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Executives

Alexander Machowetz – Media Relations

Professor Siegfried Russwurm – Member, Siemens Board and Chief Executive Officer, Siemens Industry Sector

Stefan Jacoby – President and Chief Executive Officer, Volvo Car Corporation

Siemens AG (SI) Siemens and Volvo Car Corporation Joint Press Conference Call August 31, 2011 7:00 AM ET

Alexander Machowetz – Media Relations

Good afternoon, ladies and gentlemen. I would like to welcome you very quarterly here in Munich and just the best regards from Munich. Welcome to this press conference which is being broadcast live on the Internet. As you have seen in the press information, this press conference is held jointly together with our future partner, Volvo Car Corporation.

I would like to welcome the speakers, Professor Siegfried Russwurm, Member of the Siemens Board and CEO of Siemens Industry Sector and Stefan Jacoby, President and CEO of Volvo Car Corporation.

Following the presentations, we will have a Q&A session, where in addition to the two CEOs, the experts from Siemens and Volvo Car Corporation who are present here will also be included. I would like to ask all of you to please switch off your cell phones during the press conference and for the photographers, please do not use a flash during the press conference. We will have later on have the possibility for pictures. And I’d now like to give the floor to Professor Dr. Russwurm.

Professor Siegfried Russwurm – Member, Siemens Board and Chief Executive Officer, Siemens Industry Sector

Thank you very much, Mr. Machowetz. Ladies and gentlemen, Mr. Jacoby, our dear partner from Volvo Car Corporation, representatives of the press in Munich and around the world, I’d like to welcome you here at Siemens forum for this joint press conference of Siemens and Volvo Car Corporation.

The fact that Siemens is cooperating with renowned companies is something that you probably expect, because we at Siemens are not car manufacturers and we do not want to become one as opposed to some of the guests that are out there, but the fact that we are announcing the partnership with Volvo is something that might have surprised some of you.

The signature on our agreement is still wet although in the field of production, automation, we have been cooperating with Volvo very closely for a number of years already. We are familiar with them. We know Volvo Cars from a lot of projects as a reliable and first of all most a fast and pragmatic company and that’s why I am particularly be happy that the CEO of our future partner, Stefan Jacoby, has followed this invitation to participate in a press conference prior to the International Automobile Association.

Mr. Jacoby is now going to explain a little bit more about the car side of the Electric Mobility side. Stage is all yours.

Stefan Jacoby – President and Chief Executive Officer, Volvo Car Corporation

Thank you very much, Siemens. Thank you very much, Professor Russwurm for this nice and kind introduction.

Ladies and gentlemen when talking about the future of mobility of vehicles with electric drive, nowadays you can easily get the impression that this would be something entirely new, but this is not really the case. Looking at the books you can see that we already had electric vehicles more than one century ago. As early as 1897 there was an entire fleet of electric vehicles, electric taxi cabs in New York. And in 1902, the Woods motor company presented its feet on Chicago, an electric vehicle with a range of 30 kilometers and a maximum speed of 20 kilometers per hour for a very competitive price of $2000.

Another 14 years later, Woods also launched a hybrid model with a combustion engine and electric motor. And indeed that was a very promising beginning, but then there were two things that turned the entire situation around, on the one hand some enthusiastic people in Texas wearing cowboy hats found oil and prompted with lot of state subsidies from the Texas Soil.

And secondly, Henry Ford started the mass production of cost efficient automobiles with a combustion engine in Detroit. You might remember the words of a old wise Turkey Indian once said, the success of a rain dance depends primarily on timing. And looking back we can see today that the right timing was missing for the electric vehicle at that time. A lot of things would have gone entirely differently, the development would have been a different one.

Ladies and gentlemen, I am very happy to be here today and I am also very happy that I have brought a very competent team to Munich. On the one hand, the Head of our development department, Dr. Peter Mertens, the Executive Vice President of Volvo Cars; Lennart Stegland, Vice President for Special Vehicles, who is the Head of Development for the project C30 electric.

Ladies and gentlemen, today our society of mobility is on the verge of a new path towards sustainable development, the dependency from crude oil will have to be stopped and climate change will have to be countered with good products at the appropriate measures. We in the automotive industry are part of the problem and we will make our contribution when it comes to solving this problem. It is now the time to find long-term strategies and alternatives for this problem and launching them and making them sustainable.

Looking at the history of motor vehicle development, electric vehicle is now facing a come back and it will start a new chapter in the history of automobiles. We will also have to recognize and remain realistic that the transition to a CO2 free mobility will take its’ time, probably more time than a lot of politicians believe in lot of countries, because mobility needs to be affordable for our customers and our customers demand the respective confident functionality in automobile.

As Professor Russwurm already stated in the beginning, we are not among the biggest automotive companies, but nonetheless this prices with the unique opportunity of being different at Volvo. We are a fast moving company and one thing is very important for all of the developments that we are launching at Volvo mainly that we are designing around people. Particularly when we are designing cars, we like people and this has been the case since 1927 when the company was founded and our first car Volvo ÖV 4, this has already being parcel of all our strategy. Volvo represents robustness and safety for people and for the environment. We analyze the needs of people. We are listening to the customers to the people and we then build an automobile for these very people.

We clearly recognized that more and more customers around the world not just in Europe, not just in Germany, one to have a low emission vehicle with less CO2 emissions. But looking forward ecologically sustainable mobility does not mean that our customers are willing to make a big trader when it comes to enjoying the ride and enjoying the fact of owning a luxury vehicle, why should they. It is our objective to offer mobility to our customers and offer them vehicles that are the key to really enjoying driving a car. And we do not lose the fact out of site that we should be doing this in a responsible way.

We have set ourselves the target that until the change of the decade 20-20 that no people should die in a Volvo in the accident – in an automotive accident. But we’ve also said ourselves to target that in 10 years we want to try towards 00 emissions and we want to create a platform for a CO2 free mobility without any emissions in a comprehensive approach. It’s about making today’s drives more efficient and working towards alternative concepts. We already have seven diesel engines in our range with CO2 emissions that are below 120 grams per kilometers, three of them are below 100 grams per kilometer.

At the same time, we are developing engines for alternative fuels. Volvo has a very broad range of bio-ethanol models and gas powered models. But the long-term direction means that we are developing towards the electric vehicle and towards hybrid models with different degrees of electrification. And this is one important step for the transport industry to curb climate change and we being a responsible brand want to set a signal we want to be a pioneer.

Next year, we will launch the Volvo V60 plug-in-hybrid. For me as automotive person, this is the continual combination of an electric engine and a very efficient diesel engine and Volvo usually looks like what people really want and here in this case it’s the customer who can really choose whether he wants to drive in the electric mode and then he has a range of 50 kilometers with these vehicle and this means that about 70% of all of the commuters in Europe can take this car to go to work and comeback and then reach out their car in the evening and one it’s for a daily use. They can use this vehicle in the electric mode, but should they choose to go from their rural areas of residential to the city, they can use the hybrid mode first and when they enter the city they can switch to electric mode and if they want to go from here to Munich, from Munich to Hamburg via the autobahn, they can use 640 Newton meters and more than 285 horsepower and enjoy the entire pleasure of a Volvo on the German autobahn.

