Audi of America President Daniel Weissland joins Yahoo Finance Live to discuss 2021 car sales, the automaker's electric vehicle portfolio, its timeline for phasing out internal combustion engine vehicles, and the outlook for EVs and autonomous driving.
- Welcome back. During a year marked by ongoing virus related disruptions, Audi of America delivered a 5% year over year increase in deliveries in 2021, with these topping $196,000. Here to discuss is Daniel Weissland, president of Audi America and Yahoo Finance's own producer and autos reporter, Pras Subramanian.
Daniel, it's great to have you on. As I was mentioning, Audi posted a sales and delivery increase for the full year, even as fourth quarter deliveries came under pressure, due to industry-wide supply chain challenges. What's your outlook on how some of these challenges might evolve into the new year and the impact to Audi?
DANIEL WEISSLAND: I mean, what is important, it's not just a 5% increase we had over last year. What I'm most proud of is we really increased our EV sales by over 50%. And going into 2022, we expect to have the largest fully electric portfolio, of all manufacturing here in the US. We saw launches in Q4 and the Q4 e-tron Sportback.
So we really want to lead the way, towards transformation, towards electric vehicles. And that's what I'm looking forward to. Customers want it, we see the demand in the market, and that's what Audi will stand for in the future.
PRAS SUBRAMANIAN: Hey Daniel, Pras here. So by the end of 2022, the short term for Audi, what's Audi's goals for EVs, as a percent of sales in the US, would you say?
DANIEL WEISSLAND: So we constantly will increase our share of EV sales. And ultimately in the next few years, we probably see the tipping point that we hopefully sell more EVs and ICE vehicles. And also from a global strategy, it is that we're not going to launch new ICE vehicles after 2026. So we are fully committed to electric future. We say at Audi, our future's electric.
PRAS SUBRAMANIAN: So looking ahead to 2025, when you said the company will have about 30% of its vehicles be EVs. How many more types of vehicles will be EVs. You're going to have five at the end of this year. How many more are you going to add by 2025, would you say?
DANIEL WEISSLAND: So our portfolio, more than one third of our portfolio will be fully electric. And additionally, we have some plug-in hybrids. But the demand we see, already, with those electric vehicles, will hopefully then outsell even our ICEs after 2025. The customer demand is there, we see a high demand. And yeah, I'm really excited about the future.
- I realize a great many different things go into the cost of a vehicle. But given that electric vehicles don't have as many parts, and we're talking thousands of parts that no longer need to be part of a vehicle, plus they lose the weight, and the engine, all of that. Should we expect the price of EVs eventually to come down and to actually be cheaper in real dollars? Or wherever you're selling them, going forward.
DANIEL WEISSLAND: I think if you look at the comparison between electric vehicles and combustion engine vehicles, we need to look at the cost of ownership. And yes, the expectation is that the cost of ownership is going down and will then become even less with a combustion engine vehicle. For the time being, still the most expensive part of an electric vehicle is the battery. And we all know we are just at the beginning of the technology, developing batteries.
And if you look at engines, over 100 years, we have been developing engines and fine tuning and optimizing them. We are just at the beginning, with the batteries. And we will see a lot of improvement over the next few years.
- Companies, legacy automakers from GM to Ford, and of course, Audi and others have also announced really ambitious plans to expand their EV portfolios in the next five, ten years. What do you think differentiates Audi's offering and the suite of products that you currently have and will be continuing to launch, from the competition?
DANIEL WEISSLAND: I mean, one strength we always have at Audi and will continue to be one of our strengths is design. But also the functionalities, the fit and finish, the quality we bring with our vehicles. And obviously we want to have a car, which serves any of our customers in every different segment. And that's what we committed to, to really invest and develop and bring more electric vehicles to the market.
And as I said, earlier, look we don't plan to launch any ICE vehicle after 2026 anymore. And that means by 2033, we will be fully electric.
PRAS SUBRAMANIAN: Hey Daniel, I know your background is in sales, that's what you kind of cut your teeth in. And you know the Q4 e-tron is going to start around $45,000, a great starting price there for that car. What else do you need to do to convince buyers to go fully electric? When we see so many reports and studies about US buyers not wanting to go there just yet.
DANIEL WEISSLAND: You know, it's still, I think, a lack of awareness, to a certain extent. It's also a lack of education. And I think that's our responsibility, to educate consumers what it is all about. I drive electric vehicles since over two years and I love it.
I love the fact I don't need to see a gas station anymore. I charge at home, like I do with my mobile phone. I plug it in at night, unplug it in the morning, and here I go. And the acceleration, and I know that I'm doing something good for the environment. Saving our planet, the future of our children and grandchildren. And that feels good to drive an electric vehicle.
- I may have missed this. And I just wanted to hit it again. In our lifetimes, hopefully we all have long lives. We will see the elimination, 100%, of the internal combustion engine. Is there a date by which you think we would actually witness that?
DANIEL WEISSLAND: Yes. So next century for sure, beginning of the 2030s. We will see the run out of the ICEs. There is not a committed or exact time yet. But for sure, we are fully committed to go fully electric. And yeah, we will see it next century for sure, the end of the ICEs.
PRAS SUBRAMANIAN: Hey Daniel, one concept that caught my eye recently was the Audi Grand Sphere, that really elegant looking sedan. Very long, very sporty looking. But it looks like it could be a future Audi in the not too distant future. Is it sort of hinting at new design language or even a possible new car in the Audi range?
DANIEL WEISSLAND: Yes, for sure. It basically combines what the future of Audi is all going to be about. It's a car that provides more space for the customer, more safety with level 4 autonomous driving. And that's just the next step at Audi. And the Grand Sphere definitely stands for this next big step. And we will probably see the car, pretty soon, also in the US market.
PRAS SUBRAMANIAN: Hey, sorry. One more Daniel. I've got to ask you about the Q5, right. That sold 60,000 cars last year, it's your number one selling vehicle. Clearly Americans love it, they love ICVs, they love gas powered cars. But when do you think we would see it, what year will we see the point where the actual the Q4 e-tron sells 60,000 units?
DANIEL WEISSLAND: You know, it's not just a Q4 e-tron. We're also going to bring some other, like a Q6 e-tron to the market in the next few years. So we know that the market is calling for SUVs, the market is actually calling for electric vehicles. And we try to offer something for everybody, starting with the Q4, Q6, and more to come, Q8 e-tron. So I would not rely only on one single model. We want to offer a variety of products for our customers.
- All right. Daniel Weissland is president of Audi America and Pras Subramanian is Yahoo Finance's own producer and autos reporter. And we thank you both so much for being here.