Volkswagen AG ($VOW3)

Hello. And a very warm welcome here from Wolfsburg, out of our Studio 35. It looks very familiar to most of you who follow us very frequently. A very warm welcome to our eighth sustainability conference with the dedicated purpose we are giving insights in our ESG strategy. We have a very interesting lineup of speakers today. We will start with a very well-known face. Dirk Voeste, who will give us an update on the regenerate+ strategy. And then that will be followed by a presentation held by Guido Eickenroth who will tell us about how sustainability and our overall business model go hand-in-hand when it comes to making the Volkswagen system a little more sustainable. And then we have a deep dive session which is presented by Andreas Walingen and it's all about circular economy, and he will present our latest and greatest on that topic. We will finish the presentation today with a brief wrap-up on where we stand on our green issuance bond framework followed by certain deep dive also into our Raw Materials Report 2025. How is PowerCo handling the raw material risk in their procurement processes and last topic will then be an update on our most relevant ESG topics within Volkswagen Group. What has changed over the last 12 months. And before I hand it over to Dirk, I have to bore you unfortunately with a disclaimer. Please read it carefully, all forward-looking statements and the safe harbor language and other cautionary statement on the slide will go on today's presentation. And as said, I encourage you to read it because I will not read it for you in the interest of time and not to bore you today. So with that, I welcome Dirk here on stage to give us an update on regenerate+. Very good to see you, Dirk. And the clicker, and please go ahead.

