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 transformation 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 in the medium term, from 6.9% in 2022 to around 20% in 2025. 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 calculation 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 production 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 increasingly 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 consolidated 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 management of the Group and in Group planning, please refer to the sections entitled “Goals and Strategies” and “Sustainable Value Enhancement” in the group management report.