Audi’s U.S. EV Plan: Another Indication That OEMs Aren’t On Board

OCT 17 2018 BY EVANNEX 77


We journalists who cover the electric vehicle industry really want to believe automakers when they say they’re going to get serious about EVs, although we’ve been fooled so many times. Audi’s recent multi-million-dollar extravaganza for the launch of the e-tron convinced this correspondent (and quite a few others) that the company was serious about selling an EV in volume. Then we heard the news that Audi does not plan to ship any inventory vehicles to its US dealers.

*This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Charles Morris. The opinions expressed in these articles are not necessarily our own at InsideEVs.

Above: A look at the Audi e-tron (Image: InsideEVs)

Audi of America President Scott Keogh tried to put a positive spin on the decision, implying that saving the cost of maintaining an inventory was the only way Audi could make a profit on its first pure EV. “I think it would be a beautiful world if you can go to a dealer – and we’d like to find that beautiful world – with zero floorplan [expense] and proper, full gross on the car,” quoth he. “This would be a beautiful state; so let’s go see if we can find this dream state.”

The situation isn’t quite as dire as Keogh’s self-defeating sarcasm (and outraged responses from some of the EV press) makes it sound. Audi dealers will have demonstrator models on hand, and they will have the option of ordering e-trons for their own inventory (I expect some California dealers to do so, based on a conversation I had at the launch event with one of those dealers, who was enthusiastic about selling the e-tron).

Above: Audi’s e-tron from behind (Image: InsideEVs)

However, the sales model Audi is proposing is that customers will place orders for the e-tron at dealerships or on Audi’s web site, held by refundable $1,000 deposits. Keogh said that wait times for delivery will depend on global demand, and could be months or even a year or more. All e-trons will be built at Audi’s assembly plant in Brussels.

Keogh told Automotive News that Audi’s dealer network will give the brand “a massive competitive advantage” over other EV-makers. At the launch event, one of the 300 dealers present told me that it would be interesting to see Tesla “fade away” as the e-tron came into its own. I responded to that comment with a wry smile, which has now evolved into a sad head-shake.

Above: Audi trolled Tesla’s Elon Musk on a billboard that featured the e-tron concept in Berlin (Image: InsideEVs via Audi Deutschland / Facebook)

Yes, an established dealer network is a good thing, but dealers are famously focused on closing sales quickly – put your money on the table and drive it off the lot. They’re not likely to be thrilled about a put-down-a-deposit-and-wait sales model. And so far, most dealers haven’t proven to be enthusiastic EV-sellers. On the contrary, they’re often cited as one of the main bottlenecks standing in the way of wider EV adoption.

As other automakers have, Audi may be falling into the error of assuming that EVs can only be bought by a subset of the market called “EV buyers.” Of course such people exist, and a few of them will surely order an e-tron. But any automaker that wants to sell an EV in volume needs to reach people who haven’t considered an EV before, and it’s hard to see how an Audi dealer is going to convince many of them to put down a grand and wait a few months for an e-tron when they can drive a perfectly good gas or diesel-powered Audi home right now.

Above: Meanwhile, in Germany, Audi’s CEO was recently detained by police in connection with the dieselgate probe* (Youtube: euronews)

On the other hand, car buyers’ habits are changing, and they may get used to ordering vehicles online more quickly than we think. Electrek reports that in Norway, Audi has already logged some 6,300 advance reservations for the e-tron (second only to the Tesla Model 3, which has an estimated 10,000 Norwegian orders on the books).


Written by: Charles Morris; Source: Automotive News; *Editor’s Note: According to Bloomberg, Audi’s dieselgate probe resulted in a fine of 800 million euros ($927 million) to settle its investigation by German prosecutors into the carmaker’s illegal emissions related to approximately 5 million diesel cars (with software “cheat” devices) sold in the U.S. and Europe.

*Editor’s Note: EVANNEX, which also sells aftermarket gear for Teslas, has kindly allowed us to share some of its content with our readers, free of charge. Our thanks go out to EVANNEX. Check out the site here.

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77 Comments on "Audi’s U.S. EV Plan: Another Indication That OEMs Aren’t On Board"

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These Guys Have Been Blowing Smoke Up Our Butts From Day One .. Their smoke & Mirror Act will Not Change Anytime Soon., if Ever !

