This was the kickoff time for me. Dear all, thanks for joining us today to our investor and analyst Q&A. Together with me here in Berlin are our CEO, Oliver Blume, and our CFO, Arno Antlitz. Before I hand over to Oli and to Arno, some housekeeping remarks. You should have all received today our press release, the annual report 2022, and the investor and analyst presentation. If not so, please visit our website www.volkswagenag.com. The session will be opened by a brief summary from Oli and from Arno, focusing on the most relevant topics for fiscal year 2022 and are also for 2023. Before we start, I would like to draw your attention to the disclaimer, which you will see now. Please read it carefully, because I'm not going to read it to you. After the intro, we will host Q&A and would ask all of you to stay disciplined on the Q&A, limiting yourselves to, let's say, two questions per person in order to give everybody a chance to raise his or her question on due time. If anything is left unanswered, the IR team will be happy to take your questions afterwards. With that, I hand it over to Oli and Arno for the opening remarks. Oli, the floor is yours. All right. Thank you very much for your introduction, dear ladies and gentlemen. Thanks for joining our investors and analyst Q&A session today after our annual media conference. Last year's success were a great team effort. Each of our brands has also contributed to our success, that in all four brand groups. Let me start with the Brand Group Volume, I'm particularly very proud of the ID. Buzz. Its success shows that the combination of tradition and state-of-the-art technology is extremely well received by our customers. The premium brand group gently sold more than 15,000 vehicles in one year for the first time in 2022. Looking to the results, operating profit over EUR 700 million with a profitability over 20%. This is a great team effort of which we can particularly proud of. Lamborghini continued to build on its impressive growth, delivering over 9,000 vehicles worldwide last year, a 10% increase over the previous sales record set in 2021. That with an operating profit over EUR 600 million and a profitability over 25%. In sports and luxury, my personal highlight was the Porsche IPO, which a lot of you joined during the last year. The IPO marks a historic day. Porsche is more independent and agile after the IPO. The newly gained independence makes it possible to develop even more speed, and yesterday we were able to present it on the annual media conference portion. The IPO has shown that we can successful on the capital market. We are now using this experience to sustainably increase the value of the group. Last but not least, coming to Traton, also with a positive development. For the first time in history, we achieved over 300,000 units, also driven by Navistar and everything with a operating profit of EUR 1.6 billion. We are confident that we have a successful fiscal year ahead of us. To turn this confidence into reality, we will continue to systematically implement our 10-point plan. Let me touch on some highlights here. Our top priority remains financial robustness. We will use our capital more efficiently and focus more on our financial income and net cash flow. At the same time, controlling our costs and the proceeds generated by the Porsche IPO in September 2022 have provided additional headroom. On products, our customers buy brands, and our brands are iconic. We will continue to focus on product strategy, design, quality, and future-oriented technology profile of our products, we'll release a series of new models. Coming to China, I had the opportunity to visit China four weeks ago, and I was very impressed because of the speed you can see there in the market in terms of technology. The Chinese market is changing very quickly, we need the right strategy and the right speed to safeguard our leadership position there. We are naming our approach In China, for China, which will center local partnerships, including Horizon Robotics and CARIAD, what we announced last year. Coming to CARIAD, one of our most pressing issues last year was a reorganization of our software activities. Now we continue to develop CARIAD with exciting projects and a new realistic software roadmap. Coming to PowerCo, a stable supply of competitive battery cells is necessary for the ramp-up of e-mobility. That is why we established PowerCo in July. PowerCo is responsible for all activities along the entire battery value chain. Our plant in Salzgitter, which is scheduled to start production in 2025, is the blueprint for our global battery offensive. As you have mentioned, we already announced a battery plant in Canada as well. Sustainability. Last year, we tightened our CO₂ targets in production and received an award from the renowned Science Based Targets initiative. Instead of the previous 30% reduction, we are now aiming for 50% reduction in production-related CO₂ emissions from our passenger cars and light commercial vehicles by 2030. By the end of the year, our European production sites will already be supplied with 100% renewable energy. Important capital markets, our strategic investment planning up to 2027 proves that the Volkswagen Group is looking to the future for all our brands. We are therefore further fine-tuning virtual equity stories for our brand groups and value drivers in the group. The results will be presented at the Capital Market D ay on June 21st. Strong, robust, resilient, digital and sustainable. This is how we will continue to play a leading role in the era of electric and digital mobility. At the end of my words, I would like to comment something about our Capital Market Day. We have announced for the June this year, which will take place in Hockenheim, and what you can expect from the Capital Market Day. First of all, we thought that it would be very useful for you to experience our great products at the capital markets day during a driving event at the Hockenheimring, the racetrack. Content-wise, the capital markets day will provide an update of key focus areas and the new steering approach at Volkswagen. We plan to detail the strategy of our brand groups, including plant, the plant EV ramp up. Give an update of status and key milestones for our technology business. Provide an overview of our strategy in key regions. Explain our new steering model. Share the group financial targets and framework. We target that you as investors will have better transparency on where we currently stand and how the new team will turn the company into a better one. The capital markets day is planned as the start of a series of events, string of pearls over the coming years. More to be revealed at the capital markets day. Thank you very much for listening. Now I would like to turn over to Arno. I think, this is where the financials come into play. Can you give us a short