Audi gearing up to take on Tesla in electric car market

Audi is preparing to challenge Elon Musk's Tesla Motors Inc. in making electric cars, betting that its decades of experience in designing traditional automobiles will help it trump the Silicon Valley startup.

The division of Volkswagen AG that traces its roots back to 1885 said the expertise of German carmakers will make "exponential" increases in range for electric cars by 2020, making the vehicles more attractive to a wider swath of consumers.

"For over 100 years, automobiles have always gotten better," Stefan Niemand, the German engineer who is the architect of Audi's electric-car strategy, said recently in Vienna. "Drivers won't adopt electric cars if they're seen as smaller, uglier and more expensive."

The luxury-car manufacturer is the largest earnings contributor to Volkswagen and plans to start selling its first all-electric vehicle in 2018. With development costs in the range of some "billion-euros," Niemand said Audi will leverage its experience with automotive mass production to push e-cars into a new era.

While Nissan Motor Co.'s boxy and compact LEAF is the world's best-selling battery-powered car, the $70,000 Model S made by Tesla has dominated the market for high-performance and fashionable electric cars. Musk's company has collected $1,000 deposits each from a list of 373,000 drivers waiting to buy its new Model 3. To meet that demand, Tesla will have to ramp up production 10-fold. It expects to produce 500,000 cars annually by 2018. Niemand is charged with preparing a challenge from Audi.

SundayMonday Business on 06/26/2016

Upcoming Events