Basis of consolidation

In addition to Volkswagen AG, the consolidated financial statements comprise all significant German and non-German subsidiaries, including structured entities that are controlled directly or indirectly by Volkswagen AG. The structured entities are used primarily to enter into asset-backed securities transactions to refinance the financial services business and to invest surplus liquidity in special securities funds.

Subsidiaries whose business is dormant or insignificant, both individually and in the aggregate, for the fair presentation of the net assets, financial position and results of operations as well as the cash flows of the Volkswagen Group are not consolidated. They are carried in the consolidated financial statements at cost net of any impairment losses and reversals of impairment losses required to be recognized.

Significant companies where Volkswagen AG is able, directly or indirectly, to significantly influence financial and operating policy decisions (associates), or that are directly or indirectly jointly controlled (joint ventures), are accounted for using the equity method. Joint ventures also include companies in which the Volkswagen Group holds the majority of voting rights, but whose articles of association or partnership agreements stipulate that important decisions may only be resolved unanimously. Insignificant associates and joint ventures are carried at cost net of any impairment losses and reversals of impairment losses required to be recognized.

The composition of the Volkswagen Group is shown in the following table:

The list of all shareholdings that forms part of the annual financial statements of Volkswagen AG can be downloaded from the electronic company register at www.unternehmensregister.de and from www.volkswagen-group.com/investor-relations.

The following consolidated German subsidiaries with the legal form of a corporation or partnership have met the criteria set out in section 264(3) or section 264b of the Handelsgesetzbuch (HGB – German Commercial Code) and have as far as possible exercised the option not to publish annual financial statements:

• AUDI AG, Ingolstadt
• Audi Berlin GmbH, Berlin
• Audi Frankfurt GmbH, Frankfurt am Main
• Audi Hamburg GmbH, Hamburg
• Audi Hannover GmbH, Hanover
• Audi Leipzig GmbH, Leipzig
• Audi München GmbH, Munich
• Audi Sport GmbH, Neckarsulm
• Audi Stuttgart GmbH, Stuttgart
• Auto & Service PIA GmbH, Munich
• Autostadt GmbH, Wolfsburg
• Bugatti Engineering GmbH, Wolfsburg
• CARIAD SE, Wolfsburg
• dx.one GmbH, Wolfsburg
• Eberhardt Kraftfahrzeug GmbH + Co. KG, Ulm
• GETAS Verwaltung GmbH & Co. Objekt Heinrich-von-Buz-Straße KG, Pullach i. Isartal
• HABAMO Verwaltung GmbH & Co. Objekt Sterkrade KG, Pullach i. Isartal
• Haberl Beteiligungs-GmbH, Munich
• Held & Ströhle GmbH & Co. KG, Ulm
• MAHAG Automobilhandel und Service GmbH & Co. oHG, Munich
• MAHAG GmbH, Munich
• MAHAG Sportwagen Zentrum Albrechtstraße GmbH, Munich
• MAN Energy Solutions SE, Augsburg
• MOIA GmbH, Berlin
• MOIA Operations Germany GmbH, Hanover
• Porsche Holding Stuttgart GmbH, Stuttgart
• Porsche Niederlassung Mannheim GmbH, Mannheim
• PowerCo SE, Salzgitter
• PSW automotive engineering GmbH, Gaimersheim
• PZ Leipzig GmbH, Leipzig
• Quest One GmbH, Augsburg
• Schwaba GmbH, Augsburg
• SEAT Deutschland Niederlassung GmbH, Weiterstadt
• SKODA AUTO Deutschland GmbH, Weiterstadt
• SZM Sportwagen Zentrum München GmbH, Munich
• VfL Wolfsburg-Fußball GmbH, Wolfsburg
• VGRB GmbH, Berlin
• VGRD GmbH, Wolfsburg
• VGRDD GmbH, Dresden
• VGRHH GmbH, Hamburg
• Volkswagen ADMT Hannover GmbH, Hanover
• Volkswagen AirService GmbH, Braunschweig
• Volkswagen Automobile Berlin GmbH, Berlin
• Volkswagen Automobile Chemnitz GmbH, Chemnitz
• Volkswagen Automobile Frankfurt GmbH, Frankfurt am Main
• Volkswagen Automobile Hamburg GmbH, Hamburg
• Volkswagen Automobile Hannover GmbH, Hanover
• VOLKSWAGEN Automobile Leipzig GmbH, Leipzig
• Volkswagen Automobile Rhein-Neckar GmbH, Mannheim
• Volkswagen Automobile Stuttgart GmbH, Stuttgart
• Volkswagen Deutschland GmbH & Co. KG, Wolfsburg
• Volkswagen Deutschland Verwaltungs GmbH, Wolfsburg
• Volkswagen Gebrauchtfahrzeughandels und Service GmbH, Langenhagen
• Volkswagen Group AI Lab GmbH, Braunschweig
• Volkswagen Group Beteiligungen GmbH, Wolfsburg
• Volkswagen Group IT Solutions GmbH, Wolfsburg
• Volkswagen Group Real Estate GmbH & Co. KG, Wolfsburg
• Volkswagen Group Services GmbH, Wolfsburg
• Volkswagen Immobilien GmbH, Wolfsburg
• Volkswagen Konzernlogistik GmbH & Co. OHG, Wolfsburg
• Volkswagen Leasingobjekt GmbH, Braunschweig
• Volkswagen Original Teile Logistik GmbH & Co. KG, Baunatal
• Volkswagen Osnabrück GmbH, Osnabrück
• Volkswagen Sachsen GmbH, Zwickau
• Volkswagen Software Asset Management GmbH, Wolfsburg
• Volkswagen Vermögensverwaltungs-GmbH, Wolfsburg
• Volkswagen Zubehör GmbH, Dreieich