overview on the results and a overview for the upcoming year? Thank you, Oliver, and I promise I'll make it short. The Volkswagen Group generated solid financial results in the year 2022 in a challenging environment. At the same time, we made important progress in key areas of our corporate strategy and thus vigorously advanced our transformation. This again proves the robustness of our business model and the commitment of our team to drive change. Volkswagen Group operates from a strong financial position and has the will to continue to transform towards electrification and digitalization, also in challenging times. We now look at our financial figures just briefly. I'm sure by now everyone of you had the chance to have a look at them in detail. Our sales volume were at the big level of the previous year due to various restrictions and distortions in the supply chain and the continued shortage of semiconductors. Our sales revenue increased by 12% to EUR 279 billion as the trend, higher mix and better equipped vehicles from the previous year continued. We increased our operating profit before special items to EUR 22.5 billion. The operating margin increased slightly to 8.1%. Strong results benefited from non-cash valuation effect of around EUR 1.8 billion on our raw material purchases. On the other hand, we had to absorb write-downs in connection with the closure of our business in Russia in the order of EUR 2 billion and the cost associated with the very successful IPO, of course, amounted to around EUR 500 billion. Earnings, adjusted for these effects, would have been even exceeded the reported EUR 22.5 billion. Our passenger car business came in at EUR 15 billion. A strong performance given the challenges in supply chains and the burden from our Russian business. Trucks came in at EUR 1.6 billion, corresponding to a 4% margin. Really strong results again in our financial services business, with an operating result of EUR 5.7 billion. Coming to our EBIT bridge, performance in the passenger car division was driven by a convincing product substance across all brands, enabling us once again able to compensate for the negative effects of the slightly lower sales volume through strong mix and better pricing discipline. Raw material costs for steel, aluminum and battery raw materials have become considerably more expensive compared to 2021. For the year as a whole, the resulting increase in product costs had a negative impact of almost EUR 8 billion on the operating profit. Despite the continued high discipline, we were unable to completely avoid an increase in fixed costs due to sales growth and upfront expenditures to new products. Nevertheless, our fixed cost reduction initiative contributed significantly to the good result and to an improved competitive position. A short moment on net liquidity as well and net cash flow. We cannot be satisfied with the reported net cash flow generated of around EUR 5 billion in fiscal year 2022, also reflecting an unstable supply situation throughout 2022, and disruptions in the logistics chains, particularly at the end of the year. As a result, working capital, and in particular, inventory of finished goods and raw materials were, at the end of the year, significantly higher than expected. Investments in CAPEX, as well as R&D increase versus fiscal year 2022, as we continue to invest in our future. The liquidity of our automotive division, end of 2022, increased to EUR 43 billion, including proceeds of EUR 16.1 billion from the successful Porsche IPO in September 2022. Adjust this for the payout of the net dividend in January, the net liquidity for the automotive business stands to around EUR 36.5 trillion at the end of the beginning of 2023. In Western China, our proportion of this result of our joint venture in China came in at EUR 3.3 billion, well above the 2021 figure, but still under the respective result of 2020. Last but not least, you are aware that we proposed a regular dividend of EUR 8.70 per ordinary share. This is around 16% above previous year and adds to the special dividend of EUR 19.06 per ordinary share. This clearly underpins our conviction that our shareholders benefit from the robust financial performance of the Volkswagen Group. Coming to our outlook, important core economic indicators, such as growth prospects in individual regions or expected inflation rates, remain challenging. On the other hand, we expect that in 2023, the structural shortages of semiconductors will improve and the supply of raw materials and logistics will gradually stabilize. The latter one is within our clear focus. We have fascinating brands with convincing product offerings in all major segments and an order backlog of almost 2 million vehicles in Western Europe alone. On this basis, we assume that deliveries to customers of the Volkswagen Group in 2023 will amount to around 9.5 million vehicles. For the Volkswagen Group, we expect sales revenue in 2023 to exceed the prior year figure by 10%-15% and the operating return on sales to remain between a solid 7.5% and 8.5%. Volkswagen Group expects reported net cash flow in the region of EUR 6 billion-EUR 8 billion in 2023. This implies the reversal of the negative effect in working capital at the end of 2022 mentioned earlier. On the other hand, this guidance takes into account the provision for additional cash expenses for the development of our battery business in PowerCo of around EUR 5 billion on top of our current core business. These upfront expenditures for our battery activity are important prerequisite for the successful ramp-up of electric vehicle production and, in our opinion, represent a key success factor in the future. So far to our financial figures, and now let's kick off to the Q&A. Thank you, Arno, and thank you, Oli. Who wants to raise a question, please press nine on your telephone keypad, followed by star. We can already see first questions actually queuing up here. I would like to take as first question here, Tim Rokossa from Deutsche Bank. Tim? Yeah. Thank you, also. Thank you, Oli and Arno, for taking our questions. I want to address my two questions because they are clearly of financial nature, but at the same time it's very much about the strategic direction of the company. When I think about my two questions, I think about the outlook for the midterm. In the short term, the outlook sent quite a huge shockwaves through the automotive industry last week, many wondering in particular about the bullishness for the volume, but also how you wanna keep pricing while you're growing so strongly. Can you explain why you feel a need to grow as much instead of clearly prioritizing profit after we've all learned that the industry can be much more profitable at lower selling levels? If Q1 already supports this guide, so if this is something that you have to chase into H2? Secondly, when we think about the