Welcome to Porsche's full year 2022 annual results call. I'm very happy to have today Oliver Blume, our CEO, and Lutz Meschke, our CFO, who will give a quick intro to this call, but make it crisp so we have sufficient time for your questions later on.
Already now, please let me remind you, please one or two questions max, okay? We want to give everybody on this call the opportunity to have the air time to raise his or her question. With this, I would also like to remind you had already seen the disclaimer.
All forward-looking statements that are being given today are being under the aegis of the safe harbor wording that you can find either in the disclaimer on our deck or also on the webpage. With this, Oli, the floor is yours.
Thank you very much, Björn, for your introduction. We have prepared a short overview. Good afternoon to everybody from my side. Welcome to our financial year 2022 investor and analyst call. Within the next 50 minutes, Lutz and I will take you through the major milestones that we have achieved last year. Give you an update to our strategy and priorities.
It has been a challenging year, with remarkable progress, innovation and achievements for our company. These achievements are mainly the result of our high level of flexibility and our ability to adapt to challenging situations, as well as our close integration of procurement, production, research and development, and sales. First of all, I want to thank all Porsche employees for their great teamwork in 2022.
Also I want to thank all of our suppliers, Volkswagen and partners, who have helped us considerably during the past challenging year. Most of all, we have benefited from the strong trust of our loyal customers and their unchanging high demand for our products. We experience strong demand across all regions and all products, so incoming orders once again exceeded wholesales.
Our order bank maintains on a very high level, and the mix is quite strong. As it is, our primary goal to make our customers happy and keep them excited, we will have a couple of interesting product additions to the already amazing product portfolio this year. Not to forget, we are celebrating 75 years of Porsche sports cars this year.
Thank you, Oli. From a financial perspective, 2022 was an extraordinary year as well. Despite all challenges, we were able to post record levels with our group sales revenues, operating profit and automotive net cash flow. Certainly, supply chain issues had a greater impact on our business than high inflation.
However, we have shown that we can manage both issues, and we expect to continue to do so in the future. With EUR 37.6 billion of group sales revenues, EUR 6.8 billion of group operating profit, 18% group return on sales and EUR 3.9 billion of automotive net cash flow, we have underlined the desirability of our products and resilience of our business model once more.
With EUR 2.7 billion R&D spending and EUR 1.6 billion CapEx in the automotive segment, we continue to heavily invest in technology, innovation, digitalization and product, pushing ahead with our modern luxury strategy. Our investments are the foundation for Porsche's commitment to being a leader in exclusive and sporty mobility.
We are sticking to advancing our electrification strategy in terms of attractive product line up and healthy ecosystem deployment. Let us now take a look at the automotive segment. Here we earned EUR 6.4 billion in operating profit at a return on sales of 18.6%, result of better product mix, improved pricing, volume growth, positive currency effects, as well as a stable and lean cost structure.
At the same time, we had to deal with higher material, raw material, energy and logistic costs, as well as some extra support for some of our suppliers. We accounted for the one-time costs in connection with the IPO bonus. The automotive EBITDA margin in 2022 was 25.2%. Automotive net cash flow rose to EUR 3.9 billion. This equals a margin of 11.2%. Porsche finished the year with EUR 8.3 billion of automotive net liquidity.
However, please note this number still includes EUR 4 billion of cash that will be transferred to Volkswagen in Q1 2023, which, by the way, will be the last payment of this kind as the domination and profit and loss transfer agreement was terminated at the end of 2022. You can find more details on the net liquidity development in the deck on our website.
Stringent capital deployment and synergies with Volkswagen remain top priorities for us. In 2022, the R&D costs of the group were EUR 2.7 billion. Investment in capitalized development costs amounted to EUR 2.0 billion, significantly higher than in 2021. The increase is due to the increasing expenditure on ongoing projects which are close to being ready for series production.
More than half of our R&D expenses in the reporting period were due to the conversion of the product portfolio towards electro mobility. Over the next five years, we plan to invest more than EUR 20 billion in electrification and digitalization with a focus on vehicle projects. Future-oriented drive concepts are the basis of our success.
