Good day, and welcome to the Volkswagen AG live audio webcast conference call. Today's conference is being recorded, and at this time, I'd like to turn the conference over to Helen Beckermann. Please go ahead, ma'am. Thank you. Ladies and gentlemen, we would like to welcome you to the Volkswagen conference call for investors and analysts on the results of the period January to September, based on our interim report and our press release from this morning. For today's conference, I am delighted once again to have Herbert Diess with us, our CEO, to have Arno Antlitz with us, our CFO, to have Christian Dahlheim, our Director of Group Sales, with us, and for the first time today to welcome Murat Aksel, who is our Head of Group Purchasing. Yeah, as usual, you will find the webcast on the internet site from us. Following the presentations, we look forward to taking Q&A from you. Yeah, we'll kick in and start off with Herbert for a few opening words. Yeah. Hello, everybody. In our last quarterly call in July, we said that we would see the biggest impact of the semiconductor crisis in the third quarter. Indeed, in addition to structural effects, the one-time events from the first half significantly burdened supplies. On top came COVID-related shutdowns at semiconductor processing plants, the backend plants in Malaysia. This all slowed down the strong recovery that we had seen in the first six months of the year. We reacted by allocating, at least to a certain extent, chips to higher margin models in order to mitigate the significant decline in deliveries across all passenger car brands. We raised prices and continued our cost-cutting efforts, and we also saw some positive effects. Our financial services division posted a record EBIT, mainly driven by higher prices for used cars. Against the backdrop of the strong first half and the countermeasures in Q3, all in all, we recorded a 20% increase in sales for the first nine months to EUR 187 billion. Our operating profit before special items stood at EUR 14 billion, leading to an operating margin of 7.6%. As a result, we confirmed our margin guidance of between 6% and 7.5% for the year. We also achieved some important milestones in implementing our NEW AUTO strategy that we unveiled in July. We generated BEV record sales in Q3, which have doubled year-over-year. The MEB ramp-up is accelerating, especially in China. The planned acquisition of Europcar to build a leading mobility platform is progressing well and according to plan. In the first nine months, the group delivered a total of 7 million vehicles to customers worldwide, a plus of around 7%. For all brand groups, year-to-date deliveries are still above the previous year, thanks to a very strong first half. The volume brand group increases deliveries by 3.8%. At the Premium and Sport groups, deliveries rose more than 13% respectively, and the Truck and Bus division raised deliveries by 53%. Looking only at Q3, all passenger car brands took a serious hit due to the semiconductor supply shortage. Particularly affected were the volume brands, which with their lower margin products depend more on high volumes to drive earnings growth. As a result, Volkswagen Passenger Cars, Škoda, SEAT, and Volkswagen Commercial Vehicles posted negative EBIT in Q3. These results underscore, once again, the need for further productivity and fixed cost improvements in the volume group in order to remain competitive. Premium and Sport were also affected by the semiconductor shortage, but we're able to post robust results with an EBIT of EUR 3.9 billion for Audi, EUR 275 million for Bentley, and EUR 3.4 billion for Porsche in the first nine months. Trucks and Bus was also quite resilient with an EBIT of EUR 453 million for the first nine months. Financial services, as mentioned, posted a record EBIT of EUR 1.5 billion. The regions have been affected to different degrees by the semiconductor shortage. Year to date, we gained market share, particularly in North America and in Europe. In South America and Asia Pacific, the situation is more challenging. In Q3 alone, we lost some 600,000 vehicles that could not be delivered to customers compared to the second quarter. Thereof, 265,000 in Western Europe and 150,000 in China were clearly linked to the chip crisis. Customer demand is high. We have more than one million vehicles in our order bank in Western Europe alone. Thereof, 180,000 BEV. China was particularly hit by the lack of MQB chips from Japan, but here again, it's important to stress that decreasing deliveries are clearly a supply, not a demand issue. In the South, we will add Audi to the SAIC joint venture, and we'll start a model offensive, particularly with highly attractive S series. Globally, we now expect deliveries to customers on prior year level compared with our earlier forecast, where we expected deliveries to be noticeably above prior year. Worldwide BEV deliveries more than doubled to 122,000 units in Q3. Volkswagen ID.4 and ID.3 models are our most popular BEVs. ID.3 already with more than 150,000 orders. Every second was a new customer for the Volkswagen brand. The Audi e-tron and the Škoda Enyaq are also in high demand, with order backlogs of above 30,000 each in Western Europe. The Porsche Taycan has an order backlog of around 10,000. BEV share of total deliveries rose to more than 6% in Q3, particularly in China. BEV sales accelerated significantly in Q3, with 29,000 BEVs delivered just in one quarter, compared with 18,300 in the first half. BEV run rate speeding up from months to months, with more than 10,000 IDs in September. Our ID city showrooms have more in-store visits, more orders, and a higher conversion rate than traditional sales channels. Currently, we have over 60 ID city showrooms in China. By the end of the year, we will expand our physical ID distribution network to around 170. We are still striving to meet our target of delivering 80,000 vehicles from the ID model family this year, depending on the availability of semiconductors. In Europe, we have a market share of about 26% in BEV deliveries and are thus clear market leader. In the U.S., our market share in the BEV market is about 8%, putting us in the number two position. Our BEV market share is significantly higher than in the overall market. We also see continuously strong demand for PHEVs. Deliveries year to date doubled to 246,000 units. For our goal to deliver up to 1 million electrified models in 2021, BEV and PHEV, customer demand is clearly there. Due to the semiconductor shortage, we might see some delays. Some of the vehicles might only be delivered next year. The successful ramp up of our BEV strategy demonstrates that our transformation is progressing with great momentum. With our NEW AUTO strategy, we now have a clear roadmap to tackle the transformation, not only to BEVs, but to a fully connected, fully digital and vertically integrated mobility future. We have laid the foundation to tap into future profit pools with strong technology platforms, leveraging our scales. Over the past few months, we have further reduced complexity by setting up strong brand groups with more responsibility. The premium group has aligned the business plans of Audi, Bentley, Lamborghini, and Ducati to lift synergies and maximize customer reach going forward. The volume group has established a governance system to foster the collaboration between Volkswagen Commercial Vehicles, ŠKODA, SEAT, and CUPRA. At TRATON, we have replaced the complex governance structure with a lean management led by Scania CEO Christian Levin. Regarding our core technology and enabling base initiatives, we have set ourselves ambitious targets that we will report on regularly. I will now share some highlights for the technology initiatives. Arno Antlitz will later talk about one of the most important base initiatives, financing the transformation. First, mechatronics. We have seen a further ramp up of the MEB. In the U.S., pre-series production started at our Chattanooga plant preparing for the ID.4 SOP. Model will be launched in Q3 2022. In China, MEB production is speeding up with the ID.3 as the latest addition to the market. In Europe, our e-offensive is in full swing with the SOP of the Cupra Born, the introduction of the ID.5 and the Enyaq Coupé. Work has started on the SSP, which is designed to provide one single architecture for our entire BEV product portfolio from entry level to top of the range. Our biggest site in Wolfsburg, the SSP will form the platform. The SSP will form the platform for Trinity, our lighthouse BEV project, which will transfer the technology to the volume sector. Trinity also provides a historic chance to