Audi elects electric over eclectic

The electric powertrain’s infancy and simplicity limit auto makers’ opportunity to differentiate their product on a key front. How have they changed their approach? We thought it best to ask the local head of Audi, the marque set to push the mainstream industry into a new era of electric glamour.

Uwe Hagen, like the company whose Australian arm he heads up, is unequivocal about the future of mobility. “We’re at the point now, I think, where DVDs were a few years ago,” Audi’s local managing director told motoring.com.au in a recent chat.

“There are lots of companies pouring tons of money into their idea of the way of the future and promoting them accordingly. But I think in the longer term only one or two will win out and establish themselves as standards, in the way Sony did with Blu-Ray.”

While most companies are dividing their eggs among many baskets, the Volkswagen Group’s upmarket brand is unusually clear about its path into the future. It’s electric. The short to medium term – the teen years – will see it releasing a raft of hybrids and plug-ins, but they’re mere stepping stones to 2020, by which time it plans to have an all-electric variant at every level of its lineup. Over the next few decades, we will witness a slow phasing out of the combustion engine as all-electric power gains in efficiency and viability.

With Europe sliding into a new era of economic uncertainty at best and decline at worst, one of the more audacious announcements to come out of its auto industry in the closing weeks of 2011 was Audi’s declaration of its first tilt at the EV market. No cautiously dipped toes here. Rather, a big splash in the form of the R8 e-tron – an update on the stunner that stole the 2009 Frankfurt motor show.

This might seem odd, not to mention risky, given the news on consumer acceptance of the burgeoning new order in automotive power hasn’t been great anywhere in the world. Sales figures have consistently failed to fulfil even modest expectations worldwide.

What there is of the sector is populated by humble, sensible fare like the Mitsubishi i-MiEV, the Nissan LEAF and Renault’s Fluence and Kangoo ZE models. Yes, there’s Tesla’s Roadster, but despite the Californian outfit’s marketing efforts to date and the efficacy of its product, it’s still an embryonic brand with a big price and none of the scale needed to give it room to move. Auto companies normally hold buyer profile details close to their chests, but it’s a safe bet that most Teslas tuck up at night in a garage full of big-brand fossil-fuellers.

The R8 e-tron will hit the market like a Tesla writ big. Exact specs haven’t been announced yet – the electric mobility industry is moving fast enough to make such announcements a year ahead of release way premature. And while it will most likely be simpler, lighter and short of the stonking 4500Nm the Frankfurt concept’s half-tonne battery sent to the ground through its four wheel motors, its most important feature will be the big-name badge, underpinned by an even bigger one in the Volkswagen Group.

But there’s something we can’t help wondering about auto world’s shift to electrification. Electric drivetrains are simpler than their combustion counterparts. Much simpler. You can count the motor’s moving parts on one hand, and because it operates across a higher rev range, it eliminates the need for complex multispeed transmissions (although it’s a fair bet that variations on the continuously variable concept will work their way into the picture, somehow or other).

While such simplicity opens up a world of difference in serviceability to the benefit of buyer and seller alike, it also strips the powertrain of much of its traditional nuance and tweakability. There’s so much engineers and mechanics can do with an IC powertrain, by dint of the number of variables in its operation, from the shape and richness of the mixture injected into an inlet manifold, through the placement of teeth on a camshaft and resultant valve timing, cylinder bore and piston stroke, to the manner and efficiency of exhaust extraction, to name the more obvious.

How will this affect the way carmakers differentiate their product? The powertrain is, after all, a crucial locus of competition, and it gets more so the further upmarket you go.

Current conventional wisdom has it that over time, with the advancement in a raft of different alternative powertrain technologies, each will find its niche in a new and more diverse mainstream. The fleet of the future, it seems, will run on a mix of all-electric, petrol- and diesel-electric hybrid, LPG, natural gas and hydrogen fuel cell. It’s why so many marques are dividing their R&D resources between these in different combinations.

Not so Audi, or not to the extent of many of its competitors. The R8 e-tron announcement symbolises just how heavily the German marque is betting on the EV as the way of the future. To that end, in 2008 it placed a chunk of its stocks in a development deal with Japanese electronics giant Sanyo. That company has expressed ambitions to own 40 per cent of the global green car battery market by 2021.

Car companies have been experimenting with alternative power for years, driven more by peak oil than the threat of climate change. Hagen, who came across to Audi from BMW, recalls how that company touted LPG as the way ahead for some time. “But I think they came to realise the disadvantage it’s at in terms of infrastructure on the scale we need, initially to supplement, then to parallel and eventually to replace the petrol station network. The whole question of its delivery on the scale we need means deciding, should it be in liquid or gaseous form? Either way it’s a high-risk proposition.”

This, he added, is the big advantage electricity enjoys over other power sources. “Simply, the infrastructure’s mostly already there.”

Not that Audi hasn’t dabbled at the radical end of the alternative power pool. Some years ago it investigated hydrogen fuel cells, but decided the funds were better spent elsewhere. “Fuel cells have been round for 20 years in one form or another, but no one’s yet come up with one that’s a clear solution yet. It might be viable some time into the future, but right now it’s too far away.”

The company has announced pending hybrid and PHEV models – Australia will see hybrid additions to the A6 and A8 lineups in 2013 – but it has made it clear these represent mere stepping stones in realising its leadership ambitions in the EV sector. By 2020, it will offer at least one electric version of each model in its lineup.

Having set off down the EV path, how does the company plan to differentiate its product, taking into account those limitations imposed on all-electric powertrains for the time being?

Of course, there’s no shortage of channels through which makers can stamp their identity on their product, giving each total package its own mojo. Audi has already set to work on it. For a premium marque, coming in from the top and working downwards is more convincing than the other way round. Serving up a bit of glamour for early adopters is a form of advertising, says Hagen.