As early as this year where we start the series production of a small series of the Volvo C30 electric vehicle, we have already started the car has been fully developed and we’ll now enter industrial production. What’s important for Volvo is that we will not have a specific electric vehicle manufacturing side. We want to have electric cars in our already existing plans. This is a technical challenge for our engineers and our manufacturing experts, but this is our claim our demand we want to have electric mobility in an economically efficient way. The C30 electric car is a highly advanced vehicle. It is well-equipped, it’s comfortable, its sporty and safe as our all of the Volvos with a classic internal combustion engine. Craft just show that the Volvo C30 electric is also able to get five stars in the Euro and (Cub) rating. This is our objective. There will be no trade-offs, when it comes to safety in all electric vehicles will have five stars. This vehicle the C30 Electric will provide a maximum range of 150 kilometers per battery with zero CO2 emissions.

In May of this year, the Volvo C30 Electric has already proven its environmental competence, when it participated in the 130 kilometer race at the Michelin Challenge Bibendum and it won the gold medal. And there is also positive signal from the side of the markets; we are very positive and optimistic that this trend will continue and for this very reason, we are now preparing the next step.

We will soon present our highly flexible, scalable Volvo platform architecture. I do not yet want to go into too much detail. Please visit the Volvo booth at the International Automobile Exhibition. On the press days you are cordially invited. Our experts will explain what this means. But with this new vehicle generation, we will make sure that all electrification degrees and ranges will be taken into consideration throughout our entire portfolio from prototypes and small series and now series production.

This will all provide us with a great opportunity, although it is also big challenge. Success requires cooperation with strong partner and with the right know-how, with the right skills and with the right entrepreneurial attitude and for this very reason, we are entering into a strategic partnership with Siemens. This partnership guarantees top quality competitiveness for us, if we want to go into the economically feasible serial production of electric vehicles. The core competences of the two companies create win-win situation.

Siemens the global leader in know-how and experience will lead the technology of our electric vehicles to new level. And this will help us on the growing market of electric vehicles and a top role there and we perfectly positioned in this field.

The broadly based know-how of Siemens in the different and ranges on electric motors, power electronics, charging infrastructure as well as smart grid applications will used by us. And we on our end are exerting our deep know-how in the field of electric vehicles and technologies in this partnership. We hope that Siemens will get important input for the future development of components and systems.

I would like to explicitly say that this is just the beginning and we at Volvo are very willing to clearly and strongly deep in this cooperation and the future. The first test vehicles of this joint project will hopefully rollout this year and in internal Siemens test fleet will be launched in early next year.

Ladies and gentlemen, I am convinced that electrification will decisively change automobility. I myself have automotive background. I love cars and as long as I can run that I love cars. My entire professional life has been dealing with range, capacity, and torque, power and that’s what the entire sector of industry has been looking at for around 100 years to.

Volvo C30 Electric very impressively shows the mobility of the future. The C30 Electric is a very remarkable car for the day-to-day use. You immediately have torque. You have a very quite, smooth driving experience. You are more or less gliding over the street. Nice change in the way you drive. I have been driving a C30 Electric for quite some time now and suddenly energy efficient driving for a combust engine fan like myself become something fun. We start to think twice before we switch on the AC and you hope that you possibly use the energy better to use and drive the wheels.

I am driving a C30 myself. I am proud that I can drive such a vehicle and it my personal contribution to saving the environment. I am very happy that we have Siemens as a partner for the future of the battery-powered electric vehicle. We will be a strong team together and we will be setting the standards for this technology.

And with this, I would like to give the floor to Professor Russwurm. Thank you.

Professor Siegfried Russwurm – Member, Siemens Board and Chief Executive Officer, Siemens Industry Sector

Thank you very much indeed Mr. Jacoby for your words. Of course, I am also going to pickup on what you said about our cooperation, but I would like to start by saying or by putting things in perspective a bit vis-à-vis our overall philosophy. That is how we see electric mobility. For us, this is a part of the answers we will need to global challenges such as climate change or the global growing requirements for evermore mobility. This is a worldwide thing and this is uncontested. At the same time, Electric Mobility is a future market with great growth opportunities, which means that our partnership is ideal, we have an ideal situation.

Electric cars can reduce CO2 output and this will be necessary, because the transportation sector accounts for one quarter of global CO2 emissions. This decrease in local emissions is important, because in 2020, 60% of all vehicles will be running either in large cities or in conurbations. Mr. Jacoby mentioned that because of the ever scarce resources and the increasing demands for sustainable energy supply and ultimately a reduction in the dependence on oil on petroleum as an energy carrier. So, in all this, Electric Mobility can help. Also, electric motors have a high efficiency, they are very energy-efficient not only if you look at the individual component, but specifically when you look at the drive train at the entire energy conversion chain. The whole scenario becomes even better when you use the possibility to generate power from renewable resources. And this is something I am going to speak about at the end of my talk.

The expectations of experts regarding the future market development, of course, are subject to large fluctuations, but there is a clear trend. Cars with hybrid drive electric cars or electric drive being powered from a fuel cell will have an ever increasing share in the weaker markets. So, the market for Electric Mobility is really in its infancy, but it’s going to pickup speed, especially from the year 2020 onwards. Battery electric vehicles and fuel-cell powered vehicles will have a technical maturity, which will make them suitable for intercity traffic all for day commuters.

When you look at the market for electric vehicles more closely, we see that or we see what analysts say that one can quantify up to the year 2016 what’s going to happen because there is specific planning underway with OEMs. And Mr. Jacoby said for Volvo that this is the case in J.D. Power analysis resulting 1.2 million units in 2016 and we have in fact given up projecting figures for 2018 or ‘20. The fact that the trend is rising is uncontested and it doesn’t really matter what gradient the curves actually going to have. So, the trend is clear, isn’t it? And something else is clear. Europe and also China will be the growth centers for electric vehicles. We believe that the United States will lag behind just a bit. This development depends on a number of different factors starting with subsidies, regulation especially in mega cities will Electric Mobility be subject to certain regulations.

The development of the oil price is another question and also the question how we are all going to address the technological challenges and what requirements users will purse and of course individual acceptance of customers is important regarding electric vehicles. And there may be cultural differences Mr. Jacoby regarding the readiness to embrace such technologies. In the development of vehicle technologies, we have different degrees of electrification or different perspectives which result from them. Electric drives, batteries, and charging technologies will become key technologies in these vehicles.

In addition to that, there are secondary consequences such as lightweight materials in the body or in the drive train, design, and production concepts, which would also post new challenges to automotive engineering. We believe that especially after discussing this with automotive manufacturers, the integration of systems is going to be important. And innovative software is going to play a crucial role. Innovative software is going to play a role in the development process and highly automated manufacturing is going to be required to make this affordable.

