Audi hits brakes on EV rollout as enthusiasm wanes

Audi will hit the brakes on its rollout of electric car models as consumer enthusiasm wanes in the face of high prices compared to petrol models.

Gernot Döllner, the boss of the Volkswagen-owned brand, said that he wants to avoid flooding dealerships and factories with the vehicles as sales slow. 

“The advantage of EVs (electric vehicles) is becoming visible to consumers step by step,” Mr Döllner told Bloomberg News. 

Official forecasts for electric car take-up in the UK were slashed by almost half last month. Sales of new battery-powered cars were expected to grow steadily until they accounted for 67pc of the market by 2027, under a prediction issued in March.

But that figure has now been revised down to just 38pc by the Office for Budget Responsibility (OBR), which said the take-up of EVs has been slowing. 

Mr Döllner, who was an executive at upmarket stablemate Porsche, was hired in the summer to reinvigorate the mid-market brand, on which Volkswagen relies for a large chunk of its profits. 

Audi, whose electric models include the £69,480 Q8 e-tron, faces cheaper competition from China, which is also a key market for Volkswagen’s brands.  

While electric cars are cheaper to run, their initial price remains stubbornly higher than petrol and diesel models.

It comes as electric car sales fell by the most on record last month following Prime Minister Rishi Sunak’s climbdown on banning petrol models. 

Sales of EVs plummeted by 17pc from November last year, according to the statistics published by industry group the Society of Motor Manufacturers and Traders.  

The drop beat a 9.7pc fall in April 2020, when showrooms closed due to lockdown restrictions and a 7.9pc decline in the early days of EV sales in March 2008. 

The Government pushed back a petrol car sales ban from 2030 to 2035 in a move which carmakers warned could knock consumer confidence in EVs.  

Much of the 17pc EV sales drop from last year was due to a glut of deliveries in 2022 following months of supply problems. 

But the percentage of electric cars being sold has fallen compared to the rest of the year, according to the figures, with EVs taking only 15.6pc of car sales in November compared to 16.3pc in the first 10 months of the year.

Volkswagen is likely to cut jobs in order to protect its profitability, it emerged last month.

On Monday, managers told VW brand employees of the plans for job reductions. 

VW may cut jobs through early retirements, since it has a relatively large number of older workers due to retire.

Factory output for Germany, Europe’s manufacturing powerhouse, fell to a three-year low in September, dragged down by weak car production.

Output fell 1.5pc compared to August, the lowest production since 2020, with carmakers and their suppliers’ production figures dropping 5pc.

In October, Porsche said soaring borrowing costs and rising prices were starting to bite even its wealthy clientele.

Sales are starting to slip in China, which has in recent years grown as an important market for luxury carmakers. The company suffered a 12pc revenue drop in the country in the first nine months of the year.

Porsche was separately listed last year by its owner Volkswagen. Trading at €120 in May, Porsche shares now change hands at €81.

In the months following the lockdowns of the pandemic, carmakers were able to wring higher prices from rich buyers as they were the biggest beneficiaries of the cheap money central banks unleashed in an effort to prop up the economy. 

They also had savings to enjoy, having been denied travel and other spending opportunities during that time.

But a sluggish stock market and rising rates have eaten away their buying power. 

In March, Porsche said it would implement price increases in a bid to capitalise on high demand.

Since then the price of Porsche’s 718 sports car has been raised from £47,700 to £51,800 and that of the four-door Macan SUV has gone up from £50,800 to £53,400.