CONSOLIDATED SUBSIDIARIES

The fiscal year’s changes in the consolidated Group are shown in the following table:

The initial consolidation or deconsolidation of these subsidiaries, either individually or collectively, did not have a significant effect on the presentation of the net assets, financial position and results of operations. The unconsolidated structured entities are immaterial from a Group perspective. In particular, they do not give rise to any significant risks to the Group.

INVESTMENTS IN ASSOCIATES

From a Group perspective, the associates QuantumScape, Gotion High-Tech Co., Ltd., Hefei/China (Gotion) and Sinotruk (Hong Kong) Ltd., Hongkong/China (Sinotruk), were material as of the balance sheet date. In the previous year, the equity investment in Northvolt had been included in the disclosures. Further disclosures on Northvolt can be found in the “Key events” section.

QuantumScape

QuantumScape is a US-based start-up for solid-state lithium-metal batteries. An agreement to industrialize QuantumScape’s next-generation solid-state lithium-metal technology exists between Group companies and QuantumScape. QuantumScape’s principal place of business is in San José/USA.

As of December 31, 2024, the quoted market price of the shares in QuantumScape amounted to €430 million (previous year: €541 million).

Gotion

Gotion is a Chinese technology company that engages primarily in research and development, production and sales of lithium-ion batteries and in electric transmission and transformation businesses. Group companies and Gotion have agreed upon a strategic framework for cooperation in the development, manufacture and distribution of battery cells. Gotion’s principal place of business is in Hefei/China.

As of December 31, 2024, the quoted market price of the shares in Gotion amounted to €1.2 billion (previous year: €1.2 billion).

Sinotruk

Sinotruk is one of the largest truck manufacturers in the Chinese market. Sinotruk’s principal place of business is in Hongkong/China.

As of December 31, 2024, the quoted market price of the shares in Sinotruk amounted to €1,947 million (previous year: €1,222 million).

There are unrecognized losses of €636 million (previous year: €– million) relating to investments in associates in the current fiscal year. Financial guarantees have been issued to associates in an amount of €1 million (previous year: €1 million).

INTERESTS IN JOINT VENTURES

From a Group perspective, the joint ventures FAW-Volkswagen Automotive Company Ltd., Changchun/China, SAIC-Volkswagen Automotive Company Ltd., Shanghai/China, and SAIC-Volkswagen Sales Company Ltd., Shanghai/China, were material at the reporting date.

FAW-Volkswagen Automotive Company

FAW-Volkswagen Automotive Company develops, produces and sells passenger cars. There is an agreement in place between Group companies and the joint venture partner China FAW Corporation Limited regarding a long-term strategic partnership. The principal place of business is in Changchun/China.