Hello, and thank you, and a warm welcome from my side as well. Thanks for joining us for an update on regenerate+, our sustainability strategy. And with this said, it has a title, a subtitle for this year, moving what matters to really look and in the next half hour, we will look into the details, which we believe are really mattering which we are driving and which we are taking thereof. But before that, again, let's have a short view on sustainability. Currently in the times we are receiving quite a lot of questions, is sustainability is still relevant? Is it really embedded into our strategy? Are those targets really met? Where are we on sustainability, and not only for Volkswagen Group but also certainly for other entities and firms and companies around this world. . And let me firmly state, sustainability will not go away. And we're already seeing it, looking at climate change and others, it is driving businesses, it is driving businesses impact, opportunities and challenges. It won't go away. Super important in sustainability is that opportunities and challenges are balancing out. So for us, and I think we are strongly confirmed, this one is we are standing on the right side of the balance. And certainly, and I think Guido will -- and Andreas will later talk about circular economy, sustainability is a business driver. And circular economy, you will see it as a prime example, how we're combining nature topics, people, society together with business topics in really driving all the future business profit pools in this end. And with this said, you may recall our vision again here firmly restating our vision becoming a enabling positive mobility provider. This is our vision. This is our aim. Of course, we know it will be difficult. But we still are very much of the opinion and very clear we need to start in touch again, be it with circular economy, but certainly also with the initiatives we are driving on the societal aspect. Our regenerate+ strategy is built on 4 dimensions. Normally, you would see 3 dimensions in sustainability, but with around 670,000 people around the world, it is very important that our people have a face, have a name and also embedded in our holistic approach in sustainability. So we have 4 dimensions, nature, our people, society and business. And within those 4 dimensions, you know and you will see later on, we have each 3 KPIs where we are measuring our success, where we are looking at our strategy and how the implementation success. We have integrated regenerate+ into our group strategy. So it's a fundamental pillar of Volkswagen Group's group strategy and certainly a strong commitment and strategy and a framework for the group and the respective brands. Those are the 12 KPIs and in the next minute, we will walk through the individual KPIs in nature or people and society. They are stick. We have numbers to it. You would see progress, which we have achieved in 2025. So reporting on this one today. But you will also hear where we are stocking and what work we still have to do. So let's go deep by -- climate. Strong progress in our own facilities, 60% reduction of CO2 emissions in this end. We are above target. We set ourselves a target with 50%, but we're very much on track for our 2040 target to become net carbon neutral for our own production sites. We will talk about circular economy resources, but only as a glimpse. Here is an ambition level for 2040. And certainly, what you will hear later on from Guido and from Andreas, where we already have recycled material in our vehicles, where do we have it in our plans, what are we really doing? So from my end, this will be my circular economy contribution, but there is much more to hear it in the next presentations. And certainly, about ecosystems and we are learning more and more the importance about nature, how nature is impacting our business and how our businesses are impacting nature. And we promised to have an indicator. We are still working on it, to be honest, it's not so easy. We are linked to, of course, the disclosure. We are linked to all our reporting. We're linked to the respective initiatives, and we will have an indicator on biodiversity by the end of the year. So next year, once we see each other again or you see me more or less, again, we will present the biodiversity indicator. What we could say is -- and we'll come to this in a minute, we have still the biodiversity fund. So we're really pushing towards positivity and contributions to nature and ecosystems. Talking about climate and climate change. And we all observe it. You know it from your assets, from the way how your assets are insured or valued in nature and climate go hand-in-hand and they really -- we need to take care of. And certainly, what we are seeing here is we are still committed to our ambition by 2050 to become net carbon neutral. You're seeing that we are certified with SBTi until 2030. And with the current discussion with the SBTi, we are still waiting for the final standard to be issued in the automotive and mobility sector. We are also in very good discussions, intensive discussions with SBTi because as you probably know, they are also currently restructuring themselves and they're also looking at their respective offers. We are confident that we will work on this pathway until 2030, let's say, certified. We talked about 2040 already. And when we talk later about our electromobility successes and the ramp-up, you'll see that we're also on track for the decarbonization pathway. Some more details and you'll find all the details when you look it up either in the ESG factbook or if you see on our web pages, you see the progress report, you will find all the data and presentations in there as well within our asset Scope 1 and 2, we are significantly above target. When we look at Scope 3, the use phase, we are on track for 2030, roughly nearly 18% by 2025, aiming for 30% in 2030. Ecosystems, we talked about. We have the biodiversity fund. We have initiatives within our own assets. We have initiatives along our supply chain, where we're strongly working with our suppliers to improve their environmental footprint, also particularly in their footprint. And of course, we are close to launch our biodiversity fund within the next weeks, and please follow up on this one as well. And it's not only the larger things which we're driving. And here is an example from this spring where we had volunteer days of tree planting. And certainly, you could say tree planting is not the most creative one, but it's an important tool. Why is it an important tool. It combines values to society. It combines value to nature together with our people. So it is strongly bringing the topic of nature to our people. It's engaging, and you saw that we have more 100 employees only with this one initiative very close by to Wolfsburg, a great success, explaining about the nature, explaining about our business model and certainly bring people together currently in this dynamic time, super important. Those initiatives are going all over the globe. It is not only Wolfsburg, it's not only Germany. It is South Africa, it is China, it is U.S., it is Brazil and all over the world, which I think is where you see sustainability is more and more getting embedded into our own company. When you talk our people, we'll talk a little bit about the targets on the right side, women and international management, training of our employees is very, very important. Here you see we had 21 -- on average, 21.6% of training hours per employee really bring them from an analog into a digital world and maybe even put them into an AI world and certainly from a combustion engine into an electromobility world, I think when you take our people along, we've given them the targets. We're giving them the opportunities even in these dynamic times to train themselves to really be and have the capacities to join with us on the transformation of this one. Accident frequency is still high. We are aiming for below 1. We have implemented certain measures, and I would like to give you one measure on the next slide. You will see it on the lower part, it is the so-called health care run. Here is a picture of 2025. The recent health care run took place last weekend, more than 2,500 people, including families here again. So societal aspect took care promoting health, putting -- making and bringing activities together and really not only forming the unity in the team, but also promoting what can be done with health, be it at their own stage by health care, but also certainly within the company and ourselves. Very important topic. On the left-hand side, you see the diversity index. And you see with portion of women in management, we are on track to our 2028 target by roughly being 23.3%. And on the right side, you see our target is 28.1%, degree of internationalization in top management. We are above target and you may ask the question, why is our target below what we have already achieved. Please keep in mind, we are currently going through some also significant restructuring where we believe this 28.1% is an ambitious target, which we want to leave by 2028. If we see that we are really on track, certainly, we will revisit the target. Society and on society, it is on one side, what we do with society with neighborhood and engagement, but it also includes our supply chain, our value chain. And here, you see that roughly 87% have a positive performance. Our relevant Tier 1 suppliers have a positive performance. In the S rating, we are shooting for 95% knowing with roughly 60,000 Tier 1 suppliers. There is a yearly turnover and 100% cannot really be achieved. That's why we believe higher than 95% is approximately the 100%, which we need to achieve. We will see it in a minute. We will also see, again, here the reputation KPI, and I have a slide in a second and certainly about the projects worldwide. I indicated this already, more than 200 projects worldwide roughly EUR 74 million in donations and Sustainability Impact Fund with about around EUR 20 million per year. This fund is dedicated to activities driven by our company within the company and within society. So there are interesting models in there, for example, long term business opportunities and sustainability, there are efficient gains in it, but there are also societal engagement topics in there. So really, as we understand sustainability, very broad, holistic. And maybe let's make a short pause. And you may ask yourself the question, what is our definition on sustainability. And sustainability can be defined in various ways coming from the very, let's say, dogmatic brown land definition into value creation definition, but sustainability also in our way, we're looking at it is business continuity. So how can we implement those initiatives drive in KPIs that Volkswagen in the mid and long run is also successful. So sustainability is an underlying function of business continuity. And that's why I think it is super important to see not only the investments we do in our own assets, we need to look at the investments and the work we do with our supply chain, with our stakeholders and certainly also with society and societal impact. So let's dive deeper a little bit into the supply chain. We do the S rating for quite some units. We published the data. And you see that we have continuously improved our rating roughly 87% last year with our target of being above 95%. So we are really on track. Why is this S rating so important. It offers us the opportunity with our relevant Tier 1 suppliers to talk about where they are good at, where improvements are needed and what we need to do. But we really want and do work with our Tier 1 suppliers in driving a topic towards an increased sustainability in their own asset, but also in the whole supply chain. The global reputation KPI. It's a KPI, which you know from our reports since 2017, we are reporting it. We have set up or revised the whole questionnaires. It is done with 2 universities scientifically based, and we are coming with key questions, trust, likeability and recognition. And those 3 elements are building the reputation KPI. We are roughly at 89% globally. But you see on the lower part, it differs from country to country. For example, with Germany, around 81%, to Brazil to 96%. Mexico, of course, was a highlight of 100% and U.S. was a laggard of 73%. This data and the knowledge what individual stakeholders, media, customers, opinion makers but also investors, analysts, are giving us, it helps us to see where can we position ourselves better. It helps us to go back to our production, our technical development, how can we make our offer even better and certainly what is missing and what we should do. So this is a super helpful tool for us to understand how are we perceived, how is our reputation, but also data driven, what and should be improved in order to drive reputation and certainly our position. And we talked about the societal impact, more than 200 global projects. Here on the left-hand side, you see how it differs from region. It is really international. It is not a German topic. It is really broad in driving this topic. And on the right side, you see more details on the Impact Fund, up to EUR 25 million in the year of '28, '29. Last year, we funded 15 projects globally, so we get started. And in 2026, we put it on hold, referring to our economic situation. But we will apply -- or new projects will be applied for next year we'll keep on running again. And again, it restates our commitment to sustainability. It restates the Board's commitment to sustainability, but it also -- and you can see it really as a prime example, we stay on track, we stay on target, but of course, we're also reflecting our economic situation. When you talk about business, how much money are we making with sustainability. And we promised last year that we are coming with the KPI. And this year, it's the first time we will present it to you. It's our sustainable revenues, all revenues, which we are doing with sustainable sales or in business fields. We'll come to this in a minute. We still have investment, the Leitmotif venture capital fund was roughly USD 300 million investing into startups in the area of decarbonization and circular economy. Our BEV share, a clear commitment to electromobility. And certainly, as Rolf has pointed out already in his initial speech, we will talk about green bonds. And here, again, with our target of 50% total outstanding volumes through green bonds last year, in year 2025, 31.5% of those shares have been green bonds, which have been issued. Let's dive deeper. And you've seen the -- you know the last slides last year, the first time in Europe, more vehicles with an electric engine have been sold than combustion engines. And I'd say the -- the association -- the European Association of Automotive have published the figures for the first quarter, 20% true BEVs, only 30% combustion engine cars and the rest, plug-in hybrids and hybrids have been sold in the first quarter in Europe, which means electromobility is making its way through. And what we also know from our own data, once people have driven an electric vehicle, 80%, 90% will stay. So what we're really seeing even in the past, we have anticipated the ramp-up curve differently. We are now seeing it is really coming, we are coming with the ID.2 or the ID. Polo. You saw the recent announcement of the Raval. We are now coming with this urban street -- urban car family. So we are really, let's say, having the right product. We promised to be below EUR 25,000. We delivered on our promise, and we will also deliver on our promise with the ID. for everyone or it will be called most slightly different in the next year with a car below EUR 20,000. That's coming, sustainable revenues. What is a sustainable revenue? What we did is we looked into our sales in 19.9% of our sales, roughly EUR 64 billion are dedicated to sustainable revenues, which includes BEVs, PHEVs and REVs. But it also includes mobility services or emergency vehicles, et cetera. So what we did is, together with our council, and I come with it for the -- to this topic in a minute, together with our council, we reviewed a new methodology, which is based on EU taxonomy and other issued and published methodologies in order to describe sustainability, so it's to come up with a framework. The framework is published in the white paper. You will see the white paper and you can find the white paper either in the ESG factbook or on our web page. Happy also to provide you with further details, if you wish, come up with a 4-tier segmentation, how we are looking at our sales with transformers, enablers and certainly true sustainability sales and the overarching merged into 19.9%. We don't have a target or ambition level yet. It's the first time we have come with this number to present you, roughly 20% of our sales are sustainable -- accounting to sustainable and certainly in the next year, we will come with a different ambition level. Very important, this paper has been published. It's available. It has been vetted with our Sustainability Council, with experts in the field, and we feel it's a very strong and robust methodology, which is appreciated, and we're getting very, very positive feedback on this methodology. Again, a very clear commitment from our end to be transparent and driving our business towards increased, let's say, level of sustainability. And certainly, I think when you talk about the strategy, it's a question how you implement it. Where do you create value? And in the next minutes, I will focus on 2 aspects: ESG, where do we -- and stakeholder engagement. Of course, we talk about value creation impact, and maybe there will be further questions from your end. Happy to answer them in the Q&A session. The ESG ratings, and we still stick to our 3 major ESG raters, MSCI, Sustainalytics and ISS. You see our trajectory from 2020 until 2025, and the trend where we are seeing improved rating, but keeping them on the MSCI level. Sustainalytics, yes, we still -- we are doing good on the trend, we are even improving. So here again, we believe, yes, a little bit more can be done. And certainly, with ISS, we want and will maintain the prime status. So overall, I think a very realistic picture reflecting our ambition, very solid with tick in improvement as well. But you also know the discussions around the raters, the rating agencies and the respective questions around it. Our Group Sustainability Council, and you see here quite a number of people. Why? It is because our -- it is different than what you normally know as a council. Normally, councils are set up to counsel and advice of the Board of Directors, smaller group, very often very close by. And very often, it is very difficult that those discussions trickle down in an organization. In our case, our Board is strongly committed to sustainability. They don't need the extra advice in talking about the importance of sustainability. We are much more looking into an area, how can we utilize those expert levels in driving projects and improving our strategy. And that's why we have, we call it, sustainability practice groups. They're helping us to advise on strategic frames. They give us external expertise, honest feedback, business value because they are trusted experts and drives those topics. And certainly, they increase the reputation and credibility. So let's see what they did in the last year. The full council, and they are consisting out of 4 practice groups. And of course, whereas 1 practice group for nature, 1 for our people, 1 for society and 1 for business. And each practice group, and you see there are 3 external experts and 3 internal experts. So the discussion already happens on expert level on the topic. So there is an immediate feedback on projects, questions, strategies, and it don't need to -- it doesn't need to trickle down from the Board of Directors. We're really having the expertise where we really need it. And you see here what in the last years have been done, the advice of our group strategy. And then we talked about mobility services, megatrends, but also they helped us on the reputation study, the materiality analysis. And as I mentioned, certainly also in the reputation and the revenue KPI. The individual working groups worked on various topics. For example, our people was the whole area of the participation, international messaging, but also on our HR strategy in itself. When you look at across these groups, it was about CO2 emission, the regulations, it was about ecosystem services. It was circular economy, very, very strong because circular economy goes beyond all 4 dimensions, and Guido and Andreas will talk about it in more detail. And they advised us and challenged us on our decarbonization strategy. So very, very broad overall. And then certainly, we use individual experts in their opinion on specific questions. And here you see the numbers of the external as well as internal experts, and you see here Rebecca Shaw from the World Wildlife Fund or you see on the right side, William toch from transport and environment. Mia group known from a German aspect or Aron Cramer, CEO of BSR. So very broad expertise on this field. But again, it's a completely new setup. The -- we have 2 meetings face-to-face meeting every year. But I would say, rather monthly meetings within the respective team. So very, let's say, interactive, very engaging. And what we are getting out of is a lot of impulses, a lot of challenges and very, very important, very detailed topics, very detailed expertise on the respective projects, which we can then use and really drive our projects forward. So a new way of sustainable council. And again, a systematic approach, how we're implementing our strategy, regenerate+ with our vision. And then our 4 dimensions, again, you will see it here again. So very consistent how we implement and translate our strategy into our real world. And then again, for the third year, we had our Group Sustainability Forum, around 100 participations in their 60% external, 60% entities of the group worldwide and roughly 30% of internals engaging panel discussions, very open dialogues on topics on circular economy. AI is a big topic, of course, of this day. And certainly, we use this opportunity this time to also invite my Dirk's 40 colleagues, and we had a CSO meeting at this port on top of it. So Volkswagen is really positioned not only in a content provider, but also engaging with society, engaging with experts, really getting external know-how into our own strategy, questioning our own position, questioning our strategy, improving our strategy and making it really robust. And you see here, again, super positive feedback from all participants, very, very active social media accounts around it, wonderful speakers, provocative speakers as well would really make a difference. And you see it run a little bit like Mr. James Bond, the forum will return in spring '27 because it is a format and it also shows our commitment to sustainability and engagement with society. A few last slides. Coming to the end of the presentation, just to remind you, yes, we have the sustainability report. Our ESG effect, which I'm sure you all know, it has been updated, I think, 2 days ago. One day ago, I think, 1 day ago, so with the latest figures, you will see the white paper, you see the revenue figures in there. They're all in there. And certainly, when you want to read more about the individual figures, I talked about they are in the progress report. Run it up. Again, it is very, very important, and we talked about, particularly in this uncertain dynamic times, we need to empower people and take them along with it. We need from a business perspective, but also from a nature perspective, protect our resources. And you will later on how circular economy will help us, particularly also to make us as a company and also as a region, much more sovereign and independent, we have regenerate with strong progress. We talk about climate change, climate neutrality is achievable. We are on track. So the economy is about it. It's about regeneration, but very, very important, it's about people and bring them together to shape our sustainable future together. Again, moving what matters. And with this one, looking forward to your questions, to your comments and happy to answer them.

