Powering profitability

Audi is setting itself ambitious goals for electric mobility. Production of the Audi e-tron electric SUV is scheduled to begin this year, followed by the e-tron Sportback in 2019. By the year 2025, one in every three Audi vehicles sold is to be a fully electric car. At the same time, the company’s target for operating return on sales will remain between eight to ten percent in the future as well. No mean feat given that the product costs of electric vehicles are (still) comparatively high due to the costly batteries. Despite this, Audi aims to inspire as many customers as possible with attractive offers to make the switch. A challenge for the entire automotive industry. All of this shows: Sustained financial success by Audi calls for profitable electric mobility.

05/15/2018 Text: Stefan Kemmerer Photos: AUDI AG Talking Business

How does Audi make electric mobility profitable?

How does Audi make electric mobility profitable?

Audi is setting itself ambitious goals for electric mobility. Production of the Audi e-tron electric SUV is scheduled to begin this year, followed by the e-tron Sportback in 2019. By the year 2025, one in every three Audi vehicles sold is to be a fully electric car. At the same time, the company’s target for operating return on sales will remain between eight to ten percent in the future as well. No mean feat given that the product costs of electric vehicles are (still) comparatively high due to the costly batteries. Despite this, Audi aims to inspire as many customers as possible with attractive offers to make the switch. A challenge for the entire automotive industry. All of this shows: Sustained financial success by Audi calls for profitable electric mobility.

 

To position the new e-tron models on the market successfully, Audi is pursuing a holistic approach that focuses on market conditions, costs, complexity and, above all, on delighting customers. Electric mobility makes it possible to re-imagine the vehicle architecture. Other technologies – such as high-voltage batteries, control units and control electronics – start to determine the pace of development. With this in mind, Audi is systematically scrutinizing existing structures: How is the vehicle character changing? What will customers care most about in the future? Which of the features that set the products apart from the competition must Audi develop and manufacture itself?

 

Making the best possible use of synergies is the primary lever for optimizing costs. Synergies between individual Audi models. And within the brand network of the Volkswagen Group. Modular vehicle architectures or so-called platforms make it easier to position the most diverse derivatives in the market cost-efficiently and flexibly – thereby meeting the ever-increasing demand for electric vehicles. Examples of these include the Premium Platform Electric (PPE) jointly developed by Audi and Porsche as well as the Modular Electrification Toolkit (MEB) overseen by Volkswagen for the compact segments.

 

Does electric mobility offer the potential for additional revenue?

Does electric mobility offer the potential for additional revenue?

Audi emphasizes the opportunities of electric mobility, for instance, in the area of digital services. To this end, the upcoming e-tron models will see Audi debut functions that the customer can digitally activate retrospectively (function on demand). For example: Drivers who want greater range and performance can purchase an upgrade – via an app or directly in the vehicle. More power at the push of a button, so to speak. What does Audi expect to gain from this? Greater sales potential. Reduced manufacturing complexity. But above all, a more intensive and loyal customer relationship.

 

Keyword infrastructure: The need for a comprehensive, high-performance quick-charging network to support the market penetration of electric mobility is not news. Yet as this network represents an additional customer interface, it is also a gateway to future business models. Examples include high-power charging to guarantee everyday electric mobility also over long distances, as well as customer-focused smart home solutions.

 

Audi is additionally developing business models that revolve around creating a second or even a third life for batteries – for instance, as stationary energy storage devices. In-house research also points to major potential for recycling specific materials such as cobalt.

What is the Premium Platform Electric (PPE) and what role does it play for Audi?

What is the Premium Platform Electric (PPE) and what role does it play for Audi?

Audi and Porsche are working hand in hand on the electrification of their vehicle models. To this end, both companies have pooled their expertise and resources in what is referred to as the PPE, and are jointly developing the vehicle architecture, modules and components. This enables efficient development and production of electric vehicles in the long run, paving the way for offering attractive prices to the end customer and delivering premium-level product substance.

 

In terms of technology, the PPE has been systematically designed to meet the new requirements of electric mobility. This means that assets such as full torque availability from standstill, along with enhanced acceleration and traction, are further refined. The PPE optimizes ways to address new challenges such as vehicle handling characteristics due to the high battery weight. For example, intelligent design as well as installation of the drive system battery low in the vehicle ensure the best possible driving balance. No less important: Battery modules installed in the floor open up new design options. For instance, in terms of styling, for a sporty silhouette. But also in the interior, for functional ergonomics. In 2017, Audi showcased how this might look with the Audi Aicon concept car cabin. It does without a steering wheel and pedals, and offers top-class comforts. In doing so, it provides an ideal setting for innovative transportation concepts that would allow passengers in an autonomous future to complete office work, surf the Internet or simply relax in a comfortable position while on the move.

How will Audi retain its identity in the process?

To start with: The concept of optimizing synergies with the help of modules and platforms was developed long before electric mobility. The world of conventional drive systems also makes use of standardized architectures, harmonized production processes and identical modules to realize cost advantages and reduce complexity. Despite the growing pressure to maximize efficiency in the age of electric mobility, the brand identity will be retained. After all, the PPE not only harmonizes the technical substructure, but is also extremely flexible. In terms of look and feel, operation, perceived quality and handling characteristics, the brands and models will continue to differ from one another in the customary way – and above all in a manner that is clearly perceptible to customers. In other words, Audi and Porsche will retain their unique identities in the electrification process, too.

An electrifying outlook

At this year’s Geneva Motor Show, Audi unveiled a prototype of its first fully electric series-production. Sporty dynamism, lots of comfort, a high range and day-to-day practicality – the prototype made for an electriying outlook of the purely electrically driven future of Audi.

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