Focus on future technologies with an upfront expenditure of almost € 17 billion
With its investment planning for the next five years, AUDI AG is pushing ahead its transformation to a provider of networked and sustainable premium mobility: with a total amount of approximately € 35 billion, investments remain at a high level, especially for future vehicle projects, in spite of a difficult business environment. Some € 17 billion, amounting to half of the investment sum, is allocated to future technologies alone. Like the Volkswagen Group as a whole, Audi is reinforcing investments in electromobility. The premium manufacturer has earmarked approximately € 15 billion for this and the future topic of hybridization, thus underlining the key importance of its electro-roadmap. The necessary financial scope is created by synergies in the Volkswagen Group – in both the e-platform strategy and in software development. Improvements in fixed costs, a leaner product portfolio, and savings in non-vehicle investments further contribute to the financial solidity of the Audi brand.
“With the investment planning that has now been carried out, we are making Audi stronger for the upcoming transformation of the core business. Technological leadership in electric-powered and fully networked driving is the aim of the supervisory board and management board. We are providing Audi with the necessary resources for this,” says Herbert Diess, Chairman of the Supervisory Board of AUDI AG.
“The investments approved today for enhancing Audi’s forward-looking themes of electrification, hybrid technology and digitalization are extremely important for us in this transformation. They secure the technological leadership of the Group. This benefits us in many projects, and also in creating high-quality jobs. The Audi sites at Neckarsulm and Ingolstadt will derive long-term advantages from this. That is a decisive factor for us as employee representatives,” emphasized Peter Mosch, Vice Chairman of the Supervisory Board of AUDI AG and Chairman of the General Works Council of AUDI AG.
Electrification and hybridization
From 2021 to 2025 AUDI AG plans spending on research and development and on investments in fixed assets of about € 35 billion. Almost € 17 billion is allocated by the premium manufacturer to vehicle projects and innovative vehicle technologies alone, in order to newly energize the brand promise of “Vorsprung durch Technik”
The total sum of development costs takes account of comprehensive synergies in the Group. For example, the development and implementation of the electric platforms takes place across the brands. Here Audi is developing together with Porsche the premium platform electric (PPE); at the same time, Audi uses the Group technology of the modular electrification platform (MEB). On the basis of the investment planning, upfront expenditure in the years 2021 to 2025 focuses on the uncompromising implementation of Roadmap E, with a large-scale product offensive for fully and partly electric models. For electrification alone, a sum of approximately € 15 billion – more than 40 percent of the total expenditure – is foreseen in the context of the planning round. Specifically, some € 10 billion is to be devoted to electromobility and € 5 billion to hybridization. By 2025 AUDI AG will expand its e-portfolio to about 30 models, of which approximately 20 will be powered entirely by electric batteries.
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Digitalization and Car.Software organization
In digitalization, too, Audi benefits from cooperation in the Group, and will now exploit this competitive advantage even more efficiently. In software development, Audi CEO Markus Duesmann is now taking over as chairman at the Car. Software-Organization, which combines and extends the know-how of the brands.
In this way the Group’s own software unit is creating a unified operating system with basic functions for all vehicles of the Group. The tasks of the Car.Software-Organization also include further development of functions for automated driving.
“Our investment planning tells a clear story: we are not cutting back on the substance of products, and are giving full priority to expenditure on electromobility and software development,” says Markus Duesmann, CEO of AUDI AG. “The thorough-going focus on group synergies for these central future themes is an important key to success.”
Audi Transformation Plan and Audi.Zukunft
Thanks to an optimization of the product portfolio in order to become more efficient and lean, reduced complexity in internal processes, and improvements in fixed costs, the Audi brand is in a solid financial position. There will be substantial efficiency gains from the Audi Transformation Plan (ATP) and the Audi.Zukunft basic agreement. The ATP alone has released more than € 6.5 billion since the program started three years ago. Despite a challenging environment caused by the coronavirus pandemic this year, AUDI AG continues to focus clearly on the aim of achieving a cumulative sum of some € 15 billion by 2022 through this program. In addition, the Audi.Zukunft agreement lays down foundations of a strong market position for AUDI AG, secure jobs, and profitable company sites. Through the planned expenditures, the sites in Germany, too, will remain thoroughly competitive and well positioned for the future.
Arno Antlitz, Member of the Board of Management of AUDI AG for Finance and Legal Affairs, says “With the Audi Transformation Plan and Audi.Zukunft we are making our company fit for the future. Both of these programs secure our financial basis for continuing investment in future technologies and thus for a decisive contribution to shaping the transformation of the automotive industry.”