Thank you, Dirk. Very insightful, as always. Yes, we are opening the Q&A session. We will -- one is now and then the next one after Andreas and Guido's presentation and then at the very end of the section. And we have here the first one coming in from Justin from Hermes. You mentioned SBTi. Could you confirm the plan for SBTi renewal as the current SBTi contract expires in 2027. To start with, an easy one.

Highly appreciate it. Since more than 2 years, we are waiting for the final standard of SBTi. And there is always an intermediate coming. We have now, I think we are in discussion with SBTi, which I think also had a structure change that the -- there will be -- end of this year, there should be the final draft, which we are waiting for. So our commitment is to go further with the SBTi, but we're also looking left and right around the corner what other standards are also available in this regard. So let's see what the final standard will be. But certainly, let's say, looking into a recertification commitment. However, it is strongly dependent how the final standard of SBTi will look like, what we are currently seeing is and I had a discussion with the new CEO of SBTi, we are seeing a much more pragmatic and also business-oriented view.

Thank you, Dirk. Sounds reasonable to me. First, now actually what you commit, yes, before you commit to. The next question here would be from Sarah, TEFIO, I hope I spell or pronounce the name correctly. Can you share where or how policy engagement shows up in the regenerate+ program?

Yes. And it is not a claim in itself. But when you look at, for example, our BEV ramp up, when you look at circular economy, in all those topics we have are very, very engaged in policy engagement or with this policy and policy makers and governments. Be it, for example, we're looking at in harmonization of the waste legislations. We are looking at product passes when we talk circular economy. We're also looking at CBAM, ETS and ETS2, where we're also engaging. And certainly, I think we're looking at Filip compliance. The various buckets we are in or if I can mention another example, biodiversity disclosure protocols. We are in those working groups either through associations and/or individually to see what we can do, not to either make it pragmatic and applicable in this regard. So it fits into all the respective baskets. It is not a single column, but it's really content-driven together with our verse colleagues around the world.

Very good. So next question is unfortunately -- you present a Paris-aligned decarbonization strategy. Yet delivery depends heavily on future BEV ramp up. External factors like grid decarbonization and long-dated targets such as 2040, 2050 net neutrality, what gives you confidence this pathway is actually executable and not another case of front-loaded ambition within back-loaded delivery risk.

Next time, we need to underline risk. That's a different target. Really the confidence is, when I'm looking at our current portfolio and BEVs, which we bring on the market, the urban car family is one topic broadly getting into it. When I'm looking at the ID.1, which will come '27, '28, strong topic and a strong component. When I'm looking at the overall portfolio, and you know that as well, not only in Volkswagen, but in Audi, in China, what we are doing all over the world, the projects are now coming. So that gives me a strong confidence. What also gives me confidence when I'm looking at our own assets, we talked about this one. We are already above and before the standard. So those measures are really being implemented. Will it be easy ride, right? No, it won't be an easy ride, right? But I think we're tackling it bit by bit, and we are confident that we are driving it in this way.

I think I would want to present and agree. You mentioned before that the Irma electric car family are going to sell EUR 25,000 and then the ID. for everyone next year at EUR 20,000. I mean we can keep in mind, obviously, that there is currently subsidies paid across Europe, take France, Germany, you can be eligible for subsidies of up to EUR 6,000. So it wouldn't mean actually they get an entry-level BEV car, Volkswagen quality already for less than EUR 20,000, yes. So -- and in particular, in a segment here, which has been largely abandoned during the Corona pandemic situation, so 0 entry level. It was a segment which was almost 1.6 million units in size. So I think we made the mistake to be fair 2020, that we assumed a rather linear increase in battery electric vehicle penetration. And with all innovation curves, we have basically seen in the past, they are not moving linear. They are moving in certain ups and downs. But at least from today's perspective, we can say by all what we know, we are really moving in the right direction. And this holds then also true for our sustainable revenues.

Absolutely. And you see it also, and we see just given a little bit more tension for Andreas and Guido, but also circular economy presents decarbonization because the circular material has less carbon footprint. So you see more and more initiatives are really, let's say, paying into the same direction. So we are confident that we'll make it. But certainly, I think it won't be an easy ride, but I think ready to take it.

Very good. Dirk, there is no further question. I mean there is plenty of time here to think over your questions. I said this session runs until 5 in the evening. So -- and then we will have several Q&A rounds where you can address additional questions. But for now, I would like to thank you again. We will see you later on. The next speaker, and I'm very glad to introduce, you know we always want to have a changeover in all the experts we have in Volkswagen Group to provide you always with an updated and also fresh angle of the sustainability efforts we are having in Volkswagen. So it's my pleasure to have today Guido Eickenroth, he is Head of Volkswagen Group Sustainability Strategy and Decarbonization and he will tell you why circular economy matters and what our strategy is on circular economy. Very good to have you. Thank you.

