Brussels

CO₂ – the currency of the future

In the era of electric mobility, decarbonization is becoming a competitive advantage. How Audi is shrinking its corporate carbon footprint and why this is key to making itself future-proof – a look at the new “Consistently Audi” strategy.

06/18/2019 Copy: Franziska Hartung Photos: AUDI AG Talking Business Reading Time: 5 min

Audi Brussels, Montage: Audi e-tron

Climate change concerns everyone

Climate change: probably the biggest challenge facing humankind in the 21st century. Audi acknowledges its responsibility and aims to become part of the solution instead of part of the problem. The prerequisites for this vision are a clear objective, drive and concerted action by the company. Audi expressly commits to the targets of the Paris Climate Accord, which envisages a world with net zero by 2050.

Responsible actions will provide a competitive edge in the capital market

Environmental awareness is on the rise – not just in society and in political circles, but also increasingly in the capital market. “The stock market tells us where the future is happening,” comments the value-oriented asset manager and CEO of Globalance Bank, Reto Ringger, in conversation with Audi CEO Bram Schot. “Stocks are bought because investors think that companies can tackle the new business, social and ecological challenges and quickly adapt their business model.” While revenue and EBIT were the measure of all things on the stock market until a few years ago, the picture today is more diverse. That is reflected in the growing relevance worldwide of Environment, Social and Governance (ESG) factors in investment decisions.

ESG stands for responsible actions with a positive environmental and social impact. According to an article in Forbes magazine an estimated 20 trillion dollars is now invested in products that meet ESG criteria – with the tendency rising sharply! 1 By using the carbon footprint as a key figure, sustainability becomes measurable and assessable for businesses. Audi is systematically shrinking its carbon footprint in order to safeguard its competitiveness. But above all as a demonstration of its social responsibility.

The vision: carbon neutrality as part of Audi DNA

Audi looks at the entire life cycle of its models, starting from supply chain and production, through utilization, right up to recycling. Audi will have entirely carbon-neutral operations by no later than 2050.

Strategy

Company

Strategy

The automotive industry is experiencing radical upheaval. The Audi Group is likewise in the process of redefining itself for the future and playing an instrumental role in shaping the transformation as we head into a new age of mobility.

The objective: 40 percent of all deliveries electrified by 2025

From the present perspective, electric mobility is the key to climate-neutral, clean mobility. The Audi e-tron therefore marks the start of the four rings’ drive to electrify.

Audi will present twelve electrified cars by next year: seven plug-in hybrids and five electric cars. By 2025, Audi will already have 30 electrified models, corresponding to 40 percent of all deliveries.

Audi stands to benefit here from its experience in developing the Audi e-tron. Audi will already start scaling up production with the Audi e-tron Sportback, and then ramp up the rate at which new models appear on the market.

Consistently Electric

Consistently Electric

by 2020

12

electrified models

by 2025

30

electrified models

2025

40%

volume share for electrified models

Insights from the Audi e-roadmap: From the premium compact car segment to the full-size class

The new currency of CO₂

In the future, we will consistently prioritize our product portfolio according to capital value and CO₂ contribution.

Bram Schot, CEO AUDI AG

The electric initiative is a huge financial commitment, because the price of the batteries means the product costs of electric and electrified vehicles are (still) comparatively high. Nevertheless, this focus on electric mobility will pay dividends because combustion-engine vehicles will get significantly more expensive by 2021 at the latest, when the new EU-wide fleet target for carbon emissions comes into force. It will limit emissions of carbon dioxide per car to 95 grams per kilometer. Manufacturers that overstep this limit will have a bill to pay: 95 euros per car for every gram above that figure. So CO₂ comes with a price tag. For Audi, that means CO₂ will be considered in product costing, making it an active cost factor. This acts as a penalty on the product margin of combustion-engine vehicles with higher carbon emissions, and as a bonus on low-emissions electric cars. Such a mechanism provides the right internal incentives for developing more environment-friendly vehicles.

Carbon-neutral right across the board: a pioneering role for Brussels within the Group

The Audi Brussels plant is the first accredited carbon-neutral site of the four rings, and within the Group it serves as the pioneer for decarbonizing production: Audi already switched to green power there back in 2012, and 95 percent of the energy consumed now comes from renewable sources. Where it is unable to avoid emissions, Audi Brussels employs what is known as carbon credit projects.

What has already become a reality in Brussels is set to happen at all other plants throughout the Audi Group network by the middle of the next decade. For example, the Hungarian plant in Győr will likewise achieve carbon-neutral production as soon as next year.

Mission zero
Mission zero

Environmental Management 03/15/2018

Mission zero

Emission-neutral production is becoming reality. The Audi plant in Brussels is showing how it is done – and making an important contribution to sustainability in the process.

Less CO₂ means more sustainable mobility

  • Audi sees a competitive advantage in operating sustainably as the basis of economic activity. As part of the new “Consistently Audi” strategy, the strategic goals therefore include sustainability. One vision is carbon-neutral mobility, where the entire life cycle of a vehicle is considered.
  • When costing up its products, Audi gives CO₂ a price tag. This figure acts as a penalty on the product margin of combustion-engine vehicles with higher carbon emissions, and as a bonus on electric cars. Audi therefore creates compelling internal incentives for both the product and finances to develop more environment-friendly vehicles.
  • The Audi e-tron serves as the blueprint for sustainable premium mobility. This vehicle, the brand’s first fully electric model, is built in the carbon-neutral plant at the Brussels site. Audi will use the findings from its manufacture to bring new electric models to market faster and achieve carbon-neutral production in all Audi plants by mid-way through the next decade. Audi will have entirely carbon-neutral operations by no later than 2050.
  • Audi is promoting the electrification of the product lines with even greater intensity. It aims to have 20 electric models in circulation by as early as 2025. 40 percent of new Audi cars will have fully electric (BEF) or part-electric (PHEV) drive.

Let’s talk business

Talking Business

Let’s talk business

The numbers have to be right. But it takes backgrounds to make the transformation of Audi tangible. Strategic. Substantiated. Compact. Here we are Talking Business.

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