Operator: The conference is now being recorded. Hello, ladies and gentlemen, and welcome to the Investor and Analyst Conference Call of Volkswagen AG. At this time, all participants have been on a listen-only mode. The floor will be open for questions, following the presentation. Let me now turn the floor over to Rolf Woller.

Rolf Woller: Thank you very much. Good morning, good afternoon, or good evening everyone from wherever you have dialed in, and a warm welcome to the Volkswagen Group Investor Relations and Analyst Call 2024. With me today, we have Oliver Blume, our CEO; and Arno Antlitz, our CFO, COO. The presentation is structured in three parts. First, Ollie will provide a brief overview and highlight the key strategic milestones achieved in 2024.

And he will be followed by Arno, who will guide us through the financials of 2024, and provide us with the financial outlook for 2025. Finally, Ollie will provide us with a strategic outlook for 2025, before we enter the Q&A session. Before we start, let me provide a few remarks. You should have received the press release, the annual report, and other related material. All of which were published early this morning.

If you haven't received them, you can find all related documents on our website. In case of any issues, give us a call or drop us an email. And, we will send them straight to you. As a reminder and as always, the safe harbor language and other cautionary statements are on page two of our presentation which will govern today's presentation. I would like to encourage you to read the disclaimer carefully and in full, since all forward-looking statements are qualified by this language.

In order to maximize the time we have for the presentation and the Q&A, I will not read it aloud to you. And with that, and any further ado, I hand over to Ollie. Ollie, the floor is yours.

Oliver Blume: Thank you, Rolf. And also from my side, a warm welcome to everyone on the call after our annual media conference we have held in Wolfsburg, our headquarter.

2024 was the year of major strategic decisions for Volkswagen Group, and all this in a rapidly changing environment. We have faced weak demands in Europe, rising trade barriers, challenging industrial framework conditions in our domestic market, fierce price competition, especially in China; and at the same time, the need to invest powerfully in the future. Volkswagen Group has not allowed those to slow it down. On the contrary, we have set a decisive course for 2024. And we drove change forward sustainably along our group wide Top 10 program and even gone further.

In 2024, we have achieved the goals we set ourselves. Let us have a look on some of our key achievements in the last year. 2024 marked a year with a comprehensive model offensive. We have been renewing our main volume models from Volkswagen, Skoda CUPRA, and many highlights from Audi and Porsche. In total, we launched more than 30 new models to the markets across our group.

We have sharpened the designs, once again emphasized our brand identities, and measurably improved the quality of our products and services well received in the markets. And we are rewarded with the great feedback beside of our customers also from the trade press. This proves we are right on track. In China, our new strategy makes us fit for the opportunities and the challenges in the world's large car market and much more competitive. With new strong regional tech partners along the key differentiating technologies, the launch of our innovation hub in Hefei, accelerating development time to China speed, reworked cost structures allowing us to match local competition, and new product strategy fully tailored to our Chinese customers.

Unlike many other manufacturers, we continue to earn money in China thanks to our strong position in the combustion engine business, an important factor in the most competitive and agile market. This allows us to continue to invest in new models and technologies, and enhance our competitiveness. North America remains key to the Volkswagen Group's growth strategy. With our investments in the region and in strategic partnerships, we are sending a clear signal for our ambition to grow in new market segments in this region. The revival of heritage brand Scout allows us to enter the attractive pickup and rugged SUV business with highly flexible drivetrain options.

Meanwhile, we have received almost 80,000 orders with prepayments. In 2024, we reached major milestones for global software strategy. We have realigned our software activities and strengthened the team with new partners. Together with Xpeng for China and our new OS partner, Rivian, for the other regions of the world, we are developing the electronic architectures and software solutions of the automotive future. Cariad will focus on the further developed and central digital services, autonomous driving, infotainment, cloud services and data processing and back end solutions.

In collaboration with Cariad, we are also putting the responsibility and control over the software where it belongs with our brands. Last but not definitely not least, the future Volkswagen agreement is a foundation for an economically success future of our German operations and Volkswagen AG in particular, a milestone in rebuilding competitive and future proof structures in the long-term. Reducing overcapacities in Germany, lowering labor costs, enhancing productivity and achieving competitive plant cost, these are the cornerstones of the agreement. Adherence to the agreed productivity targets is reviewed quarterly. This is how we ensure that the agreements made are met.

Negotiations were tough, but we achieved a fair result and effective for our medium term strategic targets. Arno will provide more details later in the presentation. Despite considerable challenges and restructuring work, we were able to achieve almost €325 billion in group revenue and €19.5 billion in operating profits. These are solid results in a challenging global environment. The fact that we have achieved them in the face of restructuring with considerable cost headwinds proves our resilience and our will to shape the future.

With our robust balance sheet and net liquidity, we are well prepared for the New Year. This financial stability gives us a necessary leeway to continue investing in the future and pursue our strategic goals. Based on these results, we propose a dividend of €6.36 per preference share to the Annual General Meeting in May. This corresponds to a payout of 30% of net profit. Our product renewal is starting to pay off.

With a re-launch of more than 30 models across all brands, we closed 2024 with a strong 2.5 million deliveries in the fourth quarter. Nine million vehicles delivered means that we kept our global market share. Incoming orders in Western Europe increased in the fourth quarter by around 128,000 units and stood at around 800,000 units. Incoming orders in December once again accelerated significantly compared to the previous year and increased by almost 90,000 vehicles. Incoming orders from '24 as a whole were therefore, a good 16% up to the previous year, mainly because of our attractive new product range, which is becoming increasingly available to the market.

At the end of December, the order backlog in Europe stood at a very healthy level of around 850,000 units. Deliveries in Europe were stable and Volkswagen Group remains the market leader for both combustion engines and electric vehicles. The increase in deliveries of electric vehicles, in particular, had a positive impact in the final quarter, which were almost 20% higher than in the same quarter of the previous year. Our activities in North America recorded strong growth of 6%, with the Volkswagen brand even growing by 18% in the region. This is an important first step towards a more robust global presence and an excellent result from our team there.

All in, we almost compensated for the communicated and anticipated decline of sales in China in an intense competitive environment. Despite the weakness of the German electric vehicle market, we kept our share of battery electric vehicles stable in 2024. In total, we delivered 745,000 battery electric vehicles to customers worldwide in '24, about 3% less than 23%. In addition, plug in hybrid sales were up by 5% to 270,000 units. And we expect strong growth in '25 to a battery electric vehicle share of 10% to 14% globally.

Key drivers will be the latest successful product launches, including the ID.7 Tourer, the entry level of Skoda ELROQ as well as the premium and luxury segment vehicles, Porsche Macan and Audi Q6 e-tron. Not to forget the all new Audi A6 e-tron. Our upgraded model line is very well received in the markets, as evidenced by the latest order intake in Western Europe, which is up by almost 50% year-to-date. Battery electric vehicles represent more than 20% of our European order book. All over, we got off to a promising start towards a full-year target.

