Good morning, everybody, and a warm welcome to our Q3 Conference Call. I'm Sebastian Rudolph. I'm heading Global Group Communications. And this time, this is a joint call with media and with investors and analysts, and that's why as two nice colleagues are with me, Rolf Woller, our Head of Treasury and IR for the investors and analysts, and Nicole, as you all know, for the media team, our Head of Group Communications. With us today are two important persons, our CEO, Oliver Blume, and our CFO, Arno Antlitz. Welcome to you as well. And before we start, I want to make some housekeeping remarks. First, we have already published, and you should already received the press release, the interim report for the first nine months, and all other PR related materials. If not, you can find them on our Media and Investor Relations website or give us a call and we send them the material directly. Let me give you a brief run-through of the next 90 minutes. First, Oliver will talk to you about the highlights of the first nine months and the third quarter. He will also outline the current and upcoming challenges and foremost his strategic approach to tackle them. After that, Arno will take a closer look at the financials, and then we will host a Q&A session like described with investors and analysts' community and after a short break with media. And with this, I hand over to Oliver. The floor is yours.

Yes. Thanks, Sebastian. Good morning, ladies and gentlemen. I'm excited to be here with you today for the first time as Volkswagen Group CEO. And thanks to you for joining us and taking the time. Despite numerous global changes, we achieved a lot with solid financial results. Overall, Volkswagen Group's operating result before special items in the first nine months increased to €17.5 billion, reflecting an operating margin of 8.6%. In quarter three, the operating result increased to €4.3 billion, corresponding to a margin of 6%. The performance was burdened by nonrecurring items totaling €1.6 billion. The underlying margin came in at around 8%. Our recovery in China continues to accelerate with a 26% increase in deliveries in quarter three, and 33% increase in deliveries only in September. The Porsche IPO has demonstrated the continued strength of our brands and the opportunity of realizing their full potential across the Volkswagen Group. Arno will take in detail -- will talk in detail about the last quarter shortly. But first, I want to talk about my leadership priorities. I wanted to build on our recent success using the five leadership principles I applied at Porsche, and I've been rolling out across the whole group. The Volkswagen brands are among the most important criteria for customers buying our products. We will be positioning and sharpening our brands better. And I've seen the great work from colleagues across the different brands, when I visited the sites of Volkswagen, SEAT Leon CUPRA, ŠKODA and Audi within my first weeks. I personally was impressed by the great team spirit, brand strategy and the individual design language. Our products start with a clear strategy, a design focused on brand identity, product identities and above all, quality. When I visited the major brands, I asked for status quo reports per brand to define the current gap versus benchmark, particularly in terms of user interface. We will not compromise on quality or user experience ever. I'm very focused on people working together, helping each other and winning together. Culture play a big role to live it every day, being role model, and that starts with me personally. So two, does entrepreneurship. Innovation combined with engineering excellence is a bedrock of what Volkswagen does. We intend to drive this even more going forward. And last but not least, sustainability. For me, the biggest challenge of our generation is to leave behind a better planet for future generations. As one of the world's largest automobile companies, we will ensure we take a global approach to help solving the environmental challenges which confront us. There are several challenges that the automobile industry currently faces. First of all, there are worrying geopolitical developments, particularly the rise of nationalism and protectionism. This includes growing barriers to technology transfer between East and West. Challenges to our supply chains will become the rule, not the exception. In order to set up our supply chains more resiliently, we founded a separate organizational unit. This organization will provide the Volkswagen Group with relevant risk and strategy information, and analyzes potential risks in advance to identify threats to supply security. We want to be in a position to deal with different possible risk scenario at any time and avoid having long lead times for preparation. At the same time, the speed of technological change is transforming our industry. In markets like China, we are competing with new BEV-only entrants to the industry that are appealing to young people, the country's future drivers. That means, when it comes to software, autonomous driving, but also the performance range and charging times of our cars, we must accelerate our transformation. I have no doubt that Volkswagen will successfully meet all of these challenges from a position of strength, and we will work hard to continuously show proof points along the way. This is due to our financial resilience, scale, great products that millions of people across the world aspire to buy. We know we have the opportunities and means to win. I have introduced a 10-point program outlining our key priorities for the next few months. This is about executing our new auto strategy, which we strongly believe is the right framework to accelerate our ambitions. To do so, I will be critical to speed up the implementation of my 10-point program. And that's the advantage when I started at Volkswagen that I was involved during the last years very deeply in the situation of Volkswagen, and I was able to start from the beginning. And now I would like to lead you a bit through the 10 -- top 10 program that you understand what is behind. First of all, it stands -- starts with our planning round to focus on increasing our financial resilience to give a very clear KPI framework for the brands and focusing on our product range. Then it comes overall to our products, starting with a clear product strategy. When it comes to design, having a clear profile for brand identity, for product identity, then the technology strategy, having a long jump when it comes to a new product comparing to the competition. Then we already started a speed quality initiative. And at the end, what is very important, are the product returns on the financial level. Talking about the regions. China play a big role. And there, it's up to us to have the right China product strategy. When it comes to profit pools, customer profiles of our brands because everything is about the customer perspective. And then having the right product, talking about technologies and the content we are offering to our customers. North America plays a big being flexible in our global footprint. And therefore, also the product portfolio and cycle plants plays a big role. It is about localization of our issues in the U.S. planning to continue with our Chattanooga plant, where we are ramping up currently ID.4, and what we already published is a new approach with the brand Scout, where we will tackle the pickup business. Coming to the software issue. And this one was discussed a lot during the last years. And I think what is very important to look ahead and making a redesign of CARIAD, focusing on the core competencies for the future, having clear where we have the interfaces with the brands and what partnering do we want to have. And I think when there are existing solutions in the market, it's not necessary to design and develop them by our own to working together with strong partners. And then, it's up to us to optimize our processes, tools and the organization of the CARIAD, and we already kicked up on this process. And this afternoon, we will come to the first decisions. Then it comes to technology, our platforms for the future and the profiles, we do have with the technological footprint. It will be about the platform allocations and the product mapping in between the brands with a big opportunity we do have with the scale effects in between the Volkswagen Group. Important for the ramp-up of our strong battery and our electrification strategy is the deployment, planning of our battery plants and supported with our charging strategy and a clear implementation plan. And beside of this, more important than ever is a clear energy strategy. Mobility services play a big role for us as a global company. And we announced that we bought Europcar as a new partner for our mobility services for Volkswagen, and there, we kicked off a restructuring program. This top 10 points is about development of our mobility platform and at the end of a consolidation of mobility activities. And as we announced, also when it comes to autonomous driving, we harden our road map. We announced a partnership with Horizon Robotics in China. We will continue to develop Level 4 driving with Porsche for the other regions of the world. And we are in good decisions and talks with another partner approaching with Level 2++ and Level 3 driving all over the world. And on the other side, we decided not to invest even more -- ever more in Argo. And that's like in the transformation years ago, we started with different approaches and now it's up to us to harden our road map. Sustainability plays a big role for us and our strategy. And I personally stand for sustainability. As you know, it's -- with a sustainability footprint of Porsche. For us, it's important to have clear KPIs for all our brands and regions, and then establish an ESG program for all the brands and brand groups of our group, and having the right footprint and being measured with our progress of our sustainability approaches. And last but not least, and this is what my experience of the last month is being focused on the capital markets, having clear and the analysis of the levers to increase the value of the group. And when you see the big success of the Porsche IPO for us, this is a role model. And looking only to the last four weeks, the shares increased over 20%. And that shows the potential we do have in our brands. And therefore, I established and kicked off a virtual equity story for all brands to unleash the full potential and this will lead to a complete equity story for the Volkswagen Group, where we will plan a Capital Markets Day in the next year, presenting you how we want to lift up the value for the whole group. All this shows that we are ready to accelerate our group transformation with a relentless focus on product quality and shareholder value. I will continue to update you on the progress we have made and provide further details about my specific priority in due course. With this, I will hand over to my colleague, Arno to run you through our quarter three results in greater detail. Thanks for listening.