midterm, many investors look at the investment plans today and they wonder if it will ever stop to go up or if you will always find something new to spend money on. You say the peak is in 2025. It feels that all of these investments are done just to frankly maintain your ability to actually build cars, battery availability, Euro 7, and so on, so forth, rather than really generating any incremental profits from where you are today. Post the investment peak in 2025, should we expect free cash flow to increase materially from here? Is the ROI that you are generating with these investments rather in the range of what we are used to from you guys today? Thank you. Hi, Tim. We used the time here to align. The first answer will come from Oli. It's on the bullishness of the, of the volume. The second then will be taken by Arno, and the third is a mix of the two. Please start. Hi, Tim. Thanks for your questions. Yeah, about our volume planning. We still have a very strong order bank and a strong order intake. On the other side, we implemented a program to settle the rise on our supply chain, which is paying off. So we are getting positive results from our supply network. When you look back to 2022, you have to take in mind that we had to close a lot of our factories because of the Ukraine war and the wire harnesses we are getting from the Ukraine. We were not able to catch up all the units over the year. Therefore, it's very logical for us that we have a strong increase in deliveries in 23, calculating with 9.5. If that's feasible because of our market condition. Overall, we won't push the products into the market in terms of pricing situation. That is my position that we drive the company more market-driven than production-driven. I hand over to Arno for the second question. I'll try to answer this combination of questions that you referred to our outlook and also the volume planning. As Oliver said, the volume planning is a combination of great products we have. We sit on an order bank of 1.8 million cars alone in Europe, and we wanna deliver these cars to the customers. Definitely, if you compare to 2022, there were like a significant improvement plan since we had specifically the wiring harness topic in April shown. All in all, we think we can achieve that without sacrificing margin discipline and pay discipline here. Our outlook, as you mentioned, it's a confident outlook. If you look on our business model, we think we have all the ingredients on hand that we can achieve this outlook. First and foremost, yeah, there will be a positive volume price mix, of course, due to the volume planning we have and two good effects as I just mentioned. On the product cost, I think you saw that specifically in Q4, we were hit with a huge amount of huge magnitude of product costs. Some of them will, like, basically also be relevant for 2023. Overall, the back of product costs in our EBITDA should turn to a significant positive. Lastly, not least on the fixed cost side, we wanna stay very disciplined on the fixed costs. Taking all these things into I think, yes, it's a outlook which is ambitious, but we are pretty much sure that we can achieve that outlook in terms of margin. Our midterm planning. I'm sure you refer to the EUR 180 billion for the five-year Planning Round. Let me give you a little bit more light into or more details onto that. Basically, technically, if you take EUR 169 billion from last Planning Round, we basically added EUR 15 billion for the battery capacity increase and our battery strategy, not only in terms of battery capacity, but also in terms of raw materials. The significant increase was cow. In terms of, yeah, which, the R&D budgets combined over time, we expect a peak in 2025. Yeah, 2024, 2025. From there on, a significant, like, reduction year over year. Why is that the case? Look, currently, we are really in a situation where we wanna ramp up or we need to ramp up our battery electric strategy, both in terms of product and in terms of, you know, basically transforming our factories to electric. At the same time, we expect the last expenditures, last investments for keeping our combustion cars competitive. It's a unique situation for us to grow in relevant regions, specifically in the U.S. with the Inflation Reduction Act. This is basically kind of a double burden we see in the next two to three years. Based on what you said, based on our long-term asset planning, cash flows should significantly improve after 2025 and beyond. Arno, a word on first quarter start. First quarter start. We had a decent start into the first quarter in terms of sales, specifically in Europe and the rest of the world. China was weak. China, also the overall market was weak. It was not only Volkswagen situation. We wanna and we will be disciplined on pricing and incentives. I talked about a burden from raw materials that might be still a significant factor in the first quarter. In the total year, as said, it should turn to a positive. Of course, we cannot predict our hedging results. Fixed cost discipline. All in all, we expect also the first quarter to be within the bandwidth of 7.5%-8.5%. Thanks, Arno. Very good. Tim. Yeah, that's very clear. Can I follow up with one question on the short-term statement? Come the second half, you realize China does not bounce back very strongly. Europe is actually weaker than you expect. You have worked through your order backlog. Do you prioritize the unit sales targets or the margin target? As said, we wanna stay disciplined, and we will stay disciplined. On the other hand, look, we have this order backlog of 1.8 million-2 million cars. We really wanna deliver these cars to the customers. Our ambitious volume planning is not taking into account the significant increase in incentives. Really, the customers are waiting. Some electrical cars, customers are even waiting for more than a year. Also the combustion engine cars have really a long lead time. We have a strong order intake based on the current pricing specifically on the non-EV cars. The order bank is even moving towards 1.9 billion and towards 2 billion, 2 million cars. We really wanna deliver these cars to the customer. Executing on the order book and taking the September on the margin. George, the next question comes from you, from George Galliers from Goldman Sachs. Thank you. Thank you for taking my questions. The first question I had was just around the incremental investments in the battery business, of EUR 15 billion. Can you just confirm how many incremental plants you're adding to the plan today versus what was included in Planning Round 70? With the EUR 15 billion you've identified, is that sufficient to cover this investment by Volkswagen as a whole? Will you still need or potentially need funding support from external partners, either potentially battery pure plays or in the past you've mentioned potential battery IPO