Opportunities and risks from mergers and acquisitions and/or other strategic partnerships/investments

For this risk category, the likelihood of occurrence is classified as medium (previous year: high) and the potential extent of damage is classified as high (previous year: high).

The most significant risks from the regular GRC process and QRP are linked to cooperation with other partners.

Opportunities and risks from partnerships

As part of our future program TOGETHER 2025+, we are stepping up our efforts to forge partnerships, both for the transformation of our core business and for the establishment of the new mobility solutions business.

In the field of battery cells, possible risks could arise from potential disagreement with our partners, possible delays in battery cell development or delayed battery cell production.

Strong interaction with partners in the field of e-mobility, such as the development of a comprehensive charging infrastructure, in the form of partnerships and joint ventures, supports technological change. This cooperation involves risks such as an increased coordination workload, more complex decision-making processes and the loss of expertise. At the same time, opportunities are presented by the pooling of specialist knowledge, by horizontal and vertical integration and by better use of resources. Volkswagen has therefore created various teams in Group Components to closely support all such partnerships.

With the marketing of the Modular Electric Drive Toolkit to third parties, as is conceivable as part of the strategic alliance with Ford, for example, damage claims could arise in the event of problems with procurement, production and quality.

By entering into partnerships at a local level, we aim to identify regional customer needs more precisely, establish competitive cost structures and thus develop and offer market-driven products. We are concentrating to a greater extent on partnerships, acquisitions and venture capital investments. This will enable us to generate maximum value for the Group and its brands and to expand our expertise, particularly in new areas of business. Our innovative presence in the markets supports this process. At the same time, there is a risk that the interests of business partners differ from our own.

Volkswagen owns a large number of patents and other industrial property rights and copyrights. Partnerships can lead to patent and licensing infringements and thus to the unauthorized disclosure of company-specific expertise. Volkswagen monitors the sales markets and also protects its expertise with legal action.

Risks arising from the recoverability of goodwill or brand names

For the goodwill recognized in the consolidated financial statements and for brand names, there is a risk that the carrying amount of goodwill may be higher than the recoverable amount and that an extraordinary impairment loss must therefore be recognized. Volkswagen tests at least once a year on the basis of underlying cash-generating units, whether the value of the goodwill or the brand names could have been impaired. If there are objective indications that the recoverable amount of the asset concerned is lower than the carrying amount, then Volkswagen recognizes this as a non-cash impairment. An impairment can be caused by an increase in interest rates or deteriorating business prospects.

Risks from the disposal of equity investments

An unexpected need for funding, for example in connection with the diesel issue, may lead to a situation in which assets have to be sold for a lower amount not equivalent to their value.