Ladies and gentlemen, welcome to today's conference call on the results of a strong first quarter. When we look at the figures today, you can still see why we entered 2022 with optimism. The global corona pandemic seemed to be over after two years. The supply situation for semiconductors improving from month to month. On February 24th, the war in Ukraine started, which is now 10 long weeks ago. In Europe, we were short of wiring harnesses from one day to the next. Around the world, prices for key raw materials have soared due to the inflationary environment. I will come to the impact on our business in a second. At the same time, there are new tough COVID lockdowns in China, which have put a lot of pressure on our supply chains. In Q1, we were able to mitigate these extremes.
In comparison to the first quarter of 2021, we kept sales revenue stable and slightly increased the operating margin. Even so, we delivered 340,000 fewer vehicles. A strong quarter. This is true even if you factor out the effects resulting from our successful hedging against price increases for raw materials. Arno will give you more details on this in a moment. Regarding our deliveries, our e-cars are sold out for this year and are still very much in demand. The order backlog in Western Europe alone is around 300,000 vehicles. We just presented the ID. Buzz to the public with outstanding response. Despite supply bottlenecks for semiconductors and cable harnesses, we delivered almost 100,000 EVs. You can see that our group has shown resilience. As a global company, we have extensive production capacities in the relevant growth and sales markets worldwide.
Volkswagen's global setup helps us to mitigate many of the adverse effects we are currently seeing. Operating globally in open markets is essential for us as a global company. Therefore, the midterm strategy for us is clear. Our setup will be even more global. Particularly with regards to the U.S., we will implement an ambitious growth plan. In China, Volkswagen will maintain a high pace, accelerating digitalization and electrification. America is our chance for strong strategic growth. Our BEV market share is already twice as high as our ICE market share. In Chattanooga, we are to launch the locally assembled ID.4 this year. Because of our successful e-mobility ramp-up, we are considering to expand our production capacities there.
We have committed $7.1 billion to boost Volkswagen's product lineup, R&D, and manufacturing in North America, and we are sourcing and producing 95% of all cars for the region. This makes us fast, flexible, and resilient in our supply base. In China, we delivered almost 30,000 EVs in Q1, more than four times as many as in the first quarter of last year. This represents almost one-third of the group's worldwide BEV deliveries. With Audi FAW, we agreed in January to build electric premium cars in Changchun from 2024. We are expanding our location in Anhui into a hub for e-mobility with a new development center. From now on, we produce software in China for China.
To better tailor the user experience of the group's software to the needs of Chinese customers, Cariad has just started operations in Beijing with already 600 employees. We adapted to the dynamic market environment with immediate action. First, we were fast in finding solutions for a pressing problem, the lack of wiring harnesses. The task force team started to work on February 26th, only two days after the beginning of the war. Second, our hedging mechanisms against raw material prices have taken effect. The extent of the risks we have been able to reduce, at least in part, can be seen on our balance sheet. Third, we focused on higher-margin products to help offset overall production decline.
Lastly, we used our position as a truly global company to balance production across our markets and relieve pressure where there were supply issues and product shortages. For example, when we had to cut back production in Europe due to a lack of wiring harnesses, and in some cases, we had to shut down plants, we sent the semiconductors we didn't need to the other regions. In this difficult market environment, we are continuing to drive our NEW AUTO strategy. We are evolving from a classic OEM into a vertically integrated mobility company. To reduce complexity, we have organized our brands in brand groups, premium, volume, sports, and reported our first quarter earnings for the first time based on the new structure.
Going forward, operational decisions will be taken on brand group level, while the group will focus on overall strategy and synergies. Within the volume brand group, for the first time, we have defined clear customer segments for the brands. In the new setup, we will further leverage synergies across the group. We're also strengthening our four tech platforms to ensure we can maximize synergies. In Q1, we have reached milestones in these platforms. With regards to our mechatronics platform, we have expanded our e-mobility partnership with Ford. Ford plans to produce another electric model for the European market based on the MEB platform. They will also double its planned MEB volume to 1.2 million units over a six-year timeframe. We are making good progress with our software. The Travel Assist has caught up to our competitor systems, bringing the feeling of autonomous driving closer than ever before.
Cariad took over IP from Bosch to accelerate the development of autonomous driving, and we bought Intenta to increase our in-house skills of image processing. We announced Valencia as a dedicated location for our third battery cell factory. Within the application to the Spanish PERTE program, we want to help turn Spain in an e-mobility hub. All plans are still subject to final approvals, foremost, the PERTE submission. In our charging business, we have harmonized our European price model. One card gives you now access to a network of over 300,000 charging points. We also presented the next step in the development of autonomous shuttle services as a new source of revenue. From now on, the ID. Buzz, equipped with Argo AI technology, drives autonomously no longer on the test site, but on public roads in the center of Munich.
We completed the next steps to take over Europcar as a base for building a leading mobility platform for our customers. We are confident to close the deal in Q2. Finally, we further accelerated our decarbonization efforts and raised our ambition level for our own production facilities. We are now planning to reduce CO2 emissions by 50% until 2030, compared with 2018. As a result, the Science Based Targets initiative confirmed that Volkswagen's climate targets in production are now in line with the 1.5-degree target. These are rather uncertain times. We cannot predict the long-term effects of the Ukraine war or the ongoing COVID-19 pandemic on our business yet, nor the effects on the global economy and growth in the industry in fiscal year 2022.
Our global setup, our risk management, and our capabilities to act fast when facing new challenges gives us confidence for the months ahead. With that, I would like to hand over to Arno.
Herbert, thanks very much. Hello, and welcome, everyone, to our first quarter investors and analyst call in 2022, also from my side. As already mentioned by Herbert, the war in the Ukraine has been going on now for more than two months. We are greatly concerned at the daily news about the war and continue to hope for a hold of hostilities and a return to diplomacy. Nevertheless, today we would like to provide you with the full picture of the quarter, adding to our pre-release announcement from April 14. In short, solid operating result again showed the robustness of our business model in a challenging environment. On top, we benefited significantly from the positive fair value measurement of our commodity hedge portfolio.
We continued to focus on cost and mix and margin, and we improved our cost base further, but made no compromise on future investments to accelerate our transformation towards electric and digital. In Q1, our supply chain faced a threefold challenge. The war in Ukraine that started on February 24, impacting the global supply chains, a continued undersupply of semiconductors, and last but not least, the resurgence of COVID-19 pandemic in China, affecting us at the end of March. First and foremost, let me thank our employees who managed the situation so greatly. Now I give you a brief update on where we stand as of today. In Ukraine, we took countermeasures to stabilize the supply chains. I want to express our great respect to the people in Ukraine doing everything possible to keep production of key parts running.