Okay. So also welcome from my side. I'll try to make also some new points that Dirk already pointed out a lot of topics regarding circular economy and the activities. No, that's the wrong slide. Okay. Here we are. So let's talk about also the -- from Dirk mentioned challenges and opportunities when we talk also about circular economy because we see really this is a kind of a huge driver also for our business options and alternatives that we also see in the area of sustainability and circular economy. . When we go through the slide, and then we see here on the left side, the increase in resilience. Resilience Is quite often in discussion at the moment. But also, yes, from the raw material side, virgin material side to be more independent, be more resilient, what is happening also in the raw material markets. But also when it comes to circularity, it's getting more and more important because we see also the increasing demand on circular materials, and we need to be sure that we have the right volumes and the right quality also for this reticles in the market and also available for our products. And therefore, it's getting more and more important. It's not only a buzzword anymore. On the other hand, we have a lot of untapped profit pools. And then what I mean with that, when we talk about, for instance, special parts of circular economy, for instance, the used parts areas, where we see really used parts that maybe have another life and have more options to be used again have more potential also to be in the market. It's at the moment, also in '23 was EUR 100 billion market only in the European market. So that's a massive demand and a lot of potential is there to use this more. And on the other side, and this is exactly where the point sustainability and business comes together is the acceleration of nature action. Because if we're using and Dirk pointed already out that we have also less carbon footprint when we use, for instance, used parts and then other material and keep them longer in the life cycle. So we have then the aspects on the profit side, but of course, on the nature side as well because we save a lot of carbon footprint when we use these things in a different way. The uncertain legislation or the legislation topic itself, of course, is important. And there was also a small -- short analysis from the hansplast last year prepared that the ask also companies in the German market, and there was 80% of these companies was pushed circular economy actions, regulatory frameworks that there may be in place or will be coming in the next years. But should be definitely not the only push in a circular economy business, we also should also focus on the other side because it's pretty much related to the legislation topic at the moment from the European perspective. But on the other side, and this indicates a little bit the market dimensions, we have also China. China has this not in the legislation at the moment, but they have it in a 5-year plan implemented. So that sees and indicates also how important is that from their side, not only for legislation, also making this be more resilient and really have also a sustainable business is also from the economic perspective, very, very, very important. But -- so when we look what we are doing now also in our current portfolio, and this is very important as well because the only thing what we get in the next years back for recycling and other alternatives, is that what we bring now in our cars. And here, some samples of our current portfolio, just some samples here with the ID.7, for instance, with a lot of recycled PET bottles in the interior material. That's very important because interior plastics are very sensitive from the consumer perspective as well. We have in our T-Roc at the moment, the highest -- quarter for polymers. We have up to 40-kilo in that car. That's really a good step forward. And also on the CUPRA side, we have also implemented and built in this car, a lot of polymers. That is not a lighthouse, that is really bringing it in the mass market of volume cars. That's the way forward, how we bring these polymers and our products because when it's in our products, that's really going to happen. On the other side, we're facing a lot of complexity. And as an OEM, and you see here the loop from the circular economy business, and I will go through a little bit more a detailed picture. On the upper side of this loop, you really can see the business, how we do as today. It's a linear business. We're designing cars, we're producing cars, we're purchasing material as it is. So we sell them -- we sell the cars. And then, of course, we treat them with spare parts and servicing a long time in the market lifetime. But at a certain time point, the lifetime is over of this vehicle, and then it's really out of our focus at the moment. And that will change dramatically when we talk about circular economy business and then really kicks the lower part in to make the business really circular. And circular is one very, very important gate point. You see here on a green circle, that it's take back and buy back because this is a decision point where really circular economy starts. We need to evaluate what we should do with the car, what should we do with the materials inside. Do we give them a second life in terms of using that parts or when we talk about electric cars, bring them these batteries a second life in the market and energy storage or anything else. So we have a lot of more possibilities and options to really think about the material used in these vehicles. And then it comes to lower part where we really get the cars back and have maybe use the material, and we have a real end of life of the vehicle, then we use the materials for circular materials and recycling activities. So -- but at the end, we have a strong focus on strengthening the values, have the synergies in our company, and that is the point where circular economy is very important because it's a scaling business. We talk about of 10 brands and then in the group. And if we work all together, we have a huge network around the world, not only in Europe, around the world, a lot of dealers that we also need all incorporated in this kind of process. And on the other side, we're really focused on costs, not make things on different perspective twice, really focused on that structure how we organize circular economy business, and I will also come in a second to that. And also the partnerships and activities is very important and very new to circular economy because it's a new orientation also in the market. I will also come in a second to that. So when we come to the structure point that I mentioned because circular economy business is not only recycling because a lot of people think when we talk about circular economy, it's only using circular materials and then recycling, using PET bottles and so on, but it's much, much more. And this is the point where we really say, okay, from our company perspective, it's very, very important that we have all in the company with over 650,000 people around the world. We have a clear picture, what is circular economy, what is behind it. And we have here our main blocks from the circular economy perspective coming from the production, for sure, it's clear, but also the vehicle side, I mentioned that we bring with redesign and reduce and avoid also new aspects in our vehicle development and our production in the cars but also think about revitalized programs and repair programs, but also talk about refuse. And this is very difficult for an automotive company to talk about maybe to produce less. Not -- it's not less, produce it in a different way with a different purpose. Use it also more efficient and we have here in sample where we have more also activities to have 1 vehicle that's used by much more people than only 1 or 2 person. This is all aspects of circular economy. Battery side, I just mentioned that will also change, and Dirk also said that we have a clear indication in which direction e-mobility will go also within the next years. it's important for reducing also our footprint from the use phase, but battery replace and dematic role when it comes to CO2 footprint from the supply chain because it starts with a huge footprint. And we have a circular economy huge potential to reduce this footprint also of the battery, and that will be the game changer also for the future. Parts I addressed already the topic that we have a huge demand here and potential in the market. But what we should not forget is digitalization and people because without digitalization and digital product passports and then also AI solutions in market evaluation and volume evaluation for recycled materials and so on, it will not work with our digitalization. And if we do not change the mindset of our people coming back to our strategy regenerate+, our internal people, how we treat, how we handle the usage of our materials of our cars as well, but also the external. We need to do a lot of education. So what is really behind circular economy. And therefore, it's very important to get also the company when we talk about people, the whole company behind this picture with all the brands all over the world say, okay, this is the frame set that we have the same understanding about this. This is the way how we can incorporate this. And that brings me actually to the next page, how we framed our circular economy strategy, making circularity the new normal in mobility. It's a claim where we really see it must be in our product, must be in our core processes, must be in our heart and our genius that we have it in our company fully established because only then it will work. And this shows then also the indication when we use the full power of circular economy if we use the whole volume, the whole network, all the people behind that topic. But of course, new business model sounds that easy. It's also a lot of development work to get new ways established, how to use things in a different way, break also processes, creating new processes, integrate all our strategies and our corporate strategy, bring them in there. It's a core potential, save resources, reducing cost I mentioned already, but also strengthening innovation, and I will give also in a second example where we start to do that. And partnerships as well as the rest. The whole circle and the reduce and grow part that covers the circular economy strategy need to be valued for over 1 million cars that we get back through this cycle. When we talk in the end of next decade, this is the volume that we at least need only fulfill the polymer quarters for the European market. So we see there is a huge potential behind on one side, from the parts side but all the other business activities, but also to ensure our future business. What is new in a market situation? So we have different partners now, that changes. We have close contact to waste and disposal companies and recyclers. Of course, we know them that they're all in the market, and we work somehow together, but the collaboration in this situation is completely different because we need really to work much, much closer to see what kind of material we build today in our cars, what comes in the next 10, 15, 20 years back in the market, how we are going to recycle this material and then use this also for our new car. So that will be a huge challenge. And we should also say circular economy, we will not work alone. So it's not our own thing. That's an economy. It's a global thing with all partners in the market and the communication and how we work together is not a circle, not circular economy and circular communication, it's really a network. It's a new ecosystem, what is established. And therefore, I will also give some samples how we, as a Volkswagen group start to establish this kind of new way of communication. So we have here only some samples because we do a lot of things in the circular economy area. But when we go through this and from Volkswagen, where we have vehicle recycling, take back dismantling, using used parts, activities, and this is really how we're going to practice and Andreas will also tell us in a second much, much more detail how we start these activities also with here stated, our group of competent center for circular economy. But also, we have these kind of small branches with start-ups working together. Porsche has a very great start-up collaboration with a small battery recycler and an -- so they really were close together how to optimize the processes, how to really get the material back in the series, and this is very important. And also, of course, we have the battery recycling technology from the PowerCo and Audi has also project running over the whole value from circular economy perspective. So this is what we are doing. We are definitely at the beginning. But I want to close my presentation with some statements. And these are very important also to summarize a little bit what I have talked with in the last minutes. So strengthening resilience and sustainability is a key opportunity for circular economy, be more independent, be more sustainable that is the purpose also behind it. Circular business model opened new and lasting profit pools for the Volkswagen Group is really using material more efficient and also have our used parts business, for instance, implemented using other lifetime models that we not have at the moment on the radar. And last but not least, our strategy and implementation parts space are key to leveraging the scale and our innovation in the business. And this is what I mean. We have a framework with our reduce and grow strategy for circular economy that is working all over the group and with all the brands together. Thank you for now and Andreas, this stages yours for going a bit more in detail.

