So much for Audi’s “Tesla killer”

Mea culpa. Fooled again.

Audi must have dropped several million bucks at a recent extravaganza in San Francisco, all for the launch of the e-tron, the brand’s first pure electric model, and it convinced this correspondent that this time, the company was serious about selling an EV in volume. Then came the news that Audi does not plan to ship any inventory vehicles to its US dealers.

Audi of America President Scott Keogh tried to put a positive spin on the decision, implying that saving the cost of maintaining an inventory was the only way Audi could make a profit on the EV. “I think it would be a beautiful world if you can go to a dealer – and we’d like to find that beautiful world – with zero floorplan [expense] and proper, full gross on the car,” quoth he. “This would be a beautiful state; so let’s go see if we can find this dream state.”

The situation isn’t quite as bleak as Keogh’s self-defeating sarcasm (and outraged responses from some of the EV press) makes it sound. Dealers will have demonstrator models on hand, and they will have the option of ordering e-trons for their own inventory (I expect some California dealers to do so, based on a conversation I had at the launch event with one of those dealers, who was enthusiastic about selling the e-tron).

However, the sales model Audi is proposing is that customers will place orders for the e-tron at dealerships or on Audi’s web site, held by refundable $1,000 deposits. Keogh said that wait times for delivery will depend on global demand, and could be months or even a year or more. All e-trons will be built at Audi’s assembly plant in Brussels.

Keogh told Automotive News that Audi’s dealer network will give the brand “a massive competitive advantage” over other EV-makers. At the launch event, one of the 300 dealers present told me that it would be interesting to see Tesla “fade away” as the e-tron came into its own. I responded to that comment with a wry smile, which has now evolved into a sad head-shake.

Yes, an established dealer network is a good thing, but dealers are famously focused on closing sales quickly – put your money on the table and drive it off the lot. They’re not likely to be thrilled about a put-down-a-deposit-and-wait sales model. And so far, most dealers haven’t proven to be enthusiastic EV-sellers. On the contrary, they’re often cited as one of the main bottlenecks standing in the way of wider EV adoption. Thomas Moloughney works for an outfit called PlugStar, which aims to break that bottleneck by providing EV training to dealers (PlugStar will be the subject of a feature article in the next issue of Charged). “Very disappointing, Audi,” was Tom’s reaction to the latest news. “Besides the obvious sales constriction, this really isn’t the message you want to be sending.”

As other automakers have, Audi may be falling into the error of assuming that EVs are only bought by a subset of the market called “EV buyers.” Of course such people exist, and a few of them will surely order an e-tron. But any automaker that wants to sell an EV in volume needs to reach buyers who haven’t considered an EV before, and it’s hard to see how an Audi dealer is going to convince many of them to put down a grand and wait a few months for an e-tron when they can drive a perfectly good gas-powered Audi home right now.

 

Source: Automotive News


Source: Electric Vehicles Magazine