revolutionize the site and prepare Wolfsburg for the competition with Grünheide, including much faster R&D processes, much higher productivity in production, leaner and more agile management structures. The site has a real chance to become a benchmark when it comes to productivity and state-of-the-art production, and this will help the Volkswagen brand to further reduce fixed costs in Germany. Over the past few weeks, we have intensified the discussions around a shared vision for Wolfsburg 2030 with both the management board and supervisory board. The increased competitive pressure have underscored the necessity to include this joint venture in our next planning round. Therefore, we agreed yesterday to move the submission of our five-year investment plans to the supervisory board to December 9, giving us a few more weeks to agree on a shared vision and roadmap for the transformation. Second, software. We have successfully rolled out over-the-air updates for all ID. customers. ID. Software 2.3 offers new functions and optimizes existing ones. From now on, there will be a new customer experience every 12 weeks. This transition has been very smooth. Third, battery and charging. Škoda announced that we will set up several thousand charging points in the Czech Republic by 2025, together with the energy company ČEZ and the Czech government. Volkswagen Group China is building battery system factory in Anhui. It will deliver over 150,000 battery systems a year for MEB models. SOP is scheduled for the second half of 2023. E.ON and Volkswagen have launched fast chargers with storage battery. Two electric vehicles can be charged simultaneously with up to 150 kilowatts, plug and play, no civil engineering work required. Fourth, mobility and services. The planned acquisition of Europcar to build a leading mobility platform is progressing well and according to plan. The proposed tender offer for the shares of Europcar Mobility Group has been filed with the French regulator, AMF, in September. We expect clearance of the offer document by the AMF and the start of the tender period in Q4. It is expected that the necessary merger control clearances will be received by early next year. A closing of the transaction could then take place in the first quarter of 2022. Argo AI started tests of its self-driving system with ID.Buzz AD prototypes in Munich. Germany now is one of the most progressive legislations for autonomous driving in the world. Volkswagen brand launched Auto Abo subscription models with ID.3 and ID.4, thus picking up the pace of its business model to point zero. As you can see, we are managing the semiconductor shortage and are rigorously working on protecting short-term margins. At the same time, we are not losing sight of the transformation of the company. We are committed to implementing NEW AUTO. With that, let me hand over to Arno. Herbert, thank you very much. Yeah, and ladies and gentlemen, warm welcome from my side as well. As Herbert said, we are looking back on a challenging quarter. In Q3, the semiconductor shortage hit the whole automotive and supplier industry at its hardest. Also, our financial results were not spared from a significant impact. Due to a lack of chip supply, it wasn't possible for us to stick to our planned production programs. In Q3, we produced about 800,000 cars less than 2020 third quarter. Against that challenge, we clearly displayed robustness of our business. We achieved an operating result of EUR 40.2 billion and a margin of 7.6% so far, both figures almost on par with 2019, which was our best year in financial terms. However, looking at the third quarter alone, there was a substantial impact from the decrease in production compared to prior year's third quarter, with an effect on sales, operating result, and margin. Especially in our volume brands, we also see the task we still have in terms of resilience. I will come back to this effect in more detail in a few moments. Looking at the year-to-date performance, we produced 6.1 million cars, a similar level at last year, but 1.9 million cars below 2019. Sales came in at 6.5 million cars, slightly above last year, but also substantially below 2019. Despite this drop in sales, our sales revenue came in at around EUR 208.3 billion on par with 2019. Here we see the impact of a shift to higher priced and higher margin vehicles and the result of a very strong used car business, which is driving our sales revenue, but not included in the sales figures. Cumulated operating profit before special items came in at EUR 14.2 billion, significantly above last year and only a notch below 2019. This corresponds to an operating margin of 7.6%. We reported an automotive net cash flow of EUR 7.2 billion for the cumulative period and a clean net cash flow of EUR 12.4 billion. While the premium and luxury brands performed robustly, the volume group delivered negative results in Q3 and a significantly weaker cash flow. The reported net cash flow in Q3 slipped into the red at -EUR 3 billion. This was mainly driven by two factors, the consequence of the chip shortage on operating cash and the completion of the Navistar deal, which had the biggest impact on the reported net cash flow. The payment of the acquisition price of EUR 3.1 billion netted against the cash balance taken out from Navistar, taking over from Navistar of EUR 0.5 billion, resulted in an overall negative cash flow impact of -EUR 2.6 billion. Net liquidity came in at EUR 25.6 billion, slightly below the end of last year. However, this was a significant decrease of over EUR 9 billion versus H1, mainly driven by the negative impact of the Navistar consolidation of around EUR 6 billion in total. I already mentioned the -EUR 2.6 billion effect on our cash flow. Another impact was -EUR 3.3 billion related to the financial debt taken over as part of this transaction. In addition, we paid out the dividend to Volkswagen AG shareholders of EUR 2.4 billion. All in all, we still strive for a robust full-year net liquidity of around EUR 20.5 billion, including M&A activities. Since Q3 was a quarter far from normal, let's have a closer look into the third quarter on group level. We produced about 800,000 vehicles less than 2020 and about 1,000,000 vehicles less versus 2019. Since we are still selling a certain amount of vehicles from stock, we proportionally lost less vehicle sales than production. We saw a shift to higher margin cars, optimized our pricing position, and reduced our sales and marketing costs. These positive effects were partially offset by the very low production volume and the corresponding fixed cost effect. Although we made progress on this topic, the absolute amount of fixed costs was allocated to significantly fewer cars produced, leading to a significant burden on our margin. At the end of the day, we achieved a face-saving 4.9% margin before special items in Q3, significantly below our strategic target, but in light of the shortage of the chips, the best we could achieve. Even though the visibility of the situation still remains difficult to forecast, we see the start of stabilization of the chip supply and expect improvement of our key financials in Q4. Coming to the performance of our divisions. Within the Automotive division, passenger cars delivered EUR 9.7 billion operative result before special items, driven by the strong performance of the premium and luxury brands. This was still a solid 7.5% operating margin. Commercial vehicles came in at EUR 0.5 billion. This result was burdened by substantial restructuring costs at MAN of EUR 0.7 billion and the purchase price allocation amortization of around EUR 150 million related to the Navistar acquisition. We expect the payback of these restructuring measures to bring positive effects in the following months. Financial services division doubled its results and contributed a very strong EUR 4.0 billion, benefiting especially from high used car demand, very good residual values, and low risk costs. Moving to our passenger car EBIT bridge. The strong result before special items of EUR 9.7 billion for the passenger car business was driven by substantial positive volume price mix effect of EUR 10 billion, with premium being the key driver. The FX exchange rates and derivatives came in at a positive EUR 2.4 billion versus last year. That was mainly driven by the fair value valuation of commodity derivatives of EUR 1.9 billion. Product costs deteriorated by -EUR 0.4 billion, and we expect larger headwinds in the remainder of the year, for example, in relation to steel and magnesium. The fixed costs and others had a significant negative effect of EUR 3.2 billion versus 2020. Overhead