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00:00What is Škoda all about? Modern and solid. This modern solid, you can really translate
00:05into our design language the attributes. You can see them, you can feel them.
00:17Well, Klaus, firstly, thank you very much for letting me be your chauffeur in London today,
00:22beautiful day in London. What is this model we're in?
00:24Well, it's the Enyaq that we've been successfully selling globally, but very, very successful here
00:32in the UK. We just gave it a little bit of a facelift with the new brand design, the modern
00:38solid design with a tech deck in the front. We just became number two in Europe with our battery
00:42electric vehicles, and we only have the Enyaq, Enyaq Coupé and the Elrock. And we're actually
00:46putting a big footprint into the battery electric vehicle market. And the Enyaq, of course, is a
00:52big player in that. The future is electric, so this is why it's great that we have the
00:56Enyaq being in such a successful spot in the moment.
01:00Why is the future electric?
01:01Oh, because if you take efficiency of energy, you convert into mobility, nothing beats electric
01:08engines. It could be electrified drivetrains, like we have the plug-in hybrids, a bridging
01:13technology with the current Kodiak and the Superb.
01:17And what's the pitch to my neighbors? I always reference Martin and Gull, who live next door
01:23to me. If they come to me and say, why should we buy an electric car? What's your pitch?
01:27Why should they buy an electric car?
01:28We all know about electric machines, electric motors and electric systems that need less
01:34maintenance. It's a quiet ride. It's better for the environment. But I always tell people
01:39who are interested in better electric vehicles, it also depends on their driving habits.
01:42So if you're a regular person going long distance and your mind breaks, you want to get somewhere
01:50fast without taking breaks on a regular basis. You might want to look into a plug-in hybrid.
01:55We're not religious about pushing everybody into the battery electric vehicle direction.
02:00One of my favorite sentences when I explain the emotional motives and rational motives of
02:05people buying cars, they always buy cars for the least probable cause.
02:09So they buy a Kombi because last year at IKEA, they had this big box and had to then fight
02:18with each other to build shelves. But they buy for that. They say, we need a Kombi or we
02:25need an all-wheel drive or we need a convertible. I need a long distance car. You can easily go
02:30long distance with better electric vehicles, but you might have to change your habits. And this
02:34is what you need to be open for.
02:35I think in the UK, the average mileage that somebody drives every year is 7,000 miles a
02:40year these days, which is way, way less than it used to be.
02:43Why is there this disconnect? Because once people experience an electric car, they do like
02:48it. And once they live with an electric car, they realize that they can live with an electric
02:53car. Not many people go back, do they? But why is it such a struggle to get people into
02:58them in the first place? Is it because of all the bad stories that are untrue?
03:01Yeah. There are stories that are true and not true because you have to change your behavior.
03:06You have to change your preferences. You have to change maybe even your ideology with some
03:12people. And change takes time and change takes trust. You have to create the right prerequisites,
03:20charging stations, infrastructure, electricity prices. There's so many factors that come to play.
03:25So it's a lot easier to just stay where you are. You have your petrol station, you go there,
03:30you fill up your tank. If it's a diesel car, you know, you're ready for 400, 500 miles easily. And
03:37people enjoy that kind of psychological safety. And they feel jeopardized with an electric car not
03:44to have that freedom. Rationally, we all know it's irrelevant.
03:48Yeah. Has the fact that EVs haven't taken off at the speed that everybody was hoping and expecting
03:54them to take off, how has that affected your business? I mean, what a business needs is
03:59certainty all the time, doesn't there? Have you had to sort of quick U-turn on your strategy and
04:04change your product strategy to react to that? Unfortunately, in the car industry,
04:08there's no quick U-turn when you talk about development cycles. You know, we need three
04:13to four years to develop a new car. For facelift, we need two to three years. And this is fast.
04:19Yeah. So you can't make quick turns. You have to anticipate and you have to keep all avenues open.
04:24And this is what we did at SCADA. We said that, you know, at the end of the day, consumers make
04:28choices and we are there to provide choice. This is why, for example, we have in our entry level,
04:35we have the Fabia, the Kamik and the Scala. And we just extended their life cycle from an original
04:43end of life cycle in 27 to now beyond 30. Because we just see consumers still demanding
04:49efficient, small, affordable cars like the Fabia, Kamik and Scala. And so we need to keep those
04:58avenues open. At the same time, we need to manage that transformation that we are all
05:03asked and responsible for in order to cut down CO2 emissions.
