Category Archives: Volkswagen

Volkswagen

Structural and personnel realignment at CARIAD

The Supervisory Board of CARIAD has approved a comprehensive realignment of the Volkswagen Group’s software subsidiary. Peter Bosch, previously responsible for manufacturing at Bentley and the Volkswagen AG representative on the Board of Scout Motors, has been appointed CEO. Supported by acknowledged software experts and a transformation team of experienced managers from the Volkswagen Group, CARIAD senior management and technology specialists will comprehensively advance the development of CARIAD.

Oliver Blume, CEO of the Volkswagen Group and Chairman of the Supervisory Board of CARIAD, commented: “Last year, we drew up a ten-point plan for operational and strategic areas of action within the Volkswagen Group. One key element is the realignment of CARIAD, and we have already made good progress. We are now setting the next milestones for advancing strategic, structural and personnel development. CARIAD focuses on the development of digital future technologies for the Group brands. We are stepping up the pace and broadening our approach to partnerships. This is designed to combine our competences with the best solutions on the market for the benefit of our customers. The outcome is even closer software-vehicle development interaction.”

In the past few years, experts from all over the world have been recruited and inspired with the ambition to develop a uniform operating system for all Group brands.

“When I took office in September 2022, I underscored that CARIAD is a key success factor for the Volkswagen Group. As one of the core elements in our 10-point plan, we have addressed key issues:

  • Sharpening CARIAD’S core competences
  • Revising the interfaces with the brands
  • Realistic sequences for the software architectures
  • Boosting effectiveness
  • Expanding strategic partnerships

We have taken important decisions on these issues in the past few months and have set our guardrails – for example, we have organized the software architectures and their timelines for our vehicle projects. We have drawn further specific conclusions on the basis of our thorough analyses, and are now advancing the in-depth development of CARIAD. We would like to thank Dirk Hilgenberg and his team for their passionate commitment and the progress they have achieved. We are already in talks with them about possible new roles within the Volkswagen Group,” Oliver Blume said.

Peter Bosch named new CEO

Peter Bosch assumes responsibility as CEO of CARIAD effective June 1, 2023. As the Member of the Board for Manufacturing at Bentley Motors since 2017, he shared responsibility for the successful restructuring and reorganization of the company. Peter Bosch is an experienced Volkswagen manager, having held several other posts within the Group, including roles within the Volkswagen brand. As a Member of the Board of Scout Motors, he was recently closely involved in establishing the manufacturer of full-electric R-SUVs and Pickups in North America. Within CARIAD, Bosch will also assume responsibility for Finance, Purchasing and IT.

“Peter Bosch is the right CEO at the right time,” Oliver Blume said. “He is a strategist, an enabler and a team player. He successfully proved that at Bentley. He knows the Volkswagen Group well and also has extensive experience in the fields of change and consulting.”

Going forward, the new CEO will be joined on the Board of Management by two acknowledged software experts. CARIAD will announce these appointments in the near future. The final Board Member is Rainer Zugehör, who retains his role as Chief People Officer (CPO).

In addition, an experienced Transformation Board is already in place to provide CARIAD with further support. This board brings together selected CARIAD managers to create a highly-competent team to shape the realignment. “The focus is on steering the transformation process and advancing cooperation between CARIAD and the Volkswagen Group brands – with a team spirit, fairness and passion,” Michael Steiner, Member of the Supervisory Board of CARIAD and responsible for development in the Volkswagen Group, said. According to Steiner, the Supervisory Board specifically focused on a team of experienced managers from all Volkswagen Group brands, CARIAD experts and new external managers.

The comprehensive realignment of CARIAD is based on five points:

  1. Restructuring of the CARIAD organization
  2. Accelerated execution of the E³ platforms
  3. Structural orientation to the development of software-defined vehicles (SDV)
  4. Intensified technology partnerships with strong tech players
  5. A new leadership and team model

Software based: the software-defined vehicle architecture

CARIAD will play an even greater role in developing the vehicles of the future, from software to hardware. For example, there are plans for an integrated project house with the Volkswagen and Audi brands to develop the next generation of software-defined vehicles.