Good morning, and welcome, everyone to our today's nine-months combined investor, analyst and media call. Thank you, Oliver, for the introduction and brief overview. Now let's change to the financials and the operative business. Before getting into details of our financials, we should not forget to mention that the war in Ukraine is lasting now for 246 days, and that our thoughts and wishes are with the people in the Ukraine. Within the next 20 minutes, I will take you through the major milestones we have achieved in Q3. In summary, our supply of semiconductors has somewhat improved and COVID impacts have at least temporarily reduced. We see, as expected, a significant higher impact from material costs, including energy costs. At the same time, disruptions in supply chains prevail, but are carefully managed. We delivered solid nine-month results with an operating profit before special items of €17.5 billion, corresponding to an operating margin of 8.6%, slightly ahead of our full year target, and showing the robustness of our business model. The Premium and Sport brand groups continued on their strong path. Volume brand group was a little weaker, reflecting the regular seasonal pattern and impact of semiconductor shortages. Nonrecurring costs related to the Porsche IPO and impact from the revaluation of certain parts of our activities in Russia, burdened the result in the third quarter by around €1.6 billion. Before these effects, the underlying margin in Q3 was above 8% for the Volkswagen Group. At the end of September, we ended a new era by successfully listing Porsche AG on the stock market. This was the largest IPO in Europe in terms of market capitalization and achievement we are very proud of, specifically in the current environment. PowerCo and Umicore established a joint venture for European battery materials production at the end of September. And we are in the process of realigning our mobility as a service and transferred as a service activities. Going forward, Volkswagen Commercial Vehicles has decided to cooperate with a different partner to develop a self-driving system. Therefore, Volkswagen will not continue to invest in Argo and is withdrawing as a shareholder. This decision led to a noncash impairment of €1.9 billion in Q3 shown in our financial results. I'm aware that the gas issue is on top of your mind, so let's spend a few moments right away on this topic. We are effectively managing the gas supply situation and have put a group-wide task force in place. Effective countermeasures have been implemented in our German and Eastern Europe plants like switching fuel to coal and oil, reducing energy consumption by reducing heating. We have also stocked up on selected critical parts to buffer production, and we see a low risk of any production stops in the winter period of 2022, 2023, assuming average temperatures. Let's have a brief look at our unit sales in Q3. Our deliveries included favorable pricing and low incentives. July and August were weaker due to the typical summer holiday seasonality, with September improving to a run rate of around 750,000 units a month. We recorded a significant increase in deliveries in China as the COVID shutdowns were gradually lifted, and the government stimulus kicked in. Order bank in Western Europe remains on a high level that will stretch well into the first half of next year. Vehicle sales for Volkswagen Group came in at over 6 million units in the nine-month period, around 220,000 units less than the prior year, cost per ongoing limited vehicle availability. Despite lower sales, sales revenues amounted to €203 billion, including €7.6 billion from the consolidation of Navistar, and up 9% from the comparable period. The operating result before special items came in at €17.5 billion. The operating margin stands at 8.6%. Operating results for Q3 came in at three point -- came in at €4.3 billion, corresponding to an operating margin of 6%. This clearly looks underwhelming at the first glance. However, as mentioned earlier, the underlying margin without the cumulated nonrecurring items of €1.7 billion for Russian impact and the Porsche IPO costs was about 8.3%. This solid result demonstrates the continued robustness of our group in a challenging environment. In Q3, we had a negative effect of €0.1 billion from fair value measurements on hedging instruments outside hedge accounting. Our financial result came in at minus €0.1 billion in the nine-month period. Our interest results improved significantly year-on-year due to the positive effects from discounting of long-term provisions based on higher interest rates. As mentioned earlier, we made a noncash impairment of €1.9 billion in Q3, reflecting our withdrawal from Argo. Reported net cash flow came in at €5.6 billion. Clean net cash flow amounted to €9.2 billion. The difference relates to diesel payouts of €950 million and M&A outflows of €2.6 billion. Thereof, €1.7 billion related to a Europcar settlement in Q2. Working capital is burdened by higher inventories due mainly to the ongoing supply disruptions with a significant increase in unfinished goods, especially in Q3. Currently, about 150,000 unfinished vehicles are waiting to be completed and finally delivered to our customers soon. The Volkswagen Automotive net liquidity stood at a robust €31.6 billion, an increase compared with the €26.7 billion at the end of 2021 and at the end of Q2. It's not including the proceeds from the Porsche IPO, which will be booked in Q4 2022. Now coming to the performance of our divisions. Passenger Cars delivered a solid €12.1 billion operating result and a margin of 8.8% before special items. Our Commercial Vehicles came in at €1 billion and a margin of 3.4%. The Financial Services Division continued with their strong performance also in Q3 and recorded a cumulative profit of €4.2 billion. Moving to our Passenger Car EBIT bridge. The strong result before special items of €12.1 billion for the Passenger Car business was mainly driven by a positive mix effect from well-equipped cars and favorable pricing. The bucket exchange rates and derivatives turned year-on-year into a small burden of €0.3 billion. Product costs deteriorated further to minus €3.7 billion due to increasing raw material costs. The position fixed costs and others had a negative effect of minus €1.8 million from higher R&D, nonrecurring Russian impairments, Porsche IPO costs and other effects, while our fixed cost program continuously contributed to the resilience of our business. After special items, the result came in at around €11.7 billion, including a minus four -- minus €0.4 billion for diesel-related costs. Looking briefly at the brand group reporting within the Passenger Car business. The volume group came in with an operating result of €3.7 billion. The cumulative margin for the nine-month period amounted to 4.6%. The margin of volume group decreased in Q3 to 3.8%, mainly as a result of summer seasonality and plant shutdowns during the holiday season. Brand Volkswagen came in at a cumulative margin of 4.7%, positive mix and pricing and good performance of the regions, North and South America, had a positive impact, while increased raw material costs burdened the result. ŠKODA's margin at 5.6% year-on-year -- year-to-date, which is a decent performance as they are continuing to consolidate our Russian business. Our Premium group came in with a very solid operating result of €6.3 billion and a margin of 14% for the first nine months, benefiting both from strong mix and pricing, positive ForEx effects as well as the positive effects from derivatives. The demand for value vehicles remained strong, and the order bank is well filled. Lamborghini and Bentley performed extremely strong. Synergies within the Premium group are clearly materializing. Porsche is well underway with 221,000 units sold in the first nine months, showing an impressive return on sales of 19.4% in its automotive business. The result was mainly driven by improved pricing, better product mix and positive ForEx. Net cash flow continued to be solid and totaled to €3.3 billion in the first nine months period. The average price per vehicle remains at €110,000 per car, up 10% versus prior year. CARIAD sales revenue improved driven by license revenues with brand groups, reflecting the ramp-up of our MEB cars. The negative operating result and cash flow reflect the ongoing ramp-up of our business. Volkswagen will significantly strengthen its regional development expertise for autonomous driving in China through the joint venture between CARIAD and Horizon Robotics recently announced. Coming now to our Commercial Vehicle business. Trade and unit sales are up 11%, supported by Navistar consolidation. The operating result came in at nearly €1 billion for the first nine months period, with an operating margin of 3.4%. We saw a significant impact on operating results from supply shortages, higher costs for raw materials and production stops at MAN as well as impairments related to the disposal of sales business of Russia -- of cumulated €0.2 billion. Net cash flow was impacted mainly by payments related to legal proceedings, €1.4 billion, and working capital movements. Our Financial Services contributed to deliver strong results and reported an operating result of €4.2 billion. The Q3 operating result was burdened by impairments related to Financial Services business in Russia of around €0.4 billion. Contracts remain stable, while used car business positively contributed. Looking at our JV business in China. Q3 improved significantly, driven by improved chip availability and boosted by the government stimulus. However, the quarter still was impacted by heat wave and regional COVID resurgences. The proportionate operating profit of our JV business in Q3 came in at €1.2 billion, driven by pent-up sales. We continue to thrive in 2022 for higher Chinese proportion operative profit than in 2021, depending on the further development of the pandemic and semiconductor supply. Now let's come to the outlook for 2022 and to make it short, we confirm outlook from H1 in major material aspect. However, we now expect our deliveries to customers to come in on similar level as prior year. This is mainly due to limitations in our production driven by the supply chain constraints. Revenues are expected to reach the upper end of the range between 8% and 13% due to the continued positive mix effect on pricing. We remain confident to end up at the upper end of our margin guidance between 7% and 8.5%. Reported net cash flow is expected to stay at the same level as in 2021. However, this depends on the ability to transport and deliver the Q4 production to customers and also on the timely completion of processing and settling of the corresponding invoices. We are determined to reduce stocks as much as possible by year-end. However, this will be challenging since we are holding a buffer of critical parts and expect a certain amount of newly completed vehicles awaiting specific semiconductors also at the end of the year. Ladies and gentlemen, we are focused on the financial steering of the transformation. Let me give you a brief glance on where we stand on some of these topics at the end of nine months. In Q3, we sold 149,000 BEVs, reflecting a total share of 6.8%. Our year-to-date share is now 6%, especially in Western Europe, we continue to hold a strong order bank above 350,000 vehicles. Our E Group continues to hold the number one position in Europe, demand for ID.5 is above our expectations, and ID. Buzz shows great customer response for both cargo and people variants. In China, the Q4 e-tron was also well received. In China, we are currently at 113,000 BEV units, and still see our year-over-year target of up to 180,000 units in reach, reflecting the continuous increase in BEV deliveries in Q3, we have our 7% to 8% full year target firmly in site. To finance our ambitious transformation towards electrification and digitalization, we have initiated in 2021 our overhead cost program. We achieved our 2023 target of minus 10% cut in overhead cost already in 2021. So far, we are able to largely compensate inflation on the fixed cost side. However, there are first evidence that fixed costs are surpassing prior year's level driven by higher energy prices. To compensate for that, we will intensify our efforts. Stringent capital deployment and synergies across brands stay on our top priority. In the first nine months, the R&D expenditures within the Automotive Division increased to €13.8 billion due to a significant development activities for future BEV models and software technologies within CARIAD. At the same time, the group spent around €7.2 billion on CapEx. CapEx ratio is at 4.3% with the retooling of the MEB in our Emden plant, Hannover and Chattanooga being one of the major drivers, increasing worldwide MEB capacity to close to 1.5 million cars in 2023. Further CapEx expenditure in Q4 can be expected relating to our new Audi plant in China and for a new electric platform PPE at Audi and Porsche. Our forecast for R&D, as a percentage of sales is 8%, while we now expect our CapEx ratio to be around 5.5%. This shows clearly our focus to compensate for higher R&D for BEVs and our software stacks with CapEx discipline. With the Porsche IPO, we pursued the successful and at the same time, one of the largest IPOs in Europe in a challenging environment. Looking at the proceeds from the Porsche IPO according to the exemplary deal value. In total, we will receive gross proceeds of €19.5 billion. Our shareholders will participate via a special dividend of €9.6 billion. It is planned to be paid out at the start of January 2023 based on the resolution of the Extraordinary General Meeting, which will be held on coming December 16. Funds of more than €9 billion that will stay with us, will play a vital role in financing the acceleration of the transformation, in particular, in supporting the development of our own battery business within PowerCo. We expect a safe and sufficient supply and efficient supply of batteries to be a key differentiator in our industry. PowerCo will be a key decisive competitive advantage in the future and will make a significant positive contribution to our business. Ladies and gentlemen, let me finish today's presentation with our steering metrics, in our view, the key of successful in managing the transformation. Based on a very convincing product range, our brand groups performed well in a challenging environment. At the same time, we continue to drive forward our key platforms. Within all value drivers, we achieved good progress so far, BEV sales are significantly up year-on-year, and we are in sight of our share overall sales target for the full year. The joint venture between CARIAD and Horizon Robotics to develop ADAS demonstrates a further step in software strategy. For China, the partnership between PowerCo and Umicore further enables our BEV strategy. And our realignment of MaaS/TaaS will allow us to optimize our development of solutions for autonomous driving. We have achieved strong operating results across all brand groups and our Financial Services business, despite tough conditions. Based on a very sound balance sheet and a robust net liquidity position, we continue to transform Volkswagen towards electrification and digitalization, keep focusing on integrity and ESG and continue our path of decarbonization for a planet worth living on. Ladies and gentlemen, I'm aware that you're anticipating an event in Q4 as part of our regular reporting that would usually cover five-year planning round. After careful consideration, we have decided not to hold this event in November. We are facing a different economic reality than in the time when we set up the framework and assumptions for the planning round. This has to be reflected in our plans, which takes a little bit more time. We will, for sure, give you an update by March 2023 during the annual press conference and in detail in our Capital Markets Day in Q2 next year at the latest. Thank you for taking the time and listening so far, and now we are very much looking forward to answering your questions. A - Rolf Woller: Thank you, Arno. And now we are opening up the question-and-answer session to our investors and analysts. [Operator Instructions] And I think I see the first question coming in here from Tim from Deutsche Bank.

