Audi to cut gas and diesel R&D in order to fund electric car development with ~$12 billion, report says

Following the emission test cheating scandal and now allegations that the German automakers created a cartel to deploy their strategy to fake their emission cutting effort, the country’s industry is in a crisis.

A likely winner to come on top of this disastrous situation is the electric car segment. German automakers have been investing in the technology in an attempt to distance themselves from diesel.

In the latest example of that, Audi is reportedly trying to cut gas and diesel R&D by 10 billion euros (~12 billion USD) in order to finance its electric car development.

Germany’s Handelsblatt and Reuters both reported on the move this weekend based on inside sources.

Audi is reportedly about to change its leadership in order to implement the new strategy:

“Sources told Reuters on Friday that four of the brand’s seven top executives are earmarked for dismissal in the near future. On Sunday, sources said the dismissals were discussed by supervisory board members last Thursday but a formal decision has yet to be taken.”

By financing electric car development, Audi aims to make them profitable. They reportedly want to maintain a 8% operating profit after the shift to EVs.

The German automaker has been spending a lot of money on its Brussels plant lately in preparation for the launch of its first few all-electric cars built from the ground up.

They will be building the e-tron quattro, an all-electric SUV, there next year.

Furthermore, Audi recently confirmed that the e-tron Sportback, a smaller and sportier version of the SUV which they were just teasing Tesla and Elon Musk about in a new billboard ad, will go into production at the Brussels plant in 2019.

After the quattro in 2018 and the Sportsback in 2019, Audi confirmed that it plans a third new all-electric vehicle for 2020.

Audi and Porsche, both brands of the VW group, plan to be able to release new electric vehicles faster after having greenlighted cooperation on a shared architecture for electric and autonomous vehicles earlier this year. Those vehicles will use similar technology as Porsche’s upcoming Mission E planned for 2019.

Again, we really need to see those plans coming to fruition, but they seem pretty serious about it if they are to finance it with $12 billion from their gas and diesel research programs. Earlier this year, Audi told its dealerships to get behind electric vehicles because it will dominate the market within 10 years.