CO₂ – the currency of the future

• 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.

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. “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.

Audi looks at the entire life cycle of its models, starting from supply chain and production, through utilization, right up to recycling. Audi is to have entirely carbon-neutral ² operations by no later than 2050.

From the present perspective, electric mobility is a vital 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 models by the end of 2020, including five electric cars and seven plug-in hybrids. By 2025, this will be 30 electrified models.

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, thus ramping up the rate.

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, it is clear that the 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 more closely 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-emission electric cars. Such a mechanism provides the right internal incentives for developing more environment-friendly vehicles.