It's Tim from Deutsche Bank. I would have two questions, please. The first one is, Oliver, we're generally hearing a lot from you about independent of the brands, potential equity stories, IPO drills, all of them. At the same time, obviously, group holding like yours only really makes sense when you can reap synergies out of those product at customers will directly see. How do you intend to balance the independency versus the synergies? Where do you see the biggest synergies, and in particular on the software side, you were absolutely heading for a lot of independence in your previous role as Porsche CEO. Is that still the case? And then secondly, when we think about the BEVs, arguably, in particular on the mass market side, they are not very impressive versus the competitive offering. You may have the 800-volt charging infrastructure. The Chinese peers put a lot more tech into these vehicles. Do you believe you need to step up your game there substantially? Can you do that in the current cost structure? Or there are no need to find money elsewhere?

Okay. May I start, Tim. Thanks for your questions. And first of all, to explain a bit what is my idea to steer the group. At the end, our customers are focused very much on brands. And our brands have got the biggest priority. And there is in between brand autonomy and synergies in between the group. Our group has got the responsibility to manage the synergies in between the brands and giving a KPI framework, what is our expectation as an investor for the brands. And therefore, organizing synergies, it's all about platforms. We have scale effects more than any other automotive company in the world with the scale effects in between our brands. And therefore, we have a very special platform program, I mentioned before in my speech. And when it comes to software. We have the unique opportunity to share software platforms. Once and they are being ready, it's easily to copy from one product to the other. And that's the responsibility of the group to manage it. When it comes to our brands, it is important to have a clear footprint in terms of design, when it comes to brand identity, product identities, but also the financial footprint. And therefore, that was my experience of the last month, that was Porsche IPO, is building a virtual equity story for all brands, focusing on the right things, having a clear strategy, which is also attractive for the capital market. And so I think we have exactly the right balance in between the steering model from the group and empowering our brands with entrepreneurship. And at the end, exciting our customers, what is the most important issue. Coming to your second question about our BEV footprint. And therefore, I established with my top 10 program, also a technology initiative, which is focused on our platforms but also on the technology footprint. And therefore, we have a clear analysis, where is our competition today, where will be our competition in five years, and then to leverage what we have to do in our different platforms to have the right positioning for the future. And I'm very confident having started this process and with the experience we do have in our brands, we will be able to do so. And the expectations of the customers in the different regions of the world are different. And therefore, we need to offer the different ecosystems for our customers in the Western and the Eastern world. And when you look at China, the expectation, especially from the younger customers, is totally different. They are very technology focused. And so we will have there also the right approach together with my colleague, Ralf Brandstatter in China. We know what we have to do. We are very confident that we will be able to do so and counting on our experience in the Hella Group.

Do you believe you can achieve these improvements with the budget you have set yourself so far? Or do you feel there is a need to spend more money?

Yes, that's about us, and that's a big advantage we do have are the scale effect. And with an intelligent platform strategy, where we share our technologies in between the brands, we will come to a positive cost structure. We have already shown it in the last years, in the crisis years, when you look at the corona year, at the semiconductor year and this year, we are faced with several crises. Still, corona issues, supply chain issues and geopolitical crisis. We are coming of a position of strength, and we will be able to do so, and benefiting from our very positive scale position.

Tim, I would like to do one more aspect or add one more aspect to that topic. If you look at the BEV sales, we mustn't forget that we are heavily supply constrained. We sit on the order bank in Europe, only of 350,000 BEVs that shows the huge success of the MEB cars in Europe and also the great customer response and the product substance. And if you look at the, for example, the response to the ID. Buzz or other cars, so they are very well received in the market.

Looking at the list, the next one is Patrick Hummel from UBS.

It's Patrick from UBS. First question for Oliver, please. Regarding your comment about the virtual equity stories that your brands will be elaborating. Looking at the Porsche IPO, it's been hugely successful for Porsche AG and congratulations, by the way. But looking at VW's share price, it hasn't really helped. On the contrary, you now have an even larger sum of the parts discount in the Volkswagen shares. So I wonder, when it comes to elaborating these virtual equity stories, do you also think about different ways of crystallizing the value, for example, via spin-offs rather than minority IPOs? Any thoughts on that would be appreciated. And the second question, I'm not sure, if that's for Oliver or Arno. I'm a bit confused by the order comments, we hear also from your organization, order intake has been slowing in Europe. We hear from dealers that the situation in Europe looks pretty difficult these days including cancellations. So could you maybe just comment on the development of the order bank? Where do we stand at the end of the third quarter versus the end of the second quarter?