Thank you very much, Guido. Thank you, Guido, and welcome also from my side. I'm very happy to share some insights on how we are implementing the circular economy strategy. I think you just learned how important it is for our regenerate+ strategy and also for the framework Guido just set out, our reduce and grow strategy. And I would like to give you an insight on how are we addressing this and make it very tangible that we come from a strategy point of view into the execution and how we implement circular economy in our business operations. . And I'll give you to make it as tangible as possible. I'll give you some insights on how we are setting up a group circular economy where we combine all the competencies we need for circular economy to scale it and bring it to the success story for the whole group, integrating all the good efforts we have at the brand. And before we started this group activity at the circular economy hub, we decided to take a look at the customers and at the profit pools. And how can we use our strategy, just Guido just outlined, how can we use them into business fields? And this is exactly what we did here on the chart. You see we have new cars where we produce and we sell them. There's a European market for that, like 13 million, 14 million cars on average. And of course, our redesign activities with used materials, recycled materials are going to fill in there. But on the other hand side, we widened our scope on to a much broader perspective where we see there's a huge car park in Europe. For example, over 300 million cars are on the road, and they're getting older and they're getting -- and they're looking for repairment and parts. So we see repairment and refurbishment for younger cars and also for reused and remanufactured parts there's a huge potential in the market as there's a huge car park in line. And we see, of course, there's also a number of end-of-life vehicles, roughly 4 million to 6 million cars are scrapped in Europe to recycle them, to get the materials, bring them back into the loop in order to secure them. So this is how we address the -- our strategy to business fields. And with -- in this setup, we set up the Circular Economy hub in order to really learn and scale the activities here. And for us, it's very important that we start on operating level, so that we get as fast as possible in doing things and implementing things. So after a short test phase last year, we are right in the middle of preparation. We are actively dismantling cars at Spico plant already in order to learn and prepare to scale. And '27, we want to really go on a bigger number in order to process cars, get the materials get the used parts and get the business going. And in order to give you an idea of what is our vision to this circular economy, I will show you a short video. [Presentation]

All right. I think it shows a good view on how our vision is for group Circular Economy hub. We're right in the transformation phase, and we're working on that. And at the end of the year, we go live with this approach. And we're happy that we're also supported by the state of Saxony because we see this as an industry push where politics regulatory frameworks and industry partners work together. This is very important to set up an ecosystem where circular economy takes off and scales successfully. That's why I think it's an important sign that also we get support from our local governments. And what is also very important, maybe the key to all that is our people. We need convinced and committed people. I talked to a lot of people before we installed this. And then he said, okay, it's not about so much technology because we got very good ideas and engineers to do so, but it's very important to take the people to this idea to get them committed and convinced that they're really working on this circular economy momentum we are building up. And so we have a dedicated information platform set up. So we have awareness and senility workshops going on where we involve the people and our engineers and experience center to really get a circular economy tangible for the people and to get more qualification into this and bring new ideas to our operating model. An operating model is a good example to give you a very concrete number of what is our idea of scaling and material we like to gather in such a circular economy. We have a modular setup where we can raise capacity from step to step. The more we learn, the better we get, the more we automate, and we set like 4,000 cars at the first stage, 8,000, 50,000 cars. So we ramp it up, the better we get the business balance and the more we get inside. So -- and to give you an idea of how much material and parts we process in such a hub, we've given you some numbers here for to give some rough numbers. For example, we will receive at least 300 tonnes of qualified recycled polymer that will be implemented in new cars, for example. 3,000 to 5,000 battery packs, so really a huge part of batteries we're receiving back. 450,000 parts, used parts, we could sell to our customers and offer them and 15,000 cars roughly assumed to 15,000 tonnes of scrap materials, basically, steel and aluminum. And that's very important for us to close the loop and steel and aluminum and not to forget about copper, for example, and also other raw materials. So you see that we're really bringing some materials in our cycle and also some parts and remanufactured parts to our customers. So we combine the profits of the used parts together with the raw material resilience at one side. But of course, 15,000 is probably one of the biggest sites in Germany and at quite a big site in Europe. But for a size of the Volkswagen Group, we need scale. And the success factor from our perspective, circular economy is scaling. And to scale this, we will prepare for scaling in the 2030s to set up an idea of a partner network where we implement those strategies and scale together with partner across Europe. And to give you an idea of what do I mean by scaling on that and what do we need, I would take this, for example, of the upcoming regulation that is going to be discussed on the European level, and we assume that it will take place in this year and it will be effective in 2032. Let me walk you through these numbers sometimes rather complex. So it says -- the regulation says use recycled materials. And they start with polymers. So it says -- the regulation says use 15% of post-consumer reticles for your cars. And out of this 15%, you need 20% coming from -- not your own but from automotive cars. So that means really to close an automotive loop. So it is not industry scrap, it's really post-consumer scrap. And even further, it is automotive closed loop. Those 20%, for example, relate to roughly 10 kilograms per new car. So that means in every new car we are building in 2032 going forward, we need 10 kilograms of recycled automotive loop. And the regulation sees that is going to scale up the volume that's going to be needed. They say 25% in the following years. And they're also thinking about aluminum and steel. So it's just an example of how this will impact the automotive industry, us and also our partners. Because how do we get those automotive closed-loop materials? Take a look at the recycling cycle of cars. To make it very concrete you have at the bottom, you have an old car, like Volkswagen car but could be any cars. Of course, they have an average less plastic than today's cars, but you get qualified recycled materials out of those old cars for roughly only 30 kilograms. So only 30 kilograms are really qualified to be used to our new cars in terms of quality, safety and all standards we need. So those 30 kilograms relate to new parts we are designing together with our engineering team to bring them by circular design into our new cars. And the numbers that relate to, given 30 kilograms on the one hand side and 10 kilograms you need on the other, this reflects to an easy number of what you say, you need 1 old car to get prepared for 3 new cars. So this gives you an idea of how many cars we need to be processed throughout our system in order to meet those requirements and also to make our decarbonization strategy feasible. And also polymers are the start, and we see aluminum and steel coming up. And talking about ELVs to be even more specific, where do those ELVs come from? We did an analysis on that. Those are public numbers based on 2023, that they don't change that much in the area. You see that in Europe, we have roughly 4 million to 5 million ELVs processed in the European Union. And you see also that they are distributed all over Europe. This means from a regional perspective, we need regional partners to process those ELVs and they not necessarily have to be in Germany because in Germany, we have the specific situation that we are, by far, not really developed in this market. For example, I really take a close look at France at many times and talk to the colleagues there. They have processed roughly 1 million ELV cars per year. The legislation really supports them or -- and they get used parts in there. So it's almost 4x as many cars processed in France than in Germany, giving the same size of the market and the same maturity of the industry. So there's potential in that. But it also means that we need a regional network because it doesn't make economically and ecologically no sense to bring a car an old car from Spain, for example, to Germany, or from the Eastern part of Europe to the southern part. So it's going to be regional and ecologically. And on the other hand side, it has to be a technology network. We have technologies well established. I think for steel, aluminum and copper, there's an existing structure. It's pretty common for our industry and other industries to use scrap and for steel and aluminum. But we have to take into account those decarbonization effects that we can leverage into our products and our decarbonization strategy. Battery is a total different game, and we still have to develop this game for batteries. As you are familiar, the battery industry just setting up in Europe. And before we discuss a reverse takeback from recycling for batteries, we also have to install the supply chain in Europe again. Otherwise, we're just processing the materials and ship them down to Asia or China, this can't be the idea for made in Europe or recycled in Europe. And on polymers, to be quite open, it's very important that we get cost priority. Otherwise, it's very difficult to process this polymer into our cars. And we have to find smart solutions and circular design approaches to implement this into our new cars. And what do I mean by that? And this is where the loop is going to close, and this is why we need competencies here at the group circular economy hub we have at spico. We really learned to dismantle the cars to increase the striking efficiency to bring the material back to our new parts and design them as good as possible into new approaches to bring them into our cars. So that on the other hand side, we increased our recycling efficiency when we bring back our cost to our system. So this is really what we learn and set up and build up and scale our group circularity hub, where all the companies come together but it's set to be by far larger network once we learned and control the system in order to prepare for the 2030 story and to fill our overarching strategy from regenerate+. But also the business logic, we've seen that the reduce and grow strategy. And to summarize it, to implement circular economy successfully at Volkswagen. Our focus is to scale circular economy for the whole group, with profitable circular business models to make it a circular business and secure raw material and improve our resilience based on the competencies we have, and drive new innovations with new partners. Thank you for your attention.

Thank you, Andreas. You stay in the middle. I stay here. I think I've really learned 2 things, right? One would be that the sustainability and profitable business models go hand in hand. And the other thing, obviously, that in Europe, you need the regulation to push things forward to bring it in the right direction for that circular economy approach, but it's also highly complicated and takes a lot of effort actually in order to be successful. Jumping directly into the Q&A session. There is a couple of questions. We have already lined up here. And the first one goes to Guido. The question is which concrete group-wide KPIs will define success for the circular economy strategy? And will you set clear interim targets, for instance, for 2030 to track our progress.

That's a good question regarding the KPIs and the measurement, how successful we are. And I absolutely agree also that the KPIs and setting of the KPIs are absolutely relevant for steering and bringing the business in the right direction. From my perspective, so we are working on that. We are defining that KPIs. There are, of course, as well as all our competitors, some KPIs, circular revenues and circular material shares. So this is usually the common KPIs that everyone knows. But for us, it's much more important to have also a bit more detailed KPIs, not only to report them. Also, you saw the complexity of our structure and our company with all the brands behind how really to steal the activities that we have. And therefore, we have different KPIs that we are currently developing. And as I mentioned, there will be 1 more for the communication part, but 1 more really for hard steering because circular material cannot be the 1 KPI for circular economy as we see all the strategies behind -- regarding decarbonization, much more also, when it comes to profitability, we need to have much, much more focus also on that KPIs really to steer the business in the right direction. For sure, we need to set also midterm targets for ourselves. And this is also what we're currently working on that also with our new product lineup because that will be very challenging also to bring it in the new products. So -- but clear KPI set we definitely will have in place.

