Report: Audi E-Tron Production Stalled Over Suspected Battery Shortage
Audi has reportedly paused assembly of its all-electric e-Tron to address production issues that include battery supply bottlenecks. It’s not uncharted territory for the model. Audi had to delay the model’s launch over claimed software changes in 2018, though it was known that corporate parent Volkswagen Group was having trouble with battery supplier LG Chem at the time. Since then, the crossover’s short life has been a well-publicized series of victories and failures.
Outselling rivals like the Jaguar I-Pace by a margin of almost two to one, Audi delivered 5,369 e-Trons in the United States in 2019 despite it not being available for the full year. Competition was closer in Europe, with the Audi still moving in larger volumes. The model also received favorable crash test ratings and was awarded with the IIHS’ Top Safety Pick+ designation.
However, supply problems never really abated. Every few months brought a new rumor that Audi was suffering from battery shortages, possibly forcing it to idle production. A battery fire scare prompted the factory to voluntarily recall the first batch. While the impact of these issues was rarely as serious as feared, their persistent nature caused many to wonder how ready the industry actually is for the transition to EVs.
According to a report from Bloomberg, the manufacturer has only made passing mention of supply issues, confirming that the planned shutdown will only last until Tuesday. While speculation arose that the factory in Brussels was just preparing for the sportback variant (directly above) and subsequent E-Tron GT performance sedan (below), the idle only began on Thursday. That’s precious little time to enact any factory retooling, even if it is just to prepare the mechanically similar model (which offers less headroom for rear occupants).
From Bloomberg:
Former BMW AG executive Markus Duesmann will take over as chief executive at Audi in April to accelerate restructuring efforts and try to restore the brand’s technological edge. In November, the company mapped out plans to cut roughly 15 [percent] of its German workforce by 2025 as part of a broader push to lift earnings by 6 billion euros ($6.5 billion).
The E-Tron production outtage in Brussels was earlier reported by Belgian newspaper L’Echo. LG Chem Ltd. supplies the battery cells for the model.
We shouldn’t pick on Audi more than we have to. Electrification has proven a minefield for just about every manufacturer on the planet, and the Germans certainly haven’t had it easy. Last summer, BMW executive and board member Klaus Fröhlich basically said no legitimate demand exists for EVs, calling them “overhyped” at an event where the manufacturer was supposed to announce plans to accelerate its electrification efforts — which it did. Months later it was learned that BMW was spending billions to secure battery investments with CATL and Samsung while it hunted for rare metals (necessary for battery production) in Australia and Morocco.
In February, we learned VW Group and Daimler commissioned a study into sustainable lithium mining in Chile under similar circumstances. While Daimler has denied its decision to reduce 2020 production targets for the Mercedes-Benz EQC had anything to do with supply shortages with LG Chem, the move served to delay the model’s U.S. debut by one year.
[Images: Volkswagen Group]
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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LG Chem cannot say no to a battery contract. I think it's the South Korean way. Aggressive if not necessarily truthful - out back the massed jugglers are figuring who gets batteries this week, and who gets the excuses. They cannot even keep up with supplying Audi. Perhaps that Lucid crowd who signed up with LG Chem (in an article above) expect a steady supply. Seems a tad unlikely. LG Chem also supply GM and VW -- sometimes. And goodness knows who else, probably Tesla in China along with CATL. Well, lookee here, they also supply Jaguar, and Mercedes who cannot get enough to launch the EQC in the USA. I'd say anyone who signed up with LG Chem for EV batteries did so on a wing and a prayer and got fed a story. Correct me if I'm wrong.
Part of the problem, is cost. Want a Q4 ? $650 a month. Want an e-tron ? $1300 per month. That's a lot of gas and even for the upper middle cohort, this is money. Tesla never came out with that mass market car, and the Chevy Bolt, closer in price, gives you econo-car interior at a 45k price point. Batteries have to get cheaper to make this work. We may care about the how and what, but the mass market cares about most car for least money, and the rest is frippery....it's fun to shop at the Benz/BMW/Audi store, but that's not the reality for 95% of the car buying market.