,171 6,854 – – 23,025 –196 22,829
Used vehicles
and third-party products 12,977 2,560 – 22,897 38,434 –4,598 33,836
Engines, powertrains
and parts deliveries 12,659 1,010 – – 13,669 –71 13,598
Power Engineering – – 4,044 – 4,044 –1 4,043
Motorcycles 890 – – – 890 – 890
Leasing business 918 1,575 0 18,124 20,617 –1,387 19,230
Interest and similar income 310 0 – 12,500 12,810 –860 11,950
Hedges sales revenue –930 26 – – –904 83 –821
Other sales revenue 11,469 2,482 – 607 14,558 –945 13,614
245,680 45,731 4,044 54,128 349,584 –27,300 322,284
ST R U C T U R E O F G R O U P S A L E S R E V E N U E 2 0 2 2 1
Passenger Cars
and Light
Commercial Commercial Power Financial Total Seg- Volkswagen
€ million Vehicles Vehicles Engineering Services ments Reconciliation Group
Vehicles 160,562 25,542 – 0 186,104 –14,657 171,447

Genuine parts 14,970 6,759 – – 21,729 –160 21,570
Used vehicles
and third-party products 11,474 2,334 – 20,485 34,293 –3,650 30,643
Engines, powertrains
and parts deliveries 12,313 858 – – 13,171 –65 13,105
Power Engineering – – 3,565 – 3,565 –1 3,564
Motorcycles 915 – – – 915 – 915
Leasing business 764 1,693 0 16,669 19,126 –1,231 17,895
Interest and similar income 285 1 – 8,873 9,160 –418 8,742
Hedges sales revenue –2,220 –20 – – –2,241 –53 –2,294
Other sales revenue 11,314 2,349 – 631 14,294 –831 13,463
210,378 39,516 3,565 46,657 300,116 –21,067 279,050
312
For segment reporting purposes, the sales revenue of the Group is presented by segment and market.
Other sales revenue comprises revenue from workshop services and extended warranties, among other things.
Of the sales revenue recognized in the period under review, an amount of €8,936 million (previous year:
€8,045 million) was included in contract liabilities as of January 1, 2023.
The sales revenue realized in the period under review comprises performance obligations of €363 million (pre-
vious year: €718 million) that had already been met in an earlier period.
In addition to existing performance obligations of €4,794 million (previous year: €3,939 million) in the Power
Engineering segment, most of which are expected to be satisfied or for which sales revenue is expected to be
recognized by December 31, 2024, the vast majority of the Volkswagen Group’s performance obligations that were
unsatisfied as of the reporting date relate to vehicle deliveries. Most of these deliveries had already been made at
the time this report was prepared, or will be made in the first quarter of 2024. The calculation of the amounts for
the Power Engineering Business Area took account of both contracts with a term of up to one year and service
contracts under which the Volkswagen Group realizes sales revenue in exactly the same amount as the customer
benefits from the services rendered by the Company. In the case of variable consideration, sales revenue is only
recognized to the extent that there is reasonable assurance that this sales revenue will not subsequently have to
be reversed or adjusted downward.
2. Cost of sales
Cost of sales includes interest expenses of €7,968 million (previous year: €3,323 million) attributable to the
financial services business.
This item also includes impairment losses on intangible assets (primarily development costs), property, plant
and equipment (primarily other equipment, operating and office equipment), and lease assets in the amount of
€1,335 million (previous year: €843 million). The impairment losses totaling €388 million (previous year: €572 mil-
lion) recognized during the reporting year on intangible assets and items of property, plant and equipment result
primarily from lower values in use of various products in the Passenger Cars and Light Commercial Vehicles seg-
ment, due to market and exchange rate risks, and in particular from expected declines in volumes. The impairment
losses on lease assets in the amount of €947 million (previous year: €270 million) are predominantly attributable
to the Financial Services segment. They are based on constantly updated internal and external information that is
factored into the forecast residual values of the vehicles. €138 million (previous year: €10 million) of this figure is
reported in current lease assets.
Government grants related to income amounted to €292 million in the fiscal year (previous year: €457 million)
and were generally allocated to the functional areas.
3. Distribution expenses
Distribution expenses amounting to €21.3 billion (previous year: €19.8 billion) include nonstaff overheads and
personnel costs, and depreciation and amortization applicable to the distribution function, as well as the costs of
shipping, advertising and sales promotions.
4. Administrative expenses
Administrative expenses of €12.7 billion (previous year: €11.7 billion) mainly include nonstaff overheads and per-
sonnel costs, as well as depreciation and amortization charges applicable to the administrative function.
313
5. Other operating income
€ million 2023 2022¹
Income from reversal of loss allowances on receivables and other assets 2,164 1,512
Income from reversal of provisions and accruals 922 988
Income from derivatives within hedge accounting 766 892
Income from derivatives not within hedge accounting Financial Services 894 1,999
Income from other hedges 2,245 5,396
Income from foreign exchange gains 3,419 3,640
Income from sale of promotional material 304 339
Income from cost allocations 1,470 1,099
Income from investment property 12 30
Gains on asset disposals and the reversal of impairment losses on noncurrent assets 586 724
Miscellaneous other operating income 2,369 2,615
15,152 19,234
Foreign exchange gains mainly comprise gains from changes in exchange rates between the dates of recognition
and payment of receivables and liabilities denominated in foreign currencies, as well as exchange rate gains
resulting from measurement at the closing rate. Foreign exchange losses from these items are included in other
operating expenses.
Income from other hedges includes primarily gains from the fair value measurement and realization of deriva-
tive financial instruments used to hedge exchange rates and commodity prices in the Automotive Division that are
not designated in a hedging relationship. Losses are included in other operating expenses.
314
6. Other operating expenses
€ million 2023 2022¹
Loss allowances on trade receivables 558 345

Loss allowances on other receivables and other assets 2,051 2,756
Expenses from derivatives within hedge accounting 754 971
Expenses from derivatives not within hedge accounting Financial Services 1,221 1,309
Expenses from other hedges 4,857 2,417
Foreign exchange losses 3,793 3,762
Expenses from cost allocations 1,113 833
Expenses for termination agreements 62 280
Losses on disposal of noncurrent assets 406 321
Miscellaneous other operating expenses 4,719 4,820
19,534 17,813
Allowances on other receivables and other assets include allowances on receivables from long-term construction con-
tracts amounting to €2.1 million (previous year: €0.3 million). In the previous year, allowances on other receiva-
bles and other assets also included expenses incurred in connection with the Russia-Ukraine conflict (see “Key
events” section).
Expenses from other hedges include primarily losses from the fair value measurement and realization of deriv-
ative financial instruments used to hedge exchange rates and commodity prices in the Automotive Division that
are not designated in a hedging relationship. Gains are included in other operating income.
7. Share of the result of equity-accounted investments
€ million 2023 2022¹
Share of profits of equity-accounted investments 2,910 2,957

of which from joint ventures 2,713 2,893
of which from associates 196 64
Share of losses of equity-accounted investments 619 554
of which from joint ventures 174 187
of which from associates 445 367
2,291 2,403
315
8. Interest result
€ million 2023 2022¹
Interest income 2,658 1,325

Other interest and similar income 2,656 1,325
Valuation of fair value hedges 2 –
Interest expenses –3,592 –408
Other interest and similar expenses –2,050 –938
Valuation of fair value hedges –3 1
Expenses from discounting lease liabilities –222 –158
Interest result from compounding/discounting other noncurrent liabilities –304 1,236
Net interest on the net defined benefit liability –1,014 –549
Interest result –934 916
In the previous year, the positive interest result from compounding/discounting other noncurrent liabilities was
mainly the result of adjustments to the discount rates used to measure noncurrent provisions.
9. Other financial result
€ million 2023 2022
Income from profit and loss transfer agreements 28 55

Cost of loss absorption –63 –52
Other income from equity investments 341 168
Other expenses from equity investments –837 –2,270
Gains and losses from marketable securities and loans 725 –1,013
Realized income of loan receivables and payables in foreign currency 1,093 1,227
Realized expenses of loan receivables and payables in foreign currency –1,226 –985
Gains and losses from remeasurement and impairment of financial instruments –904 166
Gains and losses from fair value changes of hedging instruments/derivatives
not included in hedge accounting 111 –662
Gains and losses from fair value changes of hedging instruments/derivatives
included in hedge accounting –6 7
Other financial result –739 –3,359
Other expenses from equity investments reported in the previous year related primarily to the impairment loss of
€1.9 billion recognized to write down all shares held in Argo AI. See “Key events” section for more information.
Gains and losses from marketable securities and loans are mainly the result of positive net income from funds,
which had been negatively affected in the previous year by the turbulence in the capital markets attributable to
the Russia-Ukraine conflict.
In fiscal year 2023, gains and losses from remeasurement and impairment of financial instruments are primarily
attributable to valuation adjustments on cash and cash equivalents held in Argentina.
Gains and losses from fair value changes of hedging instruments/derivatives not included in hedge accounting
include gains on the measurement of the options in connection with the acquisition of Europcar in an amount of
€0.1 billion. In the previous year, the measurement of the options had resulted in losses of €0.3 billion (see “Key
events” section).
316
10. Income tax income/expense
COMPONENTS OF TAX INCOME AND EXPENSE
€ million 2023 2022¹
Current tax expense, Germany 2,880 1,179

Current tax expense, abroad 3,911 4,084
Current income tax expense 6,791 5,263
of which prior-period income (–)/expense (+) –62 666
Deferred tax income (–)/expense (+), Germany –740 3,334
Deferred tax income (–)/expense (+), abroad –786 –2,380
Deferred tax income (–)/expense (+) –1,526 954
Income tax income/expense 5,266 6,217
The statutory corporation tax rate in Germany for the 2023 assessment period was 15%. Including trade tax and
the solidarity surcharge, this resulted in an aggregate tax rate of 30.0% (previous year: 30.0%).
A tax rate of 30.0% (previous year: 30.0%) was used to measure deferred taxes in the German consolidated tax
group.
The local income tax rates applied to companies outside Germany vary between 0% and 46% (previous year:
0% and 46%). In the case of split tax rates, the tax rate applicable to undistributed profits is applied.
The realization of tax benefits from tax loss carryforwards from previous years resulted in a reduction in current
income taxes in 2023 of €816 million (previous year: €1,013 million).
The tax loss carryforwards and the expiry of loss carryforwards that could not be used changed as follows:
P R E V I O U S LY U N U S ED THEREOF UNUSABLE
TAX LOSS TAX LOSS
CARRYFORWARDS CARRYFORWARDS
€ million Dec. 31, 2023 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2022
Non-expiring tax loss carryforwards 14,993 13,178 4,577 4,512

Expiry within 10 years 1,880 3,556 1,152 1,199
Expiry over 10 years 10,511 11,002 381 1,335
Total 27,385 27,736 6,111 7,045
The benefit arising from previously unrecognized tax losses or tax credits of a prior period that is used to reduce
current tax expense in the current fiscal year amounts to €120 million (previous year: €139 million). Deferred tax
expense was reduced by €372 million (previous year: €1,687 million) because of a benefit arising from previously
unrecognized tax losses and tax credits of a prior period. Deferred tax expense resulting from the write-down of
a deferred tax asset amounts to €44 million (previous year: €70 million). Deferred tax income resulting from the
reversal of a write-down of deferred tax assets amounts to €125 million (previous year: €34 million).
Tax credits granted by various countries amounted to €473 million (previous year: €493 million).
No deferred tax assets were recognized for deductible temporary differences of €2,232 million (previous year:
€2,262 million) and for tax credits of €128 million (previous year: €159 million) that would expire in the next 20
years.
317
In accordance with IAS 12.39, deferred tax liabilities of €251 million (previous year: €265 million) for temporary
differences and undistributed profits of Volkswagen AG subsidiaries were not recognized because control exists.
Deferred tax income resulting from changes in tax rates amounted to €9 million at Group level (previous year:
deferred tax expense of €31 million).
Deferred tax assets of €6,508 million (previous year: €1,731 million) were recognized without being offset by
deferred tax liabilities in the same amount. In fiscal year 2023, the existing deferred tax assets of companies within
the German tax group, which had been recognized due to positive results in the past, were included in this analysis.
The companies concerned are expecting positive tax income in the future, following losses in the reporting period
or the previous year.
€2,861 million (previous year adjusted: €2,407 million (see changes in comprehensive income)) of the deferred
taxes recognized in the balance sheet was credited to equity and relates to other comprehensive income.
€– 66 million (previous year: €– 6 million) of this figure is attributable to noncontrolling interests. In fiscal year
2023, no deferred tax income from the remeasurement of pension plans directly through equity was reclassified
within equity (previous year: €2 million). In the previous year, there were effects from capital transactions with
noncontrolling interests. The classification of changes in deferred taxes is presented in the statement of compre-
hensive income.
In fiscal year 2023, tax effects of €3 million resulting from equity transaction costs were credited to equity
(previous year: €3 million).
D E F E R R E D T A X E S C L A S S I F I E D B Y B A L A N C E SH E E T I T E M
The following recognized deferred tax assets and liabilities were attributable to recognition and measurement
differences in the individual balance sheet items and to tax loss carryforwards:
D E F E R R E D T AX AS S E T S D E F E R R E D T AX LI A B I L I TI E S
€ million Dec. 31, 2023 Dec. 31, 2022¹ Dec. 31, 2023 Dec. 31, 2022¹
Intangible assets 1,179 1,170 15,095 13,698

Property, plant and equipment, and lease assets 6,076 5,236 8,041 8,190
Noncurrent financial assets 410 55 10 193
Inventories 2,743 2,073 924 979
Receivables and other assets
(including Financial Services Division) 2,492 2,144 10,258 10,090
Other current assets 3,117 4,077 35 76
Pension provisions 5,476 4,674 88 92
Liabilities and other provisions 13,807 14,012 5,022 5,707
Loss allowances on deferred tax assets from
temporary differences –194 –236 – –
Temporary differences, net of loss allowances 35,107 33,205 39,473 39,025
Tax loss carryforwards, net of loss allowances 5,678 5,394 – –
Tax credits, net of loss allowances 345 330 – –
Value before consolidation and offset 41,130 38,929 39,473 39,025
of which attributable to noncurrent assets and liabilities 27,347 25,438 31,800 31,194
Offset 30,488 29,152 30,488 29,152
Consolidation 3,298 3,151 796 862
Amount recognized 13,940 12,929 9,781 10,736
318
The tax expense reported for 2023 of €5,266 million (previous year adjusted: €6,217 million (see disclosures on
IFRS 17)) was €1,692 million (previous year adjusted: €404 million (see disclosures on IFRS 17)) lower than the
expected tax expense of €6,958 million that would have resulted from application of a tax rate for the Group of
30.0% (previous year: 30.0%) to the earnings before tax of the Group.
RECONCILIATION OF EXPECTED TO EFFECTIVE INCOME TAX
€ million 2023 2022¹
Profit before tax 23,194 22,070

Expected income tax income (–)/expense (+)
(tax rate 30.0%; previous year 30.0%) 6,958 6,621
Reconciliation:
Effect of different tax rates outside Germany –1,171 –561
Proportion of taxation relating to:
tax-exempt income –1,461 –1,398
expenses not deductible for tax purposes 1,100 1,101
effects of loss carryforwards 52 –1,247
permanent differences –761 382
Tax credits –120 –96
Prior-period tax expense –361 688
Effect of tax rate changes –9 31
Nondeductible withholding tax 702 369
Other taxation changes 337 327
Effective income tax expense 5,266 6,217
Effective tax rate in % 22.7 28.2
GLOBAL MINIMUM TOP-UP TAX

The Organisation for Economic Co-operation and Development (OECD) has published the model rules for Pillar
Two (Pillar 2) based on G20 Inclusive Framework on Tax Avoidance and Profit Shifting, which are intended to
address the tax challenges arising from the digitalization of the global economy in order to ensure an effective
minimum tax rate of 15%. Volkswagen Group falls within the scope of the OECD model regulations of Pillar Two.
The Pillar Two legislation has been enacted or substantially enacted in countries Austria, Belgium, Bulgaria, Czech
Republic, Denmark, Finland, France, Germany, Hungary, Ireland, Italy, Japan, Liechtenstein, Luxembourg, Malay-
sia, Mauritius, Netherlands, Qatar, Romania, Slovakia, Slovenia, South Korea, Sweden, Switzerland, United Arab
Emirates, United Kingdom and Vietnam and will enter into force from 1 January 2024 in different combinations
of rules and in some cases at a later date. Since the Pillar Two legislation had not yet been finalized at the time of
the report, Volkswagen Group is not subject to any tax burden in this regard for the financial year 2023.
The exception introduced in May 2023 with the amendments to IAS 12 means that deferred taxes in connection
with income taxes resulting from applicable or announced tax provisions implementing the Pillar Two model rules
published by the OECD are neither recognized nor disclosed at Volkswagen Group.
According to legislation, Volkswagen Group will be liable for an additional tax per country at the difference
between the GloBE effective tax rate and the minimum tax rate of 15%.
Volkswagen Group is currently in the process of assessing the impact of Pillar Two legislation becoming effec-
tive as of in 2024 et seq. Based on the country-by-country reporting (CbCR) for the financial years 2021 and 2022,
all Group companies are subject to an effective tax rate per country of more than 15% however with the exception
of countries Bermuda, Bosnia and Herzegovina, Bulgaria, Cayman Islands, Estonia, Finland, Ireland, Kosovo, Kuwait,
Latvia, Lithuania, Norway, Oman, Pakistan, Panama, Qatar, Saudi Arabia, Tanzania, Thailand, Turkey and the United
Arab Emirates. Although the average effective tax rate is less than 15% based on the CbCR data, Volkswagen
319
Group may not be required to pay Pillar Two income taxes in respect of these countries. This is due to specific
adjustments provided for in the Pillar Two legislation, which may result in deviations from the effective tax rates
calculated. Overall, it is assumed that the tax burden for Volkswagen Group from Pillar Two based on the 2021 and
2022 CbCR data will amount to a range of between EUR 10 million to 20 EUR million. This would have an effect
of 0.04% - 0.08% on the Group tax rate. Hence, there are no material effects on the net assets, financial position
and earnings of Volkswagen Group.
Due to the complexity of the application of the legislation, the quantitative effects of the legislation enacted or
entered into force can currently only be estimated in ranges. Therefore, even for group companies with an effective
tax rate of more than 15%, Pillar Two may have tax implications. Furthermore, on the basis of the CbCR Safe Har-
bour, this assessment only applies on a transitional basis (currently until the end of the financial year 2026). For
the years following the expiry of the CbCR Safe Harbours, further analyses will be carried out on the basis of the
general set of rules.
320
11. Earnings per share
Basic earnings per share are calculated by dividing earnings attributable to Volkswagen AG shareholders by the
weighted average number of ordinary and preferred shares outstanding during the reporting period. Since there
were no transactions in 2023 and 2022 that had a dilutive effect on the number of shares, diluted earnings per
share are equivalent to basic earnings per share.
In accordance with Article 27(2) No. 3 of the Articles of Association of Volkswagen AG, preferred shares are
entitled to a €0.06 higher dividend than ordinary shares.
2023 2022¹
Weighted average number of:

Ordinary shares – basic/diluted Shares 295,089,818 295,089,818
Preferred shares – basic/diluted Shares 206,205,445 206,205,445
Earnings after tax € million 17,928 15,852

Earnings attributable to noncontrolling interests € million 1,329 395
Earnings attributable to Volkswagen AG hybrid capital investors € million 586 576
Earnings attributable to Volkswagen AG shareholders € million 16,013 14,881
of which basic/diluted earnings attributable to ordinary shares € million 9,419 8,753
of which basic/diluted earnings attributable to preferred shares € million 6,594 6,129
Earnings per ordinary share – basic/diluted € 31.92 29.66

Earnings per preferred share – basic/diluted € 31.98 29.72
321
Balance sheet disclosures
12. Intangible assets
CHANGES IN INTANGIBLE ASSETS IN THE PERIOD JANUARY 1 TO DECEMBER 31, 2023
Capitalized Capitalized
development development
costs for costs for
products under products Other
€ million Brand names Goodwill development currently in use intangible assets Total
Cost
Balance at Jan. 1, 2023 17,633 26,211 17,595 44,949 15,464 121,853
Foreign exchange differences –27 –114 –8 23 –105 –231
Changes in consolidated Group – 210 –137 – 31 104
Additions – – 9,275 1,868 1,302 12,445
Transfers – – –4,763 4,763 219 219
Disposals 10 2 35 966 323 1,336
Balance at Dec. 31, 2023 17,596 26,305 21,927 50,638 16,587 133,053
Amortization and impairment
Balance at Jan. 1, 2023 105 9 93 29,021 9,385 38,612
Foreign exchange differences 3 0 0 13 –23 –7
Changes in consolidated Group – – – – –40 –40
Additions to cumulative amortization – – – 5,120 1,298 6,418
Additions to cumulative impairment losses – 6 23 45 71 145
Transfers – – – 0 –2 –2
Disposals 10 2 0 954 212 1,179
Reversal of impairment losses – – – 3 – 3
Balance at Dec. 31, 2023 98 13 116 33,240 10,476 43,944
Carrying amount at Dec. 31, 2023 17,498 26,292 21,811 17,398 6,111 89,109
322
CHANGES IN INTANGIBLE ASSETS IN THE PERIOD JANUARY 1 TO DECEMBER 31, 2022
Capitalized Capitalized
development development
costs for costs for
products under products Other
€ million Brand names Goodwill development currently in use intangible assets Total
Cost
Balance at Jan. 1, 2022 17,661 26,203 10,287 44,806 13,789 112,745
Foreign exchange differences –22 –17 16 –125 155 7
Changes in consolidated Group 5 75 1 40 110 232
Additions – – 9,057 666 1,945 11,668
Transfers 0 – –1,728 1,738 55 65
Classified as held for sale 0 – 4 65 30 99
Disposals 11 50 33 2,111 560 2,764
Balance at Dec. 31, 2022 17,633 26,211 17,595 44,949 15,464 121,853
Balance at Jan. 1, 2022 89 29 88 26,120 8,731 35,056
Foreign exchange differences 0 0 0 –118 29 –89
Changes in consolidated Group – – – 7 9 16
Additions to cumulative amortization 2 – – 5,058 1,111 6,171
Additions to cumulative impairment losses 16 30 21 65 15 147
Transfers – – 0 1 –5 –4
Classified as held for sale – – 0 18 25 43
Disposals 2 50 15 2,095 481 2,642
Reversal of impairment losses – – – – – –
Balance at Dec. 31, 2022 105 9 93 29,021 9,385 38,612
Carrying amount at Dec. 31, 2022 17,528 26,202 17,502 15,929 6,079 83,241
Other intangible assets comprise in particular concessions, purchased customer lists and dealer relationships,
industrial and similar rights, and licenses in such rights and assets.
323
The allocation of the brand names and goodwill to the operating segments is shown in the following table:
€ million 2023 2022
Brand names by operating segment

Porsche 13,823 13,823
Scania Vehicles and Services 878 878
MAN Truck & Bus 1,127 1,127
MAN Energy Solutions 415 415
Navistar 784 813
Ducati 404 404
Other 68 68
17,498 17,528
Goodwill by operating segment
Porsche 18,825 18,825
Scania Vehicles and Services 2,546 2,548
MAN Truck & Bus 587 587
MAN Energy Solutions 263 263
Navistar 2,989 3,101
Ducati 290 290
Škoda 168 168
Porsche Holding Salzburg 125 126
Other 498 294
26,292 26,202
The impairment test for recognized goodwill and brand names is always based on value in use, which has been
determined at the level of the respective brand. In this process, the WACC rates, based on the risk-free rate of
interest, a market risk premium and the cost of debt, are applied. For more information on the general approach
and key assumptions, please refer to the details provided on intangible assets in the “Accounting policies” section.
Moreover, the following aspects were of significance for the brands with material recognized brand names and
goodwill:
The Porsche cash-generating unit is based on the assumption that Porsche’s current position as a profitable
manufacturer of exclusive sports cars is to be expanded further. Under the “Road to 20” program, the Porsche AG
Group has a long-term profitability target of achieving an operating return on sales of more than 20% for the Group.
For MAN Truck & Bus, the year 2023 marked a turnaround, after the positive effects from the realignment pro-
gram had not been fully leveraged because of the negative impacts of the war in Ukraine in the previous year. After
a period of stabilization in 2024, the transformation towards e-mobility will have an increasing effect on cash from
fiscal year 2025 onwards.
Moreover, Navistar Sales & Services is to be taken to new levels of strength. The measures applied to this end
range from using the powerful component and technology organization within the TRATON GROUP through
expanding the financial services business down to making even more effective use of one of the largest independ-
ent dealer and service networks in the North American market which Navistar has already access to.
At Scania Vehicles & Services, a rise in sales volume and the expansion of the vehicle services business are
additionally having a positive impact on the planned cash flows.
For all cash-generating units, recoverability is not affected by a variation in the growth forecast of – 0.5 percent-
age points with respect to the perpetual annuity or of + 0.5 percentage point with respect to the discount rate.
Due to market volatility in recent years, the planned cash flows were also tested for their sensitivity to reasonably
possible changes and their recoverability was established.
324
Research and development costs developed as follows:
€ million 2023 2022 %
Total research and development costs 21,779 18,908 15.2

of which: capitalized development costs 11,142 9,723 14.6
Capitalization ratio in % 51.2 51.4
Amortization of capitalized development costs 5,187 5,144 0.8
Research and development costs recognized in profit or loss 15,824 14,329 10.4
13. Property, plant and equipment
CHANGES IN PROPERTY, PLANT AND EQUIPMENT IN THE PERIOD

JANUARY 1 TO DECEMBER 31, 2023
Land, land rights

and buildings, Other Payments on
including Technical equipment, account and
buildings on equipment and operating and assets under
€ million third-party land machinery office equipment construction Total
Cost
Balance at Jan. 1, 2023 50,789 53,934 91,212 9,991 205,925
Foreign exchange differences –281 –268 –288 –100 –936
Changes in consolidated Group –298 –464 –434 –418 –1,614
Additions 2,080 1,280 4,326 7,141 14,826
Transfers 1,194 798 3,595 –5,446 142
Disposals 670 1,009 2,874 166 4,720
Balance at Dec. 31, 2023 52,814 54,271 95,537 11,001 213,622
Balance at Jan. 1, 2023 23,083 42,377 76,565 10 142,035
Foreign exchange differences –113 –216 –239 0 –568
Changes in consolidated Group –281 –446 –413 –10 –1,150
Additions to cumulative amortization 2,337 3,053 4,712 – 10,102
Additions to cumulative impairment losses 26 185 19 13 244
Transfers –2 –1,134 1,246 6 116
Disposals 423 962 2,642 0 4,026
Reversal of impairment losses 0 1 6 3 10
Balance at Dec. 31, 2023 24,627 42,857 79,243 15 146,742
Carrying amount at Dec. 31, 2023 28,186 11,414 16,294 10,986 66,880
325
CHANGES IN PROPERTY, PLANT AND E QUIPMENT IN THE PERIOD

JANUARY 1 TO DECEMBER 31, 2022
Land, land rights

and buildings, Other Payments on
including Technical equipment, account and
buildings on equipment and operating and assets under
€ million third-party land machinery office equipment construction Total
Cost
Balance at Jan. 1, 2022 48,281 52,144 88,111 7,645 196,181
Foreign exchange differences 158 314 697 70 1,240
Changes in consolidated Group 18 10 27 21 77
Additions 2,065 1,240 2,858 6,698 12,861
Transfers 1,117 1,702 1,489 –4,373 –65
Classified as held for sale 21 39 –14 0 45
Disposals 830 1,439 1,985 71 4,325
Balance at Dec. 31, 2022 50,789 53,934 91,212 9,991 205,925
Balance at Jan. 1, 2022 21,083 40,103 71,296 4 132,486
Foreign exchange differences 83 270 592 0 945
Changes in consolidated Group –48 34 12 0 –2
Additions to cumulative amortization 2,250 3,175 6,379 – 11,804
Additions to cumulative impairment losses 154 132 132 6 425
Transfers 13 8 –17 0 4
Classified as held for sale 9 9 –2 – 16
Disposals 426 1,336 1,823 –3 3,583
Reversal of impairment losses 16 1 8 3 29
Balance at Dec. 31, 2022 23,083 42,377 76,565 10 142,035
Carrying amount at Dec. 31, 2022 27,705 11,557 14,647 9,981 63,890
Government grants of €237 million (previous year adjusted: €66 million) were deducted from the cost of property,
plant and equipment.
In connection with land and buildings, real property liens of €1,497 million (previous year: €1,517 million) are
pledged as collateral for partial retirement obligations, financial liabilities and other liabilities.
326
14. Lease assets and investment property
C H A N G E S I N L E A S E A S S E T S A N D I N V E ST M E N T P R O P E R T Y I N T H E P E R I O D J A N U A R Y 1 T O
DECEMBER 31, 2023
€ million Lease assets Investment property Total
Cost
Balance at Jan. 1, 2023 80,919 961 81,880
Changes in consolidated Group 1,098 4 1,101
Additions 32,974 6 32,980
Transfers –57 93 36
Disposals 28,061 19 28,080
Balance at Dec. 31, 2023 86,093 1,033 87,126
Balance at Jan. 1, 2023 21,539 351 21,890
Changes in consolidated Group 92 0 92
Additions to cumulative amortization 10,241 21 10,263
Additions to cumulative impairment losses 809 1 810
Transfers –19 34 15
Disposals 10,051 4 10,055
Reversal of impairment losses 395 0 396
Balance at Dec. 31, 2023 21,999 401 22,400
Carrying amount at Dec. 31, 2023 64,094 632 64,726
C H A N G E S I N L E A S E A S S E T S A N D I N V E ST M E N T P R O P E R T Y I N T H E P E R I O D J A N U A R Y 1 T O
DECEMBER 31, 2022
€ million Lease assets Investment property Total
Cost
Balance at Jan. 1, 2022 79,146 947 80,092
Foreign exchange differences 1,105 17 1,122
Changes in consolidated Group 187 –5 182
Additions 24,105 4 24,110
Transfers –14 4 –10
Disposals 23,611 6 23,617
Balance at Dec. 31, 2022 80,919 961 81,880
Balance at Jan. 1, 2022 19,447 332 19,779
Foreign exchange differences 262 3 265
Changes in consolidated Group 73 –1 72
Additions to cumulative amortization 10,255 21 10,276
Additions to cumulative impairment losses 261 1 261
Transfers –4 1 –3
Disposals 8,216 3 8,220
Balance at Dec. 31, 2022 21,539 351 21,890
Carrying amount at Dec. 31, 2022 59,380 610 59,990
327
Lease assets include assets leased out under the terms of operating leases and assets covered by long-term buy-
back agreements.
Investment property includes apartments rented out and leased dealerships with a fair value of €1,456 million
(previous year: €1,279 million). Fair value is estimated using an investment method based on internal calculations
(Level 3 of the fair value hierarchy). Operating expenses of €85 million (previous year: €69 million) were incurred
for the maintenance of investment property in use. Expenses of €0.4 million (previous year: €0.8 million) were
incurred for unused investment property.
Rental income from investment property amounted to €81 million in fiscal year 2023 (previous year adjusted:
€89 million).
15. Equity-accounted investments and other equity investments
C H A N G E S I N E Q U I T Y - A C C O U N T E D I N V E S T M E N T S A N D O T H E R E Q U I T Y I N V E ST M E N T S
IN THE PERIOD JANUARY 1 TO DECEMBER 31, 2023
Equity-accounted
€ million investments Other equity investments Total
Gross carrying amount

Balance at Jan. 1, 2023 15,235 4,538 19,774
Changes in consolidated Group 271 –386 –114
Additions 570 2,085 2,655
Transfers – – –
Disposals – 321 321
Changes recognized in profit or loss 2,243 –13 2,230
Dividends¹ –2,511 – –2,511
Other changes recognized in other comprehensive income –388 –122 –510
Balance at Dec. 31, 2023 15,204 5,734 20,937
Impairment losses
Balance at Jan. 1, 2023 2,567 1,050 3,617
Changes in consolidated Group –19 94 76
Additions 523 304 826
Disposals 27 96 124
Balance at Dec. 31, 2023 2,964 1,303 4,267
Carrying amount at Dec. 31, 2023 12,239 4,431 16,670
328
C H A N G E S I N E Q U I T Y - A C C O U N T E D I N V E S T M E N T S A N D O T H E R E Q U I T Y I N V E ST M E N T S
IN THE PERIOD JANUARY 1 TO DECEMBER 31, 20222
Equity-accounted
€ million investments Other equity investments Total
Gross carrying amount

Balance at Jan. 1, 2022 13,102 4,033 17,135
Foreign exchange differences –82 1 –81
Changes in consolidated Group 203 –233 –30
Additions 2,167 1,499 3,666
Changes recognized in profit or loss 2,399 5 2,404
Dividends¹ –2,877 – –2,877
Other changes recognized in other comprehensive income 323 –449 –125
Balance at Dec. 31, 2022 15,235 4,538 19,774
Impairment losses
Balance at Jan. 1, 2022 571 1,033 1,604
Changes in consolidated Group –25 11 –15
Additions 2,077 180 2,258
Balance at Dec. 31, 2022 2,567 1,050 3,617
Carrying amount at Dec. 31, 2022 12,668 3,489 16,157

Equity-accounted investments include joint ventures in the amount of €7,139 million (previous year: €6,959 mil-
lion) and associates in the amount of €5,100 million (previous year: €5,709 million).
Among the additions to equity-accounted investments in the fiscal year under review, an amount of €0.3 billion
is attributable to the capital contribution to the new joint venture CARIZON established with Horizon Robotics. In
the previous year, material additions to equity-accounted investments had included a capital increase of €1.7 bil-
lion at GMH in connection with the acquisition of Europcar.
Among the additions to other equity investments, the main item was an amount of €0.7 billion for the acquisi-
tion of shares of XPeng.
Changes in the consolidated Group affecting equity-accounted investments in the fiscal year relate mainly to
the joint venture Audi FAW NEV Co. in an amount of €0.3 billion. In the previous year, the main changes in the
consolidated Group affecting equity-accounted investments had related to the associate Brose Sitech Sp. z o.o.,
Polkowice/Poland in an amount of €0.3 billion.
Additions to impairment losses on equity-accounted investments in an amount of €0.4 billion were mostly
attributable to the associate QuantumScape in the fiscal year. In the previous year, additions to impairment losses
on equity-accounted investments in an amount of €1.9 billion were mostly attributable to the joint venture Argo AI.
Additional disclosures on the above mentioned equity investments can be found in the “Key events” section.
Of the other changes recognized in other comprehensive income, €– 377 million (previous year adjusted:
€366 million (see disclosures on IFRS 17)) is attributable to joint ventures and €– 12 million (previous year:
€– 43 million) to associates. They are mainly the result of foreign exchange differences in the amount of
€– 288 million (previous year: €157 million), pension plan remeasurements in the amount of €– 3 million (previous
year: €9 million) and fair value measurement of cash flow hedges in the amount of €– 128 million (previous year:
€143 million).
329
16. Noncurrent and current financial services receivables
FAIR FAIR
CARRYING AMOUNT VALUE CARRYING AMOUNT VALUE
€ million Current Noncurrent Dec. 31, 2023 Dec. 31, 2023 Current Noncurrent Dec. 31, 2022 Dec. 31, 2022
Receivables from
financing business
Customer financing 27,025 49,354 76,379 76,713 27,087 49,065 76,152 75,302
Dealer financing 17,968 3,780 21,748 21,731 14,243 2,653 16,896 16,908
Direct banking 361 22 382 387 338 17 356 359
45,353 53,155 98,509 98,831 41,668 51,735 93,403 92,568
Receivables from
operating leases 496 – 496 496 387 – 387 387
Receivables from
finance leases 20,532 41,318 61,850 61,720 19,493 35,209 54,702 53,748
66,381 94,474 160,855 161,047 61,549 86,944 148,493 146,703
Finance lease receivables included in financial services receivables of €160.9 billion (previous year: €148.5 bil-
lion) increased by €293 million (previous year: decline of €156 million) due to hedged fair value changes of
hedged items designated in portfolio hedges.
The receivables from customer and dealer financing are secured by vehicles or real property liens. Of the
receivables, €957 million (previous year: €767 million) was furnished as collateral for financial liabilities and con-
tingent liabilities.
The receivables from dealer financing include €30 million (previous year: €15 million) receivable from uncon-
solidated affiliated companies.
17. Noncurrent and current other financial assets
CARRYING AMOUNT CARRYING AMOUNT
€ million Current Noncurrent Dec. 31, 2023 Current Noncurrent Dec. 31, 2022¹
Positive fair values

of derivative financial
instruments 3,289 4,629 7,918 3,916 7,545 11,461
Receivables from loans,
bonds, profit participation
rights
(excluding interest) 8,972 6,201 15,173 6,843 5,253 12,097
Miscellaneous financial as-
sets 4,692 927 5,619 4,389 1,033 5,422
16,953 11,757 28,710 15,148 13,832 28,980
Other financial assets include receivables from related parties of €14.3 billion (previous year: €11.8 billion). Other
financial assets amounting to €90 million (previous year: €118 million) were furnished as collateral for financial
liabilities and contingent liabilities. There is no original right of disposal or pledge for the furnished collateral on
the part of the collateral taker.
In addition, miscellaneous financial assets include receivables from restricted deposits that serve as collateral
(mainly under asset-backed securities transactions).
330
The positive fair values of derivatives relate to the following items:
€ million Dec. 31, 2023 Dec. 31, 2022
Transactions for hedging

foreign currency risk from assets using fair value hedges 28 50
foreign currency risk from liabilities using fair value hedges 50 38
interest rate risk using fair value hedges 364 868
interest rate risk using cash flow hedges 170 504
foreign currency and price risk from future cash flows (cash flow hedges) 3,801 3,282
Hedging transactions Total 4,413 4,741
Assets related to derivatives not included in hedging relationships 3,506 6,720
Total 7,918 11,461
Positive fair values of €260 million (previous year: €822 million) were recognized from transactions for hedging
interest rate risk (fair value hedges) designated in portfolio hedges.
Further details on derivative financial instruments as a whole are given in the section entitled “Financial risk
management and financial instruments”.
18. Noncurrent and current other receivables
Other recoverable income

taxes 5,431 1,240 6,671 4,852 1,028 5,879
Miscellaneous receivables 3,368 1,462 4,830 2,961 1,449 4,410
8,799 2,702 11,501 7,813 2,477 10,290
Miscellaneous receivables include assets to fund post-employment benefits in the amount of €127 million (pre-
vious year: €70 million). This item also includes assets from reinsurance contracts held in an amount of €35 mil-
lion (previous year adjusted: €38 million (see disclosures on IFRS 17)).
Current other receivables are predominantly non-interest-bearing.
Other receivables include contingent receivables from long-term construction contracts recognized in accord-
ance with project progress. They correspond to the contract assets recognized under contracts with customers
and changed as follows:
€ million 2023 2022
Contingent construction contract receivables at Jan. 1 212 306

