Welcome to Volkswagen Group nine months results call. This, as, as you know, it's a joint call for both media as well as investors and analysts, which is moderated by Rolf Woller, our Head of Treasury and IR, and myself, Pietro Zollino, I'm heading Corporate Communications. With us today is Arno Antlitz, our CFO and COO. Good morning, Rolf. Good morning, Arno. Let me provide a few remarks before we start. You should have received the press release, the interim financial report, and all other related materials of which have been published this morning. If you do not have them yet, you can find all documents on our website. In case of any issue, give us a call or drop us a mail, and we will send them straight to you. Let me now hand over to Rolf, who will give you a brief run-through of the next about two hours. Thank you, Pietro, and good morning to everyone on the call. Thanks for joining us this morning from wherever you have dialed in. Let's have a look at our agenda today. Arno will first present the highlights of the first nine months and the third quarter, and after that, we will take a closer look at the financial and full year outlook. Following the presentation, we will, as always, host a question and answer session for the investors and analysts first, and this one will be moderated by myself. After this session, we will have a short break and then continue with the media Q&A, which is then moderated by Pietro. With that, and without any further ado, I hand over to Arno, who guides us through the presentation. Arno? Yeah. Thank you, Rolf, and a warm welcome to all of you from my side as well. We published key data for the first nine months and the third quarter, and our outlook for 2023, on October 20th already. I will thus concentrate on the incremental news and will provide additional information and explanation on the current business. Let's dive straight into the presentation and start with the highlights of the first nine months. Starting with the Volkswagen ID.4 and ID.5, which received major product upgrades, a fresh infotainment system with intuitive operation, and a new electric drive with power up to 210 kW, and up to 556 km of range. We regard this a major step up in terms of product competitiveness. Next, at the occasion of this year's IAA Automotive Fair, we gave design a greater overall significance and meaning with the Volkswagen Group brand universe. We redefined design principles, aiming for higher design quality and stronger differentiation of the brands. Both the Volkswagen ID. GTI concept and the CUPRA Dark Rebel car show received great feedback. Further, at the IAA, we announced significant advances in our four industry-leading technology platform. Most impressive was a preview of our new software generation, E3 1.2, in our all-electric Audi Q6 e-tron, which we will bring to the market next year. Talking about EVs, the ID.7 just won the prestigious German Car of the Year award, further evidence that we are on the right track with top quality, intuitive operation, and efficiency. Last but not least, we finalized the vehicle allocation for plants in Germany until 2028. Reduced production complexity by a platform-based allocation will improve efficiency and will contribute to our performance program significantly. Our global deliveries, after nine months, reached 6.7 million vehicles, corresponding to an increase of about 11%. Q3 standalone saw deliveries expand by 7% to 2.3 million units. Growth was primarily driven by a strong double-digit performance in Western Europe and North America, while we recorded a slight decline in the Chinese market. The situation in global supply chains continued to improve. However, production in the third quarter was held back by parts shortages related to the severe flooding in Slovenia and its impact on the supplier production. The total impact in the quarter amounted to more than 100,000 units, Brand Group Core in particular. Our order book in Western Europe is currently standing at about 1.4 million vehicles, versus 1.9 million vehicles a year ago. Order intake in the ICE segment continues to be robust, although being slightly below the prior year figure. New orders for BEVs recently picked up. In total, our book includes orders for about 150,000 BEVs. We gained market share and remained in a market-leading position in this segment in Europe. However, our order intake is below our ambitious targets due to the lower-than-expected overall market trend. Deliveries of battery electric vehicles continued their positive momentum, as evidenced by a further increase in the BEV share. We sold 532,000 BEVs in the first nine months of 2023, equaling 7.9% of deliveries. In the third quarter, standalone, the share of BEVs advanced to even 9%. Importantly, at 61% year-on-year growth, we continued to outgrow the market in Europe, confirming our leading position there. EV volume growth in the Chinese market was slightly positive after nine months, with double-digit growth in Q3 standalone, and momentum thus remains positive. We currently face a general reluctance in the European market to buy battery-powered vehicles. However, performance in the coming months should be further supported by the launch of the upgraded ID.4 and ID.5, as well as the ramp-up of our all-new ID.7, and with an increasingly competitive product offering. Now, let's move to the financials and the operating performance. Vehicle sales for Volkswagen Group came in up 8% at 6.8 million units, including China JV's vehicle sales advanced even stronger by 18% to 4.6 million vehicles year- to- date. We achieved sales revenue of EUR 235 billion, up by 16%. The significant volume improvement was supported by a strong increase of sales, both in Europe, + 21%, and North America, + 16%. Sales revenues were further supported by a healthy mix and continued favorable pricing. However, Forex had a counteracting effect on revenues growth of about 3 percentage points. Operating result came in at EUR 16.2 billion, corresponding to a margin of 6.9%, 1.7 percentage points below the prior year period. What seems underwhelming at the first glance is, in fact, a robust performance. The first nine months, 2022, had benefited from positive valuation effects of commodity hedges outside hedge accounting in the magnitude of EUR 0.8 billion. This year, we recorded non-cash valuation effects of EUR -2.5 billion year-to-date, a swing of about EUR 3.3 billion year-on-year. Including these valuation effects, our operating result after nine months increased by EUR 2 billion to EUR 18.7 billion, resulting in an underlying operating margin of 8%, almost on par with prior year's level. Coming to the cash flow situation, which has improved since we last spoke at H1 results conference call. Net cash flow generated in the automotive division totaled to EUR 4.9 billion after nine months, which includes a solid contribution of EUR 2.5 billion in the third quarter standalone. The third quarter cash flow includes an outflow of EUR -1.5 billion from tax payments for past assessment periods. Net cash flow in the reporting period was still held back, in particular, by a significant build-up of working capital of EUR -4.6 billion, mainly as a result of bottlenecks in vehicle logistics, affecting inventories and finished goods levels in Europe and North America. However, following peak headwinds in the second quarter, the situation has been improving since, thanks to the execution of decisive countermeasures of our committed teams. Working capital movement had a positive effect of EUR 1.4 billion in Q3 2023, and the teams continue to work hard to further improve inventory levels by year-end. Nevertheless, the environment remains challenging and volatile. Free net cash flow totaled EUR 6 billion in the first nine months, compared to EUR 9.2 billion in prior year period. Which brings me to our automotive net liquidity, which stood at EUR 36.7 billion as per end of September 2023, a truly solid position within an industry in transition. Compared to year-end 2022, net liquidity declined by about EUR 6 billion, mainly as a result of dividend payments to Volkswagen shareholders of total amount of EUR 11 billion. This is truly a proof that our shareholders are participating in the success of our business. Coming to the divisional performance, passenger cars delivered EUR 10.3 billion operating result, corresponding to a margin of 6.5% before special items. These numbers in 2023 were negatively impacted by the swing in valuation effects of our hedging portfolio of EUR 3.3 billion year-on-year. Commercial vehicles continued the strong performance. Results came in at EUR 2.7 billion, which is almost three times the level recorded in the first 9 months, 2022. Return on sales stood at a strong 8%, which is broadly confirming the level achieved in H1 already. Financial services division recorded an operating result of EUR 3 billion, a decline of 28% versus the prior year period. Let's have a look together at the drivers behind our business. Volume price mix contributed a positive around EUR 6.3 billion. At EUR +4.5 billion, operating results were in particular supported by the strong volume expansion, which continued to be a key driver in the third quarter. Mix was slightly positive, and pricing continued on healthy levels in line with our value over volume strategy and contributed EUR +1.4 billion to our result. In comparison to the prior year, operating result in the first nine months was held back by a substantial swing of fair value effects outside hedge accounting in order of EUR 3.3 billion. Product costs were higher year-over-year at EUR -3.4 billion and continued to limit earnings growth also in the third quarter, with a EUR -1.1 billion in Q3. Fixed costs and other costs increased moderately in the nine-month period, which is attributed to higher R&D costs, the ramp-up of new business, like our battery or Scout, inflation, and rigorous execution of fixed cost measures, on the other hand, to compensate for that. Before I move on for a more detailed look at our brand groups and business segments, let's have a look on our financial steering model. Based on our holistic program, we are