The electrification of drive train will blur the delineations between the OEMs and other companies in the value chain. And the question has to be addressed by OEMs, how much they want to contribute in the development of electric components and drives, but this is really a rather superficial question. Another question is just as important, how will automotive manufacturers differentiate themselves regarding driving behavior? And this is not just about the component. The hardware itself will not be crucial, because the characteristic curve of the electric motor is what it is physically.

So, the hardware itself will not be a key differentiator, but if you make sure that drives with the same hardware can be used for the main drive of a container crane in a port, but also for the micrometer feed action of a machine tool. If you know this, then you know how this differentiation works through the motion control software, which drives the drives. So, we believe that most OEMs will gain competence in electric drives through partnerships. And we believe that with our offering of manufacturer-specific configuration of a drive train using scale effects will enable us to be a very attractive partner.

The role on Siemens in this landscape in the division of tasks is clear. We will not build cars. Although, we do have a certain tradition in 1905, for example, the Electric Victoria is a Siemens built vehicle. So, we have a history in electric cars as well, but our long-term goal is to provide solutions inside and outside electric vehicles. We want to be a systems provider. As partners of the automotive industry, we are drawing on a longstanding experience in electric vehicles, history of more than 100 years. And if we look back over all the years and when we have worked or developed and produced drives, you can add another 50 years.

Siemens has always been a pioneer and has always worked in drive technology 1879, 1907 the first electric locomotive, then 1905 the Electric Victoria, the electric vehicle by Siemens. But also things people of my age remember 1992, the first hybrid car, and here of course, what the Indian said is right about the timing. But we delivered components for that car since 1997, we have been delivering components for hybrid buses, but also for container stackers in harbors and ports, where hybrid technology for commercial vehicles is supplied. More than 20 different models of these buses are in fact running in urban traffic.

And not to mentioned, of course, our successes in rail technology we have reported on that. Sufficiently, (indiscernible) platform which is spearheading our development there, but also pioneers in electric drives for regional trains and light rail. So, we are becoming evolving to become an electrics component supplier to reduce CO2 output. Energy efficient mobility solutions with integrated electric drive trains by Siemens, this applies to road, rail, air, or off-road, you know the (indiscernible) rail transit with distributed traction with extremely dynamic drives with highly efficient break energy recovery with consumption equivalent per passenger of 0.33 liters per 100 kilometers.

The hybrid buses I mentioned those, the Siemens ELFA concept and modular concept typically a diesel engine running at the optimum operating point in some cases fed with or powered with natural gas and energy recovery and intermittent operation. It’s maybe slightly less known that many mining trucks, these huge trucks which run in mines operate electrically because the hybrid technology, which we supply or health supply is much more optimum in terms of emissions and are operating point. Of course when you move extremely high masses, it does make a difference whether you push on the accelerator of the diesel engine and sort of – emit a lot of particular matter or whether you optimized the operation of a diesel engine to emit at liter partials as possible and consume little fewer.

And finally electrically driven aeroplanes, we provided a drive train for an aeroplane, which consisted of an electric drive, an inverter, and the control in electronics. The electric motor drives propel with low noise. Of course it is also weight optimized. It is an aeroplane after all. These done together with ADS and another company and this shows that you can save a lot of fuel and emission and the noise behavior, the noise characteristics are quite different from the convention of the drive train.

So, you can see drive technology is something that covers many areas and it is something we’re good at. And in cars we are focusing very clearly on technological strengths are key differentiators, the electric drive train not other units. We believe that this is a business we are good and where our production and development is expert. The traction provided by the electric motor will win the day in the long run. We believe and the concept such as mild hybrids. You can of course argue that lifetime and how long they will be used, but there is a certain trend to that.

Many electric vehicle we see today on roads, vehicles which were not developed in this sense or with this in mind they will converted, they have a converted to electric or hybrid vehicles. However in the future, the market will demand vehicles, which will clearly differentiate themselves as electric vehicles and which were developed as such with electric traction with or without range extend us and we will certainly see a situation where also the axillaries have to be electric, because there is no under pressure no vacuum produced by an engine.

Now, these are all developments which are coming and which we are looking forward to, because we believe we can contribute our experience from Siemens drives for innovative solutions and electric vehicles. In order to do this as professionally as possible, in spring 2010, we setup a new business unit inside e-car or the head of that unit is here welcome and he is going to help me answer your technical questions if you have.

Now, we setup this unit because we wanted to bring two things together. One thing where the specific requirements from the OEM side regarding manufacturing and development processes, which have to have a very high degree of maturity for the mass production business. And on the other hand, the product itself regarding factor such as weight, scalability and obviously cost.

Our experience with electric drives is something that will help us along the way. We have more than 100 staffs are working specifically on electric drive technology. It doesn’t sound very impressive. But if you realized that this is backed up by drives technology with 36,000 staff and 30 or so manufacturing sites, then you will realize that this is actually, this has a pretty powerful and comprehensive underpinning. So we have a solid base to draw on and we can certainly step up production capacity for electric drives, if the market demands that.

We are also using our industrial portfolio for inverters and motors in our production. Our products have very high reliability and robustness. So we are very optimistic regarding the new requirements from our partners. We’re using our modular platform concept which helps us guarantee quality standards because we don’t have to start from scratch.

However, we at Siemens realize that the electric component inside E Car should not be looked at in an isolated way, but we should always pursue an integrated approach. We should also look at the charging infrastructure, infrastructure and cities is the sector which is the umbrella sector for others. And then we have the complete picture, the motor, the inventor, hybrid buses, charging stations at home and public charging stations as well. Not if they get of course the hard and software for the charging stations, that is also Smart Grids and selling power solutions for fleet management. And my favorite example which I just heard from one of our experts as an answer to the question, why Smart Grids, why don’t we just hook this up to the standard grid.

Imagine you live in a new residential area and all your colleagues have electric cars too and they all come home at 6pm and plug in their hybrid cars or their electric cars and have to be charged. Now without a Smart Grid, then it’s possible that your TV set might go blank, or black, and possibly also your OSRAM incandescent lamps.

So we want to cover the whole spectrum and we went to these system suppliers and of course our partners know that they are working in this context. Everybody knows from the start that we’re working in a sort of cross sectional approach and also people realize this, and knew that they could rely on that. The fact that they were ready to become our partners or to enter this partnership is of course proof of that. And I’d like to thank you for this. But of course we are not conceited about the cooperation with Volvo to believe that in this market we could do without the support of renowned and dependable partners.

The risk with everything that concerns individual mobility is at everyone drives a car and when you drive a car you think you understand the car. I think you know what it takes. Now we are extremely realistic, we know that it takes a partnership, such as the one with Volvo which will enable Siemens to actually provide mass production suitable products. We want to do this. We agreed on this. Let’s say, as we earlier said that during the year the first C30 electric units were rebuiltable, supply the key components, the motors, synchronizing motors, and there is scalable product family from 30 kilowatt to 80 kilowatt with a high power density and high efficiency. And this will be water cooled with certain effects. We also supply the invertors compatible with the motors mentioned up to 80 kilowatt at 400 volt which also posses certain requirements. 400 volt is of course a different game than 12 volt or 24 volt, on board network in commercial vehicle, some problems soon have to be solved their, but the high energy density and qualifies the components.