costs were only slightly higher by EUR 0.1 billion. Development costs were higher by EUR 0.7 billion due to our continued BEV ramp-up and significant software investment in the period. The third driver relates to a one-off effect of -EUR 0.9 billion compared to last year. After special items, the result came in at EUR 9.5 billion. Coming to our brand group's performance. Within the volume group, Volkswagen came in with a relatively weak operating margin year-to-date of 2.9%. Within that result, Q3, isolated was negative, with -1.2%. This was mainly driven by a significant loss in production due to a lower availability of chips, but it also highlights a structural weakness in terms of resilience in the Volkswagen brand. The same holds true for SEAT or Volkswagen Commercial Vehicles. Clearly, more needs to be done to improve the stability and resilience to achieve a competitive break-even point, both on brand, on group level, in taking fixed costs, further fixed cost reduction and productivity measures. In relation to the Volkswagen brand, on the positive side, we expect North America and South America to achieve a consolidated break-even this year, despite semiconductors. In relation to the full year, we now see a guidance for the brand of up to 3% as realistic. ŠKODA was also significantly negatively impacted by the chip issue. The operating margin in Q3 was negative at minus 2.4%. Due to the very solid first half of the year, the operating margin after nine months came in at 6.8%. Within the premium group, Audi was also hit by the undersupply of chips and has lost a decent amount of sales in its core regions, Western Europe, U.S., and China. Year to date, the margin is at 9.6%. The margin of the third quarter was 7%, also lower than previous quarters. Bentley maintains its rock-solid margin performance with an operating margin of 14.1%. Within that, Q3 was very impressive at 15.5% operating margin. Even Porsche was impacted by the chip shortage, however, not as much as Audi or the volume brands. The operating margin year to date is still 16%. In Q3, the margin was lower than the previous quarter at 11.9%. Looking at commercial vehicle business in more detail, we get a mixed picture. Scania delivered an operating margin year to date of 10.7%. MAN delivered a margin year to date of a negative minus 3.5%, but this was mainly driven by restructuring costs of EUR 0.7 billion. Looking at our Chinese joint ventures after nine months, the proportional operative profit came in at around EUR 2 billion, significantly below 2020. Chip shortage caused significant effects here as we expect an improvement supply situation Q4 should come in higher than Q3 in euro terms. The FAW Group China premium brands continued to perform better than volume. This leads to a higher proportion operating profit from the Northern JV, FAW-VW, FAW versus the South. We strive to catch up as much as we can, but due to the loss of volume, we now expect the proportionate operating result to be below the last year. Now, looking at our full year guidance. Following a strong H1, Q3 has been very challenging due to the chip shortage. Nevertheless, we have managed COVID and the semiconductor restrictions reasonably well so far. We now expect full year deliveries to be on prior year level and revenue to be noticeably higher than last year. The customer demand for our excellent product is high. The order bank is filled. The combination of strong H1, a weaker third quarter, combined with an expected catch-up in production and sales in Q4 still gives us enough confidence to strive for the upper end of our margin guidance of 6%-7.5%. Due to the hard hit from semiconductors in Q3, we are now striving for a level of around EUR 15 billion for clean net cash flow. Moving on to our focus on product transformation and looking at our BEV ramp up. Our BEV volume continued to ramp up significantly. We delivered nearly 300,000 BEV year to date, of which 170,000 were produced on the MEB platform. Demand for BEV is very high, and we are still striving for a BEV share between 5%-6% in 2021, with minimal tactical spending. Focus on China. We know that there are critics about our BEV development in this region so far. However, we saw substantial improvement in the run rate of the ID family in Q3, and the rollout of our new different retail formats is well underway, as Herbert already mentioned. Financing the transformation, we launched several programs. Looking at our fixed cost program, we managed to continue our progress and decreased this cost base by around 8% versus 2019, basically on par with H1, and we are absolutely committed to continue this disciplined approach. The sharpened focus will continue into Q4 as well as 2022 and 2023 and beyond. To safeguard our future, we have very ambitious transformation plans. For that reason, we have guided R&D of around 7% for the full year 2021. While this is still above our strategic target of 6%, it's a necessary reflection of the execution of our BEV strategy and of building up our software competence. Year to date, R&D spending came in at 7.5%, still above our 2021 target of 7%. However, in terms of CapEx, we showed industry discipline benchmark. The nine-month CapEx ratio came in at 3.9%, and that was well below 2020 figure. We put full focus on product and future technologies while keeping non-product related and structural CapEx at a minimum. We are aiming to offset the higher R&D share this year, and for both ratios we combined are now striving to achieve 12%. Looking now at our brand cash flows. In July, we communicated cash flows per brand for the first time. The trend that was clearly visible in H1 continued in Q3. Premium brands remain dominant and are the key contributors to the robust cash flow generation. Our volume brands still have a way to go to achieve acceptable cash flow levels, with Volkswagen brand having the biggest challenge. However, please take into account that they have been hit hardest in Q3 due to undersupply of semiconductors and in addition, cash flow of Volkswagen brand was burdened by diesel outflows of EUR 0.5 billion. The impact of the acquisition of Navistar in July is shown within the other line. Ladies and gentlemen, we have strong brands. At the same time, we will continue to shape our transformation with focus on technology, ramping up battery electric vehicles and developing and deploying a leading automotive software stack. We will continue to financially steer our transformation by focusing on synergies and building resilience by working hard on cost and efficiency to be less reliant on volumes and growth. Thank you very much so far. Thank you very much, Arno. Emma, may we please begin the Q&A session now? Certainly. If you would like to ask a question, you can do so by pressing star one on your telephone. That's star one if you'd like to ask a question. We will now take our first question from George Galliers from Goldman Sachs. Please go ahead. The line is open. Thank you, and thank you for taking my questions. I had two questions really around software and autonomous driving. The first one is with respect to the first autonomous vehicle, the ID.Buzz. Is it correct that the autonomous systems on this vehicle are largely leveraged from Argo AI? And to the extent Argo AI goes public in the next 12-18 months, would Volkswagen be happy to see its ownership diluted in any potential transaction? Or would you maybe see an opportunity to increase your position and influence there? The second one with respect to software more broadly. Your commitment to software is very clear, and I would argue very exciting. However, many investors are asking how to appraise whether Volkswagen has the technical competency in-house to develop class-leading software. What assurances other than the scale of investment can you give that Volkswagen will be leaders in software? Are there any near-term milestones that investors can evaluate, what is the first deliverable from CARIAD, for example? Or do investors need to wait until mid-decade for the rollout of Artemis and Trinity for validation? Thank you. Okay, George. ID.Buzz, yes, you're right. ID.Buzz AD is driven by Argo technology. The first prototypes are now hitting German roads, where we will, let's say, test the fleet starting in Munich, later in Hamburg and over the next years, we will come into operations. First of all, we are happy with our investment into Argo. I think the combination between Ford and Volkswagen, we have a totally coherent set of interests. We have a minor investment from Lyft in the company, which allows us to be also closer to our customers, to the platforms. I think we have the