Q3 Report 2021

Interim Report

JANUARY - SEPTEMBER 2021

1	UPDATED INFORMATION	6	INTERIM MANAGEMENT	26 BRANDS AND	29 INTERIM CONSOLIDATED FINANCIAL
			REPORT	BUSINESS FIELDS		STATEMENTS (CONDENSED)
1	Key Facts	6	Volkswagen Shares		29	Income Statement
2	Key Events	7	Business Development		30	Statement of Comprehensive Income
		17 Results of Operations, Finan-		33	Balance Sheet
			cial Position and Net Assets		34	Statement of Changes in Equity
		25	Outlook		36	Cash Flow Statement
					37	Notes to the Interim Consolidated
						Financial Statements
					61	Review Report

Key Figures

VOLKSWAGE N GROU P

		Q3					Q1 - 3
		2021			2020		%		2021			2020		%
Volume Data1 in thousands
Deliveries to customers (units)	1,973		2,612	-24.4	6,951		6,505	+6.9
Vehicle sales (units)		1,805		2,575	-29.9	6,466		6,311	+2.5
Production (units)		1,586		2,445	-35.1	6,098		6,107	-0.1
Employees (on September 30, 2021/Dec. 31, 2020)									674.8		662.6	+1.9
Financial Data (IFRSs), € million
Sales revenue	56,931		59,355	-4.1	186,599			155,486		+20.0
Operating result before special items		2,798		3,183	-12.1	14,157		2,380	x
Operating return on sales before special items (%)		4.9		5.4			7.6		1.5
Special items		-203			-	x	-203	-687	-70.4
Operating result		2,595		3,183	-18.5	13,953		1,693	x
Operating return on sales (%)		4.6		5.4			7.5		1.1
Earnings before tax		3,079		3,606	-14.6	14,232		2,254	x
Return on sales before tax (%)		5.4		6.1			7.6		1.4
Earnings after tax		2,903		2,751	+5.6	11,357		1,731	x
Automotive Division2
Total research and development costs		3,665		3,496	+4.8	11,401		10,191	+11.9
R&D ratio (%)		8.0		7.2			7.5		8.1
Cash flows from operating activities		3,615		10,162	-64.4	22,703		13,171	+72.4
Cash flows from investing activities attributable to
operating activities3		6,586		3,938	+67.2	15,483		11,754	+31.7
of which: capex		2,114		2,292	-7.8	5,891		6,422	-8.3
capex/sales revenue (%)		4.6		4.7			3.9		5.1
Net cash flow		-2,971	6,224	x	7,220		1,418	x
Net liquidity at Sept. 30									25,642		24,848	+3.2

1. Volume data including the unconsolidated Chinese joint ventures. These companies are accounted for using the equity method. Prior-year deliveries have been updated to reflect subsequent statistical trends.
2. Including allocation of consolidation adjustments between the Automotive and Financial Services divisions.
3. Excluding acquisition and disposal of equity investments: Q3 €3,670 (3,754) million, Q1-Q3 €11,029 (10,657) million.

This version of the Interim Report is a translation of the German original. The German takes precedence. All figures shown in the Report are rounded, so minor discrepancies may arise from addition of these amounts. The figures from the previous fiscal year are shown in parentheses directly after the figures for the current reporting period.

Specified vehicle ranges correspond to results obtained through the Worldwide Harmonized Light vehicles Test Procedure (WLTP) on the chassis dynamometer. WLTP value ranges for series-produced vehicles may vary depending on the equipment. The actual range will deviate in practice depending on various other factors.

Updated Information

Key Facts

1

Key Facts

• Deliveries to Volkswagen Group customers up 6.9% on the pandemic-related weak prior-year figure, reaching 7.0 million vehicles; semiconductor shortage impacts on sales figures; growth particularly in Europe and in North and South America; electric vehicle deliveries more than doubled
• Group sales revenue rises by 20.0% to €186.6 billion
• Operating result before special items increases by €11.8 billion to €14.2 billion. Improvements in volume, the mix and price positioning, as well as positive effects from the fair value measurement of commodity hedges; one-off expenses for restructuring measures of €0.7 billion
• Operating result up €12.3 billion year-on-year to €14.0 billion; negative special items of €-0.2(-0.7) billion relating to the diesel issue
• Profit before tax improves to €14.2 (2.3) billion
• Automotive Division's net cash flow up by €5.8 billion to €7.2 billion due primarily to earnings-related factors; ratio of capex to sales revenue of 3.9 (5.1)%
• Net liquidity in the Automotive Division after dividend payment and purchase of shares in Navistar robust at €25.6 billion
• Exciting products:
• • Volkswagen Passenger Cars unveils the compact SUV coupé Taigo; all-electric concept car ID. LIFE combines sustainability and digitalization
  • Audi's self-driving skysphere and grandsphere concept vehicles turn the car into an interactive space
  • CUPRA provides a glimpse of an urban electric vehicle with the UrbanRebel concept
  • Bentley showcases the Flying Spur with a plug-in hybrid drive
  • Porsche launches the upgraded Macan
  • Lamborghini celebrates the 50th anniversary of its cult model with the Countach LPI 800-4
  • Volkswagen Commercial Vehicles electrifies its bestseller with the Multivan eHybrid