Volkswagen

Volkswagen: Brand Group Volume doubles operating profit in first quarter 2023

The Volkswagen Group’s Brand Group Volume further strengthened the close cooperation between the sister brands Volkswagen, Škoda, SEAT/CUPRA and Volkswagen Commercial Vehicles in the first quarter of 2023. To take account of this successful development and the significance of the Brand Group Volume in the ongoing transformation of the Volkswagen Group, the four volume brands are publishing their key financial metrics for the first time in a Brand Group Volume quarterly report.

The brand group’s positive development towards greater efficiency and profitability in the volume segment is reflected in particular by the operating profit before special items, which doubled compared with the prior-year quarter, coming in at EUR 1.74 billion (Q1 2022: EUR 0.88 billion), and by a sharp increase in the Brand Group Volume’s operating return on sales from 3.6 percent in the first quarter of the previous year to 5.3 percent in Q1/23. There was also a sharp increase in consolidated sales revenue, which grew 36 percent to EUR 33.16 billion (Q1 2022: EUR 24.36 billion), while net cash flow was EUR 1.7 billion (Q1 2022: EUR 0.5 billion), thus reflecting the good first-quarter performance.

Unit sales in the first quarter of 2023 increased 30 percent to 1.19 million vehicles (Q1 2022: 0.92 million vehicles). The full-electric model range accounts for an ever-larger share of deliveries. In total, the Brand Group Volume delivered 97,100 full-electric vehicles in the first quarter of the year, 49 percent more than in the prior-year quarter.

“Strong brands, lean engine room: targeted cooperation between the brands enabled us to expand existing synergies and scaling benefits in the past few months and at the same time increase our financial robustness and innovation strength. The Brand Group Volume’s key figures prove we are on the right track,” Thomas Schäfer, Member of the Volkswagen Group Board of Management in charge of the Brand Group Volume, said.

Overview of key figures for the Brand Group Volume:

Key figures

Brand Group Volume Q1 2023 (+development)

Brand Group Volume Q1 2022

Unit sales

1,193,000 vehicles (+30 %)

918,000 vehicles

Sales revenue

EUR 33.16 billion (+36 %)

EUR 24.36 billion

Operating profit before special items

EUR 1.74 billion (+99 %)

EUR 0.88 billion

Operating return on sales before special items

5.3 % (+1.7 %pp)

3.6%

Net cash flow

EUR 1.7 billion

EUR 0.5 billion

Four strong brands lay basis for strong performance by Brand Group Volume
The convincing Q1 performance by the Brand Group Volume is also due to the successful development of the individual brands Volkswagen, Škoda, SEAT/CUPRA and Volkswagen Commercial Vehicles.

The Volkswagen brand reported a slight upward trend in deliveries. The Volkswagen Passenger Cars brand handed over a total of 1.02 million passenger cars to customers worldwide in the first quarter of 2023 (+ 0.9 percent). Full-electric vehicles accounted for a large share of this success: with unit sales of some 70,000 vehicles, the brand accounted for just under half of all BEVs delivered by the Group (+31.2 percent). Despite the challenging environment and persistent supply constraints, operating profit before special items in the first quarter of 2023 came in at EUR 608 million, an improvement on the figure for the prior-year quarter (EUR 513 million). Sales revenue rose from EUR 14.9 billion (Q1 2022) to EUR 20.5 billion (Q1 2023). This positive trend was in part offset by factors such as significantly higher material costs as well as exchange rate effects. As a result, the brand’s operating return on sales before special items in the first three months of the current fiscal year stood at 3.0 percent, 0.5 percentage points lower than the corresponding quarter in 2022.

Škoda Auto reported a strong first quarter and delivered 209.600 vehicles to customers worldwide (+12.6 percent). The all-electric Enyaq iV family was particularly successful, with deliveries rising by over 40 percent. The traditional Czech brand generated sales revenue of EUR 6.8 billion, up 33.3 percent on the same period in 2022. Operating profit before special items also increased by over 60 percent to EUR 542 million. At 8.0 percent, the return on sales was at a high level.