“Yeah, when it’s on the street, you will for sure look at this car,” he laughed. “Much more than some little biscuit tin. I mean, why does an EV have to be small and humble? Who made that rule?”

Launching the R8 e-tron up front – a big, showy sportster, complete with open-top Spyder version – in the face of LEAF, i-MiEV and the likes: was that intended strategically? Hagen makes it clear he can’t speak officially for the company’s global strategists, but he’s happy to share his own well informed ideas.

“It makes sense. We’re a premium brand – look at our past. And we’ve been first with so many technologies, like quattro. Until we came up with it [in the homologated rally car in the early 1980s], AWD for a road car was a laughable idea. And now?”

Diesel, too. You need only look at its Le Mans record to see no maker has done more to extract brute performance from thick oil.

“So I think you can take it, it’s the same kind of thing with e-tron. If you have new technology and it’s not going into mass production up front, it’s going to cost a bit more, even at the base end like the cars we’ve seen. Who can afford that? People with a little more… financial flexibility, shall we say. So it shouldn’t come as a surprise that we do it. It fits with the premium-product values of the people who can afford it.”

Hagen believes it’s critical for each marque to look to long-held core values in its bid to differentiate its offerings in these early stages of the electric car’s evolution. “It’s not about conscious differentiation as much as focusing on your strengths.” For Audi? “Build quality, lightweight construction and sustainability.”

When he speaks of ‘sustainability’, he’s talking in broader terms than the usual eco-references. “I think it’s about coming up with ideas that endure. Not jumping on every latest one, but looking to the ones that bring us to our target. Again, like quattro, like refining diesels.

The emphasis on build quality, he continues, has been there since August Horch founded the marque in 1909. Horch started out building cars with two hallmarks: they had large engines of eight cylinders and they were built to last. The engines have changed, but Horch’s original idea of giving robustness a central place lives on. “It was one of the first things I saw when I came to Audi , the attention to detail. Things like the paintwork – look in all the hidden parts of the car, under the bonnet and the like, and you’ll find it’s fully paint-finished, to the same standards as the visible panels.”

It’s paid off. Nary a review of Audi product goes by that doesn’t give space to the quality of its materials and the way they’re melded together.

On lightweight construction, the company has a head start over most of its rivals. More than two decades’ work on aluminium structural components has set it up to cope with the growing imperative to reduce weight as emissions regulations tighten.

The centrepiece has long been the aluminium space-frame. Introduced in the A8 in 1994, it was designed to cut chassis weight and boost torsional rigidity. The company has incorporated it into high-end models like the A8 and the R8, and in the radical A2 city car that lasted from 1999 to 2005.

The latter was a radical exercise in innovation. Not just for the space frame chassis but for its low maintenance requirements, with its underfloor engine and a ‘service panel’ to check and refill water, windscreen fluid and oil, in place or a grille.

The tiny A2 was never going to find commercial success, given the incongruity of pitching so much costly technology into the most price sensitive of consumer auto segments.

But don’t suggest to Hagen it didn’t work. Rather, he says, it exemplifies the difference between a loser and a loss leader. “No, we couldn’t charge what we needed to break even. But that kind of project, you’re not doing for just one car. You’re doing it for your brand, for your whole range.”

And there’s no doubt it’s paid off long term. “It went to market new at a high price. Now, ten years on, dealers in Germany have waiting lists for second hand ones. When they get one, they don’t display it, they just pull out the list. It’s pretty much sold before they even get it.”

And besides, the R&D work that spawned the A2 has shown up in mainstream models years later. The space frame is restricted to A8, R8 and TT models today, but the rest of the lineup has inherited aluminium body panels and bonnets, pillarwork, sheetwork and chassis profiles.

If it’s hard to see any volume model achieving the economies of scale to justify the use of the space frame, the company has come far enough with these other elements to give the whole weight-loss regime its own brand: ‘Audi Ultra’. This is showing up everywhere. For example, the current A6 3.0 TDI, launched at the end of 2011 is 80kg lighter than its predecessor. Its body now comprises about 20 per cent aluminium components.

The immediate result is better power-to-weight ratio, an effective simple measure of a vehicle’s overall operating efficiency. It at least mitigates the weight gain that comes with AWD.

The ‘ultra’ strategy sees the company also investing heavily in CFRP, high strength alloy steels and magnesium.

Not that any of this means the company is complacent about the future. Like so many others, it’s acutely aware of the importance of interaction with the vast collection of groups influencing that future. From direct connections in the industry like its owner, Volkswagen, to which it’s contributing hybrid technologies, to wider industry players like Sanyo, to urban planning authorities and consumer lobby groups.

What better way to keep an ear to all this ground than a talkfest? Or rather, the Audi Urban Future Initiative – a collection of talkfests with the four-ringed logo hanging over them. By the company’s own definition, it ‘consists of four pillars: Award, Summit, Insight and Research. The Initiative aims to establish a dialogue on the synergy of mobility, architecture and urban development by means of a view into the future'.

Its main function is as an ideas repository about future mobility. It’s big, global big, assaying the many different forms future mobility might take, taking into account the different needs of the world’s major cities. To that end, last year it hosted events under banners like ‘Festival of Ideas’, ‘Design Miami’ and ‘Project New York’.

Commercially, its benefits are indirect, says Hagen. “It’s an acknowledgement that we as a car company have to do business with the world in a very different way, starting sooner rather than later. It’s a response to a jolt.”

It also highlights one major reason behind Germany’s growing dominance of the global auto industry: no other country’s industry better leverages the two-way reactive relationship between long-term thinking and steady growth.