managing the group systematically, efficiently, and with a strong focus on execution. In the course of the year, we have delivered a continuous flow of proof points for consistent strategy execution and are committed to drive our program with full force and focus. An important element of our group strategy is to enhance resilience by reducing group overhead costs. By 2022 compared to 2019, we were able to reduce the ratio to automotive revenues by 230 basis points, despite the first-time consolidation of Navistar and the significant upfront investments in our battery, software, and mobility business. We are making further progress. year-to-date, the ratio advanced to a level of 15.7%, equivalent to an improvement of an additional 140 basis points versus the prior year period. We believe there is still room for improvement going forward in executing our improvement program in the group. As Volkswagen progresses, we are committed to prudent cost management and continued overhead cost discipline. Moving on to the performance of our groups and platforms. Brand Group Core saw a significant uplift in volumes. Sales revenue increased even stronger and grew by 24%. Operating margin at brand group level reached 4.9%, 30 basis points up year-on-year. In absolute terms, operating result came in at EUR 5 billion, up 34% year-on-year. Positive volume and price effects compensated for headwinds from higher product costs and fixed costs. Brand Group Core suffered a substantial impact of more than 100,000 cars on Q3 ICE production from the severe flooding in Slovenia and its impact on a key supplier in that region. The brand recorded a margin of 2.4% in the third quarter of 2023, and 3.4% in the first nine months. In absolute terms, EUR 300 million below prior year figure, and significantly below our previous expectations, and certainly below our ambition. Volkswagen brand is advancing in designing the performance program as we speak, and everybody's well aware that the current performance, as well as the economic environment, underscore the importance of achieving significant steps ahead in terms of competitiveness in the coming months. ŠKODA achieved an improvement margin of 6.4% after nine months, up by 80 basis points year- over- year. However, this is well below what ŠKODA, what we think, what ŠKODA could deliver. SEAT CUPRA recorded an operating margin of 4.6%, compared to a - 0.1% in the first nine months, 2022. Also, Volkswagen Commercial Vehicles advanced its profitability to 6%, equivalent to an increase of 150 basis points, and our component business delivered an increase of the operating result by more than EUR 450 million year-over-year and a margin of 2.7%. Finally, net cash flow of Brand Group Core advanced significantly to EUR 3.6 billion. Mar gin of Brand Group Progressive declined by 500 basis points year-over-year to 9.1%, despite a significant increase in sales volume. This development was heavily impacted by negative valuation effects from raw material price hedging, outside hedge accounting in the magnitude of roughly EUR 900 million. The underlying margin after nine months, excluding these effects, was at a solid level of 10.9%. Nevertheless, some 190 basis points below the strong level recorded in the prior year period. Declines mainly result of higher product cost and upfront investment in R&D. Net cash flow of Brand Group Progressive remained robust overall and came in at EUR 3.5 billion, despite increased product-related investments in preparation of upcoming product launches. Porsche AG continued its successful track record and remains strong at 18.8% operating margin, despite product launch costs and input cost inflation. The operating result benefited from improved pricing, better product mix, and not last but not least, 13% higher volumes. Porsche is following its strict pricing policy. Net cash flow increased slightly year-on-year to EUR 3.4 billion, driven by strong underlying business. Audi continued to roll out software to a growing group vehicle park as planned, which resulted in a significant increase in contracted license fees of +34% year-on-year. Sales revenue rose by 29%, driven by higher license revenues from MEB cars on the 1.1 platform. Losses on operating result level were up on the previous year due to accelerated efforts to secure timing and quality level for upcoming product launches, and reported net cash flow was unchanged at EUR -1.5 billion. However, as already explained in our Q2 call, Cariad benefited from a EUR 1 billion intra-group income tax refund, resulting from an inter-group allocation from 2022. The underlying negative net cash flow thus came in at EUR -2.5 billion. Our global battery business is making fast-paced progress, both in terms of developing the teams and capabilities, as well as in the construction of Salzgitter plant, as the first of three already decided cell factories. In the period under review, costs associated for the continued ramp-up and higher CapEx, as planned, lead to a negative operating result of EUR -0.2 billion, as well as a net cash flow of -EUR 0.7 billion. One further milestone in the execution of our battery strategy was the announcement by the PowerCo and Umicore-backed JV, IONWAY, to build its first cathode active material plant in Nysa. From 2025 onwards, the joint venture will supply PowerCo's European battery cell factories with key materials for production, secured from Umicore's existing capacity in Nysa. TRATON continued this positive trend. Unit sales increased by 15% year-to-date, thanks to robust customer demand, as well filled order book and easing supply chain constraints. The strong volume expansion, combined with positive price and mix effects and continued growth in vehicle services, drove sales revenue up by 19%. Operating margin came in at a strong 8%, with Q3 largely confirming the stronger profitability level achieved in the first half of the year. Key drivers were better fixed cost absorption, resulting from higher volumes, as well as price mix, compensating for increased input costs. Mainly driven by the strongly improved operating performance, TRATON delivered a net cash flow of EUR 1.7 billion, significantly up year-on-year. Financial services kept the overall contract volume stable. A slightly lower number of financing contracts was compensated for by an increase in the number of both leasing and insurance contracts. The credit loss ratio was largely unchanged versus the prior year level, despite the worsened macroeconomic environment. Given the dynamic evolution of the environment, we are all closely monitoring the future development of this ratio. Operating income in the first nine months, 2023, fell by about a quarter to EUR 3 billion, corresponding to a margin of 7.5%, still on track towards achieving the full year forecast of an operating result in the magnitude of EUR 4 billion. The decline reflects the normalization of used car prices, as well as significant increase in interest rate and adverse exchange rate trends. Moving on to automotive investments, to R&D and CapEx. Current R&D spending levels are reflecting the accelerating transformation of the Volkswagen Group and its brands towards electrification and digitalization. At the same time, it is our strategy to keep our ICE cars competitive, as they will run in part until the end of the next decade. As a consequence, we are currently investing in both BEVs and ICE technologies in parallel, a situation that we expect to continue over the next two years. In addition, we launch our global footprint in the U.S. with the Scout project and launch an ambitious catch-up program in China. After this transition period, we expect the group to benefit from lower capital expenditure and research and development costs. Looking at spend levels in the first nine months of 2023, R&D expenses amounted to EUR 15.6 billion, corresponding to an R&D ratio of 8%. CapEx came in at EUR 8.7 billion, and at a ratio to sales of 4.5%, reflecting our CapEx discipline to compensate for higher R&D costs. For the full year, we continue to expect a CapEx ratio of 6%-6.5% and R&D ratio of 8%-8.5%, and this results in an overall investment ratio of 14.5% then. Moving on to the performance of our China joint ventures. After a weak start to the year and a stronger second quarter, group delivery figures in the third quarter were up quarter-over-quarter. Overall, deliveries to customers in the first nine months were 3% lower year-on-year, at about 2.3 million vehicles. We were able to further strengthen our leading position in the ICE segment, advancing market share there. At the same time, our BEV sales experienced an accelerating trend. Volume increased from 22,000 units in Q1 to 55,000 units in Q3, and the share in the Chinese deliveries advanced from 3%-7%. Thanks to a stronger third quarter performance, the proportionate operating result of our Chinese JVs amounted to EUR 1.88 billion after nine months in 2023. Overall, we are approaching our target of up to EUR 3.8 billion proportionate operating result in the full year 2023. Ladies and gentlemen, finally, on the full year outlook. Based on a strong top-line performance in the first nine months of the year, we are well on track to achieve our forecast for deliveries to customers of 9-9.5 million vehicles and a target of 10%-15% growth in sales revenues. At the same time, we updated the outlook for the group's operating profit. We no longer assume to compensate for the negative impact of fair value measurements outside hedge accounting, totaling EUR 2.5 billion during the first nine months. As a result, we now expect the operating result to be around previous year level before special items of about EUR 22.5 billion. This forecast includes the effect of the fair value measurement of the hedging instruments accumulated in the first nine months of the year. As you can see, we are expecting a decent fourth quarter with strong volumes and operating profit. In this context, it is important to note that this forecast does not include valuation effects other than those recorded to date. On underlying basis, before valuation effects, the operating return on sales in the full year is thus