Thank you, Guido. The next question would be here directly a reaction to Andreas presentation where it says, firstly, congratulations on getting ready to launch the spika factory this year. Would you consider an investor tour of the facility? I mean I would always be supportive depending on if we get an invite. But is that something we could imagine.

Honestly, we haven't thought about that yet. We're really due to making it happen this year. We're just building on that, but I'm very open to that. Let's discuss that and why not make it possible. It's not a secret something there. But give us this year that we really start up the operation that you can really see something going on, but we should really take this as a good proposal.

Well, then we thank you already for the invite. We will pull together the interest actually from the investor community, and then we will find a date. We cannot promise, look, we have summer break coming around the corner, but I would be pretty sure that after the summer break, we can find one or 2 spots where we can realize that. And thanks, Sarah for that very positive feedback. Next question comes from Justin. And I think you -- both of you can then decide whether who takes which part of the question. He says, great to hear about the focus and activities in the circular economy. And there are a lot of projects. Do you have some overall group level targets on what the company wants to achieve over time and assess how well it's doing -- well, it's little bit going in the direction of the KPI, Guido. Maybe you start and if Andreas has something to add.

Exactly as you mentioned, it goes a bit in the direction of the KPIs, how really developing the KPIs and what the KPIs are really should indicate. Of course, it should be indicated also certain progress that we have in our company regarding circular economy activities. Otherwise, it will be very difficult really to measure also the progress. And -- so therefore, there will be definitely yes, and that we also have it then implemented. And also regarding -- on group level, for sure. But we need to have then kind of aggregation of the targets and have an overall ambition and the group target, having said that. But at the end, the devil is in the detail. We need to have it really in a precise way to steer all these different business entities. And we talk about, for instance, the spika regarding getting the cars back, how much cars we get back, need to be steered also by the purchasing department, how much raw material or how much recycled material we need in the cars. So there are lots of -- and various of KPIs that they really need to good develop. And then also then at the end, of course, can be communicated and should be also.

But as I know that Justin is always very active in engaging. Justin, you are super welcomed in order to share with us best practice in this regard. We would be very happy to see how others are tracking in their circular economy efforts in order to see whether there is something actually we can adapt or amend or basically think over ourselves that. It will be greatly appreciated. Very good. Then the next one comes from Bruno. Bruno Lapierre, very good to see you also participating in our conference. How do you track the capital required to put in place this circular strategy and its return for the group, will you communicate on the potential KPIs, Guido?.

So Dirk presented also in the beginning that we have our sustainable revenue KPIs. So now established. And this is, from our perspective, exactly the direction it should go. So that we really bring this together and also have an indication not only internally for management also for externally that you really see have kind of a feeling what we are doing and how successful we are doing that. And therefore, these KPIs are very important to that. So -- and then as I mentioned, so the circular -- there's a sustainable revenue KPIs goes exactly in that direction how we are going to push and make it also transparent to our external.

And I think given that we also report sustainable revenues, yes, you can be sure that the capital which is put there is, to a certain extent, tracked. And then I think you hinted to it here that we are looking at the profit pools and then obviously also how much we can earn in these profit pools would give us a certain angle on how to report on these KPIs potentially then also in the future. There's plenty of questions, and I'm reasonably thrilled. So you really had point here. How are learnings from spika being transferred to manufacturing sites in China, the U.S., Brazil, where Volkswagen has significant production, but no equivalent infrastructure. Andreas?

Yes. Thank you for this question. And this shows the potential, I think, for the group because we are really in exchange with all our plants and also with other regions, they have similar questions. How can we use used parts or remanufacture parts with circular material within our cars. And we have a constant exchange there. And sometimes we learn from them, for example, China's also really dedicated to a circular economy strategy on their global level. There are also activities in Brazil from a regulatory point of view. And we really exchange our knowledge and processes in order to get our knowledge and competitive advantage on the ground. And it doesn't have to pit like on a one-to-one approach we set up at Spika, for example, to transform it to Brazil. So it always will be adapted to the local needs and local possibilities there. But the ideas and the technologies and the approaches there, it can really learn from each other and there's a really good exchange on it.

So thank you, Raphael, for that question. The next one would go, are you able to give an indication of what percentage of steel or aluminum would meet quality standards for reuse and end-of-life vehicles. And this question comes from Paul Britain. Would you be able.

I haven't something in mind, but I think it wouldn't be appropriate because that's really an engineering question. I would take it to my engineering colleagues and give you a feedback on that if that is sufficient. There's really quality standards from different perspectives, and that's something should be adequately answered.

Perfect. But Andreas, we would then basically collect your feedback and would share then with the group so that everyone can receive the answer. So the last question on that section, I see here on screen is coming from Justin again. And he says automotive companies were fined by the EU and the U.K. for collusion on end of life cycle -- on end-of-life recycling of vehicles. Is it clear how Volkswagen will avoid this kind of fine in the future while still working with competitors to facilitate recycling and reuse of competitive vehicles.

Yes. I think it's absolutely clear that we have our compliance guidelines and our antitrust colleagues that are really supporting us whenever we talk to or seeing -- looking for partners that we're in line with those guidelines. And this is why we have the standards for and why we get very good support from our also legal advisers.

