The business model of Škoda Auto encompasses the entire process of vehicle development, production, and marketing, along with related activities. As per the EU Taxonomy Regulation, these activities have the potential to significantly contribute to the environmental objective of climate change mitigation by promoting clean and climate-neutral mobility.

The Company has categorised its itemised activities under the economic activity of “3.3 Manufacture of low carbon technologies for transport” in line with the environmental objective of climate change mitigation. This categorisation applies to all cars produced, regardless of the drive technology used, and includes genuine parts.

Additionally, the Company also included economic activity “3.18 Manufacture of automotive and mobility components”. This economic activity was added to the EU Taxonomy in the reporting period to enable those components that play a key role in reducing greenhouse gas emissions also to be taken into account. To this activity, we allocate the sale of motors, aggregates and material in intercompany transactions produced by us for all-electric vehicles.

However, hedging transactions and activities of subordinate importance that are reported as other sales revenue in Škoda Auto’s financial statements are not considered eligible according to the EU Taxonomy.

Although certain activities directly associated with the vehicle- related business should also be categorised under this economic activity, they are not currently classified as Taxonomy-eligible due to uncertainty around the appropriate economic activity as per the EU Taxonomy. These activities include the sale of additional engines, powertrains, parts deliveries, and production under licence by third parties, which are also reported as other sales revenue.

As the objectives of the Taxonomy Regulation overlap with the topics of disclosure requirements of the ESRS, relevant details regarding Škoda Auto’s substantial contribution to those objectives, as well as the context of avoiding any harm to them, can be found in the sections of this report dedicated to respective sustainability topics.

Substantial Contribution

The screening criteria for assessing Škoda Auto’s fulfilment of key performance indicators pertains to the CO₂e emissions of the vehicles produced by the Company. A comprehensive analysis of the CO₂e emissions was conducted and associated with each vehicle model and powertrain technology manufactured, in accordance with the Worldwide Harmonized Light Vehicles Test Procedure (WLTP). This analysis enables vehicles to identify which vehicles meet the screening criteria among all Taxonomy-eligible vehicles and contribute substantially to climate change mitigation.

During the reporting period, the BEV model series of Škoda Enyaq and Škoda Enyaq Coupé fulfilled the criterion of CO₂e emissions equal to 0 g/km. Moreover, during the reporting period, the PHEV model series of Škoda Superb and Škoda Octavia fulfilled the criterion of CO₂e emissions of less than 50 g/km.

Do no Significant Harm

In accordance with the EU Taxonomy, ecologically sustainable economic activities are expected to contribute to one or more of the defined environmental goals while ensuring that no adverse effects are imposed on other environmental objectives. To exclude any significant harm to these goals, economic activities must adhere to the “do no significant harm” criteria (DNSH).

During the review period, a thorough analysis of the DNSH criteria for the economic activity of “Manufacture of low-carbon technologies for transport” and “Manufacture of automotive and mobility components” was carried out at the Group level for Škoda Auto. For vehicle-related business, the analysis was conducted at the individual production sites responsible for manufacturing or planning to manufacture Škoda vehicles that meet the screening criteria or are anticipated to do so in accordance with the five-year plan.

The Group’s Annual Report features the primary interpretations and analyses employed by the Group to evaluate any potential harm to other environmental goals. As per these assessments, the Škoda Auto vehicle-producing sites fulfilled the DNSH criteria during the review period.

Key Performance Indicators

To present the details of eligibility and alignment of Škoda Auto’s activities with the screening criteria, DNSH and the minimum safeguards required by the Taxonomy Regulation, the Company presents the key performance indicators of the turnover (here sales revenue in accordance with IFRS), Capital expenditure (CapEx) and Operating expenditure (OpEx) using the templates provided in Annex II to the Disclosures Delegated Act (see following tables).

Revenues are directly assigned to an economic activity based on a direct connection to the vehicles that can be established in accordance with the screening criteria.

CapEx and OpEx without a direct connection to vehicles are broken down using an allocation formula to fulfil the screening criteria. The allocation formulas used are based on the long-term sales plan and the planned capacity utilisation at individual sites. The data and planning figures used are part of the medium-term financial planning for the next five years agreed by the Board of Management and the Supervisory Board of Škoda Auto.

The definition of turnover in the EU Taxonomy corresponds to sales revenues as reported in the IFRS financial statements published in the Annual Reports. This amounted to EUR 24,012 million in the fiscal year 2023.

Of this total, EUR 22,331 million or 93% of sales, was attributable to economic activity “Manufacture of low-carbon technologies for transport“ and was classified as Taxonomy-eligible. This includes sales revenues from the sale of new and used vehicles, from genuine parts (after-sales allowances), and from extended warranties. Of this total, EUR 1,064 million or 4% of sales, was attributable to economic activity “Manufacture of automotive and mobility components”. This includes the sale of all-electric vehicle motors and powertrains to third parties.

Of the Taxonomy-eligible sales revenues, EUR 4,790 million (20%) meet the screening criteria used to measure a substantial contribution to climate change mitigation. This includes all of the Company´s all-electric vehicles and the plug-in hybrids.