Yes, Patrick. Thanks for your questions. I would like to start with your first question and then I hand over to Arno coming to the virtual equity stories. And that was my learning effect from the last months preparing the Porsche IPO. Coming from the investors' perspective, with all these questions from an external, it brings you to a situation to focus more, to unleash the potential of your brand. And that was a big part of the success story of the Porsche IPO. And then I came to the idea, why not start a process with virtual equity stories to sharpen the profile of each of our brands. And coming to your comments that the value of the whole Volkswagen Group hasn't yet benefited from the Porsche valuation. But I think the Porsche IPO shows the potential we do have. In Volkswagen Group, we still have a conglomeration discount. And I think when we will be able, with the virtual equity stories, to crystallize more the value of the whole brands and then decide where is potential for the future, maybe to bring other units to capital market. It isn't decided yet. But there, we are coming to a preparing process where the capital markets will also benefit. And I think, on the one hand side, it is a good exercise to improve the profitability of each brand. And on the other side, to crystallize the real value of Volkswagen Group. And so I think the Porsche IPO was a perfect role model, and the effectance in the market, we can see right now that the development during the last four weeks only was over 20% of the shares of the Porsche in difficult market conditions. And so I'm very confident that we will go this part with all the other brands and at the end to improve the value of the whole group. And it's a positive signal for the capital market.

Patrick, I come back to your question on the order bank and on the situation. We said -- I said before in a huge order bank, it's about six months in Europe, and the six months equals to 1.9 million cars. And if you ask for the development, it's really difficult to judge because from today's perspective, we don't have really a significant change in order entry. There are some slight decreases in order entry. But look, some of the cars are really sold out not only for 2022, but for example, the Q4 e-tron has basically a pipeline of 18 months. So of course, if you are basically have so long lead times, they are like first customers who say, look, this is rather long. On the other hand, not even all the channels are fully open because, I mean, it's pretty clear, and you would support that in a time where we don't have enough savings and enough capacity, we would concentrate on the more like profitable channels. So for the time being, we are not worried about order bank or order entry so far.

Thank you, Patrick. And moving to the next question, José from JPMorgan. José Asumendi: It's José from JPMorgan. A couple of questions, please. Oliver, how do you think about CARIAD strategically for the -- for this year and for the coming years? On one hand, we've got a substantial negative earnings contribution in the P&L to the extent offsetting the profitability generated across some of the brands. On the other hand, it is vital and strategic for the group. So can you just help us understand a bit better whether you're planning to reduce the losses maybe in the coming quarters? What's you're thinking here, especially also in the light of the other announcements we've seen on software and autonomous cars across your competitors? And second, Arno, can you speak a little bit around the pluses and minuses when we think about the fourth quarter versus the third quarter? What are the positives and key negatives we should think about in the light of your confidence to hit the upper end of your margin range guidance for 2022?

José, may I start with your first question about CARIAD? First of all, it was the completely right decision to go for our own operating system for the Volkswagen Group, only thinking about the scale effects, we do have in -- and our group. To ramp up, a company like this cost efforts. That's very clear all over the world, also in other industries. And we are tackling the problems and it's not a secret. And it was discussed a lot in the media about the issues we do have in CARIAD. And now we are looking ahead what we have to do. And therefore, I started an initiative from my first day on -- in Volkswagen Group to focus on the core competencies of CARIAD, on the one hand side, to define very clearly the interfaces we do have in between CARIAD and the brands to optimize them, and then to build a clear partnering profile for the different generations of software in CARIAD. Besides of this, we are close to finish a clear picture, what content do we want to connect with which generation of software, what will be the starting time for which generation, and then we built and rebuilt our cycle plans with this approach. And beside of this, we already started some optimizing processes in between CARIAD's, optimizing tools and organization. And now we are in the middle of this optimization process. We continue to invest heavily in software. And we will have on the scale effects once we are able to make the application to the product. And we will be in the market in 2024 with the first products with the software generation 1.2 and developing this generation even further for a lot of other products coming in this decade. And a further step will be the 2.0 generation, especially prepared well for the autonomous driving issue when it comes to Level 4 driving. Both generations are perfectly prepared for the market. I personally have driven the cars from Audi and from Porsche with a software generation 1.2, and I'm very confident that we are hitting in the middle of the market and our customer needs. And so we will improve step by step by CARIAD's and having the right footprint for CARIAD for the future. And then, I hand over to Arno to your second question.

José talking about the fourth quarter, and let's start with what you've said already. We are quite confident that we can end at the upper end of our margin guidance. I think it's best to describe the fourth quarter in terms of our EBIT bridge. Look, the first bucket, volume price mix, clearly will be a positive from the volume side and we plan to keep on our current path in terms of mix and pricing. We have a great track record there so far and we want to keep that part. There might be a slight deterioration in terms of country mix. Once we have more cars available throughout the world, yes, we also want to sell some more costs than in, for example, Brazil or other countries. But in general, pricing and cost -- pricing discipline and mix discipline will stay volume positive. We don't expect major changes on the currency side and derivatives. We will -- we expect from today's perspective, a significant higher burden on the material cost on the product cost side. You're aware, we communicated a minus €3.7 billion cost so far. You shouldn't be surprised if that goes up to €6 billion for the full year. And there is also a slightly higher burden on the fixed cost side, specifically due to energy and other topics. But again, there will be a significant positive effect on the volume side. You can see that on the run rate already in the end of Q3. And also, we see the run rate already in October and we will make our like -- we will continue our path on the fixed cost side and cost discipline. So overall, despite the headwind on product costs, we are quite confident. Not in the EBIT bridge, of course, is our FinCo. But there, we see also clearly positive signs that I think they guided so far, the result of €5 billion. We shouldn't be expected -- it shouldn't be a surprise if that goes more like to €5.5 billion and beyond.

Thank you, José. We move on to Horst Schneider from Bank of America.

It's Horst here From Bank of America. Maybe first of all, a question for Oliver. When you talk about your future strategy, in an interview, you've said that you want to stress the strength of product, and by strength of product, you want to gain back market share. That sounds to me a little bit like a volume strategy that you want to run is less focus on costs. Gaining back market share that takes, of course, time because model developments take time. So what you intend to do in an environment, which is getting maybe more recessionary, would you be prepared to step up the cost cutting? And in that context, again, I know that you have got your CNG only in 2023, but can you at least confirm all targets that have been set by your predecessors before? So Arno, a question on full year guidance again, and I want to hook up to the question that José has asked. When I do the calculation, then basically, your revenues should go up by something like, I don't know, at least €5 billion quarter-on-quarter, 15% year-on-year. You made last year in Q4, a 9% in operating margin. You guide now imply for just 8%, despite your revenues are strongly up year-on-year. I understand the calculation about the product cost, but don't you think that your Q4 -- implied Q4 guidance is still rather conservative? If it's not conservative, doesn't that mean as well that you have put a cost problem because the cost at the moment increased much more than you originally planned?

Horst, I would like to start with your product question. And products are the focus of our company and therefore, and very clearly, products are one part of my top 10 program. This starts with the right product strategy, then the design approach to sharpen the profile of each brands with brand identity, product identities, then having the right level of technology and the quality profile, which we already kicked off and that at the end, coming to the financial profit margin of our products and they're having the right footprint for each of our brands. That's the content, how we are driving this process. And it's not about only focusing on volume, and I think very clearly, my priorities. First priority is profit margin. The second one is operating profit. Then the third one, the sales revenue. And on the fourth level is coming volume. And that shows you how we are focused. And talking about the cost situation of our products, we are in good conditions because of our scale effect benefiting from our platform strategy. And so we think with the right shape of our platform strategy and product strategy at the end, focused on profit margins, we will prepare the group for future success. And then handing over to Arno.

But Oliver, you confirm all targets for '23 and '25? Sorry for that.

What targets you're talking about, the profit margin for the group? Or operating...

I talk both all targets, but specifically, of course, for the profit margin target, the 7% to 9% in 2023 and 8% to 9% in 2025.

Yes. We will comment to you about the profit margins in our annual press conference. What we can say for this year, that would be in the upper part of the range, in between 7% and 8.5% of profit margin. And what is very clear, listening to my strategy, very focused on profit margins that I will go for more potential for the future. But it's too early to predict. We will do so in the annual press conference, how we will build in our path. And therefore, Arno said with all the activities we are doing right now. And with all the situation, we have faced all around Volkswagen. We will present all the details of our planning round in the spring of next year.