fully in line with our original margin corridor of 7.5%-8.5%, and with that, demonstrating the robustness of our business model in a challenging environment. For the sake of completeness, we confirmed our forecast for net cash flow in the Automotive division at the lower end of the range of EUR 6 billion-EUR 8 billion, assuming that we will be able to deliver all vehicles to our customers as planned and in time. We continue to expect net liquidity at healthy levels of between EUR 35 billion and EUR 40 billion. Rest assured, net cash flow generation enjoys the highest level of attention of the whole board of management. To sum it up, we continue to deliver a robust performance in a challenging environment, both in terms of top and bottom line. We continue to execute our strategic initiatives along our top 10-point program with full force and focus, and delivered important proof points so far. The group is just ahead of a substantial refreshment of its product portfolio, adding to our brand's competitiveness in the markets. Next proof point will be the completion of VW Brand Performance program and its launch, and with that, taking important steps towards improving the competitiveness of the Volkswagen Group going forward. We rely on a very solid balance sheet and financials, and based on that, we continue to transform our company towards electrification and digitalization, with full focus on execution, capturing synergies within the group and delivery on cash flow. Thank you very much so far, and let me now hand back to, to Rolf. Thank you for listening. Thank you, Arno, for that very comprehensive presentation. Before we go now to the Q&A, I, in sheer anticipation of Arno's presentation, moved over Slide 2, yeah, which is the disclaimer. As a reminder, the safe harbor language and other cautionary statements on Page 2 have governed today's presentation, and I definitely would like to encourage you to read the disclaimer carefully, since all forward-looking statements are qualified by this language. As promised, I won't read it to you. With that, for everyone who wants to ask a question, please press star one on your telephone keypad, and then we start the question and answer session. We have the first question here from George from Goldman Sachs. George, the floor is yours. Great, thank you for taking my questions. The first question I had was with respect to, the elevated product costs. Could you just give us some insight into what that relates to? Is it employee compensation? Is it just inflation of the bill of material. Sorry, supply compensation, is it inflation in the bill of material, or, or does it relate to some other matters? And what can you do to bring that down in Q4 and 2024? The second question I had was with respect to European CO2 compliance in 2025. Will you need to meaningfully increase your BEV penetration in Europe in order to be compliant in 2025, or is it feasible with the present level of battery electric vehicle penetration? Thank you. Yeah, George, thanks very much and good, good morning. So yeah, two questions. First, on product cost and then BEV penetration. Look, in the product cost, if you talk about the EBIT bridge, it's really a little bit of several things. We had a headwind of -EUR 1.1 billion, I think, in Q3 only. We expected that to be lower, to be basically a slight headwind, and so it's really in some elements we expected improved battery materials for lithium hitting the P&L already in Q3. So with the reduced production volume, this effect will hit us in Q4. It's also a significant cost increase in logistics cost. There were some one-offs related to semiconductor. All in all, this is the effect then that led to the, I would say, higher product cost than expected in Q3. For Q4, we expect for Q4 only that bucket product cost to be significantly positive in order to compensate for some of the effects, and also year-over-year 2022, when you realize we had a rather high increase in product cost in the fourth quarter back then. But there's still, for the overall year, we still expect here to see a negative effect here in product cost year-over-year, of course. In terms of BEV penetration, we had our outlook for this year, 8%-10%. We really made very good progress in the BEV share. If you look at our shares, Q1 was, I think, about 7%, Q2 was 7.7, Q3, 9% already. We are on the way to meet our 8%-10% target, our target of 8%-10% BEV share in 2023, basically due to the situation in China, which we discussed before. For 2025, year 2025, we still aim for a 20% share. But yes, this might be challenging given the current environment, but we are rather optimistic for our increase in BEV volume overall, and this should be then in line with also the targets we need for the greenhouse gas. Great. Thank you very much. Thank you, George. The next question is from Patrick Hummel, from UBS. Patrick? Yeah, thank you. Good morning, Arno. Good morning, everybody. So, two questions, please. First one, we see some competitors already pushing back EV launches and also dialing back on EV investments. And, I wonder, you still emphasize the growth in the BEVs here in the mix, but at the same time, there's lots of negative headlines about EV demand, EV pricing. So I wonder what this means for your best strategy in terms of product rollouts, in terms of investments. And, last but not least, in that regard, what's the value of the investments you've made so far if the profitability is now under significant pressure, does that bear the risk of meaningful write-downs? And the second question on the production side. You had that 100,000 production loss because of the supplier issue, but at the same time, you were saying order intake is below your ambitious targets. So, isn't it, in the end, more of a demand issue that the, you know... And it's not a good idea to catch up with that lost production in the coming quarters because the inventory is already quite high in the channels. And, yeah, how should we basically think about production in the coming quarters in light of the current demand situation? Thank you. Yeah, Patrick, we are absolutely committed on the ramp-up of our total EV business, which has several elements. First and foremost, product. We launched an ID.7 with really great product substance, range, updates over the air, automatic lane change. We updated the ID.4, ID.5. We updated a great product enhancement of the ID.3, and next year, we will see the launch of the PPE platform, Amarok, Audi e-tron. At the same time, we ramp up our battery business in Europe with PowerCo. In Salzgitter, we advanced in the U.S. We launched Scout, an all-electric platform. So we are absolutely committed to the EV ramp-up. We always said that our battery business, that we invest by ourselves, which is crucial for reaching our targets, and it's also crucial for reaching, eventually back then, out there, then the EV parity. We always want to... There's only 50% of the demand we need. 50%, we want to invest in PowerCo, 50%, we, we wanna, buy from outside markets. We look at different chemistries, NMC, LFP, and so this gives us also flexibility if the demand should, for certain quarters or ever, be, be below than expected. So it, it was, it was always a very robust strategy, and, and it will be a very robust strategy, going forward. In terms of production and supply issue, we were hit by more or less 100,000 cars, to be honest. In October, we will see another hit of about 50,000. But then for the time being, that whole topic should be then really fixed, thanks to the really great efforts of our teams. They enlarged capacity worldwide and a lot of other suppliers showed high flexibility. And then that has nothing to do with, like, the current situation and the orders. If you look at our order bank, our order bank is still 1.4 million cars in Europe alone. Yes, the order bank of BEVs went down to 150,000, but we have a very strong order bank in Western Europe. And if you look at our figures we achieved so far, it's really that we plan for a rather robust fourth quarter in order to meet our ambitious targets. We'll be guided for EUR 25 billion, EUR 22.5 billion euro reported, and basically then EUR 25 billion operating result before our commodity hedges. And for that, we need and we plan for a rather strong fourth quarter. Based on that strong product substance, based on the, I would say, also tailwind from new model launches, new Tiguan, new Passat, and based on the 1.4 million order bank, we see and we expect a solid fourth quarter. Thank you, Arno. Thank you, Patrick. We are moving on to the next question, which comes from Philippe, from Jefferies. Philippe? Yes, good morning. I have three hopefully straightforward questions. The first one is, I look on your balance sheet, and there's probably about EUR 35 billion of net capitalized development cost. Would that withstand an impairment test, and how often do you do impairment tests? In other words, could we expect one by the year-end? The second question is: when are we going to get an update of PR Planning Round 71? And look, what you've been doing for a while is now you're going to try to buy a platform that should be cheaper. I think you've resized PowerCo. You're not doing acquisitions as much as you did. You're not going to build a Trinity plant. It seems like the PR 71 we got a while back is out of whack. And so when can we get an update? The last one briefly is, I see you mentioned dry coating as part of your battery cell process. It's well documented, Tesla hasn't quite been able to make it work so far, so I'm just wondering who's helping you there. Thank you. Look, Philippe, thanks for the three questions. Balance sheet and improvement, we are doing continuous impairment tests on participations on R&D. So we shouldn't expect any surprises on that topic. On the planning round, we communicated EUR 180 billion with a very systematic approach based on, I would say, a very competitive 9% underlying R&D CapEx spend. And then based on really three deliberate pieces of, or amount of specific strategic topics. One for like improving competitiveness of our platforms, 1 percentage point for our battery business, and 