Audi’s Updated Electrification Plans Up The Ante, But Is It Enough?

MAY 11 2018 BY CARLO OMBELLO 20

Audi’s 2025 electrification plans give way to Tesla’s dominance

Audi Group held their annual general meeting this week on Wednesday. As expected, the company provided news on their long-term plan for cars’ electrification.

It was an interesting update and a significant one: four new full electric production models will be introduced by 2020, plus a fully autonomous EV in 2021 (based on the Audi Aicon concept). This is one of the most aggressive timelines among major automakers, along with those of Audi’s sibling VW. More than 20 “electrified” Audi models will be available on the market by 2025.

*This article originally appeared on opportunity:energy. Author Carlo Ombello graciously shared it with InsideEVs. He plans to share more related content in the future.

Read Also: More Details On Porsche-Audi Premium Platform Electric Architecture

A number of details stand out in Audi’s latest announcements. The next couple of years will see a rapid succession of EVs that will surely draw much attention and stir EV growth and momentum globally.

The Audi e-tron SUV (its production version is due for unveiling this coming August) will be followed next year by the e-tron Sportback, and by two additional EV models in 2020: the e-tron GT – a coupé announced in March – and a yet undisclosed premium compact model. The latter might end up being the most interesting model by far in terms of global EV market penetration for Audi, as smaller cars such as hatchbacks are popular globally and satisfy a broad variety of customers. We should expect further updates from Audi on this side fairly soon.

The Dieselgate-ridden premium automaker is now adamant about its ambitions of leadership in the field. From Audi’s press release:

“Audi aims to sell approximately 800,000 fully electric cars and plug-in hybrids in the year 2025. At this Wednesday’s Annual General Meeting of AUDI AG, the Board of Management presents the updated “Audi.Vorsprung.2025.” strategy. To enable about every third customer to decide in favor of an e-model by the middle of the next decade, there is to be an electrified variant in each model series by then – most of them are to be fully electric, with a smaller proportion as plug-in hybrids. […]

Our ambition has always been and will continue to be Vorsprung durch Technik,” says Rupert Stadler, Chairman of the Board of Management of AUDI AG. “Our goal is to revolutionize mobility. Also in electric mobility, we want to become the Number 1 among the premium manufacturers – with full suitability for everyday use, no compromises, top quality and driving pleasure for the customer. With our technological excellence, we are utilizing our Vorsprung and lifting electric mobility to the next level. […]

The product fireworks include more than 20 electrified models in rapid succession until 2025. In 2019, the Audi e-tron Sportback will be the second fully electric car to be launched, followed by the Audi e-tron GT from Audi Sport in 2020. Audi will also offer an electric model in the premium compact segment in 2020.”

While this week’s news from Audi represents significant progress, a rather underwhelming detail is their projected sales. The German brand aims at producing around 800,000 “electrified” cars by 2025, including hybrids of all sorts (from mild to plug-ins) and proper EVs. This, in their vision, means one in three Audi customers would choose an electrified vehicle, although not necessarily a full EV. While it looks like a substantial number, it does lend itself to less than flattering comparisons.

For starters, Audi seems to imply that it plans to reach annual production of around 2.4 million cars by 2025 (from over 1.8 million today). Of these, only a third would be electrified in any way, possibly leading to about half a million of pure EV sales under its brand or about 20% of the total. Some may think this is aggressive enough, but with two-thirds of Audi sales still anticipated to be conventional cars at 2025, the company’s strategy seems to not fully consider the ongoing EV market dynamics and customer readiness for electric vehicles.

Check This Out: Audi Reinvents Quality Control In Manufacturing For Electric Cars

As anticipated in a separate article and S3XY chart, Tesla is set for exponential growth with the mass market production of Model 3 (already in progress) and Model Y (starting in a couple of years).

With these two models and new, yet to be announced factories around the world (most likely in China, US as well as Europe), the Silicon Valley company is likely to reach the milestone production of about 1 million cars per year by 2022, all the while maintaining or increasing its leading edge, particularly in terms of battery and autonomous driving technologies. Maturity of models’ production and ramp up of new factories in all continents could lead to a doubling up to 2 million cars per year around 2024.

As Tesla breaks out of its original niche, competing premium car makers such as Audi, Mercedes and even first mover BMW will soon have to up their game, or they may quickly find themselves outpaced by Tesla in both sales and technology despite their best efforts.

Source: opportunity:energy

Categories: Audi

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20 Comments on "Audi’s Updated Electrification Plans Up The Ante, But Is It Enough?"

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jelloslug

I have also head that VAG has hired Pixar to lead their product rendering…err development team.

Get Real

MINIONS, assemble!

ModernMarvelFan

That is a lot of talks from VAG in the last 3 years but hardly any real actions…

Will we have to listen to this for the next 5 years?

BoltUp

Guess they started talking when they started developing, per FullyCharged, development of the e-tron has been ongoing for 3 years, so releasing a car this year is fairly quick response. All good news unless your a troll.

