In Pole Position
Indian arm of the German carmaker Audi is certainly setting the pace as far as electric vehicles (EV) are concerned. The luxury carmaker has already rolled out five EVs in India—the Audi e-tron 50, Audi e-tron 55, Audi e-tron Sportback 55, Audi e-tron GT and Audi RS e-tron GT. “We can proudly say that all our five electric vehicles have received an overwhelming response. Our first and second allocation of cars were sold out even before they were brought into the country,” exults Balbir Singh Dhillon, Head of Audi India. Audi India launched its range of EVs only in the second half of 2021, and finished the year with sales of 3,293 units, a nearly 95 per cent jump in sales over 2020. In short, last year was one of the best for the luxury carmaker in India in recent times. What has fundamentally changed for the carmaker? The answer lies in the policy shift announced by the headquarters in Germany last year.
In 2021, Audi’s board unveiled a corporate strategy, ‘Vorsprung 2030’, which essentially means a head-start to 2030. More importantly, with this new strategy, Audi as a brand has announced a definitive timeline for the transition to electric mobility; this includes the launch of only EVs in 2026, the end of ICE powered car production in 2033 and increased focus on software and autonomous technology. “Going by the current traction in the EV segment, we may see the volume of EVs more than triple albeit on a low base. The direction of volumes and growth is very encouraging. At Audi, we are expecting 15 per cent of our sales in the country to be driven by EVs by 2025-2026,” says Dhillon.
USP of Audi EV series
Audi’s EV success so far has hinged on a combination of technology, space and comfort. “The e-tron is a luxury electric SUV with a range that is suitable for everyday use,” says Dhillon. The Audi e-tron is a five-seater SUV powered by two electric motors and produces maximum output of 300 kW and 664Nm of torque. The Audi e-tron can sprint from 0-100kph in about six seconds and the top speed is electronically limited to 200 kph. On a full charge, the e-tron can travel up to 400 km. To make electric mobility a premium experience it is offered with comprehensive and reliable charging options with intelligent solutions for ‘at home’ and ‘on the go’, says Dhillon. But all this comfort and luxury comes with a hefty price tag. The price of Audi e-tron starts at Rs1.01 crore and goes up to Rs 1.19 crore. Who is Audi India EV customer? “Our customer is someone who knows the merits of going electric. He is a luxury car buyer who may also buy the e-tron as his second or third car in the family. On the other hand, the Audi e-tron customer is also someone who is moving from a mass market brand to electric. We recently had a customer move from a premium sedan to the Audi e-tron,” says Dhillon. What’s working in favour of Audi EVs is the necessary infrastructure including the charging ecosystem and on-road support that the carmaker has put in place.
When the company launched the Audi e-tron in India, it created an entire ecosystem for its customers. “The Audi e-tron is sold with two chargers — a portable 22kW wall-box charger and an in-car charger. In addition, we have an e-tron hub section on the myAudi Connect App that helps locate the nearest chargers on the route of a journey,” he explains. “We have installed more than 100 chargers in India including high speed chargers at our dealerships,” he adds. Indeed, a robust charging infrastructure is vital for the rapid adoption of electric cars in the country. “We are also installing chargers at our group brand (Skoda & VW) dealerships that are located across strategic highways to help expand the charging network. As a brand, we are also setting up high[1]speed chargers at our dealerships to ensure ease of charging,” says Dhillon. But others including private players, brands and the government must work on expanding the network of chargers across the country. This, Dhillon says, will help enhance customer confidence and aid the growth of EVs.
Supply Chain Challenges
How soon will Audi start manufacturing 100 per cent ‘made in India’ Audi cars? Dhillon says local manufacturing is a matter of time. “It is a matter of when and not if. To manufacture electric vehicles in India we need further investments and to make such investments, we need to achieve a certain threshold sales volume in India to allow us to make strong projections for the future, which is a prerequisite for any fresh investments,” he says. He, however, wants the central government to handhold the carmakers in this transition to EVs. “We request the government to give us a window of 3-5 years of tax sops, which will allow us to create a decent scale and explore localisation.”
These are not easy times for carmakers in the country. They have been hit with a shortage of semiconductors — the backbone of all electronics in cars — and an increase in raw material prices. While the first has inordinately increased the waiting periods for cars due to low production, the spiralling raw material costs have forced automakers to raise the price of cars, a major sales dampener. “The chip shortage has hit the automotive sector and also many other industries globally.
But the biggest challenge which we face is uncertainty. In the luxury segment, the planning cycles are very long and we have to plan, from nine months to one year, even be[1]yond. The waiting period on our models has improved significantly since May and we are hopeful this continues in the months ahead. It is difficult to predict how the rising Covid cases will have an impact in the months ahead,” Dhillon shares. What is Audi’s future focus on EVs? “Starting 2033, we will only launch electric cars, as communicated globally. This strategy is aligned for the Indian market as well,” says Dhillon. For now, Audi India will focus on increasing its share of sales of the five electric cars it launched in 2021.
(This story was published in the 02 July, 2022 print issue of BW Businessworld magazine)
