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Audi to Dealers: Wean Yourselves Off Incentives and Get Ready to Push EVs

e-tron

Along with the rest of Volkswagen AG, Audi has made plans to invest heavily into electric vehicles. The company expects EVs to comprise 25 percent of its U.S. sales by 2025 and is devoting the e-tron moniker to an entire division of electrified models, with the first arriving next year.

Addressing the J.D. Power Summit at this year’s National Automobile Dealers Association Convention and Expo, Audi of America President Scott Keogh told salesmen to welcome the electric mobility market with open arms or learn to cope with an ambivalent future. However, jumping head-first into a relatively small market with a huge potential for growth isn’t without pitfalls, and it isn’t unwise for dealers to remain cautious. Still, with Audi planning to introduce three new BEVs within the United States by 2020 and Volkswagen Group hoping to have 30 battery-electric models out by the 2025, you can see why Keogh is pressing the issue. 

According to Wards Auto, he’s not exactly thrilled with the way dealerships have been doing business at the present, either. Many have become comfortable offering large incentives to encourage sales while recouping the loss in the servicing and parts department — something that will become less lucrative when Audi goes all-electric.

“We have to look at alternative channels and start to make money,� Keogh told dealers. “These cars are going to have to be fixed less. But you’re going to have a host of opportunities around the battery and helping the customer in their home.

“That’s a very, very, profoundly dangerous game,� he continued. “Because you end up telling the customer…[the product] has diminished value. We have to come to the point where we are selling a product that has value. Because [if] you have to have a strong brand, or frankly, you don’t have anything.�

Keogh believes the move toward electrification in the United States will become unstoppable as charging infrastructure continues to develop. Volkswagen has pledged spend $2 billion installing public charging utilities across the nation as part of its emissions cheating punishment, Tesla has been perpetually expanding its own network, and most states have green initiatives dedicated toward EV powering solutions.

The lessening of dreaded range anxiety should help ease dealership concerns over the swift normalization of electrified vehicles as the general public sees fewer downsides to EV ownership.

“All this fright about where am I going to get a charge is going to go away extremely fast,� Keogh claimed. “The technology on this front is moving at a staggering pace. You’re going to be looking at a marketplace in the next seven, eight, nine, 10 years where for 30 or 40 some brands their entire business is going to be battery-electric vehicles.�

“Do we want to jump in and compete? Without a doubt,� he said. “We have the resources, the scale, the infrastructure, the customers [and] the dealers to compete in this new order.�

[Image: Audi]

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