And last but not least, we want to look at the charging technology side. Siemens has a very broad portfolio of such technologies which we’re willing to look at together and different power categories, different technologies, different handlings of the users.

As I said, this drive technology is going to be applied in the Volvo C30 electric. We are matching our technology to this car and as I said about 150 engineers and developers are working on getting this vehicle on the road. So, this is about exchanging and sharing know-how and experience in inverters and components with the different sites we have, we are intensifying this cooperation.

In 2011, the first prototypes will be tested in the internal Siemens test fleet will start taking up operation in 2012 and we’ll probably have a problem that our service engineers are cuing up who can drive the C30 and it’s going to be a bit of a price for the employee of the month that they get permission to be the test driver for all the C30. So, I believe it’s going to be a big incentive because people will love driving this car.

So, the vehicles we’ll then be driven in Berlin, Munich, and Erlangen. We’ve already setup at charging infrastructure for this purpose, which is compatible with that car and as I said since this cooperation is starting today or this is the formal start of the cooperation. I am of course looking forward to discussions. Some of them will be fierce, of course. This is normal in the industry about the cooperation after 2013.

Right. Now, I suppose that some people among you are engineers or technical specialists who want to know little bit about what’s behind all this. Now, Mr. Russwurm, the car driver is of course tented to explain all this. But there is somebody who is much better of this the project head. Now if you could tell us a little bit about what makes this drive so special?

Unidentified Company Speaker

I am very impressed over what the two teams together in a pretty short period of time have been able to do in terms of delivering a very, very efficient peace and motto with a higher output than we specified originally with a very high efficiency and in connection with a very interesting inverter we will find a combination of electronics, power electronics, and motto that will fit this car in a perfect way and we will all drive this car with a big smile. Thank you.

Unidentified Company Speaker

Thank you a lot.

Unidentified Company Speaker

Thank you very much. You can imagine that the colleagues of Volvo have given clear assignments to our engineers. They told us what to expect how the integration of the drive train should look like in the vehicle and we will with our skills focused very much on this challenge. We can see all of the hard work components here and I would like to underline again that a big part of the work is the integration of the software in this overall concept and our offer that Volvo has taken up was that we will not determine the drive and characteristics because we delivered the electric engine. The driving experience we’ll continue to be a proprietary Volvo characteristic that we provide tool environment. We know how to build electric engines and we want to make these tools available to Volvo so that a driving experience allow Volvo can be created and this is an aspect of the technology, which is usually overlooked in the general discussions, it’s not trust about the components, it’s also about integration.

So, let me summary again how we see the position of Siemens, how we see our sales as preparing the road for electric mobility. If you want to get the car on the road, it’s about integrated them – integration of drive technology into the vehicle. The necessary system approaches our one key strength of Siemens that we used to differentiate our sales against competitors who only work in the individual segment.

Siemens is on the few company one of the few global companies that are able to cover this entire range of technologies. We lasted the systems of charging technology inside and outside of the electric vehicle, the entire electric high infrastructure. The integration engineering will play an important role integrating the technology into the actual vehicles and this does not only apply to the integration of the drive technology into the vehicle, but also the mechatronic design and on the other hand, the integration of the charging infrastructure into electric smart grid.

The software configuration I’ve already mentioned that as the drive you can teach electric drives, how to behave in a car and this tool box, this engineering environment is what we want to make available to our partner. And all of this is embedded in an offer that already mentioned in the beginning and offer for the automotive industry that we already very active in based on a long year experience with Volvo in the production sites, in the development units. When it comes to developing and producing components and vehicles and this is a synergy that will continue to manifest itself all the way down to the manufacturing lines that will produce these cars with modern design software and production.

Technology will also contribute to reduce the cost of the components and the entire electric vehicle. It’s quite obvious that in storage technology, when it comes to batteries there is a great need of making production more industrial to reduce the costs and we believe that in the combination of our industry and software solutions and automation technology. We can make a contribution to reducing the cost sent time to market and time to market and is highly dynamic environment of electric mobility continues to be very important factor.

And if we go one step further, the big picture, the outer rim of this circle is the integration of the electric vehicle into smart grids. And it’s not just plugging its more than that, I believe that we are a qualified provider when it comes to that long term sustainable development of electric mobility will very much depend on electric and storage battery. We talked about that we are talking with battery manufacturers, when it comes to automation but also to the design of the product. And we are also looking at technologies from the future and all electric vehicles can have a battery as a storage medium but for longer distances, for longer storage and purposes it can maybe also have a fuel cell made of hydrogen, which then provides the electric energy, generates its electric energy for the vehicle.

Hydrogen has a very high energy density and is a very interesting alternative, when it comes to storing energy. It can be used to be integrated in this technology. It can become the link between environmentally friendly generation of power and environmentally friendly driving of electric vehicles. And if you take the excess hydrogen energy from renewable energies and stored chemically or the recovery of hydrogen to charge batteries, all of this provides a rounded of concept, so that and we are not only cooperating with E Car, we have them setup in organizational units, so that the hydrogen electrolyzer, the generation of hydrogen from excess electric energy. This is one element of the future of electric mobility in which to which extent or in which mix is something that shouldn’t be written about. It’s not whether it’s about a version that has 5% more or less market share, but growth radiant will be important for everybody.

Ladies and gentlemen, I hope you have been able to see that we are systematically working on tapping into this industry in a comprehensively in a similar way that we have been doing in the field of automobiles for years now. And I think we stand out from our competitors who are usually active just in individual fields. We are very much working on the development of serial components in the field of electric drives. We want to be a leading provider in this sector. And in order to achieve this, the cooperation with Volvo Cars, there is an important milestone for the entry into the market and we are very happy and grateful for this, because it’s a sign of respect of Volvo to us.

Thank you very much to our partners at Volvo. Thank you very much to you for your attention and I am looking forward to your questions.

Alexander Machowetz – Media Relations

Thank you very much Professor Russwurm. Thank you very much Mr. Jacoby for your presentations. I would now like to open the Q&A session and I would like to ask you to please wait until you have been given a microphone and then introduce yourselves quickly and tell us, who you are working for. Let’s maybe start with Mr. (indiscernible).

Question-and-Answer Session

Unidentified Analyst

(indiscernible) three questions. Professor Russwurm can you give us some figures on the made investment that is going to be made profit that you are expecting and second question is this is an exclusive partnership and if so for how long and would you wanted to have big partner. And the third question, video you sold that do you regret this and was there a clause that excluded competitors, which make you come to the public only now.

