Audi expects EVs to be as profitable as combustion vehicles by 2024

Audi CEO Markus Duesmann assumes that electric cars will be just as profitable as petrol cars in two to three years. That is why he is already setting much stricter profitability targets.

The return on sales should rise from 5.5 per cent to more than 11 per cent in 2025, reports German publication Der Spiegel, citing people familiar with the matter. This is to be made possible by the purchase premium and increased customer interest. Duesmann is quoted as saying: “In two to three years, our battery-electric cars will be just as profitable as combustion engines.”

Nevertheless, according to the report, the Audi CEO will have to pursue a “though-but strategy”: Electric car shares should continue to rise, and in a few years Audi should only offer electric drives. The “but” remains, however, that Duesmann should not scare away “combustion engine fans”. After all, they need to continue to contribute to sales and profits for a few more years.

It had already become apparent that Duesmann would be taking a sharper electric course. In March, he announced in an interview that he would not develop any new combustion engines from scratch – only already existing engines would be developed. This also has consequences for other brands of the VW Group, some of which buy engines from Audi.

In June, Audi had given details of its accelerated electric course: According to this, production of the last new combustion engine model will start in 2025, and from 2026 onwards every new Audi model will only be offered in pure electric form. The last combustion models introduced in 2025 should then be phased out by 2033 – and Audi would be a purely electric brand in twelve years. However, Audi is keeping a loophole open for the Chinese market: The company expects demand there to continue beyond 2033, which is why it could offer vehicles with combustion engines from local production.

It was also announced that the brand intends to sell its electric cars in an agency model from 2023. In this case, the customer enters into a contract directly with Audi, and the local dealer only acts as an intermediary/agent. Details of this are not yet known, however, as new contracts will have to be negotiated between Audi and the dealers. A conclusion is not expected before 2022.

spiegel.de (in German)