2

Key Events

Updated Information

Key Events

COVI D - 1 9 PA N DE MIC

At the end of 2019, initial cases of a potentially fatal respiratory disease became known in China. This disease is attributable to a novel virus belonging to the coronavirus family. Infections also appeared outside China from mid-January 2020. The number of people infected rose very rapidly in the course of 2020, albeit with differences in timing and regional spread. Around the world, measures were taken and adapted at national level and with varying levels of intensity based on the situation. However, these ultimately failed to bring the spread of the SARS-CoV-2 virus under control. In addition, aid packages to support the economy were agreed by the Euro- pean Commission and by numerous governments in Europe and other regions, and economic stimulus measures were introduced to counter the pandemic's impact. Throughout the whole of 2020, the global spread of the SARS-CoV-2 virus brought enormous disruption to all areas of everyday life and the economy.

The mostly dynamic increase in the rate of infection continued in many places throughout the first quarter of 2021. This was accompanied by ongoing disruption - such as contact and mobility restrictions or limitations on business activities - in many parts of the world. With the increased availability of testing capacities and vaccines, some countries have permitted the extensive reopening of everyday life and the economy. In China in particular, the measures taken resulted in a removal of restrictions. In most of the world, infection rates initially declined in the second quarter of 2021, leading to further easing of the measures taken to contain the pandemic. From the middle of the year, however, some countries recorded a renewed increase in infection rates, which was mainly due to new variants of the SARS-CoV-2 virus. Some restrictions returned in response to the situation. Most regions of the world saw a declining rate of new infections in the third quarter of 2021. Against this backdrop, many countries largely lifted their restrictions on everyday life and the economy, depending on the progress of their vaccination campaigns. Temporary increases in case numbers - primarily associated with increased travel - only rarely resulted in the measures being tightened again.

N EW PRO DU CT S AN D TE CH NO LOG I ES P RE SEN TE D

The Volkswagen Group and its brands presented new vehicles and technologies once again in the third quarter of 2021.

IAA MOBILITY 2021

The IAA MOBILITY 2021 took place in a new format in Munich in September 2021. The Volkswagen Passenger Cars brand presented the ID. LIFE, its vision of a fully electric small car for the urban environment, which is consistently aimed at the needs of younger target groups. The study combines sustainability and digitalization with an exceptionally flexible utilization concept. In the clear coat for the bodywork, wood chips are used as a natural coloring agent along with a bio- based hardener. The air chamber textile for the roof and the bonnet are made from 100% recycled PET bottles. A retractable projection screen in the dash panel can turn the vehicle into a mini cinema or gaming lounge, for example. The vehicle comes with a video game console and projector. The design of the ID. LIFE is strikingly clear, pared-down and high-quality. The horizontal division between the body, glass surfaces and roof also contributes to the car's purist appear- ance. The ID. LIFE concept car is based on a version of the Volkswagen Group's Modular Electric Drive Toolkit (MEB) specially developed for the compact segment. It is the first MEB vehicle with front-wheel-drive. With its 172 kW (234 PS) electric motor, the ID. LIFE accelerates from 0 to 100 km/h in

6.9 seconds. The range is around 400 km. A camouflaged near-production concept car was also presented in Munich: the ID.5 GTX is based on the MEB and is the Volkswagen Passenger Cars brand's first all-electric SUV coupé. With its fluid lines, the ID.5 GTX is both elegant and sporty. Short overhangs and big wheels highlight its strong character. In the high front, LED matrix headlights generate an intelli- gently controlled full beam. The flat sloping A-pillar posi- tioned right near the front gives the roof line an elegant flow that tapers out in an integrated rear spoiler. The LED rear lights with a 3D design complete the premium feel. The abbreviation GTX represents the Volkswagen brand's new athleticism. It continues the tradition of the successful GTI, GTD and GTE models and transfers it to the world of e-mo- bility. The ID.5 GTX has an electric motor at both the front and rear axle. The powerful dual motor all-wheel drive guarantees strong driving performance, superior traction and sporty handling. The large lithium-ion battery between the axles enables a range of up to 497 km.

