FYI: Audi is recalibrating its timeline for phasing out gasoline engines, responding to slower-than-expected EV adoption and planning increased production in North America by 2029.
Audi is considering a significant shift in its strategy to phase out gasoline-powered vehicles, originally set to conclude by 2026. This reassessment comes as the renowned automaker faces an unexpected 12% sales drop in 2024, largely attributed to the slower pace of electric vehicle (EV) adoption.
Reevaluating the Gasoline Engine Timeline
Audi’s CEO, Gernot Döllner, who spoke at Audi’s recent annual meeting, announced that the company is reassessing the launch of its last gasoline engine model. This move follows the initial 2021 announcement that aimed to end the production of gasoline engines by 2026. Despite the goal to sell only electric models by 2033, Audi must revisit these targets due to global market developments and consumer behaviors not meeting expectations.
Sales and Economic Challenges
The current scenario is challenging for Audi. Alongside the strategic reevaluation, the company intends to trim its workforce by 7,500 positions by 2029. The automaker’s global sales took a hit, plummeting by 11.8% to 1,671,218 units in 2024. This downturn reflects a 38% drop in operating profit, amounting to 3.9 billion euros (around 4.3 billion dollars). The reduced demand for electric mid-sized SUVs, underscored by the closure of their Brussels factory—responsible for producing the Q8 E-Tron—compounds these challenges.
Adaptation and Innovation Plans
Despite these hurdles, Audi remains committed to revitalization. Döllner assured new initiatives, including launching over 20 new or refreshed models within the next two years. Among the highlights are new plug-in hybrid options for the A5 and updated versions of the 2025 A6 and Q3, aiming to bolster the lineup and reignite market interest.
Regional Focus: Increasing North American Production
Audi’s strategy also involves intensifying production efforts in North America. The CEO hinted at leveraging existing facilities, such as the factory in Mexico and potential collaborations with Volkswagen’s plants in Chattanooga, Tennessee, or the upcoming site in South Carolina. These moves are designed to better cater to local demands and enhance economic resilience amid an uncertain global landscape.
This comprehensive approach highlights Audi’s commitment to adjusting its roadmap while strategically embracing market dynamics and technological shifts.
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Donald Smith, Editor of Automotive.fyi