1 percentage point for increasing our competitiveness in the U.S. and in China. And in U.S., not only increasing competitiveness, but also taking advantage of a very strong market that's turning electric and also moving into a very profitable business. And since I laid out the parallelity of these initiatives in the connection with the necessity to keep our combustion cars competitive in the next two years, means that in the next two years we will see a peak of investments, as part of the EUR 180 billion. And from now on, when we move forward year-over-year, it's of course it's too early to give you a figure. We are planning to do that in the year-end call next year. But you should see the EUR 180 billion going down just from a technical effect that we move one year forward and we explain and we promised a better capital efficiency going forward, due to the fact that we become more efficient by measures. For example, allocating cars with the same platform in the future to one plant. And in terms of that, the parallelity of these ambitious measures to improve our productivity, our competitiveness, will in principle then be limited to 2024 and 2025. And so overall, you see, you should see below, past 2025, you see overall yearly R&D CapEx ratios. And that means that the EUR 180 billion also will... You should expect that they will go down in the next planning rounds. Last but not least, dry coating. It's really a combination of own research. We work with research institutes and also, it's also a sign of the success that we were able to attract really already a great team, a very talented team, international team, and that we make progress not only in ramping up our capacity and securing raw materials, but also in advancing in technology and in the development of battery cells. Thank much. Thank you, Philippe. We are moving on to the next question. It comes from Horst Schneider from Bank of America. Horst? Yeah, thank you for taking my questions. The first one relates again to the guidance for 2023. When you say you aim to achieve around EUR 22.5 billion operating profit, could you maybe, maybe quantify what means around? What is the corridor for that? What is by now your visibility on Q4? How can we be sure that in Q4 there's not going to be another shortfall? I mean, you guide for significant positive product-related costs, and I see this just warned today because the product-related cost is going to be higher than expected. So maybe you can comment on that a little bit more. On the cash flow guidance and the implied cash flow for Q4, I think it implies something like more than EUR 1 billion positive free cash flow. In history, Volkswagen's cash flow was rather negative in Q4, so therefore, maybe you can tell us what needs to happen that this positive Q4 cash flow really comes true? And on the product-related costs, again, my perception is, is that the problem is, is that not enough BEVs get sold, and that basically the cell producers, they, want compensation payments. They come then maybe unexpected to you or to the whole industry, maybe not just to Volkswagen, and that triggers them basically an additional earnings burden. And should that mean also that for 2024, maybe, the tailwind expected from product-related costs could be smaller than we all expect? So maybe some color on, in, in what you expect specifically for product-related costs then in 2024 as well. Thank you. Yeah, Horst, thanks very much for your question. I mean, look, we thought it's already a rather precise guidance. Yeah, we could have come up with a corridor for the total year, but we decided to guide for around EUR 22.5 billion, and actually then basically for around EUR 25 billion before the valuation effects, which should be really a good indication. I don't really want to now make up a new corridor, what what means around. So sorry for that. And yeah, on the product related cost, look, we. If you look at the Q3, we originally... I mean, if you take our business, it's basically, I would say in the this year, we guide for 8% underlying, and we have a seasonality in our business in Q3. And the seasonality in our business means that if you look at the long trend, it's about a percentage points weaker than average, a little bit less. So if you look at the margin in Q3, 6.2%, if you want, then we're missing basically one percentage point, and half of that relates to the flooding, and half of that relates to higher material costs than expected in Q3. This is to give you just an explanation. The reason for that, I mentioned already, it's not only product, it's also logistics costs. Logistics cost significantly increased, and also for us specifically, because, look, we had a more than 20% increase in Europe, and we have a huge increase in the U.S. in terms of delivery. So we had to secure capacity for transportation. And the specificities for our EBIT bridge works like you compare with prior year figure. And prior year figure, if you remember, we had a huge increase in Q4 2024 for the product cost, partly one time, partly for raw materials. And for Q4 2023, we really expect versus last year significant improvement in the magnitude of beyond EUR 1 billion. Partly year-over-year effect, and partly, since we have certain contracts at cheaper raw material prices for batteries like lithium, like cobalt or nickel, will help us in the fourth quarter. And so this should gives you a little bit more visibility there. And then coming to the second question, cash flow. Yes, if you look on the long history, sometimes cash flow in the fourth quarter was positive, sometimes it was negative. The specificity in this year is that we expect really a strong fourth quarter in terms of sales, which is clear, which we need in order to achieve our sales guidance and delivery guidance. And second, we still haven't fully solved the topic of delivery shortage. I explained a call earlier that the shortage in our industry, and specifically for Volkswagen, moved from semiconductor now to delivering really finished vehicles. We made significant progress there, which you can see at our P&L and balance sheet from the second to the third quarter, but we still have really room for improving our inventories towards year-end. And this should give us significant positive additional for the fourth quarter in terms of cash flow, addition to to the years back, I think you when you made the and the analysis. And product costs going forward, 2024, it's really, I would say, too early to make really a forecast there. We will give you a forecast in when we release our financial results. But from today's perspective, it's basically always a year-over-year effect, and with... We are committed to further product improvement, and we see really an improvement at aluminum, at steel, at lithium and other raw materials, which should have a mitigating effect there as well. Mm-hmm. Okay, super. Thank you. Thank you, Horst. We are moving on to the next question, which is coming from Henning Cosman from Barclays. Yeah, thank you. Good morning. Thank you for taking a question. So the first one is just again on the phasing of the shortfall in the full year guidance. Arno, I wanted to ask your view. To me, it seems like the bulk of the shortfall of the EUR 2.5 billion appears to actually fall more into the fourth quarter. It seems like the shortfall in Q3, relative to your earlier expectations, is perhaps more around the EUR 0.5 billion mark or so, which would imply that EUR 2 billion would come in the fourth quarter. So we haven't really talked about this much, so I just wanted to ask if you would share that observation and what this is attributable to. Because it seems like the flood effects are lower in the fourth quarter than in the third quarter, the product cost effects should in fact reverse. So I just wanted to ask your view on the phasing or if I understand that incorrectly? And then the second question is on the planning round. Thank you for your comments on the impairments and confirming that mechanically the EUR 180 billion will go down. I think that's a really positive, constructive statement. But my understanding is that you're not going to publish anything around the planning round or share these outcomes. And I just wanted to ask if that is correct or if there will be a release, and if not, why not? Thank you. Yeah, it's thanks for the questions. Well, I'll start with the last question, and I'm a little bit smiling because I'm not aware that any company in the world publishes its planning rounds. And so it's perhaps also a step towards a more normal way of doing business. We will give you an indication at when we publish our year-end results. And they will, we will give you a detailed outlook on the... Just going forward, as I said, but it's, I think it's not a negative that we don't do a huge publication. That hasn't much to do with that we don't want to give you the transparency. We gave you at the Capital Markets Day and also in several calls a very detailed transparency on EUR 180 billion in terms of CapEx and R&D, in terms of BEV and ICE. We published how it translated into our strategy. So we think we are very transparent on that. And then back on the savings. Yeah, look, we now guide for, I said, EUR 25 billion, about EUR 25 billion, I must say. EBIT and basically a margin around 8%, in the midst of the corridor, if you take the run rate of our for our deliveries and sales. Yes, originally, we hoped to compensate some of the negative effects of our commodity hedges in order to stay in the original margin corridor. And let me put it that way. The miss, if you want like to put it that way, in the third quarter is a little bit higher than you just mentioned. It's more like I said before, we expected a 7-point-something margin. We achieved a 6-point-something margin, which is almost EUR 800 million-EUR 900 million, and 50% of that related to flooding and 50% due to higher raw material costs. We expect a little bit additional headwind from flooding in Q4. We still achieve, and hopefully then, from today's perspective, we are rather confident that we will achieve that, an 8% margin and EUR 25 billion in a very challenging