as a means of funding the battery plants. The second question I had was also around the incremental investments, and this is specifically on Scout. Scout sounds like an exciting venture, with a very good history to the brand. When I look at your portfolio today, it looks like you have in excess of 12 brands, more than 80 different models, which obviously adds a huge amount of complexity to your business. When I compare that to the most valuable car company in the world, operating with one brand and four models, clearly they don't have the same complexity. As you think about Volkswagen strategically, do you need to have the complexity you have in the old world, in the new world, to achieve sales volumes of 40 million units, which you've achieved in the past? Thank you. Thanks, George. The first point will be taken by Oli on the EUR 15 billion battery invest. The second, Scout, we have a passionate speaker here for the Scout brand. That will be taken by Arno. Yeah, George, let me start with your question about the battery business for us. It is on the one hand side important that we see the battery technologies as a core competence for the future. Therefore, we decided also to build our own development and production. On the other side, we always have to leverage what we want to do by our own and where we want to work together with partners. That depends a lot on the cost positioning we would and will be able to achieve in the different regions of the world. So it's a make or buy process behind. This important that from our planning, what we need only in Europe by our own are 240 kWh per year. We kicked off 2 battery plants in Europe. It's Salzgitter and Valencia. For the upcoming years, we will decide where we want to build new battery plants. That depends a lot on the industrial framework we are getting in the regions, which support we are getting on the financial level. What plays a big role is the energy pricing. Turning to North America, the decision we have taken for the Canada plant provides all these aspects. Very positive industrial framework, a guarantee for energy pricing, and beside of this, the opportunity for cooperation in value chain and energy, and raw materials. That makes this decision so attractive. In Europe, we will take it step by step and always leveraging on what we do by our own and what we will do with partners, but also focusing on our core competence. Yeah, George, I answer the question. As said and I will base on what Oliver Blume said on the strategy on the battery, a little bit more technical background. In the Planning Round 70, there was basically only the Salzgitter plant included. We always said including one plant. Now with the Planning Round 71, we included basically the EUR 15 billion on top for basically the finalization of Salzgitter. Then basically Valencia, the plant in Canada we just communicated a small proportion of money if there would be an additional investment. The remaining EUR 50 billion are basically reserved for investment along the value chain upstream in raw material and then also in EVs, for example, for the cathode material. This is basically the EURO 50 billion. We do not rule out that the figure over time will increase, but for the time being, this is included in our 71 figure. Let me talk a little bit about Scout. I'm really excited. I would put a little bit more from a strategic perspective. Given the regulatory uncertainty in the current environment, it's really important that we are strategically more resilient, we are strong in Europe, we are strong in China, we really wanna keep that strength. We have the chance and we need to basically strengthen our third pillar in the U.S. This is very clear with more localization and Scout and the electrification also of the C pickup segment. By the way, one of the most profitable and promising segments in the world, gives us the opportunity to enter this very profitable segment with an own brand, with Scout. We have the technology. We basically now have also the battery cells there, and that would really enlarge our footprint. Also, yeah, would give us the opportunity to grow in the U.S. market and to grow profitable. Just for a reminder, for years we made losses, which is basically not a secret. We achieved the turnaround in 2021, and in 2022 we were already highly profitable there, and we wanna continue that profitable growth. That doesn't mean that we see also the necessity and the profitability of reduction of our model lineup, specifically in the combustion engine. You will see a significant first reduction towards Euro 7 or after Euro 7. In total, we wanna achieve a significant higher sales volume in 2030 with significantly less models overall. If you take the number of models today, ICE and combustion engine on the one hand, and EVs on the other hand, the model lineup in 2030 will be significantly lower than today. Great. Thank you. Thanks, George. The next question comes from Harald. Harald from Morgan Stanley. Please go ahead. Yeah. Thank you so much for taking my questions. Two questions really. Firstly, I mean, I'm sorry to have to go back to this, but, I mean, all the clients are wondering. We unfortunately have a lot of experience with car companies guiding ambitiously on volumes. As you well know, that hasn't historically ended incredibly well. I'm just wondering the strategy, why guide to 9.5? Why not guide a little bit lower? You know, I know you've got to push back, and obviously I'm listening to you. If you guide lower and then you end up higher, tends to have a much, much better result. It now seems like three or four of the big OEMs are over-guiding, and historically that led to more pricing. Maybe you can give us a bit of color on the overall market share assumptions you're making, because on our, and even S&P Global sales growth of 3%, it looks like you're aiming to take 1 million units of market share in 2023, which is, you know, quite ambitious. Second question, strategically, given the increase in the investment plan, and again, I fully understand your ambitions industrially, and it makes sense. If you're an investor and, you know, your company is currently very profitable, right? Over EUR 20 billion of EBIT, which is historically peak profitability. You're now spending EUR 180 billion, EUR 360 per share in the next 5 years, you know, on transitioning the company. What happens to that strategy if suddenly we do have a much more difficult market? You saw what happened to the banking system this week. You know, if banks suddenly contract from lending and overall car demand starts to fall, what happens to EUR 180 billion worth of investment, which you must understand is the most enormous number we've ever seen, if your cash flow starts to fall? You understand that's strategically very difficult, but it's very difficult for investors as well. How would you answer that question, please? All