Yes, coming back to the question. I really -- all I can say is we are rather confident to achieve the margin guidance between 7% and 8.5% at the upper end. And I also gave you basically an indication already on the headwind on material costs. And -- but I also must say, look, given the difficult environment so far, we really showed robust results. We work on the fixed cost side, and we will continue on that path. So let's leave it like that. But rest assured that we do everything like to run our business also in the fourth quarter, and we are confident to end at the upper end of the guidance. Whether it's conservative or not, I don't really don't want to comment on that right now.

Thank you, Horst. And we are moving on to the next question from Philippe from Jefferies.

It's Philippe Houchois at Jefferies. I have two questions. Maybe the first one for Oliver and then for Arno. Oliver, on this decision to exit the Argo AI, I mean, unlike Ford, which is exiting this four -- Level 4, Level 5 ambitions, you are committed to it. And you seem to be choosing two different partners, which I fully understand the Horizon for China and Bosch for the rest of the world. I'm just trying to understand how much duplication of technology is required to address different market requirements. Or how much synergy there is going to be between what you're doing with Bosch and you're doing with Horizon? Still trying to understand are we kind of doubling down on spending, or are we getting an attractive level of synergy between the two approaches considering two different partners? And my second question for Arno is as Volvo cars have started to disclose the gross margin of their BEVs versus ICE, and it was quite a deterioration in the third quarter, which they explain with a significant increase in costs, particularly related to EVs and batteries. And I'm just wondering, if you can comment on any change in cost trends for you on your BEV activities that might positively or negatively impact your margins?

Philippe, to your first question about Argo or the Hella road map for autonomous driving. We kicked off several initiatives years ago, and it's normal in a period of transformation when the technology isn't clear to go for different approaches. And now, it's up to me to harden our road map and to focus, and focus also means speed. And therefore, now we decided a very clear footprint, on the one hand side, to build a joint venture together with Horizon Robotics in China, to continue with Bosch and to have quick approaches for Level 2++ and Level 3 driving with another partner. And so I think we are very focused to the different approaches. And therefore, we decided not to invest more into Argo. Talking about why different approaches in between the regions, that has a lot to do with regulations for the future we are expecting, especially when it comes to higher automotive driving levels like Level 3 and Level 4. From the technology perspective, it's everything the same. But how to use maps when it comes to legal regulations, we need different approaches. And so we think we are well ordered in between a Western approach together with Bosch, the Eastern together with Horizon Technologies and the third partner, we are already in a concept phase to add to this concept. And what we have learned during the last years, we are now very confident having taken the right decisions for our autonomous driving activities. And then coming back to Arno.

Yes. In terms of margin BEVs versus ICE, of course, there's always like the concept of margin parity, when will we achieve it. And what are the specific circumstances right now. And of course, we are all aware that basically, specifically raw material prices for batteries went up. On the other hand, nickel was stabilized, and we see the lithium price. So yes, there are like cost pressures for the BEVs currently. But the question is more for us, how would the material price evolve in the future? And what is the strategy on BEVs in the long-term. And there you know that we embarked on a strategy to ramp up our own battery business, not only in terms of production capacity, but also in terms of engagement along the value chain upstream in terms of materials, in terms of asset materials, in terms of mining, and we see this is absolutely the right approach. On the other hand, there's a second effect we mustn't underestimate. BEVs are just ramping up. As said before, we have now a capacity in place for about €1.5 million MEBs next year alone on top come the other cuts from PPE and Audi and Porsche. So there will be a significant positive scale effect in the BEVs as well. Customer demand is very high. Specifically for our current BEVs, customers ask for well-equipped cars for the bigger batteries. So these are basically the effect. And we still work on, of course, on the concept of margin parity and -- which depends on the raw material prices, of course. But I would say the specificities of the Q3, Q4 -- or Q2, Q3, we just mentioned in terms of Volvo had very much to do with like the terrible war and the current supply chain topics as well.

Thank you, Philippe. And looking here a little bit at the time, the next question would come from Daniel. And if we could stick to the two questions principle, would be greatly appreciated.

Daniel Schwarz from Stifel. I had a follow-up question on the Porsche IPO. In case the valuation gap remains between Porsche and Volkswagen, so the Porsche is worth more than Volkswagen as a whole, do you consider setting more Porsche shares in the long-term and payout to proceed its dividend after the lockup? And the second one is a follow-up on the planning round. Just to understand, is that postponed due to the macro uncertainties or because you still work on the long-term strategy and priorities? I understand you will update the long-term targets only next year. However, the €15 billion free cash flow target, can that still be valid when you say you would spend the €10 billion proceeds from the Porsche IPO on top of the spending that you had in mind for the Porsche IPO?

Yes. First of all, coming to comment about the Porsche IPO, and thanks that also the market response was so positive on the Porsche IPO. And that shows the potential we do have with our brands in Volkswagen Group. There isn't planned right now to bring more shares to the market. The only thing is that we want to use Porsche as a role model also going into the business cases of the other brands, and to unleash the full potential of our brands. And then handing over to Arno with a planning round issue.

In terms of planning round, first and foremost, let me really position there. There's nothing to worry about that we postponed this event. It's just like, look, we have a rather long planning cycle. And when we started the planning with our assumptions, that was even before the terrible war in the Ukraine broke out. In the meantime, we see basically economic situation versus inflation. And all these effects have to be taken into account. It takes a little bit of time. But rest assured, we work on our resilience, and we showed great resilience over the last years, much more resilience than we had in the past, and we will continue on that resilience. And we take that time to reflect what are the current macroeconomic outlook, what are the cost topics ahead and how to compensate for that and how to deal with that. And again, nothing to worry about. And we, of course, stick at least to our strategic targets we gave out a year ago for 2025 and 2026.

Thank you, Daniel. Moving on. The next one is Stephen Reitman from Societe General. Please go ahead.

Yes. I have two questions, first of all. On the decision to exit Argo AI, some of us were at the presentation with Volkswagen gave on the eve of the Munich also show the IAA impact in September last year, where Argo, Bryan Salesky was presenting with Herbert Diess, your predecessor. The decision to exit Argo AI, does this represent now a more -- a faster decision-making process, I think, under your leadership that you're looking at now more closely at the returns on some of these businesses and making it sort of like part of the decision develop things like this? And what at least these gained from the Argo AI and of the cooperation in terms of what will still go on and what we kept in terms of IP? Second question, you mentioned about having different products in different markets because of different customer taste. But it seems that, for example, the Apple iPhone is liked all around the world. And a lot of the new cars, whether it'd be Tesla or whether it some of the Chinese BEVs coming out are often described as iPhones on wheels. Do you think looking at the present products you have on the BEV range, particularly I'm talking about the ID. family, do you think more has to be done and be done at the maybe a midyear facelift stage? Or does it have to wait for next-generation products before we see a more tech visible tech heavy approach or these kind of products, maybe in terms of screens and obviously, we discuss CARIAD as well?

Yes, Stephen, thanks for your questions. First of all, decision process. And as you know me from Porsche, I'm about to take decisions. And we have a clear plan behind of our 10-point program, when we want to take what decisions. And up to the end of the year, for all these 10 points, I have a clear schedule. This afternoon, we will take the first decisions when it comes to platforms and to software. And the same for all the other topics. And then what we are building right now is a plan for the next year already with milestones, clear goals for all these initiatives and to take decisions because in a period of transformation, it's all about speed and that is what you can expect from me. Talking about the product footprint, we have standards for our products like Apple does, as you mentioned. It starts with some brand identities. It comes over to product identities to make the differentiation in between the different products. And then what you need, especially when it comes to software to fulfill the expectations of the regional customers. Also developing regional solutions with regional partners for regional customers. And that is what we are doing in the Eastern and in the Western world, while at the same time, keeping on our product, standard qualities and technology issues. Coming to the ID. family, that was a very first approach to come with the ID. family very early into the market because we decided very early to switch our strategy from combustion engines to electrification. And we know what we have to do from the technology aspect, especially when it comes to the product updates for the ID., talking about charging times, talking about range, talking about the software offers. And so we will invest also for the upcoming updates for the ID. family as we invest for all the other products. And also, I'm looking to Porsche, for example. There, we will bring, at the end of next year, being in the market in 2024 update for the Taycan, which was one of the first competitive electric cars in the market. And that's the transformation we are driving right now.

Thank you, Stephen. And given the time, we have to come to the last questioner, Charles from Redburn.

