How Audi's CEO is transforming the 111-year-old brand

Will electrification cut the number of Audis on offer?

“I wouldn’t expect the number of models we offer to rise, and perhaps it will fall a little. The number of combustion models will certainly fall as we launch electric models, but cutting the total number of models isn’t a priority for us. Keeping our stable together is the priority.”

You’ve said Audi won’t develop any new engines, but Ford has gone further with the goal for all of its European cars to be EVs by 2030. Will Audi make a similar announcement?

“No, my official announcement is that the last combustion cars we make will be the best of that type we ever make. It’s too early for us to announce a final date, given the disparate requirements of our many markets. But we’re in the process of reviewing the whole Audi strategy, and this will certainly be a discussion point for us.”

Some manufacturers say the impending Euro 7 efficiency standards will add huge cost to engines, which, together with a fall in battery prices, will cause the cost of EVs and combustion cars to cross over. What’s your view on this?

“It’s certainly true that meeting Euro 7 [standards] adds a lot of cost to combustion engines and that a crossover point is coming – we think by the middle of the decade at the latest. Euro 7 is a real headache, especially since it doesn’t do much to improve the environment. So we will reach this crossover point soon.”

There are suggestions that BEVs have progressed so quickly that plug-in hybrids (PHEVs) might be needed only for a short time. Do you agree?

“We see the PHEV as a convenient bridge technology, but it’s also a technical overkill, because it requires a car to have two powertrains – one of which will soon be an expensive Euro 7 combustion engine. And it still doesn’t make mobility CO2-neutral. That’s why we’re strongly focusing on BEVs for future Audi models.”

Is this to say that you would prefer not to offer PHEVs?

“No, we offer them now. The needs of our subsidiaries and our customers force us to do that. It probably sounds hard, saying it like that, but that’s how it is. We’re convinced that pure battery-electric vehicles are the future.”

Are batteries truly reducing in price, and if so, how fast?

“Many things influence battery costs: commodity prices, materials supply, fluctuating demand, transportation... But the technology trend is that costs will go down, and significantly. We’ve predicted a 50% drop by the middle of the decade. The technology is already far enough developed to see that this can happen.”

How will electric motors progress?

“They will develop more too, especially when problems of battery range and [EV charging] infrastructure reduce. There’s not much sign of design convergence at present, but this will change over the next 15 years. The main drivers will be size – have you seen those tiny motors they use in Formula E? – plus weight, efficiency and cost. It’s not an easy technology. It looks easy and there are fewer legislative problems, but it’s still very difficult to do well.”

Many manufacturers say that the existence of small cars is under threat, because they aren’t profitable. What’s the truth?

“Earning money from little cars is definitely difficult. Diesels have already disappeared from little cars, because they’re just too expensive to make; cheaper to use, maybe, but expensive to make. We continue with the A1 Sportback [supermini], because it’s only two-and-ahalf years old. In the longer term, we will stay with cars in the A1 and Q2 [crossover] bracket. It’s not where we make money, but it’s a segment that our customers like, so we will continue.”