Currently, we are back to more than 70% of wiring harness availability. On top, we started the duplication of production lines in other countries as fallback option. We are still losing some production due to the shortage of semiconductors. This situation is expected to improve in the second half of the year. COVID in China restarted in March. Again, production slowed down with temporary production stops towards end of the quarter at suppliers and our joint ventures. By now, production has resumed, however, at low levels. Although predictability of the situation is limited, we will try to make up for the loss of production in the course of a year as much as possible. Against the backdrop of these challenging developments, we delivered a set of decent results during the first quarter.
Vehicle sales for Volkswagen Group came in at around two million units in Q1 2022, 340 units less than in Q1 2021. Despite lower sales revenue came in at EUR 62.7 billion on par with prior year. Lost volume has been partly offset by the first-time consolidation of Navistar revenues, ongoing high demand for well-equipped vehicles and favorable pricing. The operating result before special items came in at EUR 8.5 billion. The operating margin is 13.5%. This result contains a significant positive impact from positive fair value measurements on hedging instruments outside hedge accounting. In total, EUR 3.5 billion resulting especially from derivatives on commodities and currencies, as stated in our pre-release.
Even excluding these fair value effects, an underlying operating profit of around EUR 5 billion lies significantly above previous year and underlies the robustness of our business. Our financial result came in at around +EUR 600 million, benefiting mainly from slightly higher at-equity contributions from our Chinese joint ventures, an improvement of our interest results, and the absence of a negative valuation effect in the other financial result. Clean net cash flow in Q1 2022 amounted to EUR 2.2 billion and reported net cash flow with EUR 1.5 billion. This compares well to Q1 2019, both driven by our strong operating business but burdened by higher inventories due to the supply chain disturbances mentioned earlier. Net liquidity in the automotive division amounted to around EUR 31 billion.
It includes the repayment of a hybrid bond of EUR 1.1 billion in March 2022, and the successful placement of a new hybrid bond issued in the same month for EUR 2.25 billion. This again underlines our continued excellent access to financial capital markets. We continue our focus on cash flow generation. However, Q1 results showed a strong gross cash flow burdened by a negative change in working capital due to supply chain disruptions due to the war and limited supply of semiconductors. Now coming to the performance of our divisions. Passenger cars delivered EUR 6.5 billion operating result of 15.5% margin before special items. Drivers were especially the strong performance of the premium and luxury brands and of course the effect of fair value measurements we already discussed. Also, our commercial vehicles came in higher than last year.
The operating result of EUR 330 million now includes Navistar, around +EUR 80 million in Q1. MAN production was negatively impacted by Ukraine in Q1 this year, and the prior year was burdened by a EUR 356 million restructuring expenses of MAN. The financial services division again had a very strong start to the year with an operating result of EUR 1.5 billion. Positive effects were the continued high used car demand at higher prices, a favorable development of residual value risk, and a solid credit risk situation. Moving to our EBIT bridge. The strong result before special items of EUR 6.5 billion for the passenger cars business was driven by a positive mix effect from well-equipped cars and favorable pricing. This more than offset the negative impact from lower volumes.
FX exchange rate and derivatives came in at a positive EUR 2.4 billion versus last year. This was mainly driven by the fair value measurement of commodities, derivatives and positive foreign effects. Product cost deteriorated by EUR 0.6 billion due to the increasing raw material costs, for example, for steel and other price increases. The position fixed costs and others had a positive effect of EUR 300 million. Cost discipline in our indirect areas continued as we keep delivering on overhead cost programs. After special items, the result came in at EUR 6.4 billion, including around EUR 120 million for diesel. Let's have a brief look at our newly established brand group reporting. Volume brands group, which consists out of Volkswagen brand, Škoda, SEAT, Volkswagen Commercial Vehicles and our component business.
Due to the disruptions in the supply chain, sales at brand group level was around 280,000 cars lower versus last year, especially for VW brand and SEAT. Volume brands group had the biggest exposure to COVID-19, SEMIS and to Ukraine. Despite that, the group showed a decent start into the year and initiated countermeasures to catch up. However, the margin of 3.6% clearly shows room and necessity for improvement. The volume group has upside in terms of capturing synergies and increasing productivity. Coming to premium brands group, despite 16% lower sales revenue are on par with last year and demand for well-equipped premium vehicles were high and continued. The operating profit as well as the operating margin are up significantly. Main drivers are strong pricing as well as the effect of fair value of commodity hedges.
Porsche sold 66,000 units in Q1, slightly down versus last year. However, sales revenue was up, as well as operating profit. Porsche had an impressive margin at 18.6%. Let me spend a few words on fair value hedges and fair values on commodities, how they are reflected in the results within the brand groups. Historically, within the volume group, the majority of fair values are included in the other line or group level, whereas at Audi, it's included in the operating result. Porsche currently has no commodity hedging in place. We are currently in the process of building up a group-wide IT system for hedge accounting in order to separate effects from fair values. From 2024 onwards, these effects will be shown in our balance sheet instead of the P&L. A deep dive into the volume group shows encouraging news.
All brands in the volume brands saw an increase in average sales price, even though unit sales declined in part by double-digit percentages. For volume brands, SEAT and Volkswagen Commercial Vehicles saw an increase in margin. Only Škoda saw a decline, as they are consolidating our Russian business and ramping up the factory and our business in India. Our financial services is benefiting, especially from growing used car business and demand, as well as lower risk cost. Operating profit margin improved to 13.3%. Our joint ventures in China had a decent start to the year. In total, 754,000 vehicles have been delivered to Chinese customers, thereof, 29,000 BEV units. The operating profit in Q1 came in at around EUR 820 million, up by 25% year-on-year. FAW on par with previous year, SAIC Volkswagen improved.
Both the Volume and the premium brands contributed to the success. Without the resurgence of COVID-19, the situation would have been even better. SAIC Audi started to deliver its first vehicles in the first quarter. The chip shortage caused last year's significant negative effects. In the meantime, the COVID-related lockdowns are causing additional challenges, which started at the end of March. We strive to catch up as much as we can during the remainder of the year, but due to the rising uncertainties, we are well advised to stay cautious. Now let's come to the outlook for 2022. To make it short, we confirm our outlook for March 15.