Actually, I've just got one on China. So obviously, you had a very strong Q3 results, but there has been a noticeable slowdown for the overall industry in October. Some of your major competitors have obviously cut prices. Could you comment on how Q4 has started for VW, and how you see the outlook going into next year?

As around the world, we were so far heavily supply constrained in China, not only by semiconductor, but also by the COVID measures from China. Now the stimulus program kicked in and we remain overall confident for China, both in terms of total market and recovering of market share, and also in terms of our proportional operative result, which is rather important for us also in terms of proceeds we get via dividends. You saw already that we surpassed the 2021 level, and we are quite confident that we can also improve there significantly and come back to all strengths there. In terms of what we will have a look at, what we already said is in terms of ICE versus BEV. We will work on further competitiveness on our BEVs. And there, we are rather really happy that we could communicate the joint venture or the -- or working together with Horizon Robotics, which will give us a significant boost also in driving assistance functions and local software capabilities for our BEVs in China.

Thanks, Charles. So this concludes now the investor and analyst question-and-answer session. Thank you very much, Oli. Thank you very much, Arno, for the detailed answers. I want to make you aware before I hand over back to my colleague, Sebastian, that we have on December 16, the Extraordinary General Meeting, important for Dividend Entitlement is the same date, so December 16. And the first ex-dividend price quotation will be on December 19, yes. I know it's very technical, but important for investors to note, and then the dividend payment date is foreseen for January 9. If there is anything unanswered, anything unclear, please give us a call here in Volkswagen. The team is very happy to take any questions which are not answered yet. Thanks for keeping us employed, and I hand it back to Sebastian.

Thanks, Rolf. And now we will make a small break. In three minutes, we'll be back and all media, all journalists can stay in this call in three minutes, and then we start the Q&A session. Looking forward to it and bye-bye.

Okay, thank you very much. Thanks for the patience and the short break. We are continuing with the media Q&A. My name is Nicole Mommsen, I'll moderate the Q&A sessions, and we'll start with the AFP. Thank you.

What do you think about the European deal of the [indiscernible] and join cars by 2035? Also I had a second question. I wanted to know if you're worried about the political climate worsening between China and Germany? Thank you.

Yes. May I start, Oliver speaking, with the decision of the EU not to allow more engines with CO2 pollution for up to 2035. We have a strong electrification strategy and we will be prepared for this decision. On the meantime, for us, it's important to be flexible in the period of transformation because the different regions of the world are moving with a different speed towards transformation. And so far from our perspective, we will be prepared. All our brands are prepared, and we are not worrying about this. Yes. And the relationship in between China and Germany, China is a strong market for Volkswagen with successful decades in the past. We have strong partnerships in China. We are focusing on our values in China, focusing on our true customers in China, and continuing to offer exciting products to our fan base in China. But on the other side also we are looking to the geopolitical situation and therefore it is important for our business having a robust financial situation and being flexible with our global footprint, in terms of being able to react on geopolitical crisis.

Thank you. Thanks for your question. The next question comes from Patricia from the Financial Times.

Good morning. I have two questions. I'm wondering about the quite abrupt unwinding of Argo AI? Can you help to contextualize this? How far back will it take, Volkswagen and its autonomous driving ambitious in the West? And I'm also -- I also have a sort of China related question. You spoke about wearing obstacles and a transfer of tech between East and West. Can you give a bit more detail as to what the risks are here and what this means to Volkswagen? Thank you.

Yes, Patricia. First of all to on the IU issue, we started the initiatives for autonomous driving years ago. And it is in a transformation period, important to leverage which technology is the right one. And therefore, now it's up to us to all in our roadmap. We have already experienced what's technology -- which technological approach will be the right one. And therefore, we decided on the one hand side to continue our partnership together with Bosch and more for the Western world, and to open a joint venture with Chinese partner Horizon to be prepared for the Chinese autonomous driving market. At the meantime, we are in a concept phase with another partner for quick approaches for Level 2++ and Level 3. And so, it's more to focus our roadmap on autonomous driving. We believe that, it will be a very important for the future mobility sector to have the right offer for our customers. And therefore, we will still have offers for individual mobility, but also offers for public mobility, when it comes especially for level for driving likely do it already with OEM. Talking about the different ecosystems in between the Eastern and the Western world, we are already faced to these situations. And for us, it's important to develop our products always, first of all from the customer perspective, and our customers expect in their cars, and the ecosystems they are using in their software devices and their mobile phones. And there as a situation comparing, for example, North America, Europe, with China is different. And therefore, it's up to us to develop regional solutions for regional customers together with regional partners to be adapted very closely to the customer's needs.

Thanks Patricia. And then, we have Bill Boston from The Wall Street Journal. Bill, go ahead.

I hope you can hear me. Thanks for taking my question. I also wanted to follow-up, excuse me, I wanted to follow-up a bit on the on the software. There are a couple of questions. One is this seems like the first time that you have actually broken out figures for CARIAD. And, it shows up as a loss, a significant loss. And I'm just wondering, why are you showing that since -- the only revenue is between companies, right? It's within the group. So, I'm just wondering, is this a real figure that belongs in the profit loss accounts? Or is this just some kind of internal accounting? What is the significance of this number? Because if it's showing that in the future there will be revenue, I mean, when CARIAD is going to then show a profit? And where is that revenue going to come from? That's one question. The other is. Oliver's discussion of -- in the how the software strategy is changing to include more external partners, but at the same time reaffirming the Company's commitment to developing its own operating system? So I'm wondering, what has really changed in your software strategy? Are you open to bringing in external partners for real, the kind of the internal part of that software that in the past the Company has said, this has to be a VW territory? No one can be in here to get our data or be able to control systems that we should be controlling ourselves. Thank you.

Yes. Bill, may I start, first with a technical issue and it was totally the right decision to go for a own operating system for the Volkswagen Group, which should be a open operating system, being able to connect solutions from partners. We think that is as important to have the Volkswagen software footprint and benefiting from the scale effect. We do have in our brands with over 10 million cars a year. And the positive aspect of software is you can copy it once being ready and therefore it was right. And now, we are on a point to focus, to define very clearly which are, with our experience from the last years, which will be our core competencies of carriers, interfaces in between group and carrier, and then picking the right partners, and defining very clearly the level of integration into our open source system. And coming to the investment question, it's like, in other products where we are investing by CARIAD as own company. And then I hand over to Arno to explain it a bit more.

Yes. Bill, coming to the way we set it up. First and foremost, as Oliver said, we really think having the own software in our own hands is a clear competitive advantage. And I don't want to add on what Oliver already said on the strategy. In terms of how we organize that, we will -- we organize all the key platforms in a same way that that means like CARIAD is a separate entity, a standalone entity. Because we think in this respect, we can manage it much better. They have its own culture, its own processes, how to run a software company. They are slightly different to how you run car company and this is why we set up an own company, which is more agile and has a own reporting and in order to be better able to capture the synergies throughout the group. In terms of business model and why is that shown and why is it negative, we think it helps much more to understand our like performance in the group and the business case is as follows. CARIAD does all the upfront investment in terms of R&D developing our software stacks. So it's natural that they have a loss at the beginning because they get the revenues in terms of a license fee car by car. So, since we have a lot of upfront investments so far, but only the MEB cars pay license fee. There will be a phase with losses, but eventually that phase of losses will then turn into a significant positive later on. So yes, it's only internal, but it's real basically transfer pricing and there are clear business plans behind that. So, it is basically due to the upfront investment of the CARIAD that there's a loss and there will be some more years losses, but that's basically as planned and it will turn to a significant positive in certain amount of time.

Thanks Bill. Then we have Monica from Bloomberg News. Monica, go ahead.

Thank you so much and thanks for taking our calls today. The first question I wanted to ask was on this planning round, and let's see, you said that the economic outlook has sort of shifted. Can you maybe detail which aspect of the economic outlook is the most concerning for Volkswagen Group overall in needing more time? And then the other question that I wanted to ask is, if you could give a regional outlook for car demand, Mercedes earlier reduced expectations for the U.S. and Europe. And I'm wondering, what's your view across your luxury and mass market brands and whether or not mass market new orders are weakening?