SEAT/CUPRA grew the number of electric vehicles delivered between January and March 2023 more than fourfold (+318.9 percent) to 9,200 units. Overall, SEAT/CUPRA delivered 125,218 vehicles in Q1/23.37 percent more than in the prior-year quarter (91,407), making this SEAT’s strongest first quarter ever. The company reported an operating profit of EUR 144 million for the period January – March 2023, an improvement of EUR 139 million on the first quarter of 2022. The operating return on sales in Q1/23 rose to 4.0 percent. Thanks to high demand and improved components supply, sales revenue increased to EUR 3.6 billion (+48.2 percent compared with the prior-year quarter).

Volkswagen Commercial Vehicles continued the positive business trend of 2022 in the first quarter of fiscal year 2023. Deliveries grew 18.7 percent to 97,189 vehicles. Q1/23 was the first full business quarter for the ID.Buzz since its market launch, lifting deliveries of all VWN BEV vehicles to 5,500 units (Q1 22: 700 BEVs). Sales revenue rose to just under EUR 3.6 billion, driven by positive pricing and mix effects. Even though the market and supplier situation remained tense, operating profit before special items soared to EUR 171 million (Q1/22: EUR 46 million). In line with these figures, the operating return on sales increased from 2 percent in the first quarter of the previous year to 4.8 percent.

Outlook
The Brand Group Volume is the crucial lever for financial robustness, synergies and innovation in the Volkswagen Group – and bolsters resilience against external challenges. Based on effective management of the Brand Group Volume with lean structures, the focus is on reducing complexity – and the systematic leveraging of existing synergy potential. The central performance indicator for Brand Group Volume is a consolidated operating return on sales of 8 percent from 2025. For the 2023 fiscal year, the brand group already expects a consolidated operating return on sales significantly higher than the 3.6 percent posted for 2022.

Volkswagen

Shell and Volkswagen push ahead the expansion of charging infrastructure: Opening of the first innovative Flexpole charging station

Shell Germany and the Volkswagen Group are jointly driving forward the expansion of the charging infrastructure for electric mobility: On May 4, 2023, the first innovative 150 kW Elli Flexpole charging station was put in operation at a Shell service station in Göttingen. The charging station of the Volkswagen brand Elli has a unique battery storage system that enables connection to a low-voltage grid. Thanks to this new technology, the charging stations can be installed easily and flexibly, and the grid expansion can be accelerated. Following a successful test operation, Shell and Volkswagen also plan to install the Flexpole charging station at other locations in Germany and Europe.

“With VW’s Elli Flexpole charging stations, we can make an important contribution to the necessary expansion of the charging infrastructure. And in locations where it would be otherwise difficult for fast charging. Shell is already one of the largest providers of charging infrastructure at home, at work, at on-street lamp posts and at our service stations. We want to do our part to enable customers to switch to an electric vehicles and thus reduce CO2 emissions in the transport sector,” says Tobias Bahnsen, Head of Shell E-Mobility responsible for Germany, Austria and Switzerland.

Simon Löffler, Chief Commercial Officer at Elli, adds: “The rapid expansion of the charging infrastructure is a prerequisite for the success of e-mobility. We contribute to this journey with our innovations such as the Elli Flexpole. It can be set up almost anywhere without major construction work, making it ideal for quickly setting up fast-charging options. We are pleased to have found a strong partner in Shell who, like us, wants to expand the charging network in Germany and across Europe.”

Accelerated network expansion thanks to innovative Elli Flexpole technology

The German government has set itself the goal of having at least one million charging points available to drivers of electric cars by 2030. According to the Federal Network Agency, the number of charging points rose significantly last year by around 21,000 to a total of over 80,000. Of these, around 67,000 are standard charging points and around 13,000 are fast charging points. A faster expansion of the charging infrastructure is delayed due the need of a special transformers with currently long delivery times. In addition, around 900 German distribution system operators have different requirements for the transformers.