right investment structure, and we can afford the financing, which is still to come, and it's going. It's still long way until we really get the investment back, but we are confident that we can self-finance together with Ford. Your question regarding software in-house competencies and milestones. Yes, you know, you probably underestimated already through recent years we purchased quite exciting in-house software competencies. Now, for instance, we own in Bochum a group of 800 engineers coming from Nokia and then shifting to BlackBerry, which do the communication for our vehicles. They are state-of-the-art, very competent team. We just recently purchased from HELLA a group of image recognition for autonomous driving, which is world-class, state-of-the-art. We're building up our group of hardware competencies, people joining from Intel, Apple around the world. This is organic growth. There will be still a few more. We had three acquisitions only last year, which was WirelessCar, which is basically how to bring software into the car, and diconium, which is mostly based on app development. We combined all the resources we had in Porsche, Audi, and Volkswagen into one group, which still needs some consolidation now because it's 16 different companies. We have to really find a new company identity, bring them together. There are still a few acquisitions to do, yeah. There are still a few acquisitions to come. I'm sure that we have all the competencies to have the software competence we need to continuously deploy software into the car, which is basically the reason why we are integrating that, because, you know, you then have full responsibility about what happens to the car, and you're directly facing the customer, and you have to do that in-house, because if you're not doing it in-house, you just won't become fast enough. This is where we are. What are the milestones? We decided that CARIAD would take all the electrics, electronics platform for our ID family, which we call software 1.1, and is working on the next generation for Audi, Porsche, our PPE platform, which we call 1.2. The milestones E³ 1.1 are the current updates of the cars now which are working quite well. It's the first time in volume that we update big fleets of cars, and so far it's going really well. Customers are happy. They perceive it as really an enhancement, an improvement of their in-car experience. Every 12 months, those over-the-air updates will occur and show how competent we are already in performing updates and enhancing product specifications over the air. This is going well. Next milestones for the PPE, for sure, are the launches. The launches are going to happen next year. They are well on the way to... It's for sure a challenging task, but the first car will be the Porsche Macan, electric Macan. Audi and Porsche will deliver on this new platform their cars, which will once again demonstrate the next phase of software capabilities. The big step towards, let's say, really leveraging scale is then software 2.0 being launched with Artemis and then rolled out through the whole product lineup starting in 2026. This is a big challenge. This is also where most of the insourcing will happen, and then we will have full competencies also on own autonomous driving stack, own configuration of the core operating system of the software stack. This is the full stack. Why we decided to combine or let's say hand over all three software systems to CARIAD, because, you know, with each and every step and technical improvement, we are learning, we are getting better, we are training the team, and we get more focused on deploying. If we would have only started with 2.0, it would be a long way to go, a lot of theoretical tasks happening. You need the day-to-day business. That is why we think. I'm spending now more time with the CARIAD team, and actually with the recent hirings, I get a good feeling about the competencies, about what's still to do, and about the commitment, and really different style of working in CARIAD, which I think we are fully on the right way, and the management team is getting stronger by the week. This is what. It's probably a bit lengthy answer to your question, but should be okay. George. Thank you very much. Thank you very much. Thank you very much. Very comprehensive. Thank you, Herbert. Thanks, George. Maybe Emma now, if we can take the next person in the line, please. Certainly. We will now take our next question from Patrick Hummel from UBS. Please go ahead. Yeah. Thank you. It's Patrick from UBS. Good afternoon, everybody. I would have two questions for Herbert, please. The first one is regarding your BEV execution. I mean, this year we could probably say things are going pretty well because you're doubling your BEV sales. I know you like to benchmark yourself against Tesla, and the fact is that Tesla is growing much more than you are in absolute terms. They will grow from 500,000 cars last year to 900,000 this year. They're gapping away in terms of their growth margins. They seem to have a structurally better access to chips. They seem to have a structurally better access to batteries. So I'm just wondering how you think about that going forward. Will we just see a constantly widening gap despite your nice growth rates that you undoubtedly deliver and decent products, but what can you actually do to reverse that trend over the next 12 to 24 months? Specifically in regards to battery supply, how confident do you feel that you have enough really secured to meet probably the demand that's exceeding expectations? My second question relates to the upcoming planning round. Can you just give us a feel what is really your priority? Is it about safeguarding the profitability over the next five years and we'll just get an updated five-year investment budget? Or will you also try to, you know, pin things down to get more granular on the auto, NEW AUTO 2030 strategy? Against that backdrop, you know, GM a couple of weeks ago did a very precise capital markets day in terms of the growth initiatives, the business plan, the margin potential, et cetera, while your NEW AUTO strategy for the time being is relatively vague. Will we, with that upcoming planning round, get a little bit more granularity, how you really think about your business model ten years from now? Thank you. Okay. Patrick, yeah, quite comprehensive questions. Yeah, the gap to Tesla, we would have been closer if we wouldn't have been hit by the semiconductor supply. We have really strong demand for our EVs. The lead times are higher than for the ICEs. We don't have to spend incentives. There's a challenge in China now where we have to probably redo our retail formats, but we have a higher share on the EV side than we have on the ICE side. The strategy basically is working and the effect of the strategy should increase over time because now ŠKODA is only coming to the market. SEAT is only getting. The new models being launched in China should really materialize early next year. We have been preparing two sites in China. Our capacities here in Europe will increase with the additional Emden plant to come to produce electric cars later, Hanover in 2023, and we're just starting production next year in America. I think capacity-wise, and that's true for assembly plants and the batteries, we are ready to, let's say, stay in the game with Tesla. Yeah. We have, you know, we have very competent cars, we have much higher differentiation. We have top premium cars, sports cars, volume cars. We are strong in China, Europe and the United States. From there, that should really work out well, and we should achieve similar scale than Tesla. You know, 70% of the parts of MEB are basically the same for ŠKODA, Audi, Volkswagen, and so worldwide. Later, Ford will join. You know, so that should work out well. Semiconductors really hits us stronger than Tesla. You're absolutely right. You know, so we have less in-house competencies, and our electrics, electronics network is less consolidated than Tesla's. Now, Tesla already is in the next phase of architecture. We will get there, but this will still take a little bit of time. Until then, Murat just has to make sure that we get all the semiconductors we need. He will probably report later on it. We are, let's say, always prioritizing our EV sales. Yeah, I think, there's no... Currently, I don't see that the gap would widen further in getting into next years. We should really be able to catch up and make some ground. The planning round priority clearly is get the financial figures right, enough cash flows, margins. We're strongly optimizing our R&D and also our investment budgets. The focus is really