SAIC-Volkswagen Automotive Company

SAIC-Volkswagen Automotive Company develops and produces passenger cars. There is an agreement in place between Group companies and the joint venture partner Shanghai Automotive Industry Corporation regarding a long-term strategic partnership. The principal place of business is in Shanghai/China.

SAIC-Volkswagen Sales Company

SAIC-Volkswagen Sales Company sells passenger cars for SAIC-Volkswagen Automotive Company. There is an agreement in place between Group companies and the joint venture partner Shanghai Automotive Industry Corporation regarding a long-term strategic partnership. The principal place of business is in Shanghai/China.

The carrying amount of equity-accounted investments includes the equity investment in Green Mobility Holding S.A., Strassen/Luxembourg.

There were no unrecognized losses relating to investments in joint ventures in the fiscal year or the previous year. Contingent liabilities to joint ventures amounted to €228 million (previous year: €219 million); there were no financial guarantees (previous year: €70 million). Cash funds of joint ventures amounting to €162 million (previous year: €150 million) are deposited as collateral for asset-backed securities transactions and are therefore not freely available.

IFRS 5 – NON-CURRENT ASSETS HELD FOR SALE

As of December 31, 2024, the Volkswagen Group did not hold any assets and liabilities classified as held for sale.

Transactions completed/discontinued in the current fiscal year

In accordance with the requirements of IFRS 5, the consolidated subsidiaries OOO Volkswagen Group Finanz, Moscow/Russia, OOO Volkswagen Financial Services RUS, Moscow/Russia and OOO Volkswagen Bank RUS, Moscow/Russia have been classified as a disposal group held for sale since fiscal year 2022. In this context, impairment losses of €186 million were recognized in fiscal year 2023.

The shares in OOO Volkswagen Group Finanz, Moscow/Russia and OOO Volkswagen Financial Services RUS, Moscow/Russia were sold to an external investor on January 18, 2024. In particular due to the reclassification of foreign exchange differences to the income statement, the deconsolidation of the two companies resulted in a loss of €62 million, which was recognized in other operating expenses.

In addition, impairment losses of €29 million were recognized for OOO Volkswagen Bank RUS, Moscow/Russia in fiscal year 2024. The company was deconsolidated as of June 30, 2024. Deconsolidation resulted in a loss of €184 million, which was recognized in other operating expenses; the amount includes in particular the reclassification of foreign exchange differences to the income statement.

In its ruling of July 3, 2024, the German Federal Ministry for Economic Affairs and Climate Action prohibited the sale of the MGT gas turbine business to CSIC Longjiang GH Gas Turbine Co. Ltd., Harbin/China. The Federal Cabinet approved the prohibition ruling. Following the prohibition, MAN Energy Solutions SE, Augsburg discontinued the development, manufacture and sales of MGT gas turbines. It will continue its service activities for MGT gas turbines. The prohibition of the planned sale and the discontinuation of the new-build business with MGT gas turbines means that these activities are no longer presented in line with IFRS 5, and led to the recognition of an impairment loss on the capitalized development costs and inventories for MGT gas turbines as of June 30, 2024. This resulted in an expense of €86 million, which is presented in cost of sales and in other operating expenses. There are three further types of gas turbines (THM, FT8 and S class) in addition to the MGT gas turbines. Business with these is not affected by this development.

In accordance with the requirements of IFRS 5, two Russian sales companies in the Automotive segment, OOO Porsche Russland, Moscow/Russia and OOO Porsche Center Moscow, Moscow/Russia, and one Russian company assigned to the Financial Services segment, OOO Porsche Financial Services Russland, Moscow/Russia, have been classified as a disposal group held for sale since September 2022. An impairment loss of €25 million was recognized for the disposal group in fiscal year 2022; another impairment loss and offsetting currency translation effects were identified in fiscal year 2023. No further material adjustments were made in the first nine months of 2024. The Russian companies were deconsolidated in the fourth quarter of 2024. Deconsolidation resulted in a loss of €54 million, which was recognized in other operating expenses; the amount includes in particular the classification of foreign exchange differences to the income statement.