Audi AG has allocated roughly $41 billion for research and development expenditure over the next five years. The carmaker is planning an upfront investment of more than $13 billion exclusively for electromobility.
The investment is planned between 2020 and 2024. It comprises expenditure in property, plant and equipment, as well as research and development. The current planning reflects a significant investment and cost discipline, along with prioritization of investments in electric mobility.
The first all-electric model from Audi, the e-Tron Quattro, showcases just how much Audi is capable of when it comes to EVs.
Audi will work with other members of the Volkswagen Group portfolio to develop platforms for large as well as small electrified and all-electric cars. The electrification drive has begun at Audi with the launch of the e-Tron Quattro.
Alexander Seitz, Board of Management Member for Finance, China, and Legal Affairs at Audi AG, says, “With our Consistently Audi strategy, we are accelerating our roadmap towards electrification. Our investment planning takes this into account. At around €12 billion, we will spend more than ever before on electric mobility by 2024.”
Audi Group aims to put 30 electrified on the road by 2025, 20 of which will be pure EVs. The company is targeting to achieve 40 percent of its worldwide sales raked in by electric and hybrid cars. It is working with Porsche to develop the Premium Electrification architecture (PPE) for large electric cars, and the Modular E Drive system (MEB) with Volkswagen.
Audi launched the Audi Transformation Plan (ATP) two years ago to finance the high investment required to realign its business model. Seitz provides some additional details, saying, “With the ATP, we have significantly improved our spending discipline and our focus on investment. The course has been set for Audi to return to an operating return on sales within the strategic target corridor of 9 to 11 percent in the medium term.”
Audi.Zukunft, a fundamental agreement reached in the last week of November this year between the firm’s management and employee representatives, will make a crucial contribution towards ensuring Audi’s long-term competitiveness. The agreement includes market-oriented optimization of strategic production capacities at the two German plants and socially responsible workforce adjustments.
Audi will develop an entrie portfolio of electric cars, ranging from premium commuters to high-performance models.
By strengthening new job profiles in apprenticeships and extending employment guarantee through 2029, the Works Council and company management are sending an important message to the employees of German plants. The measures taken as part of Audi.Zukunft are expected to make a cumulative impact on earnings of approximately $7 billion by 2029, which will be earmarked for investments in the future.