Additions and disposals 136 –96
Change in valuation allowances –1 1
Foreign exchange differences 0 2
Contingent construction contract receivables at Dec. 31 347 212
331
The Volkswagen Group capitalizes costs to obtain a contract and amortizes them on a straight-line basis over the
life of the contract only if they are material, the underlying contract has a term of at least one year, and these costs
would not have been incurred, if the corresponding contract had not been entered into. As of December 31, 2023,
no costs to obtain contracts were recognized as assets (previous year: €81 million). In fiscal year 2023, the capi-
talized costs to obtain contracts were realized in total; in the previous year, amortization charges on capitalized
costs to obtain contracts had amounted to €47 million.
19. Tax assets
Deferred tax assets – 13,940 13,940 – 12,929 12,929

Tax receivables 1,649 437 2,086 1,732 394 2,125
1,649 14,377 16,025 1,732 13,323 15,054
Deferred tax assets include an amount of €7,867 million (previous year adjusted: €7,016 million (see disclosures
on IFRS 17)) arising from recognition and measurement differences between IFRS carrying amounts and the tax
base, which will reverse within one year.
20. Inventories
€ million Dec. 31, 2023 Dec. 31, 2022
Raw materials, consumables and supplies 9,787 10,458

Work in progress 5,005 6,041
Finished goods and purchased merchandise 30,994 29,466
Current lease assets 6,183 5,170
Prepayments 1,649 1,165
Hedges on inventories –16 –26
53,601 52,274
At the same time as the relevant revenue was recognized, inventories in the amount of €234 billion (previous year:
€204 billion) were included in cost of sales. Loss allowances (excluding lease assets) recognized as expenses in
the reporting period amounted to €621 million (previous year: €582 million). Vehicles with a value amounting to
€236 million (previous year: €257 million) were assigned as collateral for partial retirement obligations.
332
21. Trade receivables
€ million Dec. 31, 2023 Dec. 31, 2022¹
Trade receivables from

third parties 18,340 14,785
unconsolidated subsidiaries 185 210
joint ventures 3,234 3,451
associates 89 87
other investees and investors 1 1
21,849 18,534
The fair values of the trade receivables correspond to the carrying amounts.
22. Marketable securities and time deposits
The marketable securities serve to safeguard liquidity. They are mainly short-term fixed-income securities and
shares. Most securities are measured at fair value. Current securities amounting to €1,264 million (previous year:
€1,406 million) were furnished as collateral for financial liabilities and contingent liabilities. There is no original
right of disposal or pledge for the furnished collateral on the part of the collateral taker.
23. Cash and cash equivalents
€ million Dec. 31, 2023 Dec. 31, 2022
Bank balances 43,158 28,685

Checks, cash-in-hand, bills and call deposits 291 487
43,449 29,172
Bank balances are held at various banks in different currencies and also include time deposits with maturities of
less than three months.
333
24. Equity
The subscribed capital of Volkswagen AG is composed of no-par value bearer shares with a notional value of
€2.56. As well as ordinary shares, there are preferred shares that entitle the bearer to a €0.06 higher dividend
than ordinary shares, but do not carry voting rights.
The Annual General Meeting on May 10, 2023 resolved to create authorized capital of up to €228 million, ex-
piring on May 9, 2028, to issue new preferred bearer shares.
The subscribed capital is composed of 295,089,818 no-par value ordinary shares (previous year: 295,089,818)
and 206,205,445 no-par value preferred shares (previous year: 206,205,445), and amounts to €1,283,315,873
(previous year: €1,283,315,873).
The capital reserves comprise the share premium totaling €14,225 million (previous year: €14,225 million) from
capital increases, the share premium of €219 million from the issuance of bonds with warrants and an amount of
€107 million appropriated on the basis of the capital reduction implemented in 2006. No amounts were withdrawn
from the capital reserves.
DIVIDENDS AND DIVIDEND PROPOSAL

In accordance with section 58(2) of the Aktiengesetz (AktG – German Stock Corporation Act), the dividend pay-
ment by Volkswagen AG is based on the net retained profits reported in the annual financial statements of
Volkswagen AG prepared in accordance with the German Commercial Code. Based on these annual financial
statements of Volkswagen AG, following the transfer of €1,720 million to revenue reserves, net retained profits
of €4,526 million are eligible for distribution. The Board of Management and Supervisory Board will propose to
the Annual General Meeting that a total dividend of €4,524 million, i.e. €9.00 per ordinary share and €9.06 per
preferred share, be paid from the net retained profits. Shareholders are not entitled to a dividend payment until it
has been resolved by the Annual General Meeting.
In fiscal year 2023, based on the resolution of the Annual General Meeting of Volkswagen AG of May 10, 2023,
a dividend of €8.70 per ordinary share and €8.76 per preferred share was distributed. In addition, the increased
dividend of €19.06 per ordinary and preferred share resolved at the extraordinary General Meeting of
Volkswagen AG on December 16, 2022, in connection with the IPO of Porsche AG was distributed in January 2023.
HYBRID CAPITAL
Under IAS 32, the hybrid notes of the Volkswagen Group must be classified in their entirety as equity. The capital
raised was recognized in equity, less a discount and transaction costs and net of deferred taxes. The interest
payments payable to the noteholders will be recognized directly in equity. IAS 32 only allows these hybrid notes
to be classified as debt once the respective hybrid note is called. Interest may be accumulated depending on
whether a dividend is paid to Volkswagen AG shareholders.
In July 2023, Volkswagen AG called a hybrid note (maturity: 10 years) with a principal amount of €750 million,
which had been placed in 2013 via Volkswagen International Finance N.V., Amsterdam/the Netherlands (issuer).
Once called, the note was classified as debt in accordance with IAS 32. Equity and net liquidity of the
Volkswagen Group were reduced accordingly. The hybrid note was redeemed on September 4, 2023.
From the hybrid capital issued on September 6, 2023, Volkswagen AG recorded a cash inflow of €1,750 million
less transaction costs of €9 million. In addition, the recognition of deferred taxes led to non-cash effects of €3 mil-
lion.
334
NONCONTROLLING INTERESTS
As of December 31, 2023, noncontrolling interests amounted to €14,218 million (previous year adjusted:
€12,952 million (see disclosures on IFRS 17)). Noncontrolling interests are mainly attributable to the
Porsche AG Group (see “Key events” section for details) and the TRATON GROUP.
The table below shows summarized financial information of the Porsche AG Group, including amortized goodwill
and fair value adjustments, which were determined at the acquisition date:
€ million 2023 2022²
Noncontrolling interests in % 1
24.58 24.58


Other comprehensive income, net of tax –471 1,947
Dividend paid to noncontrolling interest shareholders 225 6

Change in working capital –1,866 –1,168
Net cash flow 2,701 3,011
1 The percentage only includes direct noncontrolling interests.

335
The table below shows summarized financial information of the TRATON GROUP, including amortized goodwill and
fair value adjustments, which were determined at the acquisition date:
€ million 2023 2022
Noncontrolling interests in %1 10.28 10.28



Other comprehensive income, net of tax –25 10
Dividend paid to noncontrolling interest shareholders 36 26

Change in working capital –2,680 –4,702
Cash flows from operating activities 2,583 –660
Net cash flow 198 –2,576
1 The percentage only includes direct noncontrolling interests.
25. Noncurrent and current financial liabilities
€ million Current Noncurrent Dec. 31, 2023 Current Noncurrent Dec. 31, 2022
Bonds 25,272 73,885 99,157 21,284 71,835 93,119

Commercial paper and notes 21,446 23,281 44,727 17,239 18,034 35,273
Liabilities to banks 25,769 15,288 41,057 18,840 23,266 42,105
Deposits business 35,589 3,238 38,827 24,107 2,642 26,749
Loans and miscellaneous lia-
bilities 1,288 1,250 2,537 876 677 1,554
Lease liabilities 1,112 5,381 6,494 1,102 5,283 6,385
110,476 122,323 232,799 83,448 121,737 205,185
336
26. Noncurrent and current other financial liabilities
€ million Current Noncurrent Dec. 31, 2023 Current¹ Noncurrent Dec. 31, 2022¹
Negative fair values of

derivative financial
instruments 2,649 4,680 7,329 2,281 5,565 7,846
Interest payable 1,256 281 1,537 837 215 1,052
Miscellaneous financial
liabilities 10,117 2,006 12,123 16,689 2,409 19,097
14,022 6,968 20,990 19,807 8,188 27,995
Under miscellaneous current financial liabilities, an amount of €6,750 million was attributable in the previous year
to the obligation to pay a special dividend to the shareholders of Volkswagen AG in connection with the IPO of
Porsche AG (see “Key events” section).
The negative fair values of derivatives relate to the following items:
€ million Dec. 31, 2023 Dec. 31, 2022
Transactions for hedging

foreign currency risk from assets using fair value hedges 30 12
foreign currency risk from liabilities using fair value hedges 81 14
interest rate risk using fair value hedges 1,793 2,596
interest rate risk using cash flow hedges 64 54
foreign currency and price risk from future cash flows (cash flow hedges) 2,443 2,801
Hedging transactions Total 4,412 5,477
Liabilities related to derivatives not included in hedging relationships 2,918 2,369
Total 7,329 7,846
Negative fair values of €110 million (previous year: €0 million) were recognized from transactions for hedging
interest rate risk (fair value hedges) designated in portfolio hedges.
Further details on derivative financial instruments as a whole are given in the section entitled “Financial risk
management and financial instruments”.
337
27. Noncurrent and current other liabilities
€ million Current Noncurrent Dec. 31, 2023 Current¹ Noncurrent¹ Dec. 31, 2022¹
Payments received on ac-

count of orders 10,446 7,001 17,447 9,579 6,301 15,880
Liabilities relating to
other taxes 3,930 219 4,149 3,544 159 3,703
social security 881 74 955 806 149 955
wages and salaries 6,789 799 7,588 6,503 878 7,381
Miscellaneous liabilities 2,298 1,792 4,091 2,232 1,658 3,890
24,345 9,885 34,230 22,665 9,144 31,810
The liabilities from payments on account received under contracts with customers correspond to the contract
liabilities under contracts with customers; they are part of the payments received on account of orders. They
changed as follows:
€ million 2023 2022
Liabilities from advance payments received under contracts with customers at Jan. 1 14,286 12,762
Additions and disposals 1,603 1,467
Changes in consolidated Group 6 –4
Classified as held for sale 0 2
Foreign exchange differences –143 63
Liabilities from advance payments received under contracts with customers at Dec. 31 15,752 14,286
28. Tax liabilities
Deferred tax liabilities – 9,781 9,781 – 10,736 10,736

Provisions for taxes 1,663 4,287 5,950 2,586 4,320 6,906
Tax payables 556 – 556 726 – 726
2,219 14,068 16,287 3,312 15,056 18,368
Deferred tax liabilities include an amount of €717 million (previous year adjusted: €780 million (see disclosures
on IFRS 17)) arising from recognition and measurement differences between IFRS carrying amounts and the tax
base, which will reverse within one year.
338
29. Provisions for pensions and other post-employment benefits
Provisions for pensions are recognized for commitments in the form of retirement, invalidity and dependents’
benefits payable under pension plans. The benefits provided by the Group vary according to the legal, tax and
economic circumstances of the country concerned, and usually depend on the length of service and remuneration
of the employees.
Volkswagen Group companies provide occupational pensions under both defined contribution and defined
benefit plans. In the case of defined contribution plans, the Company makes contributions to state or private pen-
sion schemes based on legal or contractual requirements, or on a voluntary basis. Once the contributions have
been paid, there are no further obligations for the Volkswagen Group. Current contributions are recognized as
pension expenses of the period concerned. In fiscal year 2023, they amounted to a total of €3,061 million (previous
year: €2,846 million) in the Volkswagen Group. Of this figure, contributions to the compulsory state pension sys-
tem in Germany amounted to €1,963 million (previous year: €1,854 million).
In the case of defined benefit plans, a distinction is made between pensions funded by provisions and exter-
nally funded plans.
The pension provisions for defined benefits are measured by independent actuaries using the internationally
accepted projected unit credit method in accordance with IAS 19, under which the future obligations are meas-
ured on the basis of the ratable benefit entitlements earned as of the balance sheet date. Measurement reflects
actuarial assumptions as to discount rates, salary and pension trends, employee turnover rates, longevity and
increases in healthcare costs, which were determined for each Group company depending on the economic envi-
ronment. Remeasurements arise from differences between what has actually occurred and the prior-year assump-
tions, from changes in assumptions, as well as from gains or losses on plan assets, excluding amounts included in
net interest income or expenses. They are recognized in other comprehensive income, net of deferred taxes, in the
period in which they arise.
Multi-employer pension plans exist in the Volkswagen Group in the United Kingdom, Switzerland, Sweden and
the Netherlands. These plans are defined benefit plans. A small proportion of them are accounted for as defined
contribution plans, as the Volkswagen Group is not authorized to receive the information required in order to
account for them as defined benefit plans. Under the terms of the multi-employer plans, the Volkswagen Group is
not liable for the obligations of the other employers. In the event of its withdrawal from the plans or their winding-
up, the proportionate share of the surplus of assets attributable to the Volkswagen Group will be credited or the
proportionate share of the deficit attributable to the Volkswagen Group will have to be funded. In the case of the
defined benefit plans accounted for as defined contribution plans, the Volkswagen Group’s share of the obligations
represents a small proportion of the total obligations. No probable significant risks arising from multi-employer
defined benefit pension plans that are accounted for as defined contribution plans have been identified. The
expected contributions to those plans will amount to €30 million for fiscal year 2024.
Owing to their benefit character, the obligations of the US Group companies in respect of post-employment
medical care in particular are also carried under provisions for pensions. These post-employment benefit provi-
sions take into account the expected long-term change in the cost of healthcare. In fiscal year 2023, €40 million
(previous year: €33 million) was recognized as an expense for healthcare costs. The related carrying amount as of
December 31, 2023 was €550 million (previous year: €637 million).
339
The following amounts were recognized in the balance sheet for defined benefit plans:
€ million Dec. 31, 2023 Dec. 31, 2022
Present value of funded obligations 20,233 18,082

Fair value of plan assets 16,381 14,880
Funded status (net) 3,851 3,201
Present value of unfunded obligations 25,590 24,090
Amount not recognized as an asset because of the ceiling in IAS 19 104 191
Net liability recognized in the balance sheet 29,546 27,483
of which provisions for pensions 29,672 27,553
of which other assets 127 70
Significant pension arrangements in the Volkswagen Group

For the period after their active working life, the Volkswagen Group offers its employees benefits under attrac-
tive, modern occupational pension arrangements. Most of the arrangements in the Volkswagen Group are pension
plans for employees in Germany classified as defined benefit plans under IAS 19. The majority of these obligations
are funded solely by recognized provisions. These plans are now largely closed to new members. To reduce the
risks associated with defined benefit plans, in particular longevity, salary increases and inflation, the Volkswagen
Group has introduced new defined benefit plans in recent years whose benefits are funded by appropriate external
plan assets. The aforementioned risks have been largely reduced in these pension plans. The proportion of the
total defined benefit obligation attributable to pension obligations funded by plan assets will continue to rise in
the future. The significant pension plans are described in the following.
GERMAN PENSION PLANS FUNDED SOLELY BY RECOGNIZED PROVISIONS

The pension plans funded solely by recognized provisions comprise both contribution-based plans with guaran-
tees and final salary plans. For contribution-based plans, an annual pension expense dependent on income and
status is converted into a lifelong pension entitlement using annuity factors (guaranteed modular pension entitle-
ments). The annuity factors include a guaranteed rate of interest. At retirement, the modular pension entitlements
earned annually are added together. For final salary plans, the underlying salary is multiplied at retirement by a
percentage that depends on the years of service up until the retirement date.
The present value of the guaranteed obligation rises as interest rates fall and is therefore exposed to interest
rate risk.
The pension system provides for lifelong pension payments. The companies bear the longevity risk in this re-
spect. This is accounted for by calculating the annuity factors and the present value of the guaranteed obli-
gation using the latest generational mortality tables – the “Heubeck 2018 G” mortality tables – which already
reflect future increases in life expectancy.
To reduce the inflation risk from adjusting the regular pension payments by the rate of inflation, a pension
adjustment that is not indexed to inflation was introduced for pension plans where this is permitted by law.
340
GERMAN PENSION PLANS FUNDED BY EXTERNAL PLAN ASSETS

The pension plans funded by external plan assets are contribution-based plans with guarantees. In this case, an
annual pension expense dependent on income and status is either converted into a lifelong pension entitlement
using annuity factors (guaranteed modular pension entitlement) or paid out in a single lump sum or in installments.
In some cases, employees also have the opportunity to provide for their own retirement through deferred compensa-
tion. The annuity factors include a guaranteed rate of interest. At retirement, the modular pension entitlements
earned annually are added together. The pension expense is contributed on an ongoing basis to a separate pool
of assets that is administered independently of the Company in trust and invested in the capital markets. If the
plan assets exceed the present value of the obligations calculated using the guaranteed rate of interest, surpluses
are allocated (modular pension bonuses).
Since the assets administered in trust meet the IAS 19 criteria for classification as plan assets, they are
deducted from the obligations.
The amount of the pension assets is exposed to general market risk. The investment strategy and its imple-
mentation are therefore continuously monitored by the trusts’ governing bodies, on which the companies are also rep-
resented. For example, investment policies are stipulated in investment guidelines with the aim of limiting market
risk and its impact on plan assets. In addition, asset-liability management studies are conducted if required
so as to ensure that investments are in line with the obligations that need to be covered. The pension assets are
currently invested primarily in fixed-income or equity funds. The main risks are therefore interest rate and
equity price risk. To mitigate market risk, the pension system also provides for cash funds to be set aside in an
equalization reserve before any surplus is allocated.
The present value of the obligation is the present value of the guaranteed obligation after deducting the plan
assets. If the plan assets fall below the present value of the guaranteed obligation, a provision must be recognized
in that amount. The present value of the guaranteed obligation rises as interest rates fall and is therefore exposed
to interest rate risk.
In the case of lifelong pension payments, the Volkswagen Group bears the longevity risk. This is accounted for
by calculating the annuity factors and the present value of the guaranteed obligation using the latest generational
mortality tables – the “Heubeck 2018 G” mortality tables – which already reflect future increases in life expectancy. In
addition, the independent actuaries carry out annual risk monitoring as part of the review of the assets adminis-
tered by the trusts.
To reduce the inflation risk from adjusting the regular pension payments by the rate of inflation, a pension adjust-
ment that is not indexed to inflation was introduced for pension plans where this is permitted by law.
Calculation of the pension provisions was based on the following actuarial assumptions:
GERMANY ABROAD
% 2023 2022 2023 2022
Discount rate at December 31 3.29 3.69 4.61 5.00

Payroll trend 3.39 3.23 3.77 4.41
Pension trend 2.19 2.19 2.63 2.96
Employee turnover rate 1.20 1.20 4.46 4.43
Annual increase in healthcare costs – – 5.46 5.56
341
These assumptions are averages that were weighted using the present value of the defined benefit obligation.
With regard to life expectancy, consideration is given to the latest mortality tables in each country. The dis-
count rates are generally defined to reflect the yields on prime-rated corporate bonds with matching matur-
ities and currencies. The iBoxx AA Corporate Bond index was taken as the basis for the obligations of German
Group companies. Similar indices were used for foreign pension obligations.
The payroll trends cover expected wage and salary trends, which also include increases attributable to career
development.
The pension trends either reflect the contractually guaranteed pension adjustments or are based on the rules
on pension adjustments in force in each country.
The employee turnover rates are based on past experience and future expectations.
The following table shows changes in the net defined benefit liability recognized in the balance sheet:
€ million 2023 2022
Net liability recognized in the balance sheet at January 1 27,483 41,376

Current service cost 1,270 2,086
Net interest expense 1,007 546
Actuarial gains (–)/losses (+) arising from changes in demographic assumptions 5 –13
Actuarial gains (–)/losses (+) arising from changes in financial assumptions 2,637 –19,630
Actuarial gains (–)/losses (+) arising from experience adjustments –86 1,762
Income (+)/expenses (–) from plan assets not included in interest income 619 –3,017
Change in amount not recognized as an asset because of the ceiling in IAS 19 –93 85
Employer contributions to plan assets 925 902
Employee contributions to plan assets –22 –15
Pension payments from company assets 1,062 984
Past service cost (including plan curtailments) 8 38
Gains (–) or losses (+) arising from plan settlements –22 –16
Classified as held for sale – –
Other changes –50 105
Foreign exchange differences from foreign plans –27 2
Net liability recognized in the balance sheet at December 31 29,546 27,483
The change in the amount not recognized as an asset because of the ceiling in IAS 19 contains an interest com-
ponent, part of which was recognized in the financial result in profit or loss, and part of which was recognized
outside profit or loss directly in equity.
342
The change in the present value of the defined benefit obligation is attributable to the following factors:
€ million 2023 2022
Present value of obligations at January 1 42,172 58,555

Interest cost 1,607 820
Actuarial gains(–)/losses (+) arising from changes in demographic assumptions 5 –13
Actuarial gains(–)/losses (+) arising from changes in financial assumptions 2,637 –19,630
Actuarial gains(–)/losses (+) arising from experience adjustments –86 1,762
Employee contributions to plan assets 33 25
Pension payments from company assets 1,062 984
Pension payments from plan assets 552 549
Foreign exchange differences from foreign plans –22 59
Present value of obligations at December 31 45,823 42,172
The actuarial losses arising from changes in financial assumptions result primarily from the change in the discount
rate in Germany. In the previous year, the rise in the discount rate from 1.2% to 3.7% led to actuarial gains of
€19,588 million, while the increase in the pension trend from 1.7% to 2.2% had an offsetting effect, reducing
actuarial gains by €2,389 million.
Changes in the relevant actuarial assumptions would have had the following effects on the defined benefit obli-
gation:
DEC. 31, 2023 DEC. 31, 2022
Present value of defined benefit obligation if € million Change in percent € million Change in percent
is 0.5
percentage
Discount rate points higher 42,434 –7.40 39,172 –7.11
is 0.5
percentage
points lower 49,704 8.47 45,599 8.13
is 0.5
percentage
Pension trend points higher 47,744 4.19 43,926 4.16
is 0.5
percentage
points lower 44,066 –3.83 40,585 –3.76
is 0.5
percentage
Payroll trend points higher 46,058 0.51 42,398 0.54
is 0.5
percentage
points lower 45,611 –0.46 41,966 –0.49
increases by
Longevity one year 47,175 2.95 43,461 3.05
343
The sensitivity analysis shown above considers the change in one assumption at a time, leaving the other
assumptions unchanged versus the original calculation. I.e. any correlation effects between the individual as-
sumptions are ignored.
To examine the sensitivity of the present value of the defined benefit obligation to a change in assumed longevity,
the estimates of mortality were reduced as part of a comparative calculation to the extent that doing so increases
life expectancy by approximately one year.
The average duration of the defined benefit obligation weighted by the present value of the defined benefit
obligation (Macaulay duration) is 16 years (previous year: 16 years).
The present value of the defined benefit obligation is attributable as follows to the members of the plan:
€ million 2023 2022
Active members with pension entitlements 23,408 21,054

Members with vested entitlements who have left the Company 2,463 2,270
Pensioners 19,951 18,848
45,823 42,172
The maturity profile of payments attributable to the defined benefit obligation is presented in the following table,
which classifies the present value of the obligation by the maturity of the underlying payments:
€ million 2023 2022
Payments due within the next fiscal year 1,626 1,638

Payments due between two and five years 6,901 6,655
Payments due in more than five years 37,296 33,879
45,823 42,172
Changes in plan assets are shown in the following table:
€ million 2023 2022
Fair value of plan assets at January 1 14,880 17,285

Interest income on plan assets determined using the discount rate 600 274
Income (+)/expenses (–) from plan assets not included in interest income 619 –3,017
Employer contributions to plan assets 925 902
Employee contributions to plan assets 10 9
Pension payments from plan assets 552 550
Gains (+) or losses (–) arising from plan settlements – –
Changes in consolidated Group – 0
Other changes –113 –81
Foreign exchange differences from foreign plans 11 57
Fair value of plan assets at December 31 16,381 14,880
The investment of the plan assets to cover future pension obligations resulted in income of €1,219 million (previ-
ous year: expenses of €2,742 million).
Employer contributions to plan assets are expected to amount to €973 million (previous year: €901 million) in the
next fiscal year.
344
Plan assets are invested in the following asset classes:
DEC. 31, 2023 DEC. 31, 2022
Quoted prices No quoted prices Quoted prices No quoted prices

€ million in active markets in active markets Total in active markets in active markets Total
Cash and cash equivalents 424 – 424 591 – 591

Equity instruments 324 – 324 278 – 278
Debt instruments 531 4 536 518 5 523
Direct investments in
real estate – 224 224 0 193 193
Derivatives 420 –5 415 444 29 473
Equity funds 5,217 2 5,219 4,593 1 4,594
Bond funds 6,362 87 6,449 5,522 107 5,628
Real estate funds 512 24 536 617 30 647
Other funds 1,200 216 1,416 1,011 233 1,244
Other instruments 217 621 839 105 604 709
Plan assets include €16 million (previous year: €15 million) invested in Volkswagen Group assets and €4 million
(previous year: €5 million) in Volkswagen Group debt instruments.
The following amounts were recognized in the income statement:
€ million 2023 2022

Net interest on the net defined benefit liability 1,007 546
Net income (–) and expenses (+) recognized in profit or loss 2,263 2,654
The above amounts are generally included in the personnel costs of the functional areas in the income statement.
Net interest on the net defined benefit liability is reported in interest expenses.
345
30. Noncurrent and current other provisions
Obligations
arising from Employee Litigation and Miscellaneous
€ million sales expenses legal risks provisions1 Total1
Balance at Jan. 1, 2022 26,310 6,837 5,220 10,103 48,470

Changes in consolidated Group –1 12 –3 12 20
Classified as held for sale 6 1 1 2 10
Utilization 9,009 2,633 2,781 3,618 18,042
Additions/New provisions 11,528 2,830 974 6,449 21,780
Unwinding of discount/effect of change in
discount rate –465 –553 –53 –76 –1,146
Reversals 2,518 194 394 2,523 5,629
Balance at Dec. 31, 2022 26,046 6,314 3,045 10,473 45,878
of which current 12,396 3,073 1,181 7,946 24,596
of which noncurrent 13,650 3,241 1,864 2,527 21,283
Balance at Jan. 1, 2023 26,046 6,314 3,045 10,473 45,878
Foreign exchange differences –230 –31 –4 –93 –358
Changes in consolidated Group –112 –7 1 –234 –352
Classified as held for sale – – – – –
Utilization 10,047 2,432 673 5,076 18,229
Additions/New provisions 13,833 2,719 508 5,519 22,578
Reclassifications 196 – – –196 –
Unwinding of discount/effect of change in
discount rate 134 166 –1 –55 244
Reversals 2,056 251 387 1,552 4,245
Balance at Dec. 31, 2023 27,764 6,477 2,489 8,786 45,517
of which current 13,549 3,082 1,155 6,095 23,881
of which noncurrent 14,214 3,396 1,335 2,691 21,636
The obligations arising from sales contain provisions covering all risks relating to the sale of vehicles, components
and genuine parts through to the disposal of end-of-life vehicles. They primarily comprise warranty obligations,
calculated on the basis of losses to date and estimated future losses. They also include provisions for discounts,
bonuses and similar allowances which are incurred after the balance sheet date, but for which there is a legal or
constructive obligation attributable to sales revenue before the balance sheet date.
Provisions for employee expenses are recognized for long-service awards, time credits, partial retirement
arrangements, severance payments and similar obligations, among other things.
In addition to residual provisions relating to the diesel issue, the provisions for litigation and legal risks contain
amounts related to a large number of legal disputes and official proceedings in which Volkswagen Group compa-
nies become involved in Germany and internationally in the course of their operating activities. In particular, such
legal disputes and other proceedings may occur in relation to suppliers, dealers, customers, employees, or inves-
tors. Please refer to the “Litigation” section for a discussion of the legal risks.
346
Miscellaneous provisions relate to a wide range of identifiable specific risks, price risks and uncertain obligations,
which are measured in the amount of the expected settlement value. Depending the jurisdiction concerned, they
also include risk provisions for any non-compliance with legal emissions limits. Their measurement takes into
account, among other things, the respective sales volume and the legally defined fee or the cost of acquiring
emission rights from other manufacturers. Advantage has been taken of synergies between individual brands of
the Volkswagen Group by establishing emission pools where possible.
Miscellaneous provisions additionally include provisions amounting to €944 million (previous year adjusted:
€892 million (see disclosures on IFRS 17)) relating to the insurance business.
31. Trade payables
€ million Dec. 31, 2023 Dec. 31, 2022¹
Trade payables to
third parties 30,157 27,966
unconsolidated subsidiaries 210 196
joint ventures 204 227
associates 322 342
other investees and investors 8 7
30,901 28,738
Trade payables include an amount of €993 million (previous year: €403 million) for which the Volkswagen Group
has entered into reverse factoring agreements.
Under these agreements, suppliers can assign their receivables from Volkswagen Group companies at a dis-
count to the commercial banks participating in the program and in this way receive the discounted invoice amount
prematurely.
The Volkswagen Group companies settle the invoice amount with the bank as of the due date originally agreed.
347
Other disclosures
32. IAS 23 (Borrowing costs)
Capitalized borrowing costs amounted to €507 million (previous year: €178 million) and related mainly to capi-
talized development costs. An average cost of debt of 3.4% (previous year: 2.2%) was used as a basis for capital-
ization in the Volkswagen Group.
33. IFRS 16 (Leases)
1. Lessee accounting
The Volkswagen Group is a lessee, mainly as a result of leasing office equipment, real estate and other means of
production. The leases are negotiated individually and include a large number of contract terms and conditions.
The following amounts for right-of-use assets resulting from leases are included in the balance sheet items:
P R E S E N T A T I O N O F A N D C H A N G E S I N R I G H T - O F - U S E A S SE T S F R O M LE A SE S F O R T H E P E R I O D
Right of use on
land, land rights Right of use on Right of use on
and buildings incl. technical other equipment,
buildings on third equipment and operational and
€ million party land machinery office equipment Total
Cost
Balance at Jan. 1, 2023 8,758 62 911 9,731
Changes in consolidated group –118 0 –10 –127
Additions 1,285 10 276 1,571
Transfers –14 – 0 –14
Classified as held for sale – – – –
Disposals 569 5 180 754
Balance at Dec. 31, 2023 9,249 66 992 10,308
Depreciation and impairment
Balance at Jan. 1, 2023 2,942 34 394 3,370
Changes in consolidated group –53 0 –4 –57
Additions to cumulative depreciation 1,048 7 196 1,251
Additions to cumulative impairment losses 0 – – 0
Classified as held for sale – – – –
Disposals 364 3 173 539
Reversal of impairment losses – – – –
Balance at Dec. 31, 2023 3,538 37 411 3,986
Carrying amount at Dec. 31, 2023 5,711 29 581 6,322
348
P R E S E N T A T I O N O F A N D C H A N G E S I N R I G H T - O F - U S E A S SE T S F R O M LE A SE S F O R T H E P E R I O D
Right of use on
land, land rights Right of use on Right of use on
and buildings incl. technical other equipment,
buildings on third equipment and operational and
€ million party land machinery office equipment Total
Cost
Balance at Jan. 1, 2022 7,962 63 816 8,841
Foreign exchange differences –8 0 –3 –12
Changes in consolidated group 51 – 1 52
Additions 1,477 7 174 1,657
Transfers –32 – –1 –32
Classified as held for sale 7 – – 7
Disposals 685 7 75 768
Balance at Dec. 31, 2022 8,758 62 911 9,731
Depreciation and impairment
Balance at Jan. 1, 2022 2,332 34 289 2,656
Foreign exchange differences –10 0 –2 –12
Changes in consolidated group –1 – 0 –1
Additions to cumulative depreciation 1,000 7 179 1,185
Additions to cumulative impairment losses 6 – 0 6
Classified as held for sale 5 – – 5
Disposals 362 7 72 440
Reversal of impairment losses 15 – – 15
Balance at Dec. 31, 2022 2,942 34 394 3,370
Carrying amount at Dec. 31, 2022 5,816 28 517 6,361
Subleases of right-of-use assets generated income of €16 million (previous year: €17 million) in the fiscal year.
The measurement of right-of-use assets from leases and the associated lease liabilities is based on a best
estimate regarding the exercise of extension and termination options. If there are material changes in circum-
stances or in the contract, this estimate is updated.
349
The tables below show how the lease liabilities are assigned in the balance sheet and give an overview of their
contractual maturities:
A S S I G N M E N T O F L E A S E L I A B I L I T I E S T O T H E R E SP E C T I V E B A LA N C E SH E E T I T E M S
€ million Dec. 31, 2023 Dec. 31, 2022
Financial liabilities – Noncurrent 5,381 5,283

Financial liabilities – Current 1,112 1,102
Lease liabilities – Total 6,494 6,385
M A T U R I T Y A N A L Y S I S O F U N D I S C O U N T E D LE A S E LI A B I LI T I E S
REMAINING
C O N T R A C T U A L M A T U RI T I ES
within one
€ million under one year to five years over five years Total
Lease liabilities at Dec. 31, 2023 1,339 3,804 2,779 7,921

Lease liabilities at Dec. 31, 2022 1,290 3,544 2,813 7,647
Interest expenses of €233 million (previous year: €168 million) were incurred for lease liabilities in the fiscal year.
No right-of-use assets are recognized for low-value or short-term leases. Expenses for leasing low-value assets
totaled €294 million (previous year: €265 million) in the fiscal year. This figure does not include any expenses for
short-term leases, which totaled €262 million (previous year: €234 million) in the fiscal year. Variable lease ex-
penses not included in the measurement of lease liabilities accounted for €21 million (previous year: €19 million)
in the fiscal year.
Leases gave rise to cash outflows totaling €1,986 million (previous year: €1,832 million) in the fiscal year.
The table below shows a summary of potential future cash outflows, that have not been included in the measure-
ment of the lease liabilities:
€ million 2023 2022
Future cash outflows to which the lessee is potentially exposed

Variable lease payments 32 44
Extension options 3,408 3,513
Termination options 23 3
Obligations under leases not yet commenced 323 249
3,788 3,809
No material cash outflows attributable to residual value guarantees are expected.
350
2. Lessor accounting
The Volkswagen Group is a lessor in both the finance lease business and the operating lease business. The subject
of these transactions is primarily motor vehicles and, to a small extent, land and buildings and items of equipment
for dealerships.
The Volkswagen Group fully accounts for the default risk on lease receivables by recognizing loss allowances,
which are recognized in accordance with the requirements of IFRS 9. As lessor, the Volkswagen Group covers risks
arising from the assets underlying the leases by, among other measures, taking account of residual value guaran-
tees received for parts of the lease portfolio and by taking account of forward-looking residual values forecast on
the basis of internal and external information as part of residual value management. The forecast residual values
are regularly reviewed.
2.1 Operating leases

Assets leased under long-term operating leases amounted to €64,726 million at the end of the fiscal year (previ-
ous year: €59,990 million). While €632 million (previous year: €610 million) is attributable to investment property,
assets separately reported as lease assets in the balance sheet amount to €64,094 million (previous year:
€59,380 million). They relate primarily to vehicles in an amount of €64,059 million (previous year: €59,263 mil-
lion) as well as land, land rights and buildings, including buildings on third-party land, in an amount of €35 million
(previous year: €109 million). The remaining assets relate to technical equipment and machinery as well as other
equipment, operating and office equipment. More information on changes in value of investment property and
lease assets can be found in the section entitled “Lease assets and investment property”.
The following cash inflows from expected outstanding, non-discounted operating lease payments are expected
over the coming years:
DISCLOSURE AS OF DECEMBER 31, 2023
€ million 2024 2025 2026 2027 2028 from 2029 Total
Lease payments 9,731 6,622 4,378 1,636 583 239 23,189
Lease payments 8,615 5,851 3,441 1,368 464 262 20,001
B R E A K D O W N O F I N C O M E F R O M O P E R A T I N G LE A SE S
€ million 2023 2022
Lease income 15,343 14,600

Income from variable lease payments 0 1
Total 15,343 14,600
351
2.2 Finance leases

Interest income from the net investment in the leases amounted to €3.3 billion (previous year: €2.6 billion) in the
fiscal year. Furthermore, a selling profit from the finance leases in the amount of €1.6 billion (previous year:
€1.2 billion) was recognized.
The following table shows the reconciliation of outstanding lease payments under finance leases to the net
investment:
€ million Dec. 31, 2023 Dec. 31, 2022
Non-discounted lease payments 65,979 57,501

Non-guaranteed residual value 3,499 3,466
Unearned interest income –6,667 –4,497
Loss allowance on lease receivables –1,223 –1,611
Net investment 61,588 54,858
The following cash inflows from expected outstanding, non-discounted finance lease payments are expected over
the coming years:
Lease payments 22,616 17,479 15,111 9,238 921 613 65,979
Lease payments 21,172 15,055 12,381 7,588 848 457 57,501
352
34. IFRS 7 (Financial instruments)
The table below shows the carrying amounts of financial instruments by measurement category:
CARRYING AMOUNT OF FINANCIAL INSTRUMENTS BY IFRS 9 MEASUREMENT CATEGORY
€ million Dec. 31, 2023 Dec. 31, 2022¹
Financial assets at fair value through profit or loss 27,325 28,185

Financial assets at fair value through other comprehensive income (debt instruments) 4,406 4,224
Financial assets at fair value through other comprehensive income (equity instruments) 910 277
Financial assets measured at amortized cost 183,469 170,220
of which classified as held for sale 76 570
Financial liabilities at fair value through profit or loss 2,935 2,522
Financial liabilities measured at amortized cost 270,883 247,553
of which classified as held for sale 15 132
Classes of financial instruments

Financial instruments are divided into the following classes at the Volkswagen Group:
 financial instruments measured at fair value;
 financial instruments measured at amortized cost;
 derivative financial instruments within hedge accounting;
 not allocated to any measurement category; and
 credit commitments and financial guarantees (off-balance sheet).
Reconcilitation of balance sheet items to classes of financial instruments

