Group Management Report

header icon

Research and Development

Forward-looking mobility solutions with brand-defining products and services would be unthinkable without innovation. This makes our research and development work essential for sustainably increasing the value of the Company.

Together with our Group brands, we have launched measures based on our NEW AUTO strategy to link development activities across the Group. At the heart of this new strategy is an efficient, cross-brand development alliance characterized by a close network of our experts, collaboration on an equal footing, an innovative working environment and the pooling of development activities. The aim is to make use of synergies across the Group and act as a role model for the environment, safety and integrity. The development alliance plays a major part in driving the Volkswagen Group’s transformation and helping to make it fit for the future.

In view of this strategic focus, we concentrated in the reporting period on continuing to develop forward-looking mobility solutions, establishing technological expertise to strengthen our competitiveness, expanding our range of products and services and improving the functionality, quality, safety and environmental compatibility of our products and services.

CO2 fleet emissions

We use a strategic indicator in Europe and the United States to evaluate the effectiveness of our measures to reduce CO2 emissions when driving:

  • CO2 fleet emissions. The Volkswagen Group’s new passenger car fleet in the EU (excluding Lamborghini and Bentley) (EU27+2) emitted an average of 119 g CO2/km (WLTP)1 in the reporting period in accordance with the statutory measurement bases. The statutory target is 121 g CO2/km (WLTP)1. The Volkswagen Group thus more than met the EU’s CO2 fleet target. Under European CO2 legislation, the Lamborghini and Bentley brands are considered small volume manufacturers with an independent fleet and are assessed accordingly. Both exceeded their individual targets. Bentley and Lamborghini will be integrated into the Volkswagen Group’s new passenger car fleet in the EU from 2022. The European Commission is striving to cut CO2 emissions by 15 % by the year 2025, which corresponds to a CO2 target of less than 105 g CO2/km for our new passenger car fleet in the EU. A reduction of 55 % has been proposed for 2030, equivalent to a CO2 target of less than 60 g CO2/km. We assume that our new passenger car fleet in the EU will meet this target for 2025 and exceed the target for 2030. The Volkswagen Group’s new light commercial vehicles fleet in the EU emitted an average of 202 g CO2/km (WLTP)1 in the 2021 reporting period according to the statutory measurement bases. The statutory target is 198 g CO2/km (WLTP)1. Contrary to the original planning, the Group fell just short of this target owing to the semiconductor shortage, which resulted in limited vehicle availability. The CO2 pool established together with other manufacturers achieved its target. All figures are subject to confirmation of CO2 data within the scope of official publication by the European Commission. The European Commission is striving to cut CO2 emissions by 15 % by the year 2025, which corresponds to a CO2 target of less than 175 g CO2/km for our new light commercial vehicles fleet in the EU. A reduction of 50 % has been proposed for 2030, equivalent to a CO2 target of less than 115 g CO2/km. We assume that our new light commercial vehicles fleet in the EU will meet this target for 2025 and exceed the target for 2030. In the United Kingdom and Switzerland/Liechtenstein markets, the Volkswagen Group fleets fell just short of the statutory requirements for the 2021 reporting period. In the United States, the emission pool – comprising the Group brands Volkswagen Passenger Cars, Audi, Lamborghini, Bentley, Porsche and Bugatti – commits to the Green House Gas (GHG) and Corporate Average Fuel Economy (CAFE) regulations with which all manufacturers are required to comply in connection with passenger cars and light commercial vehicles, taking into account credits for air conditioning and off cycle credits. Due to the delay in the confirmation by the authorities of model years differing from the calendar year, internal calculations are used to determine the figures for the current and preceding model year. The average GHG CO2 value (internal data as of September 2021) for the passenger car and light commercial vehicle fleets in model year 2021 is 147 g CO2/km (model year 2020: 151 g CO2/km). The statutory target is 142 g CO2/km (model year 2020: 139 g CO2/km). Application of the statutory flexibility offered by GHG and CAFE together with externally acquired credits enabled the Volkswagen Group to comply with the applicable requirements for model year 2021 subject to confirmation by the authorities. The figure given for model year 2020 is subject to confirmation by EPA and CARB. For 2025, we anticipate a CO2 target in the USA of approximately 110 g CO2/km and expect to meet this target. For 2030, we will increase the share of electric vehicles in our new vehicle fleet to significantly more than 40 %, putting us within the target range of the current administration.


in grams per kilometer (WLTP)

CO<sub>2</sub> emission of the Volkswagen Group's European new passenger car fleet (bar chart)
1 The European Commission switched its calculation of CO2 fleet emissions from NEDC to WLTP in 2021.
2 Subject to confirmation of CO2 data within the scope of official publication by the European Commission.


in grams per kilometer for the model year

CO<sub>2</sub> emission in Volkswagen Group passenger cars and light commercial vehicles under ghg standards in the USA (bar chart)
1 Subject to submission of the final MY report MY21 and subsequent confirmation by EPA and CARB (internal data as of September 2021).
2 Subject to confirmation by EPA and CARB (final MY report MY20 submitted but not yet confirmed).