environment. We assume that as a rather robust result, and it's now really theoretical to elaborate on what we could have achieved and why we didn't. If you look at top-down and what really counts, before our valuation effects, we delivered EUR 25 billion in EBIT and an 8% margin from today's perspective, which is rather robust. The third question was about? There was no third. No, I just had two questions. Thank you, Arno. Okay. Thanks. Thanks, Henning. Now we are moving on to Harald from Citigroup. Thank you so much for taking my questions also. Three quick questions, if you don't mind. One, can you just make some more detailed comments about China, overall conditions in China, consumer sentiment, and what your expectations in the future are? Obviously, your position in China is a lot smaller than it was three or four years ago. You know, are we now managing that business at the current rates? You know, what are the expectations going forward? Can we recover anything or is that just too optimistic? Secondly, EVs. EVs are just too expensive, and so people are not buying them. You're obviously in a better position to make slightly better-priced EVs than some people, but would you consider selling them at even lower prices to get your penetration up more quickly towards that 20% target for 2025? It feels like the Europeans have been much more careful in pricing EVs than the Chinese, and I think that's a big part of why they're losing out in the market share race. And then a quick question from a client. Slovenia, did that impact Audi as well as Volkswagen? Or is it just those two brands, or can you just explain a little bit more? Thank you. Yeah, thanks. Thanks for your questions. I would like to give you a little bit more holistic view on China. China market, you really have to distinguish between ICE and BEVs. In the ICE, we have rather strong, we have great product substance, we invest in our product, we even increase our market-leading position to, in terms of market share. And in the BEVs, we see both a very competitive environment, a very competitive pricing environment. And we've launched a holistic program to improve our product substance. We launched a program in order to increase ADAS, so Level 2, Level 2+, in-car infotainment, to increase the competitiveness of our battery cost. In terms of LFP, today, we are one of the only few competitors that have only an expensive NMC batteries. We will bring LFP batteries. And until we have all these, I would say, ingredients in place, we make a deliberate decision between margin and market share in the EV business. And so this is the reason why you could expect from us a very deliberate and wise decision there, and that might lead to even slightly higher market share losses in the next one or two years, depending on the situation. And then we will catch up, I would say, 2026 onwards, with full competitiveness, with PPE cars in China, with the new models from XPeng, based on the cooperation with XPeng. And in between, we make deliberate and sound decisions based on our value, our volume strategy, which we always communicated and which should be also in line with our investors. So this is the situation. So going forward in 2024, yeah, the market, the global market, I expect still a small growth. I expected back then in summer, 3%-5%, perhaps now it's more like 3%. Overall, a little bit less growth in China, perhaps for 2024, a little bit higher growth in U.S. And if you look on then our figure on our share, we wanna grow with the market in Europe. We are heading for increased market share in the U.S., but there might be even a small market share loss next year in China. This is our way going forward as we plan it, and we think it's very robust and reasonable. And in terms of EV prices, again, I start with our overall strategy, value over volume. We have great product substance. We increased our competitiveness of the ID platform and the ID cars, ID.4, ID.5, PPE cars are coming. And on the other hand, you could expect better EV costs next year due to material costs. And based on that, too, I would say, ingredients, our pricing strategy, of course, we are not alone in the world. We look what competitors are doing. There might be temporary sales promotions, but based on the product substance, our value of volume strategy and better material cost next year, we will move into the next year also with the EV penetration. And the flooding, Audi was not impacted. There was a very small impact, of course. Audi has some of the MQB cars, but the main, the really, the majority of the effect was Brand Group Core, and within Brand Group Core, the majority effect was Brand Volkswagen. Was Brand Volkswagen. Thank you very much. Thank you, Harald. We are moving on to Stephen Reitman from Societe Generale. Stephen? Yes, good morning. Thank you for taking my questions. First, I have two. At the CMD in Hockenheim in June, you did promise us an update on the performance plan for the core Volkswagen brand. Could you explain why this is being delayed, and the sense of urgency that is felt within the organization to actually get this done? And my second question, you mentioned that you've seen an acceleration in your BEV sales, and we certainly note that in China, your pricing actions you've taken on the ID.3, specifically, selling the car for about 21,000 EUR equivalent, is a very attractive price level. Could you comment on the economics of that and how that compares to the profitability of that vehicle in China versus the sort of European side? Thank you very much. No, Stephen, yeah, you're right. Look, I mean, what is very clear and what is everybody well aware of is that we need significant steps of competitiveness in brand Volkswagen, and the team around Thomas Schäfer and the team are working really hard on that topic. So if you look at the magnitude of the program they are trying to put together, we released a... Or they do release the figure of EUR 10 billion in three years in order to achieve the 6.5% margin. It's very clear that it's really huge program. And I would say it's very important that we come up with a good program in terms of market, but on the cost side. On the cost side, we talk about productivity, we talk about fixed costs, we talk about material costs, and other costs. There's also a second element to the program. It's not only Brand Volkswagen, it's also synergies within the Brand Group Core. You mustn't underestimate the huge potential the Brand Group Core has in terms of synergies, in terms of joint R&D, in terms of joint production. In the future, we won't see in the Brand Group Core brand-specific production of cars rather than all the Brand Group Core cars that are on the same platform. For example, the Passat and the Superb, and other cars will be allocated to a certain capacities and plants within the Brand Group Core. There are other huge potential benefits in the back office, for example, in the sales area, and others. So if having said that, you can understand that it's a really huge effort and this time we really need to make it right. You know? We made progress in the past, significantly. We had the Zukunftspakt and other programs, but we really want to come up with a program to achieve the 6.5% margin, and for that, quality is more important than speed. And they're making good progress. They are in the finalization of the whole package. And there will be a communication as soon as they're ready. But I think it's absolutely right in business terms of view, to focus on the quality of the program, to focus on how deliberate it's designed, how well it's negotiated. And we shouldn't worry about a month or two delay for a program that for the next three years and in the magnitude of EUR 10 billion. This is my personal view. And in terms of China, yes, I think not for only for Volkswagen, but for the whole industry, and we can see it in the P&L of a lot of players in China. The margin pressure and the price pressure also translates into the margin of the BEVs in China. So yes, the... Also our margin in China are of course under pressure, and this is the reason why we deliberately make choices in terms of volume. Yeah, we deliberately make choices in terms of how much do we want to sell, in terms of keep momenting up. On the other hand, on the one hand, and the other hand, protect our margin. And from how we react in the market, you can see that we've from our perspective, we find a wise compromise between ramp up of our business in China, attracting new customers on the one hand, and securing margins on the other hand. Do you think, I mean, because, I mean, the volume impact you've had on the ID.3 has been immense. You've gone from 2,000 a month to more than 9,000 units a month in terms of your retail sales. Do you think that's something you, you will spread to the other ID family members? There are several elements to that topic. Yeah, we have also elements on the product line. And yes, there were like specific measures on the ID.3. At the time being, I would stick to the guidance in China that we wanna, from a volume point of view, be slightly above prior year figure. And that means also a slight improvement on ID.4 and ID.6 and other cars, and that should then lead to that figure. Thank you. Thank you, Stephen. We are coming to the next question, which is from Tim, from Deutsche Bank. Tim, please. Thank you very much, Rolf and Arno. It's Tim from Deutsche Bank. I would have two follow-up questions to stuff that was already asked about. When we think about the EUR 10 billion, Arno, as you rightly said, you already had various programs in the past, the Zukunftspakt, so on and so forth, and the end result is that we are now looking at a volume brand margin that was 2% on the VW side in Q3. Is this really a net savings target? How much of this EUR 10 billion do you want to see from these guys? And you call them they, which I find quite interesting actually, for you as the group CFO. How much do you want to see from these guys as a net result towards the improvement? It's always easy to agree on volume and better pricing numbers, but actually really taking out costs with all the opposition that you face, is