Yes, look, technically, we have a rather long planning cycle and there are several aspects that go into our planning as perquisite, for example, what are the total markets, what are inflation expectations, interest expectations, and also economic outlook? And basically, these are the effects. There are other effects, for example, wage inflation also material costs increase and more importantly raw material and energy prices. So, as you're aware, all these factors have changed since like the, the terrible war in the UK in broke out in February, March. And then, it took quite some while that until to be able to fully quantify these effects. And by in the time being like we basically moved on with our planning cycle and not all of these aspects were reflected fully. And now, we have to come up with a plan how to best compensate for these effects. In order to meet our targets, all our targets as said before, and this takes a little bit time, and as said before, nothing to worry about, but rather we need a little bit more time for that to compensate in terms of for example, more productivity in terms of fee cost discipline, in terms of perhaps also price, price steps in the future. If you look specifically us specifically in terms of what do we expect for the total market next year. Look, we want to -- we don't want to give guidance today. We will give the guidance in our earnings call next year and then in our Capital Market Day or over posted that already. But there are still a lot of institutes that expect the growth of the total industry. And why is that the case? Yes, the economic outlook has worsened, but on the other hand, you must understand the whole industry today is significantly restricted by supply constraints. So, if you wouldn't -- not have the semi-shortage and other supply concerns, the market would be much higher. So this is the reason why, although the economic outlook wasn't, we still expect from today's perspective a market that is next year growing, not by double digit, that's for sure. But we still expect a growing market next year from today's perspective.

Then we have, Jan Schwartz from Reuters. Jan, go ahead.

Yes, thank you. Can you hear me?

Yes, very well.

Okay, great. So, I would like to come back to the Capital Market Day, next year. You spoke about these virtual equity stories, earlier already in an interview, but will you be in the position then to let's say present names saying, okay, this or the other brand would be -- but yes could go to have an IPO in the next time? How concrete would you be on this?

Yes. Talking about the virtual equity stories, the idea behind was also coming from the experience. I was able to take during the last month with supporter IPO is to unleash the full potential of all our brands. And that is an exercise to focus on the right things to sharpen the strategy to have a clear company footprint when it comes to sustainability for example. And we see more as an exercise to also increase the profitability of each brand. And at the end we will use this exercise for the capital market stay for Volkswagen Group for the next year. We haven't decided for another upcoming IPO. We see Porsche IPO as a role model, but we have to work step by step in the brands, in the entities. And so it's only an exercise. What we will do doing this equity story in the single brand, we will assume this for the brand groups and what we will present in the capital markets day is a situation in the brand groups and how they will support the evaluation of the Hella Group.

Thank you. And then, we have [Christian Mikkelsen] from [indiscernible]. We can hear you.

My question is on CARIAD. You said you will have a decision this or meeting this afternoon about CARIAD. So maybe you can explain a little bit about that. What will you decide about? Will you clear up what will be the starting time for each platform and the models already? Or what will be the topic? And the second question is how, is this in any way connected to cancel the planning round? I mean, CARIAD is connected to each and every model that will come to the market? So does this play any role in the decision concerning the planning role?

Yes. We have a very tough schedule, taking decisions and I stand for decisions for all of the program I kicked off beginning of September. And this afternoon, that's right, we have one step of taking decisions. It's nothing to publish. It's internal. And that will have an impact also on cycle plans and product planning. That is very clear. It's a first step of all in the roadmap on the level of software, but also we will talk about platforms. And during the next weeks, we will have other decision points. And I have got a very clear plan what we have to decide up to the end of the year, while we built already a plan for the next year with clear goals and clear mile stones and decisions points. Going public with decisions, at the end, we will consider when we have a complete picture. There we can show where to go, but still too early to go out. It's more an internal process how we take decisions.

Thank you. And then the next question comes from [indiscernible].

Hello. Good morning. This is Alok. Can you hear me? Does it work?

We can hear you.

Okay. Good morning. Just more technical question about the planning around, maybe a question for Arno. Normally, in November, we've got a special Supervisory Board meeting and after that, the press conference and so on. So nothing does it mean what you said about the next spring that nothing will take place this November?

As we said before, we need some more time to reflect what has changed in the economic environment and also what Oliver just said in terms of second plan. And so, we will decide than next year and that the result of that we will communicate then early as possible potentially in the earnings call we will give an outlook. And then in detail, we will present all this on the strategy and the sum of the virtual equity stories in a Capital Markets Day, which we are planning for Q2.

And we have the next question from [indiscernible] Henning Koch. Henning, please go ahead.

Hi, I am from the motor city Hamburg. Mr. Blume, the topic planning round is the number one within Europe 10 points plan for the VW Group. Now having this in mind, what is standing at the very top of your personal management agenda for the fourth quarter of the current year? As mentioned in a clear connection with planning round. Mr. Antlitz, you are in charge of finance for quite some time now and have taken over the function of VW Group's Chief Operating Officer. Which new tasks did that bring along for you, please give some examples? And which part of your additional function turned out to be the most demanding so far? Thank you.

Yes, Mr. Koch, let me start with planning around. By planning around one of my top 10 points and that's all about increasing the financial robustness of our business. And therefore, we are focusing on the product range for each brands focusing on the scale effects in between the platforms and then having an adaption of the volume targets, we will take. We will define very clear KPI frameworks for the brands. And that is the work we have to do during the next weeks. And talking about a KPI framework for we, as important that we as Volkswagen group, acting as a investor, what is our expectation from the brands giving guidelines, but having enough space for the brands to move like an entrepreneur. And that is what we are working out right now. And then having a consistency, in between the sub plans, in the planning round, having an optimized cycle plan. CapEx planning plays a big role. And this, as Antlitz already mentioned in the surrounding we do have and evaluating the new aspect is important to implement and therefore we postponed closing the planning round bit later and going public in the beginning of next year.

Yes. In terms of my role as CFO, let me first say that Oliver and myself, we know each other for quite a while, we work closely together on all the topics. Look, we have a really, an ambitious transformation in front of us. Electrification, digitalization, all these projects need a lot of investment and funds. And there's one program we call that financing the transformation. And in that program, we make sure that we have the funds available, but not only in terms of funds available from the capital market of from external, but also that we have enough earnings power and we have enough internal cash flow to finance that program, the transformation. And part of that is the fixed cost initiative we talked about. Part of that is productivity improvement in the plan, also on the sourcing side, also on cost in our retail network. So if you ask me, what is an important pillar of your CFO role? I would say being responsible for the broker financing the transformation is surely one of these pillars I could mention here.

Thank you. And then we are moving on to [indiscernible]

Yes. Hello from Vosburg. Can you hear me? Yes, I hope so. Just two questions at the end of the day. The first one with your joint venture with Argo, you just finished or stepped out. You talked about the new partner to find quick solutions for Level 2++ and Level 3, but at the end of the day, what ID. Buzz for some commercial vehicles and wire plan Hamburg will need to Level 4 driving. So how will you, how does this fit? Is -- will the new partner also develop Level 4 as Argo has tried to do so far? And the second question to towards CARIAD and software, you said that the 1.2 software will be available in 2024, so not end of 2023 as was. Well, I think the last plan, will this be the basis for future developments tool so postponement of 2.0 where you did not say any deadline so far?

Yes, first of all about the decision of Argo AI was to our roadmap for autonomous driving. And now we have strong partners for level four driving. In China, we published with Horizon Robotics. And we will continue very clearly with -- for the other regions of the world Level 4 driving depends also a lot on regulations and we are still not at this point to go directly into level four driving, like the whole industry. And therefore, we need intermediate steps with 2++ and Level 3 and therefore, we have a concept phase which is all ready for example by Volkswagen auto with other brands, and we will decide during the next month to go for it and then having a clear plan step by step over Level 2++, Level 3 coming later to Level 4 with the right partners. Coming to CARIAD, that's right, that we will be in the market, in 2024 with the first project with the 1.2 software level CARIAD. We are already in ramp up activities preparing everything. For example, the Porsche Macan, I had already the opportunity to drive from the Porsche Macan, which opens the full potential. And I'm looking very much forward. I'm having this product in 2024 on the market, but ramp up activities are already kicked off and we will have to start off production in the next year. Talking about 2.0 that depends also on the study, we have done during the last weeks, in between what functions will we connect with which software level and that will be a continuously path coming from a Level 1.2 to 2.0, and timing plays a role that should be feasible and connecting the decision. We will take on the carry issue, combining it with the platform decisions at the end. The result will be the optimization of our cycle plan.

Thank you. Then we have the next question from Victoria Waldersee from Reuters.

Just two quick questions. One, how is it that you are planning on keeping your margin at the same level when your outlook despite lower deliveries? And then second question, I know, you mentioned positive scale effects that you were seeing positive scale effects as battery electric vehicle sales rise. Is that something that you are already seeing also in the volume brands or just luxury at this stage? And more broadly, how will you make an affordable electric car with costs rising and inflation squeezing consumers?