We rely on a triad of drive types, combustion engines, hybrids, and pure electric models. The group's financial services segment's operating profit was EUR 341 million in 2022, mainly due to portfolio growth, conservative risk management, better pricing for used cars, as well as positive currency effects. The penetration rate in 2022 was 40.8% compared to 43.0% last year. Let's move on to the outlook for 2023.
With its plan for 2023, the Porsche AG group assumes that average global economic output will continue to grow at a slightly lower level compared to 2022. As detailed in the slide deck available on our website, this is subject to risks, uncertainties, and assumptions relating to the development of the economic, political, and legal environment in individual countries, economic regions, and markets, and in particular for the automotive industry.
Based on these above-mentioned assumptions, the Porsche AG group expects an operating return on sales for 2023 in the range of 17%-19%. This forecast includes assumed group sales revenues in the corridor of around EUR 40 billion-EUR 42 billion. Our forecast for the automotive segment is a net cash flow margin between 10% and 12% and an automotive EBITDA margin between 25% and 27%.
As part of the 2023 sales forecast, the company expects, despite the supply challenges, fully electrified vehicles to account for up to 12%-14% of total new vehicles delivered to customers, more than last year. For the fiscal year 2022, the executive board will propose a dividend of EUR 1 per ordinary share and EUR 1.0 per preferred share to the annual general meeting.
This is to be distributed in early July. In the medium term, Porsche aims to pay out approximately 50% of net income to shareholders. We wouldn't be Porsche if we were satisfied with what we have achieved. Despite all our achievements, we have set ourselves very ambitious goals to position Porsche even financially stronger. We have a clear plan on how we want to achieve this. We call it Road to 20.
The number 20 represents our strategic target of a group return on sales of more than 20%. Porsche is striving towards this very ambitious target in the long term. To this end, we are now putting everything to the test once again, starting with our product range through pricing to the cost structure. We are putting together a comprehensive package of measures to increase the quality of contribution margins and make our products even more attractive.
Above all, we want to make our products even better, even more unique, even more desirable. We wanna focus even more on our customers and offer them even more performance and even more luxury experiences. With Porsche specific technologies and partnerships, we wanna fulfill even more individual wishes so that even more customer dreams come true. All in all, of course, we are sticking to our medium and long-term targets. Group operating return on sales of 17%-19% for 2023, and in the long term, more than 20%.
Yeah, thank you, thank you, Lutz, for your overall overview on our financials. Before we start with the Q&A, let me give you a brief update on our 2023 priorities. We believe there will be a accelerated move into luxury and there's a significant pricing power supported for strong brands such as Porsche. We will continue to build on our own brand, product, and ecosystem positioning and pursue our luxury strategy. As a result, we set new standards.
Porsche combines fascinating products with very personal experiences and with a brand that takes responsibility for the world we live in. A brand that combines exclusivity, performance, and sustainability. Sustainability is a central pillar of Porsche's strategy and a matter close to my heart and that of my entire team. Porsche seeks to take responsibility for the environment and society.
We are willing to take our part to build a sustainable future for society and have set ourselves ambitious targets in doing so. Above all, we are working towards a net carbon neutral value chain for our vehicles in 2030. We will continue to develop our strong product portfolio.
After the very successful market launch of the first all-electric model, our Taycan, we are now focusing on the development of the all-electric Macan. First delivery to customers is planned for next year. After the Macan, the 718 will follow. In the middle of the decade, we plan to also have a fully electrified version parallel to its ICE version. The full electric Cayenne will follow after that and will be ready to extend its 20-year long success history.
We plan to also expand our product portfolio upwards with a new all-electric SUV in the D-segment above the Cayenne. The model is designed to further underscore and strengthen our luxury positioning. We expect strong demand, especially in China and the U.S. We will increasingly offer new models and limited editions and expand our so-called Sonderwunsch program.
This way, we want to meet the needs and the lifestyle of our customers even more and exceed their expectations again and again. The Porsche story is sharpened by dreams and the drive to make them come true, of pioneering spirit and passion, the combination of tradition and innovation, and our customers don't simply buy a product, they buy into the Porsche family, a community for those driven by dreams.
75 years ago, Ferry Porsche brought this dream to a sports car, the 356, to life and thus launched the Porsche brand. Sixty years ago, the first 911 came onto the market, still our icon today and currently more popular than ever before. In the past 75 years, Porsche has changed again and again, and yet has always remained true to itself. Porsche has always remained Porsche because we are all driven by dreams.
