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 Group strategy to integrate development activities across the Group. At the heart of this 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 development alliance plays a major role in driving the Volkswagen Group’s transformation and in helping to reinforce its future viability.
In view of this strategic focus, we concentrated in the reporting year 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 the strategic indicator of CO2 fleet emissions in Europe and the United States to evaluate the effectiveness of our measures to reduce CO2 emissions of our vehicles.
The Volkswagen Group’s new passenger car fleet in the 27 EU member states including Norway and Iceland (EU27+2) emitted an average of 100 g CO2/km in the reporting year according to the statutory basis for calculation. The CO2 data are subject to confirmation within the scope of the official publication by the European Commission. The European Commission tightened the target as of 2025, stipulating a 15% reduction in CO2 compared with 2021. This corresponds to a CO2 target of 95 g CO2/km for the Volkswagen Group’s new passenger car fleet.
For the 2025 to 2027 period, the European Commission introduced a three-year compensation mechanism for the CO2 fleet limits for passenger cars. The Volkswagen Group’s goal is to achieve the CO2 fleet limits in EU27+2 in each year over the three-year period from 2025 to 2027 primarily through its own efforts. Given the persistently challenging and volatile market environment, particularly in the field of e-mobility, achieving the targets remains a major challenge.
CO2 EMISSIONS OF THE VOLKSWAGEN GROUP‘S EUROPEAN (EU27+2) NEW PASSENGER CAR FLEET
in grams per kilometer (WLTP)
In the United States, the emission pool – comprising the Group brands Volkswagen Passenger Cars, Audi, Bentley, Lamborghini and Porsche, plus the Bugatti Rimac joint venture, which is not part of the Group – commits to the two regulations for Greenhouse Gas (GHG) and Corporate Average Fuel Economy (CAFE). Due to a model year – the accounting period used in the USA – differing in length 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) for the passenger car and light commercial vehicle fleets in model year 2025 is 131 g CO2/km (model year 2024: 135 g CO2/km). The statutory target is 110 g CO2/km (model year 2024: 117 g CO2/km). Taking into account the statutory flexibilities for the GHG and CAFE regulations, the Volkswagen Group endeavors to comply with applicable requirements – subject to confirmation by the authorities. The figure given for model year 2025 is also subject to confirmation by the US Environmental Protection Agency (EPA). Achieving the CO2 target of approximately 99 g CO2/km for 2026 represents a major challenge. For 2030 we aim to achieve an electrification rate of our new vehicle fleet that will enable us to independently meet the legal requirements for fleet regulations.
The current administration is reviewing the regulations to determine their fundamental necessity and structure.
CO2 EMISSIONS OF VOLKSWAGEN GROUP PASSENGER CARS AND LIGHT COMMERCIAL VEHICLES UNDER GHG STANDARDS IN THE USA
in grams per kilometer for the model year
Fuel and drivetrain strategy
In view of 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 – regardless 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. As part of our electrification campaign, we want to offer our customers worldwide an increasing range of battery-electric models, from high-volume models to premium vehicles. 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 designing the Scalable Systems Platform (SSP), the successor platform for our future all-electric vehicles. The strategic goals of the SSP are to further reduce variance across all segments by consistently enhancing synergies and thus tapping into considerable savings potential.
In order to offer sustainable, affordable mobility in the future for as many people around the world as possible, our range of drivetrains focuses on electrification. From today’s perspective, conventional combustion engines will still 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. In order to fulfill future emissions standards, it will be necessary to introduce powertrain measures such as significantly more sophisticated exhaust gas purification or increased use of hybridization of drivetrains, as well as vehicle measures such as optimized aerodynamics or reduced rolling resistance. We are working intensively on this in the further development of our product portfolio.
It is important to us to rigorously pursue the modular approach. We are optimizing the number of individual modules so that we can make a broad product portfolio economically viable. For example, we are reducing the number of versions of conventional combustion engines in the Group in the long term as part of our transformation towards e-mobility. This will create capacity for the development and production of new electrified drives.
Connectivity and automated driving
Mobilizing people and goods is a prerequisite for economic growth and social development. But natural resources are dwindling and climate change is advancing. Customers are therefore calling for comprehensive mobility concepts that minimize the environmental impact. Such solutions need to be efficient, sustainable, crisis-proof, customer-oriented and accessible anytime and anywhere.
We are researching and developing such concepts in our Group-wide alliance. In shaping the future of mobility, we are looking not only at the automobile and related services, but at all modes of transport, transport infrastructures and people’s mobility habits. Digital connectivity and automated driving allow for new approaches to solving problems. They can help us contribute to a comprehensive mobility system of the future and advance our industry’s transformation.
Software forms the basis. Software development is one of the target core competencies of the Volkswagen Group as a global automotive tech driver, and is embedded in the TOP 10 program of the Group strategy through the “software architecture” action area. The aim is to develop a sustainable, convenient, connected, safe automotive experience for the customers of our Group brands, with the support of synergistic Group software entity CARIAD.