Yes. These are very valid questions. First of all, the margins we have really close look at the margin. And as you see in our results during the last, I would say months and years. We've achieved to be much more robust than in the past. First of all, if you talk about the contribution margin, of course, we work on cost optimization to balance the cost increase specifically on material costs. And they are also like, I would say, pricing discipline measures in order to keep the margins. And on the second topic on operative margins, as you aware, so far, we were able to almost fully compensate the increasing costs on the fixed cost side due to inflation energy costs, the fixed cost measures. These are the two major effects. Overall, as Oliver mentioned, the good margins start with great product substance and then finally willingness of the customers to pay for our cars. And there is also great news. So cars are very well received to EVs have a huge order bank, 350,000 we mentioned before and model comes, and these are the effects to keep the margins in the first quarter. In terms of battery, raw materials battery prices and cars, I said before the one lever is also to gain the synergy, the efficiencies we get from greater scale. Look, we have one of the biggest platforms with MEB in the world capacity of 1.5 million cars only on that platform. The platform is invested in Europe, now in Zwickau, which was our first plant. And at ŠKODA, we ramp up now [indiscernible]. So in four plants in Europe, I personally just visited Chattanooga some days ago where we ramped up the MEB and we have two plants in China. So, this is one level, how we could -- how we want to achieve like cost competitive electric cars using the scale and using the synergies worldwide.

Thank you. Then we have Stephen Wilmot from Wall Street Journal. Stephen, go ahead.

Hello. Thanks for taking the questions, two from me. One, I'm just going to come back to this question of the virtual equity stories. Just to try and understand is the purpose -- would the purpose of these of seeing Porsche IPO as a role model for other brands in the group? Is the purpose to raise capital? Or is the purpose to try and improve the valuation of the VW Group itself? Just because as Patrick Hummel mentioned earlier, we haven't actually seen any benefit from the rising share price at Porsche again on Volkswagen Groups shares. So that's one question. And the other question I wanted to ask is about the divergence between you are seeing, well, we're seeing globally, but particularly in Volkswagen's results between premium and volume performance particularly at the margin level. Is there something you can -- can you talk a bit about why your premium brands are doing so much better than your volume brand in the current environment? And what the latest trend on that is? Thank you.

Yes. Stephen, may I start with your first question about virtual equity story and then I hand over to Arno to talk about the margin level and expectations. And it is right that's a purpose of the virtual equity story is to focus to improve the business model of each brand. And I personally take the Porsche process as a role model. Everything we learned in this process to focus more on the main issues to have a clear strategy, to have a clear path for the future. And we think that we can unleash the full potential of all brands at the end. I think also it will have an impact on the whole evaluation of our Group. And we sum up the results of the virtual equity stories on brand Group level for our Capital Markets Day that we will have next year for the Group. And so, it's start point of a process. And I think up to now, we see that, the full potential of the Volkswagen Group isn't valued. And therefore, we have to crystallize more the potential of all of our entities. And then I hand over to Arno talking about the margins.

Yes. I mean, you are quite right, but let me start first with our two other groups. Premium group had a margin of 14% in difficult environment and Porsche has a margin of more than 19%. So, we can be very pleased with the margin of our Premium and Porsche group already. The brand Volkswagen and the volume group stand at 4.6% and there are some operational reasons behind that. And of course, we have a program to improve that. First, operationally, they were hit harder by this shortage of semiconductors, specifically in second quarter and also by the postponement of the situation of our Russian business. But on the other hand, we clearly see, altogether, we clearly see room for improvement there. And the most important thing that needs to achieve in the volume group is to lower the breakeven to be more resilient in the future. And in order to achieve that, of course, we work on the cost and efficiency side and productivity side. But there is one important measure we haven't discussed that in detail so far. It is the formation of the volume group itself. But that doesn't mean that cars in front of the customer will become similar. No, exactly the other way around. In front of the customer, they will differentiate even more. But in the back office, we will get even more synergies in the volume group, exchanging ideas, getting more synergies on the sales side, on the after sales side. So, this is one of the very important levers to improve the margin of the volume group. You know the margin target is 6% for Volkswagen brand. And of course, the margin target of the volume group will be even higher. We'll communicate that in detail also on the Capital Markets Day. But rest assured we work heavily on improving the productivity and the margin in the volume group as well.

Thank you. Next the line is Matthias Schmidt with [indiscernible].

Hello. Thank you. I'd like to know, how do you look at the EU decision in regards to e-Fuels? Does it affect the Porsche plants for e-Fuels production? And what is your prospect? Is there -- do you think that there will be a model 911 in Europe after 2035 for the combustion engine?

Yes, first of all, Volkswagen Group is prepared for the EU decision for 2035. And they are still considering how to continue with some synthetic fuels and then e-Fuels because we think that these e-Fuels are supportive for the electrification for the future very clearly. The technology part is focused on EVs, but we need solutions during this period and therefore e-Fuels and the investment Porsche is doing is very supportive. And therefore as a group, they're very clear that we focus the investments only in Porsche. The rest of the group will focus only on elect mobility while having the flexibility for the transformation offering in the different regions of the world a mix in between combustion engine cars, hybrids and fully electric cars because different regions of the world are moving with a different speed towards the transformation. Talking about the 911 we will continue as long as we can with the combustion engine 911. And that depends also on the different regions of the world. We are very successful, right now. The order intake is as high as, is an all time high in history for the 911. And so, we think we are in this mix on the totally right path at Porsche. We have a clear strategy being able to offer all the Porsche segments all three options in between combustion engine, hybrids and full electric cars during the next years. And then going electrified step by step through sort of the brands and the 911 will be the last one.

Thank you. And then we have [indiscernible]

Hi there. A question for Mr. Blume. I just wondered, if you are able to confirm that you are going to be accompanying Chancellor Olaf Scholz on his visit to China, which is expected next week? And if you could, if you can confirm that what you are kind of planning to achieve on this trip?

Yes, they asked me to join and I will go there because we think it is important in our world to have communication in between the countries, to listen what are the ideas, perspectives, and therefore it's helpful that also partners from industrial companies join the politics when they have the talks. And that is also important to build our own perspective in this discussion with the Chinese government. And I think it's very positive that they after their politic event in China get in touch directly with the German government to change opinions, positions and to further plan future cooperations.

Thank you. [Operator Instructions] And the last one in the line is from Bill Boston again at the Journal.

Hi. Thanks very much. I just have a follow up. On Argo, when Ford was explaining the decision yesterday, they made very clear that their position was that fully autonomous vehicles are still a long way off and that they won't be profitable for a very, very long time. It doesn't sound like that's your reasoning for getting out of the venture. So, I'd like if you could explain your view on the future -- deployment of autonomous vehicles fully autonomous vehicles, robotaxi in particular? And what were your reasons for getting out of the Argo Venture? Was it the business case or was it because you have -- you just want to work together with Bosch rather than with the American company? Yes, basically that was it. Thank you very much.

Yes. What is very clear that autonomous driving is a potential for the future. And today in the roads, we see already applications of autonomous driving, which are very helpful for the driver, which are very helpful for security. And it starts with [indiscernible] for example, we are avoiding accidents, but the development of autonomous driving is going step by step. And our strategy is focused on this step by step development. First and stepping into the market with Level 2++ then Level 3 and then Level 4, but I think for a big car company like Volkswagen, globally positioned, it is important also to continue activities with Level 4, that has something to do very clearly on the one hand side with technology on the other side with regulations. But we have to be prepared once when regents of the world will open the market for fully connected and fully autonomous driving, driving cars. We have to differentiate in between, the individual mobility where these options are helpful, but especially when it comes to robotaxis, which we kicked off with a MOIA project to get experience for this market. We will be prepared and therefore we rebuilt our landscape together with Horizon Robotics with Bosch for the Level 4 issues, a different partner for Level 2++ and Level 3. And so, we are prepared as a group. Talking about Argo, there are technical and business case reasons behind, it's not a cooperation with Ford. We are continuing strongly with Ford for example, when it comes to share the MEB platform together with Ford. And it was more a redesign of our landscape of autonomous driving.

We don't have any further questions. As always, the whole press team and obviously also the IR team are available for your questions and to give answers. We are all here. And with that, I wish you all a great day and say, thank you, and talk to you next quarter. Bye-bye.

All the best to everybody, thanks for your questions, also for my part. Thanks very much.