to generate the resources to be able to further invest in the NEW AUTO strategy. You will see more, let's say, a more detailed disclosure of where we are going to invest, in which steps, how much in the different platforms, I would say early next year. Early next year, we should be ready to talk more in detail about batteries, about the next steps in software, and the SSP platform. We are going also to talk more about the new profit pools and revenue pools, step-by-step, you know. We will elaborate on the strategy. I think you already can see where we are going, but more detail to come early next year. Can I just ask Herbert- Okay. Can I just ask, thank you for that. Can I just ask regarding the battery, supply part of my first question? Yeah. Is there any bottleneck you would potentially see in terms of your growth next year? Because it seems things are starting to get really tight. No, we don't see. I hand over probably to Murat. Yeah. Patrick, this is Murat, responsible- Hi, Murat. for purchasing. The leading shortage also next year will be semiconductors and not batteries or not battery systems or cells. Understood. Thank you very much. Thank you. Emma, maybe. We will now. Yeah, go ahead, Emma. Yeah, we can kick off the next question. Thank you. Perfect. We'll now take our next question from Tim Rokossa from Deutsche Bank. Please go ahead. Yeah. Thank you very much for taking my question. I'd like to add on a little bit to what Patrick just asked. Herbert, that is really about your priorities when it comes to the planning round. There's only so much you can do in a given day. When we look out to Stellantis, you like to benchmark yourself to Tesla, but the more traditional guy, Stellantis, they will make 10% EBIT margin this year and a harder hit on the volume front than you are. That's a number that you will probably not even achieve with Audi. If we suggest something a little bit more controversial here, why don't you focus a little bit less on optimizing your financials? Because that seems to be very difficult for you. It's running constantly into issues with the labor unions, which is also quite annoying to some of your shareholders to read about this on an almost weekly basis. Why don't you focus more on NEW AUTO? Go really full speed ahead, try to increase your volume on that side, try to increase the quality of the vehicles, really start to roll out that issue while maintaining the margins and the free cash flow generation potential that you have today anyway. Really means focusing on one thing, you have less struggle with the unions. Why isn't that prioritization, which also seems to be more rewarded by the stock market when we look at the multiples of strong growth versus just the traditional strength of an automaker, something that you want to make your priority as well? Secondly, and this is perhaps now for Arno and probably Christian, if he's on the line as well. How should we think about the Q4 development? Can you walk us through a couple of the bridge items, what's there with respect to raw material headwind, the volume bounce? How much will production be up? Do you already have more chips available now than you had, let's say, a month ago? Thank you. Yeah. Tim, I think we are fully focused on the NEW AUTO strategy. I know I'm focusing a lot on CARIAD and software development. I think we spend now in the new planning round, we will spend much more than half of our investment into the new world. Arno might elaborate on that a little bit longer. There is full focus on the new world. Even the new world requires, let's say, core competencies in when it comes to manufacturing, productivity, fixed costs, because, you know, we will maintain big part of our world. We will maintain the plants, we will maintain our sales structures. It's worthwhile to keep on improving the existing structure. Now, we wouldn't invest as much anymore in, let's say, the run out of ICE engines or plants. No. But the plants we are going to use and the structures, the overheads, we have to work on because we will need those in the new world as well. There's also some work to do to be competitive with the kinds of Tesla. Now, that is why we can't just focus on doing the new cars. Yeah, this is it. Yeah. Tim. The other question was Q4, Arno? Yeah, Q4. Give a little bit of a general guidance, and then Murat is on the phone as well. He can walk us through more like on the chip side. In terms of production, we think of from a level-wise, more on Q1 and Q2, roughly. In terms of effects and headwinds or tailwinds. We expect a little bit more headwind in terms of raw materials. On the other hand, our mix and pricing opportunities and also the reduction of incentives, they really come through now. This gives us basically confidence that we stick to our guidance of 6%-7.5% on the upper end. This should be more the general theme. Fixed cost work you have seen so far. We are very well underway. In terms of CapEx and R&D, we guided for 12%. With R&D due to the upfront investment into current, slightly higher, but we do very well on CapEx. I mean we spent so far almost or only 4% in CapEx, which is significantly below 2020 and 2019. That should also gives a little bit room on the differentiation side. All in all, we are quite confident that we can achieve the margin of to keep in the margin guidance of 6%-7.5% with the upper end. I would hand over to Murat. Can you a little bit more- Yes. Thank you. Elaborate on the production side and supply side. Yes. Thank you, Arno. Tim, and ladies and gentlemen, as you all know, on top of the structural shortage we have between supply and demand for the semiconductors across all industries, there were three events which were mentioned also by Herbert, which caused the really low production in Q3. Two of them happened in the February, March timeframe, which was the winter storm and the fire in Japan at a supplier. As this happened in the front-end process, the process takes a couple of months. It hit us in the third quarter, and on top of this, also the Delta variant of COVID in Southeast Asia, where a lot of back-end processes happen, hit also in the third quarter. This led to a very low production in the Volkswagen Group overall. Since three weeks since we moved into the fourth quarter, we do week-over-week already an improvement. We are forecasting that we will achieve until the end of this quarter, the level which we had in Q1 and Q2, where we had only in parentheses obviously, the structural shortage. If there's no additional event coming, we believe that over 2022 we will keep this run rate in the first months. Over time, we will produce probably even 5% more than we had in the Q1 and Q2 of this year. This is an improvement month-over-month. We do see this already. Again, the shortfall, the structural shortfall will be with us almost through all 2022. Thank you very much. Okay. Thank you very much. We'll pass over to Jimmy, I'll ask for a quick additional question. Christian, yeah. On the volumes. I think as Arno has already mentioned, we expect Q4 to be clearly better than Q3, while not as good as Q1 and Q2 if you take the delivery numbers. Again, the full pricing effects and technical effects that Arno just have mentioned will of course then be fully embedded in the Q4 deliveries. Great. Thank you, Christian. May we take the next caller, please? We will now take our next question from Stephen Reitman from Société Générale. Please go ahead. Your line is open. Good afternoon, gentlemen. Looking at your BEV progression, you've obviously mentioned the number of vehicles you've lost in the third quarter because of the semiconductor shortage. Could you make some more specific figure for what you think that 122,000 might have been if you'd had a more normalized supply of semiconductors? Secondly, looking at China, the model that Volkswagen has had has been obviously for a long time selling very successful European models in China. I think the reaction to the ID family has been a bit slower than you anticipated. You mentioned some changes to the retail strategy you're planning there. Do you think there's fundamentally any difference in consumer perception and tastes for models in China that is different from that may be impacting the reception of the ID family in China? Third, you mentioned about the extension of Audi to the southern joint venture, SAIC, and making SUVs there. Could you give us some idea about which SUVs you're planning to make there under the Audi brand? Thank you. First of all, we always are China-specific. No, our cars are having different interiors, different style elements, also different software functionalities for China because