right. Oli is taking the 9.5, and then also happy to elaborate on the 180, and Arno is adding then additional color. Yeah. Thank you, Ralf. Harald, about the volume, that's more a consequence about the situation we do have from the order side and the more stable situation in our supply chain network and the expectations we do have in the market. But once again, for us, the volume at the end is not a driving key figure. Yeah. More important is our profit margin. At the end, over the year, we will leverage how the market situation is developing. For example, already we are able to see it in Europe that the situation for our Volkswagen Group is better than last year. Logical, because of the Ukraine war last year. Now we see a strong signal from the market. In China, the whole market now is increasing. Especially in China, we are expecting a very strong second half year. That is the logic behind. We have seen already in Europe and North America, after Corona, a lot of people there were waiting, were watching what happens in the community, what decisions will be taken by the government in March. That's the expectations we do have. At the end, if we see difficult market conditions, we always leverage and prioritize our margin and situation. Okay. Okay, thank you. You would agree that you're not actually looking to take 1 million units. You're more bullish on the overall market volumes than we are. Is that the right conclusion from what you're saying? I would say we expect a +8% for the overall market. That compares to the +15%. Right. Right. we would take slightly higher share. I said both on product substance and order bank. Also technically, if you look at how we performed in the last year, specifically from the wire and harness topic, following the Ukraine War. it's plausible how we plan the overall market. Okay. Thank you. On the investment. Yeah. We have very solid financials. We always said the post-IPO would give us more flexibility to finance the transformation. The proceeds was, were always earmarked basically for the battery strategy. In terms of profitability of the battery business, we think it also justified. In terms of risk and robustness, of course, if there were signs that our overall plan doesn't work out, the overall industry, is not growing as in tech, we are flexible, to also react on the EUR 180 billion. There are flexibilities built in. One flexibility is obvious. If the market would come different, if the battery electric vehicle overall market would be different in Europe, we have flexibility in the postponing or shifting some of the investment in the battery, business. Rest assured, the overall target is having at all times solid finances and robust financials. We will look at this figure, Planning Round by Planning Round, and look at our volumes we achieve and our margin we achieve, and if necessary, we would adjust accordingly. Okay. Thank you very much. Thanks, Harold. The next question comes from Daniel Röska from Sanford C. Bernstein. Hey, thanks for taking my questions. My first question relates to the speed of innovation in the industry at Volkswagen. You referenced your China trip several times, highlighting the speed in the market, and in some areas you highlighted kind of where you wanted to catch up. If you're behind today, how can you increase your speed sufficiently to kind of out-innovate the competitors ahead of you? What are some of the changes that give you confidence kind of to significantly increase Volkswagen innovation speed in the years to come? My second question relates to e-fuels, where I see we have a disconnect. You summarized earlier that ships, aircraft across the other regions would greatly benefit from e-fuels. No argument there. How does that create a need for e-fuels in Europe where by 2035 your tailpipe emissions, you know, 100% should be feasible? Or is this kind of a vote of non-confidence for that 100% target by 2035? At the sector level, are you not worried that, you know, more delays and more discussions about regulations in Europe and the 2025 targets may drive investment away from Europe and in aggregate, actually work against the, let's say, the cop on the Paris Agreement? Thank you. If you have enough for these two questions, Daniel. Oli. Daniel, thanks for your questions. First, speed of innovation. Yeah, that is so important for us, having on the one hand side focus and on the other side, speed. Therefore, we have taken many very important decisions on group levels. Let me start with our platforms. We ordered very clearly our platforms for the future now to lead engineers. We have a smaller platforms, A0 and A in the development of Volkswagen, the B and C segment for Audi, and the G segment in Porsche. That leaves us in a position to benefit from our scale effects in the group with a very clear focus. What we are now doing currently, we already started with the first platform, the SSP sports platform, to define a clear technology profile, which defines where we want to be 5 or 10 years. Also watching the competition in the market in order to jump far enough with our platforms. That's driving innovation. Therefore, we are very confident now with the shape of our platforms that we're competitive. For our intermediate platforms, for example, the MEB and the PPE, we already decided important upgrades which will come very, very soon on the level of innovations, but also on the quality of our cars. As a important point, it's not about innovation, but about attractiveness of our product is a very big design approach to improve design features for the future. We have a complete program, very focused on product and there, and we are very confident, all the products sold from the customers, that we will hit the market and speed up the platforms. Talking about e-fuels, and there the discussion is often that there's a conflict in between electro mobility and e-fuels and there isn't a conflict. 