With the Elli Flexpole solution, one of the biggest hurdles of expansion could be overcome. The Flexpole chargers can be connected directly to the low-voltage grid thanks to the integrated battery system, without the need for a special transformer or costly construction work. As a result, the installation time is significantly reduced. At the same time, Flexpole charging stations enable a charging speed of up to 150 kW. Depending on the vehicle, a range of up to 160 kilometres can be charged within 10 minutes.

Shell expands charging network throughout Germany

Shell aims to become a company with net-zero CO2 emissions by 2050. One important strategy component for achieving this ambition is the development of diverse infrastructure for electric vehicles. Cornerstones have been set already few years ago. In 2017, the company bought NewMotion, then Europe’s largest charging provider, which has since been later renamed to Shell Recharge Solutions. In 2019, Shell started building Shell Recharge fast charging stations (HPC) at Shell service stations. In 2021, Shell bought the Berlin-based startup ubitricity, which enables charging at lampposts on the street. Recently, Shell acquired SBRS GmbH, a leading provider of charging infrastructure solutions for commercial electric vehicles. In 2022, Shell opened the first Shell Recharge fast charging stations at the parking lots at REWE and PENNY supermarkets. In addition, Shell has a close cooperation with IONITY, the joint venture of Audi, BMW, Daimler, Ford, Hyundai, Porsche and Volkswagen, to set up fast-charging stations along motorways in European countries.

Worldwide, Shell aims to install over 500,000 charging points by 2025 and 2,500,000 by 2030.

Group Technology: The Volkswagen Group’s technology powerhouse 

Volkswagen Group Technology bundles the Group-wide activities in the areas of battery, charging and e-components and supports the Group brands as an in-house technology supplier along with its subsidiaries PowerCo (battery) and Elli (charging & energy). With the network of the charging and mobility brand Elli, the Group provides access to Europe’s largest charging network for electric mobility. At over 500,000 charging points at around 950 providers in 28 countries, customers receive a convenient and cross-border charging experience.

The Volkswagen Group’s goal is to become the leading provider of an intelligent charging and energy ecosystem. By 2025, a global network of a total of 45,000 high-power charging points (HPC) with an output of up to 350 kW will be established. By the end of 2022, the Group had already connected a total of around 15,000 fast-charging points to the grid with its subsidiaries IONITY, Ewiva and strategic partners BP and Iberdrola in Europe, Electrify America in the USA and CAMS in China. By the end of 2023, around 10,000 HPC charging points are expected to be available in Europe and up to 25,000 worldwide.

Volkswagen

Volkswagen Group makes solid start to fiscal year 2023 with strong increase in revenues and underlying operating profit

The Volkswagen Group made a solid start to fiscal year 2023. Despite the challenging global environment, operating profit before negative valuation effects, mainly from commodity hedging activities saw a strong increase in the first quarter.

Sales revenue grew by 22 percent to EUR 76 billion primarily driven by a recovery in sales volumes in Europe and North America. In addition, improved pricing had a positive effect.

Operating profit before valuation effects from commodity hedging increased by 35 percent to EUR 7.1 billion. The corresponding margin increased to 9.3 percent, and was therefore above the forecast target corridor for the Volkswagen Group of 7.5 to 8.5 percent.

Operating profit decreased year-on-year from EUR 8.3 billion to EUR 5.7 billion due to negative non-cash effects mainly from commodity hedging outside hedge accounting of EUR 1.3 billion in Q1 2023. In the prior-year quarter, operating profit had benefited from positive non-cash effects from commodity hedging of EUR 3.2 billion. Operating return on sales was 7.5 percent in the first quarter.

The Automotive Division generated net cash of EUR 2.2 billion in Q1 2023. Working capital suffered from continuing disruptions in the supply chains increased by EUR 1.9 billion year-on-year. Net cash flow also contained EUR 0.4 billion cash out from M&A transactions in the quarter.

