Report of the Supervisory Board

Ladies and gentlemen,

The work of the Supervisory Board of Volkswagen AG and its committees in fiscal year 2020 focused on the Volkswagen Group’s strategic direction. The Supervisory Board regularly deliberated on the Company’s position and development in the reporting period. We supervised and supported the Board of Management in its running of the business and advised it on issues relating to the management of the Company in accordance with our duties under the law, the Articles of Association and the rules of procedure. We also observed the relevant recommendations and suggestions of the German Corporate Governance Code (the Code) at all times. The Supervisory Board was directly involved in all decisions of fundamental importance to the Group. Additionally, we discussed strategic considerations with the Board of Management at regular intervals.

The Board of Management complied with its disclosure obligations, which are set out in the information policy adopted by the Supervisory Board in 2018. The Board of Management provided us with information regularly, promptly and comprehensively both in writing and orally, particularly on all matters of relevance to the Company relating to its strategy, business development and the Company’s planning and position. This also included the risk situation and risk management. In this respect, the Board of Management also informed the Supervisory Board of further improvements to the risk and compliance management system. In addition, the Supervisory Board received information about compliance and other topical issues by the Board of Management on an ongoing basis. We received the documents relevant to our decisions in good time for our meetings. At regular intervals, we also received a detailed report from the Board of Management on the current business position and the forecast for the current year. Any deviations in performance from the plans and targets previously drawn up were explained in detail by the Board of Management, either in person or in writing. Together with the Board of Management we analyzed the reasons for the deviations so as to enable countermeasures to be derived. The Board of Management reported extensively and promptly, particularly on the impacts of the Covid-19 pandemic. It established a crisis management team to deal with this issue. Minutes of the meetings of the crisis management team were provided to the Chairman of the Supervisory Board without delay. The Supervisory Board was also provided with detailed information on the effects of the Covid-19 pandemic and action taken by the Board of Management. At the meetings of the Special Committee on Diesel Engines, the Board of Management presented regular reports on current developments in connection with the diesel issue.

In addition, the Chairman of the Supervisory Board consulted with the Chairman of the Board of Management at regular intervals between meetings to discuss important current issues. Apart from the work to address the diesel issue, these included the Volkswagen Group’s strategy and planning, its business development, and the risk situation and risk management, including integrity and compliance issues in the Volkswagen Group. Within reason, the Chairman of the Supervisory Board discussed Supervisory Board-specific topics with investors and, in consultation with the Board of Management, also discussed non-Supervisory Board-specific topics. The Chairman of the Supervisory Board informed the Supervisory Board of such discussions after they had taken place.

The Supervisory Board held a total of 13 meetings in fiscal year 2020. The average attendance rate was around 90.0%. In addition, resolutions on particularly urgent matters were adopted in writing or using electronic communications media. Particularly the challenges and restrictions resulting from the Covid-19 pandemic necessitated additional flexibility for the meetings of the Supervisory Board in fiscal year 2020. The Covid-19 pandemic also resulted in travel restrictions and presented additional challenges for the Supervisory Board members, who have special responsibilities in business and politics. Nevertheless, all members of the Supervisory Board except for Dr. Al Abdulla attended over half of the meetings of the Supervisory Board and the committees of which they are members. Supervisory Board members who could not attend a meeting were able to engage with the meeting topics using the preparatory documents.