Oli Lutz, thank you very much.
Yeah. Thank you, Björn.
With this now, we're gonna step on with respect to the Q&A, and the first on the line will be George Galliers.
Thank you.
Put George on the mic, please?
Thank you for taking.
Thanks, thanks, George.
Thank you, and thank you for taking my question. I wanted to focus on Road to 20 because I found it interesting that you've given it so much prominence in your press release and your speeches today. Obviously it sounds like a very comprehensive plan where you're going to review everything from product through to price through to cost structure.
At this stage, can you give us any indications in terms of timing or milestones in terms of when you might have completed the review and by when you think it might be realistic for Porsche to get to 20%+ margins? As we think about those three buckets, product, price, cost structure, is the one that which particularly stands out to you and which you feel very excited about in terms of the opportunity going forward?
Yeah. Thank you, George, for this question. Yeah, in general, it's an ongoing process, the Road to 20. We are talking about a period of five to seven years. The Road to 20 will be the base for our long-term profitability ambition to reach a group return on sales of at least 20%. In general, we are putting everything to the test. We wanna make our products better, even better. We want to deliver not only luxury products, but also luxury experiences for our customers compared to the past, where the focus was more on the product. It's a more broader approach. It's also necessary to mention the link to all the sustainability aspects.
It's not just the product, the experience for our customers, but also a more value-driven approach in future. We have already mentioned we have a very ambitious target when it comes to a net CO2 neutrality. We want to reach it in 2030 then with a share of electrified cars of at least 80%. We wanted to have the value chain CO2 neutral and also the use phase for the car is included. In addition, it's very important, first of all, for the younger generation and also for the higher share, female share in China that we take responsibility for the community, that we give a certain part of our success back to the community. The social aspect is also yeah, very necessary in order to reach our targets for the future.
It's a must for us as a very profitable company to invest in this direction, to give back some part of our success to the community and make a certain contribution in order to make the world a little bit better for the future generations. We will have a clear focus on our pricing power in future. We have shown already a very good product mix in the past. We want to increase this product mix towards our S and top models in future. We want to also increase our customization rates, of course, and we will have a very close look also on our cost structure. It's part of our D&A to have a close look on the costs.
It's necessary to make our processes and structures even more efficient. In combination with the pricing power, with the good product mix, we should be able to reach the 20%, yeah, in the long term. Yeah, we see, furthermore, additional potential also from new products. We addressed also the new SUV, positioned above the Cayenne, that it will help a lot, first of all, in China and in the U.S. to attract new customers.
Very good. The next one in the row will be Horst Schneider from Bank of America.
Yeah. Thank you for taking also my questions. I wanna constrain myself also to two. Would be great if you could share some more details basically on the guidance for 2023. I mean, you have been clear in saying that you expect EUR 40 billion-EUR 42 billion of revenues. That corresponds to 6%-12% growth. Would be great if you could outline a little bit the split that is behind this targeted revenue growth. What is coming from volumes, what is coming from price mix, and what is coming from FX. I could imagine you will stress now as well the price mix side.
In that relation, of course, it strikes that the operating margin guidance could imply that the margin is just flat. Therefore, it would be great if you could share some detail what you expect in terms of drivers for the operating margin. Price mix, cost inflation, and FX headwinds as well. Thank you.
Yeah. Thank you for your question. Yeah. As I've already mentioned, we prioritize price and mix, of course, over volume. Nevertheless, we expect also a certain volume increase in 2023. I think the foundation for our business is very promising when it comes to the increasing numbers of high net worth individuals, first of all, in China, in the Asian world. Also, the SUV segment is expected to increase significantly in the short term and the midterm, and also the luxury BEV segment is expected to grow significantly. Therefore, as I've already mentioned, we see also a certain volume increase.
Value-driven growth. Therefore, the focus is on our pricing power also in 2023, on a very good product mix, and of course, also a very high personalization rate. These are the main topics in order to run in this direction. We are talking about an increase in turnover of about eight, maybe 9% in 2023, and the major part of this increase should come from value. That means from pricing and a better product mix, and the lower part from the volume increase
look, what is in the bottleneck for you? Is it still more supply or is it more demand? I could imagine you already sold out until end 2023 on certain product categories, right?