It’s almost as if the people who sell the car have never driven the car, or any EV. This Audi will be 300% better than any other Audi for sale. It’s a pure luxury vehicle, in a class by itself, but, with all other EV’s.

Obsolete gas engines are just that: Obsolete.
The driving experience is far and away better in an EV.

But, sure Audi, keep Tesla in business.

well, even if all of the german car makers switched, none of them could put Tesla out of business.

That is what gets me. I have read tons of messages saying Tesla is doomed because once the luxury brands come out the interiors will have people wanting them more than Tesla.

But what interior? If people can’t see it, most will not order it.

What about what Tesla, is that not what they did? But when Tesla started it was the only game in town that had the range, and did not look like a space mobile.

Today, however there are plenty of Teslas around for people look at, and delivery is down to a few months (2-3). Worse, there are other BEVs on the market that you also do not have to wait a year to get.

And sales-people work on commission, you can’t ask them to work on a sale but not pay them for up to a year from.

Okay, I read the rest of the replies. As pointed out this is the European model so it should work fine there. However, this is not the North American model.

This can go two ways, people start ordering custom designs online and in the long run this will bankrupt a lot of the dealers. Or people will try ordering thru their dealers, but the dealers will have to wait a longer time for delivery rather than just sell what is on the lot.

I still see the dealership having major problems down the road.

Definitely looks like Audi’s commitment doesn’t reach beyond compliance at this point. Odd really, parent company VW seems pretty serious and so is Porsche.

Don’t question the seriousness of Tesla’s competitors though, the anti-Tesla troll army will down rate you mercilessly for suggesting that the so called Tesla killers are really just small scale side shows, while uprating their own BS.

I see nothing indicating VW is serious. They’re building a charging network that a court ordered them to build. They have a lot of paper EVs, but they’ve always had a lot of paper EVs – no reason to think they’ll become real.

Porsche’s Taycan is something, but they’re only talking about building 20K per year, putting it in the range of just being a (really nice) compliance vehicle.

I think the I-Pace will sell also, but with the Porsche we are talking about 40,000 cars on the road next year. Not only is that not a threat to Tesla, it just validates the idea of electric cars to more people.

To me it looks like the more they sell, the more demand there will be for the Tesla and other lower cost BEVs out there. People like Audi, BMW … are too busy protecting their present markets to really push a good BEV to the masses.

key word seems.

We’ll know by the production volume.

Strange, they don’t need pre-orders to design and off gas cars…

VW serious? That’s funny 🙂

I think we have the wrong conclusion based on what was presented. This is not a lack of commitment to selling EVs. It is a lack of commitment to the US dealership model. Lots of lots with inventory is expensive as noted by keough of Audi America. It seems a bit ironic that at a dealership convention he is throwing shade at the dealership model. He seems to be confirming the advantages of Tesla’s model.

An Evannex article throwing shade at a non-Tesla manufacturer. I’m shocked, I tell you, shocked!

So Tesla commitment dates were not trustworthy??? Now Audi “A few months or more than a year” is ok…

Yeah!! Another Evannex us vs them if it ain’t Testa it’s carp slander article….

Why might this be??
An article yesterday on VWs EU dealer network gives a clue for those who have one…

VWs EV commitment and thoughts from their CEO??
Yep there was an article yesterday too??

So Audi sells cars in the US in the same way as Tesla and that proves that they are not serious about selling EVs? That is silly. The truth is that the US dealer stock model just isn’t competitive with markets in which ordering cars is normal.

The truth is, dealerships are expensive. VW (including Audi), Daimler and BMW want to get rid of them.

Tesla doen’t have stealerships that take dozens of cars off Tesla’s books per site. Audi has that “advantage” but chooses not to do so. Probably because the stealerships aren’t willing to buy inventory on a low volume compliance car nor are they willing to spend the “cash burn” to install chargers at stealerships.

Or simply because they have long waiting lists full of people that already signed a contract with a non refundable deposit. Just like Hyundai with the Ioniq and the Kona or BMW with the i3.
The American market just isn’t attractive if you have a supply constrained product.