The following table shows the reconciliation of the balance sheet items to the relevant classes of financial instru-
ments, broken down by the carrying amount and fair value of the financial instruments.
The fair value of financial instruments measured at amortized cost, such as receivables and liabilities, is calcu-
lated by discounting the carrying amount using a market rate of interest for a similar risk and matching maturity.
For reasons of materiality, the fair value of current balance sheet items is generally deemed to be their carrying
amount.
For reconciliation to the carrying amounts, the “Not allocated to a measurement category” column in the table
also includes items other than financial instruments.
The risk variables governing the fair value of the receivables are risk-adjusted interest rates.
“Financial instruments measured at fair value” also include shares in partnerships and corporations.
353
R E C O N C I L I A T I O N O F B A L A N C E S H E E T I T E M S T O C LA S SE S O F F I N A N C I A L I N ST R U M E N T S
AS OF DECEMBER 31, 2023
DERIVATIVE NOT
FINANCIAL ALLOCATED
MEASURED INSTRUMENTS TO A BALANCE
AT FAIR MEASURED AT W I T H I N H ED G E MEASUREMENT S H E E T I TE M A T
VALUE AMORTIZED COST ACCOUNTING CATEGORY DEC. 31, 2023
€ million Carrying amount Carrying amount Fair value Carrying amount Carrying amount
Noncurrent assets
Equity-accounted investments – – – – 12,239 12,239
Other equity investments 1,150 – – – 3,281 4,431
Financial services receivables 89 53,066 53,389 – 41,318 94,474
Other financial assets 3,007 5,847 5,923 2,903 – 11,757
Tax receivables – – – – 437 437
Current assets
Trade receivables 0 21,849 21,849 – 0 21,849
Tax receivables – 8 8 – 1,641 1,649
Marketable securities and time deposits 26,450 322 322 – – 26,772
Cash and cash equivalents – 43,449 43,449 – – 43,449
Assets held for sale – 76 76 – 114 190
Financial liabilities – 116,941 116,782 – 5,381 122,323
Other financial liabilities 1,641 2,287 2,269 3,040 – 6,968
Current liabilities
Trade payables – 30,901 30,901 – – 30,901
Tax payables – 18 18 – 537 556
Liabilities associated with assets held for
sale – 15 15 – 16 31
354
R E C O N C I L I A T I O N O F B A L A N C E S H E E T I T E M S T O C LA S SE S O F F I N A N C I A L I N ST R U M E N T S
DERIVATIVE NOT
FINANCIAL ALLOCATED
MEASURED INSTRUMENTS TO A BALANCE
AT FAIR MEASURED AT W I T H I N H ED G E MEASUREMENT S H E E T I TE M A T
VALUE AMORTIZED COST ACCOUNTING CATEGORY DEC. 31, 2022
€ million Carrying amount Carrying amount Fair value Carrying amount Carrying amount
Noncurrent assets
Equity-accounted investments – – – – 12,668 12,668
Other equity investments 342 – – – 3,147 3,489
Tax receivables – – – – 394 394
Current assets
Trade receivables 1 18,533 18,533 – 0 18,534
Tax receivables – 10 10 – 1,721 1,732
Marketable securities and time deposits 24,560 12,646 12,646 – – 37,206
Cash and cash equivalents – 29,172 29,172 – – 29,172
Assets held for sale – 570 570 – 163 733
Current liabilities
Trade payables – 28,738 28,738 – – 28,738
Tax payables – 17 17 – 709 726
sale – 132 132 – 26 158
The category headed “not allocated to a measurement category” is used in particular for shares in equity-
accounted investments, shares in non-consolidated affiliated companies as well as for lease receivables.
The carrying amount of lease receivables was €62.3 billion (previous year: €55.1 billion) and their fair value
was €62.2 billion (previous year: €54.1 billion).
355
Uniform valuation techniques and inputs are used to measure fair value. The fair value of Level 2 and 3
financial instruments is measured in the individual divisions on the basis of Group-wide specifications. The meas-
urement techniques used are explained in the section entitled “Accounting policies”. The fair value of Level 3
receivables was measured by reference to individual expectations of losses; these are based to a significant
extent on the Company’s assumptions about counterparty credit quality. The inputs used are not observable in an
active market.
The following tables contain an overview of the financial assets and liabilities measured at fair value by level:
F I N A N C I A L A S S E T S A N D L I A B I L I T I E S M E A SU R E D A T F A I R V A LU E B Y L E V E L
€ million Dec. 31, 2023 Level 1 Level 2 Level 3
Noncurrent assets
Other equity investments 1,150 697 0 452
Financial services receivables 89 – – 89
Other financial assets 3,007 – 2,161 846
Current assets
Trade receivables 0 – – 0
Marketable securities and time deposits 26,450 26,367 83 –
Other financial liabilities 1,641 – 1,443 198
Current liabilities
Noncurrent assets
Other equity investments 342 91 0 251
Other financial assets 4,735 – 2,571 2,165
Current assets
Trade receivables 1 – – 1
Marketable securities and time deposits 24,560 24,487 73 –
Current liabilities
Other financial liabilities 1,004 – 982 23
356
F A I R V A L U E O F F I N A N C I A L A S S E T S A N D LI A B I L I T I E S M E A SU R E D A T A M O R T I Z E D C O ST B Y
LE V E L
Fair value of financial assets measured at amortized cost

Financial services receivables 98,723 – – 98,723
Trade receivables 21,849 – 21,849 –
Other financial assets 19,439 1,143 5,897 12,399
Tax receivables 8 – 8 –
Marketable securities and time deposits 322 13 309 –
Cash and cash equivalents 43,449 43,449 – –
Assets held for sale 76 – 76 –
Fair value of financial assets measured at amortized cost 183,867 44,605 28,139 111,122
Fair value of financial liabilities measured at amortized cost

Trade payables 30,901 – 30,901 –
Financial liabilities 226,146 49,058 175,706 1,382
Other financial liabilities 13,625 748 12,592 284
Tax payables 18 – 18 –
Liabilities associated with assets held for sale 15 – 15 –
Fair value of financial liabilities measured at amortized cost 270,705 49,806 219,233 1,666
€ million Dec. 31, 2022¹ Level 1¹ Level 2¹ Level 3
Fair value of financial assets measured at amortized cost

Financial services receivables 92,366 – – 92,366
Trade receivables 18,533 – 18,533 –
Other financial assets 16,564 605 5,379 10,580
Tax receivables 10 – 10 –
Marketable securities and time deposits 12,646 84 12,562 –
Cash and cash equivalents 29,172 29,172 – –
Assets held for sale 570 557 13 –
Fair value of financial assets measured at amortized cost 169,861 30,418 36,498 102,945
Fair value of financial liabilities measured at amortized cost

Trade payables 28,738 – 28,738 –
Financial liabilities 194,447 47,343 145,444 1,660
Other financial liabilities 19,874 592 18,840 442
Tax payables 17 – 17 –
Liabilities associated with assets held for sale 132 132 – –
Fair value of financial liabilities measured at amortized cost 243,208 48,067 193,039 2,102
357
DERIVATIVE FINANCIAL INSTRUMENTS WITHIN HEDGE ACCOUNTING BY LEVEL
Noncurrent assets
Other financial assets 2,903 – 2,903 –
Current assets
Other financial liabilities 3,040 – 3,040 –
Current liabilities
Noncurrent assets
Current assets
Current liabilities
The allocation of fair values to the three levels in the fair value hierarchy is based on the availability of
observable market prices. Level 1 is used to report the fair value of financial instruments for which a price is
directly available in an active market. Examples include marketable securities and other equity investments
measured at fair value that are listed and traded on a public market. Fair values in Level 2, for example of deriva-
tives, are measured on the basis of market inputs using market-based valuation techniques. In particular, the inputs
used include exchange rates, yield curves and commodity prices that are observable in the relevant markets and
obtained through pricing services. Fair Values in Level 3 are calculated using valuation techniques that incor-
porate inputs that are not directly observable in active markets. In the Volkswagen Group, long-term commodity
swaps are allocated to Level 3 because the prices available on the market must be extrapolated for measurement
purposes. This is done on the basis of observable inputs obtained for the different commodities through pricing
services. Options on equity instruments, residual value protection models, customer financing receivables and
receivables from vehicle financing programs and other equity investments are also reported in Level 3. Equity
instruments are measured primarily using the relevant business plans and entity-specific discount rates. The sig-
nificant inputs used to measure fair value for the residual value protection models include forecasts and estimates
of used vehicle residual values for the appropriate models. The measurement of vehicle financing programs
requires in particular the use of the corresponding vehicle price.
358
The table below provides a summary of changes in level 3 balance sheet items measured at fair value:
C H A N G E S I N B A L A N C E S H E E T I T E M S M E A SU R E D A T F A I R V A LU E B A SE D O N L E V E L 3
Financial assets Financial liabilities

€ million measured at fair value measured at fair value
Balance at Jan. 1, 2023 3,181 102

Foreign exchange differences –29 2
Changes in consolidated Group –6 –
Total comprehensive income –748 141
recognized in profit loss –752 141
recognized in other comprehensive income 4 –
Additions (purchases) 395 –
Sales and settlements –775 37
Transfers into Level 1 – –
Transfers into Level 2 –283 –45
Balance at Dec. 31, 2023 1,734 237
Total gains or losses recognized in profit or loss –752 –117

Net other operating expense/income –763 –129
of which attributable to assets/liabilities
held at the reporting date –773 –170
Financial result 11 12
held at the reporting date 0 –12
Financial assets Financial liabilities

€ million measured at fair value measured at fair value
Balance at Jan. 1, 2022 2,119 303

Foreign exchange differences 53 –6
Changes in consolidated Group 0 –
Total comprehensive income 2,027 –127
recognized in profit loss 1,999 –127
recognized in other comprehensive income 28 –
Additions (purchases) 167 –
Sales and settlements –601 –46
Transfers into Level 1 0 –
Transfers into Level 2 –584 –22
Balance at Dec. 31, 2022 3,181 102
Total gains or losses recognized in profit or loss 1,999 127

Other operating result 1,962 127
held at the reporting date¹ 1,651 24
Financial result 36 –
held at the reporting date 12 –
1 Prior-year figures adjusted.
359
The transfers between the levels of the fair value hierarchy are reported at the respective reporting dates. The
transfers out of Level 3 into Level 2 comprise commodity swaps for which observable quoted prices are now
available for measurement purposes due to the decline in their remaining maturities; consequently, no further
extrapolation is required.
Commodity prices are the key risk variable for the fair value of commodity swaps. Sensitivity analyses are used
to present the effect of changes in commodity prices on earnings after tax and equity.
If commodity prices for commodity swaps classified as Level 3 had been 10% higher (lower) as of December 31,
2023, earnings after tax would have been €217 million (previous year: €291 million) higher (lower). Beyond that,
equity would not be materially affected.
The key risk variable for measuring options on equity instruments held by the Company is the relevant enter-
prise value. Sensitivity analyses are used to present the effect of changes in risk variables on earnings after tax.
If the assumed enterprise values at December 31, 2023 had been 10% higher, earnings after tax would have
been €2 million (previous year: €8 million) higher. If the assumed enterprise values as of December 31, 2023 had
been 10% lower, earnings after tax would have been €2 million (previous year: €8 million) lower.
Residual value risks result from hedging agreements with dealerships under which earnings effects caused by
market-related fluctuations in residual values that arise from buy-back obligations under leases are borne in part
by the Volkswagen Group.
The key risk variable influencing the fair value of the options relating to residual value risks is used car prices.
Sensitivity analyses are used to quantify the effects of changes in used car prices on earnings after tax.
If the prices of the used cars covered by the residual value protection model had been 10% higher as of Decem-
ber 31, 2023, earnings after tax would have been €491 million (previous year: €470 million) higher. If the prices of
the used cars covered by the residual value protection model had been 10% lower as of December 31, 2023, earn-
ings after tax would have been €522 million (previous year: €504 million) lower.
If the risk-adjusted interest rates applied to receivables measured at fair value had been 100 basis points higher
as of December 31, 2023, earnings after tax would have been €1 million (previous year: €7 million) lower. If the
risk-adjusted interest rates as of December 31, 2023 had been 100 basis points lower, earnings after tax would
have been €3 million (previous year: €4 million) higher.
If the corresponding vehicle price used in the vehicle financing programs had been 10% higher as of Decem-
ber 31, 2023, earnings after tax would have been €10 million (previous year: €6 million) higher. If the correspond-
ing vehicle prices used in the vehicle financing programs had been 10% lower as of December 31, 2023, earnings
after tax would have been €10 million (previous year: €6 million) lower.
If the result of operations of equity investments measured at fair value had been 10% better as of December 31,
2023, equity would have been €11 million (previous year: €9 million) higher, and earnings after tax would have
been €12 million (previous year: €5 million) higher. If the result of operations of equity investments measured at
fair value had been 10% worse, equity would have been €11 million (previous year: €9 million) lower, and earnings
after tax would have been €30 million (previous year: €5 million) lower.
360
Offsetting of financial assets and liabilities

The following tables contain information about the effects of offsetting in the balance sheet and the potential finan-
cial effects of offsetting in the case of instruments that are subject to a legally enforceable master netting
arrangement or a similar agreement.
AMOUNTS THAT ARE NOT SET

O F F I N T H E B A L A N C E S H EE T
Gross amounts of
recognized Net amounts of
Gross amounts of financial liabilities financial assets
recognized set off in the presented in the Financial Collateral Net amount at
€ million financial assets balance sheet balance sheet instruments received Dec. 31, 2023
Derivatives 7,974 –56 7,918 –4,245 – 3,673

Financial services
receivables 161,453 –598 160,855 – –68 160,787
Trade receivables 21,889 –39 21,850 – – 21,850
Marketable securities and
time deposits 26,772 – 26,772 – – 26,772
Cash and cash equivalents 43,449 – 43,449 – – 43,449
Other financial assets 21,970 –20 21,951 0 – 21,951

Gross amounts of
Gross amounts of financial liabilities financial assets
€ million financial assets¹ balance sheet balance sheet¹ instruments received Dec. 31, 2022¹
Derivatives 11,497 –36 11,461 –4,523 –37 6,901

Financial services
receivables 149,090 –597 148,493 – –81 148,412
Trade receivables 18,573 –39 18,534 0 – 18,534
Marketable securities and
time deposits 37,206 – 37,206 – – 37,206
Cash and cash equivalents 29,172 – 29,172 – – 29,172
Other financial assets 17,998 –127 17,871 0 – 17,871
Other financial assets include receivables from tax allocations of €8 million (previous year: €10 million).
361

Gross amounts of
Gross amounts of financial assets financial liabilities
€ million financial liabilities balance sheet balance sheet instruments pledged Dec. 31, 2023
Derivatives 7,405 –76 7,329 –4,245 –24 3,059

Financial liabilities 232,798 – 232,798 – –3,320 229,478
Trade payables 30,941 –39 30,901 0 – 30,901
Other financial liabilities 14,276 –598 13,679 – – 13,679

Gross amounts of
Gross amounts of financial assets financial liabilities
€ million financial liabilities¹ balance sheet balance sheet¹ instruments pledged Dec. 31, 2022¹
Derivatives 8,009 –163 7,846 –4,523 – 3,323

Financial liabilities 205,185 – 205,185 – –3,225 201,960
Trade payables 28,777 –39 28,738 0 – 28,738
Other financial liabilities 20,763 –597 20,166 – – 20,166
The “Financial instruments” column shows the amounts that are subject to a master netting arrangement but
were not set off because they do not meet the criteria for offsetting in the balance sheet. The “Collateral received”
and “Collateral pledged” columns show the amounts of cash collateral and collateral in the form of financial
instruments received and pledged for the total assets and liabilities that do not meet the criteria for offsetting in
the balance sheet.
Other financial liabilities include liabilities from tax allocations of €18 million (previous year: €17 million).
362
Asset-backed securities transactions

Asset-backed securities transactions with financial assets amounting to €34.3 billion (previous year: €28.0 bil-
lion) entered into to refinance the financial services business are included in bonds, commercial paper and notes,
and liabilities from loans. The corresponding carrying amount of the receivables from the customer and dealer
financing and the finance lease business amounted to €42.4 billion (previous year: €34.6 billion). Collateral of
€66.9 billion (previous year: €53.1 billion) in total was furnished as part of asset-backed securities transactions.
The expected payments were assigned to structured entities and the equitable liens in the financed vehicles were
transferred. These asset-backed securities transactions did not result in the receivables from financial services
business being derecognized, as the Group retains nonpayment and late payment risks. The difference between
the assigned receivables and the related liabilities is the result of different terms and conditions and the share of
the securitized paper and notes held by the Volkswagen Group itself.
Most of the public and private asset-backed securities transactions of the Volkswagen Group can be repaid in
advance (clean-up call) if less than 10% of the original transaction volume is outstanding. The assigned receivables
cannot be assigned again or pledged elsewhere as collateral. The claims of the holders of commercial paper and
notes are limited to the assigned receivables and the receipts from those receivables are earmarked for the repay-
ment of the corresponding liability.
As of December 31, 2023, the fair value of the assigned receivables still recognized in the balance sheet was
€41.3 billion (previous year: €32.8 billion). The fair value of the related liabilities was €34.0 billion (previous
year: €27.5 billion) at that reporting date.
The Volkswagen Bank GmbH Group is contractually obliged, under certain conditions, to transfer funds to the
structured entities that are included in its financial statements. Since the receivables are transferred to the special
purpose entity by way of undisclosed assignment, the situation may occur in which the receivable has already been
reduced in a legally binding manner at the originator, for example if the obligor effectively offsets it against
receivables owed to it by a company belonging to the Volkswagen Group. In this case, collateral must be furnished for
the resulting compensation claims against the special purpose entity, for example if the rating of the Group com-
pany concerned declines to a contractually agreed reference value.
363
Additional income statement disclosures in accordance with IFRS 7 (Financial instruments)

The table below shows net gains and losses on financial assets and financial liabilities by measurement cate-
gory, followed by a detailed explanation of key aspects:
N E T G A I N S O R L O S S E S F R O M F I N A N C I A L I N S T R U M E N T S B Y I F R S 9 M E A SU R E M E N T C A T E G O R Y
€ million 2023 2022¹
Financial instruments at fair value through profit or loss –1,323 3,024

Financial assets at fair value through other comprehensive income (debt instruments) 30 10
Financial liabilities measured at amortized cost –9,186 –4,888
–3,588 3,917
Net gains and losses in the category financial instruments at fair value through profit or loss are mainly composed
of the fair value measurement gains and losses on derivatives, including interest and gains and losses on currency
translation.
Net gains and losses from financial assets measured at fair value through other comprehensive income (debt
instruments) relate to interest income from fixed-income securities.
Net gains and losses from financial assets and liabilities measured at amortized cost mainly comprise interest
income and expenses calculated according to the effective interest method pursuant to IFRS 9, currency trans-
lation effects, and the recognition of loss allowances. Interest also includes interest income and expenses from
the lending business of the Financial Services Division.
364
The table below presents total interest income and expenses from financial assets and liabilities measured at
amortized cost, separately from financial assets measured at fair value through other comprehensive inco me:
T O T A L I N T E R E S T I N C O M E A N D E X P E N SE S A T T R I B U T A B LE T O F I N A N C I A L I N ST R U M E N T S N O T
M E A S U R E D A T F A I R V A L U E T H R O U G H P R O F I T O R LO SS
€ million 2023 2022
Financial assets and liabilities measured at amortized cost

Interest income 11,737 8,199
Interest expenses 9,442 4,705
Financial assets (debt instruments) measured at fair value through other comprehensive income
Interest income 28 12
Interest expenses 3 0
G A I N S A N D L O S S E S O N T H E D I S P O S A L O F F I N A N C I A L A S S E T S M E A SU R E D A T A M O R T I ZE D
COST
€ million 2023 2022
Gains arising from the derecognition of financial assets measured at amortized cost 990 1,189
Losses arising from the derecognition of financial assets measured at amortized cost –1,390 –1,006
–400 182
In the fiscal year, €3 million (previous year: €2 million) was recognized as an expense and €30 million (previous
year: €23 million) as income from fees and commissions for trust activities and from financial assets and liabilities
not measured at fair value that are not accounted for using the effective interest method.
365
35. Cash flow statement
Cash flows are presented in the cash flow statement classified into cash flows from operating activities, investing
activities and financing activities, irrespective of the balance sheet classification.
Cash flows from operating activities are derived indirectly from earnings before tax. Earnings before tax are
adjusted to eliminate non-cash expenditures (mainly depreciation, amortization and impairment losses) and
income. Other non-cash income and expense results mainly from measurement effects in connection with finan-
cial instruments and fair value changes relating to hedging transactions. This results in cash flows from operating
activities after accounting for changes in working capital, which also include changes in lease assets and in finan-
cial services receivables.
Investing activities include additions to property, plant and equipment and equity investments, additions to
capitalized development costs, and changes in investments in securities and time deposits as well as loans.
Financing activities include outflows of funds from dividend payments and the redemption of bonds, inflows
from capital increases and the issuance of bonds, and changes in other financial liabilities. Please refer to the
“Equity” section for information on the in-/outflows from the issuance/repayment of hybrid capital contained in
the capital contributions.
The changes in balance sheet items that are presented in the cash flow statement cannot be derived directly
from the balance sheet, as the effects of currency translation and changes in the consolidated Group are non-cash
transactions and are therefore eliminated.
In the fiscal year, cash flows from operating activities include interest received amounting to €12,567 million
(previous year: €8,504 million) and interest paid amounting to €7,011 million (previous year: €3,274 million). Cash
flows from operating activities also include dividend payments (net of withholding tax) received from joint ven-
tures and associates of €2,450 million (previous year: €2,781 million).
Dividends amounting to €10,897 million (previous year: €3,772 million) were paid to Volkswagen AG share-
holders.
€ million Dec. 31, 2023 Dec. 31, 2022
Cash and cash equivalents as reported in the balance sheet 43,449 29,172
Cash and cash equivalents held for sale 73 566
Cash and cash equivalents as reported in the cash flow statement 43,522 29,738
Time deposits with contractual maturities of more than three months are not classified as cash equivalents. The
maximum default risk corresponds to its carrying amount.
366
The following table shows the classification of changes in financial liabilities into cash and non-cash transactions:
N O N - C A S H C H A N G ES
Foreign Changes in
Cash-effective exchange consolidated Classified as Other
€ million Jan. 1, 2023 changes differences Group held for sale changes Dec. 31, 2023
Bonds 93,119 5,158 –304 – – 1,183 99,157

Other total third-party borrowings 105,808 22,812 –855 626 –112 –1,116 127,162
Finance lease liabilities¹ 6,385 –1,190 –61 1 0 1,359 6,494
Total third-party borrowings 205,312 26,780 –1,220 626 –112 1,427 232,813
Other financial assets and liabilities –61 –36 –1 15 – 92 9
Financial assets and liabilities in
financing activities 205,250 26,744 –1,220 641 –112 1,519 232,822
1 Other changes in lease liabilities largely contain non-cash additions of lease liabilities.
N O N - C A S H C H A N G ES
Foreign Changes in
Cash-effective exchange consolidated Classified as Other
€ million Jan. 1, 2022 changes differences Group held for sale changes Dec. 31, 2022
Bonds 98,038 –1,762 –265 – – –2,892 93,119

Other total third-party borrowings 105,929 –4,210 174 842 –10 3,082 105,808
Finance lease liabilities¹ 6,245 –1,248 14 50 –2 1,325 6,385
Total third-party borrowings 210,213 –7,220 –78 892 –11 1,516 205,312
Other financial assets and liabilities –21 –156 19 0 – 97 –61
Financial assets and liabilities in
financing activities 210,192 –7,376 –59 892 –11 1,613 205,250
1 Other changes in lease liabilities largely contain non-cash additions of lease liabilities.
367
36. Financial risk management and financial instruments
1. Hedging guidelines and financial risk management principles

The principles and responsibilities for managing and controlling the risks that could arise from financial instru-
ments are defined by the Board of Management and monitored by the Supervisory Board. General rules apply to
the Group-wide risk policy; these are oriented on the statutory requirements and the “Minimum Requirements for
Risk Management by Credit Institutions”.
Group Treasury is responsible for operational risk management and the control of risks from financial instru-
ments. The Group Board of Management Committee for Risk Management is regularly informed about current
financial risks. In addition, the Group Board of Management and the Supervisory Board are regularly updated on
the current risk situation. The MAN Energy Solutions, Porsche AG, Porsche Holding Salzburg and TRATON GROUP
subgroups and the Financial Services Division are in part included in Group Treasury’s operational risk manage-
ment and control for risks relating to financial instruments and also have their own risk management structures.
For more information, see the section on financial risks in the Report on Risks and Opportunities of the group
management report.
2. Credit and default risk

The credit and default risk arising from financial assets involves the risk of default by counterparties, and therefore
comprises at a maximum the amount of the claims under carrying amounts receivable from them and the irrevo-
cable credit commitments. The maximum potential credit and default risk is reduced by collateral held and other
credit enhancements. Collateral is held predominantly for financial assets in the “at amortized cost” category. It
relates primarily to collateral for financial services receivables and trade receivables. Collateral comprises vehi-
cles and assets transferred as security, as well as guarantees and real property liens. Cash collateral is also used
in hedging transactions.
For level 3 and level 4 financial assets with objective indications of impairment as of the reporting date, the
collateral provided led to a reduction in risk by €1.3 billion (previous year: €1.1 billion). Collateral of €6 million
(previous year adjusted: €34 million) has been accepted for assets measured at fair value through profit or loss.
Significant cash and capital investments, as well as derivatives, are only entered into with national and inter-
national banks. Credit and default risk is limited by a limit system based primarily on the equity base of the coun-
terparties concerned and on credit assessments by international rating agencies. Financial guarantees issued also
give rise to credit and default risk. The maximum default risk is determined by the guarantee amount. The corre-
sponding amounts are presented in the Liquidity risk section.
There were no material concentrations of risk at individual counterparties or counterparty groups in the fiscal
year due to the global allocation of the Group’s business activities and the resulting diversification. There was a
slight change in the concentration of credit and default risk exposures to the German public banking sector as a
whole that has arisen from Group-wide cash and capital investments as well as derivatives: the portion attributa-
ble to this sector was 9.3% at the end of 2023 compared with 6.0% at the end of 2022. Any existing concentration
of risk is assessed and monitored both at the level of individual counterparties or counterparty groups and with
regard to the countries in which these are based, in each case using the share of all credit and default risk expo-
sures accounted for by the risk exposure concerned. This analysis excludes the items of Chinese companies in
which Volkswagen holds an interest of 50% or less.
Credit and default risk exposures at the end of 2023 accounted for 18.1% for Germany, compared with 15.2%
at the end of 2022, and for 17.5% for China as against 14.0% at the end of 2022. There were no other material
concentrations of credit and default risk exposures in individual countries.
368
Loss allowance
The Volkswagen Group consistently uses the expected credit loss model of IFRS 9 for all financial assets and
other risk exposures.
The expected credit loss model under IFRS 9 takes in both loss allowances for financial assets for which there
are no objective indications of impairment and loss allowances for financial assets that are already impaired. For
the calculation of impairment losses, IFRS 9 distinguishes between the general approach and the simplified
approach.
Under the general approach, financial assets are allocated to one of three stages, plus an additional stage for
financial assets that are already impaired when acquired (stage 4). Stage 1 comprises financial assets that are
recognized for the first time or for which the probability of default has not increased significantly. The expected
credit losses for the next twelve months are calculated at this stage. Stage 2 comprises financial assets with a
significantly increased probability of default, while financial assets with objective indications of default are allo-
cated to stage 3. The lifetime expected credit losses are calculated at these stages. Stage 4 financial assets, which
are already impaired when acquired, are subsequently measured by recognizing a loss allowance on the basis of
the accumulated lifetime expected losses. Financial assets classified as impaired on acquisition remain in this
category until they are derecognized.
The Volkswagen Group applies the simplified approach to trade receivables and contract assets with a signifi-
cant financing component in accordance with IFRS 15. The same applies to receivables under operating or finance
leases accounted for under IFRS 16. Under the simplified approach, the expected losses are consistently determined
for the entire life of the asset.
369
The tables below show the reconciliation of the loss allowance for various financial assets and financial
guarantees and credit commitments:
C H A N G E S I N G R O S S C A R R Y I N G A M O U N T S O F F I N A N C I A L A S SE T S M E A SU R E D A T A M O R T I ZE D
COST
Simplified
€ million Stage 1 Stage 2 Stage 3 approach Stage 4 Total
Carrying amount at Jan. 1, 2023 137,947 12,423 2,063 20,746 368 173,548
Foreign exchange differences –2,068 –41 18 –170 2 –2,258
Changes in consolidated group –354 – – 184 – –170
Changes 14,054 –613 –532 2,941 –19 15,831
Modifications 5 1 0 – 0 6
Transfers to
Stage 1 3,512 –3,450 –62 – – 0
Stage 2 –5,756 5,834 –78 – – 0
Stage 3 –664 –314 978 – – 0
Classified as held for sale 15 – – 1 – 16
Carrying amount at Dec. 31, 2023 146,691 13,839 2,388 23,703 351 186,972
C H A N G E S I N L O S S A L L O W A N C E F O R F I N A N C I A L A S SE T S M E A SU R E D A T A M O R T I Z E D C O ST
Simplified
Carrying amount at Jan. 1, 2023 904 740 1,134 519 26 3,323

Foreign exchange differences –15 –2 12 –1 2 –5
Changes in consolidated group 0 – – 22 – 22
Newly extended/purchased financial assets (additions) 688 – – 242 6 936
Other changes within a stage –189 –174 153 8 11 –191
Transfers to
Stage 1 34 –99 –19 – – –85
Stage 2 –118 336 –36 – – 183
Stage 3 –225 –71 607 – – 311
Financial instruments derecognized during the period (disposals) –217 –117 –160 –159 –11 –664
Utilization – – –315 –21 –12 –348
Changes to models or risk parameters 28 41 4 18 4 96
Classified as held for sale – – – 0 – 0
Carrying amount at Dec. 31, 2023 890 654 1,380 628 25 3,578
370
C H A N G E S I N G R O S S C A R R Y I N G A M O U N T S O F F I N A N C I A L A S SE T S M E A SU R E D A T A M O R T I ZE D
COST1
Simplified
Carrying amount at Jan. 1, 2022 115,232 23,918 1,978 19,589 404 161,121
Foreign exchange differences 454 268 49 38 3 811
Changes in consolidated group 203 4 15 206 – 428
Changes 24,875 –13,174 –634 916 –38 11,945
Modifications 2 0 0 0 –1 0
Transfers to
Stage 1 3,163 –3,116 –47 – – 0
Stage 2 –4,707 4,794 –87 – – 0
Stage 3 –532 –264 796 – – 0
Classified as held for sale –742 –7 –6 –2 – –757
Carrying amount at Dec. 31, 2022 137,947 12,423 2,063 20,746 368 173,548
C H A N G E S I N L O S S A L L O W A N C E F O R F I N A N C I A L A S SE T S M E A SU R E D A T A M O R T I Z E D C O S T 1
Simplified
Carrying amount at Jan. 1, 2022 828 675 1,212 492 49 3,257

Foreign exchange differences 10 17 35 8 2 71
Changes in consolidated group 10 – – –17 – –7
Newly extended/purchased financial assets (additions) 557 – – 225 10 793
Other changes within a stage 53 41 90 6 –27 162
Transfers to
Stage 1 37 –109 –34 – – –106
Stage 2 –89 296 –51 – – 156
Stage 3 –138 –53 458 – – 267
Financial instruments derecognized during the period (disposals) –232 –131 –205 –152 –5 –724
Utilization – – –373 –47 –11 –431
Changes to models or risk parameters 23 11 8 4 9 54
Classified as held for sale –156 –7 –5 0 – –168
Carrying amount at Dec. 31, 2022 904 740 1,134 519 26 3,323
371
CHANGES IN DEFAULT RISK POSITIONS OF FINANCIAL GUARANTEES AND CREDIT

COMMITMENTS
€ million Stage 1 Stage 2 Stage 3 Stage 4 Total
Carrying amount at Jan. 1, 2023 9,960 3,529 318 222 14,029

Changes in consolidated group –178 – – – –178
Changes 473 –928 –151 –130 –736
Modifications – – – – –
Transfers to
Stage 1 36 –36 0 – 0
Stage 2 –99 101 –1 – 0
Stage 3 –5 –3 8 – –
Carrying amount at Dec. 31, 2023 10,185 2,683 174 92 13,134
CHANGES IN LOSS ALLOWANCE FOR FINANCIAL GUARANTEES AND CREDIT COMMITMENTS
Carrying amount at Jan. 1, 2023 34 19 23 32 108

Changes in consolidated group 0 – – – 0
Newly extended/purchased financial assets (additions) 10 – – 0 10
Other changes within a stage –4 –8 18 –21 –15
Transfers to
Stage 1 1 –1 – – 0
Stage 2 –1 1 – – 0
Stage 3 –3 0 6 – 3
Financial instruments derecognized during the period (disposals) –10 –1 0 –2 –14
Utilization – – –3 – –3
Changes to models or risk parameters – – 0 – 0
Carrying amount at Dec. 31, 2023 27 10 44 10 90
CHANGES IN DEFAULT RISK POSITIONS OF FINANCIAL GUARANTEES AND CREDIT

COMMITMENTS
Carrying amount at Jan. 1, 2022 12,032 3,858 312 228 16,430

Foreign exchange differences –54 –54 0 1 –107
Changes in consolidated group –108 – – – –108
Changes –1,862 –314 –3 –7 –2,186
Modifications – – – – –
Transfers to
Stage 1 92 –92 0 – 0
Stage 2 –136 137 –1 – 0
Stage 3 –5 –6 10 – –
Carrying amount at Dec. 31, 2022 9,960 3,529 318 222 14,029
372
CHANGES IN LOSS ALLOWANCE FOR FINANCIAL GUARANTEES AND CREDIT COMMITMENTS
Carrying amount at Jan. 1, 2022 43 20 20 7 90

Changes in consolidated group 0 – – – 0
Newly extended/purchased financial assets (additions) 14 – – 0 14
Other changes within a stage 2 0 0 26 28
Transfers to
Stage 1 0 –2 0 – –1
Stage 2 –1 1 – – 1
Stage 3 0 0 3 – 3
Financial instruments derecognized during the period (disposals) –24 –2 –1 0 –27
Utilization – – 0 0 0
Changes to models or risk parameters –1 0 0 – –1
Carrying amount at Dec. 31, 2022 34 19 23 32 108
C H A N G E S I N G R O S S C A R R Y I N G A M O U N T S O F L E A SE R E C E I V A B LE S A N D C O N T R A C T A S SE T S
S I M P LI F I ED AP P R O AC H
€ million 2023 2022
Carrying amount at Jan. 1 57,015 55,515

Changes in consolidated group –232 294
Changes 6,869 2,240
Modifications 8 3
Classified as held for sale – –149
Carrying amount at Dec. 31 64,035 57,015
C H A N G E S I N L O S S A L L O W A N C E F O R L E A SE R E C E I V A B LE S A N D C O N T R A C T A S SE T S
S I M P LI F I ED AP P R O AC H
€ million 2023 2022
Carrying amount at Jan. 1 1,713 1,297

Changes in consolidated group –162 5
Newly extended/purchased financial assets (additions) 510 611
Financial instruments derecognized during the period (disposals) –400 –297
Utilization –82 –71
Changes to models or risk parameters –32 14
Classified as held for sale – –149
Carrying amount at Dec. 31 1,341 1,713
373
C H A N G E S I N G R O S S C A R R Y I N G A M O U N T S O F A S SE T S M E A SU R E D A T F A I R V A LU E
Simplified No loss
€ million Stage 1 Stage 2 Stage 3 approach Stage 4 allowance Total
Carrying amount at Jan. 1, 2023 1,470 2,768 – – – 28,456 32,694

Foreign exchange differences –15 – – – – –43 –57
Changes in consolidated group – – – – – – –
Changes 1,230 –971 – – –56 –193 10
Modifications – – – – – 7 7
Transfers to
Stage 1 – – – – – – –
Stage 2 – – – – – – –
Stage 3 – – – – – – –
Carrying amount at Dec. 31, 2023 2,685 1,797 – – –56 28,228 32,654
C H A N G E S I N G R O S S C A R R Y I N G A M O U N T S O F A S SE T S M E A SU R E D A T F A I R V A LU E
Simplified No loss
€ million Stage 1 Stage 2 Stage 3 approach Stage 4 allowance Total
Carrying amount at Jan. 1, 2022 2,795 1,931 – – – 23,668 28,394

Foreign exchange differences 18 – – – – 73 91
Changes in consolidated group – – – – – 0 0
Changes –438 –68 – – – 4,715 4,209
Modifications – – – – – – –
Transfers to
Stage 1 – – – – – – –
Stage 2 –905 905 – – – – –
Stage 3 – – – – – – –
Carrying amount at Dec. 31, 2022 1,470 2,768 – – – 28,456 32,694
The loss allowance on assets measured at fair value in Stage 1 rose by €6 million (previous year: €0 million) in
fiscal year 2023 and those in Stage 2 declined by €2 million (previous year: increase of €1 million), resulting in a
closing balance of €12 million (previous year: €8 million). Of this amount, €10 million is attributable to Stage 1
(previous year: €4 million) and €3 million to Stage 2 (previous year €4 million).
The amount contractually outstanding for financial assets that have been derecognized in the current fiscal
year and are still subject to enforcement proceedings is €270 million (previous year: €304 million).
374
Modifications
There were contract modifications to financial assets in the reporting period that did not lead to the derecognition of
the asset. These were primarily the result of changes in credit ratings and relate to financial assets for which loss
allowances were measured in the amount of the expected lifetime credit losses. For trade and lease receivables, the
treatment is simplified by considering the credit rating-based modifications where the receivables are more than
30 days past due. Before the modification, amortized cost amount to €315 million (previous year: €548 million).
In the reporting period, contract modifications resulted in net income/net expenses of €– 1 million (previous year:
€– 2 million).
As of the reporting date, the gross carrying amounts of financial assets that have been modified since initial
recognition and were simultaneously reclassified from stage 2 or 3 to stage 1 in the reporting period amounted to
€81 million (previous year: €324 million). As a result, the measurement of the loss allowance for these financial
assets was changed from lifetime expected credit losses to 12-month expected credit losses.
Maximum credit risk

The table below shows the maximum credit risk to which the Volkswagen Group was exposed as of the report-
ing date, broken down by class to which the impairment model is applied:
MAXIMUM CREDIT RISK BY CLASS
€ million Dec. 31, 2023 Dec. 31, 2022¹
Financial assets measured at fair value 4,413 4,230

Financial guarantees and credit commitments 13,044 13,921
Not allocated to a measurement category 62,346 55,090
Total 263,196 243,460
375
Rating categories
The Volkswagen Group performs a credit assessment of borrowers in all loan and lease agreements, using scoring
systems for the high-volume business and rating systems for corporate customers as well as receivables from dealer
financing. Receivables rated as good are contained in risk class 1. Receivables from customers whose credit rating
is not good but have not yet defaulted are contained in risk class 2. Risk class 3 comprises all defaulted receiva-
bles.
The table below presents the gross carrying amounts of financial assets by rating category:
G R O S S C A R R Y I N G A M O U N T S O F F I N A N C I A L A S SE T S B Y R A T I N G C A T E G O R Y
Simplified
€ million Stage 1 Stage 2 Stage 3 approach Stage 4
Credit risk rating grade 1

(receivables with no credit risk – standard loans) 143,891 9,504 – 83,823 28
(receivables with credit risk – intensified loan management) 5,485 6,132 – 2,610 54
(cancelled receivables – non-performing loans) – – 2,388 1,304 214
Total 149,376 15,637 2,388 87,737 295
G R O S S C A R R Y I N G A M O U N T S O F F I N A N C I A L A S SE T S B Y R A T I N G C A T E G O R Y
Simplified
€ million Stage 1 Stage 2 Stage 3 approach Stage 4

