By on January 31, 2017

e-tron

Along with the rest of Volkswagen AG, Audi has made plans to invest heavily into electric vehicles. The company expects EVs to comprise 25 percent of its U.S. sales by 2025 and is devoting the e-tron moniker to an entire division of electrified models, with the first arriving next year.

Addressing the J.D. Power Summit at this year’s National Automobile Dealers Association Convention and Expo, Audi of America President Scott Keogh told salesmen to welcome the electric mobility market with open arms or learn to cope with an ambivalent future. However, jumping head-first into a relatively small market with a huge potential for growth isn’t without pitfalls, and it isn’t unwise for dealers to remain cautious. Still, with Audi planning to introduce three new BEVs within the United States by 2020 and Volkswagen Group hoping to have 30 battery-electric models out by the 2025, you can see why Keogh is pressing the issue. 

According to Wards Auto, he’s not exactly thrilled with the way dealerships have been doing business at the present, either. Many have become comfortable offering large incentives to encourage sales while recouping the loss in the servicing and parts department — something that will become less lucrative when Audi goes all-electric.

“We have to look at alternative channels and start to make money,” Keogh told dealers. “These cars are going to have to be fixed less. But you’re going to have a host of opportunities around the battery and helping the customer in their home.

“That’s a very, very, profoundly dangerous game,” he continued. “Because you end up telling the customer…[the product] has diminished value. We have to come to the point where we are selling a product that has value. Because [if] you have to have a strong brand, or frankly, you don’t have anything.”

Keogh believes the move toward electrification in the United States will become unstoppable as charging infrastructure continues to develop. Volkswagen has pledged spend $2 billion installing public charging utilities across the nation as part of its emissions cheating punishment, Tesla has been perpetually expanding its own network, and most states have green initiatives dedicated toward EV powering solutions.

The lessening of dreaded range anxiety should help ease dealership concerns over the swift normalization of electrified vehicles as the general public sees fewer downsides to EV ownership.

“All this fright about where am I going to get a charge is going to go away extremely fast,” Keogh claimed. “The technology on this front is moving at a staggering pace. You’re going to be looking at a marketplace in the next seven, eight, nine, 10 years where for 30 or 40 some brands their entire business is going to be battery-electric vehicles.”

“Do we want to jump in and compete? Without a doubt,” he said. “We have the resources, the scale, the infrastructure, the customers [and] the dealers to compete in this new order.”

[Image: Audi]

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25 Comments on “Audi to Dealers: Wean Yourselves Off Incentives and Get Ready to Push EVs...”


  • avatar
    VoGo

    I don’t understand how a future can be ambivalent (ambiguous?/ unpredictable?), but I have $60K in my pocket if Audi wants to make that vehicle in the picture. But leave out the pretend hood vents.

  • avatar
    DeadWeight

    First of all:

    “Addressing the J.D. Power Summit at this year’s National Automobile Dealers Association Convention and Expo…”

    The J.D. Powers whores strike again.

    Disgusting.

    Next, how will VAG devise a way to illegally game whatever regulations exist now that they’re transitioning from “clean” diesels to electric vehicles?

    • 0 avatar
      Kyree S. Williams

      “Check out our new EV. We can’t tell you why, but just know that you have to keep putting, ah, gasoline in it every 400 or so miles. Nothing to be worried about…”

  • avatar
    SCE to AUX

    “All this fright about where am I going to get a charge is going to go away extremely fast”

    Not if the mfrs and regulators can’t agree on a universal charging standard. IMO this is the biggest factor slowing EV adoption.

    The only long-range EV capable of driving coast-to-coast remains Tesla (because of its charging network), and that needs to change. And having multiple network standards covering the same territory makes no sense.

    Much of Tesla’s fan base would evaporate if people knew they could buy any mfr’s EV and fill it up anywhere.

  • avatar
    Fred

    Audi gives large incentives? I didn’t see that 3 years ago on either the new A3 or an old A4.

  • avatar
    Master Baiter

    “The company expects EVs to comprise 25 percent of its U.S. sales by 2025.”

    I’ll bet they’re including hybrids in that estimate, otherwise it’s not possible.
    .
    .

  • avatar
    Cactuar

    Great looking wagon!

  • avatar
    Higheriq

    Incentives are as addictive as crack. Try telling an addict to wean themselves off a very addictive drug.

  • avatar
    mmreeses

    If Audi pays for the installation of a high-capacity charger in my garage, sure I’ll think of going EV.

    Dunno if I’d switch over to real-time electricity pricing though (that’s the only way to get the deep discount electricity during the overnight hours).

    Summer and winter spot electricity can get really expensive when it’s really hot/cold.

    • 0 avatar
      SCE to AUX

      A Level 2 charger can be purchased for $400 these days, and paying for installation might cost another $400. I installed my own in 2012 for ~$850.

      Is that really all that’s keeping you from driving an Audi EV?

      BTW, electricity is always cheaper than gasoline (or diesel) on a per-mile basis.

  • avatar
    stingray65

    In Norway where the government gives EV buyers a variety of benefits that range in value of about $20,000 to almost $100,000 on a Tesla, the TV is full of ads for discount e-Golfs, Golf GTEs, BMW 225xe, Nissan Leaf, etc., so even in EV Shangri-La it is taking manufacturer/dealer incentives to move the EV metal.

  • avatar
    turbo_awd

    I love how they admitted that their quality sucks (sell cheaper, make it up on service and parts, new cars will need less repairs) without actually saying it in so many words…

    Something so familiar about that, based on my 90s and early 00s experience with VAG.. Only wish I’d learned sooner..

    • 0 avatar
      SCE to AUX

      I think what they mean is that EVs require less service to begin with, which is the case for any EV vs an ICE.

    • 0 avatar
      White Shadow

      Um…they are saying that EVs need less maintenance/repairs that ICE vehicles. That’s pretty much a universally accepted fact for any vehicle brand. If Tesla made ICE vehicles, I can say with confidence that their EVs would require far less maintenance/repairs.

  • avatar
    cdnsfan27

    That’s pretty rich of Scott Keogh to tell the dealers to stop whoring out cars when he is the one who revised the the 200k in 2020 to 200K in 2015 without any new product just to stroke his humongous ego. Audi’s were worth more when dealers weren’t sitting on inventories of 200 or more, now the customers are addicted to rebates and discounts. Why I left the brand, I couldn’t make real money selling Audi’s anymore.

  • avatar
    Sceptic

    While cross hopping for a midsize sedan I was shocked to realize that basic Audi A6 was priced pretty much the same as BMW 525. A6 looks pretty nice, but BMW has some serious discounts on 5-series these days. I am frustrated with the new Mercedes E-class pricing. Basic luxury sedan for $60K with 4-cylinder engine? That gave me a pause… I was expecting to see A6 at around $40K, but dealers are asking around $47K.

    This made me think how would the venerable German brands fare in the brand new world of electric vehicles. Likely that cars will go the way of electronics. All production will be moved to Asia. Are cars becoming more and more a disposable commodity like TV’s/VCR’s through the 60s-80s?


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