And after the first two months, our battery electric vehicle share in Western Europe has been increasing to more than 18%, strongly up from 9% in quarter one in '24. It has doubled. I would now like to hand over to Arno for a detailed analysis of our financial performance.

Arno Antlitz: Yes. Thank you, Oliver and good morning to everyone from my side, too.

Ladies and gentlemen, in 2024, we took important strategic decisions and achieved important strategic milestones. With the progress we have made, we have consistently driven forward the transformation of our company and laid the foundations for making the Volkswagen Group even more competitive and financially robust. I would like to thank all employees who have contributed to the success. The market environment in 2024 was truly challenging. Against that backdrop, we delivered a decent overall result.

Vehicle sales in 2024 totaled 9 million units, 3% below the previous year's figure. Excluding our joint venture activities in China, sales were on par with the previous year at 6.3 million vehicles. Sales revenue rose by 1% to around €325 billion, operating profit fell by 15% to €19.1 billion. The corresponding operating margin was 5.9%. Operating result was burdened by costs for the ongoing renewal of our product range in an increase of fixed costs and considerable restructuring expenses totaling about €3 billion.

Non-operating items in total, including positives, had a negative impact of €2.6 billion on earnings. Before these one offs, we achieved an operating result of €21.7 billion and a margin of 6.7%. Profit after tax was 31% lower and came in at €12.4 billion. This was due to a significant decline in the financial result, which was driven by a lower equity result of our Chinese joint ventures. In addition, we wrote down the remaining net carrying amounts of the equity investment and the loan receivables from Northwold after the opening of the creditor protection proceedings.

In this basis, we propose a dividend of €6.36 per preferred share and €6.30 per ordinary share to the Annual General Meeting. The dividend proposal is 30% lower year-on-year and corresponds to a payout ratio of around 30%. This is in line with our communicated dividend policy and a clear sign that our shareholders can rely on what we promise also in demanding times. [Technical difficulty]

Operator: [Operator Instructions] The conference is now being recorded.

Arno Antlitz: We have therefore launched extensive initiatives across all brand groups and brands to increase efficiency and productivity and to establish competitive cost structures, which I will discuss later.

Within the passenger car segment, the Brand Group Core recorded a slight sales growth of 2% to €140 billion. The operating result came in at €7 billion, 4% below the previous year. The margin of Brand Group cost stood at 5%. Margin of brand Volkswagen came in at 2.9%, again underlying the urgent need for restructuring. Skoda achieved an impressive 8.3%, showing what can be achieved based on Volkswagen Group platforms at a competitive cost base.

Sales revenue for Brand Group Progressive was 8% below the previous year's level, operating profit fell to €3.9 billion, corresponding to a margin of 6.0%. This was largely due to the announced phasing out of production at the plant in Brussels and residual value effects of minus €0.7 billion. Adjusted for these two effects of margin would have been at a solid level of over 9%. The Brand Group Sport Luxury closed the financial year with an operating margin of 14.5%, a 4.1% below the previous year's figure. We made significant progress in restructuring the Volkswagen brand with future Volkswagen agreement, which consists of three components, a new wage agreement, structural measures to reduce overcapacity in Germany and the reduction of the workforce at the German sites.

An important component is the new collective wage agreement for the Volkswagen AG companies with the following core elements. The collective agreed wage increase of more than 5% over 2025 and 2026 will be suspended until 2030. With effect from '27 onwards, a new remuneration system with an overall 6% reduction in the collectively agreed salary will come into force. Overall, it means that the increase in personnel expenses set out in our planning will be curbed by a total of around €1.5 billion. The agreement also provides for an adjustment of technical production capacity in Germany.

Overall technical capacity will be reduced by around 730,000 units by 2029. Initial effects are expected from the discontinuation of production in Dresden in 2026 and Osnabruck in mid-2027, as well as the relocation of the Golf to Puebla. With the reduction from four to two lines in Wolfsburg and one line in Zwickau, major steps will follow until 2028. Clear targets and milestones have been set for each plant to improve productivity and factory costs, and these are reviewed on a quarterly basis. The bundle of measures is complemented by the necessary reduction of workforce at Volkswagen's German sites by 35,000 until 2030, of which around 30,000 will be at Volkswagen AG.

Around two-thirds of these are expected to be achieved by utilizing a demographic curve, which is through retirement and early retirement schemes. The reduction of more than half of these jobs has already been contractually agreed. The hiring freeze remains in place. Ladies and gentlemen, the future Volkswagen agreement provides a decisive prerequisite for making Volkswagen AG and its businesses in Germany competitive and profitable on a sustainable basis. However, the agreement we reached just before Christmas marks not the end of this process.

It's just the beginning of it. The real work starts now. Only by consistently implementing the agreed bundles of measures over the course of the next five years, Volkswagen AG will realize the necessary net cost effects of over €4 billion in the medium term. CARIAD recorded a significant increase in license income due to its business model and the successful launch of the 1.2 software. Sales rose accordingly by 23% to around €1.3 billion.

At €2.4 billion, the operating loss was nevertheless roughly on par with previous year. The reported net cash flow was minus €2.5 billion and as in the previous year carried benefited from an intra group tax refund totaling €1.1 billion. The earnings performance of our battery business was characterized by the ongoing ramp-up of production capacities, particularly in Salzgitter and Valencia. This, together with some restructuring burden, led to a significant increase in the operating loss to minus €1.1 billion. In conjunction with the increased investment volume, this resulted in a negative net cash flow of €1.9 billion.

TRATON continued its positive momentum. Sales revenue were up 1% and benefited from positive market and product mix as well as better unit price realization despite a slight decrease in unit sales. TRATON again delivered a strong profitability of 9.1% driven by increased ARPU and an improved cost structure. Net cash flow at €2.5 billion reflects this improved operating performance and has helped to deliver further. Overall, we are very pleased with the TRATON performance.

We are fully aware that the low free float of the TRATON share is an obstacle for many investors to invest and we continue to be open for a next step to increase the free float at the right time. It goes without saying that Volkswagen will remain a responsible and committed shareholder and will continue to hold 25% plus one share over the medium term. Volkswagen Group Mobility recorded a slight increase in contract volume of 3% in the financial year. As expected, the operating result in the financial service division fell to around €3.1 billion despite higher volumes in 2024. The continued normalization of used car prices, an inverted yield curve and an increase in risk costs had a negative impact on earnings.

In addition, the division recorded a negative valuation effect of around €200 million from the deconsolidation of VW Bank Russia. Expenditures on CapEx and R&D in the automotive division increased by around 5% overall to €37.9 billion in 2024. This corresponds to 14.3% of the division sales revenue and is at the upper end of the forecasted range. The upfront investments remain at a high level due to the considerable upfront expenditures in the battery and software divisions and the implementation of our regional strategies. We continue to assume that capital expenditure will have peaked in 2024.

