2. Cost of sales

Cost of sales includes interest expenses of €9,307 million (previous year: €10,485 million) attributable to the financial services business.

Cost of sales also includes impairment losses on intangible assets (primarily development costs), property, plant and equipment (primarily technical equipment and machinery, and land and buildings), lease assets and investment property in the amount of €3,577 million (previous year: €1,558 million); of this amount, €2,551 million (previous year: €585 million) is attributable to intangible assets and property, plant and equipment. The increase was due, among other things, to the impairment loss on capitalized project costs in connection with the realignment of Porsche’s product strategy. Further disclosures can be found in the “Key events” section. The impairment losses on lease assets and investment property in the amount of €1,025 million (previous year: €973 million) are predominantly attributable to the Financial Services segment. They are based on constantly updated internal and external information that is factored into the forecast residual values of the vehicles. €97 million (previous year: €194 million) of this figure is reported in current lease assets. From fiscal year 2025 onward, disclosures of impairment losses are classified by functional area. The prior-year figures have been adjusted accordingly.

In fiscal year 2025, the Volkswagen Group’s research and development costs recognized in profit or loss amounted to €18,396 million (previous year: €17,963 million).

Government grants related to income amounted to €279 million in the fiscal year (previous year: €324 million) and were generally allocated to the functional areas.