05:06Is it harder for a Skoda? I always say it's hard to make a great small car. And it's much easier to
05:12make a great big car because the margins are greater. But your business is based around affordable,
05:18somewhat smaller cars. You know, you've said about the 7S, the seven seats SUV, that's going to be your
05:23biggest car. Yes. The rest of the range, the belly of your range is in something much smaller. Yeah.
05:28Does that make it harder for a Skoda? I think we have value for money. I think this is really
05:33one of our mantras that we will always keep. And yes, the margins are getting smaller, the smaller
05:40the car is. Now, with the challenges that we have with battery electric technology, especially the
05:46battery itself, representing 40 percent of the cost of a bath, this is where we struggle. This is where
05:54we need to fight. I mean, we were the first ones in the industry to offer price parity between the
06:02LROC and its sibling, the CARROC. So you could choose for the same price either a conventional
06:09drivetrain or the battery electric vehicle, but not at the same margin. I was going to say, that's
06:15going to hurt you as a business, hasn't it? It doesn't. I mean, our cars always have to make money, but of
06:20course, the margins on combustion cars, combustion engine cars are still higher. What's your gut instinct
06:28in terms of the European Union? There's a lot of rumour going around that the 2035 date for the ban
06:35of internal combustion engine new car sales may be pushed back. Do you think it will change? And what's
06:41your view on it if it does? Yeah. You know, I don't have such a big problem with the 2035 deadline. What I have
06:49a problem with is that in 2035, we're going to have 290 million cars in the car park of Europe. Out of the
06:58290 million cars, if all goes according to plan with battery electric vehicle sales that are ambitious,
07:05one third is battery electric vehicles. So round about 200 million cars are conventional combustion
07:10cars. Still a lot of carbon coming out of the year. Why wouldn't we open up the avenues now
07:15to also, you know, let engineers find solutions for CO2 emissions we need to cut also for conventional
07:24engine technology? And we're still 10 years away. There's a lot of new cars to be sold between now
07:30and 2035. Does that mean that you are continuing to develop petrol engines, diesel engines, hybrid engines,
07:38or does there come a time when you think, look, we just gonna have to stop that? There will be a time
07:42when we will have to stop it if there is a dead end. But on the other side, you know, as you say,
07:49it's a 10 year window. We don't need 10 years in order to make those decisions, we can make them
07:55within a couple of months, a couple of years. But generally speaking, yes, we still further develop
08:01our combustion engines, we still make them more efficient, we still look for cutting edge technology,
08:06we, you know, looking at our drive train with a plug-in hybrid. I mean, that's top notch technology,
08:12you know, you get up to 130 kilometers e-range. The CO2 emission, according to WLTP is less than 10 gram.
08:21Of course, that requires charging the plug-in hybrid to fully utilize its electric potential,
08:27which then causes zero emissions from a CO2 point of view. But, you know, now it's actually worth
08:35charging because 120 or let's say more than 100 kilometers e-range, you know, that that's where
08:42it makes sense to use our technology, which is top notch with 50 kilowatt, you know, charging power,
08:50so fast charging, to then, you know, do 90% of your driving in electric mode. And we're going to
08:58further invest and further develop those type of technologies. What part do sustainable fuels,
09:04e-fuels play, do you think? I mean, is it just shifting the problem from one area to another one,
09:09and they're expensive? You know, there's certain use cases, not just in the car industry, you know,
09:15the heavy trucks, ships, aircrafts, you know, if, you know, the energy density in a battery is still
09:23relative to its weight, not the right technology for aircrafts, for example. So we will need some
09:31form of CO2 minimized for those fuels, you know, in order to then fuel aircrafts. We will need that
09:40going forward as well. So why not open up the avenues also for the car industry and that. Now,
09:47many people say, you know, by definition, anything with a combustion engine creates CO2, but you take
09:53the CO2 out of the atmosphere when you create the fuel, the e-fuel. So it is a zero, almost zero CO2
10:02footprint you can use despite the fact that you have a combustion engine and driven by, you know,
10:10conventional technology. Do you think that with hindsight, we as an industry, we're talking
10:15about here and as the media, we got very excited. Do we go too fast, too soon with electric cars?