Updated Information

Key Events

3

The Volkswagen Passenger Cars brand completed its appearance at the IAA MOBILITY with the new compact Taigo. Based on the Modular Transverse Toolkit, the SUV coupé is a real crowd-pleaser with its expressive crossover body style, raised seating position, pioneering connectivity and unrestricted everyday practicality. The rear of the five-seater car slopes backwards in the style of a coupé, without restricting headroom in the back seats. With full LED headlights, a digital cockpit and infotainment system from the Modular Infotain- ment Toolkit as standard, the Taigo sets high technology standards in its class. Numerous latest-generation assistance systems enhance convenience - these include the area monitoring system Front Assist, which features the city emergency braking system, and the lane keeping system Lane Assist. IQ.DRIVE Travel Assist is available as an optional extra, enabling semi-automated driving up to a top speed of 210 km/h.

Audi presented the Audi grandsphere concept study at the IAA MOBILITY 2021. The 5.35 m long saloon combines the luxury of private travel in the greatest of comfort with a comprehensive onboard experience. Level 4 automated driving enables a new level of freedom: in this mode, the interior turns into a large interactive space without a steering wheel, pedals, or displays. The front seats become a first-class lounge with maximum space, unobstructed views and access to all the functions of the holistic digital ecosystem into which the Audi grandsphere is integrated. In the run-up to the IAA MOBILITY, Audi had already presented the Audi skysphere concept - a spectacular roadster concept vehicle. The sky- sphere is an electric-poweredtwo-door convertible whose lines lead directly to the Audi design of tomorrow. This vehi- cle, too, outlines a vision for the progressive luxury segment of the future, in which autonomous driving enables a revolutionary redesign of the interior, turning it into an interactive space.

CUPRA celebrated the world premiere of the UrbanRebel concept in Munich. The race car study gives an idea of the future design language of the urban electric vehicle that CUPRA plans to bring to the market in 2025. The UrbanRebel concept stands for fully electric drive, sustainability and performance. It mixes stunning design with dynamic driving and is based on the Volkswagen Group's MEB. The front section with its shark nose is emphasized by the triangular signature in the headlamps. The side of the car, with a wedge shape running from the C-pillar to the front door, shows athletic proportions. The rear is designed with horizontal lines and a large spoiler, giving the vehicle a sharp, imposing look. The CUPRA UrbanRebel concept delivers 250 kW (340 PS) of continuous power and up to 320 kW (435 PS) at its peak. It can accelerate from 0 to 100 km/h in just 3.2 seconds.

Porsche provided a spectacular look into the automotive future: the Mission R concept car combines state-of-the-art technologies and sustainable materials with a passion for

racing. In addition to a progressive design, the extremely low- slung, all-electric Mission R features the characteristic lines of the sports cars from Stuttgart-Zuffenhausen. The two newly developed electric motors in the Porsche Mission R deliver up to 800 kW (1,088 PS) in "qualifying mode." The battery capacity of around 80 kWh and an innovative recuperation system make sprint racing possible with no loss of output. The Mission R accelerates from 0 to 100 km/h in less than 2.5 seconds, and the top speed is more than 300 km/h. In addition to the innovative electric drive system, the body of the concept car also focuses on CO2 reduction and sustainability. It is largely made of natural-fiber-reinforced plastic, the base material of which consists of flax fibers obtained from agriculture. This environmentally friendly material is also used for the front splitter, diffuser and side skirts.

Volkswagen Commercial Vehicles celebrated the motor show premiere of the all-new generation of the Multivan in Munich. Tailor-made for families and the sporty and active, the all-rounder's newly developed seat and cargo space system makes it suitable for the most varied of uses, from a family and leisure vehicle to a premium shuttle. The plug-in hybrid drive consisting of a 1.4 TSI engine with 110 kW (150 PS) of power and an 85 kW (116 PS) electric motor is a novelty in this series. With a system output of 160 kW (218 PS), the Multivan eHybrid combines local emission-free driving with low total fuel consumption. Thanks to the lithium-ion battery, the range in fully electric mode is designed to cover average daily distances. With the ID. BUZZ AD (Autonomous Driving), Volkswagen Commercial Vehicles presented a fully electric, self-driving prototype at the IAA MOBILITY. The aim is to use the production version for mobility services such as MOIA from 2025. In Munich, the development partner Argo AI is currently testing the vehicle's Self-Driving-System SDS that will enable autonomous driving. Accurate data for the intelligent software is delivered by a combination of lidar, radar and camera systems. This gives a very precise picture of urban traffic, which will allow the self-driving ID. BUZZ AD to take passengers to their city center destinations in future.

Other new vehicles

Porsche launched its new Macan in the third quarter of 2021 with enhanced performance, modified design and a new control interface. The compact SUV's visuals have been further sharpened with a series of specific changes. The redesigned nose emphasizes the Macan's width, making it look even more imposing on the road. The rear is now rounded off toward the road by a striking diffuser in a particularly technical design. The chassis has also been optimized further: the Macan now responds even more sensitively and directly to the driving situation and road conditions. The new Porsche Macan offers a significantly enhanced interior with a modern and elegantly designed center console. Its control