Audi targets EV share at half of India sales within 5-7 years

Audi AG has set an ambitious goal to have electric vehicles contribute half of the German luxury carmaker’s sales in India within the next 5-7 years, a senior executive said.

Currently, EVs make up less than 2% of the company’s total vehicle sales in India.

“While we have five electric cars that we’ve launched so far under the Audi e-tron brand, all these cars cost ₹1 crore and above, so we are still not addressing a major portion of the luxury segment today. Therefore, EV penetration for us is less than 2% at present. Till we are able to cater to segments across the luxury market, penetration will be limited,” said Balbir Singh Dhillon, head of Audi India. “This can only happen if most vehicles are assembled in India. We can’t achieve mass volumes with imported models as all the EVs we import come with a 110% import duty.”

Audi India is in discussions with its headquarters to localize electric car assembly in India, Dhillon said. The company, he said, will need to introduce models that cater to the volume-driving segments in the luxury space to achieve its goal, particularly as rival manufacturers have already begun local assembly of some EV models. The move aligns with Audi’s global commitment to becoming an all-electric vehicle maker by 2033.

“We will transition towards that (the 2033-all electric goal) in the coming years. How soon this can happen is also a function of certain threshold volumes, which can make a possible business case for us. For now, we continue to be driven by imports,” Dhillon said.

Globally, Audi offers models such as the Q4 e-tron, an electric avatar of one of the brand’s more accessibly priced models. The brand also has new electric vehicles lined up priced below the current e-tron range by early next year for the global market, which will also be evaluated for India, Dhillon said.

However, infrastructural roadblocks will also need to be addressed to drive more luxury electric car sales, especially in the smaller segments. According to Dhillon, luxury cars with large battery capacities will also need a robust network of fast chargers in the country.

Audi India sold a total of more than 4,100 cars in India in 2022, registering a 27% growth. Even as the mass-market focussed passenger vehicle makers expect some amount of moderation in sales this year, Dhillon expects the luxury car market in India to see its best year yet.

“We closed the last year at 38,000 cars (for the luxury car market). We also grew 27% in 2022 on the back of multiple product launches and positive sentiment across the board, which we believe will continue this year as well,” Dhillon said. “In 2023, we expect we will top 2018-record volumes and surpass it by a significant margin as well”, he added. In 2018, luxury car sales were just over 40,000 units.

Audi India has launched the Sportback variant of its largest volume churner, the Q3 SUV. This will be a top-of-the-line model, which will aid a high double-digit growth for the automaker, according to Dhillon.

A prospering class of new entrepreneurs, improving road infrastructure and an upbeat sentiment among buyers will drive sales, Dhillon said. According to him, the company’s premium-end portfolio is growing faster than its overall sales.

Audi India’s pre-owned car business also recorded a 67% growth in 2022, he said.