10:20The biggest impulse and the biggest guardrail for our way forward was, of course, regulation. In 2019,
10:30CO2 compliance was defined and also the way to get compliant. And the compliance that you have to
10:37adhere to is mainly driven by the selling battery electric vehicles. Now, the adaptation and the
10:45customer sentiment is not where it has to be in order to then be on that trajectory of battery electric
10:54vehicle sales. And this is where we were too ambitious, but not as car manufacturers as a society,
11:01not as an industry, but, you know, everybody, you know, we're in many countries too slow to create
11:07the charging infrastructure, energy prices are too high. And, you know, there are psychological barriers
11:14with people that say, you know, I don't want to change my behavior. You know, I feel totally fine with
11:19my car, that conventional technology. So we have to help people understand with bridging technology,
11:26like mild hybrids, hybrids, plug-in hybrids, and then battery electric vehicles. But we have to,
11:32at the end, respect that buying decisions are made by individuals with their individual preference.
11:38You always seem to have hedged quite nicely. You know, you've had a good range of, as you say,
11:42internal capacity and energy cars with various hybrid technologies. You didn't seem to go all in
11:48as quickly as others. Is that fair? It's fair because we are convinced that you have to keep the
11:53avenues open. And it costs a little bit of money to have such a big portfolio.
11:58But at the end of the day, you much rather cater for consumers' preferences than, you know, for
12:04dictating what you think is right. Because rationally, you know, the end game is electric,
12:11either electrified or electric. So we are all aware of that. And it would be wonderful if we could
12:16flip a switch and everybody would be totally happy with one technology. But that's not the reality.
12:22It's not going to happen, is it? Let's talk about the models that still sell brilliantly,
12:26people still love. Fabia, Scala, Kamiq, Kodiak, Karok. Those cars are just going to have to be
12:33continually developed now. There's no point in investing in whole new platforms or new technologies
12:39for those cars. Is that the case? Just constant development? Yes, you're right. I mean, you know,
12:44that the way we have to manage our investments and, you know, in the car industry into platforms
12:51and hats to come up with derivatives of individual models, this is big investment. So you have to be
12:57careful not to over invest and to keep scale for your individual derivatives. With our platforms that
13:05the conventional technology, including plug-in hybrids or mild hybrids,
13:09sit on, I think we are in a very good spot. The battery electric vehicle platforms,
13:15you know, there will be more evolution in those. We have the current platform, the MEB,
13:19that will be followed by the next platform that will then also enable autonomous drive,
13:25more efficient technology in terms of battery and electric machine.
13:30Let's talk about your EV range then. We're in the Enyaq, which is a lovely thing. It's very posh. We'll
13:36come back to that in a minute. But next up is the Epic, which is a smaller vehicle, 25,000 euros. So I'm
13:45hoping that would equate to around 22,000, 23,000 pounds. When will we be able to buy that?
13:52Are we going to lift the curtain by the end of this year to really reveal more details about the car?
13:58And at the other end of your EV range, you showed the 7S, the Vision 7S concept a while ago. That's
14:06still on track as a vehicle after Epic, I presume?
14:10Yeah, that's going to be second half of 2026. It's going to be, you know, a comparable size of the Kodiak,
14:18but purely battery electric vehicle with the most modern drive train we have on battery electric
14:24mode. Originally, the car you know was a concept car, but we managed to really keep a lot of brilliant
14:31ideas, design ideas, design language in the production car as well.
14:37That was the first vision of modern solid, wasn't it?
14:39It was.
14:40Which it's spoken about a lot. How do you describe what modern solid is?
14:46The best way to understand it is just look at the car, the Elrog or now the Enyaq with the new
14:52phase. And, you know, the Epic will take that one step further. And the further step will be the 7S.
15:02We're not revealing the name yet of that car. So what does it mean? It means, you know, we initially
15:09looked at our design and, you know, defined what is Skoda all about. And we took two attributes,
15:16modern and solid. And this modern solid, you can really translate into our design language,
15:23the attributes, you can see them, you can feel them.
15:26So 7S, whatever that might be called, obviously we'll have to begin with an E and end in a Q,
15:31as all your EVs do. Good luck with that. Running out of words there. Also Octavia, you mentioned Octavia,
15:40the biggest selling vehicle, and you've committed to that going fully EV at some stage.