'Cause when you think about climate protection, you have to think in all measures which are possible. We are strongly committed on our ramp up curve on electro mobility. On the other side, and that's only a initiative we are doing in the group with Porsche. All the other brands don't invest into e-fuels. That's only Porsche. Because we see it more as a responsibility to think about options to reduce CO2 for existing combustion engine cars on the road and ships or the aviation industry. There I don't know any other options to go for than to go for e-fuels and every percentage counts. That might be a big market and it should come out from the German or the European perspective that climate change is a worldwide responsibility. When you look to South America, to Africa, to India, for example, we will have combustion engine cars over decades. They say market and therefore from our understanding of sustainability, we fight for it, but focused on Porsche. Porsche has a share of the biggest e-fuel company in the world. That is. From the argumentation, I hope it will be possible to separate the strong electric ramp up and the synthetic fuels. For the electric ramp up in Europe, 35 is ambitious. That is clear. Therefore we have to provide with exciting products. That's our job. Then we need the charging infrastructure. There we will support. We have the plan worldwide to achieve around about 45,000 fast charging points around the world. That is also a public issue. On the other side, to build new renewable energy resources is also a condition for the ramp up. In Europe, let's go for it. It's ambitious. But we also have to watch all the other regions of the world. Our investment profile is prepared for this. We also have to keep in mind the flexibility in terms of the different speed of the regions, how they are moving towards this transformation. Super. Thank you. Thank you, Daniel. The next question is from Horst Schneider from Bank of America. Horst. Good morning, everyone. Thanks for taking also my question. I want to ask them please one by one. Want to come back again, sorry, on the top line guidance. I want to phrase the question a little bit more different. Arno, you have said this morning, I think, in an interview that the parts market is getting more competitive. Maybe you can elaborate what you mean by that. Where do you see the household and price situation developing at the moment? Of course. Actually, this was not only this morning in interview. I said that already several times and just repeating it. Looking a little bit ahead, what's happened in our industry. The industry was basically supply side driven for two or three years. Have you had not enough semi supply. We are still restricted with the semi supply, but that semi supply will improve throughout the year. On the other hand, you have the macroeconomic situation, interest rates, inflation. What I expected at, let's say Q3, that demand is going down and the supply is improving. So I expect Q3, where demand and supply will meet and that better supply, that will be true for all of the companies. There will be more competition. This is what I said, we're preparing for that. We see high raw material prices, we see other price increase, and it will be more difficult to pass on these price increases to the customer. This is what I'm preparing, we are preparing our teams for. We have to refocus on productivity. We have to have a refocus on fixed cost discipline, on pricing and on cost work. Mm. That doesn't mean that we wanna lose the basically discipline on pricing and incentives, it will be more competition throughout this year. As I said before, we really prepare our company and our teams for this increased competition. That does not mean that 2023 is a kind of one-off event. You catch up with all the shortages, and then we see two big events in 2024. The ultimate ambition is still you have got now maybe a gap in the, in the model launches. You will have a firework of new models in 2024, and that means that 2024 can be even better than 2023. We don't have to give the guidance for 2024, of course, but just that we are clear with the path that we are heading for. Absolutely, Horst. I can't give you guidance today for 2024. We will do that on the Capital Market Day. Perhaps not in detail in 2024, but our strategic outlook and our strategic outlook is very sound. We had our strategic plans discussed before. It will be not such a situation that you will see one good, one additional good year for us in 2023 and not delivering then from there. Okay. It will be a positive path. That's great to hear. The second question that I have, I still got problems to understand then the link between the revenue guidance and the EBIT guidance. I mean, if you guide for EUR 10 billion-EUR 15 billion revenue growth, and then at the same time, I assume kind of 10% leverage, that should basically increase the EBIT by EUR 6 billion, should take the operating margin to 9%, and you are guiding on 10%-15% higher revenues for at the low end of, for kind of stable margin. Therefore, maybe you can elaborate again, what are now exactly the drivers? There seem to be either there's a safety cushion built into the guidance or there are some other compensating factors, maybe on the cost side, that could be 1% of sales burden, which you cannot compensate by pricing. Maybe you can explain that in some more detail. Thank you. A very precise discussion we are doing. Sorry, I'm analyst. No, no. That's quite right. Your figures are not so far away from what, how we expect them. In the volume, you're right. There will be a volume price mix effect. We will see a slightly negative mix effect, both in terms of region and both in terms of channels and both also in terms of the cars we sell. Of course, in the period where we were very much restricted by semis, we didn't ship all the cars into semis, so the less promising regions in terms of margin, for example, Brazil and others, we res-the people or customers ordered better good cars, so we didn't offer the entry cars and also different channels. There will be a slightly negative effect from there. We want to continue on pricing, and incentives discipline. Raw costs, as said before, will be even a small positive year-over-year. Fixed costs, we wanna be disciplined, but there will be also on the fixed cost side, you saw our R&D and CapEx guidance, there will be a small burden. Yes, as always, as you could see it all, there is a small safety cushion in the cushion in that whole bridge, which feeds us into the guidance. Okay. That's excellent. That's a clear statement. Thank you and good luck. Thank you. Thank you, Horst. The next one is Patrick Hummel from UBS. Patrick? Yes, thanks. Good morning, everybody. Patrick from UBS. Two questions also from my end, please. First one, I want to understand how you think about your BEV profitability longer term. Volkswagen is in the market with an ID.3, which is, say EUR 40,000 vehicle and an EBIT that's maybe slightly above 18 level. Tesla's in the market with a product today for the same price set, more or less, that's way bigger and is coming with a compact car, whatever it's exactly going to look like, in a couple of years with 50% lower costs than Model Y or Model 3 today. I really struggle to see how VW is going to have an affordable EV that's profitable to you in a couple of years' time. Can you just update us, you know, about price points you're trying to achieve, about cost reduction targets you're going to achieve? What can you tell us today that makes us confident that Volkswagen is going to be able, against such competitors, to have a profitable, affordable EV offering? That brings me to my second question. We do hear you on, you know, fixed cost discipline, et cetera. It feels to me other OEMs, especially mass market OEMs, have been much more