We continue to expect deliveries to customers of the Volkswagen Group in 2022 to be 5%-10% up on prior year level based on sequential improvement of semiconductors during the second half of the year and our massive order bank. We expect sales revenue of the Volkswagen Group in 2022 to be 8%-13% higher. In terms of operating results for the group, we continue to forecast an operating return on sales in the range of 7%-8.5%. Reported net cash flow is expected to stay on the same level as in 2021. In 2022, net liquidity in the automotive division is anticipated to be up 15% higher than prior year figure. This again underlines our self-funding capabilities.
Due to the development of positive fair value measurements on hedging instruments in Q1, and here, especially the contribution of commodity hedges, there is now a caution in our guidance for fiscal year 2022. If raw material prices remain on the level of the first quarter, we would have an upside. However, nobody can predict with certainty where these raw materials prices will come in at the end of the year, and if the value is booked in Q1, 2022 still holds true. Given all the uncertainties and given that it's still early in the year, we think we are well advised to stay cautious, especially knowing that developments in the war of the Ukraine or the COVID pandemic cannot be predicted with certainty.
Ladies and gentlemen, in financially steering the transformation, there are two very clear strategic goals: allocating and shifting of resources and capital towards electrification, digitalization, and mobility services. Our second goal is to safeguard and further strengthen our financial foundation. To achieve these twofold goals, we defined six major topics. Product transformation towards electric, digitalization and developing further our software stack, capturing group-wide synergies between the brands, steering group-wide cost and sufficiency programs to finance the transformation, strengthening brand positioning and pricing, and everything we do, we will base on our integrity and values. Let me give you a brief glance of where we stand on these topics. Volkswagen Group BEV sales in Q1 2022 has shipped almost 100,000 BEVs. Despite semi bottlenecks and wiring harness shortage, we achieved 99,000 BEV sales, and they were delivered to the customer, up 65% year-over-year.
The sales figure could have been much higher as we sit, especially in Western Europe, on a huge order bank. However, some production disruptions also impacted our BEV production. From where we are now, we anticipate a constantly growing BEV volume and share in every quarter of 2022. The ramp-up of our retool plants in Emden and Chattanooga will drive scale up. Global production footprint will help, and new exciting models will be launched. ID. Buzz was launched already, and ID.5 has started in May in Europe, as Herbert mentioned already. We will continue to increase our BEV sales this year and aim for a BEV share of 78% in 2022. Before the announcement in March, we will gain additional economies of scale to improve the profitability of our BEVs even further.
Coming to CARIAD, we are progressing in ramping up CARIAD with almost 5,000 employees and continuation of M&A activities. We also implemented the standalone reporting of CARIAD to improve transparency and accountability. Also on the product side, CARIAD makes progress. The ID. software 3.0 was updated and offers now the latest driver assistance system, greater charging capacity, and voice control performance on premium level. With the new setup and transfer of IP rights from the brand to CARIAD in the first quarter, CARIAD further sharpened its strategic focus. To finance our ambitious transformation towards electrification and digitalization, we have initiated in 2021 our overhead cost program. We achieved our 2023 target of -10% cut in overhead costs already in 2021.
So far, we are working to stay on level achieved and to compensate for inflation as well as to mitigate the first-time consolidation impact of Navistar. Capital deployment and synergies across brands is another important area for us to stay focused on. The majority of investments are geared towards production plans, upcoming product launches, electrification, digitalization, as well as our modular platform. In the first quarter, 2022, within the automotive division, the R&D expenditures increased by 10% - EUR 4.4 billion due to significant development activities for future BEV models and technologies in the brand and especially within Cariad. At the same time, the group reduces its CapEx expenditures by 11.5% - EUR 1.7 billion. This brought the CapEx ratio down to 3% and despite the rolling MEB, the retooling of MEB in our Em plant in Chattanooga.
This year, Em plant in Chattanooga will start the ramp up of MEB models. Local production in three core regions provide the basis to drive scale effect and lay ground for the sequential increase in BEV sales in the coming quarters. This shows clearly our focus to compensate for higher R&D with even higher synergies on CapEx. Ladies and gentlemen, we have solid financial basis. This provides us with the opportunity to continue our transformation also in difficult times. We continue to strive to be leader in the transformation of our industry. We will preserve our natural resources, and we will achieve this with integrity and based on our values. Thank you for taking the time and listening so far. Now we are happy to look forward to answering your questions.
Thank you, Arno, and Herbert. Yeah. In order to raise a question, you have to press star on the telephone keypad followed by one. I can already see that we have a queue now of 10 people. Let us start with Tim from Deutsche Bank. Tim, please raise your questions.
Yeah, thank you very much, gentlemen. Good afternoon. I have two questions, please. The first one, I'm not sure if it's to you, Herbert, or to Arno. It's good to see that you continue to optimize your portfolio. You had Traton. Now you think about Porsche. A question we spoke about a couple of times is splitting your EV and your ICE business. Now, in the past, you always ruled that out. You said again this morning on the press call that you wouldn't like to do this. The question is, why don't you think that this makes sense? I'm not just talking from a pure valuation perspective. I'm actually talking operationally. One business needs to be run for efficiency, the other one for growth. Your competitors on BEVs are certainly very growth focused.
You guys might miss a chance here to really just pump up your product a lot faster, roll it out a lot faster, and frankly, also having a better product potentially, because you may break free from a lot of the constraints that you still have in this combined group that, Herbert, you also criticized many times. Why don't you feel that a standalone BEV business is actually the better choice here? Secondly, Herbert, this probably goes to you. 10% market share in North America. That has long been a problem child for you when it comes to profitability, that market. Now you target 10% share with. We were finally happy to see that you were break even there. I think your shareholders had actually appreciated that you step away from an overriding volume ambition but focus on value instead.
Why do you feel now you need to chase a certain market share again? Thank you.
Probably we start with the last one, Tim. Yes, I fully agree. We will remain focused on margins instead of volume. No, I think we haven't heard this word that we would like to become the world volume leader for a long time. It's actually not our ambition. For America, you need at least if you want to participate in the volume segment, you need I would say at least an 8% or 9% market share to be competitive there because you have to compete also on the cost side. America is a cost sensitive market. The average sales prices are lower. That is okay for premium.
