What Can be Done to Revamp the Audi Brand
By Robby DeGraff, Manager of Product and Consumer Insights
The luxury space continues to rapidly evolve as consumer tastes change and brands either retreat altogether or scale back their future electrification ambitions. While some automakers remain committed to EVs, others are instead refocusing on hybridization and ICE. Point the blame at harsh tariffs placed on imported vehicles into the United States, lagging federal incentive support, lingering consumer woes about EV ownership and charging, and consequently slowing sales.
Take Audi, for example. Credited as being one of the first to market with a luxury EV, the e-tron, which launched nearly seven years ago for our 2019 MY, Audi has unfortunately faced a whirlwind of challenges and is now scaling back on its bold EV plans. The automaker initially pledged to slow the development of future gas-powered vehicles after this year, before a complete halt by 2033. Those targets have since been erased, with Audi announcing it would be making massive changes to its current lineup by way of adding various forms of hybridization and thinning the herd. But smartly, Audi isn't giving up entirely on EVs, nor should they, with the current lineup populated with enticing brand-new entrants like the A6 e-tron and Q6 e-tron, plus a few more on the way, including in the format of larger crossover options and reportedly sports cars.
But has the desirability for the upscale brand begun to plummet? Year-over-year sales fell 14% to 196,576 in 2024 compared to 228,550 units in 2023, and Audi's Q2 sales dropped a shocking 19%. The new Q6 e-tron appears to be having a successful first six months of the year here in the states, trailing sales of the lucrative Q5 and Q3, of course, but certainly outpacing sales of all of the brand's other EVs and several key ICE products.
So what then can be done then to fix Audi?
Is there just too much overlap with similar, more mainstream Volkswagen products? For decades, Audi has done a commendable job marrying athleticism and fine luxury across the board, but these efforts seem to recently have become more reserved. Take a quick look at the new Q3 and VW's Taos, and decide for yourself. Exterior styling is now more subdued, hiding interiors heavily digital and outfitted in materials not as high-rent. The storied German automaker could absolutely learn a thing or two from Hyundai Motor Group's posh arm, Genesis, who undoubtedly executes some of the most hospitable and upscale cabins within the luxury space.
Rewind to the 2000s, and Audi's passion for motorsports was loud and clear, with the TT, coveted RS-badged sedans packing serious power, and of course, the debut of the iconic R8 supercar, which served as the flagship offering. Is it time for Audi to kick it into gear again and lean in on its enthusiast roots more confidently? Probably. Sales of the hot but aging RS 6 Avant wagon, with its exhilarating twin-turbo V8, have jumped 41% this year already. The brand's catalogue of powertrains seems to be just kind of "coasting" from an engineering standpoint, while Mercedes-Benz and BMW engineers pull ahead with propulsion that's not just efficient, electrified, and engaging to drive, but exciting to buy and not numb. By Deborah Grieb, Director of Marketing and Insights; Ed Kim, President and Chief Analyst
Could Audi dip its toes into the popular rugged scene and launch a dedicated "Quattro" subbrand of soft-off-roaders? That's a strong possibility, too, given the brand’s AWD footprints are indeed capable and for many consumers “Audi” is synomonous with “all wheel drive". BMW's slowly explored that strategy with its latest X5, and Lexus answered the demand via its Overtrail overlanding trims for the GX and LX.
Another draw to luxury shoppers that's missing at Audi is the availability of intimate, personalized customization. Mercedes-Benz, BMW, Porsche, of course, and now more recently: Cadillac, all provide consumers a chance to further design and tailor their newly purchased vehicle through expansive paint palettes and interior upholstery choices, intriguing wheel designs, and more. Audi's three-row Q7, for example, lets buyers pick from just eight paint colors, half of them a shade of silver, gray, or white. BMW's X7 offers 16, including many optional premium hues the automaker can cash in on. Again, emphasizing individuality and in return, making their products highly desirable. AutoPacific’s latest 2025 Future Attribute Demand Study data show that over 47% of Audi considerers would pay a premium for special exterior paint colors. Clearly, there is opportunity here
None of this work can, or quite frankly should, get done until Audi navigates the ongoing tariff fiasco that's plagued the industry and sets up shop stateside. Recall, Audi imports many of its best sellers from factories in Mexico, Hungary, and Slovakia. Recent whispers have suggested Audi has $4.6 billion for a new plant. Alternatives could include utilizing space at Volkswagen's sprawling plant in Chattanooga, Tennessee, where there's unfilled capacity, or at the upcoming Scout plant in Columbia, South Carolina, ready to go live in 2027.
There's a lot of work to be done, but given how important and critical a brand Audi is to the greater Volkswagen Automotive Group, the only way to move is forward.