vocal about the need to take out further costs. They're launching new cost-cutting programs, be it in Europe or be it in North America. They're preparing for a market that's more competitive and where we'll see more pricing pressure. You know, costs, you talked about it, but on that slide about your 10 priorities for 2023, it's not even a single item. I just wonder, are you not too relaxed on the need to, you know, aggressively take out more costs of the business? Thank you. Go ahead. May I start and then I hand over to Arno to add some information? I will touch both of the questions quickly. First off, the BEV profitability. On the one hand side, we count on our platform strategy and the scale effects. There, especially to the SSP phase. We have decided during the last months. I'm very confident that it will bring us in very positive scale effects, invest once and using the platform for different brands. On the other side, we reestablished cost programs for our current business, but also already for the future business with these cost initiatives, because there we have a main levers already in this period for the new platforms. That is one comment on this, maybe Arno can dive a bit deeper about our cost programs or profitability improvement programs. We host a target summit with all our brands and units in January. There we agreed strategic targets for profitability and also being cash flow focused. That's not only an agreement we did there. Behind of this, we have very, very clear programs, what we have to do. One example we presented yesterday in the Porsche annual media conference and the call we had together is a Road to 6.5. For all the other units, we are currently implementing the same. An open question is to take the current Planning Round then to watch what fills the delta to get there. In the case of Porsche, to get to the Road to 6.5. We defined very clearly, what is missing in terms of operating profit, what is missing of profitability. Then we defined clear programs behind in measurable steps year by year, how to get there. It's a very clear systematic how to drive and to improve the profitability in each of our units. May I hand over to Arno to add some comments. Thanks, Oliver. I'll add a little bit on more on the detail side. Look, first and foremost, Patrick, From my point of view, we have been quite successful in fixed cost discipline. Look, we have this program of reducing fixed costs by 10%, 2019 until 2023. We achieved that program already in 2021. In 2022, we had a slight increase in fixed costs, this is an all-in summary. We acquired Navistar. We built up PowerCo, we built up CARIAD, and all of these additional activities are included in that overhead cost initiative, and still we are below 2019 figure. If you take a relative burden of fixed costs, we decreased that by 2 percentage points. Which is, yeah, okay, could it have been more? But we are operating in an industry that just makes an 8 percentage point margin, and 2 percentage points come from that overhead cost program. It is missing. Quite honestly, for 2023, at least in terms of relative burden, basically overhead costs divided by automotive sales revenue will deliver an additional positive. Going forward, we are very well aware that competition will become tougher, so we try to stay as fixed as possible on the overhead cost side, giving all the inflation, giving all the additional activities in the group on the one hand. The second lever is productivity. Look, for I would say two to three years, we were happy that we could build the cars in that same as from, which led to a lot of the absorption in the factory. Also in an internal interview, I said, 2023 has to become the year of productivity. Last but not least, we founded the Brand Group Volume, which will deliver a significant positive lever in terms of working together, not on the sales on the customer side. Here, Here, we want to differentiate the cars even stronger, but on the back office side, on production, on development, on after sales. There will be significant positives the Brand Group Volume wants to achieve. Last but not least, as Oliver said already, in that planning, there's also a new KPI we included in our Brand Group steering, and that's a break even. It's not only cash flow we have a strong focus on, but there will be also a clear break even target for each brand in the group. Just to confirm. Thank you, Arno and Oliver. Just to confirm. We are or you are on track for a 2025-ish launch of an affordable EV that will be profitable to the Group. That's still the plan. A little bit more detail on that. I think we haven't called it so far ID.2, but look, it's easier to call it that way. It will be a car below the ID.3. It will be a car from today's perspective, below EUR 25,000, although it's too early to give you specific pricing. There are a lot of measures. First and foremost, we will have significant scale by then. It's based on the MEB, but it's kind of a second generation MEB platform. There's a lot of cost improvements already, and that will be also then based on our Valencia plant cell factory, which gives us an additional improvement on the sales side by then, hopefully we also made significant progress in, yeah, in attaining and assuring sufficient supply of battery raw materials for Volkswagen. There are a lot of building blocks. Scale, technology, more product integration, on the electric engine and converter and cheaper cell supply. Yeah. Coming or adding Arno, about the scale effects, we do have talking about this platform. We also have the opportunity to add some models from other brands, like from Skoda and also from Cupra. We already announced that we are considering a Cupra UrbanRebel. With Cupra, we are increasing price gap, also the profit margins. That brings us in a very positive scale effect situation with our platform strategy. I appreciate all the color. Thank you. Thank you. We have to watch a little bit the time, so maybe we can take another two questioners before we have to round it up. As said, if there are any questions unanswered, our team is happy to take it. We continue with José Asumendi from JPMorgan. Hey, guys. It's José at JPMorgan. Couple of questions, please. Arno, when looking at the guidance and the share price reaction when you released it looks to me like consensus expectations clearly underestimate the level of disruption you went through last year. Can you just give a bit more color out of the year on the upper end of the sales and EV margin corridor that you have provided? Oli, please, on follow-up. I think it's very important to improve the competitiveness in China. Can you comment please on the Volkswagen ID.3, the refresh you're going to do with a bigger display and improved software? When should we expect this car to be launched, and how quickly can you roll out these improvements across the remaining