We expect a decline in the 2025 financial year, which should continue in subsequent years. In the 2025 to 2029 planning round, we expect investment spend to total €165 billion, €15 billion less than the prior year 2024 to 2028 planning round. We aim to achieve this by consistently utilizing synergies in the group and within the brand groups, more efficient R&D processes and structures as well as facts from the joint venture with Rivian. Adjustments to the reporting logic from January 2025 onwards will lead among other things to a more precise disclosure of the automotive division sales revenue. In mathematical terms, this will lead to a lower investment ratio, namely by 130 basis points to 13% in the financial year 2024.

Based on the adjusted reporting logic, we expect the investment ratio in the automotive division to reduce to between 12% and 30% in 2025 and around to 10% in 2027. As expected, the proportionate operating result of our joint ventures activities in China came in at €1.7 billion in the 2024 financial year. In a highly competitive market environment, we found a healthy compromise between profitability and volume. As a result, deliveries in China fell by 10% and market share by 2 percentage points. Earnings were also negatively impacted by high expenses in connection with the expansion of our local development activities and upfront expenditures for the upcoming renewal of the model portfolio.

Over the next two years, we will be focusing on the development and market launch of new local models that we expect to be absolutely competitive in terms of design, technology and cost. Against this backdrop, we expect earnings in China to decline this year again between €0.5 billion and a €1 billion before stabilizing from the end of 2025 onwards and showing a clearly positive trend in the coming years. This brings me to the financial outlook for 2025 financial year. We expect a significant tailwind from our revamped model portfolio of fascinating cars and a slightly positive volume trend in the markets outside China. We expect the implementation of future Volkswagen and continued cost discipline to have a significant positive impact on the cost side.

On the other hand, the expansion of BEV volumes, particularly in Europe, as well as the ramp-up cost of the new models and our battery activities will have a negative impact on our earnings in 2025. Overall, we expect the Volkswagen Group sales revenue to increase by up to 5%. The operating return on sales is expected to be in the range between 5.5% and 6.5% with a clearly weaker Q1 in terms of margin and subsequently cash flow. This outlook does not include possible effects from introduction of or adjustment of tariffs, rate tariffs, any relaxation in the CO2 regulation in Europe or additional provisions in connection with further restructuring measures in the group. Investment ratio in the automotive division is expected to be in the range of 12% to 13%.

Automotive net cash flow should be in the range of €2 billion to €5 billion euro. This includes cash outs of around €2 billion in connection with the implementation of restructuring measures. And we expect net liquidity to be in the range of €34 billion to €37 billion. Ladies and gentlemen, we cannot be entirely satisfied with this financial outlook. It reflects the current challenges in the global economy and the industry that is in the midst of a fundamental transformation.

We need to keep up our combustion vehicles technology -- technologically competitive while investing in exciting electric models and software solutions. In order to be able to achieve this, it's crucial to continue to offer highly attractive vehicles to our customers and at the same time consistently reduce costs and increase profitability. This is exactly what we are focusing on in the coming months and years. Thank you very much so far. And with that, I hand it back to Oliver.

Oliver Blume: Yes. Thank you very much, Arno. Then I will take over once again for a quick outlook. These solid results promise strong basis for our year '25. 2025 will be the year in which the new power of Volkswagen Group becomes tangible.

Because we have brought our company back into competitive shape in '23 and '24, we can now play our strengths again. For the year '25, we have once again set ourselves an ambitious top 10 program with clear responsibilities and full transparency. '25 is all about consistent cost management, attractive products and strengthening our presence in China and North America. We will make attractive offers over the entire life cycle of our cars. We will make our software strategy and our vehicle architecture even more resilient and continue to drive forward digitalization.

We are focusing on the implementation of a holistic battery strategy. And most importantly, we will do all this with a strong team and that will make especially the difference. Our product offensive continues in '25. Around 30 new models will be launched worldwide across all brands in all segments. We will be playing to our strengths, our products, fascinating vehicles with which we want to position ourselves at the forefront of the competition.

Our customers can look forward to the new T-Roc from Volkswagen, the new Audi Q3, the Lamborghini Temerario, high emotional 911 derivatives from Porsche and many more inspiring vehicles. And we very much look forward to this year's IAA in Munich, where we will present our new urban electric car family, our entry BEV models from Volkswagen, Skoda and Cupra. We are convinced that the future of mobility is electric, but we recognize that regions are adapting at different speeds and we respect these wishes of our customers. Our brand portfolio across all drive variants has an answer to every customer demand and vision in all regions. This flexibility is key to our success.

Where it makes sense, we supplement our combustion engines with plug in hybrids. It can also be an option to combine electric cars as a range extender. In China, we are already seeing that vehicles with this technology are in high demand. Another proof point is a strong demand for the range extender version of Scout in the U.S. We will enter the market with range extenders in Volkswagen Group models from 2026.

This gives us strategic leeway. In April, we will once again be a central part of The Shanghai Auto Show. At the Group Media Night, our brands will present their strong local product innovation for the world's largest automotive market. Important proof points for the stringent execution of our in China for China strategy is catching up in decisive technology fields like automated driving, enhancing speed and reducing cost and most importantly, launch our new product, offensive which will reach its full force in '26 and '27, all crucial milestones on our way to achieve a leading position in the era of intelligent connected vehicles. Ladies and gentlemen, let me wrap it up at the end.

In a demanding environment, we have delivered solid financial results even as we navigate significant restructuring costs. We have taken key decisions with our software strategy, our in China, for China approach and with the future Volkswagen agreement. Further, we achieved important strategic milestones that will shape our future success. Our unparalleled model offensive in '24 will continue into '25, showcasing the new power of the Volkswagen Group. We are placing a specific focus on costs and investment discipline to ensure sustainable profitability, growth and competitiveness.

For the full-year, we expect a robust financial performance underpinned by our competitive product portfolio and improved supply situation. With that, let's start to the Q&A session, and over to Rolf again. A -

Rolf Woller: Thank you, Ollie. Thank you, Arno, for this comprehensive overview. We will proceed now with the Q&A.

[Operator Instructions] With that, we start with Tim Rokossa from Deutsche Bank. Tim, please go ahead.

Tim Rokossa: Thank you very much, Rolf. I seem to have hit the right combination on the keyboard. I have two questions.