I thought the deposit was refundable.

Once you signed the order it isn’t anymore. What you mean is the reservation. With a build to order model you sign the purchase contract before it is build. The car is built to you specifications, it is unique and yours. It is a custom made item that can’t be returned for free even if it hasn’t been delivered yet.

Possibly. Or, they look at the European political EV support and mandates, and then look at the dwindling US support (country-wide). Then they look at a new car that won’t meet demand likely in the first few years, and decide like I would, to concentrate on European sales until the bugs are worked out and production volume ramps. Seems sensible to me.

Tesla will generally sell you whatever is on the floor or on their test-drive lot if you ask. Maybe if it’s literally the only one they have and it’s not the end of the quarter they won’t, but otherwise they do have stuff in inventory if you want it.

Doesn’t sound like the same will be true with Audi.

Also, doesn’t sound good that Audi is only building the vehicle at a single factory, when they have multiple. Nissan seems more serious – they’re building the Leaf at multiple factories. Nissan really wants to sell the Leaf… they’re just not interested in designing it to be good enough for there to be high enough demand for it, it seems.

Truth is, neither Audi nor dealers want to sell EVs. So, what happens?

Tesla has so much room in the EV sand-box, that they can freely obsolete functions and behave like Apple does with aging product. That’s part of the reason there are no tactile controls, as we are learning. Tesla can’t take a volume “knob” away, but they can remove split screen, full screen, camera on top, or do any of a variety of things to what you see, and how you access the functionality of your touchscreen. Oh, you thought thought what you were looking at was your property? -That’s how hiding the upper tool bar started in Version 8, before Version 9 removed any doubt this is what they are doing.

At least with Audi, or others, you know where most controls will stay. You know they will still be their, even if you want to own your car a crazy amount of time, like two years. You are free, from “updates”.

Trying so hard to spin a positive into a negative.

Sad to come back the next day, and see proof this place really is filled with rose colored glasses. I ding both Tesla and Audi and get zipped up. Don’t interrogate me, bro’s!!

And it’s not me. Go to TMC, ask <2016 Model S & X owners "How's that Version 9?". Do it in the real world, or give us your thoughts, Kbm3? If "m3" stands for Model 3, all I can say is wait. Wait and see about the acceptable process of improvement, but how it comes with curious head aches for Teslas that age. Next post about this will come with links, to plenty of Tesla "fans" who've been around TMC as long as I've been here.

It is worse than silly to claim “Audi sells cars in the US in the same way as”. Just look at the thousands and thousands of ICE-powered Audi’s sitting on lots, unsold, around the country.

Audi sells cars using the incentives set by the standard dealership model, wherein “dealers are famously focused on closing sales quickly – put your money on the table and drive it off the lot.” therefore “it’s hard to see how an Audi dealer is going to convince many of them to put down a grand and wait a few months for an e-tron when they can drive a perfectly good gas or diesel-powered Audi home right now.

The model 3 has been on sale for 15~16 months and no sign of european deliveries and we’re throwing shade on audi for following a non inventory model stateside soon after release?

Tesla would if they could sell cars in every country on earth but they simply don’t have the capacity. Funny how established automakers with 100 years of experience that like to brag about how many cars they sell vs Tesla can’t keep inventory on lots. Are they in production hell?

Model 3 is sold out for the year.

The problem is Audi still sells cars using the incentives set by the standard dealership model, wherein “dealers are famously focused on closing sales quickly – put your money on the table and drive it off the lot.” therefore “it’s hard to see how an Audi dealer is going to convince many of them to put down a grand and wait a few months for an e-tron when they can drive a perfectly good gas or diesel-powered Audi home right now.

If Audi was “serious” about EVs, Audi should remove the incentive structure their dealerships use, today, right now.

I’m getting really sick of EVANNEX fud articles. Tesla is using the European built to order model in the US, Audi now does the same and this is reason to start foaming at the mouth?

These people really are not interested in EV revolution or uptake. They have their own agenda.

See, the difference is when Tesla does the same exact thing another manufacturer is being called out for, it’s ok because TESLA.