Yeah. That's right. We still see a very high demand. First of all, for our two-door sports cars. For the 911, we have very, very long waiting times, more than one year. That's by far too long, of course, and we have to work heavily in the direction, yeah, to stabilize the entire supply chain. We are not able to cover it by 100%. The situation when it comes to semiconductors is getting better and better, but it's not a 100% supply situation. Therefore, there's still a bottleneck from the supply and logistics side, but nevertheless, we expect a certain increase in volume.
You mentioned already the inflation aspect, but we were able to cover it more than to cover it also in 2022. Of course, we will do it in the same way also in 2023. We are quite confident to reach our corridor between 17%-19% in 2023.
Great. Thank you, and best of luck.
Thank you.
The next two questions are coming from Tim Rokossa of Deutsche Bank. As Tim tells me, he has quite strong background noises. We will read out his questions. Gentlemen, can you please provide a few more details about the volume versus mix and pricing split for your revenue outlook? Is it fair to assume that the majority of your planned revenue growth is coming from price and mix? Second, FX helped you quite a bit on the margin last year. Do you expect to get a similar support this year, and can you please elaborate a bit more on how you want to achieve sustainable higher margins with less FX?
Yeah, Tim, thank you for your question. I think the first question's already answered so far. Therefore, some words towards the FX situation. You are right. We have seen a strong tailwind from FX, first of all, in the direction U.S. dollar and Chinese renminbi in 2022. That was an impact of about 200 basis points. We expect a similar situation also in 2023 and 2024, since a major part of our currency turnover is already hedged by a very flexible hedging strategy, first of all, with options, therefore the act of expectation is that we will come in a, yeah, in a similar situation when it comes to FX impact in 2023.
Thank you very much. The next in the line is Daniel Roeska of Bernstein. Daniel, your line is open.
Good afternoon, gentlemen, thanks for taking my questions. Maybe number one, you're of course guiding on the continued growth of the BEV share. In your medium-term guidance, could you give us a little bit more insight how more BEVs impact your top line? I.e., what pricing premium are you considering when you get to the BEV models?
What margin impact a higher BEV share has for Porsche AG. Secondly, Lutz, could you expand a little on your CapEx planning beyond 2023? You just mentioned about, I think, EUR 4 billion per year for electrification and digitization. I'm assuming that's not the entire envelope, how much more investment is needed on an annual basis? Will the delays of the group SSP platform or the addition of MEB+ or PPE create any additional CapEx requirements for Porsche? Thanks.
Okay. May I start first, Daniel, with our BEV strategy and then I can give you a link on the SSP platform and then I hand over to Lutz on the CapEx aspect. First of all, as you know, we have a very strong ramp-up curve for electromobility with the goal selling over 80% fully electrified cars already in 2030. That is linked directly to our cycle plan. As we already announced, after the strong introduction of the Taycan, we will have the Macan next year, followed by a fully electric 718, then quickly followed by a fully electric Cayenne. As we already talked about today, we say luxury SUV positioned over the Cayenne.
From the product range, we are well prepared, tapping in the right EV profit pools. Important for us is the positioning of our electric vehicles, and there for us is a convincing design of Porsche. A electric Porsche should be 100% Porsche. It's, as we underlined, with the Taycan, then it's the high quality level. It's the driving ability of our cars, the driving dynamics, especially where electromobility is well prepared to transfer our traditional sports car brand to the electric era. It's a driving experience, which is end-user experience, which is very special for Porsche, especially what we are offering on the software experience. Fast traveling.
Not only range and speed, it's fast charging. We are very top of the end today, and we will continuously improve and reduce our charging times. Then, at the end, it's our understanding, our responsibility for sustainability, and all our cars are sold from the beginning up to the end with a sustainability approach. We think that especially with this strong ramp-up curve, we are well prepared. Talking about the SSP platform, we are on timing with our SSP platform, and to explain that we have different levels of SSP in Volkswagen Group. Porsche is the lead engineer for the SSP Sport. There we are on timing.
We have a clear technology profile, knowing where we have to be, in, when the platform comes. We have a clear cost profile for the platform, we think that will be a huge approach when it comes to performance, to charging time. We will increase the level of voltage in the car even more to improve the charging times. We will have more performance with innovations coming from the racetrack to this platform. It wouldn't have a impact on our CapEx situation because it's already included in our planning round, and we are on timing.