One probably to you, Ollie, you are now in your third full-year as a CEO, you addressed your priorities very strategically. You did products, partners, costs. Is it fair to assume that execution is next, or are there other main priorities that you have to work through? And if it is execution, traditional on the cost side, rather weakness of VW, how do you make sure this time that is actually working beyond just a strong team that I know you care very much about, Ollie, but rather thinking about progress updates and consequences if those progress updates are not really fulfilling what you had expected them to do? And secondly, probably to you, Arno, I think if I want to pick out two aspects that stood out of a very strong result this morning, it would, (a), be the free cash flow guide for '25. Can we get some thoughts on why that is not improving earlier already? I know you're very much focused on that. And (b), the fact that you're seeing a stronger start into the year in Q1.

Why is that? And will this require a very strong H2 bound, or would Q2 already be something that is perhaps within the margin corridor? Thank you.

Oliver Blume: Yes, Tim, may I start with your question and take the opportunity for a quick review. I'm looking back now to 2.5 very challenging years in Volkswagen Group. And I think we have closed many construction sites. We have driven a huge restructuring process during the last two years.

And now I think it's up to accelerate on this basis. We are full in plan with our programs and in many cases quicker than expected. And as you know, we have a lot of achievements during the last two years, having sharpened our structures, organizations and management teams, for example, the products in terms of product strategy, improved design, the concepts of our cars and the quality with very positive feedback from our customers and also from familiar winning awards. Then with the product offensive bringing more discipline to the brands and fulfilling the timing of our start of production. Then the restructuring process in Cariad, which led to the new software platforms we were able to deliver last year with Porsche and Audi.

We have built a software strategy also with our partners in China, Xpeng; and Rivian in the U.S. Then our new China strategy, which is paying off step-by-step, and I'm very happy about the progress there, also with our partnerships, Xpeng, Horizon Robotics, Thundersoft in terms of infotainment. The North American strategy with Scout well accepted. The new platforms we have designed and also a further advanced hybrid strategy. And then, last but not least, for example, the performance programs we have implemented.

And the performance programs we are driving now since two years, we will continue to do so, led us to a profit margin of 5.9% before restructuring costs and after, as Arno mentioned, we would have been in 6.7%. I think that's solid. I think we can improve furthermore with our base we do have. But looking at the headwinds we do have in China, pricing competition or the investments in the transformation and hedging in between the drivetrains, I think that tells the truth about our profit margin. I think looking to the future now, it's all about to have a clear plan and you know how I am working.

And for me, consequences is core. And we do it short term, mid-term, long-term. And we continue with the top 10 plan and having now connected the top 10 plan with a long-term strategy, The top 10 yearly programs will be to execute the long-term strategy, which is carefully worked out with all entities of the group. What brings us what are we expecting in 2025? Overall, further improve our products, bringing over 30 new products again to our customers and overall costs. Now, what we are mentioning right now is that we are perfectly prepared on the product side.

And when we would be able to reduce our costs, I think we won't be unbeatable. That's up to us now. We have it in our hands. And to your last part of the question is we do continuously reviewing our status, a reality check, and we have the opportunity to readjust and that's part of the contract we have closed in Volkswagen and Audi and also in Porsche. So, I'm very, very confident.

And as you know, it was just a consequence. We are driving our programs. This will be the main part and this year bringing us in a better cost positioning. And then, we are counting on our product momentum.

Arno Antlitz: Yes, Tim.

Two questions for me. Free cash flow guidance, not improving yet. There are some technical effects. We expected €2 billion restructuring outflow of cash flow in 2025 from the measures decided on in 2024. Yes, we expect the investment to have peaked in 2024, but still on a high level in 2025.

I'll come to that in a minute. And also, as you know, the proportion opposite result of today is a Chinese dividend of tomorrow, and this is part of the cash flow. So, it's also less about €1 billion of what we saw on less Chinese proportion operative result. And that obviously will have also an effect on 2025 on the cash flow. But the main effect is really, as you said, we are really focused on cash flow, on working capital management.

We achieved quite a good fourth quarter. As you can see, the teams did really a great job there. And the cash flow should improve towards 2027 as guided before. Why is that the case? Because we continue to guide for a reduction in anti-CapEx combined 2027 10%, and this should then drive our cash conversion rate and eventually also cash flow for 2027. So, we are basically online on that path.

And weaker Q1, yes, the main effect is really, I would say overall a positive one. We expect a significant step up in the BEV mix. We looked at first quarter 2024 was about, I think 8% or 9% and we expect an 18% BEV mix in Q1. And that BEV mix is already shown also in our order intake. We need that to achieve our overall improvement on the BEV mix worldwide.

And the figures I just gave you were Europe, Western Europe, and they weigh heavily on our margin. As you know, the BEVs are still margin dilutive. They improve over the time. First car with margin parity might be the ID.2 in 2026, but for the time being, the BEV mix is margin dilutive. And so, that has a significant effect.

And there are smaller effects like significant ramp up costs. I think Oliver mentioned, 30 new models coming up in 2025. And there's also a muted start in China for the one or the other brands. But the real reason for muted start is really a step up in the best mix quarter-over-quarter by basically doubling it.

Rolf Woller: Thank you, Arno.

And we continue with Mike Tyndall from HSBC. Mike?

Michael Tyndall: Yes. Hi, Mike Tyndall. Just a couple of questions, if I can, Arno, if I look at the guide, basically the midpoint is €20 billion of operating profit, which is up €0.5 billion year-on-year. But there were €2.6 billion of one-offs in last year, which in theory don't repeat.

I know that BEV mix is going to be a headwind, but I think previously you'd said it was about €1.5 billion. So, I guess the question to me is, what are the other headwinds there that kind of holding things back? And then the second question just around pricing development in Q4 that was positive, it's certainly a surprise to me. I assume that's related to the new model cadence. How sustainable is that going through 2025 in terms of should we be expecting continued positive price in 2025? Thanks.

Arno Antlitz: Yes, looking to 2025, I mean, if you want to go through a virtual EBIT bridge, I don't want to be too precise there.

But, basically, we expect volume price mix more or less to be stable. But that means that we have to fully compensate in this bucket volume price mix for the basically 50% increase in BV share, in BV mix in 2025, which I said they are margin dilutive. And the step up in Europe is even higher. We come from 13% something. We have to significantly step up more towards 20 or beyond.

And so, this we have to compensate with the great new models which are much better in pricing. Obviously, for example, look at Audi. They had a run out of some models, which were nearly eight, nine years in the market, and they bring great new models. So, this is one effect. We shouldn't expect too much from forex because we are basically hedged.

We increased the hedge accounting. So, most of the commodity hedges on the hedge accounting, we shouldn't expect too much on the product cost side. And on the fixed cost side, there were several effects. First and foremost, we significantly want to drive down fixed cost. But since we did have quite some amortization in the last years, we should expect some higher depreciation on that bucket.

And so, that basically explains the EBIT bridge and the expectation of the €20 billion you just mentioned for 2025.

Michael Tyndall: Got it. Thank you.

Arno Antlitz: In terms of brands, look, the one thing is EBIT bridge; the other one is brands. I think you're aware of the guidance of Porsche.