RtFA. The huge difference is Audi still sells cars using the incentives set by the standard dealership model, wherein “dealers are famously focused on closing sales quickly – put your money on the table and drive it off the lot.” therefore “it’s hard to see how an Audi dealer is going to convince many of them to put down a grand and wait a few months for an e-tron when they can drive a perfectly good gas or diesel-powered Audi home right now.

Unfortunately, it’s not worth complaining about. I don’t click on Evannex-sourced articles as a policy, but it does happen accidentally one in a while. When I find the article content-free or misleading (80% of the time) and complain, my comments get deleted. For some reason, InsideEVs really like Evannex.

I’ve also had my comments deleted. Usually in EVANNEX articles. I was really hoping this site wouldn’t be like Electrek. Clean Technica chief editors are also Tesla shareholders. Green Car Reports seems to be the only one with some independence.

They and Tesla pay thier bills

Wow. Comprehension gets an F.
You can’t brag about your dealership model and then prove it doesn’t work.

Then why do Audi stealerships in the US keep gas/diesel inventory? Is poor little Audi in production hell with their EV’s? Your comment would be valid if they stopped keeping any inventory at all. It’s almost like they expect it to be a low volume niche car or something…

It’s about the different treatment that Audi gives its EV as compared to its ICE and the signal they emit. It’s not about criticizing one or the other, its about trying to understand how important EV’s *really* are to Audi (and other incumbents) as opposed to their PR.

This type of selling method is the rule in Europe and many parts of the world (over here, there’s no such thing as on-the-lot inventory whatsoever, for any new car). There aren’t any option lists either, except for the top luxury vehicles. You can select among 2-3 trim levels (and there may not be a demo car of the level you want), and that’s it.
There’s also no price discussion: All cars are sold by the importer directly, not a dealer, at MSRP, except during model changeover when they give a small discount. The showrooms are simply attached to major service garages, but staffed by importer personnel.

However, I really wonder whether this will fly in the US… I’m not sure potential customers will accept having other Audi models available on-lot, but not the e-tron ~We’ll wait and see.

I think you pretty much nailed it. There is no comparison between the US and Euro sales models. I was in France last month and there was a Citroen dealer around the corner from my hotel. It was basically a small service center/repair shop with a new car or two in the front window. The entire operation was roughly the size of a 7-11. None of the 1/2 acre lots with 300–500 cars you find in the US, which the inventory size you need when a car in the US sits on the lot for about 62 days. On the other hand, what should worry Audi, Jag, … is the size of the Tesla delivery lots. I was talking to someone who picked up Model 3 last week and he told a story about picking up his car at the Littleton Tesla service center (that is the one that is next door to the Jag dealership with the “where are you going to store all those cars?” story). On a cold snowy Wednesday, a week after the end of the quarter sales push, they had about 200 Model 3s lined up for delivery that day. I bet the Jag dealer… Read more »

Assuming it works in North America, it sound like some sales-people will lose their jobs.

This is not so for the domestic brands here in germany. You can configure the ever living stuff out of most vehicles. At least the big three have that with all their models, VW and Opel at least with most. That is also something to complain about, because the overall costs would be lower if every car was equipped with X, but then again, the minimum price would be higher.
You are right in that your car gets built to order. In the more premium cars you can get anything you want, basically. Audi will build you a pink A8 with pink lether interior and a fax machine. But even the standard options usually offer a really wide range of stuff. If I was in the market for a new luxury car, I can see why having that freedom of choice to build you very unique car would be apealing.

The best part of that article was reading about Tesla fading away, now that was funny! I’m sure they thought Tesla would be gone about 5 years ago and not the behemoth it is growing into.
I have to give it to Audi, it makes sense to go the direct route. They have a limited supply. The dealers are not keen to sell EV’s. Only die hards will want one while everyone else is steered towards the gas and diesel cars like usual.
Works for me, gives a chance for Tesla to keep taking more market share. The more the OEM’s put off any real challenge, the more Tesla gets to grow. What is funny is that it is great for Tesla business but crappy for there mission of trying to get OEM’s to change fast.
As a result our environment is pretty much F*cked, but hey look at my nice shiny gas/diesel eating car, ain’t it a beaut!