I can hand over to Lutz to the overall CapEx situation for electromobility and maybe talking about the tipping point of profitability of our electric vehicles.
Yeah. Absolutely. Thank you, Oliver. Yeah, Oliver mentioned already we have a tough plan towards electrification. We want to reach 80% share electrified cars in 2030, and already in 2025, we want to achieve a share of at least 50% hybrid and pure electrified cars. Nevertheless, we set us a very ambitious goal when it comes to group return on sales between 17% and 19% in midterm, and that means we have to reach a parity between combustion engine business and BEVs as soon as possible. Otherwise, this forecast wouldn't work. We have two main factors which will lead us in this direction.
First of all, we already decided to increase the prices for the new Taycan, followed by the Boxster and also the Cayenne, at least for the entry-level models by at least 10%-15%. That's the huge factor on the turnover side. On the cost side, we should benefit from rising scale effects since we decided to rely in future just on two BEV platforms, one for the two door sports cars and one for the four doors cars, starting with the K1 in the segment above the Cayenne. These two aspects are the main foundation for our yeah, way in a very profitable electrification direction.
When it comes now to the future CapEx and R&D, you already mentioned that we want to invest about EUR 20 billion in the upcoming five years for electrification and digitalization. In parallel, of course, we have to invest also in our combustion engine cars, at least in the upcoming two years. The share of combustion engine investments will come down significantly, and then we will see the scale impact in a significant manner. When it comes to ratios, we reached about 12% R&D spendings and CapEx in relation to turnover in 2022, slightly lower than the years before.
You will see a similar trend, in the upcoming years, and CapEx and research and development costs will reach peak in 2023 and in 2024.
Very clear. Thank you.
The next in the line is Henning Cosman of Barclays. Henning, your line is open.
Yeah. Hello, good afternoon. Hi, good afternoon. I hope you can hear me well. I wanted to try you again on a few puts and takes in the EBIT bridge again, if I may? Perhaps first, you're talking about price mix being a key revenue driver. If you could remind us, of the like for like price increases and the timing you are targeting for 2023? I believe you wanted to do something from the middle of the year. If you could just remind us of the magnitude there? Then, I suppose on the offsetting factors that prevent perhaps the margin accretion that we would normally expect from a strong price mix performance, if you could at all go into some kind of detail on the buckets?
I understand that the Taycan, strong Taycan growth is perhaps a bit of a dilution there. If you could comment on D&A, is that going up from the relatively low level? Is there perhaps a little bit less of R&D capitalization? Also inflation buckets. If there's any detail you can share, that'd be great. The second question is just on the order book. You made a couple of comments. I think you said for the 911, it's more than a year. I think, Oliver, you said early on, order intake has been higher than wholesales. If you could give us a sort of idea for the overall magnitude, perhaps across the board. Is it almost a year across the board now, the order book? That's the two questions. Thank you.
Yeah, Henning, thanks for your question. Let me start with your last question about order intake, and then I will hand over to Lutz. We still are on a very high level of order bank and order intake, despite of the disrupted supply chain issues we are faced. The order intake and sales in Q1 are quite satisfying. Talking about the backlog we do have, it's different in between the markets and the different models. For example, for the 911, we are on the highest order level we have ever had. We have waiting times in some models over one year.
That is by far too long. We are struggling to reduce some waiting times, but that shows the strong demand and the success of the 911. For the four-door models, we are in waiting times in between three and six months. Our supply chain situation is improving step by step, and therefore, we have a positive outlook for 2023, remaining still on a high level of order intake. We will continue to do so by offering fascinating and exciting cars to our customers, also with a lot of special products, limited editions.
To increase our offering of our Porsche Exclusive Manufaktur, for example, and our program, it's so-called Sonderwunsch program, where we are offering very individualized cars for our customers with a very strong profit margin. So we are very confident talking about the order situation. Then I hand over to Lutz to your first question.
Yeah. Coming back to the expectation for revenue in 2023. The major part I already mentioned it, regarding the increase in revenues will come from pricing and a better product mix. Oliver Blume already mentioned also the high share of Sonderwunsch. These are the main factors when it comes to increase in revenue. You already mentioned also the planned price increase. We plan a price increase for the new model year. It will take place in the middle of 2023. You should be aware that we have not a cost plus approach when it comes to pricing. We have a close look on the demand situation in the different world regions. We have a close look, of course, on our margins.