we have different ecosystems there, which we fully adopt into it. After being 35 years in China, we find that there are some Chinese preferences. Many of those are really worldwide and relatively tied into the customer segments, you know? For instance, many of our cars for China are longer. They have more length because we have a better seating comfort in the back because people love to transport and have their parents in the car. There are some preferences. When it comes to style, we also adopt. We have bigger screens in our Chinese cars. Very often we are a bit more colorful in China, though the cars are really adopted. You're referring probably, To know the new Chinese startups for the electric world, which are design-wise not so different, I would say. We're driving those cars relatively often. Probably some of the software features have to be China-specific. You know, you need karaoke functions, for instance, in the car. We're trying to catch up with local customer demand and learning. That is why we increased our software competencies in China. We have now CARIAD has about 800, 900 people working in China on the ground to adapt more to the Chinese necessities. The other thing is that our ID fleet, which has quite sophisticated lane keeping and ACC functions in the car, which are really working well in Europe. They are depending on our maps in Europe, and we have different maps in China, which will take us a few months more to adopt those functions to China. This should be specific, but we think we have all the ingredients and all the knowledge to really satisfy the Chinese customer demand. You know, if we look into the new car buyers and ID buyers, yes, they are younger. It's a different generation to come. They are probably less biased towards Western brands. Yeah, they're more open to Chinese brands. This is for us, for sure, a challenge. Now we are a well-established Chinese brand for over 35 years, so we have to reinvent ourselves, which is why we need new retail formats, a new sales force, new sales people there, and we are adopting. We think it's we can do it. You know, as we are adopting and as we are learning, sales are really picking up. The Chinese models are always co-designed with our Chinese joint venture partners, so we have strong Chinese teams coming to Germany when it comes to platform design and also the interior designs. I think we are listening to the markets, but yeah, I agree, we have to probably do even more. Yeah. There's no structural handicap we are having. Mm-hmm. The volume? Volume. Only BEVs. Yeah, Audi is. BEVs. Audi decided some two years ago to have also two-partner strategy in China and is now with SAIC, with our SAIC Volkswagen joint venture. They are launching four new cars, which is a set of cars which is not doubling up the offerings in the North. It's really different cars, partially on Volkswagen platforms, partially on Audi platforms. I think it's an attractive set of cars, and they are testing out new retail formats. This will be complementary and should increase our volumes and also profit pools in China. Audi is doing really well. We had a fantastic 2020 and 2021. Audi is really strongly recovering, and we think that a even wider product portfolio can really work in the South. Two SUVs based on Volkswagen platforms and I think it's a coupe sedan based on an Audi platform there and an electric car based on a Volkswagen platform, so you can imagine how the cars are looking. One is B size, one is A size from the SUVs, and the electric car is an A size SUV. It's three SUVs, one coupe sedan, I would call it. The sequential development of your BEVs? Sorry, can you repeat, Stephen, please? Just on the sequential development of your BEV sales. If you hadn't had the semiconductor issues, you doubled basically from Q1 to Q2 your sales of BEVs. There would not be any reason not to achieve those 1 million cars which we announced for the year. We have strong demand. We have an order bank for, I would say, on average, six months. Order intake, I've learned today, is close to 20% BEVs now in Europe, no? Which is stunningly high. It's much more than our demand. Batteries, we are fine, so it's chip shortage. Thank you very much. Okay, Emma, can we take the next person on the call, please? We will now take our next question from Horst Schneider from Bank of America. Please go ahead. Your line is open. Yeah, thanks for taking my questions as well. It's Horst here from Bank of America. I have got two rather brief ones. The first one is related to Porsche. Herbert, I listened today to the media call and the last comment that you made. My take was from that you denied that a Porsche IPO could happen. Therefore, given the press speculations that we had again recently, can you maybe give an update if that is the case, that you consider just this battery IPO, but no Porsche IPO? Number one. Number two, on looking at your bridge, Arno, it strikes me that you are not backing out any more price mix as you did in Q1 and Q2. I mean, the suspicion is then always from the outside that you want to hide something. Can you maybe clarify what was the price mix in Q3? When I back out the numbers, then I get to the conclusion that the price mix impact was rather small in Q3. My question would be, why was that the case? Should that continue to be the case also in Q4 and going forward? Is that slowing down now, or it's just a temporary effect that we had in Q3? Thank you. Yeah, to your first question, Horst, in our statement, we are always continuously reviewing our portfolio of brands and investments, and I can't say more about this. Second question, Arno? Yeah, as the price mix that wasn't deliberately done. As you see, the magnitude is still high. Of course, we had a slightly negative volume effect in Q3, but we can deliver the price mix effect in the future. From the quality of the business, price mix and margin is even stronger coming through since we are very disciplined on the incentive side. We decided on a second price step some weeks ago, and that second price step will only come through in the fourth quarter. You shouldn't be worried that price mix is deteriorating. It's actually the other way around. We even promise to be more disciplined also into 2023 and beyond. We have really stringent plans to keeping that pricing discipline throughout the planning round. Okay. Arno, it was positive Q3, and it gets stronger again thereafter, right? Do I get that right? The pricing effect will get stronger in Q4 due to the pricing which comes through, Mr. Dahlheim, I think in the next month, so. Maybe I can just add for explanation. Absolutely. The reason there is a lag is due to the very high order bank we have. The cars we're delivering now are the cars that have been ordered 6 months ago. If you order a car, the cars that are delivered now have the price effect, and they'll be priced in March. The price effect now from October, well, you will only see beginning of 2022, but because it takes time to deliver the cars. It's just because of the extremely high order bank we have. We have an almost 6 months delay in. Okay. Thanks very much. Thanks. Thanks, Horst. Thank you, Christian. Emma, can we take the next person, please? We will now take our next question from Dorothee Cresswell from Exane. Please go ahead. The line is open. Hi there, and thanks for taking my question. I have another one around BEVs in China. I wondered whether you could elaborate a bit on how you're finding the pricing environment for BEVs in the Chinese mass market, and also whether you've had to adjust any of your own pricing in response. I have another question just around magnesium and aluminum. Could you tell us whether you share some people's concerns around the risk of significant shortages as we look to 2022? Thank you. Okay. I think Christian Dahlheim, in relation to pricing in China, we would pass that one to you. Murat Aksel will follow then on the raw materials magnesium. Pricing in China is. We didn't have to adjust our pricings through the launches. Our prices are according to the market segmentation in China. We didn't have to adjust through the launch. Yes, on material availability, first of all, let me say that all materials are really tight and short. It starts really with steel products, plastics, granulates, and obviously we are observing and monitoring the situation of magnesium, aluminum very closely. Until the rest of the year, the semiconductor will stay the leading shortage. We cannot forecast right now if the shortage on magnesium and aluminum, which will happen definitely according to planning, will be bigger than the semiconductor shortage. We are observing