15:46Let's not even go there with a name. But as an estate car, estates are very big and very important
15:52for Skoda. Oh, totally. I mean, you know, it all depends what the market does. You know, at the
15:59moment, the interesting trend that you see all over Europe, actually globally, is everybody goes SUV.
16:05But we have such a strong leg on, you know, the conventional classic shapes of limousines or combis
16:14that we're going to stick to that. And, you know, we're selling more than 200,000 cars, new cars per
16:20year, just with the Octavia in both body shapes, the hatch and the combi.
16:25And so let's see what we what we come up with. It also depends on the shape. You know, you can also
16:33imagine a crossover between a hatch and a combi or estate, as you call it. So let me surprise you.
16:43Okay, I like to be surprised. What sells more at the moment? Is it the combi or the limousine?
16:49Yeah, the combi. The limousine is interesting because, you know, there's certain markets that
16:54insist on that kind of shape, like Turkey. The market is becoming very crowded these days. You're
17:00pushing with new models. So two models that don't exist currently in the Epic and the 7S,
17:07whatever we end up calling the big SUV. How is Skoda going to continue to grow,
17:13particularly in the European market where the market isn't getting any bigger,
17:17but the challenges, particularly from the Far East and others as well, are getting greater? You
17:22know, there are so many more Chinese brands in the UK and Europe that weren't there five years ago.
17:28They all want a slice of your pie. How are you going to continue to grow?
17:31By just being better, by, you know, facing competition and delivering more value to customers,
17:38be it with a car, be it with a cost, value for money, but also in the buying process and service
17:45process. You know, let's not forget many of the new entrants have totally underestimated the value of
17:52dealer partners. And I'm totally convinced myself, also from my own experience in other industries,
17:58you know, having somebody who takes care of you. I think our growth driver for the years to come will
18:04be epic or can be epic. That car is being produced in Spain, not in our factories in the Czech Republic
18:11that are currently fully utilized. India is a real opportunity for you guys. You guys seem to be
18:17playing in the Indian market and producing in the Indian market. Not everybody is yet.
18:22Yeah. You know, if you, if you look at our footprint globally at the moment,
18:26more than 80% of our sales is being now generated in Europe and the rest outside Europe.
18:33It's quite an exposure, isn't it? Which is an exposure you want to hedge. And that's why,
18:38you know, you want to look at a market that has got growth potential, but also size. And this is
18:44certainly is India. Now in India, we have two plants, two factories. We have four hats, four derivatives,
18:53two for Skoda and two for VW that we produce there. And we just have added a third one. So overall fifth,
19:01which is the Kailag. It's a so-called sub four meter car. The sub four meter car in India accounts
19:07for more than 50% of the overall market. And we have not had any car in that segment, which is very much
19:15preferred because of its tax benefits that you have if you're less than four meters long with your car.
19:20And their car is very successful. We just doubled our sales volume in the first four months of this
19:26year compared to last year. Where does technology sit in Skoda's world where it's been famous for
19:32its simply clever phrase and those wonderful features that your customers love and other people love,
19:37umbrellas in the doors, ice scrapers and somewhere handy to a net to put your charging cable and things
19:44like that. How does simple and technology go together? You know, you have to differentiate between
19:49legal requirements, which are now clearly set by EU law that if you exceed the speed limit,
19:56you're going to get a beep. Now you can turn off that beep, but it has to be a conscious decision.
20:04And there's even a regulation that clearly defines on how you can turn it off. This is what we can do as
20:11a manufacturer. We have to comply with the law, even though we have complaints from customers that say,
20:16you know, I don't need all this, but the law is the law. Yeah. And what about this, this stuff that
20:21I see in front of me, this screen, you've adapted it, but it doesn't have the best reputation within
20:27your group. How, how can you make this simpler to use? This is one of our main tasks to, to simplify and
20:34not to call it, to make it more complicated, to make it intuitive. And actually when we are in our
20:41development discussions, one of my questions is always, you know, how can we take out visual noise?
20:48You know, what, what is there that people do not really need? It's distracting. It's distracting.
