Audi recently summarised its 2019 performance and outlined future plans, which include a huge €12 billion (approx. £11 billion) investment in electrification.
"In 2020, Audi will again present around 20 models and systematically continue its electrification course. By the end of the year, the Audi core brand will launch five all-electric models on the markets and increase its PHEV offering to a total of 12 models. A PHEV variant will then be available in more than half of the model series."
By 2025, the number of plug-ins will increase to about 30 (including 20 all-electric), while their share in overall sales is expected to increase from 3.5% to 40%.
"By 2025 our portfolio should include around 30 electrified models, around 20 thereof fully electric. Approximately 40 percent of all vehicles rolling off our assembly lines will then be either all-electric or plug-in hybrid cars. To implement this Roadmap E, we will invest around 12 billion euros by 2024."
One of the major challenges is to not compromise the profitability targets. Audi admitted that today it does not earn on EVs as much as on ICE vehicles:
"Today our electric cars do not yet match combustion engine models in terms of returns. However, we still intend to at least maintain our profitability – preferably to increase it. To achieve that goal, we are dedicating all of our resources in order to make profitable electric mobility a reality, focusing on three areas.
First: We will strengthen the revenue side. With an attractive electric portfolio we will convince customers and enhance the prestige of our "Vorsprung durch Technik" motto. This will also strengthen our future pricing position.
Second: We will reduce complexity wherever we can. I am firmly convinced that the unique characteristics of electric vehicles will enable us to meet customer expectations with fewer models. We will also reduce complexity with regard to the individual options in our product range. Moreover: in the future, many customer functions will be implemented digitally.
Third: We will make the greatest possible use of synergy effects. We are the only premium manufacturer competing in the premium segment capable of capturing synergies on this scale through group-level cooperation in the interests of customers. We are teaming up with Porsche to cover the extensive development costs and investments for the Premium Platform Electric (PPE). For compact and mid-class models, we will use the modular electrification platform (MEB). Approximately 20 million vehicles will be based on MEB. The resulting economies of scale will enable us to offer our customers a superior product, traditionally identified with the Audi name, at an attractive price point.
Let's sum up Audi's plans.
- By 2025: around 30 plug-in electric cars, including around 20 BEV models
- By 2025: plug-ins to take 40% of worldwide unit sales
- upfront expenditure of approximately €12 billion (£11 billion) by 2024 solely for the electrification of its portfolio
- The range will cover every relevant market segment from the compact to the full-size class. A series of models with classic body layouts such as Avant and Sportback will also be available
- range of plug-in hybrid automobiles to greatly expanded to virtually every market segment
Financial year 2019: AUDI AG achieves its financial targets and sets a course for long-term competitiveness
- CEO Bram Schot: “Exceptional situation due to corona: we are focusing on protecting our employees, contractors and guests and making the right business decisions in this volatile environment.”
- In a difficult environment, Audi achieves its financial targets for 2019
- Operating profit of €4.5 billion; 8.1 percent operating return on sales is within forecast corridor for 2019
- Net cash flow slightly above forecast target at €3.2 billion
- CEO Bram Schot: “We have held our own against the competition with a stable return development”
- Increased focus on earnings quality
- Audi Transformation Plan (ATP) is delivering: accumulated €4.4 billion already achieved of overall €15 billion target by 2022
- CFO Dr. Arno Antlitz: “In order to achieve our ambitious return targets, we are consistently utilizing efficiency potential, tightening our cost discipline, and creating scope for future growth through targeted investments”
- Numerous presentations and launches of electric models in 2020
- CFO Dr. Arno Antlitz: “Our current focus is on the health of our employees and their families worldwide. Our task is to protect the company’s liquidity and stability and to stabilize core processes.”
Audi steered a steady course through a challenging 2019 financial year. The car manufacturer systematically reduced its WLTP inventories and achieved slightly higher deliveries for the Audi brand than in the previous year in a highly competitive environment. Revenue of €55.7 billion reflects the high demand for SUVs and top-end models. Operating profit and operating return on sales reached €4.5 billion and 8.1 percent. The Audi Transformation Plan (ATP) contributed €2.5 billion in the 2019 financial year. Significantly strengthened spending and investment discipline are reflected by the improved return on investment (12.7 percent). Audi is pushing ahead with its electrification initiative with numerous electric models this year. The company is intensifying the synergies with the Volkswagen Group now also in software development. Against the backdrop of the spread of the coronavirus and the unclear effects on the economy, the manufacturer sees major challenges in the year 2020 and is focusing on the health of employees worldwide and on the liquidity and stability of the business.