Siegfried Russwurm

Thank you for these questions. For the first question I will not satisfy you, when I say it’s an entrepreneurial decision, whether Siemens will enter into this technology or not is something that cannot be answered by filling in excel sheet. You have to believe in the success of it. So, its not that we could quantity today, how much this will cost. We have some figures that we don’t want to share with our competitors and I’m asking for your understanding here. But we do have a considerable budget for this. We are putting some money and it’s a clear entrepreneurial decision, which cannot be pinpointed down to (become).

Our turnover estimates also depend on the acceptance that electric mobility can gain and I do not want to give you any figures because they would only pretend to be accurate. It’s a considerable investment that we don’t want to quantify. Volvo is a fast and consistent partner that likes to make decisions quickly. These are the main criteria that are needed in such a partnership and the aspect of size is something that frequently goes hand in hand with speed.

So, every market share, every bit of market share gained by Volvo something that we are happy about. But what’s important is, we found a partner with the same objective, the same understanding of the work that we are doing and a partner, which has very quickly come to this home page, when its come to technical cooperation. It was important for me to know, while our legal experts were already working on the individual words that the technology experts were far beyond that were already working on how to put everything into practice.

And the last part of your question, exclusiveness, the integration needs to be exclusive. Because at the end of the day, we want to have Volvo and not one of the vehicle and on the other hand all of the participating partners are expecting scaling effects from on this work. We are talking to other partners from the industry, but what we are doing is based on platform technology and scalability effects and based on this, we will have a specific integration for the individual provider.

So, in this case, the cooperation is exclusive and it is a type of cooperation, which doesn’t have a final date set for us in 2013. Volvo has to make the next decision, but we are expecting that this will be a long-term cooperation. Again the effects of scalability from the hardware component would be beneficial to everybody. Because the engine itself is the way it is. It is quite linear the characteristic line.

And the last question on Siemens Video, if you remember the Siemens Video portfolio was in the field of drive powertrain very much focused on internal combustion engine, but it was broader than that all the way to the navigation system. And this separation was strategically correct, we didn’t regret it and we are now working on a different topping something that has regional Siemens synergies in the field of drive technology and we will not move beyond the sector. We will not start a second Siemens Video. We have clearly understood that the electric drive technology is something that can be generated with synergies from inside the group. They were the usual professional clauses, but they didn’t provide obstacles here.

Unidentified Company Speaker

Right, then over there in the back please.

Unidentified Analyst

(Indiscernible). One question to you Mr. Russwurm, you mentioned and I would like to pickup on that with combustion engines, the engine is the heart of a car, and for car enthusiasts it makes a big difference what sound it makes. And so there is a difference between a VW and a Ferrari in terms of consumption, but also in terms of sound. So what will be the future for electric car, will people speak of a Siemens motor inside the car, people who don’t just want to get from A to B. And the second question is to Mr. Jacoby. In the automotive industry when you talked to people a bit, then it seems that China is a big driver in electric mobility and this is also reflected in the figures you gave us, the four cars you gave. Volvo is a Chinese company, is that a coincidence, what role does it play? I would actually have Mr. Jacoby the first question too, because Mr. Russwurm is not going to give his personal preferences as a car driver?

Unidentified Company Speaker

The feeling of driving an electric car is different. Isn’t it? It has a different appeal to it, but I think if people who feel they have to have a roaring sound maybe you can push in a loudspeaker. But ultimately this depends on the automobile drivers or the OEMs not Siemens. And I don’t think someone is going to buy a car because the electric motor is from Siemens. It’s a B-to-B business and we have to win the acceptance of our business customers, but Mr. Jacoby can of course answer in a more qualified way.

Unidentified Company Speaker

Well, I can only support this. It is true I am sure that electric mobility will always produce automobiles which have certain properties. The Volvo will always be a Volvo, even if we have a different drive concept. And then the sound questions, this is of course an important topic and this is also something that is not unimportant, pedestrian protection is one aspect, when you have electric car he would have noticed you. If you drive in a city, for example, pedestrians crossing the road will not hear you approaching. And in country such as Japan where there are certain requirements, and this is going to be interesting what kind of sound will it be prescribed, would this be pleasant or unpleasant. And also with electric car you get different sounds and noises this has to do with wind noise, so this will be a whole range of new challenges to the automotive industry. And we mustn’t forget of course the distraction of drivers, in fact that they get tired, no we’ve been used to the engine giving a different adrenaline feeling when you push on the accelerator. This is something that maybe different, and should be taken into consideration. And very importantly the components supplied by systems partner is from Siemens, from a systems part, Siemens. But of course the matching is done and eventually, ultimately a Volvo will always be a Volvo.

Is this a coincidence, you said, we are a Chinese company, this is true, but it’s also incorrect. We have a Chinese owner but we are a Swedish company and we will remain a Swedish company with deeply rooted Nordic, European background, the brand Volvo will rather become more Nordic or Scandinavian, than the previous owner did. And one interesting aspect by the way especially among the German public, if I may say so, as a person, it is from Germany, but who no longer leaves in Germany. The fact that suddenly you talk about a Chinese company with an American company with Ford, this would never have been asked like this. The question would never have been posed, are you now an American company. So I think we have to a little less biased. China offers many possibilities and opportunities for Volvo. We have commitment compared with one with some of our core competitors, we’re catching up. We’re producing in China. We are developing in China. We will produce in China and we are building up our development capacity. And we’re also looking at the question whether the government is going to make available funds, for example for electrification. Huge sums of hundreds of billions are going to be, are suppose to be made available for this. This of course is a situation we’re following up.

Now we have a little more insight or access than our competitors. We will use that and it will of course also be used on this cooperation. China is an important market. There is no question about that. But we feel that western suppliers or sub suppliers will still have a competitive edge over Chinese suppliers. But of course we’re always open to resources available in China and again this is going to influence our partnership. Right, on the right hand side please.

Unidentified Analyst

Well, I can start with MVDI news. Both companies are pioneers in their fields of technology. Siemens is a big pioneer when it comes to electric technology. Volvo is smaller pioneer, but very specific for automotive construction. So, first question isn’t this cooperation due to the fact that you didn’t find a partner among the larger automotive manufacturers who already tied to other partner?. And question number two, in automotive electric technology, you already have a lot of competition in the field of drive technologies where some manufacturers built the engines themselves or would support the big suppliers in Germany are doing very good business I’m referring to Bosch and Continental. So, aren’t you in this situation of the hare and the tortoise, you are, the hare and tortoise always says we’re already here?

Unidentified Company Speaker

Well, with regard to your first quarter I can only reiterate this. We will not be able to make the decision of the automotive. You if the automotive manufacturer says my expectations with regard to volumes or so that I want to build my own electric engines, we immediately offer them the automation of the production line, and support in the construction of electric engines I don’t want to give you the brand, but a big German manufacturer has made particularly these decision. And then the, these are potential looks differently and we’re approaching this in the factory different way than a classic automotive supplier who would then say we cannot do any business with them for us. And business potential when it comes to electric mobility is always given if only in the field of automation of the production line this is always the decision of the automotive manufacturer themselves.