So, this is obviously also included in this discussion.

Rolf Woller: Thanks, Mike. And we move on to the next question which comes from George from Goldman Sachs. Please go ahead.

George Galliers: Yes, good morning, and thank you for taking my question.

The first question I wanted to start with was just with respect to the European CO2 regulation. Oliver, obviously, you were at the meetings last week. And, there was a proposed amendment to take the average performance over three years. Do you believe this will be passed and adopted, given you haven't assumed any changes to the regulations in your guidance? And then, when it comes to the regulation review with respect to 2030 and 2035, would Volkswagen support greater technology flexibility with respect to the 2035 requirements? And if yes, what's the principal reason for wanting increased flexibility from your perspective? Then the second one, just to follow up on Mike's question with respect to 2025, in your outlook, Arno, you do mention several items which I think perhaps will be more 2025 phenomenons than long-term phenomenons, including new model launch costs, battery ramp-up costs, costs related to execution of Scout, and expansion of the consolidated Chinese activities. Are you able to give us any rough numbers around these various items in order to help us perhaps understand what's going on with the underlying possibilities in the business? Thank you.

Oliver Blume: Hi, George. Ollie speaking. To your first question about the regulations, I feel very positive after our last meeting on Monday, two weeks ago. And, we have had several bilateral meetings before with Mrs. von der Leyen, but also with the commissioners.

And now positive is that they are open to make a reality check on the ramp-up of electromobility during the last years. And it's slower than expected, but they have taken the decision for the CO2 regulations. And so, the proposal of Mrs. von der Leyen to make a phase-in for 2025 is positive. It gives us more flexibility.

In 2025, our expectation was around €1.5 billion of penalties. Behind this, we have had a program with incentives and so on to drop it down. But we think that we wouldn't have been able to achieve the target. And now we have a three-year perspective for the phase-in. We will continue to push electromobility.

That's very clear. But now there's the opportunity to hit the expectations. So, this is positive. We also agreed a continued discussion on how to enter in 2030 and 2035. And there, from my point of view, it's also possible that we will achieve at the end a kind of more flexibility and a phase-in also for this milestone and continuously viewing on checkpoints how electromobility will develop.

Beside of this, there is also a program announced to support the framework conditions for electromobility, means charging infrastructure, energy pricing, but also support for entry cars like social leasing or tax models in the different states of the EU. So, that's positive. Adapting our mix, I think there's a need to adapt our mix in between combustion, hybrids, and fully electric cars, giving us more flexibility. We know we have hedging costs, but at the end, that's more robustness. And in the result of 2024, they are already included a part of the hedging costs and compensated in between the margin.

But I think it's important to prepare ourselves for different speeds in different regions of the world. And since it's not only Europe, we have all the other regions of the world. And so, it's obvious to do so. Yes. And so, I think we will stay very close in the discussions with the EU, but also with other regions of the world.

And then, I hand over to Arno.

Arno Antlitz: George, to give you a rough idea, I talked about the step-up of overhead costs 2023 to 2024. So, the full-year effect of 2024 for Battery Scout and China, 100% in our results, basically Anhui and the VCTC, so the local R&D operation in China, was about 600 million to 800 million. I refer to these specific three because we are ramping up here three, I would say, business elements or businesses, Battery Scout and Anhui China, which don't have sales and turnover so far. So, they really weigh on our operative result in terms of ramp-up of cost.

And this effect will continue for a certain extent also in 2025. We will see the first, I would say, ramp-up of battery in Salzgitter in 2025, but obviously no significant sales. And also Scout will kick in later in 2027 with sales. This is an example of how the ramp up of this new business weigh on our results going forward.

George Galliers: Thank you very much.

Rolf Woller: Thanks, George. And we move on to the next question, which comes from Patrick Hummel from UBS. Patrick?

Patrick Hummel: Yes, thanks, Rolf. Good morning, Ollie. Good morning, Arno.

Two questions, please. First one, it's very encouraging to see your five-year plan cut by €15 billion. And I'm just wondering if and when you start delivering on the actual reduction in investments, the 30% dividend target payout is not going to be enough to avoid a further accumulation of cash on your balance sheet. And I'm just wondering if you can share your thoughts, what you intend to do here in the medium term. Will that result in a higher payout ratio? Or are you looking at other ways to return cash to shareholders? And my second question in regards to the '25 guidance, point taken that you exclude the CO2 relaxation and potential U.S.

tariffs and potential restructuring, I guess we're talking about Audi here and their negotiations. Could you just give us a feel for the magnitude of those items? Maybe Audi is difficult to quantify. But I guess you do have an idea. And other companies do so too. What potential U.S.

tariffs would mean in terms of OP impact and also the CO2 relaxation, to which extent that changes the 1.5 billion headwinds that you guided in the pre-close call? Thank you.

Arno Antlitz: Yes, Patrick, two interesting questions; first and foremost, if we discuss going forward, first and foremost, I would say let's achieve what we promised. The reduction of R&D CapEx combined to 10%, that obviously will then drive a cash conversion rate and hopefully accumulate then over time net liquidity, which is a very important measure for us, both in terms of stability but also in terms of rating. And we have a clear target there as well. And obviously, it's early to discuss what's happening then with that, hopefully then by then accumulated net liquidity.

But for the time being, we really concentrate on delivering on our plan in order to achieve what we promised before. Payout range of 30% is something what we promised. And so, yes, this is where we stand today. And I would say let's have this discussion in one or two years' time. And we can revisit that.

2025 guidance, we don't really explicitly don't want a guide on the potential impact of tariffs, much too early to say. It's also too early to expect what our competitors will react, whether tariffs will come at all. So, this is really too early. And on the CO2, we gave you an indication of the burden of about $1.5 billion in 2025. And now with that new regime, it's obviously we have three years' time.

So, we work first and foremost towards bringing down this $1.5 billion. In 2025, we have Rivian excellent order intake of electric cars, great, great cars hitting the showroom, ID.7, order intake ID.7 on par with Passat. So, these are some very encouraging news. And then, obviously, you're aware that we have three years' time to balance. And what we then try to achieve is basically bring it down in 2025, then neutralize it in 2026 and have a positive balance in 2027.

But also, this is too early to give you an indication of where we will end up in 2025. It also depends on how 2025 will work out. But again, we are very pleased with the order intake on BEV, specifically in January and February so far. So, this is where we stand.

Patrick Hummel: Great, thank you.

Can I just clarify one little thing when you referred to the investments in 2027? And by the way, also for the Volkswagen brand margin goal, what is the underlying top-line assumption for 2027 here? Is that roughly on par with 2025 or do you factor in some additional revenue growth just to square the numbers? Thank you.

