Key performance indicators in accordance with the EU Taxonomy regulation

The EU taxonomy defines sales revenue, capital expenditure and operating expenditure as the key performance indicators that must be reported on. Disclosures on taxonomy eligibility are mandatory for fiscal year 2021. We have voluntarily assessed our business activities for taxonomy alignment and already report the relevant figures for passenger cars and light commercial vehicles, and for our hydrogen activities in the Power Engineering Business Area.

The financial figures relevant for the Volkswagen Group are based on the IFRS consolidated financial statements for fiscal year 2021. Where possible, the figures have been directly assigned to an economic activity. In our vehicle-related business, for example, we compiled the financial figures based on the vehicle model and powertrain technology. This applies both to the vehicles themselves and to the corresponding financial services and other services and activities. Only where this was not possible for capital expenditure and operating expenditure, the figures were broken down using allocation formulas. In the vehicle-related business, we based the allocation formulas on the long-term sales plan and the capacity and utilization planning at the individual sites. In the Power Engineering Business Area, we used allocation formulas based on planned sales revenue. This data and planning form part of the medium-term financial planning for the next five years, on which the Board of Management and Supervisory Board have passed a resolution.

Sales revenue

The definition of turnover in the EU taxonomy corresponds to sales revenue as reported in the IFRS consolidated financial statements, which amounted to €250.2 billion in fiscal year 2021 (see also note 1 “Sales revenue” in the notes to the consolidated financial statements).

Of this total, €225.4 billion, or 90.1% of Group sales, was attributable to economic activity 3.3 Manufacture of low-carbon technologies for transport and classified as taxonomy-eligible. This includes sales revenue after sales allowances from new and used vehicles, including motorcycles, from genuine parts, from the rental and lease business, and from interest and similar income, as well as sales revenue directly related to vehicles, such as workshop and other services.

Of the taxonomy-eligible sales revenue, €21.3 billion meet the screening criteria used to measure the substantial contribution to climate change mitigation. This includes all of our all-electric vehicles, the majority of the plug-in hybrids, and the buses meeting the EURO VI standard (Stage E).

Taking into account the DNSH criteria and minimum safeguards, sales revenue of €21.1 billion attributable to our passenger cars and light commercial vehicles, accounting for 8.5% of consolidated sales revenue, was taxonomy-aligned. Of this amount, €14.6 billion, or 5.8% of consolidated sales revenue, was attributable to our all-electric models (BEVs).

In the Power Engineering Business Area, the majority of our taxonomy-eligible sales revenue was attributable to economic activity 3.6 Manufacture of other low-carbon technologies (€2.4 billion). A further €13 million was contributed by economic activity 9.1 Close to market research, development and innovation. Our activities that fall under economic activity 3.2 Manufacture of equipment for the production and use of hydrogen recorded taxonomy-aligned sales revenue of €5 million, taking into account the DNSH criteria and minimum safeguards.

Of the Volkswagen Group’s total sales revenue in fiscal year 2021,

• €227.8 billion, or 91.0%, was taxonomy-eligible sales revenue and
• €21.2 billion, or 8.5%, was taxonomy-aligned sales revenue.

Capital expenditure

Capital expenditure for the purposes of the EU taxonomy refers to the following items in the IFRS consolidated financial statements: additions to intangible assets, additions to property, plant and equipment, and additions to lease assets and investment property. These are reported in the notes to the 2021 consolidated financial statements in note 12 “Intangible assets”, note 13 “Property, plant and equipment” and note 14 “Lease assets and investment property”. Additions from business combinations, each of which is reported under “Changes in consolidated Group”, are also included. By contrast, additions to goodwill are not included in the calculation.

In fiscal year 2021, additions in the Volkswagen Group as defined above amounted to

• €9.1 billion from intangible assets,
• €10.7 billion from property, plant and equipment and
• €29.1 billion from lease assets (mainly vehicle leasing business) and investment property.