But from the discussions that I have been having with also a number of competitors of Mr. Jacoby is that our argument in favor of system integration and influence ability of systems is something that is following a more, more federal ground. I have to look at somebody who owns an electric vehicle and put that into the car is an important step. But it is not always come to success. When we talk about integration, the question of who the tortoise, and who the hare is, would have to be rephrased. Some of those who build electric engines will have to run a little bit before they understand as much about traction motion control as we do. So, you see me with some self esteem, it’s quite interesting and then as the competitors are sleeping. But it is a market that will be highly contended every increase on the opportunities. But we feel very well positioned in the competition.

Unidentified Company Speaker

Let me add (indiscernible) said it’s not the big ones who develop the small ones, but the fast ones who (develop) the slow ones and it’s quite obvious that Volvo is a small automotive industry, a little workshop with a high degree of skills. We don’t want to even be as big as the big manufactures. Because we believe that speed will be a competitive edge in the future. And Volvo Cars is an open company and for that reason I believe that this is one of the decisive reasons that this partnership came about. We are open-minded when it comes to exchanging technology, when it comes to exchanging competences. We are extremely flexible, and let me repeat this again we are very fast when it comes to making decisions. This is one of the big advantages that we now have, now that we no longer belong to a big automotive company, but are an independent company with these skills.

Unidentified Company Speaker

Next question Ms. (Maya).

Unidentified Analyst

Thank you. Financial Times Germany, (Angelou Maya) and I have a follow-up question. Is there a danger that you will compete with your customers, because you supply to Bosch and Conti, I’m sure, in terms of manufacturing technology. And then there is a question about the figures, maybe you can answer that. If I understand correctly you’re exchanging, you’re delivering, a notice and inverters and you’re getting test vehicles back. So this is bit of an exchange, so can you tell me what the volumes and why the Siemens need those test vehicles.

Regarding the competitive situation in many of the combustion engines in the world are produced on machine tools, which have Siemens components and everybody, every company which builds its own internal combustion engines has their competitive advantage. So our competitive advantage is that we provide technology platforms, which any company, every company can use for their own purposes. And so, this, what we’re doing here, the hardware components will be platforms and this is already the case today and even drive technology outside the automobile.

Now for us it was important to define that we are offering a tool box of building blocks and the customer then differentiate itself by using those and this is something, this is true for the cooperation with Volvo. And this is also true for other customers and there are no press conferences about this. But it is true, on one hand you get the economies of sale or scale. On the other hand, you have the possibility to differentiate yourself.

So our experience from other technologies and teaches us that we can provide solutions for different customers and various specific way. And this is something we can do the cooperation between Volvo Cars and Siemens goes far beyond an exchange of components of boxes. We have a very close cooperation in the development, of course we will be supplying motors to Geneva and we will get some truck loads of cars back. But this is only one part of it, we really have a closely intermeshed development, cooperation and partnership.

And we will talk about it in participating in the manufacturing when the time is right. We will use the Siemens fleet. These are basically the cars with which Siemens engineers pay visits to their customers. So these are car pool. And also wonder these are our own company car, but use the car approval, they will drive those cars. That’s what we’re using them for, but at the moment, people are queuing up. The next one on the right hand side, (indiscernible).

Unidentified Analyst

To follow-up on this, so it’s a development corporation and you’re still far away from a strategy corporation, when it comes to serial production. If I have understood you correctly Mr. Russwurm, this decision will be made in 2013?

Unidentified Company Speaker

Well, this is a Volvo decision, so the questions should be asked to Mr. Jacoby. Don’t look at in such as static way, we’ve now taken two years of time. And I could very well imagine that before this agreement terminates we will see a concrete corporation. This year we will see a small serial production of the first generation of the C30. Together with Siemens, we’ve launched a second generation and expand the small series we have to find one of our customers all of these and vehicles will be equipped with GPS, not defined out whether your Siemens employees are visiting the reference in the evening know but for us to get data that we can then analyzed together to really find out how the everyday usability under different weather conditions will be for such an electric vehicle.

Next year, we will then also launched a plug-in-hybrid before our competitors equipped with a diesel engine of a CO2 emission of 90 grams per kilometers and a less than three liter per kilometer per 100 kilometer fuel usage and we are looking for sustainable cooperation with Siemens to four hybrid vehicles, four electric powered vehicles, and this can happen clearly before the termination of this two year agreement.

And what are the reasons for you’re not putting this into works right now, what is the reason why – where do you see the risk – why do you not want to behind yourself to Siemens exclusively right now. Do we have to, no, I think the teams prove that they can work together pragmatically and quickly if you look back over the past 10 years, you will see that lot of automobile manufacturers have made a decision too early, too quickly because they leave that they understood the entire product and Volvo so far has not done that and we will continue to be flexible in this respect in the future to really estimate and judge how this two technology is developing and where our product is and focus should be.

I don’t think that would make sense to entering to a marriage and let’s start with a friendship and see how we’re waking up in the morning, how we’re going back to bed in the morning, how we’re getting used to one in other and this does not by no means mean that we are not committed. We are committed and we believe that we have an extremely confident partner with Siemens who as Professor Russwurm where he said he is putting quite some investments in this range and for us it’s an ideal partnership and I wouldn’t like to carve it in stone.

Make it happen and sort have been when do you want to start the serial production, plug-in-hybrid next year in the fall and the electric vehicle that you are developing jointly, we will start with small series as I already said. We are monitoring this to gather the respective and experience. The second car is being developing and will be ready for launch in 2012 and we will then have to see the figures support that lot depends on external factors on how electric vehicles will stand the ground in the different markets.

What’s quite clear is that with is today’s technology with today’s scales, battery powered full electric vehicles are not competitive vis-à-vis and efficient combustion engine we are aware of this, we know this and that’s why we will have to see how this is – how this develop and just continuing how will the cost of resources – natural resources develop. What is the willingness of governments to invest and subsidize and so on and so on. We will have to stay flexible. I cannot give you any estimates on when this will happen.

It is quite clear that there is a political we’ll not only in Europe, but also in the United States and particularly in China and that because of this the electric vehicle will continue to be supported.

Last question directed to Mr. Russwurm, Mr. Jacoby himself said that Volvo is a small manufacturer and why as Siemens chosen to corporate with a small manufacturer and then you get a premium partner in Germany. No, it’s because Volvo is fast. I already said that we are talking with others with competitors as well, but this is a nice proof of Volvo’s agility, they were faster when it came to making a decision and they entered into this joint development before others did.

Unidentified Company Speaker

Getting back to the question regarding electric motors or cooperation it’s not exclusively about electric vehicles because we are of course working on the next generation plug-in-hybrid, hybrid etcetera. And of course the potential partner for us is Siemens and this going to come in the not too distant future and we are talking about considerable numbers of units.

Unidentified Analyst

(indiscernible). And I have question on two complexes. You could have formed the joint venture and cooperation this way why didn’t you? And because and the second question to Professor Russwurm, he want to be the globally leading systems supplier. So who is your main competitor and secondly, are you aiming at only passenger vehicles or also trucks and other vehicles. And you said that you’re talking with other or negotiating with other common factors. How many partners do you expect to have by the end of 2012?