Arno Antlitz: Patrick, we've got it for 0% to 5% in 2025. And we don't rule out the small growth until 2027. But again, this is also too early. We want to give you an update, Patrick, on the EIR in Frankfurt, where we revisit these 2027 and 2030 targets.

And so, perhaps we can wait until then and then be given more specific guidance.

Patrick Hummel: Sounds good. Thanks.

Rolf Woller: Thank you, Patrick. And we move on to the next question, which comes from Stuart Pearson from BNP.

Stuart?

Stuart Pearson: Yes, thanks, Rolf. Good morning. So, just following up on the European action plan, aside from the CO2 reprieve, a couple of the other things spoken about in there was a potential pathway to European-wide subsidies and then also a potential requirement for a JV structure for foreign direct investment in Europe. I just want to get your thoughts on that in terms of the discussions going on in Europe for potential subsidies across Europe. Is that even vaguely feasible in your mind for 2026? Just some thoughts on that.

And also that potential FDI point on joint ventures. Obviously, SIKE have not put any capacity into Europe yet. I think you speak a little bit about it on the media call, but you haven't had any talks with Chinese partners yet. But just in theory, would it be possible still at this stage to perhaps entertain constructing or producing the ID.1 with a Chinese partner in Europe, just hypothetically, I guess. And then, just second point on European pricing overall, just noticing the bridge looks pricing flip positive in Q4.

I just want to get a sense how much of that is down to your product improving and then how much is that just maybe the European markets stabilizing or not, maybe wishful thinking. But we'd love to get your views on just what's happening in the overall European pricing situation, given your comments as well that '25 has started a bit better than expected. Thank you.

Oliver Blume: Yes, Stuart, I would like to take your first question in terms of subsidies. What we discussed two weeks ago in Brussels was not only about the phase in '25.

It was more a holistic approach, what has to be done in Europe to support engineering and industry. And beside of '25, we will continue during the next weeks and months for the phase in 2030 and '35. For the ramp up, it is important to have the right framework. And there, the EU is very open for subsidies in terms of charging infrastructure, financing model for the different states. And there's big need to improve the charging infrastructure on the highways.

In some countries, this is right well. But especially in cities or in the regions, we have to improve. And that was already discussed in Brussels. Beside of this, industry supports, also thinking about how to support to switch from combustion engine plants to battery electric vehicle plants. That is on the table.

And then also to support battery production in Europe to make Europe more independent from other regions of the world is one important topic of the battery boost. And beside of this, also considered what support models for electromobility could be the right approach. What is successfully played in France is the social leading and could be one model, but also specific tax models in the different countries of the EU could be supportive. We will get in contact with the new German government very soon, making their proposals, but also in the EU. So, it's a very, very holistic plan.

And I have a positive view on this and also how the EU with the new commissioners and Mrs. von der Leyen speed up the process with concrete decisions. Quickly to China point of the questions, for the ID.1, we have decided already the plant where we produce the ID.1 and that's in Portugal with a big advantage on the plant cost structure. But in terms of modules, we have on the one hand side a further advanced supplier network in the Iberian Peninsula with Spain and Portugal, having decided also that the ID.2 family will be produced in Spain. We have the battery plant in Valencia.

But in terms of single modules for this car, we are including also Chinese suppliers because cost is the main important point, being able to achieve the region of a pricing of €20,000. Our business plan is now very well further advanced and that we have a good feeling to pay the cost there. Then I hand over to Arno.

Arno Antlitz: I would like to add on the ID.1 because it's often like also addressed by you. Why are you bringing this product? Are you supporting this product? Will it have a great margin? I want to really build on what Oliver said.

Look, first and foremost, we are Volkswagen. We have a certain responsibility, but this is not the only reason that we want to offer a €20,000 car. There are two other effects. First, it will be very difficult to get it positive, but we have to fight that through and we expect that the learning from that process will significantly benefit also in other projects. As Oliver said, so that will help us achieve cost advantages in higher margin electric cars.

And second, there's always pressure on the lowest car. Look, today, the pricing pressures on the ID.3. Then we bring an ID.2, which is from today's perspective, will be a car with a good margin, but then the pressure will be on the ID.2. It's important for the ID.1. It will take pressure from the ID.2.

It will be the entry car, and it will also help that ID.2 and other electric cars will significantly improve their profitability, and this is why also as CFO, I absolutely support the ID.1.

Oliver Blume: And it's also, to adding one point, an entry model to bring new customers to the group. I personally started with a Beetle, and I'm a lifetime customer for Volkswagen Group, and so it's for the younger generation as well. They're having the opportunity, starting with the ID.1, and then further in lifetime to jumping to other segments.

Arno Antlitz: So you realize Oliver and myself are both enthusiastic about the ID.1, but don't worry.

We have absolutely also the margins inside, and not only for the ID.1, but for the whole electric models we are running in the group. In terms of pricing, there are really several effects. First and foremost, we see now the positive list price increases from the past months coming through in Q4. Second, you mentioned already great new models, specifically also in the volume brand, but also the premium Passat, Tiguan, Golf. So, these new models have better margins, but obviously, and it's not a secret, if you look into the market, there's a negative effect on the BEV side.

So, we had to increase our BEV incentives in order to get to a better order intake. But still, if you take these three elements together, we were still positive in Q4, and as I said before, we are confident that overall price-volume mix we can keep stable in 2025, although we doubled the share of BEVs in Europe, which will be a challenge.

Rolf Woller: Thank you. Encouraging to see that you have the margin inside. I have to have the time inside, and we have another 20 minutes to go, and still five questionnaires here in the line.

So, I want to ask, please, to the gentleman on the line, to limit yourself to one question or maximum two, and then Ollie and Arno will give a brief and crisp answer. Stephen, please continue. Stephen Reitman from Bernstein.

Stephen Reitman: Yes, good morning. Thank you very much.

I have two questions, one shorter term, one maybe longer term. Short term, you mentioned that you had been obviously putting more incentives on BEV, and indeed you did extend the roughly €3,500 extra bonus into Q1 from the end of last year. How would you assess the health of the market and how the reliance of this, and do you think you're going to have to continue this into the second and third quarters? My second question is about development times. You often talk about China speed, particularly as a theme of last year with your presentations in Beijing. But can you tell me, what is your best idea of how much you can reduce development times across the world, particularly in Europe, to get times down? And obviously, that would have a significant impact on the R&D, and that will particularly make much bigger impact on that €165 billion of five-year spending that you've just laid out.

Thank you.

Arno Antlitz: Yes, Stephen, I think some of the part of the question I already answered, and yes, we increased or we continued that special offer, specifically on the ID.3. As I said, there's a lot of pressure always in the entry models. But let's not forget, we have other great models. ID.7 is doing very well.

It's a much better margin than the ID.3. ID.4 is doing well. Audi is ramping up; Q6 e-tron, E6 e-Macan. So, there are a lot of other models in the group that help drive our BEV share in Europe. And as I said before, we want to double the share and still keep volume price mix flat.