Net liquidity in the automotive business decreased to EUR 38.4 billion, as expected in the first quarter due to the payment of the special dividend- in connection with the Porsche AG IPO. However, this decline was smaller than the special dividend distributed to shareholders.

The Group continued to systematically implement its BEV strategy, with a 42 percent year-on-year increase in deliveries in Q1. Deliveries totaled 141,000 BEV vehicles, representing a share of around 7 percent of total deliveries.

Overall deliveries continued to recover and were up 7.5 percent year-on-year. In March 2023, global deliveries increased significantly by 23.9 percent year-on-year. Deliveries in China fell by 14.5 percent in the first quarter, but the Group is confident that due to the expanded model range and China-specific technology, deliveries in this region will recover during the remainder of the year. With a high order book of 1.8 million vehicles in Western Europe, including 260,000 BEVs, customer demand for Volkswagen Group vehicles remained strong.

Based on the solid figures, Volkswagen Group confirms its outlook for the 2023 fiscal year issued on March 3, 2023.

Arno Antlitz, CFO, Volkswagen Group, said: “Volkswagen Group has made an encouraging start to 2023 with strong growth in revenues and operating profit before negative valuation effects from commodity hedging transactions. Based on this solid performance and an order book of 1.8 million vehicles at the end of Q1, we confirm our financial outlook for 2023.”

“Volkswagen is committed to investing in its global key growth regions. In Q1, we announced plans for a new factory in the US for the iconic Scout brand in the highly attractive rugged SUV and pick-up segment. We also announced the Group’s first overseas battery cell factory in Canada and launched the all-new ID.7 at the Auto Shanghai.”

Continued expansion into the Chinese and North American markets

Led by the “In China, for China” approach, the Group has introduced the new ‘100%TechCo’ project, which combines vehicle and component R&D and procurement. This is expected reduce development times for new products and technologies by around 30 percent. The Group plans to invest EUR 1 billion to establish a new center for innovation for fully connected electric cars, headquartered in Hefei. Volkswagen continues to work with on-ground partners, such as the joint venture between CARIAD and Horizon Robotics, to accelerate the development of automated driving in China and enable faster software development of China-specific technology concepts. The Group also unveiled the ID.7 in China, a further milestone on the path to a purely electric model range.

In North America, the Group is ramping up its global battery business with the Group’s first overseas battery cell factory in Canada. New BEV models like the ID. Buzz will further enlarge our portfolio of full-electric vehicles in the US. The Group is also driving the “Electrify America Boost Plan”, doubling the number of charging points by 2026 to 8.000. By electrifying the iconic “Scout” brand, the Group is entering the highly attractive truck and rugged SUVs segment. Therefore, plans to expand US charging capabilities are complemented by those to build a factory capable of producing 200,000 EVs a year in South Carolina.

Brand Groups Results

In the brand group Volume, vehicle sales increased by 36 percent compared to the prior period, even more than deliveries at 30 percent. Operating profit came in at EUR 1.7 billion. Operating margin increased by 1.7 percentage points to 5.3 percent.

The Premium brand group recorded a solid performance, with an operating profit of EUR 1.8 billion and an operating margin of 10.8 percent. Negative effects from fair value valuation of EUR 0.4 billion impacted operating profit in the first quarter of 2023. Net cash flow was impacted by investments in BEV production capacities and a build-up of working capital.

In Brand Group Sport & Luxury, Porsche’s operating margin remained stable in Q1 at 18.5 percent thanks to higher volumes, improved pricing, and better product mix. The automotive net cash flow is up from solid prior year level.

TRATON

TRATON reported a unit sales increase by 25 percent, with overall sales revenues up 31 percent driven by strong volume growth, positive price-mix effects and vehicle services. Operating margin was 8 percent (4 percent in, Q1 2022) due to better capacity utilization and positive price/mix compensating for higher input costs. Net cash flow recorded a strong increase despite a further build-up of working capital as a result of the improved operating performance and proceeds from the intragroup sale of Scania Finance Russia. Because of the solid start TRATON increased its margin guidance for FY 2023 for return on sales to a range of 7 to 8% (before 6 to 7%).