It works for you but it won’t work for Audi.
I’m not sure Audi buyers even know they now make an EV.
But, who knows, they might send out a mailer.

But, the joke that they’re going to replace Tesla, is being shown to be just that, a joke.
They apparently were expecting Tesla to fail and have no plans to compete with any meaningful production.

But, it could still work for them if they sell everything they can make into the EU.

Just how many BEVs is Audi looking to produce annually?

I think the number that is floated is ~20K/year annually, fairly typical for compliance projects. The fact that they will not supply inventory vehicles is consistent with low volume sales targets.

I really do not get the article? Where is the news? Where is the problem?

I wait for the delivery of the first e-trons, should be soon!

There is one thinking error – Audi is not fighting for the EV future (as Tesla does) just because they have a new EV now. They join the EV market to secure their share in it but nothing more. For them the ICE age can last another 100 years they are pretty happy with it. So now they are trying to sell the etron to “EV buyers” and at the same time not to destroy their traditional ICE business. Why should they tempt their ICE cars customers with an EV? No need to stir the water.

I think you’re exactly correct. This vehicle is to “fix” their loss of 20% sales to Tesla. If it doesn’t work, they’re in trouble.

I laughed when I read Evannex refer to himself as a “journalist” in the first line.

Me too. I would be rich if I would bet on that line

Hardly a surprise. I think Audi, part of the VW group, just got hit a huge fine too, almost $1 billion, for cheating diesel emissions.
Talk about fading away.

I got fooled too. I opened this article without knowing it was from evannex.

All this will change within 5 years. but the real change will come when solid-state batteries are mass produced.

Keep smoking….

This site is becoming the Fox News of the EV work and EVANNEX is the Sean Hannity.

DL you do know you have a choice to not read the articles. Right?

Yep, but we also have the choice to speak our mind and in the end maybe get a more balanced site/reporting we can enjoy.
Speak up for change, just the way most of us here advocate for EV adoption, I advocate for less EVANNEX articles. Not everything that is for free is actually a bargain. If insideevs sees that these “articles” are frowned upon and do more harm than good, they may change their policy.

I think it’s fair to say that some Legacies are developing and selling (often very small quantities of) “placeholder” products. Once Audi’s e-tron is in production, if market conditions change significantly (lower battery prices, continued Tesla success at their expense, government mandates) they can quickly ramp up production. The Plug-In Prius is much the same — Toyota could, I’d guess, ship a 150 to 200 mile Prius EV quickly. (I’d bet they’ve already done the R&D.) The same with Honda’s Clarity EV. This is very frustrating for us, but I think it makes sense from the car makers very limited perspective. They don’t want to make a big EV push and risk failure, but they also don’t want to be caught too far behind in the rEVolution, so they hedge their bets with placeholder vehicles that get very little or no advertising and help them out with regulators, but aren’t an all-in move. In business as in politics, the primary incentive for those in power is nearly always to remain in power. This makes these decision makers very risk adverse and slows down technological advancement. I think this sets the stage for a massive tipping point. EVs keep advancing, Tesla… Read more »

The current reality is that EVs ARE more expensive than ICE vehicles. Until we reach the magic $100/kWh or whatever the number is, this will be the case. I don’t see a business case for a current car maker to jump all-in to EVs at this time. Even Tesla only sells high-end builds.

Eventually, anybody that wants to stay in the car (and light truck) manufacturing business will need to switch to EVs. PHEVs might get them closer, but again, two power trains are more than double the initial cost of one.

As far as market share, Tesla is still a very small player in a very large ocean.

I was considering a Model S CPO instead of a CT6 PHEV CPO, but, Tesla is just too scary to jump. I need my car to work every day. The anecdotal evidence of parts shortages and long wait times to get a Tesla fixed is just too much for me. Cadillac, on the other hand, repaired my ELR in record time even when parts were needed from MI.


You found a CT6 CPO? Seems like it would be hard enough to even find a new one much less a CPO.

Ordering a car to order will be the future. JIT manufacturing vs holding inventory on a lot with all the possible liabilities.

Audi and most European makers have long shied away from bringing vehicles to the US because in their words it was to expensive to “Dumb down” their vehicles to meet US standards…..I couldn’t agree more.