probably the most difficult part. Then secondly, when we think about the EUR 180 billion in your next planning round, great that you confirmed that mathematically it goes down. I think everything else would have been a big disappointment. Now, we're seeing that BEV demand is unfortunately much lower than we expected, so this may mean that you have to incrementally invest more into ICE. Is your planning round and the thinking that you just outlined there, reflecting that element, or is the majority of cuts that you're expecting to see post-2026 in ICE investments that you now have to potentially ramp up investments again? Just to understand that. Thank you. Yeah, Tim, thanks for your comment. And first, I changed the they to we. Yeah, we... I, I feel fully responsible- Yeah For that program as well. It's just that we agreed on that we won't communicate the program on group level. It's rather the responsibility of the brand to work out the program and communicate the program. This is why I switched to today. But rest assured, I feel fully responsible as Group CFO for the program of Brand Volkswagen and also for the journey of Brand Volkswagen to the 6.5% margin. We communicated for them. In terms of EUR 10 billion, of course, there are a lot of headwinds in the planning, and this is the reason why this figure is so big. But I think it's wise to plan with a lot of headwinds, because there will be headwinds in the future. And yeah, in terms of details, I really wanna leave it to the Brand Volkswagen, yeah, to finalize the program and then come up with the communication on that program as soon as it's ready. In terms of EUR 180 billion, it's... I said before, it's really a rather deliberate and strategic plan. Yes, it was criticized by you guys, that it's a lot of money. But if you look at our communication back then, we always said it's EUR 180 billion in that planning round, it's two-third of investments in battery electric vehicles, in battery and EVs and digitalization. But on the other hand, there's always one-third, there was always one-third in keeping our ICE cars competitive. And so some liked it, and some questioned us, "Why do you still invest a third of the EUR 180 billion still in your ICE business?" And we thought it was a sound and deliberate strategy back then, and it's also a sound strategy now. The ICE cars will play a significant role until 2030. We are 100% committed to ramping up our BEV business, but we invested in a completely new generation. At brand Volkswagen, you will see a new Tiguan, you'll see a new Passat family. At Audi, eventually we invest in a whole family, A4, A6, Q5, Q7. So this is part of the one-third of the EUR 180 billion, which was sometimes criticized, but we always thought it, it's wise having that one-third, two-thirds shift in this current stage of transformation. And so we don't think, Tim, we need to make any changes on our investment strategy on the EUR 180 billion, because it's always reflected the fact that we are committed to the BEV ramp up basically also on a capacity for the battery that we will only invest 50% by ourselves, and one-third was always planned for competitiveness of ICE cars. So we don't think we need to make changes. It's actually the other way around. We thought it anticipated very well what could happen in the market now. Thank you. Thank you, Tim. The next question comes from Mike Tyndall, from HSBC. Mike? Yeah, hi. Mike from HSBC. Thanks for taking my question. It's a slightly obscure question, and it's just about what is the shape of the curve that you see for EV adoption? 'Cause I can't help but wonder if we're all thinking it's going to be linear, and in fact, it's S curve. And as a consequence, we're seeing this period where demand is just below everyone's expectation. Investment is expected to be on that linear, and we're actually over-investing for where demand is at this point. And I guess the second part of the question is: does that put us in a position where what's happening in China at the moment, where you've got effectively suicide pricing, potentially happens in the rest of the world as we have a glut of EVs coming to the market in the middle of the decade? Thanks. I don't think that's exactly obscure. Actually, you're quite right. Most of the players in the market expected it to be more linear, but if you look at a lot of developments in society, in nature, you often don't find linear. You rather find S curves, and then perhaps with a turning point, and then you kind of like an S. And we might see a quarter or two, or even a longer period, where we have seen a deviation from the linear path. Yes. I mean, look at our guidance for this year. We said 8%-10%. We're more on the 8% side, but we still believe in the ramp-up of electric business. We're rather committed the prices will go down with better raw materials, and you have also a stabilizing factors. Look, when everybody planned for a lot of EVs, raw materials were high. If there's some questions on that topic, the raw materials drop, you get better cost, and you might get better pricing, and that stabilize demand. So for the time being, we stick to our plans. Of course, we review them from time to time, but for the time being, we stick to them. And yes, you might be right, for next quarter or two, it might be a deviation from a linear path, but that doesn't mean, as you said rightly, that that doesn't mean that we... That must be really a revision of the long-term plan. Rather, it could be like, like you said, like an S-curve, yeah. Just one quick follow-up, if I can. Ralf, I think you said you were going to give us an update on the audit in China. I don't know if there's anything you can tell us on what's going there. Yeah, and we're still confident that we've achieved that audit within this year, and so we don't have any updated news that we can give you so far. Please have understanding for that. We don't want to give an interim status, but as said before, as of today, we remain confident that the audit will be carried out in 2023. Great. Thank you very much. Thank you, Mike. And the last question comes from Michael Punzet from DZ Bank. Michael. Yes, good morning. Hopefully you can hear me. I have a follow-up question to the pre-close call. In the pre-close call, you mentioned that the biggest spike of the missing volumes due to the flood will be hit Q4. Now it seems that it's Q3. Maybe you can confirm that, and what have changed since in the last two weeks that the effect has changed from Q4 to Q3? Yeah, Michael, I think as I had the pre-close call, I think I should take that question. It was just simply, I was, yeah, caught by reality. The information has changed, yeah, and I ask for your understanding. In the pre-close call, we can only communicate what we know until the date of that time, and the information was, yeah, that the bulk will likely affect the fourth quarter, and now it was the other way around. I have to apologize for that, but I think now with the clarity going ahead, I think the path to fourth quarter should be clear. Yeah. Okay. Thank you. Thank you. Very good. Thank you very much, for hanging in, and for the very vivid, question-answer session. If there are any questions left, yeah, please don't hesitate to contact our team here in Wolfsburg. Lars and team are very happy to follow up on any additional questions. Yeah, I think, if we don't speak to each other, definitely next time we will catch up is very, very latest at the year-end results, March 2024. We now make a short break, until we hand over to the media, Q&A. That will be about five minutes. Thanks very much for being with us on this call, and talk to you soon. Bye. So welcome back to the forum for the media Q&A. Anyone who wants to ask a question may press star followed by one, please. So star and one, and I see the first one in line is Frank Johannsen. Frank, please go ahead. Yep. Hello, do you hear me? Perfect. Yes, Frank, Frank Johannsen, and greetings from Wolfsburg through your main capital city. And I have just two questions, I have. The first one is, according to the flooding, you just said that more than 100,000 vehicles were not built and 50,000 in October. So, do I see it correct, or a little bit more in September than in October? And what, what is the financial impact, if I calculate correct, should be around EUR 400 million-EUR 450 million. And the next... And just to follow up that, Volkswagen announced that next week, the production will work in line as normal again. So, when do you plan to catch up the volume that you have lost the last two months? That's... The second question is, according to the performance program, originally, it was announced that it should be finalized in October and implemented in November, together with the planning round, that's due in November. So that's obviously not, does not work anymore. So where are the problems? Why does it takes longer? And actually, where do you see room to improve within the, brand Volkswagen, since, the works council already said that there will be no reduction in the workforce, at least no "Entlassung" and no reduction in salaries, to the tariffs. So where do you see the room to improve to get EUR 10 billion, through there? Thank you. Yeah, thanks, Frank, thanks very much for your two questions there. You stated it completely right. Impact of flooding, about 100,000 in Q3 and then another 50,000 in October, and from there on, we will see a normal business. Partly, we planned already for a catch-up, but What I must say, the current situation is fully priced in our outlook already. So the loss of another 50,000 in October is basically part of our outlook of EUR 22.5 billion, in before or including the negative effects of our commodity valuation hedges, hedge valuations and the EUR 25 billion. So this is included. So there is a kind of some catch-up, but we must admit, some cars we can't catch up. But again, it's included both in terms of our outlook for sales, also in our outlook for deliveries between 9.5 million and 9.5 million, and also in the outlook for the margin. And the financial impact, yeah, you... That was a good, great calculation. We said a mid-triple-digit