CARIAD

CARIAD saw sales revenues improve by 53 percent, driven by license revenues with brand groups. Operating profit was stable with EUR -0.4 billion, in addition investments in software platforms were made.

Capital markets day on June 21

On Capital Markets Day, the Volkswagen Group will provide a strategy update. The presentation will focus on the new team, the new entrepreneurial spirit, our strong technology platforms and how our brand groups will benefit from it, our regional strategies and our future financial targets.

Key Figures

Volkswagen Group

Q1

2023

20221

%

Volume Data2 in thousands

Deliveries to customers (units)

2,041

1,898

+ 7.5

Vehicle sales (units)

2,124

1,995

+ 6.5

Production (units)

2,273

2,044

+ 11.2

Employees (on March 31, 2023/Dec. 31, 2022)

676.9

675.8

+ 0.2

Financial Data (IFRSs), € million

Sales revenue

76,198

62,711

+ 21.5

Operating result before special items

5,747

8,458

–32.1

Operating return on sales before special items (%)

7.5

13.5

Special items

0

–130

x

Operating result

5,747

8,328

–31.0

Operating return on sales (%)

7.5

13.3

Earnings before tax

6,453

8,916

–27.6

Return on sales before tax (%)

8.5

14.2

Earnings after tax

4,730

6,743

–29.9

Automotive Division3

Total research and development costs

5,071

4,359

+ 16.3

R&D ratio (%)

8.0

8.5

Cash flows from operating activities

7,576

5,800

+ 30.6

Cash flows from investing activities attributable to operating activities4

5,332

4,309

+ 23.7

of which: capex

2,458

1,703

+ 44.3

capex/sales revenue (%)

3.9

3.3

Net cash flow

2,244

1,491

+ 50.5

Net liquidity at March 31

38,441

31,065

+ 23.7

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

2Volume data including the unconsolidated Chinese joint ventures. These companies are accounted for using the equity method. Prior-year deliveries have been updated to reflect subsequent statistical trends.

2Including allocation of consolidation adjustments between the Automotive and Financial Services divisions.

3Excluding acquisition and disposal of equity investments: Q1 €4,954 (3,848) million.

Key Figures by brand groups and business fields from January 1 to March 31

Vehicle sales

Sales revenue

Operating result

Thousand vehicles/€ million

2023

2022

2023

20221

2023

20221

Volume brand group

1,193

918

33,163

24,361

1,742

877

Premium brand group (Audi)

323

244

16,883

14,282

1,816

3,535

Sport & Luxury brand group (Porsche Automotive2)

85

66

9,333

7,317

1,727

1,359

CARIAD

–

–

168

110

–429

–416

Battery

–

–

0

0

–72

–6

TRATON Commercial Vehicles

85

68

10,938

8,353

875

331

MAN Energy Solutions

–

–

901

761

101

55

Equity-accounted companies in China3

609

765

–

–

–

–

Volkswagen Financial Services

–

–

11,980

10,876

985

1,501

Other4

–171

–67

–7,168

–3,348

–997

1,222

Volkswagen Group before special items

–

–

–

–

5,747

8,458

Special items

–

–

–

–

–

–130

Volkswagen Group

2,124

1,995

76,198

62,711

5,747

8,328

Automotive Division5

2,124

1,995

63,463

51,210

4,583

6,784

of which: Passenger Cars Business Area

2,039

1,927

51,623

42,096

3,611

6,400

Commercial Vehicles Business Area

85

68

10,938

8,353

872

330

Power Engineering Business Area

–

–

901

761

100

54

Financial Services Division

–

–

12,736

11,502

1,164

1,544

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

2Porsche (including Financial Services): sales revenue €10,097 (8,043) million, operating result €1,840 (1,467) million.

3The 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 €625 (824) million.

4In 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.

5Including allocation of consolidation adjustments between the Automotive and Financial Services divisions.