That's, yeah, the background for our pricing strategy. We have a very good foundation with a very strong brand, with a very strong customer base, and that gives us the power to increase the prices also in very, very challenging times in an appropriate manner. This will help a lot, I already mentioned it, when it comes to the way towards electrification. In the beginning of this journey, of course, we had a lot of CapEx and R&D investments to do, and therefore, we will benefit in future significantly from the increased scale impact. I already mentioned it, that we will have a peak in CapEx and in R&D in 2023 and 2024.
In 2025, we will see for the first time a higher depreciation compared to R&D and CapEx. Yeah, that's a tipping point then in 2025.
Very good. The next one, I got via email from Dorothy from Exane. The Taycan looks to have lost momentum in China somewhat over recent month. Is this only supply chain related, or are there other dynamics like the strength of local competition at play? Second, can you please tell us what makes you confident that the eMacan will succeed in such a competitive market environment? Last, do you think that the eMacan can sell at a price premium to the ICE Macan in China specifically?
Yeah. Okay. May I take this question, Dorothy? Thanks for giving me the opportunity to give some information about China. I have had the opportunity to be one week in China four weeks ago. I'm visiting China for 25 years and working there in several regions. I was very impressed about the change in the country and the heavy speed they do have especially on the technology level. We are in a special position in China, being positioned in the luxury segment, and there are only few competitors we do have. The Taycan numbers from last year is like in all over the world, are below 2021 because of supply chain issues.
We have still a very strong order bank. As you remember, we had a Ukraine war issue in the beginning of last year because of all our wire harnesses, especially from the Taycan come from Ukraine, and we had to stop our factory for several weeks. For the Taycan we are affected more because our first concept for the Taycan was to go up to 20,000 units a year. It was the first capacity, and now we are on a level in between 30,000 and then 40,000. It was heavy for us to catch up during the year because of our capacity situations.
Beside of this, we had several supply chain issues, some of them also from China because of the lockdown situation. Semis were affected by this situation. Key message is, our order intake and the order book is still on a very high level. Talking about the product strategy for China, last year, over 25% of deliveries were already BEVs, and the expectation is a still growing percentage, and the tipping point is expected in 2025 or 2026, having over 50% BEVs in the first deliveries. We think that our product strategy fits perfectly to the Chinese market. With a strong Taycan in the market.
In the future, we will bring a update, especially in terms of range and charging time and performance. We come next year with the Macan, followed by the 718, with electric Cayenne in the row, and afterwards a luxury SUV above positioned over the Cayenne that's fitting on the spot for China. Beside of this year we already announced a very strong hybrid version of the new Cayenne with over 80 km electric range. Same as for the Panamera. That's both most important technologies for the Chinese market. Important for the positioning is our luxury positioning and therefore, we think we have even more pricing power for the electric versions, also for the Macan.
Also, the Macan segment is very competitive. It's the biggest segment in China, but with our special positioning, I think we are well prepared. Beside of our product portfolio and the technology profile we do have, we are working or thinking about what smart car offers we can prepare for Chinese customers and therefore, we are in good contacts also with Chinese tech players, with the mindset developing solutions in China for China and being very specialized for the market. The perspective from our point of view is positive in terms of volume. Last year we have sold 93,000 units in the market, and this year, we will go on a level of round about 90,000 again.
That depends a lot on balance, demand and supply. We are aiming for value oriented growth. What we won't do is go to a pricing war in China. There we have a strong positioning because of our brands, of our products, and because of our strategy of demand and supply.
Very good. The next in the line is José Asumendi of JPMorgan. José.
Thank you very much. Couple of questions. I'd like to come back again to the pricing power. I think a very important comment, Lutz, you were providing. Can you maybe just go back to the pricing element? Just I want to make sure that those price increases will not be offset by some incremental fixed costs. It is in your planning that you will see price increases dropping through into the profitability. That will be the first comment. Second question maybe for Oli, a little bit more strategic. As we think about battery production and battery development, how is Porsche invested in the development of battery?
