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 period 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 compatibility of our products and services.

CO₂ fleet emissions

We use the strategic indicator of CO₂ fleet emissions in Europe and the United States to evaluate the effectiveness of our measures to reduce CO₂ emissions when driving our vehicles.

The Volkswagen Group’s new passenger car fleet in the EU (EU27+2) (from 2022 including Lamborghini and Bentley) emitted an average of 119 g CO₂/km (Worldwide Harmonized Light Vehicles Test Procedure – WLTP)¹ in the reporting period 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 are expected to be tightened as from 2025 (subject to publication in the EU Official Journal): the European Commission has thus set a target of a 15% reduction in CO₂ emissions, which corresponds to a CO₂ target of less than 105 g CO₂/km for our new passenger car fleet in the EU. A reduction of 55% has been defined for 2030, equivalent to a CO₂ target of less than 55 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.

The Volkswagen Group’s new light commercial vehicles fleet in the EU emitted an average of 193 g CO₂/km (WLTP)¹ in the reporting period according to the statutory measurement bases. The statutory target is 199 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 are expected to be tightened as from 2025 (subject to publication in the EU Official Journal): the European Commission has thus stipulated a 15% reduction of CO₂ emissions, which corresponds to a CO₂ target of less than 184 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 108 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 light commercial vehicle fleets met the statutory requirements for the reporting period. In Switzerland, the Volkswagen Group’s passenger car fleet fell just short of the statutory requirements for the reporting year. The CO₂ pool established together with other manufacturers in the UK achieved its target.

CO₂ EMISSIONS OF THE VOLKSWAGEN GROUP‘S EUROPEAN (EU27+2) NEW PASSENGER CAR FLEET

in grams per kilometer (WLTP)

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 2022) for the passenger car and light commercial vehicle fleets in model year 2022 is 141 g CO₂/km (model year 2021: 146 g CO₂/km). The statutory target is 136 g CO₂/km (model year 2021: 142 g CO₂/km). Application of the statutory flexibility offered by GHG and CAFE together with externally acquired credits enabled the Volkswagen Group to comply with the applicable requirements for model year 2021 subject to confirmation by the authorities. The figure given for model year 2022 is also subject to confirmation 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.

CO₂ EMISSIONS IN VOLKSWAGEN GROUP PASSENGER CARS AND LIGHT COMMERCIAL VEHICLES UNDER GHG STANDARDS IN THE USA

in grams per kilometer for the model year

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. Around one in five new Volkswagen Group vehicles worldwide is therefore to have a purely electric drive already by the year 2025; depending on market development, this could be over two million electric vehicles a year. As part of our electrification campaign, we aim to offer our customers worldwide around 50 completely battery-electric models by 2030. By 2030, the Volkswagen Group aims to have electrified its entire model portfolio, from high-volume models to premium vehicles. This will mean offering at least one electric version – battery electric or hybrid vehicles – of each of our passenger car models across all Group brands. 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 Mechatronics technology 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 potential for cost savings. A first deployment of the SSP platform is currently under appraisal.

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 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. We identify the stages of the life cycle at which improvements will have the greatest effect and develop appropriate solutions. We call this life cycle engineering. Recycling, for example, is an important means of reducing environmental impact and conserving resources. We therefore already take the recyclability of the required materials into consideration when developing new vehicles, use high-quality recycled material and avoid pollutants. One of the recommendations for achieving this goal is avoiding substances on the EU REACH Candidate List of Substances of Very High Concern. 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.