Audi’s Strategic Rebuild: Can the 2 Million Sales Target Signal a Turnaround for Volkswagen’s Premium Division?

Audi’s 2025 strategic overhaul has positioned the brand at a critical crossroads. With a bold 2 million annual sales target and a rapid pivot toward electrification, the German automaker is betting on its ability to reconcile tradition with innovation. For investors, the question is whether this ambitious roadmap—anchored in premium EV positioning and Volkswagen Group’s broader transformation—can deliver a sustainable turnaround.

Electrification as a Growth Engine

Audi’s electrification strategy is accelerating at a pace that outstrips many of its peers. In Q1 2025, the brand reported a 30.1% year-over-year increase in fully electric vehicle (BEV) deliveries, driven by strong demand in Europe’s leading EV markets like Norway and Germany [1]. By 2025, Audi aims to offer 20 all-electric models and 10 plug-in hybrids, leveraging the Premium Platform Electric (PPE) architecture co-developed with Porsche [2]. The Q6 e-tron and A6 e-tron, flagship models built on PPE, exemplify Audi’s commitment to blending luxury with performance, offering 0–60 mph acceleration in under 5 seconds for high-performance variants [3].

This push is not just about volume—it’s about capturing premium EV market share. With the Volkswagen Group targeting 1 million EVs annually by 2025 [4], Audi’s role as a premium brand is to differentiate through design, technology, and customer experience. The brand’s investment in charging infrastructure, including premium lounges at fast-charging hubs, further elevates the ownership experience [1].

Balancing Tradition and Transformation

While Audi’s EV ambitions are clear, the brand is also recalibrating its combustion engine portfolio to maintain its heritage. Odd-numbered models like the A5 and S5 retain internal combustion engines, with the 2025 A5 offering a 268-horsepower turbocharged 2.0-liter engine and the S5 delivering 362 horsepower [5]. These models are designed on the Premium Platform Combustion (PPC), ensuring that Audi’s sporty DNA remains intact even as it transitions to electrification [2].

This dual-track strategy allows Audi to cater to both traditionalists and early adopters of EVs. However, the challenge lies in managing costs and complexity. The Volkswagen Group’s platform consolidation—from 12 to four modular architectures—will streamline production but requires significant upfront investment [4]. For Audi, this means navigating the tension between maintaining brand identity and aligning with Volkswagen’s efficiency-driven goals.

The 2 Million Target: Optimism vs. Reality

Audi’s 2 million sales target for 2025 represents a 5.3% increase from its 2024 performance [1]. Yet, the first half of 2025 revealed mixed results: while BEV deliveries surged 32% to 101,000 units, overall deliveries fell 6% year-on-year to 794,000 vehicles [6]. This decline was attributed to U.S. import tariffs, restructuring costs, and intensified competition in China [6].

The Volkswagen Group’s broader strategy provides context. With a target of 2–3 million EVs by 2025 [4], Audi’s success is intertwined with the group’s ability to scale battery production via PowerCo and reduce costs through platform standardization. However, Audi’s CFO, Jürgen Rittersberger, has acknowledged that profitability hinges on achieving economies of scale in electrification [6].

Risks and Opportunities

Audi’s transformation is not without risks. The premium EV segment is fiercely competitive, with Tesla, BMW, and Mercedes-Benz all expanding their offerings. Additionally, Audi’s reliance on European markets—where EV adoption is highest—leaves it vulnerable to regional economic shifts. In China, where the brand faces stiff competition from local EV startups, its combustion engine models are losing ground [6].

Yet, the opportunities are equally compelling. Audi’s PPE platform and collaboration with Porsche position it to compete in the high-margin luxury EV segment. The brand’s focus on sustainability, including investments in battery recycling and carbon-neutral manufacturing, also aligns with regulatory trends and consumer preferences [1].

Conclusion: A Calculated Bet on the Future

Audi’s 2 million sales target is more than a number—it’s a statement of intent. By doubling down on electrification while preserving its performance heritage, the brand is attempting to redefine premium mobility in an era of rapid change. For investors, the key metrics to watch are BEV market share growth, cost efficiency in platform transitions, and the ability to maintain profitability amid global headwinds.

If Audi can execute its strategy without compromising its premium positioning, the 2 million target could signal a durable turnaround. However, the path remains fraught with challenges, and success will depend on the Volkswagen Group’s ability to harmonize its diverse brands under a unified electrification vision.

Source:
[1] Despite first-quarter challenges – Audi sees strong growth in deliveries of electric vehicles [https://www.volkswagen-group.com/en/articles/despite-first-quarter-challenges-audi-sees-strong-growth-in-deliveries-of-electric-vehicles-19269]
[2] Tech talk: How Audi plans to bring 20 all-electric models [https://media.audiusa.com/releases/399]
[3] Sliding into the Electric Future: 2025 Audi Q6 e-tron Models [https://www.audifortwayne.com/en/blog/sliding-into-the-electric-future--2025-audi-q6-e-tron-models/?srsltid=AfmBOopB5qHc2rrxys4yilnLHQpV18uf7OUkHxu7iQLUi2EF1xZak8Bc]
[4] Volkswagen targets sales of three million electric cars by [https://www.autocarpro.in/news-international/vw-growth-strategy-world-leading-provider-sustainable-mobility-20329]
[5] Positioning and strategy - Audi A5 [https://www.audi-mediacenter.com/en/the-new-audi-a5-models-modern-sportiness-meets-premium-proportions-16261/positioning-and-strategy-16275]
[6] Challenging half year – Audi realignment gains momentum [https://www.volkswagen-group.com/en/articles/challenging-half-year-audi-realignment-gains-momentum-19574]