Also from a European perspective, do you think we have the right environment in Europe to develop a healthy and sustainable battery environment or battery industry, or do you think the European Union needs to do something about this industry to provide a bit more incentives to accelerate the battery development? Thank you.
Yeah. Would you start with the pricing issue and then I come over, José, to your point of batteries?
Yeah. Despite the very difficult market circumstances, when it comes to inflation, high interest rates, ongoing semiconductor situation and also the ongoing war in the Ukraine, we addressed a very ambitious goal to achieve, yeah, significant increase in revenue and to keep a very strong group return on sales ratio with a corridor of between 17% and 19%. Of course, we will see some impacts from inflation and also from support for our suppliers. They have a very difficult situation due to the mentioned factors. Of course, we have to offset a certain part of the price increase against these negative topics.
We will see a significant price increase in the middle of the year for the new model year, and that will help a lot to make sure that we can reach again a very strong group operating profit margin. Therefore, we are quite sure that we can reach this corridor. I mentioned also the tailwind from FX. Due to our hedging policy, which is very flexible and long-term oriented, we are working with option derivatives. We can be quite sure that we will see a similar impact from FX. That would bring us to the, yeah, to the upper end of this corridor in 2023.
Yeah, and José, may I come to your question about battery engineering production? We decided to go for our own approach, especially for battery cells with a high power and high energy density, which will bring us to a different performance situation of battery cells. Which will allow us to put lower weight into the cars to remain on the performance of our cars and on the other side to offer a range our customers are expecting. While at the other side, we have the opportunity to reduce weight into our cars. Therefore, also, we decided to go for a deeper value chain integration for materials. For example, for silicon, we are using there for the anode, there we have shares in Group14, for example.
That is only one approach. Talking about the whole battery cell situation, we built Porsche a flexible position with own cells and the performance level. We are benefiting from the group approach. As you know, Volkswagen Group is investing heavily in own production cell production. Therefore, we are coming to better scale effects using their cells for our base models, for example. On the other side, also benefiting from joint ventures from Volkswagen, like Northvolt. We are very open to work with partners, with suppliers, as we do it today.
We are working together with LG for the Taycan, with CATL for the Macan and other suppliers also. So we have a very flexible mix. Coming to your question about what has to be done in Europe to enable companies to invest in battery cell production. I think the energy cost is a important issue. We know that energy costs are much lower in North America or in China. When we look to North America, the costs are around about $0.05 or $0.06 Per kilowatt hour. There we are still far away in Europe.
In Spain, they did a very positive approach, which brought us on group level in the situation to invest there in Valencia. There should be more to come from the European Union and from the single states of the European Union. Watching to the IRA in North America in terms of upfront pace or tax support. I think that has to be discussed now quickly, heavily on the level of EU, how to support the European industry by not losing all the investment power in other regions of the world.
Very good. The next one we got via email from Patrick Hummel, from UBS. His question is: Is Road to 20 a response to more challenging market conditions, especially in China, or has it always been part of the plan? Excluding one-time items, you already made more than 19% operating margin in Q4 2022. This suggests you factored in quite some headwinds for other factors. Otherwise, 20% would not be that ambitious.
Yeah. The Road to 20 is not the answer on the actual situation when it comes to the market conditions in China or in other world regions. It's part of our D&A to always put, yeah, the entire cost structure and also, yeah, revenue opportunities to test. Yeah, we did it also very successful in the past, with our so-called Ergebnis Programm 25. We were able to reach the 18% group operating margin in 2022. Now the Road to 20 is the successor program in order to make sure that we will see a margin above 20% in long term. You mentioned our strong profitability in 2022. You're right. We are a very resilient brand. That's one of our strengths.
In crisis situation, we were always able to keep a very high profitability. This Road to 20 program will help us a lot to underline this development also for the upcoming years. It's necessary to have all the different aspects when it comes to revenue and costs under control, that you always check where are the opportunities regarding product range, expanding product range. We decided already the K1 in the luxury SUV segment above the Cayenne. We have shown a lot of special editions when it comes to our 911 range. We will do in the same way also in future, of course.
