Audi’s $12 billion cost cutting program to help it fund its forray into EVs

As it pushes to surge ahead leaving dieselgate behind, Audi is streamlining its operations through a cost cutting program.

As per sources close to Audi, the carmaker is aiming to cut $12  billion (10 billion euros) as cost cutting measures, by 2022. The move will help it fund its shift to electric cars.

Volkswagen, Audi’s parent, plans on introducing 5 new electric car models, starting from the e-tron SUV which will be assembled in Brussels from 2018.

Despite the run-up costs for its electric-car program, Audi aims to maintain its operating profit margins at a healthy 8% for at least a year, said sources. During the first half of this year, its profit margin was 8.9%.

As per sources, the bulk of the 10 billion savings would come from cost cuts from its research and development programs.

On Sunday, Handelsblatt, a German business daily had reported the cost-cuttings targets and profitability plans.

A spokesman at Audi’s headquarters in Ingolstadt, Germany, declined comment.

Audi is also aiming to free up  investments from its zero emission technology by allowing two of its premium brands to share components and modules. To this end it has tied up with Porsche to develop a new production platform.

Like its parent, Audi is also grappling with car recalls, persistent criticism from unions, prosecutor investigations as it charts its future post dieselgate.

According to sources, four of the brand’s seven top executives have been earmarked for dismissal which were discussed by VW’s supervisory board members last Thursday.

A formal decision has yet to be taken.

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