California dreaming

Audi CEO takes electric car battle to Tesla’s home turf

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Ready or not, here we come. Source: Reuters

Audi’s interim chief executive, Bram Schot, moved quickly to put his stamp on Volkswagen’s luxury car unit by boldly shifting the presentation of its all-electric E-Tron vehicle to Tesla’s backyard in San Francisco, instead of keeping to the planned August event in Brussels.

Such events are planned months if not years in advance and a switch at such short notice is unusual. Mr. Schot seemed intent on distracting attention from the fact that former CEO Rupert Stadler is still in jail, but also to demonstrate his own brand of leadership by taking on Elon Musk in his home turf.

It was Mr. Musk who preempted Audi’s longtime slogan, “Progress Through Technology,” with his pioneering Model S all-electric car. While German carmakers stubbornly focused on diesel engines to lower emissions, Tesla marketed a luxury zero-emission vehicle that outsold Mercedes S-Class, BMW 7 series and Audi’s A8 in important markets.

Pivot and pounce

Now that Tesla is mired in production difficulties for its down-market Model 3 and is laying off workers, Mr. Schot evidently thinks it’s time to pounce and reclaim Audi’s technological lead. The shift to California means delaying the presentation of the E-Tron to mid-September, allowing Daimler to beat Audi to the punch with an unveiling of the EQ electric vehicle series at the beginning of the month.

But Daimler can’t start serial production until next year because it is waiting for batteries to be delivered, while Audi plans to get its E-Tron crossover SUV on the street this year. It is a one-upmanship that may make a difference as the German carmakers pivot from their disastrous reliance on diesel to catch up with electric vehicles.

Mr. Schot joined Audi’s executive board only last year and, with a background in marketing instead of engineering, is not seen as a permanent successor to Mr. Stadler. But the Dutchman clearly has ambitions of his own and is set on making his mark.

Reassuring workers

After being appointed interim CEO just last week, Mr. Schot sent a memo to Audi’s 70,000 employees. “Audi – that is all of you, that is all of us,” he wrote. “And I promise you, I’m there for you.”

Employees probably need some reassurance after months of police raids, criminal investigations, and the arrest of their chief executive in connection with cheating on diesel emissions have undermined confidence in management and in the brand itself.

Audi’s troubles are hardly over, as Mr. Schot explained to the workforce. There may be new revelations with regard to Dieselgate. In addition, Audi, like Daimler and VW, is facing delays in getting new models certified with complex new emissions testing.

New models are always the best way for a carmaker to put unpleasantness behind it. “For that reason, the E-Tron presentation must be a success,” said a highly placed Audi manager.

Markus Fasse and Martin Murphy cover the auto industry for Handelsblatt. Darrell Delamaide adapted this article into English for Handelsblatt Global. To contact the authors: fasse@handelsblatt.com and murphy@handelsblatt.com.

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