We already talked about our pricing power and our product mix approach and all these topics will help us a lot to make sure that we will be able to reach 20% group operating profit margin in future. I think it's a very ambitious target since we have to consider also the current tailwind from FX. It's about 200 basis points. It's included in the margin corridor in midterm between the 2017 to 2019. I already mentioned it. We cannot be sure that we will see the same impact of FX in five to seven years. Therefore, I would say a 20% target plus is a very ambitious target. Yeah, we work very hard, very tough in this direction.
Yeah, it's a must for us to have an ongoing cost efficiency program in place, but also to think again and again about new products, about a better price mix, about more experience, exciting experiences for our customers. Therefore, I think our approach of modern luxury to combine a luxury product with special experiences for our customers and sustainability aspects like the ecological ones and the social aspects, that's the right approach to run in this direction.
The last one on this call will be Stephen Reitman . Steven, as we have three minutes left, the floor is yours.
Sure. Okay, thank you very much. Good afternoon. Two questions, please. On the Taycan, obviously, the production levels sounds a little bit disappointing in 2022 because of the issues you highlighted. Your target of a 12%-14% corridor for your BEVs in 2023, all relying on Taycan, obviously, because the Macan only comes in 2024, suggests that you're gonna be over 40,000 units in 2023. Is that a reasonable assumption? My second question is on the Macan Electric. Coming in 2024, do you expect a quite fast ramp-up in the production of that vehicle, so we'll have meaningful volumes in 2024? Thank you.
Thank you very much, Steven, for your question. The Taycan situation in 2022, I have already explained. Our aim is, as you followed, to go up to a level of 40,000 units in this year because of the high level of order intakes and the solved situation in the supply chain. We never know what will happen during the next months, but that is clearly our aim. The BEV share we are expecting is in between 12%-14%. That depends on the overall volume we do have. Key message here is, we expect higher volume of Taycan in 2023 comparing with 2022. Talking about the ramp-up curve of the Macan.
As you know, we were struggling with software issues, on CARIAD level, Volkswagen Group, during the last years. We are now up to finish the software platform for the Macan. The hardware issues are almost ready, and that will bring us in a condition to ramp up strongly once the software platform is ready. We will stay to our information that we will be in the market in 2024 and having a strong ramp-up curve.
In addition, we will produce in parallel the combustion engine Macan, and therefore, it shouldn't be an issue when it comes to volume regarding the Macan. What's very important regarding the Taycan, that we will expect sales volume of about 40,000+. That's a very realistic goal since we have a very strong order bank for the Taycan and also a very strong order intake so far. Of course we have to manage the supply chain issues. That's right. Yeah, I'm quite confident that we can handle it in this manner.
Thank you.
Let me just squeeze in the very, very last by ODDO, by Anthony. His question is, you mentioned in the presentation the focus on limited editions. 2023 will be some opportunities for special series cars with the different anniversaries. Could you update us how you think about your limited edition strategy going forward, as this can be a quite meaningful contributor to future profits, earnings, revenues, and perception?
Yeah. Anthony, you mentioned 75th anniversary of our company this year. We are about fulfilling dreams. Dreams are linked to surprises. There will be surprises during this year, very clearly. I don't want to promise too much because surprises are surprises, and we are about fulfilling dreams. The limited editions play a big role for us because they build our brand, it's important for our brand heritage, and it brings us in conditions in very positive profit margins, as, for example, in the last year, with the 911 Sport Classic or the recently announced 911 Dakar. There's a so strong demands on this limited editions, we have to plan it carefully.
We can't do it frequently every month. That's clear. We have a lot of ideas to continue to do so. Combined with a limited editions program, we have the aim to increase with our Exclusive Manufaktur program and with our program that's called Sonderwunsch, where we fulfill the very special wishes of our customers, very individualized and so that's a clear, very clear strategy to increase the offerings in this segment. It drives our brands, and it brings us in very positive profit margin situations.
Lutz, Oli, thank you very much. Thank you very much to all the audience participating in this call. Thank you very much for all of you joining on the internet. As you have seen, Porsche is combining a strong set of USPs with a very strong starting point, combination with our luxury positioning and a nicely growing customer group that stays pretty loyal with us. It's our clear ambition to further execute. This is a very humble and dedicated company. I stay at your disposal if anything should be left open. We are very happy to welcome you soon here in Zuffenhausen and to show you the cradle of where it all started. Thank you. Bye-bye.
Thank you.
Thank you very much.
Bye.