million burden. And if you take a typical margin within Volkswagen, in our industry, and you calculate that by 150,000, then basically it's the impact. There's a small mix effect as well. Unfortunately, it hit also the higher equipped cars, the double-clutch cars, Tiguans, T-Cross and T-Roc, but that's included in the calculation. But again, I must say that the teams did a phenomenal job. Yeah, the original risk was much, much higher. And both, like the supplier that was involved in that did a great job. They worked day and night. The teams worked day and night. They increased capacity at other suppliers, and it's really a great effort from the teams that we could limit it to 150,000 cars. Nobody can do something against flooding like that, but I must really thank, say thank you to the teams, how they really limit it to that burn. Yeah, in terms of performance program, I put in that already before; it's really a huge program. The magnitude is about EUR 10 billion, and that EUR 10 billion program should lead then to 6.5% margin, of the brand Volkswagen in 2026. And you can imagine that it's a really huge program, also complex program. It involves product-related topics, margin topics, improving product lines, improving product cost, productivity in the plant, fixed cost improvements, both in terms of SG&A. Of course, we want to have a leaner organization, and that worldwide. It's not only brand Volkswagen, Europe, it's including the regions, it's including North and South America, on the one hand. And on the other hand, there are also two levels, which I mentioned already. One improvement in brand Volkswagen alone, but the whole Volkswagen Group, the whole group core has to improve its competitiveness, the way going forward. So there are a lot of measures that are synergies within the Brand Group Core. Synergies in terms of developing cars together, synergies in terms of allocating platforms, allocating cars to factories that are on one platform, for example, Passat, Superb, for example. All the ID.2s will be located in one platform in Martorell, two cars from Volkswagen, one car from CUPRA, one car from SEAT. So it's a complex program, and it's really about making the right decisions, putting together ambitious measures. So a delay of two or two or a month or whatever, we always said, like in the course of the end of the year, the autumn, we said. So it's really about the quality of the program, the magnitude of the program, and the quality of the measures. We shouldn't be worried that it's not communicated so far. On the other hand, the brand doesn't stand still. That doesn't mean that first measures are implemented already. For example, we communicated the improved allocation of cars to plants already. So they made progress there already, and first measures are implemented already. That doesn't mean that they stand still in terms of working on the cost already. It's really a parallel process, putting together a comprehensive program and on the other hand, making first positive steps. Again, as I said, also internally, the margin of Brand Volkswagen and also Brand Group Core in the Q3 alone makes it evident that we have to really speed up there and have to improve our competitiveness in the whole group, but specifically also in Brand Group Core. Okay, thanks. Next in line, as I can see, it is Victoria Waldersee from Reuters. Victoria, the stage is yours. Hi, thank you. I have a question or two related questions on electric vehicle demand outlook in Europe. We had news in September that you suspended some production at Zwickau and Dresden because of weakened demand, and I was wondering if you could tell us a bit more about how that was developing in this region. Related to that, you mentioned on the analyst call, when you were talking about the, the curve of EV demand, that, for example, when raw material prices drop, you can get better pricing and stabilize demand. We have seen some easing of raw material prices, so are you adjusting your EV prices downwards to reflect that? Or what other strategies are you taking to try and keep demand up? Thank you. Yeah, Victoria, in terms of EV demand in Europe, we are still confident that we will meet our ambitious target of 8%-10% share, and this is specifically true in Europe. We don't want to give really specific targets for specific regions and specific quarters. But as I said, also in the call, specifically in Europe, we get a positive product momentum. And all the order intake, which was slower, lower than expected in Q1 and Q2, partly due to pre-buy effects, picked up in Q3 already, based on order intake also for the great car ID.7, for the renewed ID.4. So it's really also picking up. Yes, it's below our ambitious original targets, but it's also, as we said before, we make basically sound decisions between value and volume. So we expect further growth in Europe. We expect a further growth in share of our deliveries, but the specific outlook for 2024, we will give you then on next year. But we will see also in Europe, for Q4, we expect a higher volume than last year. And yeah, and curve of EV demand and stabilizing factors, when I talk about pricing, it's always combined prices and some temporary measures perhaps. We are not planning to reduce prices. We rely on our product substance. We want to secure our residual values. We have a strong financial services business, not only for ICE but also BEVs. There might be certain temporary measures in the market, promotions, whatever, but we are not planning to lower our prices on the EVs in order to secure our residual values. Okay, thanks. As I can see on the list now, Christian Müßgens from F.A.Z. Christian, are you on the line? Yeah. Good. Yeah, yeah- Go ahead. I'm here, and I can hear you. Thank you for taking my question. Just a follow-up question on the performance program. You've been talking a lot about this in the analyst call, too, and my question is, will there be effects on the workforce? And following up on that, how is it proceeding, this topic in the talks with the Works Council? What's your view on this? Christian, thanks for your question. I really must come back to what I said before. Yeah, we are in discussions. We are working on measures. In parallel, we are in good discussions with major stakeholders, and it's really too early to give any details on that, and hopefully you have understanding for that. It's a deliberate program. There are a lot of cost elements involved, of course, also personnel costs, but it's really too early to give you details on that. I must really hope for your understanding that we want to... The brand wants to communicate, we want to communicate the program as soon as it's at its ready. Okay. Thank you. Thank you, Christian. Monica, Monica Raymunt from Bloomberg. Please go ahead. Yes, good, good morning. Um- Are you able to hear me? Perfect. Every- We know, as some of the analysts have pointed out, that EV demand in Europe doesn't seem to be taking off the way it was expected, that we might be sort of in a lag period. And if the financial services division is taking on more responsibility for the leasing and holding onto the EVs longer, I just wonder what that means overall for their outlook. Thank you. Yeah. Monica, I would really distinguish these two major topics. The one is our. If you look at our FinCo, and if you look at our FinCo, we really need to also look on the, on the long-term trend. And back then, our FinCo, based on, based on the magnitude of their business, based on the, on the business itself, was made. I don't have the long, but they made, like, between EUR 3 billion and EUR 4 billion. EUR 2 million-EUR 3 million. EUR 2 million-3 billion. And so they came up with an ambitious plan between EUR 3 million and EUR 4 million. What we saw in the last two years was really a very specific situation in a market that was heavily restricted by shortage of semiconductors, and nobody in the industry could produce as much cars as he wanted. And at the same time, there was money in the market, and consumer wanted to buy new cars. There were not enough new cars, so the used car prices were really very high. And what we see right now is a reduction of used car prices, but I would rather say it a normalization. It's not really something that it's very special. It's—If you look at the trend before 2021, before the situation where the chip shortage wasn't there, it's really a normalization. And also the reduction of our business of our FinCo. Yes, it's a reduction, but it's really a normalization. What our FinCo could deliver in normal circumstances. Although of course, they have also improvement program. Of course, they improve their business, they enlarge their business, they work on cost and profit topics as well. But it's really, as we guide it, a more normalized business going forward, yeah? And the increase, the decrease is really affected to modern normalization. And on EV demand, it's really what I said. We have our order intakes are picking up in Q3. We expect our order intakes to pick up further in Q4, with product momentum, and with perhaps also better material prices. But currently, there's a certain uncertainty in the market, which is not only related to Volkswagen, it's the whole market. But we are confident that in the medium term, we can stick to our plans. We ramp up our EV business. We will bring great products, specifically, on the Audi and Porsche side, with the PPE, ID.7 will hit the market. And what you also need to take into account, when we talk about EVs versus combustion engine cars, currently, some segments are not even there in Europe. So for example, only 2025, 2026, we bring ID.2 with prices around EUR 25,000. That will boost the EV market and also our EV sales. And we even look into a car below that, although it's too early to talk about that. So yes, currently there's a certain reluctance in terms of demand, but in the medium term, we are confident that the path will continue. Okay, so if I'm not mistaken, the next in line would be Markus Klausen from Dow Jones. Please, Markus, go ahead. Yeah. Hello, good morning, and thanks for taking my question. I have one regarding the availability