Audi is the latest automaker to reveal plans for a lower-cost EV
Audi is joining the race as automakers gear up to introduce new, lower-cost EV models. The new entry-level EV will sit below the Q4 e-tron, which starts at just over $50,000.
Audi plots a new lower-cost EV, an electric A3 or Q3
After unveiling the new Q6 e-tron this week, its next-gen premium mid-size electric SUV, Audi, is planning a smaller, lower-cost EV.
The Q6 e-tron is the “start of an extensive product initiative,” according to CEO Gernot Döllner. “Despite the recent public debate, there is no doubt the future of the car is electric,” Audi’s boss explained.
“At Audi, we will electrify all core segments by 2027 and have defined a fully electric target portfolio.”
Döllner, who took over for Markus Duesmann in September, said the company is accelerating development on a new entry-level electric car that will be the electric equivalent to the A3 or Q3.
After retiring the A1 and Q2, the A3 and Q3 are Audi’s smallest models. Döllner said the luxury brand is launching an “additional electric model below the Q4 E-tron,” according to Autocar.
“It will be a wonderful, unique independent vehicle concept,” produced in Ingolstadt alongside the new Q6 e-tron.
Döllner didn’t give up any details, but given Audi’s preference toward SUVs, the entry-level EV could take more of a crossover-like design as a sibling to the Q3. The report notes that ex-tech chief Oliver Hoffman claimed Volkswagen’s MEB platform would underpin the EV rather than the new PPE powering the Q6 E-tron.
Audi’s boss said a “final decision on which platform we will use has not been taken,” suggesting it could change. The new electric car is expected to launch in 2027.
The race for more affordable EVs
The new lower-cost Audi EV is “not a four-metre car,” according to Döllner. “We won’t have a successor for the A1 or Q2, not a direct successor. But with the model below [the] Q4 in the [A3] segment, that will be definitely our entry-level car.”
Audi’s latest comments come as several automakers have made similar commitments recently.
Ford is shifting its plans to smaller, more affordable EVs. The American automaker is developing a new low-cost EV platform to underpin a smaller electric pickup and SUV.
According to Bloomberg Businessweek, Ford’s “skunk works” team working on the platform is led by Alan Clarke, who led engineering on the Tesla Model Y.
Sources familiar with the matter say the first model will launch in 2026 with starting prices around $25,000.
Tesla is also planning to launch its next-gen EV, with starting prices around $25,000. Although initial plans called for the EV to be built at Gigafactory Mexico, CEO Elon Musk confirmed it will be built in Texas.
American EV startup Rivian shook the internet after revealing the smaller, more affordable R2, which will start at $45,000. CEO RJ Scaringe unveiled an even smaller and cheaper R3 electric crossover.
Rivian has already confirmed that the R2 will launch in Europe as it expands overseas. According to Scaringe, the EV is already seeing demand, with over 68,000 reservations in under 24 hours.
Audi’s parent company, Volkswagen, announced it aims to begin producing its most affordable ID.1 electric car in 2027, starting at 20,000 euros ($21,700). VW brand leader Thomas Shafer said the ID.1 will offer “affordable electric mobility for everyone.” It will follow the ID.2, revealed as a concept last March.
Based on a new entry-level version of the MEB platform, the ID.2 will start under 25,000 euros ($27,000) with 279 miles range.
VW’s spokesperson for Design, Stepan Rehahk, posted a teaser of the ID.2 SUV, the affordable EVs bigger sibling.
Kia is also planning a series of low-cost models. Its entry-level EV3, starting at $30,000, is expected to launch by the end of the year. The EV4, Kia’s entry-level electric sedan, will follow next year, with starting prices expected around $35,000.
And this just scratches the surface. Automakers and startups from around the globe are racing to introduce lower-priced EVs as demand for affordable options builds.
Electrek’s Take
The rush to introduce more affordable EVs comes as low-cost automakers like China’s BYD continue expanding overseas.
Electric cars pushed China past Japan to become the leading export nation for the first time last year. BYD just expanded its footprint in Europe by launching its best-selling Atto 3 and Seal EV in Greece.
The global EV leader plans to more than triple its share of the European EV market before it even begins production in the region. BYD will start building EVs and batteries in Hungary in 2026, enabling faster deliveries at a lower cost.
Although BYD’s Atto 3 (Yuan Plus) starts at just $16,644 (119,800 yuan) in China, it costs around $40,000 (37,990 euros) in Europe. Once production begins, BYD looks to change that.
Legacy automakers, now Audi included, are rushing to compete with plans to launch their own lower-cost EVs.