Very good. So everything in place to make sure that we detract and act compliant. Andreas and Guido, I really thank you very much, very impressive presentation. No scripting. I think all of you might have seen it. So that means actually that they are really in detail on your daily work. Thanks for the contributions. We will collect feedback here from the community, and we'll share it afterwards. Thanks for now. And hopefully see you again in the future. Perfect. Then we are very good on time. So we will continue with the last part of today's presentations. And I have the pleasure actually to summarize some of our progress and advancements we have made on several topics. I would like to start with Green Finance and the recent developments here. Dirk has presented it to you that it's one of our KPIs, part of the regenerate+. And in 2025, we were even able to overfulfill already our 2050 target that we did about EUR 20 billion in bond issuances this year and more than half of that was in the green. For this year, and this is the latest we can share and based on our May statistics, which we have gathered. We will highly likely end up at higher than 40%. And -- so track very well when you look at the long-term scheme on our target to achieve by 2030, the higher than 80% share. You could now argue, well, it's not super ambitious if already by 2026, you meet the 2030 target level. But please bear in mind, yes, markets are not predictable. We have seen so many things and therefore, putting ourselves on a safe side. There is still a long way to go until we can meet the 2050 target and have 50% of all of our bonds being in green format, what we are making very good progress. And it's, as you all know, based on the EU taxonomy framework. Moving over to a topic where I'm not the true expert in, to be fair. But sustainability and supply chain, I just simply found it's worth because we put recently out our Raw Materials Report 2025, and I can only recommend to you really to read it yourself. It's online, and you find it on the web page. But I just wanted to give a brief summary because that's such a frequent topic we get asked about in our meetings that I think it's worthwhile to give you a little of a summary of what you would find in this report. So this is not really to complain, but just to give you a little bit of a feeling of the scope we are talking about when we talk about supply chain in Volkswagen. We have more than 63,000 direct suppliers. You can read in the Raw Materials Report, we could fill 2x the Wolfsburg Stadium of our soccer club here. if you would invite 1 representative from each and every first tier supplier. And for all of those who have participated from London, it would be 1x the Arsenal London soccer stadium, you could fill with that. And we would have to leave out about 2,500 people. They are coming from 93 different countries. And please bear in mind, we have in not all of our countries the same legal framework and regulatory framework. So this needs to be taken into consideration. And last not least, the tier chain can be as long as 9. You heard it from Dirk. You heard it also from other colleagues. Corporation is here key, and conversation and being really in frequent exchange in order to manage such a huge supply chain. All of our efforts in Volkswagen Group are based on one policy, the responsible raw materials policy. And the responsible raw materials policy is, again, a footed on the global normative guidelines, in particular, the UN Universal Declaration of Human Rights, the core labor standards according to ILO. The UN guiding principles on business and human rights, the OECD guidelines for multinational enterprises as well as the OECD due diligence guidance for responsible supply chain and last not least, the principles of the UN Global Compact. So we thought that's the best picture in order to summarize the challenge the colleagues in the supply chain management are faced with. You just see the tip of the iceberg with the 63,000 suppliers. And of course, there are multiple challenges. And most often, what we have to monitor very frequently, do our suppliers comply with our business partner code of conduct and how can we monitor insufficient adherence to the group responsible sourcing requirements. On the other hand side, when we go down to the N tiers, in part, there is lack of transparency about the N tier, sometimes we don't get disclosure from the #9 in the tier because we recently have no direct contract with those suppliers, and they are part of the second tier or the third-tier supply chain. And when you think about that one single product chain can spend more than 8 tiers with several hundred suppliers are supplying to 1 module. I think you can gauge the complexity of the whole topic actually we are facing with. Again, it's not about complaint. Not complaining, but it's just giving you an impression actually of how big the exercise is. So what you definitely need in order to be capable to manage such a supply chain is a supply chain system. And you can see here how our supply chain system works. First, we have the risk analysis and then obviously, the measures. The risk analysis looks first at the business model of the suppliers and then the individual supplier risk. And then we can apply our standard measures, first of all, the code of conduct for our business partners. The grievance mechanism. The media monitoring, which we frequently do in order to stay on top, if there is something brought up concerning one of our suppliers. The sustainability rating, which Dirk has mentioned, we're already 85% are certified. The S rating is, in particular, applied to those suppliers, which we see in the high category risk, this is mandatory. And then we have the dedicated supplier training, obviously, on those where we identify a higher risk. The deep dive is then, in particular, when there is a human rights focus. And last not least, yes, we have the raw materials due diligence system, which is embedded in this responsible supply chain system and where we will now take a closer look. So here, you have the first, the risk analysis. Second, the mitigation measures you can apply here, definitely, there are 2 alternatives on how to mitigate the measures. The one is obviously the direct engagement with the supplier or the second solution could be that you have a cross industry engagement process where you can lobby for a certain solution. And last not least, then is the third step, evaluation and reporting. So in line with the OECD and due diligence guidelines, we have established a working group and the senior level steering committee. So the working group actually feeds in ideas and process recommendations into the overall raw material due diligence cycle, while the senior level steering committee oversees the work of the cycle monitoring, and there is obviously a strong exchange between the 2. You will find this chart also in the raw materials report with a very detailed description how many members and how frequent they meet and how the index changes. So if there is now the need for an audit. There are 3 different types of an audit we can perform. So first of all, it's a near supplier audit we could do on a regular basis where if we see the need actually for action, a corrective action plan is worked out together with the supplier and then run through. What we definitely prefer in order to be able to master also the workload is, obviously, if there is an external certificate available so that the supplier could basically apply for the external certificate, makes our life obviously much easier that can be compliant certificate with the with the RMAA, ASI or with AWG, which is, in particular, necessary when we think about leather usage in the vehicle. So this would allow us to use databases in order not to do the work twice and is obviously the most efficient one. However, there are certain situations where you can't use an external certificate or whether supplier engagement, supplier audit fails, and this is then where we have the supplier engagement program, where we then make a site visit, we have a frequent dialogue with the supplier in order to make sure that we -- that the supplier is adhering to all of the procedures we have in the group. When you look at the several audits, which are currently available, you'll find this overview here also in the raw materials report, there is an audit standard currently for tantalum, tungsten and gold as well as for battery raw materials, midstream and upstream. For leather, as I've mentioned, aluminum and then also for mica, mica which is largely used in coatings. You see the scope of the risk processed in the audit very detailed and which standard actually we are looking at. And then at which level it is done and take a comprehensive overview of how external audits can help us in order to run our supply chain risk cycle. Where there is opportunity there is obviously also challenges and limits. I think we got a flavor actually from Andreas' presentation how complicated EU regulation, which is obviously necessary to drive things can make the situation for an OEM with more than 63,000 Tier 1 suppliers. So the legislation is obviously one thing. You have the European battery directive as well as the European Deforestation Act, which is obviously a lot of documentation, adding a lot of operational complexity. And we are faced with certain implementation challenges. So when we apply this to the whole of our organization. And then the second one is resulting just simply from the supply chain complexity, where we have fragmented supply chains or where we have limited visibility in the upstream part of the supply chain because it sits so low in the tier that we are not in direct contact with the suppliers. And then obviously, data constraints wherever the supplier is not willing actually to exchange data, in particular, from sub-suppliers. Other constraints to be very open, there is also that with applying all these standards to the European OEMs, we are not reaching a level playing field. When you export a vehicle, for instance, currently from outside Europe to one respective market, be it the U.K., be it Germany or whatsoever. You don't have to adhere to the Deforestation Act. And you obviously have also then certain savings, yes, by not doing all the documentation and having the operational complexity added and that gives you obviously also an advantage when selling new vehicles. Role of governments, please don't forget about that. Of course, we would all act always in compliance, like to act in compliance. But in certain countries, when you think of the number 93 countries where we are operating in, it's just simply that the governments themselves do not fully reinforce that anti-bribery laws or that the respective bodies are always adhering to the rules in place. So much to that. As said, it's the sixth responsibility raw material report we have published. It's available since March. We have a dedicated -- done a dedicated review of 18 priority raw materials here. You find in-depth information about the scope in etimology -- and yes, you'll find at the very end of the presentation, also useful links where you get to all the respective regulation or to our own in-house policies where you can see actually how we try to deal with those topics. And whenever you see that world map logo here on the very bottom of the slide, that's a hyperlink guiding you directly to this responsible raw materials report. Another area where we are very frequently asked, actually, how do you deal in particular with the raw materials for your batteries? And here also on behalf of our colleagues, we have gathered 3 slides, which are largely mirroring the approach actually you have seen in the raw materials report. But we wanted to make sure that you as investors get the comfort, everything, what we decide on the sourcing side for PowerCo is, of course, cleared by the Executive Board and Non-Executive Board level. And as part of this Executive Board clearance, there is also a detailed ESG due diligence done in order to make sure that whenever we are sourcing something or saving direct supply from a mine that we are -- that we can make sure that our standards and rules are put into place. So what are we doing on PowerCo side? Yes, the idea is to vertically integrate parts of the supply chain. In particular, on the mining side, we definitely need resources on the conversion and refining side or also for cathode and anode materials. It's on one hand side to secure the volume, which we need in order to build our battery electric vehicles. On the other hand side, to reduce the price volatility, which is very inherent when you think, for instance, of lithium. Lithium back in 2022 was as high as EUR 80,000 per tonne. Currently, we are more hovering around the EUR 20,000 per tonne. So it's quite a huge volatility we can safeguard in particular in the early years, also on the hedging side. But hedging is all but nothing if you don't have the volumes you need in your factories in order to build the vehicles, which you want to bring on the road. So the focus today here is on the sustainable cell production. That's a process, which is pretty similar actually to what you have now learned in this raw material supply chain system, which I've presented to you. You start here, obviously, with a procurement strategy, vertical integration and then the levers to sustainable set production, and this is embedded in a sustainability strategy, sustainability business and also in the corporate decision making, a very comprehensive approach on the one or the other hand, bit more detailed than what you saw on the general procurement side, but by and large, mirroring the process, the very well-known process we have on the raw material side. And you see also here if -- when identifying risks and we see that a supplier can not meet our strict ESG criteria then we will not consider such suppliers as being our partners in the battery raw material plays. That's easier said than done because we all know certain raw materials, in particular, in the battery electric vehicle area, they are largely sourced in countries where we know that we have particular problems in expecting that all standards we are known or used to here in Europe are 1% adhered to. But this is a clear commitment also from Volkswagen Group to be on the safe side with regard to raw material and battery sourcing. You see also the foundation here, that's largely on international guidelines, the OECD and the UN Global Compact. Of course, the Supply Chain Due Diligence act as the RMAA standards, pretty similar to what you have seen in the raw material report, so nothing new. Coming to the last section, which is admittedly on Volkswagen side, always a topic where I know you want to see things moving quicker. On the other hand side, we think actually that, in particular, over the last 2, 3 years, we have already achieved a lot. And let's dive into details actually on where we think we have made progress. So since 2023, there are a lot of structural changes and all the processes very much driven by Oliver Blume. It's about group steering where the 2035 strategy has been implemented. We strengthen more and more the independency of the regions. On the group level, the brand groups are strengthened. You have seen just recently that we cut almost half of the Executive Board mandates in Brand Group Core and take certain decisions actually to empower the regions, be it on the production level, albeit on the delivery level. We have newly defined a software governance, which within Volkswagen I think it's fair to claim that we are the only OEM currently being able to cater the Western Hemisphere with 1 solution and the Eastern Hemisphere with 1 solution. Eastern Hemisphere based on the Xiaopeng architecture, which is developed into the China electrical architecture. And for the Western Hemisphere, it's our Rivian tech joint venture, where we start with the first vehicle in 2027 will be the ID.Everyone. And then from 2028 with the rollout of the SSP that will definitely gain speed and volume. Because on the SSP until 2035, I think it's about 30 million vehicles, which we are planning. Then lean corporation, reducing complexity and produced number of committees, number to impress you with Audi, I think Audi has reduced 80% of its committees over the last 18 months. Clearly, a huge step forward in order to make our decision-making faster. So what have we achieved over the last 2 to 3 years? I think when most often we hear, our governance is slowing the organization down. We are not fast enough in our decision-making. And yes, to a certain extent, I mean, you always can get better. But when you think about the decisions which have -- we have taken now over the last several years, and I don't know for everyone who was able to visit us in China, just inhibited our latest CMD, has seen what is possible when the whole organization is moving in one direction. The In China, for China strategy implemented just within 3 years. after the strategy was initiated, we have been able to reduce raw material costs by more than 50%. We have been able to reduce our development times by 30%. And in April, we presented the first 3 new vehicles, which are coming now on road at very competitive pricing. And more important, at very competitive tech features also for Chinese market, where you can really get a good feeling that if we can make it there and if we are successful in one of the most competitive markets, we can also make it in Europe and in other regions of that world. Battery ramp-up we've briefly talked about it. Salzgitter is now up and running. Plant with about 20 gigawatt hours, and we are progressing here according to plan. With the launch now of the urban electric car family, we will also start to enroll the urban electric car family with LFP batteries starting soon. ADAS Level 2+ and Level 2++ is already something which we offer in 2026 in China, and people move on to Level 3 readiness by 2027, developing our own in-house chip production. When you think of December 2024, has not been seen that Volkswagen is taking out capacity over the last decades. We are reducing now capacity when we include our plant in Brussels by almost 1 million in Europe and the stringent cost execution can be witnessed on the quarterly basis when we report our results and where we highlight, in particular, this item in our EBIT bridge for automotive. But no time to stand still. Why not? Because since 2025, unfortunately, new challenges arose, that's on one hand side, the tariffs, which are costing us EUR 5 billion on an annual basis. And then in 2026, we have new conflicts, the Iran conflict. We have an unexpected weakness of the Chinese market I think the most pessimistic outlook foresaw. Maybe the Chinese market in 2026 could be stagnant or down by as much as 10%. Now it's May, and the market is almost down by 20%. That increases now the export pressure from China to, in particular, the European market. And we see actually the success of the Chinese OEMs, in particular in the U.K., but also in other regions of Europe. And this is why we have to step up again our transformation efforts. Oliver Blume, our CEO, has highlighted it on the occasion of the Q1 results, you all know these 8 action fields, which -- where we are now working on and want to be ready by summer to decide together with the Supervisory Board which measures should be newly implemented. The target is to make Volkswagen more robust and even resilient. We are banking our new 5 years plan on a no-growth scenario. And when we are frank and currently take the economic outlook, Europe, it's currently difficult to get excited about the economic activity in Europe and also over the foreseeable future. And we are already at a 25% market share. So it would be not recommended to think we can grow this market share in order to show growth in our overall numbers. Take the U.S., the tariffs have changed the situation for Volkswagen quite significantly. Even if we were to decide to localize additional capacity today, it would take a couple of years until this new capacity could come into play and help us to grow our business in the U.S. In China, we just talked about it. We have an ambitious target to move our volumes beyond 3 million vehicles by 2030. But as you know, this is not in the consolidated revenues because most of the business we do in China is consolidated equity. So long and short, the target is not, not to grow, but to prepare for an environment where we likely will not see a lot of growth and adjust our cost base accordingly. And this is why we have to take these steps and have to move on in order also to stay successful in the future. Last slide, coming to the changes in governance and what we have achieved so far. I think you all have seen that we have been able to dissolve the dual role of Oli in January. We won a new expert for our Supervisory Board, Susanne Wiegand, who is also running the Audit Committee, a truly independent person and female. So the board gender diversity increased now even to 45%, recently read a statistic that the average in the DACH is currently at around 40%. So here, I think Volkswagen is really in a very good position. New governance structure at Brand Group Core. I've mentioned it that we cut the number of Executive Board members almost in half in order to get faster, leaner and have faster decision-making. And just in April where Oli announced that he bundles development, procurement, production, sales and quality on this level in order to move things forward in a faster way. So yes, we always can be better, fully agreed. And we are definitely looking forward for your feedback and your input in order to get new impulses and to move things forward. But I think we can also be proud on what we have achieved and what we have driven over the last couple of years. And yes, with that, I come to an end, look forward very much to your questions. And because as I said, I'm not the super expert in each and every detail. I need some support. This is why I have asked Dirk again here on stage in order to take the upcoming questions.