family, especially across China? Thank you. Okay. May I start with the China question. First of all, for the ID.3, we are planning different steps for update. This year we will come to the market with a update in terms of its interior, improving quality, improving material and the exterior, especially in design, front and the rear. Then we decided in the last months a important update for the MEB platform to improve performance, to improve range, to improve charging time. That will affect also very clearly the Chinese market, but not enough with this. We have to improve our platforms, especially from the smart car approach in China. That is what I mentioned when I had the opportunity to visit China four weeks ago to be closer to the Chinese customers, to develop In China, for China solutions. Therefore, we are aiming for partnerships also with Chinese tech companies. What we will do there, that we will have a clear product program ahead, which we will decide in April, besides of the Shanghai Motor Show. We call the plan, it's our China target for 2030, but very accelerated for all the brands. The approach for Volkswagen, for Audi to be different than Porsche. Porsche, different positions, and yes, that's what we are doing. I think with this approach, we will be able to catch up in the electric era while we are still very strong in the ICE. What counts in the future, that's very clear, is the performance on EVs. That's what we are preparing currently. We have clear ideas and a clear plan to do it. Great. I'll try to answer the question. I'm not 100% sure whether I understood it right. Look, when we give a guidance, we expect from today's perspective to be at the midpoint. Knowing this in the past, there were several cases where we said, "Look, Volkswagen is a little bit more conservative," but I think we should have an ambitious guidance to also challenge ourselves. Ambitious means reachable and feasible, and we are confident that we can achieve it. But for the today's perspective, you should expect us to be in the midpoint of the guidance. Thank you. Thank you, José. We are coming to the last question for today's session. Henning, the floor is yours. Yeah. Thanks a lot for squeezing me in. I was hoping to understand the structure of free cash flow a little bit. That was my first question. You're guiding for the EUR 6 billion-EUR 8 billion. I think we understand now that we should be adding back EUR 5 billion for M&A and diesel, I guess, and EUR 2 billion separate from PowerCo. I guess if you, if you add that back, you get to the like for like number that would have otherwise been, you know, your adjusted adjusted free cash flow number in the past, I guess, EUR 14 billion-EUR 16 billion. You know, but at the same time, there's a, there's a working capital reversal in that. If you can just help us understand a bit more, what's the free cash flow, the structure of free cash flow going forward? Should we always now keep expecting an envelope for M&A, so the reported number will not go back to a double-digit figure for a while? If you could just give us a bit more color there. Secondly, it also relates to China. On the ID. model, I understand that you now start offering the ID.3 from RMB 175, which in EUR terms I think works out to about half the entry point for which you're selling the car in Germany. I would just like to understand quite how bad that is in terms of how much money you might be losing on the vehicle in China. What's the path to improvement as Oliver Blume already talked about the improvements that are coming with the next update. If you could also sort of roll in the profitability element into that. Is it getting quite a bit better in the near term? Thank you. These are both questions for Arno. Yeah. I think it's a cash flow. Look, yeah, of course it's a free cash flow. There's M&A and small outflow of diesel in it. If you wanna, like, look at it from a more global perspective, the typical cash flow we could expect in the current situation and given the EBIT guidance and the upfront investment for electrification and digitalization would be EUR 8 billion-EUR 9 billion. And you theoretically should get a reversal of the situation we had last year on the inventory side. That basically leads to EUR 12 billion-EUR 13 billion adjusted. In that EUR 12 billion-EUR 13 billion, or from that EUR 12 billion-EUR 13 billion, we basically deduct an additional EUR 5 billion, for which is reserved for, from PowerCo, which comes on top to our current core business. That leads us then to the guidance of EUR 6-8 billion. There are certain allowances for M&A, of course, but not in the magnitude that we saw, like, two or three years ago. Keep taking out PowerCo, of course. Sorry. This is beyond 2023. Are you saying the envelope for M&A, we should think of that as a little bit less, so that the number will get closer to a EUR 10 billion level? I don't want to give guidance from the cost perspective on free cash flow for 2024 and beyond. Our vision is of course to increase that. We called it a clean cash flow in the past. From the clean cash flow we deduct M&A and diesel and capture the workforce we give at least the capital market day also a guidance for the clean cash flow, then it becomes more transparent. Yep. Thank you. We appreciate that. We thought we'd make it a little bit less stringent and complex, and we took that CPI from our guidance. If it's helpful for you, we will redo it. A question on China and the profitability of the ID.3. Yeah, in China, I mean, there's a lot of discussion around whether we are still disciplined in terms of pricing or not. For all we can say, we are still disciplined. The incentives we are just giving now in terms of cash incentives, they have been given before, and they were like virtual incentives that you could change, like in the ID. stores, in the virtual ID. stores. From pricing point of view, nothing has changed. Clearly we have to work on profitability and on the cost side on ID.3, ID.4, ID.6 in China, both in terms of material costs, in terms of battery, in terms of production costs, in order to increase competitiveness, yeah. Okay. Thank you. Thank you, Henning. We are now unfortunately have to come to a close. I would like to thank all of you for the very vivid discussion. Thank Oli and Arno actually for being with us. We meet the one or the other now at the next virtual equity, virtual board show we will have now running back virtual equity sorry. Q1 will be due on May fourth. What we are very much looking forward to is the Capital Markets Day in June, on June twenty-first. Until then, please stay healthy. Yeah, whenever there is anything unanswered, please call us in post-work, and we are very happy to take your questions. Thank you very much for joining us today. Bye. Thanks very much also from my side. Great discussion. Thank you. Thank you to all of you for joining.