Premium imports, for the, let's say, mostly German premium brands, that works fine with them having a 1% or 2% market share. For a volume producer, you have to be local, and you need the necessary economies of scale to be competitive and to get the margins you need to be sustainable. Now I think we have and we did a lot now improving our margins. There's still a lot to come because the SUV business in the US is still ramping up. We're leveraging the economies of scale between Latin America and the US because we have shared platforms there. We're doing all to compete even out of a niche position and gaining the right market share. You see that on our accounts.
We are profitable even with a 3% market share, which is quite an achievement in volume segment in the U.S. and which also, let's say, motivates us to get to more. You have now a new set of rules coming in when it comes to economies of scale, because economies of scale for EVs are new ones. You have to be in the right economies of scale for EVs to be competitive, and we are. We already, when we only launched the import of the ID.4, we were at about 8% market share on the EV segment, which is probably already good enough to be competitive. We will now with the launch of the ID.4 to get the right economies of scale to be locally competitive for the American EV market.
What we basically want to do is to use that transition from ICE into EVs, and building up the necessary economies of scale to be long-term, competitive, in the American EV market. This is why we have to further invest. No, it won't be possible with the 2% market share. This is basically the rationale behind. Is it then eight or 10 or 12? It's not, you know. That will not be the target. The target will be that it's profitable and sustainable.
Tim, to your first question, we are aware that the competitors are doing that split. Let me first and foremost say we are fully committed to ramp up our BEV business profitably across brands. We are committed to ramp up volume-wise, margin-wise. We also watch closely the margins on BEVs. We gave, I think, as one of the first, the guidance where we'll see the margin parity. On the other hand, we are transforming this company. Plant by plant, we are transforming our ICE business to electric, like Zwickau first, now Emden, Chattanooga. We also significantly reduce ICE models and ramp up our BEVs. What is our way forward in terms of financial steering?
Since we are a multi-brand company which focuses on synergies, we found a different approach, which we think it's best suited for the strengths we have. Now, we found it now three brand groups, volume, premium and sport. Within the brand groups, we found synergies and address customers. For the major synergy drivers in the electric world, we defined four critical platforms. It's BEV hardware, it's Cariad, it's basically software, it's the third platform is battery energy charging, and the fourth platform is mobility. This, if you want wanna say metrics, is the way for us to steer forward, to steer the transformation, and also to gain the best out of like basically addressing customers and achieving synergies throughout the group, and then basically driving and financially steering the transformation.
Yeah, I think I just mentioned that we of course can look at disclosing more like EV some KPIs, but this we can look at in the future. Our financial steering model with three brand groups and the four industry-leading platforms, we think it's really best suited for us to steer the transformation.
We started to give a bit more transparency already at the end of the year with the EU taxonomy conform exactly. For the future reporting potentially the revenues actually we do with the battery electric vehicles is definitely an option. Thank you, Tim. I hope this answered your question.
Thank you.
Thanks, Tim.
We will continue with Patrick Hummel from UBS.
Thank you. Good afternoon. Patrick from UBS. My first question goes to CARIAD, so for Herbert probably, and thanks for giving all the additional financial transparency in the business. Can you just provide an update on how things are going at CARIAD? There have been quite a few media articles. It feels like the organization is very busy with itself, and things are slipping. If you can comment specifically on the E3 1.2 architecture that's needed for the PPE platform. There have also been some reports about delays, so it would be great to get an update. If you can comment in light of the latest headlines about your deal or potential deal with Qualcomm for the AV system on chip.
Are you still targeting the 60% in-house software share, or have you changed your mind here and you go for lower in-house software stack? That would be my first question. Second one, very briefly, what actually happens to the batteries that you currently can't use in the EVs because you're constrained in production on the semi side, wire harness or production shutdowns like in Shanghai? What does happen to these batteries? Do you store them? Are the suppliers selling them to somebody else? Or, yeah, will you be able to take those volumes later on? Very lastly, simple question, assuming that those EUR 3.5 billion of hedging tailwinds that you had in the first quarter would completely reverse over the coming quarters, would the guidance still hold even with zero net hedging gains this year?
Would you start with the last one, Arno?
Yeah. Perhaps I start with the second and last one. Yes, we store most of the batteries. You can see that also in our balance sheet. Although our waiting times are long and our inventories for finished goods are really down, we saw slight increase in inventories, and that is specifically in raw materials. One of the basic increases in raw materials is due to the storage, at least to a certain extent, of batteries.
Because we expect that, specifically in the second half of the year, Q3, Q4, the availability of semis also for our BEVs will increase, and then we want to use these batteries and the more semis to also catch up on our ramp-up plans for BEVs. In terms of hedging, our forecast would even hold if the hedging would reverse, but we need a little bit of caution that that also might go into the other direction. If we talk more about, I would say, EBIT bridge, it's a better concept, yeah. That EUR 3.5 billion translates into a EUR 2.4 billion positive on the EBIT bridge in the first quarter.
We don't foresee a positive in terms of EBIT bridge for the full year. That doesn't necessarily mean that there's not a positive in our balance sheet still on this, in this line item, but I think the better concept is that we don't foresee a positive on exchange rate and derivatives in the full year versus 2021 versus 2022.
Okay, Patrick, on software.
Yes.
Probably starting a little bit more general. First of all, I have to say I just came here with an ID, driving an ID. Buzz, which was extremely positive. Because we have been discussing that also with Arno Antlitz before, with Arno, what we see now on the 1.1 is exactly what we wanted to see. Now, this is a kind of a modern electric electronics architecture, which is hugely updatable and upgradable, and we are experiencing already now the benefits on our MEB platform on the electric cars. Now we are working on the third software update, which is coming. It's called 3.0. No, it's not only upgrading the look and feel of some screens or so. This is really substantial.
We are improving our driver assistance function. With, let's say, automating the overtaking functionality, which is quite unique in the volume segment. Only very few competitors can do this. Now, you will see a continuous upgrade in the functionality of the car. Already launching the ID. Buzz, we got extremely positive feedback regarding the speech, voice control, regarding the response time. This is where we wanted to be and where we wanted to get some five years ago when we basically started the project between Arno and myself. That makes me very happy, and you already can see how it works now, no? In the past, there was a big challenge with the launches.
I wouldn't expect any launch problems caused by software anymore now with the ID. Buzz being launched or the next Aero B being launched, because software is ready, no? Software is ready for the platform, and it's improving every 12 weeks or so when we update the car. By the way, it's the first time that we have to talk to our customers, "Are you ready for the update?" We use that contact with our customers to get a feedback and probably, over time, sell some more features and even additional services. That makes me really happy because it demonstrates that we are absolutely on the right way. Yeah, it's very, very motivational for me. You've been touching on 1.2.