Unidentified Company Speaker

Do you want to take the one with the joint venture? Well, I think we can save a lot of time if we don’t discuss joint ventures on the distribution of money. But rather if we get to work and I can confirm again that this is working exceptionally well. It’s a very pragmatic thing and the question of joint venture has really never reason for Volvo at least not for Volvo. And we have not several times we discussed very intensely our engineers have had an exchange and this is a cooperation based on trust, which is sufficient for us. Would you want to add anything else?

Unidentified Company Speaker

No, we would have given a lot of work to lawyers and for joint venture. Now regarding the question about competition, there are the usual suspects some and by Bosch and Continental have been mentioned, but we should be careful that this is a global market. So, the Asian players must be forgotten the day or the Chinese manufacturers are going to get a foot in the door and also through economies of scale, which I am sure exist there. This means that we are going to have to anticipate and expect a global market situation (indiscernible) his team and are going to be global. His team are looking at Electric Mobility in the United States. They are talking with companies there. There are also some people in China. And we realized of course that Siemens Technology will probably not be produced in the area if it’s going to be served to the Chinese market. But rather we are going to use our global sourcing and manufacturing network and we see ourselves as a global system supplier which is something our customers like because if Volvo builds cars in China, they can cooperate with Siemens there as closely as we are doing here and now between Geneva and Ireland and in Germany.

So if we defined the target market as a little broader not just the classic light commercial vehicle and passenger car market, but rather electric mobility in a broader sense and you talk about heavier trucks or buses and here Siemens is in fact one of the big, big players when it comes to electrification of the drive train. So, I think there are more Siemens in buses equipped with hybrid drive trains by Siemens, then anywhere else. So we have a pretty big stock of experience and knowledge we can tap on.

Unidentified Company Speaker

Unfortunately, if a question is asked without a microphone, it cannot be translated.

Unidentified Company Speaker

This is quite a small market compared to other markets that we are active in. So, it’s a small number and we can cover a large share of the world market and you can assume that we have a very good understanding of sales and distribution. How many of those will be one over as customers depends on a lot of different factors, I believe that will be a lot of customers otherwise, we would have invested differently. Again without a microphone question cannot be translated.

Unidentified Company Speaker

These are saying when you know 15 or 16 automobile manufacturers then you have 70% or 80% of the world market. So with as much as we like Volvo, we are not doing this investment just because we want to make Volvo happy.

Unidentified Company Speaker

Follow-up or next question?

Unidentified Analyst

(Indiscernible). I have three questions. Next year you want to start serial production. For consumers electric vehicles are not very attractive, long charging time and high purchasing cost. How do you want to lower the cost for your electric vehicles and second what though there is light construction play for you assert. What’s the approach that you pursue in charging technologies to lower the charging time to less than one hour?

Stefan Jacoby

Well, as already said an electric vehicle at the moment is not cost efficient. There are debates around the world on how much customers of an electric vehicle should be subsidized. In the U.S. its $7000, some European countries talk about the same amount of money. The same is happening in China. We have to accept that the current battery cost and the current drive technologies are clearly more expensive than a conventional drive.

But this does not mean that we will no longer invest in research in this type of technology. The investment will grow top-down. It will happen more in premium models and that’s why we are also putting our dollar on the C60 hybrid a fully functional premium car with the high tech drive.

The customers are willing to pay more for high tech. The clear rationality does not play such an important role in that case. Even though I can already tell you that this vehicle will be cost efficient, when it comes to consumption, but the entry level will be the top or premium models and only over the course of the next decades where we enter at the mass segments.

To answer your second question, light construction and charging technology maybe I can ask this question to Peter, who can give a clear answer.

Peter Mertens

Yes, light weight construction does play a considerable role for us. No doubt about that. But Volvo is slightly different from other automotive manufactures in this context. We do not build a specific vehicle for electrification. We say we want to have a full premium vehicle for day-to-day use that is driven by an electric or hybrid engine.

So, light weight construction plays a subordinate role for all of the segments across all of the construction lines and we pursue the way of smart light weight construction via material, but also via simulation and engineering and also hot-welded steel and something that goes far beyond the technology used by other competitors.

The customer acceptance of electric vehicles at the moment is when it comes to charging six to eight hours charging time and we will soon see better developments in this respect, but the breakthrough will really happen, when we will see induction technologies at some time in the future and we already talked about this prior to the press conference.

We said at some point this will happen and this some time is not that far into the future and you will drive up to a restaurant with your electric vehicle and while you are enjoying a dinner, your vehicle is recharged by means of induction. So, both you and the vehicle will take something in and when you end your dinner your battery has been recharged.

This will not happen the day after tomorrow, but that’s the technology that we are hoping to get soon and we are very much banking on the systemic approach that Siemens is pursuing in order to participate.

Unidentified Company Speaker

I think we are going to have to use another microphone. Mr. (Copstein) over there.

Unidentified Analyst

(Mattis Copstein) of the automobile. Mr. Russwurm, I would like to know, whether C30 Electric what value will Siemens parts have in this fleet and the electric motor for the C30, where will it be produced in Czech here, because I believe that lot of staff has been shed in your manufacturing and would this be different today. You haven’t given us any revenue figures, but you are dividing your business into inside and outside the car, is this two-third inside, one-third outside or what is going to be the share. And Mr. Jacoby, I would like to know from where the batteries will be supplied and why the test fleet exists only on one side of the cooperation, it will be interesting for Volvo to have the test fleet of its own with Siemens Motors. So you wouldn’t have to rely on Siemens’ test data, but have your own?

Unidentified Company Speaker

Let me start with a share which I can’t quantify also because the cost is highly dynamic and it will depend on the economies of scale and the integration. Of course, the percentage or the share of electric parts will be larger than the just the starter or say starter generator unit, but it’s very early to talk about this, the prices of mass production components. This is subject to change and we’ll see what the cost of these vehicles will be like. I do thank you for mentioning the Czech Republic and (indiscernible) because you made this sound as though we had closed a plant and we still have 1600 staff and they are still building products. One, the asynchronous motors, one special type is Czech and you can read up on this in your mechanical engineering dictionary, but we will decide whether the mass production will be in (indiscernible) or elsewhere. This hasn’t been decided yet.

Now for the large market in China, you wouldn’t necessarily producing the barrier right, so a small series possibly in (indiscernible) but series production not likely does send there correctly, but depends motors have certain wage and of course the logistics costs are not going to be neglected. In a highly automated manufacturing environment, there are different cost components, but we take these decisions with a high degree of professionality and it’s going to be that way this time too.

And regarding your question (indiscernible) is the battery manufacturer of engine capital company with one joint venture foot in China. We in the first generation, we opted for a high quality, high reliability type of battery which is going to comply with our premium quality requirements and the expectations of our customers. Now, we are very happy with this type of battery.

