Why did Audi cancel its R8 electric sports coupe?

Audi has canceled its R8 e-tron, an electric version of the luxury sports coupe. The knowledge the company gained while developing this elite vehicle may help them take advantage of new electric vehicle technologies and add market share at a lower price.

Audi has pulled the plug on its R8 e-tron, an all-electric version of the R8 luxury coupe. The decision may have set the German automaker up to dive deeper into popular electric vehicle markets.

The idea of an all-electric Audi supercar first emerged as early as 2009. It’s been in and out of development ever since. When research and development chief Ulrich Hackenberg brought it back for its most recent incarnation, the vehicle became a variant of the second-generation R8. But the car was never mass-marketed, with “fewer than 100” cars being sold, Audi told Car and Driver. The price has also been a drawback, with the cars coming in at $1.1 million each. 

The rise of Tesla has proven that buyers can have environmentally-conscious luxury cars that are not only fast and fun, but also increasingly affordable. For Audi, abandoning its project is likely a recognition that technology has progressed, reducing the appeal of the R8 e-tron. In other words, it’s time to try something new.

“It wouldn’t have appeared as a really compelling or competitive combination of price and performance or capabilities” by the time it hit the market, Karl Brauer, senior analyst for Kelley Blue Book, tells The Christian Science Monitor in a phone interview. “The world has changed…too rapidly for that car to make sense any more.”

The price of electric vehicles has been dropping rapidly over the past few years, at the same time as range has increased. Tesla has been at the forefront of this revolution. 

The Tesla Roadster, when it debuted in 2008, cost more than $100,000, with a range of 244 miles. That cost dropped to $57,000 for the Model S, which boasted a 50-mile range increase. The 2017 Tesla Model 3 has a $35,000 price tag, making it cost-competitive with the BMW 3 series and Audi A3, which have conventional internal combustion engines.

Mr. Brauer says the success of Tesla has been “an obvious wake-up call to automakers” that there is a market for electric vehicles. Other manufacturers have been quick to improve their offerings: The 2017 Chevy Bolt has a range of almost 240 miles, at a cost as low as $30,000 after tax credits. 

For Audi and other Germany automakers, their electric cars came “a little too early” for the technology, Brauer explains. And seven years on, the R8 e-tron looks “way overpriced and somewhat obsolete,” given its high cost and low range. But all is not lost. In fact, abandoning this design may pave the way for the company to produce electric vehicles with mass appeal in the future.

“They learned a lot. If they’re smart, they’ll take the lessons and move forward,” Brauer says, calling it “a good R&D project for them.”

As he points out, Audi is already working on a new electric SUV, which caters to the increasingly broad SUV market.

Staying current is important in a climate where electric cars are increasingly popular. A 2012 Deloitte survey found that 59 percent of Millennials preferred alternative power. And the International Energy Agency reported that there were 1.26 million electric cars on roads worldwide at the end of 2015. Global emissions targets could push that number substantially higher over the next five years. 

Advances in technology are helping the German manufacturers. Their preference, in building electric cars, has historically been to take existing models and replace the engines with batteries. That used to be a disadvantage, given the bulkiness of the batteries, and gave Tesla – which designed its chassis and batteries for electric vehicles – a leg up. New, flexible batteries mean that’s less of a hurdle with today’s models.

As such, while Porsche may be building its electric vehicle offering from the ground up, other car makers, such as BMW, are opting to fit already-popular cars with batteries. Overall, “battery costs have been cut by a factor [of] four since 2008…and are set to decrease further, the IEA said in its Global EV Outlook for 2016.

“It’s an EV world and Europeans, and the luxury car makers in particular, have decided to embrace it,” Brauer concludes.