this, and we are taking countermeasures already today to overcome this. For the moment, I would say semiconductor shortage is still the leading shortage in the market. On top, probably you have seen also that additional things happening, all the transportation and logistics are tight. If something happens in the supply chain, materials get shipped late. We are seeing more and more in the supply base financial stress, obviously, because of the disruptions in the supply chain. You have seen probably also that one exhaust supplier had, yesterday, two days ago, a cyberattack. These are all elements which are playing to the game. We are observing all of this. Bottom line, semiconductor shortage is the leading shortage. Many thanks. Thank you, Dorothee. Thank you, Murat. Can we take the next person, please, in the queue? Certainly. The next question will come from José Asumendi from J.P. Morgan. Please go ahead. Thank you very much. Afternoon, everyone. José Asumendi from J.P. Morgan. I have three topics, please, for Herbert. The first one would be, please, what are your top three priorities when running a group? In your discussions with the unions, do you think they have the same sense of urgency as you when you're trying to accelerate this industrial change, and specifically in Germany? Second, can you provide a bit more specific milestones on the battery ramp up across Europe? If you could give us an update on which plants or locations have been agreed so far, and then the third topic please. I would love to hear any comments if you give gigacasting any merits in terms of the industrial footprint or allowing you potentially, if you will implement it, to achieve any cost savings. Also, if I may ask, if possible, I would love to hear what was the reaction from your management team when you brought in Elon in the offsite. Thank you so much. Interesting questions. Yeah. Sense of urgency. I'm actually, you know, we basically triggered a discussion here in Wolfsburg. I think it's the right time, and it's coming. No? The sense of urgency will increase because the recent achievements of Tesla are sending a clear message. You know, Tesla is a competitor which we have to take seriously. I would say also the unions see that the most sold model in Europe in September was Tesla Model three, and not anymore the Volkswagen Golf. The unions perceive that Grünheide is about 200 kilometers from here, a very modern plant, state-of-the-art, with high automation and probably shorter lead times in manufacturing. I think the picture is getting clearer and clearer, no? As we will launch a model here in Wolfsburg, which will be in direct competition with some Tesla models as well, it's called Trinity. We have to use that model and that manufacturing plant and our R&D efforts to really transform and modernize Wolfsburg and make sure that we can face and compete against Tesla. I think that idea, which we basically brought into this game one and a half years ago when we started when we allocated this product to Wolfsburg, now is getting into the minds of the people, and people are taking it more and more seriously. This pressure will increase once Grünheide starts its launches. You have to see that, Tesla still is constrained by, the supply to Europe because all cars for Europe are currently imported. Imported means it's a 10% import tax, on the cars from the U.S. and from Shanghai, basically. The competitiveness of Tesla will increase once the launches in Grünheide happen, and we will see those cars driving around here. I think the sense of urgency will grow. We made a case now also in supervisory board level, in our. I think it's a shared view that we need a new vision for Wolfsburg, converting Wolfsburg in a competitive site, which can sustain competition against a very modern Grünheide site. There are already quite good ideas. Ralf Brandstätter is working on how to not only refurbish, but I would say rebuild the plant. We already decided to do a new R&D center to step up our R&D facilities, and we are working to streamline our overheads here in Wolfsburg. Within the next few weeks, we will work together with the union representatives on a shared vision for 2030 for Wolfsburg, and then we going to implement that plan. A sense of urgency. Yeah, I would say I had probably earlier a stronger sense of urgency, but the works council is getting into the game and up to speed now that I'm confident that we can really end up with a shared view and a shared plan, because we have to change a lot here. Gigacasting. Yes, we are considering now in this new architecture a big casting plant. We have some facilities. Most of our casting facilities are in Kassel, so not too far away from here. Whether we would integrate really giga presses in the plant, that's not yet decided. It's the cost advantage is some. No, if you would do an entirely new plant and supply chain, you might consider if you have established supply chains, it's probably not as much as an advantage as it probably looks on paper. We are considering. Decision not yet made. Elon had a nice appearance in our meeting in Alpbach. You know, it depends. Some people said it was very interesting because Elon is always interesting to talk to, no? The hidden messages between the lines. For me, it's always fascinating to talk to him. Some people may have perceived it as too detailed, as Elon is very vertical in all details. I think everyone took the message that Tesla is very focused, very vertical, very thought through, very aggressive, very fast. I think we took it serious. No? We took competition serious from there. I don't know. I'm looking into the faces of my colleagues. What would you say? Yeah. Yeah. Generally, yes, no? It was probably a bit lengthy. We talked over an hour or so, but I enjoyed that. Yeah. Okay. Oh, thanks Herbert. Thank you very much. Thank you. Thank you very much. Thanks, Herbert. Thanks, José. If we could then take the next person, and if I could request you to stick to one question, we still have four people in the line. It might get a bit difficult in terms of the time management. Thank you. Thank you. We will now take our next question from Henning Cosman from HSBC. Please go ahead. Hi. Good afternoon. Thank you. I'll just ask one question about free cash flow, then maybe to Arno. It looks like the market took it a bit badly today that the free cash flow guidance was reduced, even just with the signaling. I'm kinda wondering whether that was really necessary. If you could sort of talk us through the working capital effects that you're expecting in the fourth quarter, and with the cash flow performance of EUR 12.4 billion after nine months, isn't that actually quite easy to achieve and exceed the EUR 15 billion? Could you just share what your concerns are, why you found it necessary to make the change in the signaling? Thank you. No, that's a very good point. I mean, let's start with overall figure. About EUR 15 billion free cash flow is still from our point of view a really significant number. What we see currently is that we are significantly understocked, and although we expect a better supply with chips and production in Q4, as my colleague mentioned, it might be difficult for the last cars we produce in end of November and beginning of December to put them through the whole line on the ships into the markets and get them out to the customers. So it's basically not an operative topic or in terms of performance that led us to that reduction. It's more like that we really see the topic that in that whole supply chain, it might be that we end up with a little bit more stock, but not more stock due to we won't like to be stock but rather stock that is on transport. This is a burden on the working capital, and this is a major effect that led us to that revised figure. Basically implying it's a fairly large negative, working capital effect in Q4, right? No. There's also a technical effect on the free cash flow, but I was talking clean cash flow. Yeah. Yeah. Thank you very much. Thank you. We will now take our next question from Philippe Houchois from Jefferies. Please go ahead. Your line is open. Yes, good afternoon, and thank you for having me. I've got a couple of questions for Arno, if possible. Just if you can clarify, Arno, what you told us at the beginning about the net cash position at the end of the year. I heard 20, but I think it's more like 25. The other question is more technical, but if I look at your balance sheet today on the industrial side only, there is a negative liability of EUR 7 billion, which used to be a positive number. My understanding of that, you know, when it's positive, it's a loan from