20:53It has to be clear cut. And we, I think we've come a long way with our software. We were struggling
20:59initially. The good thing about software is, you know, most of the time you can update it. And this is
21:05what we've been doing. And, and very recently, you know, with a 5.4 version, we have a stable system
21:11with, you know, hardly any glitches we're very proud of. And, and our engineers have done a very
21:18good job correcting our initial path. But it's a, you know, it's, it's something you, you never stop.
21:25You must never get tired of trying to optimize, you know, the, the use of the front end of, of our
21:32software. If I may, you know, talk about the MQB, like the superb and the, the Kodiak, we have the
21:37so-called smart dials. You have smart dials. And I love a dial, a switch, a knob, something that's
21:43physical. And I think this is where we need to go. We need toggles. We need dials. We need something
21:48that you, you know, you feel, uh, and something, uh, you know, that does not distract. Yes. We've spoken
21:55a lot about technology, about the cars. Talk to me about the brand and how you managed the, the Skoda
22:01brand. Cause I was talking to a friend of mine and he said to me, Skoda. Yeah. That's some,
22:07they're like VWs. They're as good as VWs, but cheaper. Are you, are you happy with that? No,
22:14that's not, uh, that's not the story we want to convey, uh, because actually from a technology
22:19point of view, uh, that's not, uh, that's not the case anymore. Um, I think we're good value for
22:25money. If certainly like many other brands, including VW, I think we have an identity that goes beyond of
22:31what Skoda was a couple of years ago, uh, in terms of our design language, uh, you know,
22:36and it started with rebranding, uh, three years ago, you know, we totally changed, uh, the, uh, the logo
22:44on, on the car, you know, the, uh, it just says Skoda, there's no winged logo. Exactly. So we, we modernized
22:51everything to make it more timeless, more pleasing, um, uh, more classy in a way. At the same time,
22:58you know, keeping our recipe for success to deliver a brilliant value for money with things
23:04that surprise you and make you, your life, you know, make, make, make your life smarter.
23:09It's difficult within the family though, isn't it? So I'm, I'm sitting in this car, you know,
23:14I've been lucky enough over the past few days to be judging German car of the year. And one of the
23:18things that I'm going to be very honest that disappointed me was the quality of the Audi products
23:23I was driving from, from the keys, some of the plastics, this Enyaq is in many ways better
23:29quality than an Audi. Does that, does that get you into trouble within the group and saying,
23:33just Klaus, calm things down, put a few more cheap plastics in. You're, uh, you're in danger
23:38of people wanting Skodas more than they want Audis. Yeah. You know, I've, I mean, you know,
23:42I'm not in the position to judge, uh, about my valued colleagues from Audi, but, but, you know,
23:47our opponent is not Audi, our opponent are all the brands outside the VW group. And that's where
23:53the expectations start, you know, and if you take them, uh, coming from Korea, Japan, or in future
23:58from China, uh, this is where we need to be better. Uh, uh, not internally, we need to be better than
24:05everybody coming from the outside. And I'm telling you everything you see in China coming from China
24:10to Europe, uh, this is where we need to anticipate and be prepared. Uh, and, uh, the way they built cars,
24:17the quality they put into the cars, the speed at which they change, the speed, uh, the elevation,
24:22um, you know, this is, this is where competition will happen going forward, not within the group.
24:28So Skoda has to be the very best that Skoda can be against its rivals. I couldn't have put it better.
24:33There we go. Now Skoda has got a history of sport. I drove the Elrock VRS yesterday, uh,
24:40which looked fabulous in the, in the green and a great car to drive. What's, what's the future of
24:45sport and Skoda rallying? Is that, uh, is that going to be on the agenda?
24:49Yeah, it is on the agenda. I think, you know, our history is 130 years. Uh, and, and I think,
24:56you know, rally sport is something, uh, it's exciting. Uh, it's affordable. Uh, it's not formula one,
25:05this is not our destination, but it's something where our engineers can, can see, you know,
25:10their brilliance can show their brilliance, uh, and, and, and see, you know, whether, you know,
25:14we, we are competitive also in, in that high performance, uh, environment. And does electrification
25:21play a role in that? Yeah. Funny enough, you know, we have, uh, asked our, uh, motorsport team to
25:28produce, uh, an Enyaq RS, uh, but, uh, uh, an RS that is truly RS. So they took 300 kilos out of the car.