of battery systems. There are various bottlenecks in the, in the auto industry with different systems currently, especially with 48 volt systems. Can you say something about the situation at Volkswagen, and also about how you see the supply situation with battery systems next year in view of the increasing demand? Thank you. Markus, sorry for asking back. Are we talking about availability of batteries for EVs or about batteries or batteries for combustion engine cars with 48-volt? For EVs. Sorry for that. Ah, for EVs. Yeah, Markus, for EVs, we really don't have a shortage of batteries right now. So yes, there was a battery shortage, I would say, a year ago or even two years ago. And it's always a process, that battery capacity have to increase, and then the demand of cars and also then of batteries increase. But right now, there's no shortage of battery supply for EVs. We are not restricted there. Okay. Thank you. If there are further questions, please press star followed by one, because as I can see, there is no one lined up. I'm just... Oh! Oh, there are two more colleagues coming. So the first one is Bill Boston. Bill, go ahead. Hi. Thanks for taking my question. I have one question, just following up on the audit. Can you say today, looking down, you know, to the very depths of your supply chain, so going further into the suppliers of your suppliers, can you tell regulators today with assurance that you have no components or materials going into your vehicles, either in China or that are being exported out of China, including components being exported out of China, that are not somehow affected by forced labor practices in China? That's my first question. My second question is, whether or not... I didn't quite get the 150,000. I was just wondering if you could just restate for my lack of understanding very early in the morning, how you view BEV demand right now. Are you seeing a significant reduction in orders? And how is that going to impact BEV production in the coming weeks and months? Thank you. Yep. Bill, there's two topics. One was audit and supply chain. Look, we have our business partner code of conduct, which is implemented really fully and 100%. I must admit, I don't have the English equivalent for our Lieferkettenkontrollgesetz concerning human rights. Perhaps, can you help me? What is it in English? I think we're just calling it the supply chain law here. Oh, so we have fully implemented the supply chain law. We have a huge team around Miss Waltenberg working on that topic. 50+ people are dealing with that law. And so we are 100% committed to all the laws and regulations we are fulfilling in that area. In terms of the 150,000 Bill, the 150,000 are our orders on hand so far in Europe alone for BEVs. This is the figure. Yes, it was higher a year ago. It came down from 300,000 now to 150,000, but we still have 150,000 orders in-house that we haven't produced so far. In terms of order intake, as you know, we don't communicate specific order intakes quarter by quarter. But what I can say, and that makes me really confident, order intake is picking up quarter by quarter. It was rather low in the first quarter this year due to pre-buy effects. You're aware that last year, end of last year, a lot of subsidies changed in countries, so there was a pre-buy effect last year. And then our order intake was lower than expected in Q1, Q3. But since, I would say, May, June, order intakes is picking up again, and Q3 was already like, I would say, 30% above Q2 order index. So it's a right trend. With the ID.7 hitting the showroom, we improved ID, improved ID.4. Then specifically next year, when the new Porsche and Audi platform is coming, we expect it then further increase of our order intake. About Xinyang, I think, as I said before, hopefully you're understanding we don't want to give any interim status. But as of today, we remain confident that the audit will be carried out in 2023. Right. If I may, one follow-up question. In terms of the, you know, the volume this year, you know, you're well below the capacity that your manufacturing network is built to handle. Where is... You know, where is the capacity usage at right now? And, you know, what is the impact of that on your financials if you're, you know, have significant undercapacity, lower capacity utilization? Yeah. First and foremost, let me start with including that capacity situation. We aim for the margin guidance of 8% before valuation effects of commodity hedges and at EUR 25 billion. So it's included. It's difficult to calculate what the impact is. When you remember, back on the Capital Markets Day, we stated that although in Europe we want to grow also with the market, we have overcapacity, and we are committed to reduce the overcapacity or the capacity by -10% in order to adjust capacity and the utilization in our plants. This is also part of the program of brand Volkswagen and Audi, for example, to reduce the capacity at the Audi plant in Ingolstadt from 600,000 to 450,000. We reduce the capacity in Neckarsulm based on Audi Zukunft, which is already negotiated with everybody at Audi. So we will reduce capacity in Europe. But look, if you look at on that topic, this is mainly that nothing to do with performance of brand Volkswagen. The total market in Europe after COVID is lower than before COVID, so... And we just adapt our capacity to the local situation in Europe. And on the other hand, with the Project Scout and the initiative in the U.S., we want to grow, and we need to grow. We have only a 4% market share there. It's a huge opportunity for us, and China, we talked about. So this is the capacity situation, we just see and how we react to that. Great. Thank you very much. Thank you, Bill. Next in line is Lazar Backovic from Handelsblatt. Please go ahead. Hi, thank you for taking my question. Can you hear me? Yes, very good. Oh, okay, great. I just wanted to follow up on China and something, Arno, that you said during the analyst call regarding the margin. You said the margin is under pressure in China, especially when it comes to BEVs. And I was wondering if it is below the last year. And another question regarding China would be, if you are... You said you are going to have one or two tough years in the market when it comes to market share of your electric vehicles. But after that, you see an improvement because also of the XPeng deal. In the meantime, what are improvements that are you doing on your MEB platform to stay competitive regarding, for example, software, but also hardware? Thank you. Yeah, so that, that's quite right. If you look, I mean, at our proportion opportunity side, which is basically the result of our Chinese joint ventures, which we grew for. Last year, we showed, I think, EUR 3.3 billion proportion opportunity side. This year, we guide for EUR 2.8 billion. So this could give you a good indication of the pressure we see. For competitive reasons, we don't want to publish our margins, but I mean, if you look at last year's figure versus this year's figures, so that shows you. On the other hand, we also in the capital markets guide, we guided for a long-term, EUR 2.5 billion proportion opportunities restart, going forward. So that it's under pressure, but we're not expected at all to fall really, really sharply. It's rather that we expect for long-term view on the EUR 2.5 billion. And I specifically want to say thank you for your question on the MEB, because it's really at the heart of our strategy. It's to making our current electrical cars, our MEB cars, they are competitive. This, I would say, three or three and a half pillars. The first pillar is we will bring a driving assistance function to the MEB together with Horizon Robotics. This is a joint venture we founded there. So eventually, we will see also level two plus in the MEB. We lacked features in the car to excite Chinese customers so far, and we improved that with Thunder Soft, so we improve in-car infotainment. We bring features, Chinese-specific features into the car, into the infotainment system. And last but not least, we have a NMC battery, which is a expensive chemistry. Yes, we have a good range, but expensive chemistry, and we will move also to more a market-standard chemistry. We call it LFP, which is a chemistry that is cheaper, and which gives us also more cost competitiveness. And if we take these three measures together, we are confident that together with new cars we bring to the market on the MEB, the competitiveness on the MEB cars, on the current cars, will also significantly improve over the next two years and bring the real momentum. Because we rely in the Chinese market to our global platforms, the MEB. We will bring the PPE platform, the Audi platform, localize it there as well. And on top, we bring two models with a joint venture with XPeng. But the majority of the improvement of competitiveness comes really from our own global platforms. Yeah, thank you. Frank Johannsen. Frank, do you have a follow-up question? Is that right? Yes, yes, that's right. Please, go ahead. Yes. Actually, respect to the capacity, you just said that you will reduce it by 10%, I think, in Europe, I think so, on average, not for each single brand. But can you already said how's the timeline for that, and what does—how does that affect the workforce? So will you, I think, that does not sound sure that you will manage that without reduction in the workforce, too. Yeah. It's really a combination of measures. As I said before, sometimes it's capacity, which Ingolstadt plant, which is agreed already. Sometimes it's also we take out a shift, and but it's fully in line with our projections on the demographic curve. This is what we always communicated. We have specifically in Europe, our workforce is older than average, so some of them move into the well-deserved retirement phase, and this will help us align also workforce to the 10% reduction in Europe. Okay, seems that there are no more calls, questions. Okay, then thank you. Thank you for your questions. We are now at the end of our investor and analyst and media call. Thank you very much for your participation. Take care and all the best. See you soon. Bye.