Now, at the time when we launched in Volkswagen 1.1, a little bit later started Audi with 1.2, which is a more sophisticated platform. Yes, it is challenging to launch because it's hugely complex. It's between Audi and Porsche, CARIAD helping. It's more complex than 1.1 was, far more complex, but I can tell you that the teams are really focused on the launches, and we are confident that we can launch the cars as planned, next year. The teams are working hard. But as you see, it will be enhanced functionality. It will be much more complex on the premium side, and this is how the team's working. Knowing that now, CARIAD has especially the task of go beyond.
No, go beyond 1.1.2, and make define the platform for the 2.0 software, hardware architecture, which we are working on. Now coming to your point, Qualcomm, we assigned or we awarded Qualcomm with the semiconductor piece of our driver assistance function and finally level three, level four autonomous drivetrain. This was also a major step because we considered various options, and you're probably aware of those possible options. We decided for Qualcomm because there's huge commitment, technical capability, it's leading-edge semiconductor design. You know, it doesn't require a water-cooled processing power, and processing power is now really evolving fast with Qualcomm. Qualcomm now dedicating a lot of resources onto this bit of a driving platform for the cars.
They call it Snapdragon Digital Chassis, the platform. Which we think is a good choice. It will be also probably industry-leading, and there will be more of our peers joining that platform because it is the right hardware platform. This comes together now with all the activities you have been learning about in the past couple of months. Pace, you know, this partnership where we bought IP for about EUR 300 million from Bosch, where we joined the teams between Bosch and Volkswagen to form a competitive team for autonomous driving functions for the next generation. We'll take this hardware platform and all the other bits and pieces we bought in, so picture recognition, then the wireless capabilities to update software continuously in the car. All those comes together.
We are now fully set up in this delivery chain for the next level of driver assistance systems, reaching from NCAP functions to level three and level four. Now the work starts for the launches towards 2026, Trinity here in Wolfsburg and then Artemis also out in Ingolstadt. This is why this was a major step now for us. The teams can work now. Teams are set up and geared up and will work for already the next generation of hardware, software platform, the so-called 2.0, which will then be the yeah, group-wide one and only software platform of the future. 1.2
Still will be a challenge within the next month, but teams are set up, geared up, and with all the resources bundled between Audi, Porsche and CARIAD, they will master this task. You mentioned also the level of let's say insourcing or let's say the level of proprietary software. All in all, we have to say no, as an OEM and all OEMs will have to undergo this exercise if they want to be future-proof. We have to be able to update the core functionalities of our cars, and that means that we have to build up software skills which so far only had our first years, or we are really distributed in the industry. Though this is an insourcing process which will probably take, I would say, two life cycles or so.
Also, by the way, our big American competitor, it took him three product launches to really get ready for this kind of insourcing. We are gradually insourcing. 1.1, we probably had about 10% in-house content. 1.2, we probably around 30%, probably a little bit below. With 2.0, we will get up to probably close to 60%, including a few acquisitions which we still have in mind. Without those acquisitions, we would end up probably between 35% and 40%.
Thanks for the details.
Thanks, Patrick. The next question would come from José Asumendi from JP Morgan. José, please go ahead.
Thank you, Rolf. Hello, Herbert, Arno. It's José Asumendi from JP Morgan. Three quick questions, please. First, on China, there's a clear step up in earnings momentum in Q1. Can you comment a little bit, please, Arno, if this run rate of earnings is the right level we need to think about for the coming quarters? Also, if there were any one-offs last year within SAIC that maybe are non-repeat for 2022, that would be very helpful, please. Second, can you comment a little bit around the earnings momentum of the group into Q2, excluding the impact of derivatives, et cetera, is the earnings momentum for the group slowing down, or is it still, you know, at a relatively good level versus Q1?
Three, please, Herbert, can you please comment on CARIAD a little bit? As we think about the top line growth of this division for the coming years, how do you think about the revenue projection maybe on a three, five-year term to cover the fixed costs that you're investing now, obviously within CARIAD? Thank you.
Yeah, José, thanks for your comment. Yeah, we said that we will come back in China and the teams work on it specifically at SAIC. SAIC really did a good job in turning the business around. They increased slightly sales. Sales revenue was up, specifically margin, good pricing, less incentives. They also worked on the fixed costs. They optimized fixed costs by 18%, which is quite significant. They were like, on the way to not 100%, but almost, a double-digit margin again, which it was really a great run.
As a matter of three, I would say four weeks ago, we would have expected, as we discussed before, that the whole China operations proportional profit from the JVs could achieve a level of 2020 again. Then, you're very well aware that like two to three weeks ago, the COVID situation hit. Specifically end of March. If not, the situation would have been even better. Please have a little bit of understanding with the current situation and the visibility. It's really difficult to really precisely forecast whether that, I would say, outlook of operating result versus 2020 still holds.
What I can say, at least for today's perspective, the Chinese joint ventures are still planning to catch up throughout the remainder of the year, and that it would still be positive, that would still be possible. Of course, it depends on the course of the pandemic in the next weeks to come. As said before, for the time being, we are planning to catch up throughout the year, as good as possible, based on the high flexibility Chinese joint ventures have and more availability of semiconductors specifically in the second half of the year.
Yeah, in terms of earnings momentum in Q2, from today's perspective, yes, there will be a challenge from the wiring harness and also from semiconductors still in Q2. We expect the margin, well, within the corridor we gave for the full year. The effect should stay the same. Pricing, strong incentives, discipline, volume, perhaps even a little bit more positive than in the first quarter. We should expect a more difficult April and then perhaps until May, June, we catch up. Fixed cost side, we wanna keep the discipline and there will be a further headwind in terms of raw material prices in terms of product cost.
That had been quarter by quarter, might even increase a little bit. I think we showed in the EBIT bridge EUR 0.6 billion, and that might even increase like now quarter by quarter slightly. We shouldn't be very surprised if that total year figure exceeds EUR 3 billion. As said before, all our levers are in place, pricing, cost discipline, specifically CapEx discipline. We still stick to the guidance for the full year, and that should be also true for Q2.