Evannex is right to question the level of Audi’s commitment in light of its policy not to supply inventory vehicles. It’s a shame how this forum is staked out by trolls attacking contributors who dear questioning the seriousness of so called “Tesla killers” no doubt because that undermines an important anti-Tesla meme.

You sure you don’t write for them

I’m sort of torn on it. I agree Tesla does the same thing with not stocking vehicles at a dealership. However, Audi’s business model is based around a dealership system. And I agree with the article that says dealerships want to sell whats on the lot, and they don’t like selling EVs even if they ARE on the lot. So by having no inventory on the lot, they will simply not sell many. In fact, I suspect most people outside of the EV enthusiast groups will even know the car exists. That is, unless they start advertising the car to people. I suppose that would show some level of commitment. But I somehow doubt we’ll see much advertising for it.

You insist it’s the same thing, except not. Tesla sells cars one way, and they do it for all their offerings.

Audi does one thing for the cars they want to sell, and another for cars they don’t… see deviation from sop.

They have 6k pre-orders in one country, but they plan on building only 20k. So yeah, we’re more likely to see one grey market before one actually sold here.

Like I have said for the past couple of years – “I will believe it when I see it. ” I am super disappointed. I love the cutting edge and beautiful design of Audi cars. It is tragic that they have been deceiving all of us in this community with promises based on vapor…No Audi for me in the foreseeable future I guess. Yeah with all of the jabs at those of us Tesla enthusiasts as ‘fanbois” answer me this- Is there any other manufacturer that is truely commited to bringing a beautiful, refined, state of the art EV to market? Prove me wrong. Jaguar, Mercedes – limited in US, BMW – just announced they are keeping strong with deisel, VW lots of talk no products, nissan – lacksuster design poor battery tech, Hundai,Kia – compliance cars, Honda – fuel cells , ugly cars, GM – good product, lackluster stying, Ford – not even participating – am I missing something?

These EV are mostly for the Chinese market as the Germans will have to sell at least 12% as EV

“EV buyers” are who is buying the Model 3 right now. It’s still reaching for the top end of the sedan market as well. The big difference between the E-Tron and the Model 3 seems to be hype. This is going to be their most expensive SUV as well, so even half the volume of the Q7 would be substantial.

EV buyers are not a large enough group to account for the huge Tesla model three sales. Not only are they getting most of the EV buyers, they are getting a ton of sales from people who previously never considered an electric vehicle.

Why? I have GM car and a GM truck. I can get lots of items from GM but far, far more often I get my add-ons at my local Canadian Tire – and they are not from GM.

I really have a hard time understanding articles like this!
Inside EVs is clearly a “Tesla fanboyism site” (and it’s ok). Why are they complain about Audi doing it all wrong and failing and eventually go bankrupt?! They should be happy, aren’t all this traditional car makers the devil?

On the other side they might be just trying to find a job at Audi and show them how they should do things.

Or maybe they just want Audi to sell cars at loss and go bankrupt even faster :).

Sorry but I don’t think Insideevs is a tesla fanboy site. Quite the opposite they at least report on many facets of the EV industry and all manufacturers.

You want to see a tesla fanboy site, go to Electrek and I will bet you that you will see 7-8 of out 10 articles with Telsa in the title! Talk about a biased website. Fred is so Telsa fanboy it ridiculous.

Wow, sorry Insideevs but EVANNEX is way off. I don’t think there is anything wrong with this approach. People have been waiting for a Model 3 for over 2.5 years and many have still never seen it nor sit it it!

Nissan Leaf, Chevy Bolt, Hyundai Ioniq – to name a few have been mostly under allocation with wait times being several months to a year! So how is Audi different?

As long as many of their dealers have at least a model to sit in and drive, that will be enough. Don’t need to have inventory.

With the first year production plan (20k units) already reserved globally, cutting out the ‘stealership’ stock-keeping just makes sense.
As ‘stealership’ are not enthusiastic to sell EV’s, then bypassing them makes sense.
As EV have a much thinner profit margin than similar priced ICE, the cutting out the middlemen also makes sense.

So copying the Tesla direct internet sales model based on all this considerations is a sign of weakness ?! Tesla fanb0ys in action ….