Electric Sportscars Audi's New R8 Puts Tesla on the Run

Tesla's success, and the race to lock down the electric car market, has lit a fire under Germany's big three automakers. Audi's new super car, the R8 e-tron, has upped the stakes.
The new Audi R8 e-tron can do 0-62 MPH in 3.9 seconds, not as quick as the new Tesla S P85D, but enough to give the Californian a run for its money.

This year’s motor show at Geneva is a celebration of power and muscle – and the new Audi R8 V10 is one of the stars of the show. As a clear sign of the times, Audi’s latest animal will also be available in an electronic version, the R8 e-tron.

This high-powered sports car is the first one to give the Tesla S some serious competition in the luxury electronic vehicle sector. The R8 e-tron, which delivers a range of 430 kilometers (270 miles) on one charge, is no slouch compared to its V10 combustion brother either, going from 0 to 100 kilometers per hour (0 to 62 miles per hour) in 3.9 seconds.

The R8 e-tron is a clear signal that VW subsidiary Audi is getting serious about alternative engines. In an interview with Handelsblatt, R&D chief Ulrich Hackenberg confirmed that the company would unveil an electric SUV this year with a range of 500 kilometers (313 miles).

When Mr. Hackenberg arrived in Ingolstadt, Bavaria, in July 2013 to assume his new position as R&D chief, he didn't like what he saw. His predecessor had suspended work on the R8 e-tron because of poor battery range.

Mr. Hackenberg, a close associate of VW CEO Martin Winterkorn, had the project restarted immediately and additional electric cars developed. The results are being unveiled this year. As well as presenting the R8 e-tron in Geneva, the automaker will unveil the fully electric SUV, the Q8, at the Frankfurt International Motor Show in September. It is also expected to feature an autonomous driving system.

We and our competitors will be producing large numbers of electric cars in the future. Ulrich Hackenberg, Head of R&D, Audi

The plan is to see plug-in hybrids distributed across all VW group models. By 2020, electric or plug-in hybrid cars will account for 10 to 15 percent of total sales at Audi alone, said Mr. Hackenberg. That would translate into significantly more than 200,000 vehicles a year for Audi and more than a million for the Volkswagen Group.

The VW Group's committment to electric cars comes at a time of historically low oil prices. "Purchasing behavior is shifting toward larger, heavier and more powerful vehicles," said Thomas Göttle, managing director of the consulting firm PA Consult.

"We and our competitors will be producing large numbers of electric cars in the future," said Mr. Hackenberg. VW and Audi are banking on the modular concept, which they hope will enable them to quickly complete the transition to production with alternative engines.


Ulrich Hackenberg , 64, has overseen Audi's successful A3, A4 and TT models.


German carmakers are coming under growing pressure to start offering the new technologies in their vehicles. Executives in Wolfsburg, Munich and Stuttgart, where Volkswagen, Daimler and BMW are headquartered, underestimated how successful lateral entrant Tesla would be in the marketplace.

Even though Tesla hasn't been able to keep up with its ambitious goals recently, it is far ahead of the competition with its electric cars in future-oriented markets such as California.

Industry enfant terrible Elon Musk believes his firm Tesla is only in its infancy and plans to build the world's largest battery factory. The Tesla example shows how quickly someone new to the industry, with the help of new technology, can penetrate Germany's key industry, automobile manufacturing.

If Google and Apple, with their combined power in the IT sector, also get into the business – Apple has reportedly assigned 1,000 developers to an automobile project – Germany's premium carmakers could find their global dominance seriously threatened.

Established automakers do not have time on their side. The low price of oil is providing the industry with a deceptive business cycle. This is especially true in light of the E.U.'s climate goals for the year 2020. Because of the large, heavy cars they produce, German automakers will fall short of the other European manufacturers when it comes to reaching their climate targets, unless they take massive corrective action, say the experts with PA Consult.

"VW, BMW and Daimler are at the bottom of the rankings," the latest study said. The VW Group alone could be faced with fines of up to €1 billion. But German carmakers are even more concerned about the damage to their images if they are pilloried in Europe as "climate killers."


Video: Audi's new R8 is available in an electric or conventional version.


The German chancellor, Angela Merkel, has provided them with a solution. In the fall of 2013, responding to pressure from German manufacturers, the German chancellor ensured that electric cars would be reflected in the climate calculations. But little has happened so far, with only about 12,000 electric cars and 80,000 hybrids now registered in Germany, far short of the numbers needed to reach a governemnt goal of one million by 2020.

Audi rival BMW, which introduced its electric cars, the i3 and the i8, in 2013, has done little to make that goal a reality. The short, 160-kilometer range of the i3 and its costly carbon fiber frame make the car impractical and unaffordable for the mass market.

BMW only managed to deliver 10,000 units in the first year and is hard at work to build a successor, with a cheaper, easier-to-manufacture frame. But, say company officials, the car also needs a much larger range, a decision that will be up to CEO-designate Harald Krüger, who begins his new job in May.

Last weekend, BMW announced that it planned to hire 8,000 new employees worldwide, primarily software and development engineers.

Daimler and its Chinese partner BYD, or Build Your Dreams, are initially focusing on the mass production of electric cars in China, the world's biggest market for the vehicles. At home in Stuttgart, the company is banking on plug-in hybrid technology to provide strong electric motors with enough power to move an S-Class luxury sedan through the city.

Apart from price and battery range, another key hindrance to e-mobility in Germany is the lack of charging stations.



VW, Daimler, BMW and some energy providers are discussing the development of a nationwide fast-charging network. Mr. Hackenberg told Handelsblatt that 400 fast-charging stations across Germany would be a good start.

"We will certainly have to participate in this," said Mr. Hackenberg. "It has become clear that we will have to invest our own money to get things started. It will be an interesting area for investors later on."

The development costs arising from this pressure to innovate in the field of future mobility not only affect the automakers, but is having a knock-on effect on suppliers too.

According to a recent study from Boston Consulting, 35,000 jobs in Germany's auto supply industry could be axed in the next five years, which equates to 15 percent of overall jobs.

A mixture of savings measures, globalization, high wage agreements and passing on of development costs have created a huge pressure on the supply sector.

"We are now at a crossroads," said Stefan Wolf, head of auto-parts company Elring Klinger."We can only remain innovation leaders through fairness and cooperation in our development partnerships."  Mr. Wolf added that innovative developments from the supply side need to be respected, and paid for, by the car companies.



The author is a Handelsblatt correspondent specializing in the automobile and aviation industries. To contact the author: [email protected]