(receivables with no credit risk – standard loans) 137,035 10,549 – 74,500 103
(receivables with credit risk – intensified loan management) 2,382 4,642 – 2,150 44
(cancelled receivables – non-performing loans) – – 2,063 1,112 221
Total 139,417 15,191 2,063 77,762 368
376
Furthermore, the default risk exposure for financial guarantees and credit commitments is presented below:
DEFAULT RISK FOR FINANCIAL GUARANTEES AND CREDIT COMMITMENTS

€ million Stage 1 Stage 2 Stage 3 Stage 4

(receivables with no credit risk – standard loans) 10,040 2,579 – 14
(receivables with credit risk – intensified loan management) 145 104 – 3
(cancelled receivables – non-performing loans) – – 174 75
Total 10,185 2,683 174 92
DEFAULT RISK FOR FINANCIAL GUARANTEES AND CREDIT COMMITMENTS

€ million Stage 1 Stage 2 Stage 3 Stage 4

(receivables with no credit risk – standard loans) 9,850 2,856 – 87
(receivables with credit risk – intensified loan management) 110 673 – 9
(cancelled receivables – non-performing loans) – – 318 126
Total 9,960 3,529 318 222
Collateral that was accepted for financial assets in the current fiscal year was recognized in the balance sheet in
the amount of €303 million (previous year: €205 million). This mainly relates to vehicles.
377
3. Liquidity risk
The solvency and liquidity of the Volkswagen Group are secured by rolling liquidity planning, a liquidity reserve,
confirmed credit lines and the issuance of securities on the international money and capital markets. The volume
of confirmed bilateral and syndicated credit lines stood at €31.3 billion as of December 31, 2023 (previous
year: €27.3 billion), of which €0.4 billion (previous year: €1.0 billion) was drawn down.
Local cash funds in certain countries (e.g. China, Brazil, Argentina, South Africa and India) are only available to
the Group for cross-border transactions subject to exchange controls. There are no significant restrictions over
and above these. The liquidity risk in Argentina rose considerably as a result of the progressive depreciation of the
Argentinian peso, especially in December 2023. It cannot be ruled out that the currency will depreciate further in
fiscal year 2024.
The following overview shows the contractual undiscounted cash flows from financial instruments:
M A T U R I T Y A N A L Y S I S O F U N D I S C O U N T E D C A S H F LO W S F R O M F I N A N C I A L I N ST R U M E N T S
REMAINING REMAINING
C O N T R A C T U A L M A T U RI T I ES C O N T R A C T U A L M A T U RI T I ES
up to one within one more than up to one within one more than
€ million year to five years five years 2023 year¹ to five years five years 2022¹
Financial liabilities 116,805 111,952 23,572 252,328 86,834 108,078 24,942 219,854
Trade payables 30,890 11 1 30,901 28,721 16 0 28,738
Other financial liabilities 11,374 2,135 107 13,616 17,532 2,479 125 20,136
Derivatives 81,487 88,276 10,295 180,058 79,591 87,649 10,916 178,155
sale 18 0 – 19 114 25 – 139
240,575 202,373 33,974 476,922 212,792 198,247 35,983 447,023
The cash outflows on other financial liabilities include outflows on liabilities for tax allocations amounting to
€18 million (previous year: €17 million).
Derivatives comprise both cash flows from derivative financial instruments with negative fair values and cash
flows from derivatives with positive fair values for which a gross settlement has been agreed. Derivatives entered
into through offsetting transactions are also accounted for as cash outflows. The cash outflows from derivatives
for which a gross settlement has been agreed are matched in part by cash inflows. These cash inflows are not
reported in the maturity analysis. If these cash inflows were also recognized, the cash outflows presented would
be substantially lower. This also particularly applies if hedges have been closed with offsetting transactions.
The cash outflows from obligations from loan commitments and irrevocable credit commitments are presented
in the section entitled “Other financial obligations”, classified by contractual maturities.
As of December 31, 2023, the maximum potential liability under financial guarantees amounted to €910 million
(previous year: €1,185 million). Financial guarantees are assumed to be due immediately in all cases.
378
4. Market risk
4.1 HEDGING POLICY AND FINANCIAL DERIVATIVES

During the course of its general business activities, the Volkswagen Group is exposed to foreign currency, interest
rate, commodity price, equity price and fund price risk. Corporate policy is to limit such risk by means of hedging.
Generally, all necessary hedging transactions are executed or coordinated centrally; exceptions include, among
others, the MAN Energy Solutions, Porsche AG, Porsche Holding Salzburg and TRATON GROUP subgroups and
the Financial Services Division, as well as some regions such as South America and China.
Disclosures on gains and losses from fair value hedges

Fair value hedges involve hedging against the risk of changes in the carrying amount of balance sheet items. As
of the reporting date, both hedging instruments and hedged items are measured at fair value in relation to the
hedged risk, and the resulting opposite changes in value are recognized in the corresponding income statement
item.
The following table shows the gains and losses from fair value hedges by risk type:
D I S C L O S U R E S O N G A I N S A N D L O S S E S F R O M F A I R V A LU E H E D G E S
€ million Dec. 31, 2023 Dec. 31, 2022
Hedging interest rate risk

Other financial result –10 15
Other operating result –48 –18
Hedging currency risk
Other financial result – –
Other operating result –45 –13
Combined interest rate and currency risk hedging
Other financial result – –
Other operating result 0 0
379
Disclosures on gains and losses from cash flow hedges

Cash flow hedges are used to hedge against risks of fluctuations in future cash flows. These cash flows may arise
from a recognized asset or liability, or from a highly probable forecast transaction. The following table shows the
gains and losses from cash flow hedges by risk type:
D I S C L O S U R E S O N G A I N S A N D L O S S E S F R O M C A SH F LO W H E D G E S
€ million 2023 2022

Gains or losses from changes in fair value of hedging instruments within hedge accounting
Recognized in equity –278 287
Recognized in profit or loss –4 –2
Reclassification from the cash flow hedge reserve to profit or loss
Due to early discontinuation of the hedging relationships – –
Due to realization of the hedged item 4 –8
Recognized in equity 467 –187
Recognized in profit or loss 2 –2
Reclassification from the cash flow hedge reserve to profit or loss or inventories
Due to early discontinuation of the hedging relationships –91 –130
Due to realization of the hedged item 362 1,472
Recognized in equity 72 20
Recognized in profit or loss – 1
Reclassification from the cash flow hedge reserve to profit or loss
Due to realization of the hedged item –57 –40
Hedging commodities price risk
Recognized in equity 5 –
Recognized in profit or loss – –
Reclassification from the cash flow hedge reserve to profit or loss or inventories
Due to realization of the hedged item 1 –
The table presents effects taken to equity, reduced by deferred taxes.
The gain or loss from changes in the fair value of hedging instruments used in hedge accounting corresponds to
the basis for determining hedge ineffectiveness. The ineffective portion of a cash flow hedge is the income or
expense resulting from changes in the fair value of the hedging instrument that exceed the changes in the fair
value of the hedged item. This hedge ineffectiveness is attributable to differences in the parameters for the hedg-
ing instrument and the hedged item. Such income and expenses are recognized in other operating income/
expenses or in the financial result.
380
The Volkswagen Group uses two different methods to present market risk from nonderivative and derivative
financial instruments in accordance with IFRS 7. For quantitative risk measurement, interest rate and foreign cur-
rency risk in the Volkswagen Financial Services subgroup is measured using a value-at-risk (VaR) model on the
basis of a historical simulation, while market risk in the other Group companies is determined using a sensitivity
analysis. The value-at-risk calculation indicates the size of the maximum potential loss on the portfolio as a whole
within a time horizon of 60 days, measured at a confidence level of 99%. To provide the basis for this calculation,
all cash flows from nonderivative and derivative financial instruments are aggregated into an interest rate gap
analysis. The historical market data used in calculating VaR covers a period of four years. The sensitivity analysis
calculates the effect on equity and profit or loss by modifying risk variables within the respective market risks.
Disclosures on hedging instruments in hedge accounting

The Volkswagen Group regularly enters into hedging instruments to hedge against changes in the carrying
amount of balance sheet items. The summary below shows the notional amounts, fair values and base variables
for determining the ineffectiveness of hedging instruments entered into to hedge against the risk of changes in
carrying amounts in fair value hedges:
D I S C L O S U R E S O N H E D G I N G T R A N S A C T I O N S I N F A I R V A LU E H E D G E S I N 2 0 2 3
Fair value changes

to determine
hedge
€ million Notional amount Other assets Other liabilities ineffectiveness

Interest rate swaps 52,663 366 1,773 –1,693
Currency forwards, currency options, cross-currency swaps 6,749 67 64 –31
Cross-currency interest rate swaps 773 9 67 –55
D I S C L O S U R E S O N H E D G I N G T R A N S A C T I O N S I N F A I R V A LU E H E D G E S I N 2 0 2 2
Fair value changes

to determine
hedge

Interest rate swaps 58,170 868 2,596 –2,305
Currency forwards, currency options, cross-currency swaps 4,384 87 26 40
Cross-currency interest rate swaps 140 0 – 0
381
In addition, hedges are used to hedge against risks of fluctuations in future cash flows. The table below shows
the notional amounts, fair values and base variables for determining the ineffectiveness of hedging instruments
designated in cash flow hedges:
D I S C L O S U R E S O N H E D G I N G T R A N S A C T I O N S I N C A SH F LO W H E D G E S I N 2 0 2 3
Fair value changes

to determine
hedge

Interest rate swaps 17,331 165 62 27
Currency forwards and cross-currency swaps 113,139 3,534 2,273 2,340
Currency options 14,231 208 152 31
Cross-currency interest rate swaps 1,273 49 15 26
Commodity forwards/swaps 431 15 6 9
D I S C L O S U R E S O N H E D G I N G T R A N S A C T I O N S I N C A SH F LO W H E D G E S I N 2 0 2 2
Fair value changes

to determine
hedge

Interest rate swaps 15,371 509 30 419
Currency forwards and cross-currency swaps 119,499 3,087 2,540 2,204
Currency options 27,342 166 268 –77
Cross-currency interest rate swaps 1,437 23 17 1
Commodity forwards/swaps – – – –
The fair value change used to determine ineffectiveness corresponds to the fair value change of the designated
component.
382
Disclosures on hedged items in hedge accounting

In addition to disclosures on hedging instruments, disclosures are also required on the hedged items, broken
down by risk category and type of designation for hedge accounting. Below follows a list of hedged items desig-
nated in fair value hedges, separately from those designated in cash flow hedges:
DISCLOSURES ON HEDGED ITEMS IN FAIR VALUE HEDGES IN 2023
Cumulative hedge
adjustments from
Cumulative Hedge adjustments discontinued
hedge current period/ hedging
€ million Carrying amount adjustments fiscal year relationships

Financial services receivables 18,196 293 225 –
Other financial assets – – – –
Financial liabilities 37,503 –1,527 1,065 –
Financial services receivables – – – –
Other financial assets 1,169 2 2 –
Financial liabilities 856 –5 2 –
Other financial assets 36 0 0 –
Financial liabilities 976 116 77 –
DISCLOSURES ON HEDGED ITEMS IN FAIR VALUE HEDGES IN 2022
Cumulative hedge
adjustments from
Cumulative Hedge adjustments discontinued
hedge current period/ hedging
€ million Carrying amount adjustments fiscal year relationships

Financial services receivables 14,764 –156 –156 –
Financial liabilities 34,622 –2,890 –3,061 –
Other financial assets 795 –5 –1 –
Financial liabilities 1,132 –7 –23 –
Financial liabilities 181 39 39 –
383
D I S C L O S U R E S O N H E D G E D I T E M S I N C A SH F L O W H E D G E S I N 2 0 2 3
RESERVE FOR
Changes in fair value to

determine hedge Discontinued cash flow
€ million ineffectiveness Active cash flow hedges hedges

Designated components 25 30 1
Non-designated components – – –
Deferred taxes – 1 0
Total hedging interest rate risk 25 31 1
Designated components 2,338 2,320 26
Non-designated components – –1,137 –24
Deferred taxes – –324 –1
Total hedging currency risk 2,338 859 2
Designated components 26 –7 –
Deferred taxes – 2 –
Total hedging combined interest rate and currency risk 26 –5 –
Hedging commodity price risk
Designated components 10 9 –
Deferred taxes – –3 –
Total hedging commodity price risk 10 6 –
D I S C L O S U R E S O N H E D G E D I T E M S I N C A SH F L O W H E D G E S I N 2 0 2 2
RESERVE FOR
Changes in fair value to

determine hedge Discontinued cash flow
€ million ineffectiveness Active cash flow hedges hedges

Designated components 424 420 0
Deferred taxes – –114 0
Total hedging interest rate risk 424 306 0
Designated components 2,130 1,998 –8
Non-designated components – –1,800 –11
Deferred taxes – –61 6
Total hedging currency risk 2,130 137 –13
Designated components 1 –29 –
Deferred taxes – 9 –
Total hedging combined interest rate and currency risk 1 –20 –
Designated components – – –
Deferred taxes – – –
Total hedging commodity price risk – – –
384
Changes in the reserve

When accounting for cash flow hedges, the designated effective portions of a hedge are recognized in OCI I
directly in equity. All changes beyond this in the fair value of the designated component are recognized as inef-
fectiveness in profit or loss.
The tables below show a reconciliation to the reserve:
C H A N G E S I N T H E R E S E R V E F O R C A S H F LO W H E D G E S ( O C I I )
Interest rate/ Commodity

€ million Interest rate risk Currency risk currency risk price risk Total
Balance at Jan. 1, 2023 307 1,397 –20 – 1,684

Gains or losses from effective hedging
relationships –278 733 72 5 533
Reclassifications due to changes in whether the
hedged item is expected to occur – –137 – – –137
Reclassifications due to realization of the
hedged item 4 –325 –57 1 –377
Balance at Dec. 31, 2023 33 1,669 –5 6 1,703
C H A N G E S I N T H E R E S E R V E F O R C A S H F LO W H E D G E S ( O C I I )
Interest rate/ Commodity

€ million Interest rate risk Currency risk currency risk price risk Total
Balance at Jan. 1, 2022 28 –665 –1 – –637

Gains or losses from effective hedging
relationships 287 1,244 20 – 1,551
Reclassifications due to changes in whether the
hedged item is expected to occur – –133 – – –133
Reclassifications due to realization of the
hedged item –8 952 –40 – 904
Balance at Dec. 31, 2022 307 1,397 –20 – 1,684
If expectations about the occurrence of the hedged item change, the arrangement is reclassified by terminating
the hedging relationship prematurely. Changed expectations are primarily caused by a change in projections for
hedging sales revenue.
Changes in the fair values of non-designated components of a derivative are likewise generally recognized
immediately through profit or loss. An exception from this principle is any change in the fair value attributable to
non-designated time values of options, to the extent that they relate to the hedged item. Moreover, the Volkswagen
Group initially recognizes in equity (hedging costs) changes in the fair values of non-designated forward compo-
nents in currency forwards and currency hedges attributed to cash flow hedges. This means that the Volkswagen
Group recognizes changes in the fair value of the non-designated component respectively parts thereof immedi-
ately through profit or loss only if there is ineffectiveness.
385
The tables below show a summary of changes in the reserve for hedging costs resulting from the non-designated
portions of options and currency hedges:
C H A N G E S I N T H E R E S E R V E F O R H E D G I N G C O S T S – N O N - D E SI G N A T E D T I M E V A L U E S O F
OPTIONS
CURRENCY RISK
€ million 2023 2022
Balance at Jan. 1 –87 –80

Gains and losses from non-designated time value of options
Hedged item is recognized at a point in time 17 82
Reclassifications due to changes in whether the hedged item is expected to occur
Reclassification due to realization of the hedged item
Hedged item is recognized at a point in time 46 –91
Balance at Dec. 31 –22 –87
C H A N G E S I N T H E R E S E R V E F O R H E D G I N G C O S T S – N O N - D E SI G N A T E D F O R W A R D C O M P O N E N T
A N D C R O S S C U R R E N C Y B A S I S S P R E A D ( C C B S)
CURRENCY RISK
€ million 2023 2022
Balance at Jan. 1 –1,187 –287

Gains and losses from non-designated forward elements and CCBS
Hedged item is recognized at a point in time –283 –1,514
Reclassification due to changes in whether the hedged item is expected to occur
Reclassifications due to realization of the hedged item
Balance at Dec. 31 –785 –1,187
386
4.2 MARKET RISK IN THE VOLKSWAGEN GROUP (EXCLUDING VOLKSWAGEN FINANCIAL SERVICES
SUBGROUP)
4.2.1 FOREIGN CURRENCY RISK

Foreign currency risk in the Volkswagen Group (excluding Volkswagen Financial Services subgroup) is attributa-
ble to investments, financing measures and operating activities. Currency forwards, currency options, currency
swaps and cross-currency interest rate swaps are used to limit foreign currency risk. These transactions relate to
the exchange rate hedging of material payments covering general business activities that are not made in the
functional currency of the respective Group companies. The principle of matching currencies applies to the
Group’s financing activities.
Hedging transactions entered into in 2023 as part of foreign currency risk management were amongst others
in Australian dollars, Brazilian real, British pound sterling, Chinese renminbi, Hong Kong dollars, Indian rupees,
Japanese yen, Canadian dollars, Mexican pesos, Norwegian kroner, Polish zloty, Swedish kronor, Swiss francs, Sin-
gapore dollars, South African rand, South Korean won, Taiwan dollars, Czech koruna, Hungarian forints and US
dollars.
All nonfunctional currencies in which the Volkswagen Group enters into financial instruments are included as
relevant risk variables in the sensitivity analysis in accordance with IFRS 7.
If the functional currencies concerned had appreciated or depreciated by 10% against the other currencies, the
exchange rates shown below would have resulted in the following effects on the hedging reserve in equity and on
earnings after tax. It is not appropriate to add together the individual figures, since the results of the various func-
tional currencies concerned are based on different scenarios.
387
The following table shows the sensitivities of the main currencies in the portfolio as of December 31, 2023:
DEC. 31, 2023 DEC. 31, 2022

€ million +10% -10% +10% -10%
Exchange rate
EUR / USD
Hedging reserve 408 –393 497 –534
Earnings after tax –978 978 –731 717
EUR / GBP
Hedging reserve 1,176 –1,182 1,309 –1,317
EUR / CNY
Hedging reserve 754 –644 1,299 –1,310
EUR / CHF
Earnings after tax 10 –10 –1 1
EUR / SEK
EUR / BRL
EUR / CAD
EUR / JPY
EUR / PLN
Hedging reserve 187 –187 –72 72
EUR / AUD
EUR / KRW
EUR / TWD
EUR / MXN
Earnings after tax –10 10 2 –4
EUR / INR
Hedging reserve –96 96 –65 65
CAD / USD
Hedging reserve –91 91 –60 60
388
4.2.2 INTEREST RATE RISK

Interest rate risk in the Volkswagen Group (excluding Volkswagen Financial Services subgroup) results from
changes in market interest rates, primarily for medium- and long-term variable interest receivables and liabilities.
Interest rate swaps and cross-currency interest rate swaps are used to hedge against this risk, partially as fair
value or cash flow hedge, and depending on market conditions. Intragroup financing arrangements are mainly
structured to match the maturities of their refinancing. Departures from the Group standard are subject to cen-
trally defined limits and monitored on an ongoing basis.
Interest rate risk within the meaning of IFRS 7 is calculated using sensitivity analyses. The effects of the risk-
variable market rates of interest on the financial result and on equity are presented, net of tax.
If market interest rates had been 100 bps higher as of December 31, 2023, equity would have been €21 million
(previous year: €20 million) lower. If market interest rates had been 100 bps lower as of December 31, 2023, equity
would have been €22 million (previous year: €22 million) higher.
If market interest rates had been 100 bps higher as of December 31, 2023, earnings after tax would have been
€362 million (previous year: €143 million) lower. If market interest rates had been 100 bps lower as of December
31, 2023, earnings after tax would have been €382 million (previous year: €149 million) higher.
4.2.3 COMMODITY PRICE RISK

Commodity price risk in the Volkswagen Group (excluding Volkswagen Financial Services subgroup) primarily
results from price fluctuations and the availability of ferrous and non-ferrous metals, precious metals, commodi-
ties required in connection with the Group’s digitalization and electrification strategy, as well as of coal, CO 2 cer-
tificates and rubber.
Commodity price risk is limited by entering into forward transactions and swaps.
However, not all commodities are suitable for these types of hedges, e.g. because of low market liquidity or a
lack of correlation between hedged item and hedging instrument. Likewise, selected commodities were pur-
chased on the spot market, which led to a corresponding increase in inventories. Commodity price risk within the
meaning of IFRS 7 is presented using sensitivity analyses. These show what effect changes in the commodity price
risk variable would have on earnings after tax and on equity.
If the commodity prices of the hedged nonferrous metals, coal and rubber had been 10% higher (lower) as of
December 31, 2023, earnings after tax would have been €648 million (previous year: €954 million) higher (lower).
If commodity prices in hedging transactions to which hedge accounting is applied had been 10% higher (lower)
as of December 31, 2023, equity would have been €27 million higher (lower). As of the end of 2022, there were no
hedging relationships that qualified for hedge accounting.
4.2.4 EQUITY AND BOND PRICE RISK

The special funds launched using surplus liquidity and the equity interests measured at fair value are subject in
particular to equity price and bond price risk, which can arise from fluctuations in quoted market prices, stock
exchange indices and market rates of interest. The changes in bond prices resulting from variations in the market
rates of interest are quantified in sections 4.2.1 and 4.2.2, as are the measurement of foreign currency and other
interest rate risks arising from the special funds and the equity interests measured at fair value. As a rule, risks
arising from the special funds are countered by ensuring a broad diversification of products, issuers and regional
markets when investing funds, as stipulated by the Investment Guidelines of the Group. In addition, the Invest-
ment Guidelines define fixed minimum values, which are to be met by taking suitable risk management measures.
In addition, hedgings are executed when market conditions are appropriate.
389
As part of the presentation of market risk, IFRS 7 requires disclosures on how hypothetical changes in risk varia-
bles affect the price of financial instruments. Potential risk variables here are in particular quoted market prices
or indices, as well as interest rate changes as bond price parameters.
If share prices had been 10% higher as of December 31, 2023, earnings after tax would have been €290 million
(previous year: €107 million) higher and equity would have been €4 million (previous year: €4 million) higher. If
share prices had been 10% lower as of December 31, 2023, earnings after tax would have been €270 million (pre-
vious year: €65 million) lower and equity would have been €4 million (previous year: €4 million) lower.
4.3 MARKET RISK AT VOLKSWAGEN FINANCIAL SERVICES SUBGROUP

Exchange rate risk in the Volkswagen Financial Services subgroup is mainly attributable to assets that are not
denominated in the functional currency and from refinancing within operating activities. Interest rate risk relates
to refinancing without matching maturities and the varying interest rate elasticity of individual asset and liability
items. The risks are limited by the use of currency and interest rate hedges.
Microhedges are used for interest rate hedging. Fixed-rate assets and liabilities included in the hedging strat-
egy are recognized at fair value, as opposed to their original subsequent measurement at amortized cost. The
resulting effects in the income statement are offset by the corresponding gains and losses on the interest rate
hedging instruments (swaps). Currency hedges (currency forwards and cross-currency interest rate swaps) are
used to mitigate foreign currency risk. All cash flows in foreign currency are hedged.
As of December 31, 2023, the value at risk was €976 million (previous year: €792 million) for interest rate risk
and €133 million (previous year: €76 million) for foreign currency risk.
The entire value at risk for interest rate and foreign currency risk at the Volkswagen Financial Services subgroup
was €893 million (previous year: €720 million).
5. Methods for monitoring hedge effectiveness

Since the implementation of IFRS 9, the Volkswagen Group determines hedge effectiveness mainly on a prospec-
tive basis using the critical terms match method. Retrospective analysis of effectiveness uses a test for ineffec-
tivities in the form of the dollar offset method. Under the dollar offset method, the changes in value of the hedged
item expressed in monetary units are compared with the changes in value of the hedging instrument expressed
in monetary units.
To this end, the accumulated changes in the fair value of the designated spot component of the hedging
instrument and hedged item are compared. If the critical terms do not match, the same procedure is applied to the
non-designated component.
390
Notional amount of derivatives

The summary below presents the remaining maturities profile of the notional amounts of the hedging instruments,
which are accounted for under the Volkswagen Group’s hedge accounting rules, and of derivatives to which hedge
accounting is not applied:
NOTIONAL AMOUNT OF DERIV ATIVES IN 2023
TOTAL
NOTIONAL
REMAINING TERM AMOUNT
within one to more than five

€ million up to one year five years years Dec. 31, 2023
Notional amount of hedging instruments within hedge accounting

Interest rate swap 14,174 50,233 5,587 69,993
Currency forwards/Cross-currency swaps
Currency forwards/Cross-currency swaps in CNY 5,708 10,032 62 15,802
Currency forwards/Cross-currency swaps in GBP 12,743 7,067 – 19,810
Currency forwards/Cross-currency swaps in USD 12,383 21,008 1,000 34,391
Currency forwards/Cross-currency swaps in CHF 2,790 8,726 60 11,576
Currency forwards/Cross-currency swaps in other currencies 19,346 18,877 86 38,309
Currency options
Currency options in USD 1,264 1,174 – 2,437
Currency options in CNY 4,733 1,906 – 6,639
Currency options in CHF 1,274 2,462 – 3,736
Currency options in other currencies 583 836 – 1,419
Cross-currency interest rate swaps 1,174 872 – 2,046
Commodity forwards/swaps aluminium 146 87 – 234
Commodity forwards/swaps copper 43 102 – 145
Commodity forwards/swaps other 44 8 – 52
Notional amount of other derivatives

Currency forwards/Cross-currency swaps in USD 10,370 8,605 218 19,193
Currency options
Currency options in CNY 5,529 – – 5,529
Currency options in other currencies 4,087 511 – 4,598
Cross-currency interest rate swaps 2,298 12,293 3,406 17,997
Commodity forwards/swaps aluminium 1,263 2,535 – 3,798
Commodity forwards/swaps copper 489 1,257 – 1,746
Commodity forwards/swaps nickel 1,021 2,564 218 3,803
391
NOTIONAL AMOUNT OF DERIVATIVES IN 2022
TOTAL
NOTIONAL
REMAINING TERM AMOUNT
within one to more than five

€ million up to one year five years years Dec. 31, 2022
Notional amount of hedging instruments within hedge accounting

Currency forwards/Cross-currency swaps in CNY 7,654 12,682 120 20,456
Currency forwards/Cross-currency swaps in GBP 12,106 9,679 – 21,785
Currency forwards/Cross-currency swaps in USD 12,210 22,833 2,314 37,357
Currency forwards/Cross-currency swaps in other currencies 18,904 25,381 – 44,284
Currency options
Currency options in USD 3,484 2,772 – 6,256
Currency options in CNY 7,005 8,689 – 15,694
Currency options in other currencies 1,736 3,656 – 5,392
Cross-currency interest rate swaps 773 804 – 1,577
Notional amount of other derivatives

Currency forwards/Cross-currency swaps in USD 9,060 7,431 165 16,656
Currency options
Currency options in USD 3,549 644 – 4,193
Currency options in other currencies 280 212 – 492
Cross-currency interest rate swaps 5,231 8,717 3,945 17,892
Commodity forwards/swaps aluminium 979 2,390 – 3,369
Commodity forwards/swaps copper 416 651 – 1,067
Commodity forwards/swaps nickel 840 2,048 165 3,052
392
Both derivatives closed with offsetting transactions and the offsetting transactions themselves are included in
the respective notional amount. The offsetting transactions cancel out the effects of the original hedging trans-
actions. If the offsetting transactions were not included, the respective notional amount would be lower. In addi-
tion to the derivatives used for hedging foreign currency, interest rate and price risk, the Group held options and
other derivatives on equity instruments at the reporting date, mainly in connection with fund investments. The
notional volume with a remaining maturity of less than one year was €19.9 billion (previous year: €17.9 billion).
The notional volume with a remaining maturity of more than one year was €4.2 billion (previous year: €4.2 billion)
and relates primarily to options in connection with the acquisition of Europcar.
Also in connection with fund investments, the Group held credit default swaps with a notional amount of
€32.2 billion (previous year: €17.5 billion).
Existing cash flow hedges in the notional amount of €5.2 billion (previous year: €2.0 billion) were discontinued
because of a reduction in the projections. In addition, hedges were to be terminated due to internal risk regulations.
Items hedged under cash flow hedges are expected to be realized in accordance with the maturity buckets of
the hedges reported in the table. For cash flow hedges, the Volkswagen Group achieved an average hedging
interest rate of 2.93% for hedging interest rate risk. In addition, currency risk was hedged at the following hedging
exchange rates for the major currency pairs: EUR/USD at 1.16; EUR/GBP at 0.88; EUR/CNY at 7.39.
The average hedging prices used in commodity price hedging were USD 2,332.15/tonne for aluminum and
USD 8,359.11/tonne for copper.
The fair values of the derivatives are estimated using market data at the balance sheet date as well as by
appropriate valuation techniques. The following term structures were used for the calculation:
in % EUR AUD CAD CHF CNY CZK GBP JPY SEK USD
Interest rate for six months 3.6832 4.3613 4.9060 1.5800 2.3769 6.1629 5.1350 0.0176 4.1596 5.1613
Interest rate for one year 3.2078 4.2061 4.5750 1.3900 2.3105 6.3621 4.7450 0.0713 3.7939 4.7871
Interest rate for five years 2.1805 3.9280 3.1720 1.0675 2.5700 3.5350 3.3822 0.4500 2.3870 3.5555
Interest rate for ten years 2.2735 4.1830 3.1250 1.1700 2.7700 3.4950 3.3000 0.8438 2.3530 3.4831
37. Capital management
The Group’s capital management ensures that its goals and strategies can be achieved in the interests of share-
holders, employees and other stakeholders. In particular, management focuses on generating the minimum return
on invested assets in the Automotive Division that is required by the capital markets, and on increasing the return
on equity in the Financial Services Division. In the process, it aims overall to achieve the highest possible growth
in the value of the Group and its divisions for the benefit of all the Company’s stakeholder groups.
In order to ensure that resources are used as efficiently as possible in the Automotive Division and to measure
the success of this, we have for a number of years been using a value-based management system, with value
contribution as an absolute performance measure and return on investment (ROI) as a relative indicator.
Value contribution is defined as the difference between operating profit after tax and the opportunity cost of
invested capital. The opportunity cost of capital is calculated by multiplying the market cost of capital by average
invested capital. Invested capital is calculated by taking the operating assets reported in the balance sheet (prop-
erty, plant and equipment, intangible assets, lease assets, inventories and receivables) and deducting non-inter-
est-bearing liabilities (trade payables and payments on account received). Average invested capital is derived from
the balance at the beginning and the end of the reporting period.
393
The return on investment is defined as the return on invested capital for a particular period based on the operating
result after tax. If the return on investment exceeds the market cost of capital, there is an increase in the value of
the invested capital and a positive value contribution. In the Group, a minimum required rate of return on invested
capital of 9.0% is defined, which applies to both the business units and the individual products and product lines.
The goal of generating a sustained return on investment of over 18.0% is anchored in the company’s strategy. The
return on investment therefore serves as a consistent target in operational and strategic management and is used
to measure target attainment for the Automotive Division, the individual business units, and projects and products.
The return on investment achieved for the Automotive Division was 12.3% in the reporting period, which is above
the minimum rate of return on invested capital of 9.0%. Given the current cost of capital of 8.5%, this results in a
positive value contribution of €4,727 million.
Due to the specific features of the Financial Services Division, its management focuses on return on equity, a
special target linked to invested capital. This measure is calculated as the ratio of earnings before tax to average
equity. Average equity is calculated from the balance at the beginning and the end of the reporting period. In
addition, the goals of the Financial Services Division are to meet the banking supervisory authorities’ regulatory
capital requirements, to procure equity for the growth planned in the coming fiscal years and to support its external
rating by ensuring capital adequacy. To ensure compliance with prudential requirements at all times, a planning
procedure integrated into internal reporting has been put in place at the Volkswagen Bank, allowing the required
equity to be continuously determined on the basis of actual and expected business performance. In the reporting
period, this again ensured that regulatory minimum capital requirements were always met both at Group level and
at the level of subordinate companies’ individual, specific capital requirements.
The return on investment and value contribution in the Automotive Division as well as the return on equity and
the equity ratio in the Financial Services Division are shown in the following table:
€ million 2023 2022³
Automotive Division¹
Operating result after tax 15,218 14,080

Invested capital (average) 123,887 117,402
Cost of capital in % 8.5 8.3
Opportunity cost of invested capital 10,491 9,701
Value contribution² 4,727 4,379

Average equity 42,991 39,773
Return on equity before tax in % 8.8 14.1
Equity ratio in % 14.8 16.1
1 Including proportionate inclusion of the Chinese joint ventures and allocation of consolidation adjustments between the Automotive and Financial Services Divisions; excluding
effects on earnings and assets from purchase price allocation.
2 The value contribution corresponds to the Economic Value Added (EVA®). EVA® is a registered trademark of the consulting firm Stern Value Management.
394
38. Contingent liabilities
€ million Dec. 31, 2023 Dec. 31, 2022
Liabilities under guarantees 548 521

Liabilities under warranty contracts 65 73
Assets pledged as security for third-party liabilities 8 11
Other contingent liabilities 9,771 10,000
10,392 10,604
In the case of liabilities from guarantees, the Group is required to make specific payments if the debtors fail to
meet their obligations.
The other contingent liabilities primarily comprise potential liabilities arising from matters relating to taxes and
customs duties, as well as litigation and proceedings relating to suppliers, dealers, customers, employees and
investors. The contingent liabilities recognized in connection with the diesel issue totaled €4.0 billion (previous
year: €4.2 billion), of which €3.8 billion (previous year: €3.6 billion) was attributable to investor lawsuits in Ger-
many. Also included are certain elements of the class action lawsuits and proceedings/misdemeanor proceedings
relating to the diesel issue as far as these can be quantified. As some of these proceedings are still at a very early
stage, the plaintiffs have in a number of cases so far not specified the basis of their claims and/or there is insuffi-
cient certainty about the number of plaintiffs or the amounts being claimed. Where these lawsuits meet the defi-
nition of a contingent liability, no disclosure was normally required because it had not been possible to measure
the amount involved.
In addition, other contingent liabilities include an amount of €0.6 billion for potential liabilities resulting from
the risk of tax proceedings instituted by the Brazilian tax authorities against Volkswagen Truck & Bus (formerly:
MAN Latin America).
Since 2016, the U.S. National Highway Traffic Safety Administration (NHTSA) has announced further exten-
sions of the recalls of various models from a variety of manufacturers containing certain airbags produced by the
Takata company. Recalls were also demanded by the local authorities in individual countries. The recalls also
included models manufactured by the Volkswagen Group. Appropriate provisions have been recognized. Currently,
the possibility of further extensions to the recalls that could also affect Volkswagen Group models cannot be ruled
out. It is not possible at the moment to provide further disclosures in accordance with IAS 37.86 in relation to this
matter because the technical investigations and consultations with the authorities are still ongoing.
regarding uncertainty as to the amount or maturity of provisions and contingent liabilities in relation to additional
important legal cases. This is so as to not compromise the results of the proceedings or the interests of the Com-
pany. Further information can be found under the section entitled “Litigation”.
395
39. Litigation
Volkswagen AG and the companies in which it is directly or indirectly invested are involved in a substantial num-
ber of legal disputes and governmental proceedings in Germany and abroad. Such legal disputes and other pro-
ceedings occur, among other things, in connection with products and services or in relation to employees, public
authorities, dealers, investors, customers, suppliers, or other contracting parties. For the companies in question,
these disputes and proceedings may result in payments such as fines or in other obligations or consequences. In
particular, substantial compensatory or punitive damages may have to be paid and cost-intensive measures may
have to be implemented. In this context, specific estimation of the objectively likely consequences is often possi-
ble only to a very limited extent, if at all.
Various legal proceedings are pending worldwide, particularly in the USA, in which customers are asserting
purported product-related claims, either individually or in class actions. These claims are as a rule based on
alleged vehicle defects, including defects alleged in vehicle parts supplied to the Volkswagen Group.
Compliance with legal or regulatory requirements is another area in which risks may arise. This is particularly
true in gray areas where Volkswagen and the relevant public authorities may interpret the law differently.
In connection with their business activities, Volkswagen Group companies engage in constant dialogue with
regulatory agencies, including the Kraftfahrt-Bundesamt (KBA – German Federal Motor Transport Authority). It is
not possible to predict with assurance how government regulators will assess certain issues of fact and law in a
particular situation. For this reason, the possibility that certain vehicle characteristics and/or type approval
aspects may in particular ultimately be deemed deficient or impermissible cannot be ruled out. This is fundamen-
tally a question of the regulatory agency’s specific evaluation in a concrete situation.
A comparable challenge results from the tension between divergent national and international statutory or
regulatory requirements regarding obligations to transfer information or documents, on the one hand, and privacy
mandates under national and international data protection law on the other. Volkswagen is advised by outside law
firms on these issues so as to preclude compliance violations as far as possible despite the sometimes unclear
state of the law.
Litigation may furthermore result from demands for more extensive climate protection measures or from alleg-
edly incomplete disclosures regarding the impact of climate change. The response of the Volkswagen Group to
this risk includes, among other things, certification of its self-imposed decarbonization targets through independ-
ent and internationally respected organizations and systematic alignment of its non-financial reporting with the
requirements of the law and the capital markets.
Risks may also result from actions for infringement of intellectual property, including infringement of patents,
brands, or other third-party rights, particularly in Germany, before the Unified Patent Court and in the United States.
If Volkswagen is alleged or determined to have violated third-party intellectual property rights, it may for instance
have to pay damages, modify manufacturing processes, or redesign products, and may be barred from selling cer-
tain products; this may result in delivery and production restrictions or interruptions.
Criminal acts by individuals, which even the best compliance management system can never completely pre-
vent, are another potential source of legal risks.
Appropriate insurance has been taken out to cover these risks where they were sufficiently definite and such
coverage was economically sensible. Where necessary based on the information currently available, identified and
correspondingly measurable risks have been reflected by recognizing provisions in amounts considered appropri-
ate or disclosing contingent liabilities, as the case may be. As some risks cannot be assessed or can only be
assessed to a limited extent, the possibility of material loss or damage not covered by the insured amounts or by
provisions cannot be ruled out. This is, for instance, the case with regard to the legal risks assessed in connection
with the diesel issue.
Unless otherwise explicitly stated, the amounts disclosed for the litigation being reported on refer only to the
respective principal claim. Ancillary claims, such as for interest and litigation expense, are generally not consid-
ered.
396
DIESEL ISSUE
lation” that irregularities in relation to nitrogen oxide (NO x) emissions had been discovered in emissions tests on
road use had been identified in type EA 189 diesel engines and that this engine type had been installed in roughly
eleven million vehicles worldwide. On November 2, 2015, the EPA issued a “Notice of Violation” alleging that
irregularities had also been discovered in the software installed in US vehicles with type V6 3.0 l diesel engines.
The so-called diesel issue is rooted in a modification of parts of the software of the relevant engine control
units – which, according to Volkswagen AG’s legal position, is only unlawful under US law – for the type EA 189
diesel engines that Volkswagen AG was developing at that time. This software function was developed and
implemented from 2006 on without knowledge at the level of the Board of Management. Members of the Board of
Management did not learn of the development and implementation of this software function until the summer of
2015.
There are furthermore no findings that, following the publication in May 2014 of the study by the International
Council on Clean Transportation, an unlawful “defeat device” under US law was disclosed to the persons respon-
sible for preparing the 2014 annual and consolidated financial statements as the cause of the high NO x emissions
in certain US vehicles with 2.0 l type EA 189 diesel engines. Rather, at the time the 2014 annual and consolidated
financial statements were being prepared, the persons responsible for preparing these financial statements
remained under the impression that the issue could be resolved with comparatively little expense. In the course of
the summer of 2015, however, it became progressively apparent to individual members of Volkswagen AG’s Board
of Management that the cause of the discrepancies in the USA was a modification of parts of the software of the
engine control unit that was later identified as an unlawful “defeat device” as defined by US law. This culminated
in Volkswagen's disclosure of a “defeat device” to the EPA and the California Air Resources Board (CARB), a
department of the Environmental Protection Agency of the State of California, on September 3, 2015. According
to the assessment at the time by the responsible persons dealing with the matter, the magnitude of the costs
expected to result for the Volkswagen Group (recall costs, retrofitting costs, and financial penalties) was not fun-
damentally dissimilar to that in previous cases involving other vehicle manufacturers. It therefore appeared to be
manageable overall considering the business activities of the Volkswagen Group. This assessment by Volkswagen
AG was based, among other things, on the advice of a law firm engaged in the USA for regulatory approval issues,
according to which similar cases had in the past been amicably resolved with the US authorities. The EPA’s publi-
cation of the “Notice of Violation” on September 18, 2015, which the Board of Management had not expected,
especially at that time, then presented the situation in an entirely different light.
The AUDI AG Board of Management members in office at the time in question have likewise stated that they
had no knowledge of the use of “defeat device” software that was prohibited by US law in the type V6 3.0 l TDI
engines until the EPA issued its November 2015 “Notice of Violation.”
Within the Volkswagen Group, Volkswagen AG has development responsibility for the four-cylinder diesel
engines and AUDI AG has development responsibility for the six- and eight-cylinder diesel engines.
397
As a consequence of the diesel issue, numerous judicial and regulatory proceedings were initiated in various
countries. Volkswagen has in the interim succeeded in making substantial progress and ending many of these
proceedings. In the USA, Volkswagen AG and certain affiliates reached settlement agreements with various gov-
ernment authorities and private plaintiffs, the latter represented by a Plaintiffs’ Steering Committee in a multidis-
trict litigation in the US state of California. The agreements in question include various partial consent decrees as
well as a plea agreement that resolved certain civil claims as well as criminal charges under US federal law and
the laws of certain US states in connection with the diesel issue. Although Volkswagen is firmly committed to
fulfilling the obligations arising from these agreements, a breach of these obligations cannot be completely ruled
out. In the event of a violation, significant penalties could be imposed as stipulated in the agreements, in addition
to the possibility of further monetary fines, criminal sanctions and injunctive relief.
In agreement with the respective responsible authorities, the Volkswagen Group is making technical measures
available worldwide for virtually all diesel vehicles with type EA 189 engines. For all clusters (groups of vehicles)
within its jurisdiction, the KBA determined that implementation of the technical measures would not result in any
adverse changes in fuel consumption, CO2 emissions, engine output, maximum torque, and noise emissions.
Following the studies carried out by AUDI AG to check all relevant diesel concepts for possible irregularities
and retrofit potential, measures proposed by AUDI AG have been adopted and mandated by the KBA in various
recall orders pertaining to vehicle models with V6 and V8 TDI engines. AUDI AG continues to anticipate that the
total cost, including recall expenses, of the ongoing largely software-based retrofit program that began in July
2017 will be manageable and has recognized corresponding balance-sheet risk provisions. AUDI AG has in the
meantime developed software updates for many of the affected powertrains and, after approval by the KBA,
already installed these updates in the vehicles of a large number of affected customers. KBA approval is still
expected for the small number of software updates that are still pending.
In connection with the diesel issue, potential consequences for Volkswagen’s results of operations, financial
position and net assets could emerge primarily in the following legal areas:
1. Criminal and administrative proceedings worldwide (excluding the USA/Canada)