Now, we are showing very clearly here that we have not entered into any premature joint venture. This is an industry which is moving at a very fast pace which is also opposing certain economy requirements. In the future, we will be open who is going to be our battery manufacturer or supplier and will certainly see in China what our possibilities or options are. Now, when I talk about the economy, battery technology is a field which is also under development. The batteries which are put into cars today are state of the art. However, if after leasing period of three years, when the cars returned the battery has lost value, not because it’s not usable any longer, but simply because the new battery technology and charging technologies will have progressed and now the automotive manufacturers will probably light off these batteries quickly. And so even if they could still be used, so we are also working on concepts how batteries could be used maybe in secondary or tertiary areas. This is something that’s being discussed and it’s in fact the challenge in the industry, the data exchange. The data goes to our development center.

Now, for us, it’s very important that these cars be driven in everyday driving conditions, in different climatic conditions. So we will also have test fleets in the relatively more cool. Sweden will also have difficult climatic conditions, for example, the United States, we are thinking of California and Washington, but also China, where again the weather conditions are different. We will have global fleets and we will use the data from those global fleets.

Unidentified Company Speaker

Now, Mr. (indiscernible) wanted to say something and then there are two more questions that I’d like to permit on the left hand side over there and one, okay so just one more question.

Unidentified Analyst

I only wanted to add something with regards to these 200 vehicles that were mentioned. These 200 cars that we mentioned are our own Siemens internal test fleet, and to know this phase starts and it will start this winter in November. And December the first test vehicles will be run directly at Volvo, the spring will have more test cars run by Volvo. So until this test series is manufactured we already have 50, 60 vehicles, 200 cars are the for us. Because we from Siemens say we want to have more cars on the road. We want to test more things in this entire electric mobility range of our portfolio, that’s just for you to add. And the question concerning inside, outside electric car and market share can you answer that?

Unidentified Company Speaker

That’s very difficult to answer because the, where does the smart grid stop. Where does it stop to refer to the car only. So it’s not the charging station, the charging station is important, it needs to be so professional that the private user can easily use it, but where is the limit of the system, where is the boarder, when can the models be implemented, and how much do you want to charge in which time, that’s maybe something that you will have to pay differently for.

That question, this boarder of the system can be expanded according to your own will and so the share E Car inside or outside, or E Car infrastructure, it can change depending on your calculations but there will have to be a interplay between vehicles that are geared towards the requirements of the users and infrastructures that covers all of these needs. There will have to be monetary incentives. It will be quite interesting to see the pricing models for charging E vehicles, the needs management.

So to say how this is being done all the way down to the approach that we as Siemens also seen in our calculations that the battery is a buffer storage. And if my Volvo that is sitting in my garage can provide half of the capacity to my neighbor, I will quickly start asking my self, what’s in it for me. And if E then tells me if you want to have a fully charged battery at 7 in the morning, you can rely on this and in the time in between you provide your electricity for me and you get a certain reimbursement then this has quite some potential, but also the need for the respective infrastructure. And Siemens is very nicely positioned to provide this. Even the wind propeller that is providing, fully green power is part of this overall system and then the share of the outside E vehicle is getting too big. Last question please?

Unidentified Analyst

(Indiscernible). One question directed to Mr. Jacoby and one directed at Mr. Russwurm and one for the two of them. Mr. Jacoby, are you also discussing potential cooperation with other manufacturers of electronic technologies as you have talked with Siemens. And Mr. Russwurm, how do you explain the fact that big Siemens obviously isn’t seen as an interesting cooperation partner by the big European automotive manufacturers. VW is doing its electronics all by themselves, BMW is talking to both of them, BMW is talking to Peugeot, Audi with Bosch, nobody is talking about Siemens. And last question directed at, the two of you, are you open for battery replacement models, as I guess is suggesting networks of battery replacement stations all across the country, so that the electric vehicle can be equipped faster?

Unidentified Company Speaker

I would like to again highlight that we are really talking to a lot of manufacturers, but the decision at the end of the day lies with the automotive manufacturer. You mentioned Volkswagen and if Volkswagen decides that they want to build the units for themselves across their 11 lines than we are very much interested in making the automation for Volkswagen. And we have such a broad range of products that we can find a benefit for us irrespective of the decision made by the automobile manufacturers, but the gentlemen from Volvo also said, quite frankly we have to talk to different competitors, because the whole situation is very dynamic. I would not discontinue talking to other automotive manufacturers just because they decided to cooperate with somebody else for a certain product.

The second one you mentioned is on Daimler we are very intensely talking to Daimler AG and the fact that Daimler decided to do a joint venture with Bosch for electric engines something that we would have like to do it, but win some you lose some. When it comes to infrastructure for fuel cell – hydrogen fuel cell vehicles, I mean, these are very, very interesting discussions that we are having with Mr. Weber of Daimler. So, the world is a dynamic one and I believe that Mr. Jacoby is absolutely right when he says the automobile manufacturers should not make a early decision and decide to do everything with just one provider. And today, nobody can say who will be the leader and which technologies and we will only do the things where we are the leading company. If we look at the battery, for example, we don’t build batteries, because we say we don’t have a clear competence when it comes to building batteries. That’s why we are not doing this. When it comes to hydrogen, we do have the skills, because fuel cell drives for different applications is something that we have been doing. And we are very strong in this. And there is a dynamic development.

Well, are we talking to others? Sure. We are also talking to others and we are working with other big suppliers in today’s projects and this is by no way in contradiction with what we are doing here. Let me retreat this again. We are very open-minded and being a small company we have to be also broad-based. We have to talk with everybody. We are talking to renowned suppliers when it comes to components used in plug-in hybrid vehicles. When it comes to replaceable batteries, all I can about this I cannot imagine that this will happen. I want to see how this would work in an economically efficient way to store large volumes of these batteries at gas stations.

The replacement does take sometime 10 to 20 minutes and this is also linked to CO2 emissions. I believe there are better possibilities today and I also think that batteries will remain and have to remain within the competences of the OEMs to clearly have a differentiating factor. The battery needs to be clearly geared at the respective model and manufacturer. And I believe it cannot be marketed as a commodity, so that you can go to any gas station with any car and take up any battery. You don’t know what battery you would get, is it a battery that has already been circulating for three years and only has 60% or 70% of its power or do we get a completely new battery. I do not believe in a concept of replaceable batteries.

Unidentified Company Speaker

So, thank you very much to our two speakers. Thank you very much for your interest. I do hope that we will meet again at the International Automobile Exhibition. I would like to say thank you very much for your attention and wish you a nice afternoon. We are now ending our Internet broadcast. You participating in this room here are invited to join the management of Siemens and Volvo in a small snack outside. And for the photographers and TV teams, we now have the possibility for interviews and pictures. On the ground level, let’s meet at the vehicle, the Volvo C30, the press representatives of Siemens and Volvo will wait for you there. Enjoy the rest of the day. Thank you very much.

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Source: Siemens AG's CEO Presents at the Joint Press Conference of Siemens and Volvo Car Corporation - Conference Call Transcript
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