Audi chief sets sights on China in electric car catch-up

INGOLSTADT: Audi has to speed up development of new models to meet a surge in demand for electric vehicles, especially in China, the German luxury carmaker's CEO said in an interview with Reuters published on Thursday.

"We are in the process of reviewing our entire development process," Markus Duesmann said.

The company needs new and shorter production cycles for the areas of connectivity and software. "And we are also looking more intensively at how this is done in China," Duesmann said.

"I expect that over time we will get close to a development time of 30 months," he added. That compares with a current time of more like 48 months.

The Volkswagen subsidiary has lagged behind fellow German carmakers BMW and Mercedes-Benz in the pivot towards battery-electric vehicles (BEV).

"In 2030, the BEV share of the premium car market should already be between 60 and 70%, depending on the region," Duesmann said. "We have to react when a market suddenly changes so quickly."

That shift could happen even sooner in China, but Audi's sales performance in the world's biggest car market has fallen short of expectations. The reason, Duesmann said, is that "we still don't have the optimal vehicles on the market for Chinese needs".

From January to March, Audi sold just over 3,000 electric cars in China.

Local heavyweight BYD, meanwhile, overtook the VW brand in the first quarter to become China's top marque with a total market share of 11%, including traditional combustion-engine cars.

Software delays

Unlike BMW and Mercedes, Audi has not brought out any major additions to its model range over the past two years.

The new Q6 e-tron has been delayed by behind-schedule software development.

Its release, now set for the end of the year, marks the launch of a product offensive, with Audi aiming to bring more than 20 new models onto the market by 2025, half of them powered by electric motors.

From 2026, Audi doesn't plan any new combustion-engine models.

Hoping to offset any disappointment in China, Duesmann said the carmaker wanted to strengthen its business in North America, tapping into a strong US car market and Washington's generous subsidies programme.

Audi's strategy "has been reinforced by the Inflation Reduction Act", the CEO said, referring to the programme.

Audi has a plant in Mexico and is currently considering an expansion of its production capacity in the region, perhaps at VW's site in Tennessee.

A decision on this will "definitely be made this year," Duesmann said.