The Volkswagen Group systematically enhanced its software governance in 2025. As such, CARIAD is taking the lead on developing synergistic core technologies – automated driving, infotainment, cloud and motion – across all Group architectures and software technologies. The aim is to make the development and delivery of software faster and more efficient for the Group brands and to establish an even closer cooperation model between CARIAD and the Group brands. CARIAD’s scalable software can be used in all-electric vehicles as well as in internal combustion engine models and hybrid vehicles. CARIAD’s developers work in innovation centers at sites in Germany, Europe, China and the USA.
In the reporting year, CARIAD supplied new software releases and online updates for vehicles based on new and already existing architectures from the Volkswagen Passenger Cars, Škoda, SEAT/CUPRA, Audi and Porsche brands in all major international markets. Models newly introduced or unveiled in 2025, such as the Škoda Elroq and the Porsche Cayenne Electric, also feature CARIAD software.
The next generation of vehicle software is also designed to pave the way for the autonomous driving functions of the future. The development of autonomous driving is a core element of our Group strategy, with CARIAD responsible for developing partially and highly automated driving functions for the Volkswagen Group’s brands. These applications are to be introduced gradually in new vehicle models at varying performance levels. Volkswagen Commercial Vehicles is responsible specifically for the areas of Mobility as a Service and Transportation as a Service (MaaS/TaaS). Autonomous driving will be linked to new service models, i.e. shared mobility in these areas with robotic shuttles and vans.
Automated and autonomous drive technologies are both being developed with development partners.
Pooling strengths with strategic alliances
We are pursuing the clear strategy of transforming our core business activities, while at the same time expanding the mobility solutions business area. To achieve these goals, we are reinforcing our innovative strength through a global structure. The Volkswagen Group Innovation unit combines our technological activities at seven international locations, where sustainable solutions for urban and interurban mobility systems are developed and regularly transferred to our Group brands. In this way, we are creating an agile innovation structure that allows us to initiate projects quickly with international partners in the areas of digitalization, sustainability and e-mobility. Growth in the mobility sector is increasingly generated through regional innovation activities, which is why we concentrate our venture capital investments and partnerships specifically within the Group’s global innovation ecosystem. This gives us a better understanding of the regional needs of customers, to adjust our product range and to establish competitive cost structures. Engagement activities are selected centrally so as to maximize the value for the Group and its brands.
We have an alliance with the Ford Motor Company for light commercial vehicles and electrification. This has led to the development of three vehicles, which are available on the market. In addition, Ford uses the MEB developed by Volkswagen for two electric volume models. The aim of the cooperation is to place both Volkswagen and Ford in a position to improve their competitiveness, tailor their products to better meet the needs of customers worldwide and at the same time leverage synergies related to cost and investments.
To design the framework conditions for the approval and introduction of our own self-driving system, we are actively involved in public projects. The experience we are gathering here benefits the Group brands and thus our customers.
The software subsidiary CARIAD is responsible for developing automated driving functions for private mobility throughout the Group. In the Automated Driving Alliance, CARIAD and Robert Bosch GmbH are working to make partially and highly automated driving suitable for the volume segment as well. In 2025, the alliance made targeted improvements to its software stack for automated driving functions at Levels 2 and 3 through the use of AI. These are expected to lead to more powerful, smart driver assistance systems that act like natural persons at the wheel. The software has already been deployed in a test fleet and is being continuously trained and refined.
CARIAD also uses local partnerships in the Chinese market to further consolidate development expertise. CARIAD China, Volkswagen Group (China) Technology Company and XPeng are working together to develop the new zonal electronic architecture, China Electrical Architecture (CEA), for the Chinese market.
In the Carizon joint venture, CARIAD is overseeing the development of highly automated driving functions together with its local partner Horizon Robotics.
CARIAD is also committed to open collaboration in the global developer community to create automotive software more efficiently and promote innovation, for example as a platinum member of the Zephyr Project, a member of the Linux Foundation, and a strategic member of the Software Defined Vehicle working group run by the Eclipse Foundation open-source community.
Rivian and Volkswagen Group Technologies, the joint venture established by Volkswagen and US electric vehicle manufacturer Rivian, commenced operations in 2024. The two partners hold equal shares in the joint venture, which operates as an independent company. The aim of the partnership is to develop next generation software-defined vehicle (SDV) architectures to be used in future vehicles of both companies. The joint venture builds on Rivian’s existing software and electrical architecture to facilitate the joint development of best-in-class architectures and software for the SDVs of both partners.
Our employees’ patents
In fiscal year 2025, we filed 7,915 (6,740) patent applications worldwide for employee inventions, the majority of them in Germany. The trend continued throughout 2025 that an ever-increasing share of these patents were for important cutting-edge fields, such as driver assistance systems, automated driving, digitalization and automation, electromobility (including battery technology), and artificial intelligence.
As of December 31, 2025, our Research and Development departments – including the equity-accounted Chinese joint ventures – employed 62,954 people (+0.3%) Group-wide, corresponding to 9.5% of the total workforce.