Fuel and drivetrain strategy

With a view to the legal regulations on emissions, we are currently developing a forward-looking vehicle and drivetrain portfolio: we have set ourselves the objective of increasing drive system efficiency with each new model generation – irrespective of whether it is a combustion engine, a hybrid or a purely electric drive system. The Volkswagen Group closely coordinates technology and product planning with its brands so as to avoid breaches of fleet fuel consumption limits. These would entail substantial excess emissions premiums. Around one in five new Volkswagen Group vehicles worldwide is therefore to have a purely electric drive by the year 2025; depending on market development, this could be over two million electric vehicles a year. As part of our electrification campaign, we aim to offer our customers worldwide around 70 fully battery-electric vehicles by 2030; production of approximately 20 of these models has already started. In addition, a total of around 60 hybrid models are planned by the end of the decade, just over half of which are already in production. By 2030, the Volkswagen Group aims to have electrified its entire model portfolio, from high-volume models to premium vehicles. This will mean offering at least one electric version – battery electric or hybrid vehicles – of each of our passenger car models across all Group brands. To this end, in addition to the Modular Electric Drive Toolkit (MEB), we have also developed an all-electric platform for our premium and sports brands – the Premium Platform Electric (PPE). Furthermore, we are currently concentrating our energies on designing the Scalable Systems Platform (SSP), the successor platform for our future all-electric vehicles, in the Mechatronics technology initiative within the Group’s new strategy NEW AUTO. The strategic goals of this SSP platform are to further reduce variance by consistently leveraging synergies and thus tapping into considerable potential for cost savings. Audi’s Artemis vehicle project will use key SSP modules for the first time from 2025. As of 2026, Volkswagen will then launch its first model based on the SSP in the volume segment in the shape of the Trinity vehicle project.

To offer sustainable, affordable mobility in the future for as many people around the world as possible, we offer a range of drivetrains with a focus on electrification. From today’s perspective, conventional combustion engines will continue to make up a large share of the drive portfolio in the coming years. In the interest of using resources responsibly, it is therefore essential to further enhance this engine segment and systematically consolidate it for specific markets. Powertrain measures such as significantly more sophisticated exhaust gas purification or mild hybridization of our vehicles, as well as vehicle measures such as optimized aerodynamics or reduced rolling resistance will be necessary to fulfill future emissions standards. We are preparing intensively for this as we develop our product portfolio.

It is more important to us than ever to rigorously pursue our modular approach. We are reducing the number of individual modules so that we can make a large product portfolio economically viable. For example, we aim to reduce the number of versions of conventional combustion engines in the Group in the long term as part of our transformation. This will create capacity for the development and production of new hybrid and electric drives.

Life cycle engineering and recycling

Technological innovation for reducing fuel consumption is not enough on its own to minimize the effect of vehicles on the environment. We consider the environmental impact caused by our products throughout the entire vehicle life cycle and at all stages of the value chain. This includes the manufacturing process with the associated extraction of raw materials, the production of materials, the processes at our suppliers and our own production operations at our sites, the use phase with the resulting vehicle emissions and the necessary supply of fuel and charging current, and ultimately the recycling of the vehicle at the end of its life cycle. We identify the stages of the life cycle at which improvements will have the greatest effect and develop appropriate solutions. We call this life cycle engineering. Recycling, for example, is an important means of reducing environmental impact and conserving resources. We therefore already take the recyclability of the required materials into consideration when developing new vehicles, use high-quality recycled material and avoid pollutants. One of the recommendations for achieving this goal is avoiding substances on the EU REACH Candidate List of Substances of Very High Concern. Under the European Directive on end-of-life vehicles, passenger cars and light commercial vehicles must be 85 % recyclable and 95 % recoverable. Our vehicles registered in Europe comply with these standards.

Modular Electric Drive Toolkit (MEB)
The modular system is for the manufacturing of electric vehicles. The MEB establishes parameters for axles, drive systems, high-voltage batteries, wheelbases and weight ratios to ensure a vehicle optimally fulfills the requirements of e-mobility. The production of the first vehicles based on the MEB started into series production in 2020.
Premium Platform Electric (PPE)
A new vehicle platform for all-electric premium, sport and luxury class vehicles. The components and functions of this platform are especially tailored to meet the high demands of this segment. This platform enables high synergies to be achieved particularly between the Audi, Porsche and Bentley brands.