So, this is our task for 2025. And the great model -- the models which hit the showroom, are already in the showroom, will help us there.

Oliver Blume: Yes. Stephen, may I come to your second question about China and how we are benefiting from the China speed? What we are mentioning already is that the cooperation with our partners is very fruitful. We're talking about Xpeng, Horizon Robotics, or ThunderSoft and others there.

And our target is to reduce the engineering time of 30% and the cost of 30%. And for me, I'm convinced that we will achieve this and also having positive experience now from the progress from our products. And our Chinese partners, and only to say this, they don't ask how to fulfill the timing, they ask how to speed up. And that is very, very useful. And in the Xpeng project, we were already able to speed up three months more in an very, very tough, tough timing.

And that's also for the whole organization great to transfer this to European engineering. And then, some projects, we are already implementing this reduced engineering times. For example, ID.1 has got a very ambitious engineering time, but other products we have decided already in the group will join this direction. And besides of the reduction we will have in engineering time and engineering costs, the material cost we are working out there and that's a different aspect is a reduction of 40%. And the whole organization, Volkswagen Worldwide is benefiting from these cooperations.

Stephen Reitman: Thank you.

Rolf Woller: Thank you, Stephen. And we move on to Henning Cosman from Barclays. Henning?

Henning Cosman: Yes, thank you. Thanks for taking the question.

Maybe continuing on the China point, I wanted to ask a bit more about the consolidated China so much the JV result. Obviously, as you're localizing more, my understanding is that there's less room for parts and services sales, royalties, licenses. So, if you could just give us a feeling how that's developing in your plans. You've obviously shared now mid-term VW and margin targets. So, it would be great to get a feel for the consolidated China business within that.

And then, second question, similar to the other gentleman trying to reconcile that Slide 30 with the pull to operating margin, I don't know if it's too early and you don't want to comment before Audi's, but I would first share the Audi margin for '25 and VW brand margin for '25 implied in your guidance if it's not too early? Thank you so much.

Oliver Blume: You were difficult to understand, Henning. But the second question was if we could disclose the Volkswagen brand margin target for 2025 and the margin target for Brand Group Progressive, which we'll report in a couple of days from now. I think that would be one for Arno. And the first one was on the China consolidated results, so not the proportionate operating results, but the China consolidated results.

If we could give you a glimpse actually how much how essential they still are for the group's success?

Henning Cosman: That's right. Thank you.

Arno Antlitz: Yes. You're quite right. We don't want to disclose too much because Audi, Brand Group Core and Brand Group Progressive will have their respective calls.

But included in our guidance is a margin of greater 4% of more than 4% for Brand, Volkswagen and 7% to 9% for Audi for Brand Group Progressive, I must say, specifically.

Oliver Blume: And with regards to the consolidated results, yes, we have been always very shy actually in order to disclose the full number. I think when you look at what we have achieved in 2024, yes and what we are targeting in 2025, I think it's very fair to say that we are more and more successfully diversifying from the dependence of China earnings as a whole group.

Henning Cosman: Okay. Thank you.

Rolf Woller: Thanks, Henning. Next question comes from Jose Asumendi from J.P. Morgan. Jose, please go ahead.

Jose Asumendi: Thank you, Rolf.

A couple of questions, please, Ollie, can you comment on your partners, Xpeng and Rivian? What are the 2025 targets you have the teams working on? A little bit more short term, what should we expect from this partnership with Xpeng and Rivian? And then, Arno, can you comment on the dividend we're looking to book in '25 from the Chinese operations? And you mentioned the fixed cost buckets, Anhui, Battery and Scout, these three sort of categories within fixed costs. How do we think about that incremental headwind year-on-year in '25? If you have a number for that, that will be great. Thank you.

Oliver Blume: Yes, Jose, let me start with your first and more technical question. With Xpeng, we are very further advanced.

We are planning to bring two Volkswagen models in '26 to the market. And on the other side, we are developing our own platform together with Xpeng, but it will be an own Volkswagen China platform with China electronic architecture. And there, we are on the final phase in '25, having ready the products in the first-half year of '26. Progress is very positive. We are reviewing also business trips in China, the progress.

And I was very surprised how fast they are moving and also the technical results we are seeing there already. With Rivian, we have built the organization and the team. We are full in plan with ramping up the joint venture. This year is focused on concept work. We have clear proof points this year.

And the first important milestone is to making ready the cars for winter test for the winter '25-'26. And so, everything runs in plan. And it's also, like I mentioned before, with our Chinese partners, they are very inspiring, what we can pick from the cooperation from Rivian, also in terms of speed and clever, clever pragmatic solutions.

Arno Antlitz: Yes, Jose, sorry, we had a small discussion here. No, we talked about dividend and the headwind.

Dividend, we received €2.4 billion obviously in 2024. And looking out to 2025, as you know, we don't guide that exactly. But if you take the reduction on proportion operative result from 2023 to 2024, that will be a good estimate for the Chinese dividends we expect than in 2025, which will be paid out in 2025, as always. So, it's the effect we see one year later. And in terms of headwind, yes, the headwind will continue on Scout Battery and also on Anhui.

But we are not standing still. Look, we had the agreement, Volkswagen Zukunft. We work on reduction on our headcount, and we want to compensate for that as much as possible. And just to give you one figure, Volkswagen AG, we achieved in 2024 already a headcount reduction of 4,000 people due to our hiring freeze. We started at the beginning of the year, and we want to continue to implement Volkswagen Zukunft.

And as said before, yes, these three units, they will increase their overhead costs and fixed costs, but we want to compensate for that as much as possible in the areas where we have started ambitious fixed cost reduction programs and overhead cost reduction programs.

Jose Asumendi: Very helpful. Thank you.

Rolf Woller: Thank you, Jose. And we go on to Daniel Schwarz from Stifel.

Daniel?

Daniel Schwarz: Yes. Thank you for taking my question. The first would be on the net liquidity. Just technical question, the lower end of the cash flow guidance is €2 billion and I think the dividend outflow €3.2 billion in '25. Does the net cash guidance of €34 billion plus include any other inflows, for example, from asset sales or from more hybrid bonds? And the second question would be on the EU regulation process.

When the Commission proposes more flexible targets, does the European Council need to approve such? And is Mrs. von der Leyen very confident to get this through the council and the parliament? Or do you think there is a risk that countries like, for instance, Sweden might not support that because Volvo Cars could have a disadvantage from more flexible targets? Thank you.

Oliver Blume: Yes, Mr. Schwarz, you're quite right. There are some minor inflows, but I mean, as you know, we can't really discuss that in public.

So, it's too early to mention details. But in line what we promised in Hockenheim, looking at our portfolio, there are some chances, and this is where we stand today.