Criminal investigations, regulatory offense proceedings, and/or administrative proceedings have been com-
menced in some countries. Criminal investigations into the core factual issues are being conducted by the Offices
of the Public Prosecutor in Braunschweig and Munich.
In January 2021, the criminal proceedings regarding alleged market manipulation relating to capital market
disclosure obligations in connection with the diesel issue were terminated by the Braunschweig Regional Court
provisionally as regards the former Chair of the Board of Management and definitively as regards the correspond-
ing regulatory offense proceeding against Volkswagen AG. Pursuant to a motion filed by the Braunschweig Office
of the Public Prosecutor, the Braunschweig Regional Court reopened the proceedings against the former Chair of
the Board of Management in December 2023. This case will now move forward; the Braunschweig Regional Court
has as yet set no date for commencement of the trial.
In September 2020, the Braunschweig Regional Court allowed the indictment of the same former Chair of the
Board of Management of Volkswagen AG to proceed on charges that include fraud in connection with the diesel
issue involving type EA 189 engines. The proceedings against this former Chair of the Board of Management of
Volkswagen AG have since been severed from the other cases. The trial of the other defendants began in Septem-
ber 2021.
398
The Braunschweig Office of the Public Prosecutor conducted investigations on suspicion of fraud in connection
with type EA 288 engines. The proceedings against the accused employees and against Volkswagen AG were
terminated in late 2022 and early 2023, definitively against payment of a sum set by the court in the case of three
of the accused persons and provisionally as regards four others.
In June 2020, the Munich II Regional Court accepted the substantially unchanged indictment of the Munich II
Office of the Public Prosecutor, which also named a former Chair of the Board of Management of AUDI AG, and
opened the main trial proceedings on charges of, among other things, fraud in connection with the diesel issue
involving 3.0 l and 4.2 l TDI engines. The trial before the Munich II Regional Court concluded in June 2023; the
former Chair of the Board of Management of AUDI AG and the other two defendants were sentenced to prison
terms, the enforcement of which was in each case suspended subject to probation. The conditions of probation
include the payment of sums set by the court. The judgment is not yet final. All three defendants have filed appeals
on issues of law. The Office of the Public Prosecutor has likewise appealed the judgment against one of the de-
fendants. In April 2023, the Munich II Regional Court had previously terminated the proceedings against an addi-
tional former defendant against payment of a sum set by the court.
In August 2020, the Munich II Office of the Public Prosecutor issued a further indictment charging three former
members of the Board of Management of AUDI AG and others with, among other things, fraud in connection with
the diesel issue involving 3.0 l and 4.2 l TDI engines. The Munich II Regional Court has not yet decided whether to
accept the indictment.
As the type approval authority of proper jurisdiction, the KBA is moreover continuously testing Audi,
Volkswagen, and Porsche brand vehicles for problematic functions. If certain functions are deemed impermissible
by the KBA, the affected vehicles are recalled pursuant to a recall order or they are brought back into compliance
by means of a voluntary service measure.
In judgments rendered in July and November 2022, the European Court of Justice (ECJ) ruled that a so-called
thermal window (i.e. a temperature-dependent exhaust gas recirculation) in the range of 15°C and 33°C outside
temperature represents a defeat device. In this context, the ECJ developed a new, unwritten criterion according
to which a thermal window, even if it serves to prevent sudden and extraordinary damage, is impermissible if it is
active “for most of the year under real driving conditions prevalent in the territory of the European Union.” The KBA
commenced formal administrative proceedings relating to certain first and second generation type EA 896
engines that were installed in certain older vehicle models as well as to individual vehicle models with type EA 189
engines. In July and October 2023, the KBA issued two administrative rulings against AUDI AG in which it ruled
that the originally incorporated thermal window version failed to meet the ECJ’s new vehicle engineering criterion
in some of the affected vehicles. AUDI AG has appealed the rulings, and they are therefore not final. The KBA issued
corresponding administrative rulings against Porsche AG in December 2023 and against Volkswagen AG in Jan-
uary 2024. Porsche AG and Volkswagen AG have appealed the rulings. The Volkswagen Group had previously
already begun rolling out software updates that modify the thermal window in accordance with the ECJ’s new
vehicle engineering criterion and will continue to do so.
In a trial level decision rendered in late February 2023, the Schleswig Administrative Court upheld a lawsuit
brought by Deutsche Umwelthilfe (DUH – Environmental Action Germany) against the KBA and invalidated the
notice of approval for a software update for certain older Golf Plus model vehicles to the extent this notice classi-
fied the thermal window feature, the altitude correction feature, and the taxi switch feature as permissible deac-
tivation devices (defeat devices). Altitude correction refers to altitude-dependent exhaust gas recirculation. The
taxi switch modifies exhaust gas recirculation when a vehicle with a running engine stands motionless for a certain
period of time. Volkswagen AG is involved in the litigation as an interested party summoned. In late April 2023,
Volkswagen AG and the KBA filed appeals against the judgment of the Schleswig Administrative Court. This deci-
sion is thus not legally final. DUH has filed two additional lawsuits with the Schleswig Administrative Court. The
first action contests the notices of approval for further Audi and Porsche brand vehicles equipped with type EA 189
engines as well as with selected V-TDI engines; the second action is directed against all Group diesel vehicles
with the Euro-5 and Euro-6b/c exhaust emission standard. In the first action, the Schleswig Administrative Court
issued a judgment in January 2024 that extended its initial February 2023 decision to additional vehicles with
399
type EA 189 engines and invalidated the KBA’s notices of approval for these vehicles. The court granted both leave
to appeal (on points of fact and law) and to leap-frog appeal (on points of law). This decision is thus not legally
final.
Moreover, additional administrative proceedings relating to the diesel issue are ongoing in other jurisdictions.
The companies of the Volkswagen Group are cooperating with the government authorities.
Risks may furthermore result from possible decisions by the European Court of Justice construing EU type
approval provisions.
Whether the criminal and administrative proceedings will ultimately result in fines or other consequences for
the Company, and if so what amounts these may entail, is currently subject to estimation risks. According to
Volkswagen’s estimates, the likelihood that a sanction will be imposed is 50 % or less in the majority of these
proceedings. Contingent liabilities have therefore been disclosed where the amount of such liabilities could be
measured and the likelihood of a sanction being imposed was assessed at not less than 10 %.
2. Product-related lawsuits worldwide (excluding the USA/Canada)

A general possibility exists that customers in the affected markets will file civil lawsuits or that importers and
dealers will assert recourse claims against Volkswagen AG and other Volkswagen Group companies. Besides
individual lawsuits, various forms of collective actions (i.e. assertion of individual claims by plaintiffs acting jointly
or as representatives of a class) are available in various jurisdictions. Furthermore, in a number of markets it is
possible for consumer and/or environmental organizations to bring suit to enforce alleged rights to injunctive
relief, declaratory judgment, or damages.
Customer class action lawsuits and actions brought by consumer and/or environmental organizations were
pending in the reporting year against Volkswagen AG and other Volkswagen Group companies in a number of
countries including Belgium, Brazil, England and Wales, France, Germany, Italy, the Netherlands, Portugal, and
South Africa. These actions asserted alleged rights to damages and other relief. The pending actions included in
particular the following:
Pending in Belgium is a class action filed by the Belgian consumer organization Test Aankoop VZW seeking
repayment of the purchase price or damages in the alternative; an opt-out mechanism has been held to apply to
this action. Given the opt-out rule, the class action potentially covers all vehicles with type EA 189 engines pur-
chased by consumers on the Belgian market after September 1, 2014, unless the right to opt out is actively exer-
cised. In July 2023, a trial level judgment was rendered in this class action by which Volkswagen AG was ordered
to pay 5% of the purchase price, or 5% of the difference between the purchase price and the resale price, if a con-
sumer had purchased a vehicle with a type EA 189 engine between September 1, 2014 and September 22, 2015,
had not installed the software update, and was able to produce the relevant evidentiary documentation. The judg-
ment is not yet final.
In Brazil, two consumer protection class actions are pending. In the first class action, which pertains to some
17 thousand Amarok vehicles, the Superior Court of Justice in August 2022 rejected in part the appeal filed by
Volkswagen do Brasil against the May 2019 judgment at the first appeals level that had initially reduced the dam-
age liability of Volkswagen do Brasil considerably to around BRL 172 million. Following Volkswagen do Brasil’s
appeal, the Superior Court of Justice vacated its own prior decision in its entirety. The case was remanded to the
lower appellate court for rehearing of certain issues. Volkswagen do Brasil is permitted to introduce new evidence.
The judgment is enforceable, but remains non-final. In the second class action, which pertains to roughly 67 thou-
sand later generation Amarok vehicles, the appeal filed by the plaintiff against the October 2021 trial court judg-
ment dismissing its complaint was rejected by the appellate court in June 2023. The plaintiff has appealed this
decision to the Superior Court of Justice.
400
financialright GmbH originally filed consolidated actions before various German courts asserting roughly 45 thou-
sand claims assigned to it by customers in Germany, Slovenia, and Switzerland against Volkswagen Group com-
panies; the Bundesgerichtshof (BGH – Federal Court of Justice) has since affirmed the permissibility of financial-
right GmbH’s business model. Following the withdrawal of numerous motions for relief, approximately 9 thousand
claims are currently still pending. Provisions were recognized to account for the possibility that objectively valu-
able claims may again be raised in or out of court.
Actions were filed in late 2021 in courts in England and Wales against Volkswagen AG, Volkswagen Financial
Services (UK) Limited, and other Volkswagen Group companies in connection with certain diesel vehicles leased
or sold in England, Wales, and Northern Ireland since 2009 and various other diesel engine types. These actions
are in a very early procedural stage. No Group company has as yet been formally served with a complete statement
of the grounds of the complaint, and a number of the plaintiffs’ claims have yet to be specified in detail.
In France, a class action is pending that was filed by the French consumer organization Confédération de la
Consommation, du Logement et du Cadre de Vie (CLCV) against Volkswagen Group Automotive Retail France,
Volkswagen Group France, and Volkswagen AG for up to 1 million French owners and lessees of vehicles with type
EA 189 engines. This is an opt-in class action in which CLCV is primarily seeking rescission without compensation
for use of the vehicle or, in the alternative, damages amounting to 20-30% of the purchase price.
In Italy, a trial level judgment in favor of the plaintiffs was rendered by the Venice Regional Court in July 2021
in the class action brought by the consumer association Altroconsumo on behalf of Italian customers; the judg-
ment required Volkswagen AG and Volkswagen Group Italia to pay damages to some 63 thousand consumers in
an aggregate amount of roughly € 185 million. The judgment was largely overturned pursuant to the appeal filed
by Volkswagen AG and Volkswagen Group Italia. Per this decision, the consumers validly registered in the class
action will receive merely €300 each.
In the Netherlands, an opt-out class action is pending that was brought by Stichting Volkswagen Car Claim
seeking declaratory rulings for up to 201 thousand customers. A declaratory judgment partially granting the relief
sought was issued in July 2021. In the opinion of the court, Volkswagen AG and the other defendant Group com-
panies acted unlawfully with respect to the original engine management software. The court moreover held that
consumers are entitled to a purchase price reduction from the defendant dealerships. No specific payment obli-
gations result from the declaratory judgment. Any individual claims would then have to be established afterwards
in separate proceedings. Volkswagen AG and the other defendant Group companies appealed the decision. Fur-
thermore, an opt-out class action lawsuit brought by the Diesel Emissions Justice Foundation (DEJF) seeking
monetary damages on behalf of Dutch consumers is also pending; the action involves vehicles with type EA 189
engines, among others. The trial court rendered an interlocutory judgment in March 2022 holding the new class
action regime – which permits damage awards in addition to declaratory judgment on the existence of claims – to
be inapplicable to the instant lawsuit. The interlocutory judgment further finds that the Amsterdam court lacks
jurisdiction to hear lawsuits brought by consumers outside the Netherlands. The DJEF filed what was originally a
comprehensive appeal against this judgment, but limited its appeal in the reporting year solely to the issue of the
applicability of the new class action regime; hence the court’s decision that it lacks jurisdiction to hear lawsuits
brought by consumers outside the Netherlands is final and binding. The court suspended further trial level pro-
ceedings pending a decision by the appellate court.
In Portugal, a Portuguese consumer organization had filed an opt-out class action potentially affecting up to
approximately 70 thousand vehicles with type EA 189 engines. In July 2023, the Supreme Court dismissed the
class action as inadmissible because the plaintiff consumer organization lacked standing to sue. The judgment
became final in September 2023.
In South Africa, an opt-out class action seeking damages is pending; the action pertains to some 80 thousand
vehicles, including vehicles with type EA 189 engines.
401
Furthermore, individual lawsuits and similar proceedings are pending against Volkswagen AG and other
Volkswagen Group companies in various countries; most of these lawsuits are seeking damages or rescission of
the purchase contract.
In Germany, roughly 25 thousand individual lawsuits relating to various diesel engine types are currently pend-
ing against Volkswagen AG or other Group companies, with the plaintiffs suing for damages or rescission of the
contract in most cases.
In 2020, the BGH issued a series of fundamental judgments deciding legal issues of major importance for the
litigation still pending with regard to vehicles with type EA 189 engines. The BGH held that buyers who had pur-
chased vehicles prior to public disclosure of the diesel issue could return their vehicles to Volkswagen AG and
receive a refund of the purchase price paid, less a deduction for the benefit derived from using the vehicle. How-
ever, buyers had no tort-based claim for damages if they purchased their vehicles after the ad hoc announcement
of September 22, 2015 or if they raise claims based solely on a temperature-dependent exhaust gas recirculation
(so-called thermal window) in the engine. In February 2022, the BGH issued further fundamental judgments con-
cerning vehicles with EA 189 motors affirming that buyers of new vehicles of the Volkswagen brand were entitled
to residual damage claims against Volkswagen AG after the knowledge-based limitation period has expired; the
BGH had previously held that purchasers of used cars lacked such claims. The BGH held that buyers must return
their vehicles in order to claim payment and that such payment was reduced by the benefit derived from using the
vehicle and by the dealer profit margin. In an additional fundamental judgment rendered in July 2022 concerning
vehicles with EA 189 engines, the BGH held that buyers of new vehicles of other Group brands have no claim for
residual damages against Volkswagen AG.
In late June 2023, the BGH handed down judgments in lawsuits against Volkswagen AG and AUDI AG posing
the issue as to how the case law of the ECJ on the potential claims of buyers under European type approval law
should be implemented in German law. The BGH held that the negligent use of an impermissible defeat device
may in principle entitle plaintiffs to differential damages in tort amounting to 5 % to 15 % of their vehicle’s purchase
price. Whether this claim is given in a particular instance is for the appeals courts to determine. The BGH stated
that, when deciding whether a deactivation device was impermissible, it did not matter whether the limits in the
NEDC testing procedure would be complied with even when system functioning was modified. The BGH held that
liability does not arise where the manufacturer is not at fault, e.g. because the relevant public authority had
approved the deactivation device in its specific configuration and taking account of identified combinations of
deactivation devices, or would have done so upon request. Where a claim for differential damages exists in prin-
ciple, the buyer must furthermore accept an offset for the benefit derived from using the vehicle and for the vehi-
cle’s value to the extent these exceed the vehicle’s diminished value. An implemented software update may also
potentially mitigate damages.
Volkswagen estimates the likelihood that the plaintiffs will prevail to be 50 % or less in the great majority of
cases: customer class actions, complaints filed by consumer and/or environmental organizations, and individual
lawsuits. Contingent liabilities are disclosed for these proceedings where the amount of such liabilities can be
measured and the chance that the plaintiff will prevail was assessed as not remote. Given the early stage of the
proceedings, it is in some cases not yet possible to quantify the realistic risk exposure. Furthermore, provisions
were recognized to the extent necessary based on the current assessment.
At this time, it cannot be estimated how many customers will choose to file lawsuits in the future in addition to
those already pending and what prospect of success such lawsuits might have.
402
3. Lawsuits filed by investors worldwide (excluding the USA/Canada)

Investors from Germany and abroad have filed claims for damages against Volkswagen AG – in some cases along
with Porsche Automobil Holding SE (Porsche SE) as joint and several debtors – based on purported losses due to
alleged misconduct in capital market communications in connection with the diesel issue.
Almost all investor lawsuits are now pending before the Braunschweig Regional Court or the Braunschweig
Higher Regional Court. In August 2016, the Braunschweig Regional Court issued an order referring common ques-
tions of law and fact relevant to the investor lawsuits pending in Braunschweig to the Higher Regional Court in
Braunschweig for binding declaratory rulings pursuant to the Kapitalanleger-Musterverfahrensgesetz (KapMuG –
German Capital Investor Model Declaratory Judgment Act). The investor lawsuits pending against Volkswagen AG
in Germany are stayed pending resolution of the common issues, unless the cases can be dismissed for reasons
independent of the common issues that are to be adjudicated in the model case proceedings. The resolution in the
model case proceedings of the common questions of law and fact will be binding for the pending cases that have
been stayed as described. The model case plaintiff is Deka Investment GmbH. Oral argument in the model case
proceedings before the Braunschweig Higher Regional Court began in September 2018. The Braunschweig Higher
Regional Court issued several notification rulings stating its position on certain legal issues of fundamental im-
portance for the litigation. In July 2023, the Braunschweig Higher Regional Court issued an order for the taking of
evidence including the examination of numerous persons as well as the production and consultation of documents
and records. The mandated taking of evidence focuses initially on whether the Board of Management of
Volkswagen AG or individual members thereof and/or individual members of Volkswagen AG’s Ad Hoc Disclosure
Clearing Office (the persons with ad hoc disclosure responsibility in the court’s view) had or, as Volkswagen AG’s
state of knowledge indicates, lacked knowledge of the installation of deactivation devices prohibited under US
law in Volkswagen AG vehicles, as well as on the conceptions of these persons regarding the potential share price
impact of the information that each respectively possessed. Volkswagen AG has the burden of proof on some
issues. The taking of testimony commenced in September 2023. To date, none of the witnesses examined has
testified to having personal knowledge or to knowledge on the part of persons with ad hoc disclosure responsi-
bility. Several witnesses invoked a privilege against giving testimony. In some cases (not as to persons with ad hoc
disclosure responsibility), the Braunschweig Higher Regional Court affirmed a comprehensive right to refuse to
testify. The implications of the refusal to testify given Volkswagen AG’s burden of proof cannot be assessed
abstractly. Pursuant to § 286 of the Code of Civil Procedure, the Braunschweig Higher Regional Court must decide
at its discretion and conviction, taking account of the entire content of the hearings and the results of the evidence
taken.
Further investor lawsuits are pending before the Stuttgart Regional Court against Volkswagen AG, in some
cases along with Porsche SE as joint and several debtor. An additional investor action for model declaratory judg-
ment was filed with the Stuttgart Higher Regional Court against Porsche SE; Volkswagen AG is involved in this
action as a third party intervening in support of a party to the dispute. The Wolverhampton City Council, Adminis-
trating Authority for the West Midlands Metropolitan Authorities Pension Fund, was appointed model case plaintiff.
The Stuttgart Higher Regional Court rendered a model declaratory judgment in late March 2023. Based on the
determinations made in the model declaratory judgment and the current substantive status of the underlying
actions, all of the suspended investor lawsuits against Porsche SE would in effect have to be dismissed. The model
declaratory judgment is not yet final. The model case plaintiff, several interested parties summoned, and Porsche
SE petitioned the BGH for review on points of law. Volkswagen AG joined the proceedings as a third-party sup-
porting the petition for review of Porsche SE.
Excluding the United States and Canada, claims in connection with the diesel issue totaling roughly €9.2 billion
are currently pending worldwide against Volkswagen AG in the form of investor lawsuits, judicial applications for
dunning and conciliation procedures, and claims under the KapMuG. To date, claims in the high triple-digit-millions
range have been withdrawn or finally and conclusively dismissed. Volkswagen AG remains of the opinion that it
duly complied with its capital market obligations. Therefore, no provisions have been recognized for these investor
lawsuits. Contingent liabilities have been disclosed where the chance of success was estimated to be not less
than 10 %.
403
4. Proceedings in the USA/Canada

In the USA and Canada, the matters described in the EPA’s “Notices of Violation” are the subject of various types
of lawsuits and requests for information that have been filed against Volkswagen AG and other Volkswagen Group
companies, in particular by customers, investors, and various government agencies in the United States and Can-
ada.
In November 2023, Volkswagen reached a settlement agreement resolving the environmental claims brought
by the Attorney General of the State of Texas and various Texas municipalities against Volkswagen AG, Volkswagen
Group of America, Inc., and certain affiliates. The settlement agreement became final in January 2024 after it was
approved by the court. In November 2023, Volkswagen also finalized a settlement agreement resolving the envi-
ronmental claims brought by two municipalities (Hillsborough County/Florida and Salt Lake County/Utah) against
Volkswagen Group of America, Inc. and certain affiliates.
In March 2019, the US Securities and Exchange Commission (SEC) filed a lawsuit against, among others,
Volkswagen AG, Volkswagen Group of America Finance, LLC, and VW Credit, Inc., asserting claims under US fed-
eral securities law based, among other things, on alleged misstatements and omissions in connection with the
offer and sale of certain bonds and asset-backed securities. In August 2020, the US District Court for the Northern
District of California dismissed, among other things, all claims against VW Credit, Inc. relating to asset-backed
securities. In September 2020, the SEC filed an amended complaint that, among other things, removed the dis-
missed claims.
In line with IAS 37.92, no statements have been made concerning estimates of financial impact or regarding
uncertainty as to the amount or maturity of provisions and contingent liabilities in relation to proceedings in the
USA/Canada. This is so as to not compromise the results of the proceedings or the interests of the Company.
5. Special audit
In a November 2017 ruling, the Higher Regional Court of Celle ordered, upon the request of three US funds, the
appointment of a special auditor for Volkswagen AG. The special auditor was supposed to examine whether the
members of the Board of Management and Supervisory Board of Volkswagen AG breached their duties in connec-
tion with the diesel issue from June 22, 2006 onwards and, if so, whether this resulted in damages for
Volkswagen AG. Volkswagen AG had filed a constitutional complaint with the German Federal Constitutional
Court against this decision, which was originally unappealable as formal matter. Volkswagen AG also filed a con-
stitutional complaint against the subsequent (and likewise formally unappealable) decision by the Higher
Regional Court of Celle to appoint a special auditor other than the one initially appointed. Following November
2022 rulings by the Federal Constitutional Court that upheld both of the constitutional complaints and remanded
the cases to the Celle Higher Regional Court, the Higher Regional Court directed that extensive evidence be taken
in the case concerning the order for a special audit. Proceedings in the case concerning the replacement of the
special auditor were suspended until the completion of the taking of evidence. Volkswagen AG had in addition
previously filed an action before the Braunschweig Regional Court seeking to enjoin the special auditor from per-
forming the audit as long as he had not furnished sufficient proof of his independence. The Braunschweig
Regional Court dismissed the action for injunctive relief in the summer of 2022; Volkswagen AG then appealed
this decision to the Braunschweig Higher Regional Court.
A second motion seeking appointment of a special auditor for Volkswagen AG to examine matters relating to
the diesel issue was filed with the Regional Court of Hanover. The proceedings in this matter were resumed after
initially being stayed pending the decision of the Federal Constitutional Court in the first special audit case.
404
6. Risk assessment regarding the diesel issue

An amount of around €0.9 billion (previous year: €1.4 billion) has been included in the provisions for litigation and
legal risks as of December 31, 2023 to account for the currently known legal risks related to the diesel issue based
on the presently available information and the current assessments. Where adequately measurable at this stage,
contingent liabilities relating to the diesel issue have been disclosed in the notes in an aggregate amount of
€4.0 billion (previous year: €4.2 billion), whereby roughly €3.8 billion (previous year: €3.6 billion) of this amount
results from lawsuits filed by investors in Germany. The provisions recognized, the contingent liabilities disclosed,
and the other latent legal risks in the context of the diesel issue are in part subject to substantial estimation risks
given the complexity of the individual relevant factors, the ongoing coordination with the authorities, and the fact
that the fact-finding efforts have not yet been concluded. Should these legal or estimation risks materialize, this
could result in further substantial financial charges. In particular, adjustment of the provisions recognized in light
of knowledge acquired or events occurring in the future cannot be ruled out.
regarding uncertainty as to the amount or maturity of provisions and contingent liabilities in relation to the diesel
issue. This is so as to not compromise the results of the proceedings or the interests of the Company.
405
ADDITIONAL IMPORTANT LEGAL CASES

In 2011, ARFB Anlegerschutz UG (haftungsbeschränkt) filed a claim for damages against Volkswagen AG and
Porsche SE for allegedly violating disclosure requirements under capital market law in connection with the
acquisition of ordinary shares in Volkswagen AG by Porsche SE in 2008. The damages being sought based on
allegedly assigned rights currently amount to approximately €2.26 billion. In late September 2022 the 1st Anti-
trust Chamber of the Higher Regional Court of Celle issued a model case ruling by which all of the plaintiffs'
objects of declaratory judgment were either dismissed or declared to be irrelevant. The legal positions of the
model case defendants were thus upheld in their entirety. Two appeals alleging error of law in the model case
ruling have been received, one of which is also directed against Volkswagen AG.
In Brazil, the Brazilian tax authorities commenced tax proceedings against Volkswagen Truck & Bus (formerly:
MAN Latin America); at issue in these proceedings are the tax consequences of the acquisition structure chosen
for Volkswagen Truck & Bus in 2009. In December 2017, an adverse administrative appeal ruling was rendered
against Volkswagen Truck & Bus. Volkswagen Truck & Bus challenged this ruling before the regular court in 2018.
Estimation of the risk in the event the tax authorities prevail on all points is subject to uncertainty because of
differences in the amount of penalties and interest that might then apply under Brazilian law. However, a positive
outcome for Volkswagen Truck & Bus remains the expectation. Should this not occur, a risk of about BRL 3.4 billion
could result for the contested period from 2009 onwards; this amount has been included in contingent liabilities
in the notes.
After Volkswagen do Brasil had successfully brought an action in the Brazilian courts against what was held to
constitute unconstitutional double taxation of vehicles on the part of the Brazilian federal government,
Volkswagen do Brasil received a refund of the excess amount paid from the state of Brazil. In December 2023, the
Brazilian dealership association Associação Brasileira Dos Distribuidores Volkswagen (Assobrav) and individual
dealers, among others, filed lawsuits against Volkswagen do Brasil alleging that the dealers were at least partially
entitled to the refunded amount. Eight such actions are pending. The lawsuit brought by Assobrav with a provi-
sionally estimated amount in dispute of roughly BRL 2.4 billion is by far the largest of these actions. In January
2024, the court dismissed the dealership association’s lawsuit in its entirety. Assobrav can appeal the dismissal;
the judgment is not yet final.
In 2011, the European Commission conducted searches at European truck manufacturers for suspected
unlawful exchange of information during the period from 1997 to 2011; in November 2014, the Commission issued
a statement of objections to MAN, Scania, and the other truck manufacturers concerned. In its settlement decision
of July 2016, the European Commission assessed fines against five European truck manufacturers. MAN’s fine
was waived in full as the company had informed the European Commission about the irregularities as a key wit-
ness. In September 2017, the European Commission fined Scania €0.88 billion. In a judgment rendered in February
2022, the European General Court (Court of First Instance) rejected in its entirety the appeal filed by Scania in this
connection. Scania’s April 2022 appeal against this judgment was rejected in full by the European Court of Justice,
the court of last resort, in February 2024. Furthermore, antitrust lawsuits seeking damages have been received
from customers. As is the case in any antitrust proceedings, this may result in further lawsuits for damages. No
provisions have been recognized for a large number of these legal disputes as they are not expected to result in
final damage awards at the highest appeals level. For those actions in which, after re-assessing the risks, the final
outcome at the highest appeals level appears more likely than not to result in the payment of damages by MAN or
Scania, provisions have been recognized in an amount of €89 million. Contingent liabilities have not been dis-
closed as their quantification is not currently possible. This applies in particular to the proceedings that are cur-
rently in an early stage – including those as to which the process of expert assessment is still in an early stage.
406
In July 2021, the European Commission assessed a fine totaling roughly € 502 million against Volkswagen AG,
AUDI AG, and Dr. Ing. h.c. F. Porsche AG pursuant to a settlement decision. Volkswagen declined to file an appeal,
hence the decision became final in 2021. The subject matter scope of the decision is limited to the cooperation
of German automobile manufacturers on individual technical questions in connection with the development and
introduction of SCR (selective catalytic reduction) systems for passenger cars that were sold in the European
Economic Area. The manufacturers are not charged with any other misconduct such as price fixing or allocating
markets and customers. Following the European Commission’s July 2021 administrative fine decision, several
class actions were filed in the United Kingdom beginning in late 2021 against Volkswagen AG, among others.
Service of the complaints is expected in the course of 2024. Neither provisions nor contingent liabilities have been
stated as a realistic estimate of risk exposure is not possible at the present stage of the proceedings. After ana-
lyzing potential violations based on the facts of the EU case, the Korean competition authority KFTC issued its
administrative fine decision in April 2023. No fine was imposed on Volkswagen AG, and Porsche AG is not affected
by the decision. A fine equaling just under €3 million was assessed against AUDI AG. AUDI AG and Volkswagen
AG have appealed the decision to the relevant court in Seoul/Korea. The Turkish competition authorities, who
investigated similar matters, issued a final decision in January 2022 in which they determined anticompetitive
behavior to allegedly exist, but found that it had no effect on Türkiye, for which reason they refrained from impos-
ing fines on the German automakers. The written grounds of the final decision are not yet available. Volkswagen
AG, AUDI AG, and Porsche AG have filed appeals. Based on comparable matters, the Chinese competition author-
ity has instituted proceedings against Volkswagen AG, AUDI AG, and Porsche AG, among others, and issued
requests for information.
In March 2022, the European Commission and the Competition and Markets Authority (CMA), the English anti-
trust authorities, searched the premises of various automotive manufacturers and automotive industry organiza-
tions and/or served them with formal requests for information. In the Volkswagen Group, the investigation affects
Volkswagen Group UK, which was searched by the CMA, and Volkswagen AG, which has received a Group-wide
information request from the European Commission. The investigation relates to European, Japanese, and Korean
manufacturers as well as national organizations operating in such countries and the European organization Euro-
pean Automobile Manufacturers' Association (ACEA), which are suspected of having agreed from 2001/2002 to
the initiation of the proceedings to avoid paying for the services of recycling companies that dispose of end-of-life
vehicles (ELV) (specifically passenger cars and vans up to 3.75 tons). Also alleged is an agreement to refrain from
competitive use of ELV issues, that is, not to publicize relevant recycling data (recyclates, recyclability, recovery)
for competitive purposes. The violation under investigation is alleged to have taken place in particular in the “ACEA”
Working Group Recycling and related sub-groups thereof. Volkswagen AG is responding to the European Commis-
sion’s information requests. Volkswagen Group UK is cooperating with the CMA. In this matter, CMA furthermore
issued requests for information to Volkswagen AG. In July 2022, Volkswagen AG filed an action for judicial review
challenging the CMA's requests for information in particular because Volkswagen AG believes that they exceed
the CMA's jurisdiction. In February 2023, the court granted the claim. The CMA appealed this judgment in April
2023, and in January 2024 the appellate court ruled in the CMA’s favor. Volkswagen AG is considering whether to
appeal this decision. Concurrent therewith, Volkswagen AG continues to examine the possibilities for reasonable
cooperation with the CMA.
In addition, a few national and international authorities initiated antitrust investigations. Volkswagen is coop-
erating closely with the responsible authorities in these investigations. An assessment of the underlying situation
is not possible at this early stage.
407
Porsche AG has discovered potential regulatory issues relating to vehicles for various markets worldwide. There
are questions as to the permissibility of specific hardware and software components used in type approval meas-
urements. Differences compared with production versions may also have occurred in certain cases. Based on the
information presently available, current production is not affected, however. The issues are unrelated to the
defeat devices that were at the root of the diesel issue. A large number of the issues have already been completed.
In November 2021, three claimants accompanied by Greenpeace filed a lawsuit against Volkswagen AG before
the Braunschweig Regional Court. Among other things, the action sought to compel Volkswagen to initially reduce
in stages and by 2029 completely cease its production and placement into the stream of commerce of vehicles
with internal combustion engines as well as to reduce greenhouse gas emissions from development, production,
and marketing (including third party vehicle use). The lawsuit further sought to compel Volkswagen to exercise
influence over Group companies, subsidiaries, and joint ventures so as to cause them to fulfill these demands as
well. In February 2023, the Braunschweig Regional Court dismissed the action as unfounded. In addition, another
action with similar requests for relief and by and large the same rationale has been filed against Volkswagen AG
by an organic farmer with the support of Greenpeace before the Detmold Regional Court. This action was likewise
dismissed as unfounded by the Detmold Regional Court in February 2023. The plaintiffs filed appeals against the
judgments dismissing their complaints (appeals filed in March 2023 with the Braunschweig Higher Regional Court
and in April 2023 with the Hamm Higher Regional Court).
In Russia, Automobile Plant GAZ LLC (GAZ) had initially filed several judicial proceedings against Volkswagen
AG and others in the reporting year alleging damage claims totaling around RUB 44 billion. In this connection, GAZ
applied for and in some cases initially obtained protective measures relating to the shares in Volkswagen Group
Rus OOO (VGR) as well as to the movable and immovable property of VGR; the courts have since either rejected
or vacated these measures. GAZ had appealed these decisions rejecting or vacating protective measures relative
to the movable and immovable property of VGR; these appeals have since been finally and conclusively rejected.
In May 2023, Volkswagen AG completed the sale of its shares in VGR and its local subsidiaries to Art-Finance LLC;
thereby transferring title to the shares in VGR and its local subsidiaries to the buyer upon registration of the trans-
action. VGR was renamed AGR LLC in June 2023. In fulfillment of a court-confirmed settlement, GAZ has since
withdrawn its complaint in the first lawsuit, thus terminating these proceedings. Volkswagen AG continues to
defend the remaining second lawsuit, in which it is the sole defendant and alleged claims of approximately RUB
28.5 billion are at stake.
Provisions were recognized by Volkswagen Bank GmbH and Volkswagen Leasing GmbH for possible claims in
connection with financial services provided to consumers. These relate to actions involving certain features of
customer loan and leasing agreements that may toll the running of the statutory cancellation time periods.
In line with IAS 37.92, no further statements have been made concerning estimates of financial impact or regard-
ing uncertainty as to the amount or maturity of provisions and contingent liabilities in relation to additional
important legal cases. This is so as to not compromise the results of the proceedings or the interests of the Com-
pany.
408
40. Other financial obligations
PAYABLE PAYABLE PAYABLE TOTAL