Yeah, last question, José, was top line effect of CARIAD. What can we expect? When can we expect? I would say the CARIAD is really mission-critical for this transition into NEW AUTO. Let me try to explain how we see that going to happen and how do we see the mechanics. First of all, with these additional functions in the car, you get pricing potential, no? Because people would prefer a car which is capable of taking over more tasks in parking, level three driving in certain weather conditions. So you have a pricing potential there for more functionality.
The functionality you get because of the hardware installed in the car, your level of software matureness, and the fleet size, because you need to gain new experiences and gather data, that the whole swarm of your fleet becomes just more intelligent, more desirable and more premium than, let's say, that one of your peers. That is why we are investing heavily. We have for sure, through Cariad, access to additional services we can sell, direct customer contact. You would sell functions, services, charging, you would sell energy through those functions. Once again, they are Cariad with the right apps, design, with the right access for the customer and the desirability is the key access factor to this revenue pool.
Then, last but not least, probably most important, we see the big step change and breakthrough really with autonomous driving. Now, whenever the car, whenever the passenger or the customer is being driven by us in the car, then there's huge value created. You know, because you get one hour or two hours, or in the case of probably some people working in the car, even more hours of free time, additional productivity, which is hugely valuable, which then you can use for working, playing and other services for consuming the car. The question is when you can take over which task in the car and when you will be able to alleviate the driver from his driving task. We see that as a process.
No, there will be not a year 2025 or 2026 when the cars are driving autonomously. No, we will see that change coming into a gradual process, no? First in, let's say, normal road conditions, German motorways, nice and sunny weather, up to 130 km per hour. Next step, probably more severe weather conditions, country roads. Next step, you can enter city centers in parking. This will be a process over a long period of time where cars are becoming better and better, and cars would be able to cover more so-called ODDs, more complex ODDs, over time, and so allow for more free time, more service, more convenience. Also, cars will differentiate in the way of how smooth is the service, how safe is probably the most important criteria.
This is really why we are investing so much money and put so much effort into this bit of autonomous driving and why we think it's so mission-critical that we are driving that process, and we can take over this responsibility as soon as possible for our fleet and for our cars. This is probably then the big step change and breakthrough if you then allow our customers to use and spend this time and us assuming responsibility of driving the car. There are three, I would say, influences or potentials for top-line improvement, and this is why we are investing so strongly in CARIAD in the whole let's say process chain to make autonomous driving happen.
I think we have a good setup. We have a very competent team. We are bundling resources, push ourselves. We are insourcing all necessary IP. We are building up the tool chains for it. This is why we think we are well set up for the race, and the decisions we just recently make make more and more become more and more transparent why we did what, no? Now, the last decision now with Qualcomm is an important step. Then we are focusing towards 2026 to launch this first piece, most important bit of software we are developing. José, was that? This was probably a bit lengthy, but hopefully.
Very clear. Very helpful.
Some insight, yeah.
Thank you so much.
Okay.
Thanks. A brief wrap. Yes, CARIAD being the driver of the improvement we are currently seeing clearly on the proportionate earnings in China, then good earnings momentum into Q2. But however, being aware of all the volatility we still have in the market, the ongoing war and the COVID situation in China and others being the game changer for CARIAD revenues in the future. With that, I hand over to the next question, which will come from Dorothee from Exane. Dorothee, the floor is yours.
Hi there. It's Dorothee from Exane. Thanks for taking my question. The first one is around BEV sales momentum. You've obviously reiterated the guidance for the 7%-8% BEV mix globally for 2022. Could you just share your thoughts on how many BEVs you can sell specifically in China this year? I think in the past, you indicated you had a target of at least 170 or 180,000 BEV sales in the region. I'm just wondering if that's still achievable. Then this morning, I think you said that your BEVs are actually sold out for the full year. Does that also apply to China or is it just the case in Europe and the US? My second question is a slightly longer term one.
How quickly do you think you might be able to deploy LFP battery technology given we're seeing these higher costs and potential supply issues with nickel and cobalt? When might we see that technology and in what VW product? Thank you.
Yes. Regarding BEV sales, we basically sold out. It's also, let's say, for the main markets, I have to say, in Europe and in the United States. In China, we are aiming at between, I would say, 160-170 thousand EV sales for this year. LFP batteries, yeah, we already, this was one of the main motivators to buy into Gotion. Gotion is very skillful and one of the biggest manufacturer of LFP batteries. I would say with the launch of the small BEVs by 2025-2026, we also should have LFP batteries in our range. We think that they are hugely important also for our light commercial vehicles because they have better cyclability.
Now, they can do more cycles, and they are more robust batteries with a little bit of constraints in range. LFP is a part of our battery strategy, not only for light commercial vehicles, but also for passenger cars.
Okay. Dorothee, I hope that was clear. The next question comes from George from Goldman Sachs.
Yes. Thank you, Rolf, and thank you everyone for taking my question. I just wanted to follow up on Cariad and the revenue side. I was wondering if you could give us some insight into what you anticipate to be the average revenue per vehicle from the software services by 2030. Over time, as the features improve and the content available increases, do you expect the average revenue from software and licenses per vehicle to actually grow? And if yes, is this revenue going to be substitutional for other components or costs within the vehicle? Or do you expect consumers to spend a higher proportion of their disposable income on cars than they have done in the past? Thank you.
I would say, you know, probably we share between Arno and myself. Yes, to your last point, we think that consumers will spend more. This is also why we have so many new entries in our sector, no? Because long term, I would say, and this is also probably part of your evaluations about the sector, that long term we see a huge increase in revenue and also in profit potential in the sector because of this development, no, because of people spending more time in their car. Infrastructure is not improving, so we can assume that people would spend more time in the car, but they would use the time differently, no, for playing, family, communicating, working.
This makes, I think, our sector so attractive in the future, and this is why we are also investing. I think we're not able and prepared to really disclose a plan now year by year. I don't know. Arno, would you comment?
No, yeah, we would like to do an in-depth analysis on the capital markets there. I think Rolf will discuss that in a minute, when we share in-depth our revenue model for the whole topic of software and also for mobility services. To add on what Herbert says, yeah, we think that there will be a third revenue pool in the industry today, basically based on ICEs and then 2030, we see ICE and BEV half and half, and then there will be the third revenue pool, and that will consist of basically level four, level five autonomous driving tasks, but also on software-based revenues, which will increase the total turnover and revenue in the industry.
This is why, as Herbert said, we increase our investment and focus on that topic. As said before, we will give you an in-depth analysis on that in a more comprehensive picture during our Capital Markets Day.
Great. Thank you. I look forward to it.