Additions from changes in the consolidated Group, which amounted to €5.1 billion in fiscal year 2021, can also be added to this figure. These mostly related to Navistar. Total capital expenditure to be included in accordance with the EU taxonomy therefore came to €54.0 billion.

All capital expenditure attributable to our vehicle-related business is associated with economic activity 3.3 Manufacture of low-carbon technologies for transport. Taxonomy-eligible capital expenditure for the vehicle-related business amounted to €53.5 billion, or 99.1% of the Group’s capital expenditure.

To determine the substantial contribution in the vehicle-related business, we compiled the financial figures based on the vehicle model and powertrain technology, in the same way as for sales revenue. Where possible, capital expenditure was directly attributed to vehicles. It was included, if the vehicles in question make a substantial contribution to the climate change mitigation objective. We did not include any capital expenditure directly attributable to vehicles that do not meet the screening criteria. Capital expenditure that was not clearly attributable to a particular vehicle was taken into account on a proportionate basis using allocation formulas. In our vehicle-related business, we used model- and brand-specific allocation formulas based on the long-term sales plan and the capacity and utilization planning for the Group companies. Depending on the primary business activity, allocation formulas from the long-term sales plan were used for sales companies, for example, and allocation formulas based on the capacity and utilization planning were used for production companies. This means that capital expenditure on sites that according to our medium-term planning will only produce vehicles meeting the screening criteria for the substantial contribution in the next five years was counted in full via the allocation formula. In contrast, capital expenditure on sites that only produce vehicles not meeting the screening criteria was not counted under the allocation formula. Calculated in this way, capital expenditure relating to vehicles that meet the screening criteria for the substantial contribution amounted to €14.4 billion.

Taking into account the DNSH criteria and minimum safeguards, capital expenditure of €14.2 billion on our passenger cars and light commercial vehicles was taxonomy-aligned. This represented 26.2% of the Group’s total capital expenditure. This figure includes additions to capitalized development costs of €3.5 billion and additions to property, plant and equipment of €3.8 billion for our all-electric passenger cars and light commercial vehicles (BEVs).

Taxonomy-eligible capital expenditure in the Power Engineering Business Area has been allocated to economic activity 3.6 Manufacture of other low-carbon technologies. Capital expenditure was broken down based on planned sales revenue. Taxonomy-eligible capital expenditure amounted to €65 million.

Of the Volkswagen Group’s total capital expenditure in fiscal year 2021,

• €53.6 billion, or 99.2%, was taxonomy-eligible capital expenditure and
• €14.2 billion, or 26.2%, was taxonomy-aligned capital expenditure.

Operating expenditure

The operating expenditure reported by us for the purposes of the EU taxonomy comprises non-capitalized research and development costs, which can be taken from note 12 “Intangible assets”. We also include the expenditure for short-term leases recognised in our consolidated financial statements, which can be found in note 33 “IFRS 16 (Leases)”, and expenditure for maintenance and repairs.

The allocation of operating expenditure to the economic activities followed the same logic as that described for capital expenditure.

All operating expenditure attributable to the vehicle-related business is associated with economic activity 3.3 Manufacture of low-carbon technologies for transport and has been classified as taxonomy-eligible.

Where possible, non-capitalized research and development costs were directly attributed to vehicles. It was included, if the vehicles in question make a substantial contribution to the climate change mitigation objective. We did not include any non-capitalized research and development costs directly attributable to vehicles that do not meet the screening criteria. Non-capitalized research and development costs that were not clearly attributable to a particular vehicle were taken into account on a proportionate basis using allocation formulas. For these and other operating expenses, the same allocation formulas were used as for capital expenditure.

Taxonomy-eligible operating expenditure in the Power Engineering Business Area falls under economic activity 3.6 Manufacture of other low-carbon technologies. As with capital expenditure, operating expenditure was broken down on the basis of planned sales revenue.