Audi’s CEO, Gernot Döllner, recently revealed at the company’s annual general meeting that Audi is reevaluating its strategy to phase out gas engines by 2026. The plan, initially announced in 2021, aimed for the launch of the last gas-powered model within that timeframe, followed by a complete transition to electric vehicles (EVs) by 2033 in most markets. However, the unpredictable pace of EV adoption has prompted Audi to reassess these timelines, highlighting the challenges many automakers face in transitioning to greener alternatives.
What’s particularly striking is that Döllner’s announcements come at a time when the entire automotive industry is grappling with shifting consumer preferences and market realities. The struggles aren’t limited to Audi alone; competitors like Mercedes-Benz and Volvo have found themselves in a similar predicament, realizing that a complete exit from gas engines might not be feasible in the immediate future.
For Audi, recent sales figures underscore the urgency of these strategic shifts. The company reported a significant 11.8% decline in global sales in 2024, closing at 1.67 million units. Operating profits fell by 38%, dropping to approximately 3.9 billion euros (around $4.3 billion). This downturn highlights the sometimes turbulent road to electrification, leaving many industry insiders questioning the feasibility of rapid transitions given fluctuating consumer interest in EVs.
Döllner’s reassessment also comes on the heels of Audi’s decision to shut down its Brussels plant, which produced the Q8 E-Tron, due to disappointing sales of the electric midsize SUV. Such decisions demonstrate the company’s need to adapt quickly to market dynamics, adjusting policies and production plans in real-time to safeguard the brand’s future. The CEO articulated this need clearly, stating, “We will manage the production of our last combustion engine vehicles depending on the various developments in the world markets,” indicating a flexible approach to their production strategy.
Looking forward, Audi is aiming to pivot by rolling out over 20 new or upgraded models in the next two years, including fresh takes on popular models like the A6 and Q3, with updates slated for 2025. They’re also introducing a plug-in hybrid variant for the A5, acknowledging that there is still a market for hybrid technology as part of the transition to full electrification. This strategy may help capture the interest of consumers who are not yet ready to fully commit to EVs.
Additionally, Döllner hinted at a potential increase in production capabilities in North America, which reflects a broader trend of localization among automakers. Without explicitly referring to tariff concerns stemming from policies of former U.S. President Trump, he mentioned, “We are also currently assessing various scenarios for additional localization in North America,” which speaks to both a desire to streamline operations and an understanding of local market demands.
Currently, Audi operates a plant in Mexico, where the Q5 is manufactured. There’s potential for collaboration with Volkswagen’s Chattanooga facility or even the new Scout plant being built near Columbia, South Carolina. Bringing production closer to home not only addresses logistical challenges but also positions the brand to be more responsive to American consumers.
In summary, as Audi navigates this transformative phase, the shifting timelines for its gas engine models and the focus on hybrid and electric offerings signal a significant transitional moment for both the automaker and the entire automotive industry. There’s a collective understanding among car manufacturers that the road to electrification is not merely about meeting deadlines but about meeting the real-world needs of consumers while adapting to the ever-changing landscape of global markets.
Image Source: Below the Sky / Shutterstock
