Audi Plans To Buy An EV Platform From Chinese Rival
For months, we have been hearing about the difficulties Volkswagen Group has been having with Cariad, its software division. There have have been reports of harsh words spoken in the boardroom by both Audi and Porsche representatives because issues with Cariad are preventing it from bringing new electric car models to market in a timely fashion.
The MEB platform may be okay for the ID.-branded cars for the Volkswagen brand, but not the answer the other brands need. There has been talk of a new platform called the Scalable Systems Platform, or SSP. It was supposed to be the next step forward for Volkswagen Group and the basis for the next generation of EVs for all its divisions.
The plan started while Herbert Diess was at the helm of the world’s second largest automaker. The delay in getting the SSP into production probably played a role in Diess being kicked upstairs so Oliver Blume, head of the Porsche brand, could take his place and get the SSP platform and the Cariad division back on track.
There were rumors that SSP might be delayed until 2027, while others said 2029 at the earliest. Then a few weeks ago, Blume told investors the SSP project is back on track and will be ready by 2026. This follows a housecleaning at Cariad that saw all the top managers put out to pasture and a new team brought onboard.
Blume told those in attendance, “The SSP architecture will balance the need for scale and standardization with differentiation and speed,” according to Autocar. Originally, SSP was supposed to be capable of handling up to 1100 horsepower, but Blume now says the platform will be able to support cars with up to 1700 horsepower.
In the meantime, Porsche and Audi are working together on yet another electric car platform, this one known as PPE, which stands for Premium Platform Electric. That architecture will form the basis of the new battery-electric Porsche Macan and one or two models from Audi.
Audi In China
Audi depends on sales in China for much of its business. It currently sells two EV models in China, the Q4 e-tron and Q5 e-tron, both of which are based on the MEB platform. But sales have been less than what the company hoped for, as models from Tesla and Nio, among others, have outsold the offerings from Audi by a wide margin.
All of this tumult has led Audi to a rather startling decision. According to Automobilwoche, the German language version of Automotive News, Audi is considering buying an electric car platform from a competitor in China to shorten development times for future models.
Audi needs to update and expand its EV offerings to keep up with competitors, especially in China, after key new electric models such as the Q6 E-tron were delayed due to software problems and its Artemis project for an autonomous flagship car was axed, AN reports.
Remember how Oliver Blume said just a few weeks ago the SSP platform was back on track? Maybe it is and maybe it isn’t. The report from Automotive News says it has been pushed back to 2029 and Audi is desperate to get its Q6 e-tron into production and available for customers in China. Volkswagen Group CEO Oliver Blume has already approved Audi’s plan, sources have said, and it could be approved at a meeting of the Audi board of management this week.
Exactly who would supply an electric car platform to Audi is unclear at this point. AN says it could be either BYD or BAIC. Reuters says its sources claim SAIC will be the source. Others tells AN that Audi is talking with several companies and that no decision has been made as of yet, but that Audi’s future EVs likely will still use styling elements from the automaker’s series of Sphere concepts.
The Reuters report says Audi wants to take over the EV platform owned by SAIC’s EV unit — IM Motors — which started delivery of its first model, the L7 sedan, in June of last year. It is a premium EV brand controlled by SAIC, and its investors include e-commerce giant Alibaba Group. The sources said talks are at an “advanced stage,” without further elaboration.
Audi declined to comment on whether the talks were taking place. SAIC declined to comment. Reuters said it was not immediately able to establish the price Audi has offered for the EV platform or whether SAIC would still be involved in making the L7 sedan if a deal is struck between the companies. Chinese media outlet Mingjing Pro reported Audi’s potential takeover of the platform on Tuesday, Reuters said.
Sales of Audi electric cars in China have been well below expectations. In the first quarter, only 3000 cars were delivered to customers in China. In comparison, BMW sold 21,646 EVs and Tesla sold 137,429 cars, according to data from the China Association of Automobile Manufacturers.
Outgoing Audi CEO Markus Duesmann earlier this year promised that the brand had “product fireworks” in the pipeline, without being specific. Duesmann will be replaced as CEO on September 1 by Gernot Doellner, who was the chief strategist for the Volkswagen Group until his new appointment.
The PPE platform that Audi and Porsche are developing will serve as the basis for cars produced at a new Audi factory under construction in the northeastern city of Changchun. The cars manufactured there will be tailored specifically to the tastes of Chinese customers. Meanwhile, Audi is also making plans to build some models in the US.
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Platforms Matter
In the auto industry, platforms are what make building cars a profitable enterprise. They are flexible enough to be the basis of several different models, while standardized enough to leverage the benefits of mass production. But until now, they have been proprietary designs that are an expression of the best engineering a company can muster. The idea that an Audi might look like an Audi but be built on a platform from SAIC, BAIC, or BYD is startling.
40 years ago, General Motors got into hot water with its customers when it started installing Chevrolet engines in Pontiacs, Buicks, Oldsmobiles, and Cadillacs. GM’s reasons were perfectly understandable. It is easier and cheaper to manufacture millions of engines that use the same bore and stroke and crankshafts than it is to build a few hundred thousand examples of 10 different engines, but the customers were not impressed with GM’s logic and sued.
What does this news from Audi say about the future of the auto industry? Could this be the beginning of the great consolidation many industry observers have been predicting since the EV revolution began? Would a customer in Germany plunk down hard-earned euros for an Audi built on a Chinese chassis? The answers are far from clear, but may have significant consequences for the industry.
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