Roger Penske Puts Spotlight on Tepid EV Sales, Singles Out Audi E-Tron

Steph Willems
by Steph Willems
roger penske puts spotlight on tepid ev sales singles out audi e tron

Roger Penske, the business magnate whose Penske Automotive Group operates more than 150 dealers across the U.S., isn’t very excited about electric vehicles, as he’s seen how easily they sell.

Which is to say, he’s seen how difficult it can be to unload an EV.

While Tesla chooses to go its own way in the retailing space, established OEMs with a strong dealer presence must consider other financial realities in deciding how they offer a new EV. Unlike Tesla, these new EVs often look like the ICE-powered vehicles they share a stable with. However, their price might not have much in common with similar-sized vehicles sitting just across the showroom or lot.

Speaking on an earnings call with Automotive News ears on the line, Penske didn’t come across as bullish on the sales potential of electric vehicles — at least not those offered by traditional automakers.

The numbers reflect this reality. Last quarter, only 1.9 percent of vehicles purchased in the U.S. were battery-electric vehicles, though this actually represents a high point thus far in the vehicle type’s market penetration. Consumers have more choice than ever when it comes to EVs, and the problem of range anxiety is slowly decreasing. Prices, however, are not decreasing at the same pace.

In general, EVs “have not had the lift that expected,” Penske said. He added that he’s aware of many Audi E-Tron pre-orders cancelled in the interest of affordability.

“I think there is some sticker shock. The customers that thought these would be more affordable, like a Q5,” Penske said. “But when you’re looking at an $80,000 vehicle in a $1,500 payment, it gets — it’s really aggressive from the OEM standpoint.”

In Audi’s case, most customers will receive theirs by placing a special order, sight unseen. As part of its strategy to go easy on dealers and prevent a niche product from hogging floorspace, the brand didn’t require dealers of a certain standing to stock the E-Tron, though dealers did have the option of ordering them to keep in their inventory.

How or if that setup has changed in the ensuing months isn’t clear.

Thus far, demand for the E-Tron has not overwhelmed Audi dealers, and it would seem that sales haven’t overwhelmed company brass.

“From a margin standpoint, I know one of our stores in Northern California probably will sell six or seven [e-trons in October] and has got 30 in stock. So that certainly has pressure on margin,” Penske said.

Audi first recorded E-Tron sales in the U.S. in April, amassing a volume of 4,002 vehicles through the end of October. While Penske has his doubts about the near-term success of EV luxury vehicles, Audi of America President Daniel Weissland claims the E-Tron isn’t a sales dud.

“I think we’re pretty happy with our sales numbers,” Weissland said. “November is the strongest month ever now on e-tron sales, so we really see a tick up. The question is always, ‘What do you compare it with?’ You can’t compare the e-tron with a car which is $20,000 or $30,000 less expensive.”

Well, you can, as long as you’re willing to entertain the purchase of a non-electric vehicle. And that vehicle would very well be a plug-in hybrid that isn’t as green, but goes the distance. With an EPA-rated range of 204 miles, the E-Tron ranks fairly low on the range ladder, and that’s something many eco-minded customers might take into consideration when weighing their options.

Come next summer, the E-Tron will greet a curvaceous new sibling to the stable, one which ekes out a few extra miles of range.

[Image: Audi]

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2 of 44 comments
  • Jkross22 Jkross22 on Nov 26, 2019

    “But when you’re looking at an $80,000 vehicle in a $1,500 payment, it gets — it’s really aggressive from the OEM standpoint.” Yeah, it's an 80k Q5. That's the problem.

  • HotPotato HotPotato on Nov 27, 2019

    The problem isn't necessarily EVs in general. The problem in this particular case is that Penske is trying to shift the Audi e-Tron. A car that's almost as good as a six year old Tesla, for more than the price of a brand new Tesla, is going to have pretty limited appeal.

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