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Audi targets cost reduction of 10 billion EUR by 2022 to finance the transition to electric cars. The automotive company is the main source of revenue for the Volkswagen Group. It plans to introduce five new all-electric models in the coming years, starting with the SUV e-tron, which will be assembled in 2018 in Brussels.

Despite run-up costs for its electric-car programme, the luxury automaker wants to keep its operating profit margin at 8% per year at least, two sources close to Audi said. Its profit margin in the first half of this year was 8.9%.

The bulk of the 10 billion EUR cost savings would come from cutting research and development costs

Audi also aims to free up funds for investments in zero-emission technology by developing a new production platform with Porsche, allowing both VW premium brands to save money by sharing components and modules.

Audi is grappling with car recalls, prosecutor investigations and persistent criticism from unions and managers over the diesel emissions scandal and its strategy post-dieselgate.