Thanks, George. Horst, the next question comes from you.
Thank you and hello everyone. This is Horst from Bank of America. I've got a few questions. The first one relates to these hedging gains that you have reported for Q1, and I still ask myself, what is the midterm consequence of these hedging gains? I mean, for this year we say it's largely non-cash effective, we should ignore it. Midterm, there seems to be a competitive advantage because there are some car makers which do not hedge raw materials at all. Therefore, I want to understand how Volkswagen make use of this competitive advantage. For example, as of 2023, do you rather aim for a market share strategy where you can offer the cars at a cheaper price, or you rather want to maximize the margin to a larger extent as of 2023?
The other question on EVs is, we have learned last year about your price assumptions for batteries that you are aiming for less than EUR 100 per kWh on the battery price. That seems to be unrealistic by now. As said, you are hedged for the short term, you are fine. I don't know, midterm, long term, it should get a problem, not just you, but for the industry in total. You think that all these projections that industry can fully electrify by 2030 are still realistic, and how can that be compensated now, the cost disadvantage on the battery?
The last question, sorry for that, is again on the midterm targets, 2025, and you talked about this 8%-9% EBIT margin target, and you never announced with that what underlying volume assumption you have on that. Now we see that IHS is lowering the volume targets, although the volume projection significantly for the market. Is there now a risk that we should put this 8%-9% margin target in question or you can compensate that just with a higher price? Thank you.
Well, thanks for your question. First, the hedging gains first and foremost show how within our system of making our business robust works, yeah. But as you're very well aware, this hedging gain is basically compares all our hedges over the next four to five years with our hedging prices versus the actual prices. The gains will come if the market prices would stay like that, but it's over a rather longer period of time, yeah. It's not only the hedges for 2022, as you're aware. Price assumption, yes, we have to monitor that closely what it means.
Of course it depends basically on this lithium carbonate and hydroxide and nickel. We have to monitor that on a medium- and long-term basis. There are some hedges, yes, but at the end of the day, in the long run, we have to monitor that. But still, we think our original guidance of margin parity in two to three years, we still keep that up. First and foremost, we gain scale on a global basis. Yeah, we ramp up the MEB in Europe, we ramp up the MEB in Chattanooga. With Ford, we bring additional volume and scale on our platform and we ramp up the MEB in China. Customer demand is strong.
People are enthusiastic about our cars. Pricing is strong. We still think there is a chance to meet that margin parity. There might be the necessity to price some of the material cost increase in the future. We still predict that we can achieve that margin parity. Yes, it will be a little bit more difficult. Yes, there might be a pricing element to that as well. We are still optimistic for our BEV sales in 2025 and also 2030. Last but not least, our EBIT target of 8%-9% midterm, 2025, 2026 still holds.
I mean, if you look at robustness we gained so far, yeah, we lost quite some volume, unfortunately, last year, and we lost also quite some volume, unfortunately, in the first quarter of this year. Still we achieved, I would say an underlying margin of 8% if you take out the hedges. That gives you a glimpse and that we are really working on resilience. We are working on robustness of our business model, on pricing, on the cost side at the same time. We keep our EBIT margin for 2025, 2026 intact, and then perhaps there might be even a little bit on the upside, but this is too early to say.
All right. Excellent. Thank you.
Thank you, Horst. The next question comes from Charles Coldicott from Redburn.
Good afternoon. Thanks for taking my question. You mentioned how lengthy your order books for electric vehicles is becoming, in some cases more than a year. In light of that, how are you managing the pricing process given the battery cost inflation that we're seeing in lithium, nickel and other materials? Can you raise prices on those orders dynamically? Perhaps on that note, maybe you can remind us what the profitability of your BEVs is today relative to the combustion engine equivalent models.
Actually, no, we can't. No, we stick to the prices we sold the cars. We have to say we sold them well because, you know, at high margins, we didn't discount any of our cars. There were no sales incentives programs, so we are robust. We're already now in some European markets into 2023, and then whenever we have a model year change, we are reconsidering the pricing. This is what you're going to see in the market.
Yeah, Charles, as Herbert said, rightly, price increase will only come through like later on, due to the order book. On the other hand, as I said before, there are also some of the hedges that are relevant this year, which are also in parallel.
Once the hedging ratio naturally reduces over time, then the price increase will come through, and that will hopefully stabilize the margins. We don't wanna, at least for the time being, disclose margins by car, for competitive reasons. I think that's clear, but hopefully the indications should be okay that we still stick to our target of margin parity in the next two to three years. As said before, there might be the one or the other price step now included in that equation. As said before, we stick to our principal target of margin parity.
It's a good sign competitors are.
I think what's also a good sign is that competitors are able to raise prices quite significantly, you know, it should give us a certain umbrella for also to follow suit.
Thanks, Charles. The next question comes from Harald. Harald from Morgan Stanley, please go ahead.
Yes, thank you so much, for taking my question. Two quick questions. Just staying on the whole BEV and pricing thing. I'm starting to get a little bit worried about how we get to 50, 60% penetration when the price of BEVs is so high, right? The price of BEVs in Europe, ASPs are like 50, 52% above the ASP of normal ICE cars. I know, on every single conference call I hear CFOs talking about raising prices, all costs are gonna be reflected in raising prices. As you know, I've done this nearly, well, 20-odd years. You know, this is not a normal situation in the car market.
I mean, especially Herbert, I'd love to hear your perspective on why consumers are willing to pay these higher prices, both on ICE and then even more so on BEV. Do you believe also with your profitability prediction, that people are continue to pay 50% more for BEVs going forward? It seems that that's a very big ask for consumers who are anyway under enormous pressure right now from inflation, from higher rates and all of these things. I'd love to hear your perspective, please.
Actually, it's not 50%-60%, no. If you make the comparison from the consumer perspectives, which we already did in some of the markets, and you would compare now an ID.3 with an, uh, let's say, Tiguan, you know, as an alternative to a Tiguan, even with a Tiguan as a hybrid. You come to the conclusion that at the current pricing, you know, at the current energy prices, the BEV already has a running cost advantage, you know, per kilometer of around 20%-30%, depending on the market conditions, you know, and on how expensive fuel and energy is. There is a pricing potential in BEV. In the hands of the customer, the electric car is already cheaper, you know, in the leasing rate.
