Audi Aims For $12B Savings As Push For Electrification Intensifies

Audi wants to cut costs by 10 billion euros ($12 billion) by 2022 while pressure mounts from the diesel emission scandal and the transition over to electric vehicles.

Most of that cost savings will come from cutting research and development expenditures, sources close to the matter told Reuters. More funds will be needed to roll out the intended five all-electric models in the near future, starting with the Audi e-tron Quattro SUV that starts production next year.

Cost savings are expected to come from sharing EV architecture within the Volkswagen family. Audi will be working with Porsche in the design and by sharing components and modules.

Access would also be available to VW’s Modular Electrification Toolkit (MEB) currently being developed by the parent company for its ID concept vehicles. The flexible modular system will have access to a pool of common parts used in the VW family.

Audi executives want to reach operating profit margin of at least 8 percent a year, sources said. For the first half of the year, the company reached 8.9 percent in the first half of this year.

That will be a real challenge for the company, with all the cost increases faced to research and develop, and manufacture, five new EVs in the near future.

SEE ALSO: Audi Rolling Out Three New All-Electric E-tron Models By 2020

Pressure is on the reach the goal, with more being revealed on Audi’s involvement in the diesel emissions cheating scandal. Germany is investigating Audi, VW, and other automakers, having colluded for several years on ways to bypass scrutiny.

The company its facing recalls, investigations, and heightened criticism among several institutional leaders in Europe. That’s all led to four top Audi executives being market for dismissal soon, sources told Reuters on Friday.

Audi has taken the electrification challenge brought about by competitors such as Tesla and Daimler seriously. During the annual general brand meeting in May, Chairman Rupert Stadler said the company will launch three new battery electric models by 2020. The first of them, the e-tron Quattro SUV, will be available for sale next year.

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