€ million 2024 2025 - 2028 from 2029 Dec. 31, 2023
Purchase commitments in respect of

property, plant and equipment 9,932 1,750 4 11,686
intangible assets 1,117 117 1 1,235
investment property 13 – – 13
Obligations from loan commitments and irrevocable credit

commitments 11,267 152 24 11,443
Obligations from leasing and rental contracts 502 295 186 983
Miscellaneous other financial obligations 6,816 4,782 1,282 12,880

29,648 7,097 1,497 38,241
PAYABLE PAYABLE PAYABLE TOTAL

€ million 2023 2024 - 2027 from 2028 Dec. 31, 2022
Purchase commitments in respect of

property, plant and equipment 8,024 2,167 1 10,191
intangible assets 2,405 240 – 2,645
investment property 16 – – 16
Obligations from loan commitments and irrevocable credit

commitments 12,329 98 14 12,441
Obligations from leasing and rental contracts 350 278 135 762
Miscellaneous other financial obligations 4,302 3,407 1,609 9,318

27,426 6,190 1,758 35,375
In addition to the other financial obligations shown in the table, purchase commitments exist for inventories with
a short turnover period, which arise primarily from the Master Collaboration Agreement with Ford Motor Company
for the joint development of vans and mid-sized pickups for the global market. Furthermore, there are long-term
purchase obligations under battery purchase agreements with Northvolt Group companies.
409
41. Total fee of the Group auditor
Under the provisions of the Handelsgesetzbuch (HGB – German Commercial Code), Volkswagen AG is obliged to
disclose the total fee charged for the fiscal year by the Group auditor, EY GmbH & Co. KG
Wirtschaftsprüfungsgesellschaft.
€ million 2023 2022
Financial statement audit services 35 26

Other assurance services 2 6
Tax advisory services – 0
Other services 1 2
38 34
The financial statement audit services mainly related to the audit of the consolidated financial statements of
Volkswagen AG and to the annual financial statements of German Group companies, as well as to reviews of the
interim consolidated financial statements of Volkswagen AG and of the interim financial statements of German
Group companies. Other assurance services mainly related to statutory and non-statutory audits as well as non-
statutory assurance services for capital market transactions. Other services provided by the auditors related pri-
marily to advisory services in connection with the implementation of CSRD reporting requirements.
42. Personnel expenses
€ million 2023 2022
Wages and salaries 40,642 37,529

Social security, post-employment and other employee benefit costs 9,113 9,473
49,755 47,002
410
43. Average number of employees during the year
2023 2022
Performance-related wage-earners 261,731 263,053

Salaried staff 330,284 318,016
592,016 581,069
of which in the passive phase of partial retirement 12,358 12,144
Vocational trainees 15,803 15,622

607,818 596,691
Employees of Chinese joint ventures 71,007 72,585
678,825 669,275
44. Events after the balance sheet date
There were no events with a significant effect on net assets, financial position and results of operations after
December 31, 2023.
411
45. Remuneration based on performance shares
Performance share plan on the basis of Volkswagen preferred shares

The Supervisory Board resolved on March 3, 2023 to amend the remuneration system, effective January 1, 2023,
in particular to accommodate demands by investors to give long-term variable remuneration a higher weighting.
To this end, the relative share of the fixed remuneration components was reduced and the relative share of the
long-term variable remuneration was increased. Moreover, the option to agree a special bonus with a future effect
was removed to reinforce the pay-for-performance principle and implement investor demands. The maximum
target achievement values for the annual bonus and the performance share plan and their respective maximum
payment amounts were also increased in order to adequately reward higher levels of target achievement. In this
process, the maximum remuneration and the cash remuneration cap were likewise raised to accommodate current
market conditions. The Annual General Meeting approved the amended remuneration system on May 10, 2023
with 98.82% of the votes cast.
A four-year performance period applies to members of the Board of Management. Penalty and clawback rules
apply at the same time: if there is relevant misconduct during the assessment period, payments under the perfor-
mance share plan can be reduced or demanded back.
Board of Management members appointed before December 14, 2020 and whose service contract has not yet
been renewed are still subject to a three-year performance period. In these cases, penalty and clawback rules will
likewise only apply on renewal of their contracts.
The group of beneficiaries of the performance share plan was expanded at the end of 2018 by including mem-
bers of top management and at the end of 2019 by adding all other members of management and selected par-
ticipants below management level. Performance shares were first granted to members of top management at the
beginning of 2019. All other beneficiaries were allocated benefits on the basis of performance shares for the first
time at the beginning of 2020. The function of the performance share plan for top management and other benefi-
ciaries is largely identical to the performance share plan that was granted to the members of the Board of Man-
agement. The performance period for beneficiaries below Board of Management level is three years. When the
performance share plan was launched, members of top management were guaranteed a minimum bonus amount
for the first three years on the basis of the remuneration for 2018, while all other beneficiaries were given a guar-
antee for the first three years on the basis of the remuneration for 2019.
Each performance period of the performance share plan has a term of three or four years. For members of the
Board of Management and of top management, the annual target amount under the LTI is converted at the time of
granting into performance shares on the basis of the initial reference price of Volkswagen’s preferred shares. This
annual target amount is allocated to the respective beneficiaries as a pure calculation position. Based on the
degree of target achievement for the annual earnings per Volkswagen preferred share, the number of performance
shares is definitively determined on the basis of a three- or four-year, forward-looking performance period. After
the end of the performance period, a cash settlement is made. The payment amount corresponds to the number
of determined performance shares, multiplied by the closing reference price at the end of the period plus a divi-
dend equivalent.
For all other beneficiaries, the payment amount is determined by multiplying the target amount by the degree
of target achievement for the annual earnings per Volkswagen preferred share and the ratio of the closing refer-
ence price at the end of the period, plus a dividend equivalent, to the initial reference price. Target achievement is
determined on the basis of a three-year performance period with a forward-looking horizon of one year. For all
beneficiaries, the payment amount under the performance share plan is limited to 200% (Board of Management
from 2023: 250%).
412
BOARD OF MANAGEMENT AND TOP MANAGEMENT
Dec. 31, 2023 Dec. 31, 2022
Total expense of the reporting period € million 144 136

Carrying amount of the obligation € million 254 181
Intrinsic value of the obligation € million 145 69
Fair value on granting date € million 110 101
Granted performance shares Shares 2,362,443 2,006,851
of which granted during the reporting period Shares 943,003 684,317
MEMBERS OF MANAGEMENT AND SELECTED PARTICIPANTS BELOW MANAGEMENT LEVEL

In the fiscal year, beneficiary members of management and selected participants below management level were
allocated a target amount of €714 million (previous year: €688 million) on which target achievement of 100% is
based. As of December 31, 2023, the total carrying amount of the obligation, which corresponded to the intrinsic
value of the liabilities, was €986 million (previous year: €841 million). A total expense of €998 million (previous
year: €886 million) was recognized for this commitment in the reporting period.
Other performance share plans

Group companies also have their own performance share plans, which are largely based on Volkswagen AG’s
performance share plan.
The performance share plan of Porsche AG is different in that the level of target achievement is determined on
the basis of the annual earnings and share price performance of Porsche preferred shares. For Board of Manage-
ment members and top management, the performance share plan is applied with a forward-looking four-year hori-
zon. For members of management, the performance share plan is generally applied with a four-year term and a
forward-looking horizon of one year.
For the performance share plan of the TRATON Group, the level of target achievement is determined on the
basis of the annual earnings and share price performance of Traton shares. For the members of the Board of Man-
agement and of the brand boards of management of the TRATON Group who are not members of the Board of
Management of TRATON SE as defined under stock corporation law, and for members of management at Navistar,
the performance share plan is applied with a forward-looking horizon of three or four years. For members of man-
agement and selected beneficiaries below the TRATON Group’s management, the performance share plan is gen-
erally applied with a four-year term and a forward-looking horizon of one year.
As of December 31, 2023, the total carrying amount of the obligation was €131 million (previous year: €36 mil-
lion) and the intrinsic value of the liabilities was €92 million (previous year: €24 million). A total expense of
€119 million (previous year: €31 million) was recognized in the reporting period.
413
46. Related party disclosures in accordance with IAS 24
Related parties as defined by IAS 24 are natural persons and entities on which Volkswagen AG can exercise sig-
nificant influence, or which have the ability to exercise significant influence on Volkswagen AG, or that are influ-
enced by another related party of Volkswagen AG.
All transactions with related parties are regularly conducted on an arm’s length basis.
Porsche SE held the majority of the voting rights in Volkswagen AG as of the reporting date. The creation of
rights of appointment for the State of Lower Saxony was resolved at the extraordinary General Meeting of
Volkswagen AG on December 3, 2009. This means that Porsche SE cannot elect all shareholder representatives
to the Supervisory Board of Volkswagen AG for as long as the State of Lower Saxony holds at least 15% of
Volkswagen AG’s ordinary shares. However, Porsche SE has the power to participate in the operating policy deci-
sions of the Volkswagen Group and is therefore classified as a related party as defined by IAS 24.
According to a notification dated January 8, 2024, the State of Lower Saxony and Hannoversche Be-
teiligungsgesellschaft Niedersachsen mbH, Hanover, held 20.00% of the voting rights of Volkswagen AG on
December 31, 2023. As mentioned above, the General Meeting of Volkswagen AG on December 3, 2009 also
resolved that the State of Lower Saxony may appoint two members of the Supervisory Board (right of appointment).
Contribution of Porsche SE’s holding company operating business

The contribution of Porsche SE’s holding company operating business to Volkswagen AG on August 1, 2012 has
the following effects on the agreements between Porsche SE, Volkswagen AG and companies of the Porsche Hold-
ing Stuttgart GmbH Group that existed prior to the contribution and were entered into on the basis of the Com-
prehensive Agreement and its related implementation agreements:
 Volkswagen AG continues to indemnify Porsche SE internally against claims by the Einlagensicherungsfonds
(German deposit protection fund) after Porsche SE submitted an indemnification agreement required by the
Bundesverband Deutscher Banken (Association of German Banks) to the Einlagensicherungsfonds in August
2009. Volkswagen AG has also undertaken to indemnify the Einlagensicherungsfonds against any losses
caused by measures taken by the latter in favor of a bank in which Volkswagen AG holds a majority interest.
 Under certain conditions, Porsche SE continues to indemnify Porsche Holding Stuttgart GmbH, Porsche AG and
their legal predecessors against tax disadvantages that exceed the obligations recognized in the financial
statements of those companies relating to periods up to and including July 31, 2009. In return, Volkswagen AG
has undertaken to reimburse Porsche SE for any tax advantages of Porsche Holding Stuttgart GmbH, Porsche
AG and their legal predecessors and subsidiaries relating to tax assessment periods up to July 31, 2009. Based
on the results of the substantively completed external tax audit for the assessment periods 2006 to 2009, a
compensation claim from Volkswagen AG of around €0.2 billion arose for Porsche SE, which was recognized
under other operating expenses in the consolidated financial statements in the third quarter of 2023. The claim
was settled in the fourth quarter of 2023. The claim has been audited on the basis of the corresponding
provisions in the tax clause of the contribution agreement and its merits and amount have been confirmed by
external auditors.
414
Under the terms of the Comprehensive Agreement, Porsche SE and Volkswagen AG had granted each other put
and call options with regard to the remaining 50.1% interest in Porsche Holding Stuttgart GmbH held by Porsche
SE until the contribution of its holding company operating business to Volkswagen AG. Both Volkswagen AG (if
it had exercised its call option) and Porsche SE (if it had exercised its put option) had undertaken to bear the
tax burden resulting from the exercise of the options and any subsequent activities in relation to the equity
investment in Porsche Holding Stuttgart GmbH (e.g. from recapture taxation on the spin-off in 2007 and/or 2009).
If tax benefits had accrued to Volkswagen AG, Porsche Holding Stuttgart GmbH, Porsche AG, or their respective
subsidiaries as a result of recapture taxation on the spin-off in 2007 and/or 2009, the purchase price to be paid
by Volkswagen AG for the transfer of the outstanding 50.1% equity investment in Porsche Holding Stuttgart
GmbH if the put option had been exercised by Porsche SE would have been increased by the present value of the
tax benefit. This arrangement was taken over under the terms of the contribution agreement to the effect that
Porsche SE has a claim against Volkswagen AG for payment in the amount of the present value of the realizable
tax benefits from any recapture taxation of the spin-off in 2007 as a result of the contribution. It was also agreed
under the terms of the contribution that Porsche SE will indemnify Volkswagen AG, Porsche Holding Stuttgart
GmbH and their subsidiaries against taxes if measures taken by or not taken by Porsche SE result in recapture taxation
for 2012 at these companies in the course of or following implementation of the contribution. In this case, too,
Porsche SE is entitled to assert a claim for payment against Volkswagen AG in the amount of the present value of
the realizable tax benefits that arise at the level of Volkswagen AG or one of its subsidiaries as a result of such a
transaction.
Further agreements were entered into and declarations were issued in connection with the contribution of
Porsche SE’s holding company operating business to Volkswagen AG, in particular:
 Porsche SE indemnifies the subsidiaries it contributed as part of the business contribution as well as
Porsche Holding Stuttgart GmbH, Porsche AG and their subsidiaries against certain liabilities to Porsche SE
that relate to the period up to and including December 31, 2011 and that exceed the obligations recognized in
the financial statements of those companies for that period.
 Moreover, Porsche SE indemnifies Volkswagen AG, Porsche Holding Stuttgart GmbH , Porsche AG and their
subsidiaries against half of the taxes (other than taxes on income) arising at those companies in conjunction
with the contribution that would not have been incurred in the event of the exercise of the call options on the
shares of Porsche Holding Stuttgart GmbH that continued to be held by Porsche SE until the contribution.
Volkswagen AG therefore indemnifies Porsche SE against half of such taxes that the company incurs.
 Additionally, Porsche SE and Porsche AG agreed to allocate any subsequent VAT receivables or liabilities from
transactions in the period up to December 31, 2009 to the company entitled to the receivable or incurring the
liability.
 A range of information, conduct and cooperation obligations were agreed by Porsche SE and the Volkswagen
Group in the contribution agreement.
As part of the IPO of Porsche AG and the sale of ordinary shares to Porsche SE in fiscal year 2022, Porsche SE and
Volkswagen AG also entered, among other arrangements, into a “procedural and amendment agreement and
agreement to amend the Comprehensive Agreement”. The latter led to amendments to some provisions, including
those on appointments to governing bodies of Porsche AG, contained in the Comprehensive Agreement.
415
IPO of Porsche AG
On September 28, 2022, Volkswagen placed 25% of the preferred shares (including additional allocations) of its
subsidiary Porsche AG with investors. These preferred shares have been traded on the stock exchange since the
day after the placement. Since the end of the stabilization period on October 11, 2022, the free float of the pre-
ferred shares has been 24.2% of the preferred share capital of Porsche AG. The basis for the IPO was a compre-
hensive agreement to enter into a number of contracts between Volkswagen and Porsche SE. In this context, the
two parties agreed that Porsche SE would acquire 25% of the ordinary shares plus one ordinary share of
Porsche AG from Volkswagen. The sale of these ordinary shares in Porsche AG by Porsche SE is subject to re-
strictions until 2027.
Under the share purchase agreement, Volkswagen AG as warrantor provided several warranties to Porsche SE,
which essentially put Porsche SE in the same position as buyers of the preferred shares sold under the IPO. In
addition, Volkswagen AG assumes a small number of other standard market guarantees, most of them limited to
positive knowledge of Volkswagen AG.
to €9.6 billion as of December 31, 2022. Out of the total, an amount of €3.1 billion was attributable to Porsche SE.
Volkswagen AG and Porsche SE agreed to offset the obligation to pay a special dividend to Porsche SE against
Volkswagen AG’s claim to the payment of the purchase price still outstanding for the second tranche of ordinary
shares. In the consolidated financial statements as of December 31, 2022, the purchase price receivable and the
dividend liability were therefore presented on a net basis. Upon payment of the special dividend on January 9,
2023, the netting process was completed.
In connection with the IPO of Porsche AG, Volkswagen AG had also assumed obligations for dividend distribu-
tions of Porsche AG in 2022. The corresponding dividend of the same amount was resolved at the Annual General
Meeting of Porsche AG on June 28, 2023 and paid on July 3, 2023. €114 million of this dividend was attributable
to Porsche SE.
Volkswagen AG and Porsche SE have agreed in connection with the IPO and sale of ordinary shares to
Porsche SE that representatives of Porsche SE will have a significant presence on the Supervisory Board of
Porsche AG. Ultimate decision rights of the shareholder representatives determined by Volkswagen on the Super-
visory Board with regard to the ability to direct the relevant activities at Porsche AG within the meaning of IFRS 10
will ensure continued control by Volkswagen AG.
For more detailed information, please refer to the disclosures provided in the consolidated financial statements
as of December 31, 2022.
416
Other related party disclosures in accordance with IAS 24

The following tables present the amounts of supplies and services transacted, as well as outstanding receivables
and liabilities, between consolidated companies of the Volkswagen Group and related parties:
S U P P LI E S A N D S E R V I C E S S U P P LI E S A N D S E R V I C E S
RENDERED RECEIVED
€ million 2023 2022 2023 2022
Porsche SE and its majority interests 4 4 0 0

Supervisory Board members 2 11 4 1
Board of Management members 1 0 0 0
Unconsolidated subsidiaries 1,401 1,123 2,138 1,707
Joint ventures and their majority interests 17,355 16,284 1,573 897
Associates and their majority interests 422 326 3,086 2,582
Pension plans 2 1 3 4
Other related parties 0 0 1 1
State of Lower Saxony, its majority interests and joint ventures 10 15 4 5
L I A B I L I TI E S
RECEIVABLES FROM ( I N C L U D I NG O B L I G A TI O N S ) T O
€ million Dec. 31, 2023 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2022²
Porsche SE and its majority interests 0 1 0 136

Supervisory Board members 0 0 187 276
Board of Management members 0 0 66 54
Unconsolidated subsidiaries 1,780 1,3261 2,332 1,865
Joint ventures and their majority interests 15,687 13,9651 4,864 2,740
Associates and their majority interests 775 6141 8,647 1,096
Pension plans 2 1 0 0
Other related parties 0 0 13 52
State of Lower Saxony, its majority interests and joint ventures 1 255 1 1,127
1 Prior-year figures adjusted.

The tables above do not contain the dividend payments (net of withholding tax) of €2,450 million (previous year:
€2,781 million) received from joint ventures and associates. The tables likewise do not contain the dividends of
€1,529 million paid to Porsche SE (previous year: dividends paid or offset of €4,231 million) or the dividend of
€1,638 million (previous year: €443 million) paid to the State of Lower Saxony.
The changes in supplies and services rendered to and received from joint ventures and their majority interests
relate primarily to supplies to and from the Chinese joint ventures. The changes in supplies and services received
from members of the Supervisory Board relate primarily to higher interest payments on direct bank deposits due
to higher interest rates.
Receivables from joint ventures are primarily attributable to loans granted in an amount of €12,068 million
(previous year adjusted: €10,310 million) as well as trade receivables in an amount of €3,234 million (previous
year adjusted: €3,451 million). Receivables from non-consolidated subsidiaries also result primarily from loans
granted in an amount of €1,266 million (previous year adjusted: €713 million) as well as trade receivables in an
amount of €199 million (previous year adjusted: €219 million).
417
In addition to the liabilities to associates and their majority interests, there are long-term purchase obligations
under battery purchase agreements with Northvolt Group companies.
In the previous year, liabilities to Porsche SE had included Volkswagen AG’s special dividend, after netting
against the purchase price receivable for the second tranche of ordinary shares of €22 million, and the obligation
arising from Porsche AG’s dividend of €114 million. In the previous year, liabilities to the State of Lower Saxony
had included Volkswagen AG’s special dividend of €1,125 million. As of December 31, 2023, there were no divi-
dend liabilities or obligations to Porsche SE or the State of Lower Saxony.
Outstanding related party receivables include doubtful receivables on which impairment losses of €26 million
(previous year: €49 million) were recognized. This incurred expenses of €14 million (previous year: €40 million) in
fiscal year 2023. The change is primarily attributable to a loan granted to a joint venture.
In addition, the Volkswagen Group has furnished guarantees to external banks on behalf of related parties in
the amount of €150 million (previous year: €296 million).
In the fiscal year, the Volkswagen Group made capital contributions of €1,456 million (previous year:
€2,854 million) at related parties.
As in the previous year, obligations to members of the Supervisory Board and other related parties relate pri-
marily to interest-bearing bank balances of Supervisory Board members and related parties that were invested at
standard market terms and conditions at Volkswagen Group companies.
Obligations to members of the Board of Management include balances outstanding on the annual bonus, the
fair values of performance shares granted to the members of the Board of Management and pension provisions of
€59.8 million (previous year: €50.0 million).
In addition to the amounts shown above, the following expenses were recognized for benefits and remunera-
tion granted to members of the Board of Management and Supervisory Board of the Volkswagen Group in the
course of their activities as members of these bodies:
€ 2023 2022
Short-term benefits 39,794,902 44,535,627

Benefits based on performance shares and virtual shares 19,064,922 16,482,035
Post-employment benefits (service cost only) 5,382,815 9,475,563
Termination benefits 10,408,232 36,802,931
74,650,871 107,296,157
Employee representatives on the Supervisory Board who are employed by the company continue to be entitled to a
regular salary under their contract. This applies accordingly to the representative of senior executives on the Super-
visory Board.
The post-employment benefits relate to additions to pension provisions for current members of the Board of
Management. The termination benefits relate to the commitments made to Mr. Duesmann in connection with his
departure from the Board of Management on August 31, 2023 (previous year: departure of Mr. Diess, Ms. Wort-
mann and Mr. Aksel).
418
47. Notices and disclosure of changes regarding the ownership of voting rights in
Volkswagen AG in accordance with the Wertpapierhandelsgesetz (WpHG – German
Securities Trading Act)
Porsche
1) Porsche Automobil Holding SE, Stuttgart, Germany has notified us in accordance with article 21, section 1 of the
WpHG that its share of the voting rights in Volkswagen Aktiengesellschaft, Wolfsburg, Germany,
exceeded the threshold of 50% on January 5, 2009 and amounted to 50.76% (149,696,680 voting rights) at this date.
2) The following persons notified us in accordance with article 21, section 1 of the WpHG that their share of the
voting rights in Volkswagen Aktiengesellschaft in each case exceeded the threshold of 50% on
January 5, 2009 and in each case amounted to 50.76% (149,696,680 voting rights) at this date. All of the above-
mentioned 149,696,680 voting rights are attributable to each of the persons making the notification in
accordance with article 22, section 1, sentence 1 no. 1 of the WpHG. The voting rights attributed to the persons
making the notifications are held via subsidiaries within the meaning of article 22, section 3 of the WpHG, whose
attributed share of the voting rights amounts to 3% or more and whose names are given in brackets:
Mag. Josef Ahorner, Austria

(Ferdinand Porsche Privatstiftung, Salzburg/Austria; Ferdinand Porsche Holding GmbH, Salzburg/Austria; Louise
Daxer-Piëch GmbH, Salzburg/Austria; Louise Daxer-Piech GmbH, Grünwald/Germany; Prof. Ferdinand Alexander
Porsche GmbH, Salzburg/Austria; Ferdinand Alexander Porsche GmbH,
Grünwald/Germany; Gerhard Anton Porsche GmbH, Salzburg/Austria; Gerhard Porsche GmbH,
Grünwald/Germany; Familien Porsche-Daxer-Piech Beteiligung GmbH, Grünwald/Germany; Porsche
Automobil Holding SE, Stuttgart/Germany),
Mag. Louise Kiesling, Austria

Porsche GmbH, Salzburg/Austria; Ferdinand Alexander Porsche GmbH, Grünwald/Germany;
Gerhard Anton Porsche GmbH, Salzburg/Austria; Gerhard Porsche GmbH, Grünwald/Germany;
Familien Porsche-Daxer-Piech Beteiligung GmbH, Grünwald/Germany; Porsche Automobil Holding SE,
Stuttgart/Germany),
Prof. Ferdinand Alexander Porsche, Austria

Stuttgart/Germany),
Dr. Oliver Porsche, Austria

Stuttgart/Germany),
419
Kai Alexander Porsche, Austria

Stuttgart/Germany),
Mark Philipp Porsche, Austria

Stuttgart/Germany),
Gerhard Anton Porsche, Austria

Stuttgart/Germany),
Ing. Hans-Peter Porsche, Austria

(Familie Porsche Privatstiftung, Salzburg/Austria; Familie Porsche Holding GmbH, Salzburg/Austria;
Ing. Hans-Peter Porsche GmbH, Salzburg/Austria; Hans-Peter Porsche GmbH, Grünwald/Germany; Familie Por-
sche Beteiligung GmbH, Grünwald/Germany; Porsche Automobil Holding SE, Stuttgart/Germany),
Peter Daniell Porsche, Austria

Ing. Hans-Peter Porsche GmbH, Salzburg/Austria; Hans-Peter Porsche GmbH, Grünwald/Germany; Familie Por-
sche Beteiligung GmbH, Grünwald/Germany; Porsche Automobil Holding SE, Stuttgart/Germany),
Dr. Wolfgang Porsche, Germany

Ing. Hans-Peter Porsche GmbH, Salzburg/Austria; Hans-Peter Porsche GmbH, Grünwald/Germany; Wolfgang
Porsche GmbH, Grünwald/Germany; Familie Porsche Beteiligung GmbH, Grünwald/Germany; Porsche
Automobil Holding SE, Stuttgart/Germany),
Ferdinand Porsche Privatstiftung, Salzburg/Austria

(Ferdinand Porsche Holding GmbH, Salzburg/Austria; Louise Daxer-Piëch GmbH, Salzburg/Austria; Louise Daxer-
Piech GmbH, Grünwald/Germany; Prof. Ferdinand Alexander Porsche GmbH, Salzburg/Austria;
Ferdinand Alexander Porsche GmbH, Grünwald/Germany; Gerhard Anton Porsche GmbH,
Salzburg/Austria; Gerhard Porsche GmbH, Grünwald/Germany; Familien Porsche-Daxer-Piech Beteiligung GmbH,
Grünwald/Germany; Porsche Automobil Holding SE, Stuttgart/Germany),
420
Familie Porsche Privatstiftung, Salzburg/Austria

(Familie Porsche Holding GmbH, Salzburg/Austria; Ing. Hans-Peter Porsche GmbH, Salzburg/Austria;
Hans-Peter Porsche GmbH, Grünwald/Germany; Familie Porsche Beteiligung GmbH, Grünwald/Germany;
Porsche Automobil Holding SE, Stuttgart/Germany),
Ferdinand Porsche Holding GmbH, Salzburg/Austria

(Louise Daxer-Piëch GmbH, Salzburg/Austria; Louise Daxer-Piech GmbH, Grünwald/Germany; Prof. Ferdinand
Alexander Porsche GmbH, Salzburg/Austria; Ferdinand Alexander Porsche GmbH, Grünwald/Germany; Gerhard
Anton Porsche GmbH, Salzburg/Austria; Gerhard Porsche GmbH, Grünwald/Germany;
Stuttgart/Germany),
Familie Porsche Holding GmbH, Salzburg/Austria

(Ing. Hans-Peter Porsche GmbH, Salzburg/Austria; Hans-Peter Porsche GmbH, Grünwald/Germany; Familie
Porsche Beteiligung GmbH, Grünwald/Germany; Porsche Automobil Holding SE, Stuttgart/Germany),
Louise Daxer-Piëch GmbH, Salzburg/Austria

(Louise Daxer-Piech GmbH, Grünwald/Germany; Porsche Automobil Holding SE, Stuttgart/Germany;
Familien Porsche-Daxer-Piech Beteiligung GmbH, Grünwald/Germany),
Prof. Ferdinand Alexander Porsche GmbH, Salzburg/Austria

(Ferdinand Alexander Porsche GmbH, Grünwald/Germany; Familien Porsche-Daxer-Piech Beteiligung GmbH,
Grünwald/ Germany; Porsche Automobil Holding SE, Stuttgart/Germany),
Gerhard Anton Porsche GmbH, Salzburg/Austria

(Gerhard Porsche GmbH, Grünwald/Germany; Familien Porsche-Daxer-Piech Beteiligung GmbH,
Grünwald/Germany; Porsche Automobil Holding SE, Stuttgart/Germany),
Louise Daxer-Piech GmbH, Grünwald/Germany

(Familien Porsche-Daxer-Piech Beteiligung GmbH, Grünwald/Germany; Porsche Automobil Holding SE, Stutt-
gart/ Germany),
Ferdinand Alexander Porsche GmbH, Grünwald/Germany

gart/ Germany),
Gerhard Porsche GmbH, Grünwald/Germany

gart/Germany),
Ing. Hans-Peter Porsche GmbH, Salzburg/Austria

(Hans-Peter Porsche GmbH, Grünwald/Germany; Familie Porsche Beteiligung GmbH, Grünwald/Germany;
Porsche Automobil Holding SE, Stuttgart/Germany),
Hans-Peter Porsche GmbH, Grünwald/Germany

(Familie Porsche Beteiligung GmbH, Grünwald/Germany; Porsche Automobil Holding SE, Stuttgart/Germany),
Wolfgang Porsche GmbH, Grünwald/Germany

(Familie Porsche Beteiligung GmbH, Grünwald/Germany; Porsche Automobil Holding SE, Stuttgart/Germany),
421
Familien Porsche-Daxer-Piech Beteiligung GmbH, Grünwald/Germany

(Porsche Automobil Holding SE, Stuttgart/Germany),
Familie Porsche Beteiligung GmbH, Grünwald/Germany

Porsche GmbH, Stuttgart/Germany

Dr. Hans Michel Piëch, Austria

(Porsche Automobil Holding SE, Stuttgart/Germany; Hans Michel Piech GmbH, Grünwald/Germany;
Dr. Hans Michel Piëch GmbH, Salzburg/Austria),
Dr. Hans Michel Piëch GmbH, Salzburg/Austria

(Porsche Automobil Holding SE, Stuttgart/Germany; Hans Michel Piech GmbH, Grünwald/Germany),
Hans Michel Piech GmbH, Grünwald/Germany

Dipl.-Ing. Dr. h.c. Ferdinand Piëch, Austria

(Porsche Automobil Holding SE, Stuttgart/Germany; Ferdinand Piech GmbH, Grünwald/Germany;
Dipl.-Ing. Dr. h.c. Ferdinand Piëch GmbH, Salzburg/Austria; Ferdinand Karl Alpha Privatstiftung,
Vienna/Austria),
Ferdinand Karl Alpha Privatstiftung, Vienna/Austria

(Porsche Automobil Holding SE, Stuttgart/Germany; Ferdinand Piech GmbH, Grünwald/Germany;
Dipl.-Ing. Dr. h.c. Ferdinand Piëch GmbH, Salzburg/Austria),
Dipl.-Ing. Dr. h.c. Ferdinand Piëch GmbH, Salzburg/Austria

(Porsche Automobil Holding SE, Stuttgart/Germany; Ferdinand Piech GmbH, Grünwald/Germany),
Ferdinand Piech GmbH, Grünwald/Germany

(Porsche Automobil Holding SE, Stuttgart/Germany).
3) Porsche Holding Gesellschaft m.b.H., Salzburg/Austria, and Porsche GmbH, Salzburg/Austria, notified us in
accordance with article 21, section 1 of the WpHG that their share of the voting rights in Volkswagen Aktien-
gesellschaft in each case exceeded the threshold of 50% on January 5, 2009 and in each case amounted to
53.13% (156,702,015 voting rights) at this date.
422
All the above-mentioned 156,702,015 voting rights are attributable to Porsche Holding Gesellschaft m.b.H. in
accordance with article 22, section 1, sentence 1 no. 1 of the WpHG. The companies via which the voting rights
are actually held and whose attributed share of the voting rights amounts to 3% or more are:
– Porsche GmbH, Salzburg/Austria;
– Porsche GmbH, Stuttgart/Germany;
– Porsche Automobil Holding SE, Stuttgart/Germany.
Of the above-mentioned 156,702,015 voting rights, 50.76% of the voting rights (149,696,753 voting rights) are
attributable to Porsche GmbH, Salzburg/Austria, in accordance with article 22, section 1, sentence 1 no. 1 of the
WpHG. The companies via which the voting rights are actually held and whose attributed share of the voting
rights amounts to 3% or more are:
– Porsche GmbH, Stuttgart/Germany;
– Porsche Automobil Holding SE, Stuttgart/Germany.
4) Porsche Wolfgang 1. Beteiligungs GmbH & Co. KG, Stuttgart, Germany has notified us in accordance with arti-
cle 21, section 1 of the WpHG that its (indirect) share of the voting rights in Volkswagen Aktiengesellschaft,
Wolfsburg, Germany, exceeded the thresholds of 3%, 5%, 10%, 15%, 20%, 25%, 30% and 50% of the voting rights
on September 29, 2010 and amounted to 50.74% of the voting rights (149,696,680 voting rights) at this date.
Of this figure, 50.74% of the voting rights (149,696,680 voting rights) are attributable to Porsche Wolfgang
1. Beteiligungs GmbH & Co. KG in accordance with article 22, section 1, sentence 1 no. 1 of the WpHG.
The voting rights attributed to Porsche Wolfgang 1. Beteiligungs GmbH & Co. KG are held via the following
enterprises controlled by it, whose share of the voting rights in Volkswagen Aktiengesellschaft amounts to 3% or
more in each case: Wolfgang Porsche GmbH, Grünwald, Familie Porsche Beteiligung GmbH,
Grünwald, Porsche Automobil Holding SE, Stuttgart.
These voting rights were not reached by exercise of purchase rights resulting from financial instruments
according to article 25, section 1, sentence 1 of the WpHG.
5) On August 12, 2013, LK Holding GmbH, Salzburg, Austria, has notified us in accordance with article 21,
section 1 of the WpHG that its share of the voting rights in VOLKSWAGEN AKTIENGESELLSCHAFT ,
on August 10, 2013 and amounted to 50.73% of the voting rights (149,696,681 voting rights) at this date.
Of this figure, 50.73% of the voting rights (149,696,681 voting rights) are attributable to LK Holding GmbH in
accordance with article 22, section 1, sentence 1 no. 1 of the WpHG.
The voting rights attributed to LK Holding GmbH are held via the following enterprises controlled by it, whose
share of the voting rights in VOLKSWAGEN AKTIENGESELLSCHAFT amounts to 3% or more in each case:
Porsche Automobil Holding SE, Stuttgart; Familien Porsche-Kiesling Beteiligung GmbH, Grünwald; Louise Daxer-
Piech GmbH, Grünwald.
423
6) On September 11, 2013, Ahorner Alpha Beteiligungs GmbH, Grünwald, Germany, has notified us in accor -
dance with article 21, section 1 of the WpHG that its share of the voting rights in VOLKSWAGEN AKTIEN-
GESELLSCHAFT , Wolfsburg, Germany, exceeded the thresholds of 3%, 5%, 10%, 15%, 20%, 25%, 30% and
50% of the voting rights on September 11, 2013 and amounted to 50.73% of the voting rights (149,696,681
voting rights) at this date. Of this figure, 50.73% of the voting rights (149,696,681 voting rights) are attributable
to Ahorner Alpha Beteiligungs GmbH in accordance with article 22, section 1, sentence 1 no. 1 of the WpHG.
The voting rights attributed to Ahorner Alpha Beteiligungs GmbH are held via the following enterprises
controlled by it, whose share of the voting rights in VOLKSWAGEN AKTIENGESELLSCHAFT amounts to 3% or
more in each case: Porsche Automobil Holding SE, Stuttgart.
7) On September 11, 2013, Ahorner Beta Beteiligungs GmbH, Grünwald, Germany, has notified us in accordance
with article 21, section 1 of the WpHG that its share of the voting rights in VOLKSWAGEN AKTIENGESELL-
SCHAFT, Wolfsburg, Germany, exceeded the thresholds of 3%, 5%, 10%, 15%, 20%, 25%, 30% and 50% of the
voting rights on September 11, 2013 and amounted to 50.73% of the voting rights (149,696,681 voting rights) at
this date. Of this figure, 50.73% of the voting rights (149,696,681 voting rights) are attributable to Ahorner Beta
Beteiligungs GmbH in accordance with article 22, section 1, sentence 1 no. 1 of the WpHG.
The voting rights attributed to Ahorner Beta Beteiligungs GmbH are held via the following enterprises
more in each case: Ahorner Alpha Beteiligungs GmbH, Grünwald; Porsche Automobil Holding SE, Stuttgart.
8) On September 11, 2013, Louise Daxer-Piech GmbH, Salzburg, Austria, has notified us in accordance with
article 21, section 1 of the WpHG that its share of the voting rights in VOLKSWAGEN AKTIENGESELLSCHAFT ,
on September 11, 2013 and amounted to 50.73% of the voting rights (149,696,681 voting rights) at this date. Of
this figure, 50.73% of the voting rights (149,696,681 voting rights) are attributable to Louise Daxer-Piech GmbH
in accordance with article 22, section 1, sentence 1 no. 1 of the WpHG.
The voting rights attributed to Louise Daxer-Piech GmbH are held via the following enterprises controlled by it,
whose share of the voting rights in VOLKSWAGEN AKTIENGESELLSCHAFT amounts to 3% or more in each
case: Ahorner Beta Beteiligungs GmbH, Grünwald; Ahorner Alpha Beteiligungs GmbH, Grünwald;
Porsche Automobil Holding SE, Stuttgart.
9) On September 11, 2013, Ahorner Holding GmbH, Salzburg, Austria, has notified us in accordance with
article 21, section 1 of the WpHG that its share of the voting rights in VOLKSWAGEN AKTIENGESELLSCHAFT ,
on September 11, 2013 and amounted to 50.73% of the voting rights (149,696,681 voting rights) at this date. Of
this figure, 50.73% of the voting rights (149,696,681 voting rights) are attributable to Ahorner Holding GmbH
in accordance with article 22, section 1, sentence 1 no. 1 of the WpHG.
The voting rights attributed to Ahorner Holding GmbH are held via the following enterprises controlled by it,
whose share of the voting rights in VOLKSWAGEN AKTIENGESELLSCHAFT amounts to 3% or more in each
case: Louise Daxer-Piech GmbH, Salzburg, Austria; Ahorner Beta Beteiligungs GmbH, Grünwald; Ahorner Alpha Be-
teiligungs GmbH, Grünwald; Porsche Automobil Holding SE, Stuttgart.
424
10) On December 16, 2014, Porsche Wolfgang 1. Beteiligungsverwaltungs GmbH, Stuttgart, Germany, has noti-
fied us in accordance with article 21, section 1 of the WpHG that its share of the voting rights in VOLKSWAGEN
AKTIENGESELLSCHAFT , Wolfsburg, Germany, fell below the thresholds of 50%, 30%, 25%, 20%, 15%, 10%, 5%
and 3% of the voting rights on December 15, 2014 and amounted to 0% of the voting rights (0 voting rights) at
this date.
11) On December 17, 2014, Dr. Wolfgang Porsche Holding GmbH, Salzburg, Au stria, has notified us in
accordance with article 21, section 1 of the WpHG that its share of the voting rights in VOLKSWAGEN
AKTIENGESELLSCHAFT , Wolfsburg, Germany, exceeded the thresholds of 3%, 5%, 10%, 15%, 20%, 25%, 30%
and 50% of the voting rights on December 15, 2014 and amounted to 50.73% of the voting rights (149,696,681
voting rights) at this date. Of this figure, 50.73% of the voting rights (149,696,681 voting rights) are attributable to Dr.
Wolfgang Porsche Holding GmbH in accordance with article 22, section 1, sentence 1 no. 1 of the WpHG.
The voting rights attributed to Dr. Wolfgang Porsche Holding GmbH are held via the following enterprises con-
trolled by it, whose share of the voting rights in VOLKSWAGEN AKTIENGESELLSCHAFT amounts to 3% or
more in each case: Wolfgang Porsche GmbH, Grünwald; Familie Porsche Beteiligung GmbH, Grünwald;
12) On July 15, 2015, the following persons in each case have notified us in accordance with article 21, section 1
of the WpHG that their share of the voting rights in VOLKSWAGEN AKTIENGESELLSCHAFT , Wolfsburg,
Germany, exceeded the thresholds of 3%, 5%, 10%, 15%, 20%, 25%, 30% and 50% of the voting rights on July 14,
2015 and in each case amounted to 50.73% of the voting rights (149,696,681 voting rights) at this date:
– Dipl.-Design. Stephanie Porsche-Schröder, Austria,