Daniel Schwarz: The risk of CO2 really flexible targets not taken overall by all member states, Ollie?

Oliver Blume: Yes. The CO2 targets are for all member states. And the discussions before were diverse, but I think now there is a point for a commitment with all member states.

Their approach should go to the European Parliament. That's clear. But the mindset in the discussion we've had two weeks ago was positive. So, there is a good, good opportunity that the anti-parliament will decide positively on this phase in.

Daniel Schwarz: Okay, thank you.

Rolf Woller: Okay. Thank you, Daniel. And we are moving on to Frank [indiscernible].

Unidentified Analyst: Hi, yes, hello. Thanks for taking my question.

The one is on China sales. So, you're expecting €0.5 million to €1 billion operating result. What is your assumption in deliveries here after a 10% minus in '24? Is it again going down in that range? And what are you doing with the capacities here in China? Are you adjusting the capacities? Second question about margin was very, very good here and solid in the fourth quarter, north of 5%. Was it a special item? Or what can we expect for the time to come here?

Arno Antlitz: Yes. I mentioned earlier already, we make deliberate decisions between margin and cash flow on the one side and market share and volume on the other side.

And you should expect another year of potential market share decline. We will give up some more share before reengaging in 2026 when we have all the stuff in place, a much better cost base on our platforms, technology, income and entertainment, all the things Oliver mentioned. From 2026 onwards, we want to reengage. But 2025, you should expect another decline in market share.

Unidentified Analyst: Thank you.

With the SEAT margin, yes. Were there any one-offs included in the fourth quarter in SEAT?

Arno Antlitz: No, we had the tariff, but not one-offs. No, no positive one-offs, yes.

Unidentified Analyst: Okay, thanks.

Rolf Woller: Thank you, Frank.

And the last one here on the line before we move over to another question, which came by email, because the participant couldn't actually dial in. Horst Schneider from Bank of America.

Horst Schneider: The last one, but not the only one. My question, please, first one is on software. Oliver, you said that Rivian is in line with plan at the moment.

Can you remind us what the plan on Rivian is right now? My understanding is that the SSP platform gets launched just in 2029. So, my question is, how can you avoid that the PPE platform, but also the MEP platform gets basically uncompetitive and, for example, peers such as BMW, Mercedes launched their platforms in 2026? So ultimately, will you have before 2029 already some, let's say face lift where you put the Rivian software already in? And in that context also when does Volkswagen have Level 2 plus driving available? And the other one that I have is for Arnold that is on disposal since you have not mentioned a lot about that you said that Trade On the stake is just 75% plus long share in the long run. So, that implies you could sell down Trade On. What does it depend on? And next to Trade On, what are other disposals that we may, should have on the agenda already for 2025? So I'm thinking, for example, about power engineering. Thank you.

Oliver Blume: Yes, Horst. Let me start with software. On the one hand side, the progress we are doing on the existing platforms from Cariad 1.1 and 1.2, they're very promising. And we are working currently on updates. Yesterday, for example, I've had the opportunity to drive the new Cayenne Electric, which is based on the further advanced 1, 1.2.

That's very exciting and what we will be able to offer there. And it's completely competitive. We have a complex architecture behind, but what we can offer to our customers is very positive. For the Rivian joint venture, we have a timing that we want to start with ID.1 already in the Rivian joint venture in '27. And in '28, their platform is joined by products in a higher segment, for example, Scouts, other products from Volkswagen Group.

And in terms of the SSP, there we have different levels of SSP. And some of them are starting earlier, others in '29. But that depends of course, the ramp up of electromobility to having the right timing when we will come with the products. So, in the midterm, we have the updated 1.1, 1.2 for the electric vehicles and then starting in '27 with the first Rivian solution.

Arno Antlitz: Yes.

Also, I really don't want to disappoint you, but I think you understand that I can't go into further details on what I just mentioned on this topic. What I can say is, in line with what we promised on the Capital Markets Day, we look on all the non-automotive assets. The team is in place on PowerCo. We have their investor readiness project started, and we look also in other opportunities.

Horst Schneider: So it's not part of the guidance, but it's possible.

That's the right reading, right?

Arno Antlitz: Correct. That's the right reading.

Rolf Woller: Thank you, Horst. And I read the last question, which comes from Harald Hendriksen. As said, he was not able to dial in.

And the first part is outlook for Cariad and PowerCo losses. When will they breakeven? That would be for Arno and the second part of the question, congrats on these results. For the first time in a long time, it feels like our Plan B is working. Management controlling costs, tech, product plan. What are the key assumptions/risks that Volkswagen has not yet addressed that could pose further risk to the group earnings outlook in 2025 and 2027?

Oliver Blume: Again, I don't want to disappoint anybody.

But look, obviously, we look into the current scenarios and ramp up of battery. And so, what we said is we want to give you a more detailed longer term outlook at the IAA, and we'll promise that we will include breakeven, both EBIT and cash flow breakeven for Cariad and PowerCo. Also in this communication, we want to start at IAA in Frankfurt in Munich.

Rolf Woller: And Ollie, the question what can go wrong in '25 to '27, what is not in the plan?

Oliver Blume: First of all, when we will be able to further reduce our costs, that will be the main driver for a more robust business for Volkswagen. All the other fields in terms of products, technology, we have a very positive feeling.

So, what isn't included, that's the U.S. We don't know how they will approach with tariffs on different levels, Mexico, Canada, but also Europe. I have the hope that will come to a fair agreement in between Europe and the U.S. because the trade volume is not only about goods, it's about digital trade, where the U.S. has got a big part exporting to Europe.

And so, they'd say lever for a fair deal at the end. In terms of Mexico, Canada, the U.S. auto industry is deeply integrated in the supply chain in Mexico and in Canada in terms that could lead at the end also to bit different agreement in between Mexico, Canada and the U.S. That isn't included completely. Then I think the main important point is cost and the milestones we have taken.

And when we will deliver there, I think we are prepared for the future. And I think you could mention also from our presentation that the plan is paying off step-by-step what we introduced. We will further work hard and consequent on all these issues. And so, there is a big opportunity for Volkswagen Group for the future with all these points we have addressed in our performance programs.

Rolf Woller: Super.

Thank you for all these questions, and also, Arno and Ollie for the confidence answers. We are now at the end of the Investor and Analyst Call. If anything was left unanswered, please contact the IR team in Wolfsburg, and on their behalf, thanks for keeping us employed. Next time to meet with us is at a virtual and physical road shows, for example, in London, Paris in the coming weeks. Q1 results will be released on April 30, but before, we look forward to the Auto Shanghai in 2025, which takes place at the end of April, where we'll host an Investor event on April 23 to provide an update on our progress and our strategic initiatives in the markets.

Thank you very much for your numerous participation. We had, in part, 400 participants in the call. And take care. And speak soon. Thank you.