25:37They enhanced its, uh, drivetrain, enhanced its chassis. They replaced the skin basically,
25:43uh, with, uh, fiber, uh, materials. Um, and, uh, I drove the car, uh, on special tires, uh,
25:51in our testing ground. Uh, it's mind blowing. Good fun. Yeah, it's good fun. It's good fun.
25:56So, you know, we're testing that as well. There's no racing series that is currently
26:01open for us to enter, but it's nice to play around with that, with the idea.
26:05Now, coming back to the RS, you know, RS is, is, uh, is emotionally driven,
26:10but performance driven at the same time. Uh, uh, it's about 15% of the cars we sell
26:15that offer an RS variant. Uh, and, uh, you know, this is how far we stretch our pricing. Um,
26:22and with the Elrog RS that, uh, you just drove, uh, you know, the car of 5.4 seconds, zero to 60,
26:29uh, uh, or zero to a hundred K, uh, is quite something. Um, uh, and it's fun.
26:35And that's, that's quicker than the Lamborghini Countach when it was first, uh, first released.
26:40I, I never compared it, uh, trust me. It is, it is. Who would have ever thought that?
26:45Yeah, true. Now talking about sport, I thought we were going to be heading,
26:49we're heading towards Chelsea, but, uh, I thought we were going to be heading to the football club
26:53because you've got a, uh, a relationship with the, um, the women's team. I understand here in the UK,
26:58sponsoring the women's team. That's an important thing for you guys.
27:01Yeah. You know, we, we're looking at, uh, we're looking for platforms where we can, uh, you know,
27:08first of all, push the values, uh, be it on diversity, on equality, uh, and, uh, you know,
27:16and I think women's football is, is exciting. Uh, uh, it's underpaid, uh, and it's, it's something that,
27:24you know, we also, uh, intrinsically find, uh, we, we, we have to show, um, some commitment,
27:32uh, but this is driven by our UK colleagues. Uh, this is not, uh, uh, Skoda headquarters
27:38initiative, uh, because our central sponsoring strategy is, is different. We, we are, we basically
27:44sponsor two big sports events. One is Tour de France and the other one is, uh, ice hockey,
27:50uh, the world championship. We're nearly there. So I have two final questions that I, uh, I have to
27:54ask you now, this is a setup that's a little bit like carpool karaoke. Yeah. I'm not going to ask you to
28:00sing, but if you're in the car and I wasn't here and you just needed to up your spirits,
28:05what would you put on the, uh, on the sound systems? And you, you have pretty decent sound
28:09systems in your, in your cars as well. Um, what would you be listening to?
28:12Oh, fascinating. Uh, don't tell me that's the toughest question I've asked all day.
28:18You know, the funny thing is, uh, I would probably listen to Queen, uh, I, you know,
28:23Bohemian Rhapsody or something. I absolutely love it. Uh, I wouldn't play, we are the champions
28:28because that's too much in your face. Uh, but, uh, Bohemian Rhapsody as an example, you know,
28:33something that is probably, uh, closest to, uh, a Mozart, uh, kind of, uh, uh, genius rock opera,
28:41isn't it? Uh, it's wonderful. I love that. Uh, this puts me in, in good spirits, any classical music
28:46as well. Um, in terms of bands, uh, nothing contemporary, nothing techno, uh, Queens, Queens,
28:53Queens, good because Thomas Schaefer, uh, was in the car and he also said Queen.
28:58It did. Yeah. So you're in good company there. We're brothers in mind. Exactly. His,
29:02his choice of, uh, of track was under pressure, which I, uh, which could have been, uh, taken
29:07in certain ways, but, uh, but Queen is a good choice. So, okay, we'll, we'll stick with Queen.
29:11The final question is I have spent my career rating your cars. Um, and I, I rate this and particularly
29:17the Elrock pretty highly. How would you rate my driving? Your driving is splendid.
29:23I never felt more comfortable with anybody driving me around. No, perfectly fine. I mean,
29:30uh, you got to give me a mark out of 10. Except you get a 10, uh, especially, you know,
29:35in this difficult environment where you, all you guys drive on the wrong side of the road.
29:42Yeah. We can't say we drive on the right side of the road because clearly it's, it's the left.
29:45Exactly. But Klaus, thank you. I really appreciate your time. It's always a pleasure.
29:50Steve, thank you. No, same here. Thank you very much. Thank you.
29:52Steve, thank you.
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