Taxonomy assessment of sales revenue for 2023	Sales Revenue			Substantial Contribution to Climate Change Mitigation				Compliance with DNSH Criteria		Compliance with Minimum Safeguards		Taxonomy-Aligned Sales Revenue
Economic activities		€ million	%*		€ million	%*		Y/N		Y/N		€ million	%*
A. Taxonomy – eligible activities		23,395	97%		4,790	20%		Y		Y		4,790	20%
Vehicle-related business
3.3 Manufacture of low-carbon technologies for transport		22,331	93%		3,726	16%		Y		Y		3,726	16%
of which taxonomy- aligned BEVs								Y		Y		3,021	13%
3.18 Manufacture of automotive and mobility components		1,064	4%		1,064	4%		Y		Y		1,064	4%
B. Taxonomy – non- eligible activities		617	3%
Total (A + B)	24,012
*All percentages relate to the Company’s total sales revenue.

 

Sales Revenue

In 2023, sales revenue was EUR 24,012 mil., of which EUR 23,395 mil. (97%) was taxonomy–eligible and EUR 617 (3%) mil. was non–eligible. Taxonomy–aligned sales revenue reached EUR 4,790 mil. (20%).

In line with the EU Taxonomy, capital expenditure relates to specific items indicated in the IFRS financial statements, namely additions to intangible assets and property, plant, and equipment additions. These are to be disclosed in the “Intangible assets” and “Property, plant, and equipment” sections of the Annual Report’s financial statements.

The entirety of the capital expenditure is included in the category “Manufacture of low-carbon technologies for transport”. No other significant capital expenditure was allocated to the other categories related to business activity, such as engine and parts deliveries, that were not initially included. Consequently, the Taxonomy-eligible capital expenditure amounted to EUR 810 million. To calculate the substantial contribution, Škoda Auto identified all capital expenditure that directly relates to vehicles meeting the screening criteria. This expenditure was then entirely assigned to Taxonomy-aligned expenses. For capital expenditure that was not explicitly assigned to a particular vehicle, allocation formulas were utilised to account for them on a proportional basis.

The allocation formula for capital expenditures was established by the Group for each model and brand based on the long-term sales plan or planned capacity and utilisation. It applies to all expenditures made at sites that will produce only qualifying vehicles for the next five years according to taxonomy. Capital expenditure relating to vehicles that meet the screening criteria amounted to EUR 527 million. Considering the DNSH criteria and minimum safeguards, 65% of total capital expenditure was Taxonomy-aligned in 2023.

Taxonomy assessment of capital expenditure for 2023

Capital expenditure

Substantial contribution to climate change mitigation

Compliance with DNSH criteria

Compliance with minimum safeguards

Taxonomy-aligned capital expenditure

Economic activities

€ million

%*

€ million

%*

Y/N

Y/N

€ million

%*

A. Taxonomy – eligible activities

810

100%

527

65%

Y

Y

527

65%

Vehicle-related business

3.3 Manufacture of low-carbon technologies for transport

810

100%

527

65%

Y

Y

527

65%

of which additions to capitalized development costs for BEVs

258

32%

of which additions to property, plant and equipment for BEVs

269

33%

3.18 Manufacture of automotive and mobility components

–

–

–

–

–

–

B. Taxonomy – non- eligible activities

0

0%

Total (A + B)

810

*All percentages relate to the Company‘s total capital expenditure.

 

Taxonomy–aligned capital expenditure

Total capital expenditure in 2023 was EUR 810 mil., of which EUR 527 mil. (65%) was taxonomy–aligned.

The operating expenses disclosed in accordance with the EU Taxonomy consist of research and development costs that have not been capitalised. These costs can be found in the “Intangible assets” section of the notes in the Annual Reports. Furthermore, all operating expenses related to Škoda’s vehicle business fall under economic activity “Manufacture of low-carbon technologies for transport”. As such, these expenses have been categorised as eligible under the EU Taxonomy.

Where possible, non-capitalized research and development costs were directly attributed to vehicles. Operating expenses for vehicles with a significant contribution to climate change mitigation were included. Any non-capitalized research and development costs directly attributable to vehicles that do not meet the screening criteria were not included. Non-capitalized research and development costs that were not clearly attributable to a particular vehicle were considere on a proportionate basis using allocation formulas. For these and other operating expenses, allocation formulas were used, similarly to capital expenditure. As a result, EUR 120 million (34%) of operating expenditure was found Taxonomy-aligned in 2023.

Taxonomy assessment of operating expenditure for 2023

Operating expenditure

Substantial contribution to climate change mitigation

Compliance with DNSH criteria

Compliance with minimum safeguards

Taxonomy-aligned operating expenditure

Economic activities

€ million

%*

€ million

%*

Y/N

Y/N

€ million

%*

A. Taxonomy – eligible activities

356

100%

120

34%

Y

Y

120

34%

Vehicle-related business

3.3 Manufacture of low-carbon technologies for transport

356

100%

120

34%

Y

Y

120

34%

3.18 Manufacture of automotive and mobility components

–

–

–

–

–

–

–

–

B. Taxonomy – non- eligible activities

0

0%

Total (A + B)

356

*All percentages relate to the Company’s total operating expenditure.

 

Operating Expenditure

Total operating expenditure in 2023 was EUR 356 mil., of which EUR 120 mil. (34%) was taxonomy–aligned.