Residual values are higher, at least as a first experience, because, you know, maintenance cost is lower over time. There's high demand for the EVs. All in all, it seems to be still, even with the higher battery costs, a good deal for the customer to go into EVs, you know. Considering the stability of the residual values probably even more so. There is a fear that, you know, if EVs can get cheaper, that you can't penetrate certain segments which you would need, because to aim at 50% EV rate, we have to get into the a.
Small cars.
Small car segment. Now in the, let's call it the Polo or T-Cross segment, and there will be a hurdle. You know, the next generation of platform we are bringing forward then with LFP batteries, with probably a little bit lower range, once again are opening up this price comparison, and also there, those cars will be cheaper in the hands of the customers than the ICE cars. At the same time, you have to see that also ICE cars are becoming more expensive because of fuel prices, because of also the precious metals in the mostly in the catalytic converters, and we have to spend more for Euro 7.
This close is even with the high cost for batteries, which we are working on, will get closer, and in the hands of the customer, the EV is just a better choice. I'm not at all fearful. I always was skeptical, we'll be at 100% BEVs by 2030. No, we said 50%-60%. Yeah. I still think that's a very robust plan to go forward. I also would see the raw material cost at some stage coming down again, because there's a lot of speculation involved now. The production cost of the raw materials is much cheaper. I would say one third of the actual prices. It's a lot of, let's say, capital market influence there.
I'm convinced that we can achieve 60%, and it makes sense for the customer. It makes sense for us. You see it also on the margins of some of our peers. It's going to work out like we predicted.
Okay. Thank you.
Thank you, Harald. We are approaching the end and have two additional questions here in the queue. Tom, you would be the last before the last question. Please go ahead.
Thanks. Thanks, Rolf. Tom Ryan, RBC. Thanks for taking the question. First, does having your own captive battery supply provide an advantage as battery raw material costs increase or does it help everybody the same? Secondly, there's some news that Stellantis is buying the car-sharing business from Mercedes-Benz and BMW, and it would appear that premium operators are focusing more on maybe private car ownership and away from mobility as a service operations, you know, referring of course to ride sharing, car rental in the future to, of course, robo taxis. Maybe you could share how you think about this distinction as it relates to your different brands, you know. Would they be focused more on your volume segments, or would you also adapt them to your premium and sports brands as well? Thanks.
First of all, I have to say we are not yet captive. Now, all our batteries we are currently using are sourced in, and this is probably until 25, I'd say the case for 80% or 90% of the batteries. We are depending on the major global battery manufacturers, and only then we are becoming step by step more captive. Yes, we see an opportunity there because we're not only investing in the manufacturing plants for the batteries, we are also deep into the value chain of the batteries, getting down to mines, establishing long-term sourcing contracts, also discussing partnerships for anode materials.
We will try to pick the best big bits and pieces of the value chain to make sure that we are competitive and we can keep high margins and the necessary scale in batteries. We do that also because it allows us to standardize the batteries and standardize the battery cells, which we wouldn't be able to do with external suppliers. We think it's the right strategy towards 2030, but until 2025 or 2026, you can't call it captive strategy. Europcar, it's interesting question, I have to say. We are convinced that Europcar or car rental provides an excellent platform to grow and then consolidate, integrate further new bits and pieces of the mobility business.
Now, I would say a clear case is sharing, because sharing and rental is very complementary. You can use the same car in both systems. The car would have once a rental option and probably on the weekends, and the sharing options within the week. It's very complementary. Also, when it comes to season, you can just make better use of the car, and some of the peers are playing that game. I wouldn't say this is a volume or premium game because also in the rental or let's say shared mobility business, people would ask for a premium choice, which we also are going to prepare to offer. We will have branded services from this platform which might apply to Audi for Audi customers and which will be tailor-made for Audi customers.
I wouldn't, let's say, separate between premium and volume. It's just becoming a very relevant and important business, and combining some of the businesses, sharing, rental, short-term lease, ABO kind of rental model fleet business is for us. We see there a huge potential for, let's say, making more usage of the cars, and so getting more competitive in comparison to anyone who is doing only rental or only sharing. This is why I probably understand also that some of the people and some of our peers divest because they're not prepared to go the extra mile to do the entire bit. This will be consolidated.
Okay. Thank you.
Thank you.
Yeah. The last question now before we conclude this call, best for last. Michael, the floor is yours.
Yes. Michael, good afternoon. I have two questions with regard to the EUR 3.5 billion, the gains on derivative. First one is can you give us an indication when this will turn into a burden in your P&L, for example, when you have to pay the higher commodity prices? The second one is could you please explain the difference between the EUR 3.5 billion mentioned and the EUR 2.4 billion shown in the EBIT bridge?
Yeah. The difference between the 3.5 and the two and the EBIT bridge number, there are basically two reasons. The first one is there are also effects year-on-year. And second, not all of the effects on the EUR 3.5 billion are in the EBIT bridge in this bucket. The majority of that is in there, but not all of them. Basically if you want like the EUR 3.5 billion, then translate in with that figure in into the EBIT bridge. And the first question.
The second one was when do the higher raw material prices hit our P&L?
Mm-hmm.
It's important.
Yeah. I mean, they hit us already, yeah, with EUR 0.6, as I said. We expect quarter by quarter now, that's even a little bit higher. This was basically the guidance when I said we shouldn't be surprised if that EBIT exceeded EUR 3 billion for this year. The hedges, like of course they work against that with some of the hedges, they're relevant for this year. A lot of hedges are for the following years. For competitive reasons, Michael, hopefully you have understanding for that. We don't wanna disclose further details on our hedging.
And maybe last but not least, we will not stop hedging. We, of course, will, according to our planning, when we get the new planning rounds, look and safeguard and as part of our risk management, also future price risks. It's very difficult actually to limit this now down to EUR 3.5 billion, but as Arno has said, it's the year-over-year effect. If you see that we had last year also EUR 600 million positive from that, derivatives, and then you can make and bridge the gap. I hope, Michael, that answered your question. Let me wrap today's call up. Thank the two gentlemen and thank also the participants for a very vivid discussion.
Next time we will hear from each other, as you know, is on the occasion of our half year results. We have informed you that we will postpone the capital markets day because we currently fully concentrate on the potential Porsche IPO. George, it will be likely after the summer break when you hear on the new opportunities we have from software revenues per car. With that, I would like to conclude today's conference call. If there is any question unanswered, please contact our team here in Wolfsburg, and we are very much looking forward to speak to you again before the summer break. Thank you.
Thank you.
Okay. Thank you, colleagues.