Chris Boas

Because well constructed product development cycles (where you test the product and production line before selling cars publicly and lock down supply chains) take 5-6 years.
Tsla quality issues and financial issues arise from ignoring this. Tesla need to raise a bunch more money NOW to keep ahead – the Germans are coming with 10bn+ each.

pjwood1

“Audi seems to imply…2.4 million cars by 2025 (from over 1.8 million today). Of these, only a third would be electrified”

So, of the 150GWh VW Group claims to need yearly, in ’25:
1.8 million. If-
1/3 Mild Hybrid, or hybrid @we’ll say 1KWh each
1/3 PHEV w/15KWh
1/3 BEV w/70KWh average

Above would need about 55GWh. Faith, or not, I can see where the three brands could theoretically need the 150GWh. Maybe they’re just being symmetric with Tesla estimates?

hangtime10

I suppose the trolls think that VAG won’t invest anymore that this into EV’s until 2025.

Brotz

“For starters, Audi seems to imply that it plans to reach annual production of around 2.4 million cars by 2025 (from over 1.8 million today). Of these, only a third would be electrified in any way, possibly leading to about half a million of pure EV sales under its brand or about 20% of the total.”

20% EV in 2025 sounds about right. If you think in 2025 everybody will be buying EV only, I have a bridge to sell to you.

Carlo Ombello
Hi Brotz! Today, it does sound good for a legacy automaker, no doubt. It did to me when I first read it. The point I try to make in the article is that it will be easy to sell half a million EVs globally by 2025, actually so easy that Tesla will be selling a lot more, hence going further ahead in the EV market. What Audi should think carefully is whether the remainder of the market, the hybrid or conventional one, will still account for the vast majority of worldwide sales, as they currently think. I know this sounds very optimistic and I may well be mistaken, however let’s not forget how the internet or smartphone took over from incumbent technologies once they reached mainstream. EVs are reaching that stage between now and 2021 at the latest (say 5 to 10% of global car market?), demand is then likely to skyrocket to the detriment of conventional choices. To be fair, I am sure that Audi is prepared for unanticipated swings one way or another as they gauge demand over the next crucial couple of years. They may well update the plan in 2020 upping the EV share by 2025… Read more »
Fibb

I think transition from ICEs to EVs (in terms of NEW car sales) will be largely complete by about 2025. It’ll go something like this
comment image

Tony Seba explains why here: https://youtu.be/duWFnukFJhQ

John Doe

A camera was cheap, made in millions every month.
EVs will be slower. But 2025-2030 will be a turningpoint for sure. That is when EVs will start to be made in real volumes. Maybe 10+ millions a year. If prices become fairly competitive.

Carlo Ombello

I think it’s another great comparison Fibb, the chart shows it all. And while undoubtedly EV uptake will be slower in comparison (let’s say perhaps half the speed?), that’s what car makers should brace for in the years to come. We are now pre-chart with electric cars, maybe 1996… I do expect the next three years to have a steep increase though, thanks to plenty new models and China’s push.

Alonso Perez

Buying an ICE in 2025 will be like buying a blackberry in 2010. People did, still, but they were laggards, the kind of customers that don’t move a brand forward. Audi can’t afford to do that, and will pay a steep price in relevance, and ultimately loss of sales, if they do.

Zlatko Kregar

“Audi aims to sell approximately 800,000 fully electric cars and plug-in hybrids in the year 2025″ – this is quoted in the article above, and then, a couple of lines below, the article transforms and starts including non-plug in hybrids.

Either the original quote is wrong, or the article is wrong… As this is a base for calculating afterwards, it makes a hell of a difference…

Carlo Ombello

Zlatko you make a good point. I am myself not sure about Audi’s statements, as indeed they sometimes seem to refer specifically to EVs and plug-ins, others to “e-models” or “electrified” vehicles. The main reasoning in my article of course is about pure EVs, which I try to extrapolate as about half a million or 20% of their anticipated 2025 sales. An awful lot more than now, but a lot less than Tesla by then, meaning their business model is up for disruption and their plans as they are now may not come true.

Roy_H

Audi does not have to match Tesla in production their market is upscale vehicles and Tesla is working its way towards average, so their market will not be the same. Audi will consider themselves successful if they meet their own targets.

Nix

The plan is enough, but holy cow, Audi has had SO MANY concept cars they talked big about and never delivered that it is hard to take them serious in the United States. They seem to be an EU centric EV maker at this point. What they’ve done (or not done) in the US so far isn’t going to cut it in this market. I look forward to be proven wrong.

John Doe

The VW group stated that by a certain date, their brands will start to release an EV virtually every months.
Time will tell. That includes China as well, where they produce several EV models.
If they do, I’ll be impressed.
I’m just not 100% sure the market is ready for the extra cost of EVs (up front). At least not all the market.
Even now, across all brands – EV sales are slow, compared to ICE vehicles. . Few choises, and models that are not quite good enough.
But we’re heading in the right direction.

Greg

2025. Ha. A date designed to be pushed back. Buy one of the ones you can get now, or even a plug-in hybrid.

skierpage

@Carlo Ombello “and stir EV growth and momentum globally”
I think you meant to say “spur”, as in digging your spurs into a horse to make it gallop.

I hope Tesla builds its second car factory soon to keep the pressure on. It’s nice for all the European manufacturers of expensive BEV SUVs that Tesla hasn’t announced the Model Y so their cheaper smaller SUVs look good in comparisons with the Model X. I think a Model Y announcement would cannibalize their tepid sales even more than Model 3 reservation holders like me switching their reservations.