– Dr. Dr. Christian Porsche, Austria,
– Ferdinand Rudolf Wolfgang Porsche, Austria
Of this figure, in each case 50.73% of the voting rights (149,696,681 voting rights) are attributable to each of the
above-mentioned notifying persons in accordance with article 22, section 1, sentence 1 no. 1 of the WpHG. The
voting rights attributed to the notifying persons in each case are held via the following enterprises controlled by
the notifying persons, whose share of the voting rights in VOLKSWAGEN AKTIENGESELLSCHAFT amounts to 3%
or more in each case:
Dr. Wolfgang Porsche Holding GmbH, Salzburg; Wolfgang Porsche GmbH, Grünwald; Ferdinand Porsche Fami-
lien-Privatstiftung, Salzburg; Familie Porsche Holding GmbH, Salzburg; Ing. Hans-Peter Porsche GmbH, Salzburg;
Hans-Peter Porsche GmbH, Grünwald; Ferdinand Porsche Holding GmbH, Salzburg; Prof. Ferdinand Alexander
Porsche GmbH, Salzburg; Ferdinand Alexander Porsche GmbH, Grünwald; Gerhard Anton Porsche GmbH, Salz-
burg; Gerhard Porsche GmbH, Grünwald; LK Holding GmbH, Salzburg; Louise Kiesling GmbH, Grünwald; Familie
Porsche Beteiligung GmbH, Grünwald; Porsche Automobil Holding SE, Stuttgart.
13) On July 15, 2015, Familie Porsche Privatstiftung, Salzburg, Austria, has notified us in accordance with article
21, section 1 of the WpHG that its share of the voting rights in VOLKSWAGEN AKTIENGESELLSCHAFT , Wolfs-
burg, Germany, fell below the thresholds of 50%, 30%, 25%, 20%, 15%, 10%, 5% and 3% of the voting rights on
July 14, 2015 and amounted to 0% of the voting rights (0 voting rights) at this date.
425
14) On July 15, 2015, Ferdinand Porsche Privatstiftung, Salzburg, Austria, has notified us in accordance with article
21, section 1 of the WpHG that its share of the voting rights in VOLKSWAGEN AKTIENGESELLSCHAFT,
Wolfsburg, Germany, fell below the thresholds of 50%, 30%, 25%, 20%, 15%, 10%, 5% and 3% of the voting rights
on July 14, 2015 and amounted to 0% of the voting rights (0 voting rights) at this date.
15) On July 15, 2015, Ferdinand Porsche Familien-Privatstiftung, Salzburg, Austria, has notified us in accordance with
article 21, section 1 of the WpHG that its share of the voting rights in VOLKSWAGEN
and 50% of the voting rights on July 14, 2015 and amounted to 50.73% of the voting rights (149,696,681 voting
rights) at this date. Of this figure, 50.73% of the voting rights (149,696,681 voting rights) are attributable to Ferdi-
nand Porsche Familien-Privatstiftung in accordance with article 22, section 1, sentence 1 no. 1 of the WpHG.
The voting rights attributed to Ferdinand Porsche Familien-Privatstiftung are held via the following enterprises con-
trolled by it, whose share of the voting rights in VOLKSWAGEN AKTIENGESELLSCHAFT amounts to 3% or
more in each case:
Familie Porsche Holding GmbH, Salzburg; Ing. Hans-Peter Porsche GmbH, Salzburg; Hans-Peter Porsche GmbH,
Grünwald; Ferdinand Porsche Holding GmbH, Salzburg; Prof. Ferdinand Alexander Porsche GmbH, Salzburg; Fer-
dinand Alexander Porsche GmbH, Grünwald; Gerhard Anton Porsche GmbH, Salzburg;
Gerhard Porsche GmbH, Grünwald; LK Holding GmbH, Salzburg; Louise Kiesling GmbH, Grünwald; Familie Por-
sche Beteiligung GmbH, Grünwald; Porsche Automobil Holding SE, Stuttgart.
16) On July 20, 2015, the following persons in each case have notified us in accordance with article 21, section 1
of the WpHG that their share of the voting rights in VOLKSWAGEN AKTIENGESELLSCHAFT, Wolfsburg,
Germany, exceeded the thresholds of 3%, 5%, 10%, 15%, 20%, 25%, 30% and 50% of the voting rights on July 14, 2015
and in each case amounted to 50.73% of the voting rights (149,696,681 voting rights) at this date:
– Dr. Geraldine Porsche, Austria,

– Diana Porsche, Austria,
– Felix Alexander Porsche, Germany.
Of this figure, in each case 50.73% of the voting rights (149,696,681 voting rights) are attributable to each of the
above-mentioned notifying persons in accordance with article 22, section 1, sentence 1 no. 1 of the WpHG. The
voting rights attributed to the notifying persons in each case are held via the following enterprises controlled by
the notifying persons, whose share of the voting rights in VOLKSWAGEN AKTIENGESELLSCHAFT amounts to 3%
or more in each case:
Ferdinand Porsche Familien-Privatstiftung, Salzburg; Familie Porsche Holding GmbH, Salzburg; Ing. Hans-Peter
Porsche GmbH, Salzburg; Hans-Peter Porsche GmbH, Grünwald; Ferdinand Porsche Holding GmbH, Salzburg;
Prof. Ferdinand Alexander Porsche GmbH, Salzburg; Ferdinand Alexander Porsche GmbH,
Grünwald; Gerhard Anton Porsche GmbH, Salzburg; Gerhard Porsche GmbH, Grünwald; LK Holding GmbH,
Salzburg; Louise Kiesling GmbH, Grünwald; Familie Porsche Beteiligung GmbH, Grünwald; Porsche
Automobil Holding SE, Stuttgart.
426
17) On August 4, 2015, Ferdinand Porsche Familien- Holding GmbH, Salzburg, Austria, has notified us in
accordance with article 21, section 1 of the WpHG that its share of the voting rights in VOLKSWAGEN
and 50% of the voting rights on July 31, 2015 and amounted to 50.73% of the voting rights (149,696,681 voting
rights) at this date. Of this figure, 50.73% of the voting rights (149,696,681 voting rights) are attributable to Fer-
dinand Porsche Familien- Holding GmbH in accordance with article 22, section 1, sentence 1 no. 1 of the WpHG.
The voting rights attributed to Ferdinand Porsche Familien- Holding GmbH are held via the following enterprises
more in each case: Hans-Peter Porsche GmbH, Grünwald; Ferdinand Alexander Porsche GmbH, Grünwald; Ger-
hard Porsche GmbH, Grünwald; Louise Kiesling GmbH, Grünwald; Familie Porsche Beteiligung GmbH, Grünwald;
18) Release according to article 26, section 1 of the WpHG of June 3, 2016
1. Details of issuer
VOLKSWAGEN AKTIENGESELLSCHAFT, Berliner Ring 2, 38440 Wolfsburg, Germany
2. Reason for notification

Acquisition/disposal of shares with voting rights
Acquisition/disposal of instruments
Change of breakdown of voting rights
Other reason:
3. Details of person subject to the notification obligation

Name: City and country of registered office:
Dr. Dr. Christian Porsche, Dipl.- Design. Stephanie
Porsche-Schröder, Ferdinand Rudolf Wolfgang
Porsche, Felix Alexander Porsche
4. Names of shareholder(s) holding directly 3% or more voting rights, if different from 3.

Porsche Automobil Holding SE
5. Date on which treshold was crossed or reached

June 1, 2016
6. Total positions
% of voting rights % of voting rights total of both in % total number of

attached to shares through instruments (7.a. + 7.b.) voting rights of
(total of 7.a.) (total of 7.b.1. + 7.b.2.) issuer
Resulting situation 52.22% 52.22% 52.22% 295089818
Previous 50.73% n/a% 0.00%

notification
427
7. Notified details of the resulting situation

a. Voting rights attached to shares (articles 21, 22 WpHG)
absolute in %
ISIN
direct indirect
direct indirect
(article 21 (article 22
(article 21 WpHG) (article 22 WpHG)
WpHG) WpHG)
DE0007664005 0 154093681 0% 52,22%

Total 154093681 52.22 %
b.1. Instruments according to article 25, section 1, no. 1 WpHG

Type of instru- Expiration or Exercise or Voting rights Voting
ment maturity date conversion period absolute rights in %
%
Total %

Expira-
Exercise or Cash or Voting Voting
Type of instru- tion or
conversion physical rights rights
ment maturity
period settlement absolute in %
date
Contribution n/a n/a physical 154093681
52.22%
Agreement
Total 154093681 52.22%
428
8. Information in relation to the person subject to the notification obligation
Person subject to the notification obligation (3.) is not controlled and does itself not control any
other undertaking(s) holding directly or indirectly an interest in the (underlying) issuer (1.).
Full chain of controlled undertakings starting with the ultimate controlling natural person or
legal entity:
% of voting
% of voting
rights through
rights (if at Total of both
Name instruments (if
least held (if at least held
at least held
3% or more) 5% or more)
5% or more)
Dr. Dr. Christian Porsche, Dipl.-Design.
Stephanie Porsche-Schröder, Ferdinand
% % %
Rudolf Wolfgang Porsche, Felix Alexander
Porsche
Familie WP Holding GmbH % 52.22% 52.22%

% % %
Porsche
Dr. Wolfgang Porsche Holding GmbH % % %
Ferdinand Alexander Porsche GmbH % % %
Familie Porsche Beteiligung GmbH % % %
Porsche Automobil Holding SE 52.22% % 52.22%

% % %
Porsche
Ferdinand Porsche Familien-Privatstiftung % % %
Ferdinand Porsche Familien- Holding GmbH % % %
429
9. In case of proxy voting according to article 22, section 3 WpHG

(only possible when attributable according to article 22, section 1, sentence 1 no. 6 of the
WpHG)
Date of general meeting:
Holding position after general meeting: % (equals voting rights)

Other reason:

Name: City and country of
Mr. Dr. Wolfgang Porsche registered office:


June 1, 2016
6. Total positions
% of voting rights % of voting rights total of both total number

attached to through instru- in % of voting
shares ments (7.a. + 7.b.) rights of
(total of 7.a.) (total of 7.b.1. + issuer
7.b.2.)
Resulting 52.22% 52.22% 52.22% 295089818
situation
Previous 50.76% n/a % 0.00%

notification
430

absolute in %
ISIN indirect direct indirect
direct
(article 22 (article 21 (article 22
(article 21 WpHG)
WpHG) WpHG) WpHG)
DE0007664005 0 154093681 0% 52.22%
Total 154093681 52.22%

Voting
Type of instru- Expiration or Exercise or Voting rights
rights
ment maturity date conversion period absolute
in %
%
Total %

Expira-
Exercise or Cash or physi- Voting Voting
Type of instru- tion or
conversion cal rights rights
ment maturity
period settlement absolute in %
date
Contribution
n/a n/a physical 154093681 52.22%
Agreement
Total 154093681 52.22%
431
Person subject to the notification obligation (3.) is not controlled and does itself not control
any other undertaking(s) holding directly or indirectly an interest in the (underlying) issuer (1.).
legal entity:
% of voting
% of voting
rights through Total of both
Name rights (if at least
instruments (if at (if at least
held 3% or
least held 5% or held 5% or
more)
more) more)
Dr. Wolfgang Porsche % % %
Familie WP Holding GmbH % 52.22% 52.22%

Ferdinand Porsche Familien-Privatstif-
% % %
tung
Ferdinand Porsche Familien- Holding
% % %
GmbH
432

(only possible when attributable according to article 22, section 1, sentence 1 no. 6 of the WpHG)

Other reason: Group notification due to intra group restructuring

Dr. Wolfgang Porsche, Dr. Dr. Christian Porsche, Dipl.-
Design. Stephanie Porsche-Schröder, Ferdinand Ru-
dolf Wolfgang Porsche, Felix Alexander Porsche


June 15, 2016
6. Total positions

7.b.2.)
Resulting
situation 52.22% 0.00% 52.22% 295089818
Previous
notifcation 52.22% 52.22% 52.22%
433
7. . Notified details of the resulting situation

absolute in %
ISIN direct indirect indirect
direct
(article 21 (article 22 (article 22
(article 21 WpHG)
WpHG) WpHG) WpHG)
DE0007664005 0 154093681 0% 52.22%
Total 154093681 52.22%

Voting
Type of instru- Expiration or Exercise or Voting rights
rights
ment maturity date conversion period in %
absolute
%
Total %

Expira-
Exercise or Cash or Voting
Type of instru- tion or Voting rights
conversion physical rights
ment maturity in %
period settlement absolute
date
%
Total %
434
legal entity:
% of voting
% of voting
rights through Total of both
Name rights (if at least
instruments (if (if at least
held 3% or
at least held held 5% or
more)
5% or more) more)
Dr. Wolfgang Porsche, Dr. Dr. Christian
Porsche, Dipl.-Design. Stephanie Por-
% % %
sche-Schröder, Ferdinand Rudolf Wolf-
gang Porsche, Felix Alexander Porsche
Familie WP Holding GmbH % % %
Dr. Wolfgang Porsche, Dr. Dr. Christian

Porsche, Dipl.-Design. Stephanie Por-
% % %
sche-Schröder, Ferdinand Rudolf Wolf-
gang Porsche, Felix Alexander Porsche
Ferdinand Porsche Familien-Privatstif-
% % %
tung
Ferdinand Porsche Familien- Holding-
% % %
GmbH
435

(only possible when attributable according to article 22, section 1, sentence 1 no. 6 of the
WpHG)
21) Release according to article 26, section 1 of the WpHG of November 10, 2017

Other reason: Disposal of subsidiary

Mr Hon.-Prof. Dr. techn. h.c. Dipl.-Ing. ETH Ferdinand
Karl Piëch, Date of birth: April 17, 1937

November 8, 2017
6. Total positions

7.b.2.)
Resulting
situation 0.00% 0.00% 0.00% 295089818
Previous
notification 50.76% n/a% n/a%
436

absolute in %
ISIN
indirect indirect
direct direct
(article 22 (article 22
(article 21 WpHG) (article 21 WpHG)
WpHG) WpHG)
0 0 0.00% 0.00%
Total 0 0.00%

Voting
Expiration or Exercise or Voting rights
Type of instrument rights
maturity date conversion period absolute
in %
%
Total %

Expira-
Exercise or Cash or Voting Voting
tion or
Type of instrument conversion pe- physical rights rights
maturity
riod settlement absolute in %
date
%
Total %
legal entity
% of voting rights
% of voting rights
Name through instruments
(if at least held 3%
(if at least held 5% Total of both (if at
or more)
or more) least held 5% or more)

(only possible when attributable according to article 22, section 1, sentence 1 no. 6 of the WpHG)
437
10. Other explanatory remarks:

This voting rights notification is made with releasing effect also for Dipl.Ing. Dr. h.c. Ferdinand K.
Piech GmbH, Salzburg, and Ferdinand Karl Alpha Privatstiftung, Salzburg. Due to the sale and
transfer of the participation in Auto 2015 Beteiligungs GmbH by Dipl.-Ing. Dr. h.c. Ferdinand K.
Piech GmbH, Salzburg, voting rights in VOLKSWAGEN AKTIENGESELLSCHAFT are also no longer
attributed to Dipl.-Ing. Dr. h.c. Ferdinand K. Piech GmbH, Salzburg, and Ferdinand Karl Alpha
Privatstiftung, Salzburg.
Qatar
We have received the following notification:
(1) Pursuant to article 21, section 1 of the WpHG we hereby notify for and on behalf of the State of Qatar, acting
by and through the Qatar Investment Authority, Doha, Qatar, that its indirect voting rights in Volkswagen Aktien-
gesellschaft
(a) exceeded the threshold of 10% on December 17, 2009 and amounted to 13.71% of the voting rights of Volks-
wagen Aktiengesellschaft (40,440,274 voting rights) as per this date
(i) 6.93% (20,429,274 voting rights) of which have been obtained by the exercise by Qatar Holding LLC of financial
instruments within the meaning of article 25, section 1, sentence 1 of the WpHG on that date granting the right
to acquire shares in Volkswagen Aktiengesellschaft, and
(ii) all of which are attributed to the State of Qatar pursuant to article 22, section 1, sentence 1 no. 1 of the WpHG.
(b) exceeded the threshold of 15% on December 18, 2009 and amounted to 17.00% of the voting rights of Volks-
wagen Aktiengesellschaft (50,149,012 voting rights) as per this date
(ii) all of which are attributed to the State of Qatar pursuant to article 22, section 1, sentence 1 no. 1 of the WpHG.
Voting rights that are attributed to the State of Qatar pursuant to lit. (a) and (b) above are held via the following
entities which are controlled by it and whose attributed proportion of voting rights in Volkswagen
Aktiengesellschaft amount to 3% each or more:
(aa) Qatar Investment Authority, Doha, Qatar;

(bb) Qatar Holding LLC, Doha, Qatar;
(cc) Qatar Holding Luxembourg II S.à.r.l., Luxembourg, Luxembourg;
(dd) Qatar Holding Netherlands B.V., Amsterdam, The Netherlands.
438
(2) Pursuant to article 21, section 1 of the WpHG we hereby notify for and on behalf of the Qatar Investment
Authority, Doha, Qatar, that its indirect voting rights in Volkswagen Aktiengesellschaft
(a) exceeded the threshold of 10% on December 17, 2009 and amounted to 13.71% of the voting rights of
Volkswagen Aktiengesellschaft (40,440,274 voting rights) as per this date
(i) 6.93% (20,429,274 voting rights) of which have been obtained by the exercise by Qatar Holding LLC of finan-
cial instruments within the meaning of article 25, section 1, sentence 1 of the WpHG on that date granting the
right to acquire shares in Volkswagen Aktiengesellschaft, and
(ii) all of which are attributed to the Qatar Investment Authority pursuant to article 22, section 1,
sentence 1 no. 1 of the WpHG.
(b) exceeded the threshold of 15% on December 18, 2009 and amounted to 17.00% of the voting rights of
(ii) all of which are attributed to the Qatar Investment Authority pursuant to article 22, section 1,
sentence 1 no. 1 of the WpHG.
Voting rights that are attributed to the Qatar Investment Authority pursuant to lit. (a) and (b) above are held via the
entities as set forth in (1) (bb) through (dd) which are controlled by it and whose attributed proportion of voting rights
in Volkswagen Aktiengesellschaft amount to 3% each or more.
(3) Pursuant to article 21, section 1 of the WpHG we hereby notify for and behalf of Qatar Holding LLC, Doha,
Qatar, that its direct and indirect voting rights in Volkswagen Aktiengesellschaft
(a) exceeded the threshold of 10% on December 17, 2009 and amounted to 13.71% of the voting rights of
(i) 6.93% (20,429,274 voting rights) of which have been obtained by the exercise of financial instruments within
the meaning of article 25, section 1, sentence 1 of the WpHG on that date granting the right to acquire shares in
Volkswagen Aktiengesellschaft, and
(ii) 6.78% (20,011,000 voting rights) of which are attributed to Qatar Holding LLC pursuant to article 22, section
1, sentence 1 no. 1 of the WpHG.
(b) exceeded the threshold of 15% on December 18, 2009 and amounted to 17.00% of the voting rights of
(i) 3.29% (9,708,738 voting rights) of which have been obtained by the exercise of financial instruments within
the meaning of article 25, section 1, sentence 1 of the WpHG on that date granting the right to acquire shares in
Volkswagen Aktiengesellschaft, and
(ii) 6.78% (20,011,000 voting rights) of which are attributed to Qatar Holding LLC pursuant to article 22, section
1, sentence 1 no. 1 of the WpHG.
439
Voting rights that are attributed to Qatar Holding LLC pursuant to lit. (a) and (b) above are held via the entities as
set forth in (1) (cc) through (dd) which are controlled by it and whose attributed proportion of voting rights in
Volkswagen Aktiengesellschaft amount to 3% each or more.
We have received the following notification:
(1) Pursuant to article 21, section 1 of the WpHG we hereby notify for and on behalf of Qatar Holding
Luxembourg II S.à.r.l., Luxembourg, Luxembourg, that its indirect voting rights in Volkswagen
Aktiengesellschaft exceeded the thresholds of 10% and 15% on December 18, 2009 and amounted to
17.00% of the voting rights of Volkswagen Aktiengesellschaft (50,149,012 voting rights) as per this date, all of
which are attributed to Qatar Holding Luxembourg II S.à.r.l. pursuant to article 22, section 1, sentence 1 no.1
of the WpHG.
Voting rights that are attributed to Qatar Holding Luxembourg II S.à.r.l. are held via the following entities which
are controlled by it and whose attributed proportion of voting rights in Volkswagen Aktiengesellschaft amount to
3% each or more:
(a) Qatar Holding Netherlands B.V., Amsterdam, The Netherlands;
(b) Qatar Holding Germany GmbH, Frankfurt am Main, Germany.
Netherlands B.V., Amsterdam, The Netherlands, that its indirect voting rights in Volkswagen
Aktiengesellschaft exceeded the thresholds of 10% and 15% on December 18, 2009 and amounted to 17.00%
of the voting rights of Volkswagen Aktiengesellschaft (50,149,012 voting rights) as per this date, all of which are
attributed to Qatar Holding Luxembourg II S.à.r.l. pursuant to article 22, section 1, sentence 1
no. 1 of the WpHG
Voting rights that are attributed to Qatar Holding Netherlands B.V. are held via the entity as set forth in (1) (b)
which is controlled by it and whose attributed proportion of voting rights in Volkswagen Aktiengesellschaft
amounts to 3% or more.
Germany GmbH, Frankfurt am Main, Germany, that its direct voting rights in Volkswagen
Aktiengesellschaft exceeded the thresholds of 3%, 5%, 10% and 15% on December 18, 2009 and amounted to
17.00% of the voting rights of Volkswagen Aktiengesellschaft (50,149,012 voting rights) as per this date.
State of Lower Saxony

The State of Lower Saxony notified us on January 8, 2024 that it held a total of 59,022,390 ordinary shares of
Volkswagen AG as of December 31, 2023. It held 520 VW ordinary shares directly and 59,021,870 ordinary shares
indirectly via Hannoversche Beteiligungsgesellschaft Niedersachsen mbH (HanBG), which is owned by the State
of Lower Saxony.
440
48. German Corporate Governance Code
The Board of Management and Supervisory Board of Volkswagen AG issued the declaration of conformity with
the German Corporate Governance Code in accordance with section 161 of the AktG on November 17, 2023. It
has been made permanently available to the shareholders of Volkswagen AG on the Company’s website at
www.volkswagen-group.com/declaration.
In December 2023, the Executive Board and Supervisory Board of TRATON SE also issued their declaration of
conformity with the German Corporate Governance Code and made it permanently available to the shareholders
at https://ir.traton.com/websites/traton/English/5000/corporate-governance.html.
The Board of Management and Supervisory Board of Dr. Ing. h.c. F. Porsche AG also issued their declaration of
conformity with the German Corporate Governance Code in December 2023. It has been made permanently avail-
able to shareholders on the company’s website at https://investorrelations.porsche.com/en/corporate-
governance/.
49. Remuneration of the Board of Management and the Supervisory Board
Total remuneration granted to the members of the Board of Management amounted to €51.1 million (previous
year: €58.5 million).
Under the performance share plan, a total of 169,465 performance shares (previous year: 133,775) were
granted to active members of the Bord of Management for fiscal year 2023; their value at the grant date was
€18.8 million (previous year: €19.2 million).
No more advances were granted to members of the Board of Management under the performance share plan
in fiscal year 2023. Overall, no advances were deducted from payments under the performance share plan (previ-
ous year: €1.4 million) in the fiscal year.
Total remuneration granted to the members of the Supervisory Board amounted to €7.5 million (previous year:
€5.3 million).
Pension entitlements and benefits to retired members of the board of management

The former members of the Board of Management and their surviving dependents were granted €10.4 million
(previous year: €53.5 million). Pension provisions for this group of individuals amounted to €290.3 million (previ-
ous year: €273.3 million).
The individual remuneration of the members of the Board of Management and the Supervisory Board is explained
in the remuneration report. A comprehensive assessment of the individual remuneration components can also be
found there.
Volkswagen Aktiengesellschaft
441
Consolidated Financial Statements Responsibility Statement
Responsibility Statement
To the best of our knowledge, and in accordance with the applicable reporting principles, the consolidated
financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the
Group, and the Group management report includes a fair review of the development and performance of the busi-
ness and the position of the Group, together with a description of the material opportunities and risks asso-
ciated with the expected development of the Group.
Volkswagen Aktiengesellschaft
Oliver Blume Arno Antlitz Ralf Brandstätter
Gernot Döllner Manfred Döss Gunnar Kilian
Thomas Schäfer Thomas Schmall-von Westerholt Hauke Stars
442
Consolidated Financial Statements Independent Auditor’s Report
Independent Auditor’s Report

On completion of our audit, we issued an unqualified auditor’s report dated March 1, 2024 in German language.
The following text is a translation of this auditor’s report. The German text is authoritative:
To VOLKSWAGEN AKTIENGESELLSCHAFT
REPORT ON THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS AND OF THE GROUP
MANAGEMENT REPORT
Opinions
We have audited the consolidated financial statements of VOLKSWAGEN AKTIENGESELLSCHAFT, Wolfsburg,
and its subsidiaries (the Group), which comprise the consolidated income statement and consolidated statement
of comprehensive income for the fiscal year from 1 January to 31 December 2023, and the consolidated balance
sheet as at 31 December 2023, consolidated statement of changes in equity and consolidated cash flow state-
ment for the fiscal year from 1 January to 31 December 2023, and notes to the consolidated financial statements,
including a summary of significant accounting policies. In addition, we have audited the group management
report of VOLKSWAGEN AKTIENGESELLSCHAFT, which is combined with the Company’s management report,
for the fiscal year from 1 January to 31 December 2023. In accordance with the German legal requirements, we
have not audited the content of the parts of the group management report specified in the appendix and the
company information stated therein that is provided outside of the annual report and is referenced in the group
management report.
In our opinion, on the basis of the knowledge obtained in the audit,

• the accompanying consolidated financial statements comply, in all material respects, with the IFRSs as
adopted by the EU, and the additional requirements of German commercial law pursuant to Sec. 315e
(1) HGB [“Handelsgesetzbuch”: German Commercial Code] and, in compliance with these requirements,
give a true and fair view of the assets, liabilities and financial position of the Group as at 31 December
2023, and of its financial performance for the fiscal year from 1 January to 31 December 2023, and
• the accompanying group management report as a whole provides an appropriate view of the Group’s
position. In all material respects, this group management report is consistent with the consolidated
financial statements, complies with German legal requirements and appropriately presents the oppor-
tunities and risks of future development. We do not express an opinion on the parts of the group man-
agement report listed in the appendix.
Pursuant to Sec. 322 (3) Sentence 1 HGB, we declare that our audit has not led to any reservations relating to the
legal compliance of the consolidated financial statements and of the group management report.
Basis for the opinions

We conducted our audit of the consolidated financial statements and of the group management report in accord-
ance with Sec. 317 HGB and the EU Audit Regulation (No. 537/2014, referred to subsequently as “EU Audit Reg-
ulation”) and in compliance with German Generally Accepted Standards for Financial Statement Audits promul-
gated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). Our responsibilities
under those requirements and principles are further described in the “Auditor’s responsibilities for the audit of the
consolidated financial statements and of the group management report” section of our auditor’s report. We are
independent of the Group entities in accordance with the requirements of European law and German commercial
and professional law, and we have fulfilled our other German professional responsibilities in accordance with
443
these requirements. In addition, in accordance with Art. 10 (2) f) of the EU Audit Regulation, we declare that we
have not provided non-audit services prohibited under Art. 5 (1) of the EU Audit Regulation. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions on the consoli-
dated financial statements and on the group management report.
Key audit matters in the audit of the consolidated financial statements

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the consolidated financial statements for the fiscal year from 1 January to 31 December 2023. These matters
were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our
opinion thereon; we do not provide a separate opinion on these matters.
Below, we describe what we consider to be the key audit matters:
1. ACCOUNTING TREATMENT OF THE RISK PROVISIONS FOR THE DIESEL ISSUE
Reasons why the matter was determined to be a key audit matter

Due to indications of irregularities in connection with exhaust gas emissions from diesel engines in certain vehi-
cles of the Volkswagen Group, regulatory authorities in numerous countries (particularly in Europe, the USA and
Canada) commenced investigations in the past few years, some of which are still ongoing.
On the basis of its own findings and those of the authorities, the Volkswagen Group implemented various
measures, which differed according to the country in some cases and included hardware and software measures,
vehicle buybacks and early termination of leases as well as compensation payments to vehicle owners in some
instances. The hardware and software measures had largely been completed as of the reporting date. The risk
provisions for the diesel issue mainly include provisions for administrative and civil proceedings. Furthermore,
there are legal risks from other criminal and administrative proceedings as well as civil actions, particularly by
customers and holders of securities.
The provisions recognized as of 31 December 2023 and the contingent liabilities disclosed in the notes to the
consolidated financial statements are subject to a significant estimation risk in view of the extensive ongoing
criminal and administrative investigations and proceedings, the complexity of the different issues, developments
in court rulings and market conditions for used diesel vehicles. Whether provisions need to be recognized or con-
tingent liabilities disclosed for the legal risks from the diesel issue, and in what amount, depends to a large extent
on the assessments and assumptions made by the executive directors. As described in the notes to the consoli-
dated financial statements, the executive directors considered in their assessments in particular the fact that,
based on the various measures taken and meanwhile largely concluded to resolve the diesel issue, there is still no
confirmation that members of the Board of Management were aware of any deliberate manipulation of the engine
control unit software prior to the summer of 2015.
In light of the significance of the risk provisions and the extent of the assumptions and scope for judgment by
the executive directors, this matter was a key audit matter.
444
Auditor’s response
To assess the recognition and measurement of the provisions for legal risks and the disclosure of contingent lia-
bilities arising from the diesel issue, we considered, in particular, work and opinions by experts engaged by the
executive directors of the Volkswagen Group in addition to available official notices and court judgments as part
of a risk-based selection of significant transactions. Moreover, with the involvement of our own legal and forensic
specialists, we held regular meetings with the Legal department and the external lawyers engaged by the execu-
tive directors of the Volkswagen Group to obtain oral explanations about the current developments and reasons
leading to the assessments of the ongoing proceedings. We compared confirmations received from external law-
yers with the risk assessment by the executive directors. We also regularly reviewed publicly available infor-
mation, such as media reports, to assess the completeness of the provisions and contingent liabilities.
In addition, we reviewed on a sample basis the input factors (quantity and value) of the provisions and contin-
gent liabilities for individual matters using statements of claims received, settlement agreements and court judg-
ments. With regard to the valuation, we also compared the current assessments by the executive directors with
past experience, where observable. For significant additions to provisions, we examined whether they were due
to new matters or to changes in the estimation inputs and obtained corresponding evidence. To analyze significant
utilizations of the provisions, we obtained an understanding of the procedural controls implemented and examined
a sample to determine whether they were based on settlement agreements or court judgments and whether cor-
responding payments were made.
Our audit procedures did not lead to any reservations relating to the accounting treatment of the risk provisions
for the diesel issue.
Reference to related disclosures

The information presented and the statements made in connection with the diesel issue, including the comments
on the underlying causes, on when the members of the Board of Management became aware of the issue and on
the effects on the accompanying financial statements are contained in the “Key events” and “Accounting policies”
sections on “Estimates and assessments by management” and “Balance sheet disclosures,” note 30, “Noncurrent
and current provisions,” note 38, “Contingent liabilities” and note 39, “Litigation” of the notes to the consolidated
financial statements and in the “Report on Risks and Opportunities” chapter of the group management report,
“Legal risks” section, subsection “Diesel issue.”
445
2. RECOVERABILITY OF GOODWILL AND THE ACQUIRED BRAND NAMES

The result of the impairment testing of goodwill and the acquired brand names is highly dependent on the exec-
utive directors’ estimate of future cash flows and which discount rates they use. The recoverable amount of the
cash-generating units is calculated on the basis of their value in use, applying discounted cash flow models.
The ongoing transformation of the core business toward electromobility and digitalization, the transition to
autonomous vehicles and growing environmental regulation lead to uncertainties that have to be factored into the
estimation of market shares and margins for electric vehicles and the long-term growth rates. These estimates by
the executive directors are subject to risk and may be revised in response to changes in environmental regulation
and market conditions.
In addition, the executive directors have scope for judgment in determining the cash-generating units for
impairment testing, in determining the discount rates used and the long-term growth rates assumed.
In view of the foregoing, the materiality of goodwill and the acquired brand names in relation to total assets,
the complexity of the valuation and the judgment exercised during valuation, the impairment testing of goodwill
and the acquired brands was a key audit matter.
During our audit, we involved valuation specialists to assess among other things the methodology used to perform
the impairment tests in light of the provisions of IAS 36. We also checked the arithmetical accuracy of the valua-
tion models used.
On the basis of the Volkswagen Group’s internal reporting, we assessed for the acquired brands whether the
brands represent the lowest level within the Volkswagen Group at which independent cash inflows are generated
and whether goodwill is monitored at brand level for internal management purposes.
We analyzed the planning process established in the Volkswagen Group as well as the impairment testing
process and tested the operating effectiveness of the controls implemented in each process. In this context, we
obtained an understanding of the controls implemented to reconcile the planning of the cash-generating units to
the group planning. As a starting point, we compared the Volkswagen Group’s five-year operational plan prepared
by the executive directors and acknowledged by the Supervisory Board with the forecast figures in the underlying
impairment tests. We discussed the key planning assumptions for selected brands to which significant goodwill
and acquired brand names are allocated with the executive directors and compared them with past earnings and
cash inflows to assess the planning accuracy. We based plausibility testing of the inputs for the impairment tests
among other things on a comparison with general and industry-specific market expectations underlying the
expected cash inflows. We also investigated the expectations regarding the development of market shares for
battery electric vehicles, the effects on the planned investments and their indirect effects on the long-term cash
inflows expected by the executive directors.
With respect to the rollforward from the medium-term plan to the long-term forecast, we assessed the plausi-
bility of the assumed growth rates by comparing them with observable data. To assess the discount rates and
growth rates applied, we analyzed the inputs used to determine them on the basis of publicly available information
and obtained an understanding of the methods used with regard to the relevant requirements of IAS 36.
446
We also assessed the sensitivity analyses performed by the executive directors in order to estimate any potential
impairment risk associated with a reasonably possible change in one of the significant assumptions used in the
valuation.
Our procedures did not lead to any reservations relating to the recoverability of goodwill and the acquired brand
names.

With regard to the recognition and measurement policies applied for goodwill and the acquired brand names,
refer to the disclosure on intangible assets in the “Accounting policies” section of the notes to the consolidated
financial statements. For the related disclosures on judgments by the executive directors and sources of estima-
tion uncertainty as well as the disclosures on goodwill and the acquired brand names, refer to the disclosure in
the “Accounting policies” section on “Estimates and assumptions by management” and note 12, “Intangible as-
sets” in the “Balance sheet disclosures” section of the notes to the consolidated financial statements. In the group
management report, refer to the “Report on Risks and Opportunities” chapter, “Risks and opportunities” section,
subsection “Risks arising from the recoverability of goodwill or brand names and from equity investments.”
3. CAPITALIZATION AND RECOVERABILITY OF DEVELOPMENT COSTS

Key criteria for capitalizing development costs are the ability to implement the development projects (including
their technical feasibility, the intention to complete them and the ability to use them) as well as the realization of
an expected future economic benefit. The complexity of research and development projects is mounting in view
of the technological transformation of the Volkswagen Group and the resulting new development areas (including
high investments in electromobility, software and autonomous driving). Assessments of project feasibility are
playing an ever greater role in this connection and entail the use of considerable judgment.
Where capitalized development costs are not yet subject to amortization, they must be tested for impairment
as part of the related cash-generating unit at least annually at the level of the brands defined as cash-generating
units. The assumption of realizing future economic benefits and the result of testing the recoverability of capital-
ized development costs during the analyses and impairment tests performed are highly dependent on the execu-
tive directors’ estimate of future cash flows and which discount rates they use. The recoverable amount of the
cash-generating units is calculated on the basis of their value in use, applying discounted cash flow models.
The ongoing transformation of the core business toward electromobility and digitalization, the transition to
autonomous vehicles and growing environmental regulation lead to uncertainties that have to be factored into the
estimation of market shares and margins for electric vehicles and the long-term growth rates. Growth expectations
of the executive directors are subject to risk and may be revised in response to changes in environmental regula-
tion and market conditions.
In addition, the executive directors have scope for judgment in determining the cash-generating units for
impairment testing, in determining the discount rates used and the long-term growth rates assumed.
447
In light of the foregoing, the materiality of the capitalized development costs in relation to total assets, the total
amount of research and development costs and the judgment exercised in the valuation process, the capitaliza-
tion of development costs and the impairment test were a key audit matter.
During our audit, we examined the process for identifying the research and development costs, particularly with
reference to the criteria for capitalization. In this connection, we carried out analytical audit procedures such as
comparisons of project budgets and capitalization rates, inspected documentation on project feasibility and
tested process-related controls in some areas. We also assessed the future economic benefit criterion for capi-
talization based on the assumptions regarding the cash inflows of the cash-generating unit to which the capital-
ized development work is allocated.
Moreover, we involved valuation specialists to assess among other things the methodology used to determine
the relevant cash-generating units and perform the impairment tests in light of the provisions of IAS 36. We also
checked the arithmetical accuracy of the valuation models used.
We analyzed the planning process established in the Volkswagen Group and tested the operating effectiveness
of the controls implemented therein. As a starting point, we compared the Volkswagen Group’s five-year opera-
tional plan prepared by the executive directors and acknowledged by the Supervisory Board with the forecast
figures in the underlying impairment tests. We discussed with the executive directors the key planning assump-
tions for a sample we selected of brands with significant capitalized development costs and compared them with
past earnings and cash inflows to assess the planning accuracy. We based plausibility testing of the inputs for the
impairment tests among other things on a comparison with general and industry-specific market expectations
underlying the expected cash inflows. We also investigated the expectations regarding the development of market
shares for battery electric vehicles, the effects on the planned investments and their indirect effects on the long-
term cash inflows expected by the executive directors.
With respect to the rollforward from the medium-term plan to the long-term forecast, we assessed the plausi-
bility of the assumed growth rates by comparing them with observable data. To assess the discount rates and
growth rates applied, we analyzed the inputs used to determine them on the basis of publicly available information
and obtained an understanding of the methods used with regard to the relevant requirements of IAS 36.
We also assessed the sensitivity analyses performed by the executive directors in order to estimate any poten-
tial impairment risk associated with a reasonably possible change in one of the significant assumptions used in
the valuation.
Our procedures did not lead to any reservations relating to the recognition and recoverability of the capitalized
development costs.

