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Monday 24 July 2017

Electric cars power ahead in China as Audi targets growth

Audi and FAW have agreed to produce five more electric cars in China over the next five years. Photo: AP
Audi and FAW have agreed to produce five more electric cars in China over the next five years. Photo: AP

Laurence Frost

Audi has targeted selling more electric car models and developing automated driving in China - deepening ties with local partner FAW Group to counter challengers Mercedes-Benz and BMW in its top market.

Tighter emissions rules in China and Europe have left global carmakers and some consumers with little choice but to embrace plug-in vehicles, fuelling an investment surge. Volkswagen's luxury division and other carmakers are under pressure to sell greener cars in China as the world's biggest auto market tightens emissions rules and discourages the use of fossil-fueled cars in cities to fight pollution.

Audi and FAW have agreed to produce five more electric cars in China over the next five years, the German company said. Audi also plans to build the A6 L e-tron plug-in hybrid in China this year and import the Q7 e-tron model there.

China, struggling with catastrophic pollution levels in major cities, is aggressively pushing plug-in vehicles.

Its carrot-and-stick approach combines tens of billions in investment and research funding with subsidies and regulations designed to discourage driving fossil-fueled cars in big cities.

In Europe, green cars benefit increasingly from subsidies, tax breaks and other perks, while combustion engines face mounting penalties including driving and parking restrictions.

The road ahead for electric vehicles (EVs) in the United States, however, could have more hairpin curves.

Future electric models will include purely battery-powered cars with a range of more than 500km, Audi said.

The brand currently only imports the A3 e-tron to China, destination of almost a third of its record 1.87m deliveries in 2016.

"We are starting the next phase of our joint growth path in China," Audi sales chief Dietmar Voggenreiter said.

"More than ever, our partnership is focusing on profitable, sustainable growth."

An early entrant to China, Audi remains the best-selling premium car brand there, although it is rapidly losing ground to newer models from Mercedes-Benz.

While BMW dropped behind Mercedes-Benz last year in global sales terms, Chinese sales of its BMW brand and Mini models still jumped 11pc to a record 516,335 cars

Audi's sales rose only 3.6pc to 591,554 vehicles.

Audi and FAW leaders on Monday signed a 10-year roadmap that includes plans to set up a new company for mobility and digital services as well as closer co-operation in financial services.

"Car electrification is an irreversible trend," said Jacques Aschenbroich, ceo of auto supplier Valeo, which has expanded sales by 50pc in five years with a focus on electric, hybrid, connected and self-driving cars.

Regulators in California and a group of other US states are pushing ahead with state-level rules mandating rising quotas for electric, or "zero emission" vehicles. But plug-in registrations in the United States fell in 2015, and the market share of electric-only vehicles is in decline.

President-elect Donald Trump has pledged to roll back environmental and climate rules.

Groups representing established automakers asked Mr Trump to review Obama administration fuel economy targets out to 2025, even before the outgoing administration formally signed them into effect on Friday. (Reuters)

Irish Independent

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