How do you see Audi's powertrain mix by 2030?
We see huge differences between the different regions in the world. We are expecting combustion engines to account for less than 20 percent in Europe. It will be different in China and in the U.S. I recently spoke to more than 1,000 of our employees during a town hall meeting and remarked how different things were at Audi just 10 to 12 years ago. At that time, no one was predicting that the powertrain mix would change so rapidly.
By 2030 Audi plans to slash battery-cell costs by 50 percent. How many euros or dollars per kilowatt is that cost now and what will it be in 2030?
We don’t communicate these numbers. What I can say is that we have a central organization for battery development and production because we know that battery costs will be a key factor in a car manufacturer’s future financial results.
Is it true that the Euro 7 tailpipe pollution standards will be less stringent than expected? With this in mind, what is the future for your A1 and A3 compacts?
A lot will depend on the final Euro 7 target. We know that offering combustion engines in the smaller segments in the future will be pretty difficult because the costs will go up. Therefore, we won't have a successor to the A1. If the new Euro 7 rules are not too harsh, it will allow us to invest more in e-mobility.
How many jobs in Europe will be lost because of the move toward electric cars and how much of that loss will be offset by jobs created in other areas such as battery production?
We don't expect job losses because our plan is to increase global sales significantly by 2030. Therefore, we don't see big problems from this transformation. It’s true that a lot of tasks involved in the produce of combustion engines will no longer exist. That is why we have a plan to deal with this shift toward battery production and other jobs that must be done for electric vehicles.
To keep the same number of jobs you have now will you in-source things such as electric motor production?
Yes, we will. For example, our powertrain factory in Gyor, Hungary, already builds electric motors, which are produced alongside combustion engines. That is part of the transition plan. I think the bigger risk is on the supplier side, where some companies are 100 percent dedicated to making components for combustion engines.
Toyota argues that full-electric vehicles are not very green from a well-to-wheel perspective, especially if you factor in the ecological impact of battery production and battery recycling. Do you agree?
If the world wants to stop using fossil fuels, that's the best and the greenest technology we have. Period.
On the distribution side, Audi is applying the agency sales model only to full-electric cars. Why does it make sense to have two distribution systems operating at the same time in the same network?
We are planning to introduce an agency sales model for full-electric vehicles in Europe to see how that works. But our dealers will continue to be the backbone of our distribution in the future regardless of what sales model we choose.
How many units is Audi on track to lose this year because of the chip shortage?
We are a five-digit number of cars behind at the moment. We are fighting hard every day to recover as many of those units as possible and reduce the high order backlog. We don’t expect this problem to be completely solved by 2022.
What steps have you taken to offset the effects of the shortage?
We have set up a task force that is working on a number of ways to offset the effect of the shortage. This includes looking at how to build cars without some components and adding them afterward or re-specifying some components. It's an intense fight.
Who is responsible for this disaster?
No one because it was the perfect storm that combined COVID-19, lockdowns, a fire at Renesas’ chip plant in Japan, a massive freeze in Texas that hit chip production there. What a disaster. It just happened and it couldn’t be solved, despite the force of the entire automotive industry.
Stellantis CEO Carlos Tavares blames the problem on Tier 1 suppliers. Do you agree and will you rework parts of your supply chain in the aftermath of the crisis?
The entire supply chain experienced the problem. This system has worked well for years but the combination of factors caused it to collapse. We certainly will review our processes to make us more robust and to make the supply chain more robust. This could include buying chips directly from chipmakers and designing alternative semiconductors.
Some politicians in Europe want to add chip plants here to avoid a repeat of this crisis. Do you consider that a wise investment?
It's always good to locally produce high-tech products, and semiconductors are key for every industry. Therefore, it is very encouraging that politicians and companies are pushing to add production in Europe. We are already pushing to boost production of batteries in Europe and increase software competence in Europe, which is very positive. Being a through-and-through European, I find it very important for Europe to make sure we have production of high-tech products here. It's really wise to invest in these fields.
If you were given 20 billion euros to invest would you build one semiconductor plant or build four gigafactories?
Both must be done so I would split the money. Wait a minute, I also would want to invest in software development competencies. Therefore, I would invest one-third in each of the three. Although we are still absolutely world class in mechanical engineering, we have fallen behind in those three areas and we need to invest to catch up.
What is Audi doing to make itself as appealing as possible to lure software engineers, who might also have offers from tech giants such as Google and your carmaking rivals?
It is a tough competition, but what helps us is that we have our software teams in attractive places such as Ingolstadt, Munich and Berlin. Therefore, we don't have that many problems getting people. Especially with the clear intention of developing meaningful technology to keep the world in motion.
How many software engineers do you have now and what will that number be in five to 10 years?
We have currently 4,500 employees working at CARIAD, mainly software specialists, and the company is going to grow to a high four-digit number by the middle of this decade.