Volkswagen to the FinCO, and it's negative, it's a reverse. It's the FinCO lending money to Volkswagen. I'm just trying to understand first, is that affecting the net liquidity you report, the EUR 25 billion you had in Q3? When do you think that number will go back to a positive number? In other words, when does your growth pick up sufficiently so that you grow the asset base of the FinCO? If you can clarify, that'd be great. Thank you. I'm not 100% sure whether I understand your question, but I'll try to answer it that way. Okay. Look, the net liquidity is only. It's only automotive. It has nothing to do with FS. We currently see, as we saw in the COVID situation, then when production is quasi-shifting quite a lot, you get a balance or you get an imbalance between payables and receivables that might affect also the net cash flow. I'm not 100% sure whether that was the right explanation to your question. Mm. If not, what I would suggest, perhaps you can put that question to us, and we come back to you with the short answer. Okay. For the net cash year-end, are we looking at 20 or 25? Sorry? The net cash, the net liquidity position for the year-end 2021 will be at least EUR 25 billion. EUR 25 billion, yeah. Yeah. Okay. The clean cash flow, EUR 15, and net liquidity, EUR 25. Yeah. Okay. I'll come back to you with the balance sheet question then. Thank you. Yeah. Okay. We'll be glad to take that one. Thank you. Oh, sorry, Emma. Maybe just on the net liquidity. It is including all M&A transactions, the EUR 25 billion. Okay. I have heard we have some technical difficulties on the line. If you're listening, feel free to send me a quick email, and I'll pose your question for you. If not, if we still have people in the line, operator, feel free to put on the next caller. Thank you. As a reminder, if you'd like to ask a question, press star one on your telephones now. We will now take our next question from Tom Narayan from RBC. Please go ahead. The line is open. Hi. Yes, Tom Narayan, RBC. I just have a quick one, I think, for Christian. So yesterday there was some news that I think Hertz, Tesla, and Uber were collaborating in ridesharing. The question is, to what extent is owning the scheduling app an important part of your mobility as a service aspirations? You know, certainly if all the OEMs hand over this part to Uber. This could then be hard for, you know, VW to own this part of the ridesharing ecosystem. Thank you. Yeah, Tom, maybe two parts of your question. First of all, of course, the delivery numbers. I wanna clarify that, of course, as we said, we have a huge demand for our BEV, but we prefer them, at this point in time, to sell them to our most profitable channel, which is private customers and corporate customers, not rental car customers. Just to clarify that point. On your second question, absolutely. We do believe you have to control what we call the layer four, which is the customer interface or the actual booking mechanism for different mobility offerings. That would be also clearly our ambition, with the acquisition of Europcar to become relevant in that segment, in particular, of course, in all core regions, Europe, the U.S. and China. Oh, thank you. I think that's what you call the scheduling app, which is the customer-facing app. Yeah, that's right. Okay. Emma, may we take the next call? Thank you, Tom. Thank you. We'll now take our next question from Charles Coldicott from Redburn. Please go ahead. Please go ahead, Charles from Redburn. Your line is now open. Charles seems to have stepped away. We will now take our next question from Arndt Ellinghorst from Bernstein. Please go ahead. Your line is open. Yes. Hi, everyone. It's Arndt Ellinghorst, Bernstein. Just maybe a final question for Dr. Diess. But you do talk a lot about Tesla, and it's clear that you appreciate their achievements a lot. I just wonder, do you share the same, you know, appreciation for other EV startups as well? Do you think they will be equally successful? If I think about the Rivians, the NIOs, the, you know, XPengs of this world, there are plenty which all have very credible product, and I'd say they all ramp pretty successfully. Would you say Tesla is just the beginning and we might see a more broad success of pure-play EV companies in that market? Thank you. Arnd, I still think that Tesla is the most relevant because it's the first one to start. As we are a slow-moving industry, scaling is not as easy, you know? It takes time and a lot of investment. Tesla is so strong because it's 15 years of hard work and dedication and a lot of capital burned as well, you know? But yes, we have to take some more of them seriously. Many will fail and have been failing already, you know, because it's a different story to present a car at a show and a nice team, and the other end is really setting up a worldwide brand, being able to deliver, because our industry will remain a scale game. You have to generate scales. Tesla, we have to take Tesla very seriously because they are technologically good, and they can provide scale, and they have also good cost base meanwhile, and scaling is good. It will take time, but we have to take some of the others very seriously. You mentioned XPeng, which is a car I'm driving currently. It's a very serious car, and in China already quite successful. Some of the startups will get through, but they have to first try to keep pace with us, you know, and then probably with Tesla. We're probably in between somewhere. Yeah. Okay. Thank you. If I may sneak one additional in for Arno and maybe Christian as well. How do you think more strategically and structurally about pricing? When you do your financial planning now, you've gained so much pricing. Let's say a lot of it was windfall. How do you think about strategically internalizing some of these positive pricing trends, whether that's list prices, tactical pricing, dealer support and so forth? How do you build that into your forecast? I start with explaining how we build into the forecast, and hopefully then I get support from my colleague. No, what we did for the budget for next year and also for the planning round, we foresaw in the figures that there's a lasting effect on the margin and pricing effect of this year, as we promised. We are pretty confident that lasts at least for the next year or the and the next year, the next but one year. But it's also a chance, a structural chance for the whole industry to significantly lower the level we saw in the past, and we foresaw this in our planning. Yeah, maybe Arnd to add to the. I mean, first of all, I think the semiconductor crisis, as painful as it is an opportunity for the industry to sort of right-size the incentive levels, which, you know, have been crazy over the last years. We believe we have a tool, one tool in place, which is the introduction of the agency. We clearly see that already, that it significantly reduces discounts. We think that's long term and enables us to sort of structurally reduce 1, 2, 3 percentage points out of incentives, which, you know, based on our revenues, of course, is huge. Secondly, we also believe that structurally people will spend more on mobility going forward, including all the software, et cetera. If you take share of wallet for mobility, we believe that will increase, which all other things being equal, should increase our profit pools and our profitability. I think that's the biggest opportunity. That might not all be spent at the point of sale, but maybe some of that will be spent later. Structurally, people, we fundamentally believe people will spend more for mobility. Also the effect of the ramp up of the BEV, we currently give really minimum incentives on battery electric vehicles. I think this is also a chance going forward. Battery will be a scarce source. I think there's really a chance for a new level in the whole industry. We will really play our role there. If I may make a personal remark. My boss in particular has an extreme focus on pricing, so rest assured that that's very high on his priority list. That's good to hear. Thank you. Great. Thank you, Arndt. Thank you to the board members, and for Christian, especially Moritz, for being here today. Thank you all for your participation. I'd like to remind you that tomorrow afternoon, 3:00 P.M. Central European Time, our colleagues at Audi are holding their conference call on the Q3. I'd like to also thank my own colleagues and my team and our internal supporting colleagues, and we'd like to wish you a nice afternoon. Thank you very much. Bye-bye. Thank you all. Bye. Thank you. Ladies and gentlemen, that will conclude today's conference. You may now all disconnect.