So we have already the first one, which is coming from the Yassine Rahit. And I think it's a she. She asks, do you have appetite for green hybrid following the upcoming 2027 call date on one of your conventional hybrids. So hybrid bonds. Yes. It's the green financing. Well, Yassine, thank you very much for that question. I can only state we have our last bond -- green hybrid bond we did was in green format. So yes, we definitely plan to do further issuances, follow-on issuances in our hybrid bond portfolio in the green format. And yes, we'll look out for a spot and behave a bit opportunistic actually on timing as they are an integral part of our financing structure. But as you can imagine, we also want to manage our hiring portfolio very carefully. So thanks for that one.

Same question.

The next one, would you like to take it? .

I can take it. Cybersecurity and Yassine Rashid again. Cybersecurity had a material impact on some auto companies. I'm keen to know what Volkswagen is doing to safeguard its resilience against potential cyber case. I think last year, we had a similar question. The expert here talking about all the details we are setting up to really make sure that we are really safeguarding and ring-fencing our activities, be it our own plants, but also being in our cars as well. Referring to maybe to the old presentation, not going into too much of details, but I think there's an enormous amount of activity to make sure that we mitigate as best as we can, let's say, cyber I think you would never can avoid it but looking at the efforts we're doing, it's significant.

And Yassine, maybe as an -- obviously, on our website, when you look at the ESG conference, 2025, we had a dedicated topic on cybersecurity from one of our IT colleagues, a comprehensive presentation on that. And I would refer to this one. And if there are any open questions, then we are more than happy actually if you contact either Ares or Thomas in the Wolfsburg office and they will be happy to help you on the -- on any further follow-ups. Next question here is coming from Justin. I note in 2025, factbook that reported that Volkswagen has about 21,000 suppliers completed in SAQ and Volkswagen carried out 180 on-site audits. This seems very low for such a large group by so many Tier 1 suppliers. How do you assess where the 180 audits and 21,000 SAQs is sufficient to ensure supplier compliance and for components. That's a very good one. Because I pointed to the 63. Look, I think it's fair to say that the number of on-site audits we did, I told you that we also have the opportunity, obviously, for the certification. So if the supplier voluntarily applies for an external audit, and says then, look, I'm already certified by RMAA, by whatever standard you would like to have, which is valid actually for my industry. Then this -- it would be enough for us because certification is obviously done by externals and would then rely on the outcome of this certificate. And this might also explain why the number here, which looks here so low at first glance is maybe much better actually than you would guess. I hope. And if there is a follow-up, just then please contact us, and we will further elaborate on that. Regarding the 8 action fields, would the group be ready to communicate on new cost measures at time of Q2 report, do you plan a specific event? That's a very good one, Bruno. We said we will be ready by summer. We didn't specify actually, if it's early summer, midsummer or late summer. So if it would be early summer, we could imagine that something could already be communicated on the occasion of the H1 results. But it's quite a complex and delicate topic, as you can guess, you might have read in the press. But it also was also positioned by Oli. We are talking about potential overcapacity of another 500,000 units in Europe, which might also affect additional employees. So therefore, the discussion is obviously not easy. And to be fair, we shouldn't be a -- wouldn't be here to be fast but rather diligent and then precise not to irritate our people. You know that the 50,000, which are already agreed on, and they are all leaving Volkswagen in a socially responsible way. So we are -- we have no forced redundancies in our group. So I would say there is a certain chance that with the H1 results, we are able to disclose already first steps. But please do not be disappointed if the full release will then be done after the summer break. And yes, if so, we would definitely look then for a dedicated event. We're almost up on time, and I don't see any -- additional question here. So perfect on timing, I would say. And would leave me actually just to thank all the presenters we had, had today. I think we had a peak 120 participants in the Sustainability Conference, which is a new record and promise to interest. It's not all internals. So it's really -- it just shows the rising interest, but also that we have something to tell, and something comprehensive to tell. Otherwise, I think you wouldn't take the time and dial in. So thank you for that huge interest. We would be super happy for all feedback actually which you have to us because we want to improve. We want to move on. We might not deem every proposal as sort of -- we look at all, but please do not be disappointed if we are not following each and every recommendation and request. And with that?

Thanks for a lot of good questions.

Thanks for the very good discussion here, in particular on the section around circular economy. And with that, thank you very much and see you next time. Speak soon. .