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EV sales kept up their momentum in December 2024, with incentives playing a big role, according to the latest Cox Automotive’s Kelley Blue Book report.
December’s strong EV sales saw an average transaction price (ATP) of $55,544, which helped push the industry-wide ATP higher, according to Kelley Blue Book. The December ATP for an EV was higher year-over-year by 0.8%, slightly below the industry average, and higher month-over-month by 1.1%. Tesla ATPs were higher year-over-year by 10.5%.
Incentives for EVs remained elevated in December, although they were slightly lower month-over-month at 14.3% of ATP, down from 14.7% in November.
EV incentives were higher by an impressive 41% year-over-year and have been above 12% of ATP for six consecutive months. Strong sales incentives, which averaged more than $6,700 per sale in 2024, were one reason EV sales surpassed 1.3 million units last year, according to Cox Automotive, a new record for volume and share.
(My colleague Jameson Dow reported yesterday, “In 2024, the world sold 3.5 million more EVs than it did in the previous year … This increase is larger than the 3.2 million increase in EV sales from the previous year – meaning that EV sales aren’t just up, but that the rate of growth is itself increasing.”)
Kelley Blue Book estimated that in December, approximately 84,000 vehicles – or 5.6% of total sales – transacted at prices higher than $80,000 – the highest volume ever. KBB lumps gas cars and EVs together into this luxury vehicle category, so this is where Tesla Cybertruck is slotted.
However, Tesla bundles sales figures of Cybertruck with Model S, Model X, and Tesla Semi(!) into a category it calls “other models,” so we don’t know for sure exactly how many Cybertrucks Tesla sold in Q4, much less in December. However, Electrek‘s Fred Lambert estimates between 9,000 and 12,000 Cybertrucks were sold in Q4, and that’s not a stellar sales figure.
What will January bring when it comes to EV ATPs? What about tax credits? Check back in a month and I’ll fill you in.
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Tesla is now claiming that Cybertruck was the ‘best-selling electric pickup in US’ last year despite not even reporting the number of deliveries.
There’s a lot of context needed here.
As we often highlighted, Tesla is sadly one of, if not the most, opaque automakers regarding sales reports.
Tesla doesn’t break down sales per model or even region.
For comparison, here’s Ford’s Q4 2024 sales report compared to Tesla’s:
You could argue that Tesla has fewer models than Ford, and that’s true, but Tesla’s report literally has two lines despite having six different models.
There’s no reason not to offer a complete breakdown like all other automakers other than trying to make it hard to verify the health of each vehicle program.
This has been the case with the Cybertruck. Tesla is bundling its Cybertruck deliveries with Model S, Model X, and Tesla Semi deliveries.
Despite this lack of disclosure, Tesla has been able to claim that the Cybertruck has become “the best-selling electric pickup truck” in the US in 2024:
It very well might be true. Ford disclosed 33,510 F-150 Lightning truck deliveries in the US in 2024 while most estimates are putting Cybertruck deliveries at around 40,000 units.
Those are global deliveries, but Tesla only delivered the Cybertruck in the US, Canada, and Mexico in 2024, and most of the deliveries are believed to be in the US.
However, there’s essential context needed here, as we highlighted in our recent ‘Tesla Cybertruck sales are disastrous‘ article.
First off, Tesla had a backlog of over 1 million reservations for the Cybertruck that it has been building since 2019. This led many to believe Tesla already had years of demand baked in for the truck and that production would be the constraint.
However, based on estimates, again, because Tesla refuses to disclose the data, Cybertruck deliveries were either flat or down in Q4 versus Q3 despite Tesla introducing cheaper versions of the vehicle and ramping up production.
Again, that’s after just about 40,000 deliveries.
Furthermore, with almost 11,000 deliveries in Q4 in the US, Ford more likely than not outsold Cybertruck with the F-150 Lightning in Q4.
Electrek’s Take
Tesla is in damage control here. There’s no doubt that it is having issues selling the Cybertruck.
Inventory is full of Cybertrucks and Tesla is now discounting them and offering free lifetime Supercharging.
Tesla is great at ramping up production, and it’s clear the Cybertruck is not production-constrained anymore. It is demand-constrained despite having over 1 million reservations.
Again, those reservations were made before Tesla unveiled the production version, which happened to have less range and cost significantly more.
The upcoming cheaper single motor version should help with demand, but I have serious doubts Tesla can ramp this program up to more than 100,000 units in the US.
As a reminder, Tesla installed a production capacity of 250,000 units annually and Musk said he could see Tesla selling 500,000 Cybertrucks per year.
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