With regard to the recognition and measurement policies applied for capitalized development costs, refer to the
disclosure on intangible assets in the “Accounting policies” section of the notes to the consolidated financial
statements. For the related disclosures on judgments by the executive directors and sources of estimation uncer-
tainty as well as the disclosures on capitalized development costs, refer to the disclosures in the “Accounting
policies” section on “Estimates and assumptions by management” and note 12, “Intangible assets” in the “Balance
sheet disclosures” section of the notes to the consolidated financial statements.
448
4. COMPLETENESS AND MEASUREMENT OF PROVISIONS FOR WARRANTY OBLIGATIONS

Obligations for warranty claims are calculated on the basis of estimated warranty costs and ex gratia arrange-
ments. Where unusual individual technical risks are anticipated, an individual assessment is made whether and,
if so, to what extent measures are required to remediate them and provisions need to be recognized.
The amount of provisions for warranty claims is significant overall. Besides the general use of judgment in
selecting the valuation methods and assessing the obligations, increasing estimation uncertainty stems from the
growing proportion of hybrid and battery electric vehicles entering the market and a lack of experience of their
susceptibility to faults. In light of the amount of the provisions and the judgment exercised during valuation, the
completeness and measurement of provisions for warranty obligations was a key audit matter.
With regard to the accounting for the provisions for warranty obligations, we examined the underlying processes
for recording previous claims, calculating and valuing the estimated future warranty costs and recognizing the
provisions, and tested controls in some areas.
In light of the uncertainty in relation to the estimated future warranty costs, we assessed the underlying valu-
ation assumptions, especially the expected claim rate per vehicle and the cost thereof, using analyses of historical
data. Where there was a lack of past experience, we obtained an understanding of the assumptions made by the
executive directors and tested their plausibility using historical data for comparable items. Using the calculation
bases derived from these historical data, we checked the estimated costs for expected claims per vehicle. To
assess the completeness of the provisions, we also reconciled the number of sold vehicles used to recognize the
provision with the sales volumes. We obtained an understanding of the method used for calculating the provisions,
including the discounting, and reperformed the calculations.
For significant individual technical risks, we assessed the expected incidence of technical faults and the cal-
culation of expected costs per claim/vehicle using documentation on previous claims, inspecting resolutions
passed by technical committees and holding discussions with the departments responsible.
Our audit procedures did not lead to any reservations relating to the completeness and valuation of provisions
for warranty obligations.

With regard to the recognition and measurement policies applied in accounting for provisions for warranty obli-
gations, refer to the disclosures in the “Accounting policies” section on “Estimates and assessments by manage-
ment” and note 30, “Noncurrent and current other provisions” in the “Balance sheet disclosures” section of the
notes to the consolidated financial statements.
449
5. DETERMINATION OF THE EXPECTED RESIDUAL VALUES OF LEASE ASSETS DURING IMPAIRMENT TESTING

The lease assets balance sheet item comprises vehicles under operating leases. The recoverability of the lease
assets depends in particular on the expected residual value of the leased vehicles after expiration of the contrac-
tual term. The expected residual values are reviewed by the Company on a quarterly basis. The forecast residual
values are adjusted to include constantly updated internal and external information on residual values, depending
on specific local factors and the experiences gained in the marketing of used cars. This requires management to
make, in particular, assumptions about vehicle supply and demand in the future, as well as about vehicle price
trends.
Minimal changes in the parameters underlying the valuation can lead to significant variation in values. In this
light, the determination of the expected residual values of assets leased under operating leases during impairment
testing was a key audit matter.
During our audit, we analyzed the process implemented by the Company for determining and monitoring the
residual values to identify any risks of material misstatement and obtained an understanding of the process steps
and controls. On this basis, we tested the operating effectiveness of the implemented controls over the determi-
nation and monitoring of the expected residual values. To assess the forecasting models used to determine the
residual values, we assessed the validation plans on the basis of the respective model designs to determine
whether the validation procedures described in the plans allow an assessment of the models’ forecast quality. We
investigated whether the validation procedures performed according to the validation plans and the backtesting
performed led to any indications of model weaknesses or any need to adjust the models. Furthermore, we
assessed whether the assumptions underlying the forecasting model and the inputs used for determining the
expected residual values were clearly documented. To this end, we obtained evidence for the main inputs and
assumptions used for mileage, age and lifecycle phase of the vehicles to determine the residual values and
examined them for currentness and transparency. We assessed whether the marketing assumptions used reflect
industry-specific and general market expectations as well as, in particular, current marketing results.
Our audit procedures did not lead to any reservations relating to the determination of the expected residual
values of the assets leased under operating leases during impairment testing.

With regard to the recognition and measurement policies applied for lease assets, refer to the disclosure on lease
assets in the “Accounting policies” section of the notes to the consolidated financial statements. For the related
disclosures on judgments by the executive directors and sources of estimation uncertainty, refer to the disclo-
sures in the “Accounting policies” section on “Estimates and assumptions by management” and note 14, “Lease
assets and investment property” in the “Balance sheet disclosures” section of the notes to the consolidated
financial statements.
450
Emphasis of matter paragraph – Immanent risk due to uncertainties regarding the legal con-
formity of the interpretation of the EU Taxonomy Regulation
We draw attention to the executive directors’ comments on the EU Taxonomy disclosures in the “EU Taxonomy”
section of the group management report, where it is stated that the EU Taxonomy Regulation and the Delegated
Acts adopted thereunder contain wording and terms that are still subject to interpretation uncertainties and for
which clarifications have not yet been published in every case. The executive directors describe how they inter-
preted the EU Taxonomy Regulation and the Delegated Acts adopted thereunder. Due to the immanent risk that
undefined legal terms may be interpreted differently, the legal conformity of the interpretation is subject to
uncertainties. Our opinion on the group management report is not modified in this respect.
Other information
The Supervisory Board is responsible for the Report of the Supervisory Board. The executive directors and the
Supervisory Board are responsible for the declaration pursuant to Sec. 161 AktG [“Aktiengesetz”: German Stock
Corporation Act] on the German Corporate Governance Code, which is part of the group corporate governance
declaration, and for the remuneration report pursuant to Sec. 162 AktG. In all other respects, the executive direc-
tors are responsible for the other information. The other information comprises the parts of the annual report
listed in the appendix.
Our opinions on the consolidated financial statements and on the group management report do not cover the
other information, and consequently we do not express an opinion or any other form of assurance conclusion
thereon.
In connection with our audit, our responsibility is to read the other information and, in so doing, to consider
whether the other information
• is materially inconsistent with the consolidated financial statements, with the group management
report or our knowledge obtained in the audit, or
• otherwise appears to be materially misstated.
RESPONSIBILITIES OF THE EXECUTIVE DIRECTORS AND THE SUPERVISORY BOARD FOR THE CONSOLI-
DATED FINANCIAL STATEMENTS AND THE GROUP MANAGEMENT REPORT
The executive directors are responsible for the preparation of the consolidated financial statements that comply,
in all material respects, with IFRSs as adopted by the EU and the additional requirements of German commercial
law pursuant to Sec. 315e (1) HGB, and that the consolidated financial statements, in compliance with these
requirements, give a true and fair view of the assets, liabilities, financial position and financial performance of the
Group. In addition, the executive directors are responsible for such internal control as they have determined nec-
essary to enable the preparation of consolidated financial statements that are free from material misstatement,
whether due to fraud (i.e., fraudulent financial reporting and misappropriation of assets) or error.
In preparing the consolidated financial statements, the executive directors are responsible for assessing the
Group’s ability to continue as a going concern. They also have the responsibility for disclosing, as applicable, mat-
ters related to going concern. In addition, they are responsible for financial reporting based on the going concern
basis of accounting unless there is an intention to liquidate the Group or to cease operations, or there is no realistic
alternative but to do so.
Furthermore, the executive directors are responsible for the preparation of the group management report that,
as a whole, provides an appropriate view of the Group’s position and is, in all material respects, consistent with
the consolidated financial statements, complies with German legal requirements, and appropriately presents the
opportunities and risks of future development. In addition, the executive directors are responsible for such
arrangements and measures (systems) as they have considered necessary to enable the preparation of a group
management report that is in accordance with the applicable German legal requirements, and to be able to provide
sufficient appropriate evidence for the assertions in the group management report.
451
The Supervisory Board is responsible for overseeing the Group’s financial reporting process for the preparation of
the consolidated financial statements and of the group management report.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS AND O F
THE GROUP MANAGEMENT REPORT
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a
whole are free from material misstatement, whether due to fraud or error, and whether the group management
report as a whole provides an appropriate view of the Group’s position and, in all material respects, is consistent
with the consolidated financial statements and the knowledge obtained in the audit, complies with the German
legal requirements and appropriately presents the opportunities and risks of future development, as well as to
issue an auditor’s report that includes our opinions on the consolidated financial statements and on the group
management report.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accord-
ance with Sec. 317 HGB and the EU Audit Regulation and in compliance with German Generally Accepted Stand-
ards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer (IDW) will always detect a
material misstatement. Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these consolidated financial statements and this group management report.
452
We exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements and of
the group management report, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis
for our opinions. The risk of not detecting a material misstatement resulting from fraud is higher than
the risk of not detecting a material misstatement resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit of the consolidated financial state-
ments and of arrangements and measures (systems) relevant to the audit of the group management
report in order to design audit procedures that are appropriate in the circumstances, but not for the pur-
pose of expressing an opinion on the effectiveness of these systems.
• Evaluate the appropriateness of accounting policies used by the executive directors and the reasona-
bleness of estimates made by the executive directors and related disclosures.
• Conclude on the appropriateness of the executive directors’ use of the going concern basis of account-
ing and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in the auditor’s report to
the related disclosures in the consolidated financial statements and in the group management report or,
if such disclosures are inadequate, to modify our respective opinions. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may
cause the Group to cease to be able to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements present the underlying
transactions and events in a manner that the consolidated financial statements give a true and fair view
of the assets, liabilities, financial position and financial performance of the Group in compliance with
IFRSs as adopted by the EU and the additional requirements of German commercial law pursuant to
Sec. 315e (1) HGB.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or busi-
ness activities within the Group to express opinions on the consolidated financial statements and on
the group management report. We are responsible for the direction, supervision and performance of the
group audit. We remain solely responsible for our audit opinions.
• Evaluate the consistency of the group management report with the consolidated financial statements,
its conformity with [German] law, and the view of the Group’s position it provides.
• Perform audit procedures on the prospective information presented by the executive directors in the
group management report. On the basis of sufficient appropriate audit evidence we evaluate, in particu-
lar, the significant assumptions used by the executive directors as a basis for the prospective infor-
mation, and evaluate the proper derivation of the prospective information from these assumptions. We
do not express a separate opinion on the prospective information and on the assumptions used as a
basis. There is a substantial unavoidable risk that future events will differ materially from the prospec-
tive information.
453
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have complied with the relevant
independence requirements, and communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence and where applicable, the related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were
of most significance in the audit of the consolidated financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter.
Other legal and regulatory requirements
REPORT ON THE ASSURANCE ON THE ELECTRONIC RENDERING OF THE CONSOLIDATED F INANCIAL

STATEMENTS AND THE GROUP MANAGEMENT REPORT PREPARED FOR PUBLICATION PURPOSES IN AC-
CORDANCE WITH SEC. 317 (3A) HGB
Opinion
We have performed assurance work in accordance with Sec. 317 (3a) HGB to obtain reasonable assurance about
whether the rendering of the consolidated financial statements and the group management report (hereinafter
the “ESEF documents”) contained in the file VWAG_JFB_Konzern_2023-12-31.zip and prepared for publication
purposes complies in all material respects with the requirements of Sec. 328 (1) HGB for the electronic reporting
format (“ESEF format”). In accordance with German legal requirements, this assurance work extends only to the
conversion of the information contained in the consolidated financial statements and the group management
report into the ESEF format and therefore relates neither to the information contained within these renderings nor
to any other information contained in the file identified above.
In our opinion, the rendering of the consolidated financial statements and the group management report con-
tained in the file identified above and prepared for publication purposes complies in all material respects with the
requirements of Sec. 328 (1) HGB for the electronic reporting format. Beyond this assurance opinion and our audit
opinions on the accompanying consolidated financial statements and the accompanying group management
report for the fiscal year from 1 January to 31 December 2023 contained in the “Report on the audit of the consol-
idated financial statements and of the group management report” above, we do not express any assurance opinion
on the information contained within these renderings or on the other information contained in the file identified
above.
Basis for the opinion

We conducted our assurance work on the rendering of the consolidated financial statements and the group man-
agement report contained in the file identified above in accordance with Sec. 317 (3a) HGB and the IDW Assur-
ance Standard: Assurance on the Electronic Rendering of Financial Statements and Management Reports Pre-
pared for Publication Purposes in Accordance with Sec. 317 (3a) HGB (IDW AsS 410 (06.2022)). Our responsibility
in accordance therewith is further described in the “Group auditor’s responsibilities for the assurance work on the
ESEF documents” section. Our audit firm applies the IDW Standard on Quality Management 1: Requirements for
Quality Management in the Audit Firm (IDW QS 1).
454
Responsibilities of the executive directors and the Supervisory Board for the ESEF docu ments
The executive directors of the Company are responsible for the preparation of the ESEF documents including the
electronic rendering of the consolidated financial statements and the group management report in accordance
with Sec. 328 (1) Sentence 4 No. 1 HGB and for the tagging of the consolidated financial statements in accord-
ance with Sec. 328 (1) Sentence 4 No. 2 HGB.
In addition, the executive directors of the Company are responsible for such internal control as they have
determined necessary to enable the preparation of ESEF documents that are free from material intentional or un-
intentional non-compliance with the requirements of Sec. 328 (1) HGB for the electronic reporting format.
The Supervisory Board is responsible for overseeing the process for preparing the ESEF documents as part of
the financial reporting process.
Group auditor’s responsibilities for the assurance work on the ESEF documents
Our objective is to obtain reasonable assurance about whether the ESEF documents are free from material inten-
tional or unintentional non-compliance with the requirements of Sec. 328 (1) HGB. We exercise professional judg-
ment and maintain professional skepticism throughout the assurance work. We also:
• Identify and assess the risks of material intentional or unintentional non-compliance with the require-
ments of Sec. 328 (1) HGB, design and perform assurance procedures responsive to those risks, and
obtain assurance evidence that is sufficient and appropriate to provide a basis for our assurance opin-
ion.
• Obtain an understanding of internal control relevant to the assurance on the ESEF documents in order
to design assurance procedures that are appropriate in the circumstances, but not for the purpose of
expressing an assurance opinion on the effectiveness of these controls.
• Evaluate the technical validity of the ESEF documents, i.e., whether the file containing the ESEF docu-
ments meets the requirements of Commission Delegated Regulation (EU) 2019/815, in the version in
force at the date of the financial statements, on the technical specification for this file.
• Evaluate whether the ESEF documents enable an XHTML rendering with content equivalent to the
audited consolidated financial statements and to the audited group management report.
• Evaluate whether the tagging of the ESEF documents with Inline XBRL technology (iXBRL) in accord-
ance with the requirements of Arts. 4 and 6 of Commission Delegated Regulation (EU) 2019/815, in the
version in force at the date of the financial statements, enables an appropriate and complete machine-
readable XBRL copy of the XHTML rendering.
Further information pursuant to Art. 10 of the EU Audit Regulation

We were elected as group auditor by the Annual General Meeting on 10 May 2023. We were engaged by the
Supervisory Board on 26 July 2023. We have been the group auditor of VOLKSWAGEN AKTIENGESELLSCHAFT
since fiscal year 2020.
We declare that the opinions expressed in this auditor’s report are consistent with the additional report to the
Audit Committee pursuant to Art. 11 of the EU Audit Regulation (long-form audit report).
Other matter – Use of the auditor’s report

Our auditor’s report must always be read together with the audited consolidated financial statements and the
audited group management report as well as the assured ESEF documents. The consolidated financial statements
and the group management report converted to the ESEF format – including the versions to be published in the
Unternehmensregister [German Company Register] – are merely electronic renderings of the audited consoli-
dated financial statements and the audited group management report and do not take their place. In particular,
the ESEF report and our assurance opinion contained therein are to be used solely together with the assured ESEF
documents made available in electronic form.
German Public Auditor responsible for the engagement

The German Public Auditor responsible for the engagement is Martin Matischiok.
455
Appendix to the auditor’s report:
1. PARTS OF THE GROUP MANAGEMENT REPORT WHOSE CONTENT IS UNAUDITED

We have not audited the content of the following parts of the group management report:
• The group corporate governance declaration which is published on the website stated in the group
management report and is part of the group management report.
• The disclosures extraneous to management reports contained in the “Report on Risks and Opportuni-
ties” chapter in the section entitled “Monitoring the effectiveness of the risk management system and
the internal control system.”
Disclosures extraneous to management reports are such disclosures that are not required pursuant to Secs. 315,
315a HGB or Secs. 315b to 315d HGB or GAS 20.
2. FURTHER OTHER INFORMATION

The other information comprises the following parts of the annual report, of which we obtained a copy prior to
issuing this auditor’s report:
• The Group Nonfinancial Report
The other information also comprises other parts to be included in the annual report, of which we obtained a copy
prior to issuing this auditor’s report, in particular the sections:
• Report of the Supervisory Board
• To our Shareholders
• Divisions
• Group Corporate Governance Declaration
• Remuneration Report
• Responsibility Statement; and
• Additional Information
but not the consolidated financial statements, not the group management report disclosures whose content is
audited and not our auditor’s report thereon.
3. COMPANY INFORMATION OUTSIDE OF THE ANNUAL REPORT REFERENCED IN THE GROUP MANAGEMENT
REPORT
The group management report contains other cross-references to webpages of the Group. We have not audited
the content of the information to which these cross-references refer.
Hanover, 1 March 2024
EY GmbH & Co. KG

Wirtschaftsprüfungsgesellschaft
Meyer Matischiok
Wirtschaftsprüfer Wirtschaftsprüfer
[German Public Auditor] [German Public Auditor]
456

To VOLKSWAGEN AKTIENGESELLSCHAFT
We have audited the attached remuneration report of VOLKSWAGEN AKTIENGESELLSCHAFT, Wolfsburg, pre-
pared to comply with Sec. 162 AktG [“Aktiengesetz”: German Stock Corporation Act] for the fiscal year from
1 January to 31 December 2023 and the related disclosures. We have not audited the content of the disclosures
on appropriateness and market alignment in section “1. Principles of Board of Management remuneration” of the
remuneration report where they go beyond the scope of Sec. 162 AktG.
RESPONSIBILITIES OF THE EXECUTIVE DIRECTORS AND THE SUPERVISORY BOARD

The executive directors and the Supervisory Board of VOLKSWAGEN AKTIENGESELLSCHAFT are responsible for
the preparation of the remuneration report and the related disclosures in compliance with the requirements of
Sec. 162 AktG. In addition, the executive directors and the Supervisory Board are responsible for such internal
control as they determine is necessary to enable the preparation of a remuneration report and the related disclo-
sures that are free from material misstatement, whether due to fraud (i.e., fraudulent financial reporting and mis-
appropriation of assets) or error.
AUDITOR’S RESPONSIBILITY
Our responsibility is to express an opinion on this remuneration report and the related disclosures based on our
audit. We conducted our audit in compliance with German Generally Accepted Standards for Financial Statement
Audits promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). Those
standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance about whether the remuneration report and the related disclosures are free from material misstate-
ment, whether due to fraud or error.
An audit involves performing procedures to obtain audit evidence about the amounts in the remuneration
report and the related disclosures. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the remuneration report and the related disclosures, whether
due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the prep-
aration of the remuneration report and the related disclosures in order to plan and perform audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity’s internal control. An audit also includes evaluating the accounting policies used and the reasonableness of
accounting estimates made by the executive directors and the Supervisory Board, as well as evaluating the overall
presentation of the remuneration report and the related disclosures.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
457
OPINION
In our opinion, on the basis of the knowledge obtained in the audit, the remuneration report for the fiscal year from
1 January to 31 December 2023 and the related disclosures comply, in all material respects, with the financial
reporting provisions of Sec. 162 AktG. We do not express an opinion on the content of the abovementioned dis-
closures of the remuneration report that go beyond the scope of Sec. 162 AktG.
OTHER MATTER – FORMAL AUDIT OF THE REMUNERATION REPORT

The audit of the content of the remuneration report described in this auditor’s report comprises the formal audit
of the remuneration report required by Sec. 162 (3) AktG and the issue of a report on this audit. As we are issuing
an unqualified opinion on the audit of the content of the remuneration report, this also includes the opinion that
the disclosures pursuant to Sec. 162 (1) and (2) AktG are made in the remuneration report in all material respects.
LIMITATION OF LIABILITY
The “General Engagement Terms for Wirtschaftsprüfer and Wirtschaftsprüfungsgesellschaften [German
Public Auditors and Public Audit Firms]” as issued by the IDW on 1 January 2017, are applicable to this engage-
ment and also govern our responsibility and liability to third parties in the context of this engagement
(www.de.ey.com/general-engagement-terms).
Hanover, 1 March 2024
EY GmbH & Co. KG

Wirtschaftsprüfungsgesellschaft
Matischiok Hantke
Wirtschaftsprüfer Wirtschaftsprüfer
[German Public Auditor] [German Public Auditor]
458
Additional Information
460 Five-Year Review
461 Financial Key Performance Indicators
462 Glossary
465 Scheduled Dates
Additional Information Five-Year Review
Five-Year Review
2023 20221 2021 2020 2019
Volume Data (thousands)

Vehicle sales (units) 9,362 8,481 8,576 9,157 10,956
Germany 1,178 1,005 973 1,108 1,347
Abroad 8,184 7,476 7,603 8,049 9,609
Production (units) 9,309 8,717 8,283 8,900 10,823
Germany 1,914 1,648 1,483 1,633 2,112
Abroad 7,395 7,069 6,800 7,267 8,712
Employees (yearly average) 676 669 668 668 668
Germany 293 289 294 294 295
Abroad 383 380 373 373 373
Financial Data (in € million)

Income Statement
Sales revenue 322,284 279,050 250,200 222,884 252,632
Cost of sales –261,262 –226,866 –202,959 –183,937 –203,490
Gross profit 61,022 52,184 47,241 38,947 49,142
Distribution expenses –21,340 –19,840 –19,228 –18,407 –20,978
Administrative expenses –12,724 –11,655 –10,420 –9,399 –9,767
Net other operating result –4,382 1,421 1,682 –1,466 –1,437
Operating result 22,576 22,109 19,275 9,675 16,960
Financial result 618 –40 851 1,991 1,396
Earnings before tax 23,194 22,070 20,126 11,667 18,356
Income tax expense –5,266 –6,217 –4,698 –2,843 –4,326
Earnings after tax 17,928 15,852 15,428 8,824 14,029
Personnel expenses 49,755 47,002 43,677 40,516 42,913
Balance Sheet (at December 31)

Noncurrent assets 360,694 339,853 328,261 302,170 300,608
Current assets 239,644 224,159 200,347 194,944 187,463
Total assets 600,338 564,013 528,609 497,114 488,071
Equity 189,912 178,328 146,154 128,783 123,651

of which: noncontrolling interests 14,218 12,952 1,705 1,734 1,870
Noncurrent liabilities 204,552 202,961 218,062 202,921 196,497
Current liabilities 205,874 182,723 164,393 165,410 167,924
Total equity and liabilities 600,338 564,013 528,609 497,114 488,071
Cash flows from operating activities 19,356 28,496 38,633 24,901 17,983
activities 28,031 25,454 24,181 18,372 20,076
Cash flows from financing activities 16,008 4,225 –7,754 7,637 –865
1 The year 2022 was adjusted due to the new version of IFRS 17.
460
Additional Information Financial Key Performance Indicators
Financial Key Performance

Indicators
% 2023 20221 2021 2020 2019
Volkswagen Group
Gross margin 18.9 18.7 18.9 17.5 19.5
Personnel expense ratio 15.4 16.8 17.5 18.2 17.0
Operating return on sales 7.0 7.9 7.7 4.3 6.7
Return on sales before tax 7.2 7.9 8.0 5.2 7.3
Return on sales after tax 5.6 5.7 6.2 4.0 5.6
Equity ratio 31.6 31.6 27.6 25.9 25.3
Automotive Division2
Change in unit sales year-on-year3 +10.4 –1.1 –6.3 –16.4 +0.5
Change in sales revenue year-on-year +15.4 +12.7 +13.3 –14.3 +5.7
Operating return on sales 7.0 7.1 6.4 3.7 6.5
EBITDA (in € million)4 36,513 37,325 31,609 24,462 29,706
Return on investment (ROI)5 12.3 12.0 10.4 6.5 11.2
Cash flows from operating activities as a percentage of sales
revenue 14.1 12.9 15.7 13.6 14.5
activities as a percentage of sales revenue 10.1 10.8 11.5 10.1 9.4
Net liquidity as a percentage of sales revenue 12.5 15.4 10.7 12.0 8.4
Ratio of capex to sales revenue in % 5.4 5.5 5.1 6.1 6.6
Research and development costs as a percentage of sales
revenue 8.1 8.1 7.6 7.6 6.7
Investitionsquote im Konzernbereich Automobile 13.5 13.6 12.6 13.7 13.3
Cash Conversion Rate 57.0 29.2 65.1 95.4 78.8
Equity ratio 47.8 45.1 40.1 38.1 37.6

Increase in total assets 12.0 2.6 5.6 0.7 7.9
Return on equity before tax6 8.8 14.1 17.3 8.8 10.8
Equity ratio 14.8 16.1 14.5 13.2 12.8
1 The year 2022 was adjusted due to the new version of IFRS 17.
3 Including the Chinese joint ventures.
4 Operating result plus net depreciation/amortization and impairment losses/reversals of impairment losses on property, plant and equipment, capitalized
development costs, lease assets, goodwill and financial assets as reported in the cash flow statement.
5 For details, see the section entitled “Return on investment (ROI) and value contribution in the reporting period” in the chapter entitled “Results of Operations, Financial Position
and Net Assets”.
6 Earnings before tax as a percentage of average equity.
461
Additional Information Glossary
Glossary
Selected terms at a glance
Big Data Industry 4.0 Modular Electric Drive Toolkit (MEB)

Big data is a term used to describe new ways of Describes the fourth industrial revolution and the The modular system is for the manufacturing of
analyzing and evaluating data volumes that are too systematic development of real-time and intelligent electric vehicles. The MEB establishes parameters for
vast and too complex to be processed using manual or networks between people, objects and systems, axles, drive systems, high-voltage batteries,
conventional methods. exploiting all of the opportunities of information wheelbases and weight ratios to ensure a vehicle
technology along the entire value chain. Intelligent optimally fulfills the requirements of e-mobility. The
End-to-end electronics architecture machines, inventory systems and operating production of the first vehicles based on the MEB
A scalable platform developed by CARIAD for secure equipment that independently exchange information, started into series production in 2020.
and rapid processing of data in the digitally connected trigger actions and control each other will be
vehicle. This platform improves communication integrated into production and logistics at a technical Modular Transverse Toolkit (MQB)
between the vehicle and the cloud, thereby enhancing level. This offers tremendous versatility, efficient As an extension of the modular strategy, this platform
vehicle performance. resource utilization, ergonomics and the integration of can be deployed in vehicles whose architecture
customers and business partners in operational permits a transverse arrangement of the engine
Hybrid drive processes throughout the entire value chain. components. The modular perspective enables high
Drive combining two different types of engine and synergies to be achieved between the vehicles in the
energy storage systems (usually an internal Liquefied Natural Gas (LNG) Volkswagen Passenger Cars, Volkswagen Commercial
combustion engine and an electric motor). LNG is needed so that natural gas engines can be used Vehicles, Audi, SEAT and Škoda brands.
in long-distance trucks and buses, since this is the only
Hybrid notes way of achieving the required energy density. Net carbon neutrality
Hybrid notes issued by Volkswagen are classified in Net carbon neutrality will be achieved if
their entirety as equity. The issuer has call options at anthropogenic CO2 (carbon dioxide) emissions are
defined dates during their perpetual maturities. They offset globally through avoidance, reduction and
pay a fixed coupon until the first possible call date, compensation over a specified period of time. This
followed by a variable rate depending on their terms encompasses all other relevant greenhouse gases as
and conditions. well. Avoidance and reduction of such gases is a
priority for the Volkswagen Group.
462
Plug-in hybrid Software Defined Vehicles (SDV) Turntable concept

Performance levels of hybrid vehicles. Plug-in hybrid Vehicles designed and developed with a focus on Concept of flexible manufacturing enabling the
electric vehicles (PHEVs) have a larger battery with a software. Highly digitalized with high-performance production of different models in variable daily
correspondingly higher capacity that can be charged computers and modern, embedded computer volumes within a single plant, as well as offering the
via the combustion engine, the brake system, or an systems. Their functions can be centrally controlled facility to vary daily production volumes of one model
electrical outlet. This increases the range of the and updated and extended over the vehicle’s life. Their between two or more plants.
vehicle. software docks flexibly with all kinds of hardware –
from control units to sensors such as cameras and Vehicle-Lifetime-Value
Premium Platform Electric (PPE) lidar. SDVs are considered the basis for safe, The value a vehicle generates for the Volkswagen
A new vehicle platform for all-electric premium, sport intelligently communicating vehicle fleets, a new Group including the dealer organization over its entire
and luxury class vehicles. The components and customer experience in infotainment and highly life cycle, starting with income from the sale, through
functions of this platform are especially tailored to automated driving functions. income during the operational life, up to the recycling
meet the high demands of this segment. This at the end of the vehicle life cycle.
platform enables high synergies to be achieved Test procedure
particularly between the Audi, Porsche and Bentley Levels of fuel consumption and exhaust gas emissions Vocational groups
brands. for vehicles registered in Europe were previously For example, electronics, logistics, marketing, or
measured on a chassis dynamometer with the help of finance. A new teaching and learning culture is
Rating the “New European Driving Cycle (NEDC)”. Since fall gradually being established by promoting
Systematic assessment of companies in terms of their 2017, the existing test procedure for emissions and training in the vocational groups. The specialists are
credit quality. Ratings are expressed by means of fuel consumption used in the EU is being gradually actively involved in the teaching process by passing on
rating classes, which are defined differently by the replaced by the Worldwide Harmonized Light Vehicles their skills and knowledge to their colleagues.
individual rating agencies. Test Procedure (WLTP). This has been in place for new
vehicle types since fall 2017 and for all new vehicles Zero-Emissions Vehicle (ZEV)
Scalable Systems Platform (SSP) since fall 2018. The aim of this new test cycle is to Vehicles that operate without exhibiting any harmful
The Scalable Systems Platform (SSP) is a future- state CO2 emissions and fuel consumption in a more emissions from combustion gases. Examples of zero-
oriented and industry-leading mechatronics platform practice-oriented manner. A further important emissions vehicles include purely battery-powered
for all-electric and fully digitalized vehicles based on a European regulation is the Real Driving Emissions electric vehicles (BEV) or fuel cell vehicles.
standardized software architecture. Innovative (RDE) for passenger cars and light commercial
technologies and scalability enable high synergies vehicles, which also monitors emissions using
from the smallest vehicles all the way up to the portable emission measuring technology in real road
premium segment with the necessary differentiation traffic.
between the brand groups Volume, Premium and
Sport & Luxury, while at the same time enabling low
investment requirements.
463
Capitalization ratio Price-earnings ratio

The capitalization ratio is defined as the ratio of The price-earnings ratio is calculated by dividing the
capitalized development costs to total research and share price per share class at the end of the year by
development costs in the Automotive Division. It the earnings per share. It reflects a company’s
shows the proportion of primary research and profitability per share; a comparison over several years
development costs subject to capitalization. shows how its performance has developed over time.
Cash Conversion Rate Return on equity before tax

The cash conversion rate is the ratio of net cash flow The return on equity shows the ratio of profit before
to the operating result in the Automotive Division. It tax to average shareholders’ equity of a period,
shows the relationship between excess funds and expressed as a percentage. It reflects the company’s
operating profit. profitability per share and indicates the interest rate
earned on equity.
Distribution ratio
The distribution ratio is the ratio of total dividends Return on sales before tax
attributable to ordinary and preferred shares to The return on sales is the ratio of profit before tax to
earnings after tax attributable to the shareholders of sales revenue in a period, expressed as a percentage. It
Volkswagen AG. The distribution ratio provides shows the level of profit generated for each unit of
information on how earnings are distributed. sales revenue. The return on sales provides
information on the profitability of all business
Dividend yield activities before deducting income tax expense.
The dividend yield is the ratio of the dividend for the
reporting year to the closing price per share class on Tax rate
the last trading day of the reporting year; it represents The tax rate is the ratio of income tax expense to
the interest rate earned per share. The dividend yield profit before tax, expressed in percent. It shows what
is used in particular for measuring and comparing percentage of the profit generated has to be paid over
shares. as tax.
Equity ratio
The equity ratio measures the percentage of total
assets attributable to shareholders’ equity as of a
reporting date. This ratio indicates the stability and
financial strength of the company and shows the
degree of financial independence.
Gross margin
Gross margin is the percentage of sales revenue
attributable to gross profit in a period. Gross margin
provides information on profitability net of cost of
sales.
464
Scheduled
Dates
2024
M
arch 13
Volkswagen AG Annual Media
Conference and Investor Conference
A
pril 30
Interim Report January – March 2024
M ay 29
Volkswagen AG Annual
General Meeting
A
ugust 1
Half-Yearly Financial Report 2024
O
c tober 30
Interim Report January –
September 2024
Published by
Volkswagen AG
Group Financial Publications
Investor Relations
Letterbox 1848
38436 Wolfsburg, Germany Investor Relations
Phone + 49 (0) 5361 9-0 Letterbox 1849
Fax + 49 (0) 5361 9-28282 38436 Wolfsburg, Germany
Photography
E-mail: ir@volkswagen.de
This annual report is published in Internet: www.volkswagen-group.com Volkswagen AG
English and German. Both versions of the
report are available on the Internet: Concept, Design and Realization This annual report is
www.volkswagenag.com prepared in house with
nexxar GmbH, Vienna
firesys (excluding the
This document is an English translation Consolidated Financial
English translation
of the original annual report written in Statements).
German. In case of discrepancies, the Leinhäuser Language Services GmbH,
German version shall take precedence. Unterhaching 458.809.622.20

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2023

Volume Data2 in thousands

Financial Data (IFRSs), € million

Financial Services Division

Volume Data in thousands

Financial Data (HGB), € million

1 Prior-year figures adjusted (see disclosures on IFRS 17).

Letter to our Shareholders

We have lived up to our responsibility

Dr. Arno Antlitz

Dr. Manfred Döss

Report of the Supervisory Board

Ladies and gentlemen,

Hans Dieter Pötsch

TOPICS DISCUSSED BY THE SUPERVISORY BOARD

Meetings of the full Meetings of the

Hans Dieter Pötsch 8 out of 8 13 out of 13

CORPORATE GOVERNANCE AND DECLARATION OF CONFORMITY

COMPOSITION OF THE SUPERVISORY BOARD AND BOARD OF MANAGEMENT

AUDIT OF THE ANNUAL AND CONSOLIDATED FINANCIAL STATEMENTS

Wolfsburg, March 1, 2024

Hans Dieter Pötsch

Brands and Business Fields

REPORTING STRUCTURE OF THE VOLKSWAGEN GROUP

Automotive Financial Services

Passenger Cars Commercial Power Engineering Dealer and customer financing

KEY FIGURES BY BRAND GROUP AND BUSINESS FIELD

VEHICLE SALES SALES REVENUE OPERATING RESULT

Thousand vehicles/€ million 2023 2022 2023 20221 2023 20221

Core brand group 4,826 4,069 137,770 113,762 7,273 4,045

1 Prior-year figures adjusted (see disclosures on IFRS 17).

KEY FIGURES OF THE CORE BRAND GROUP

VEHICLE SALES SALES REVENUE OPERATING RESULT

Thousand vehicles/€ million 2023 2022 2023 2022 2023 2022

Volkswagen Passenger Cars 3,016 2,594 86,382 73,773 3,542 2,647

KEY FIGURES BY DIVISION

VEHICLE SALES SALES REVENUE OPERATING RESULT

Thousand vehicles/€ million 2023 2022 2023 20221 2023 20221

1 Prior-year figures adjusted (see disclosures on IFRS 17).

KEY FIGURES BY MARKET

KEY FIGURES BY MARKET

VEHICLE SALES SALES REVENUE

Thousand vehicles/€ million 2023 2022 2023 20221

Europe/Other Markets 4,169 3,495 187,949 154,514

1 Prior-year figures adjusted (see disclosures on IFRS 17).

SALES REVENUE AND EARNINGS

PRODUCTION VOLKSWAGEN PASSENGER CARS BRAND

Units 2023 2022 2023 2022 %

Tiguan 633,147 604,536 Deliveries (thousand units) 4,867 4,563 +6.7

Lavida 271,309 377,284 Operating return on sales (%) 4.1 3.6

T-Cross/Tacqua/Taigun 261,519 315,036

ID.7 DELIVERIES BY MARKET

 Europe/Other Markets 29.4%

FURTHER INFORMATION www.volkswagen.com

SALES REVENUE AND EARNINGS

PRODUCTION ŠKODA BRAND

Units 2023 2022 2023 2022 %

Octavia 205,764 141,499 Deliveries (thousand units) 867 731 +18.5

Kodiaq DELIVERIES BY MARKET

 Europe/Other Markets 89.2%