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Why Audi is staking its future on electric SUVs

This much we know: SUVs and crossovers sell like hotcakes. The body style has become such a juggernaut that for the first time in recorded history, sport utes beat out sedans this year to score the biggest slice of the luxury pie. Love 'em or hate 'em, SUVs are here to stay, and carmakers are investing more than ever in the segment. Sport utility vehicles also played a bigger role than you might think in making Audi relevant in the US, and based on what we learned during a sit-down with Audi of America president Scott Keogh at the Paris Motor Show, their role is only going to continue to grow at the automaker. Last year, the brand sold 202,202 cars in the States, capping off 60 consecutive months of record sales. But it's not enough to focus on traditional SUVs like the Q5, which was launched on the heels of the global economic meltdown in a tiny small segment of around 160,000 vehicles and has since ballooned to over 400,000 units. The Q5 has scored 80 percent of its buyers from conquest, and a new plant in Puebla, Mexico, promises to churn even more units to the US and the world. Still, tackling the future head-on can be like wrestling an eel – an elusive, almost impossible-to-execute challenge – and Audi is betting a huge part of that success will be the production version of the E-Tron Quattro Concept that debuted last year in Frankfurt. Internally referred to as the C Bev, this battery-powered SUV claims a 311-mile range, and might as well be nicknamed the Tesla Model X Killer. "If you look at where this car migrated from," Keogh says, "it started as a European-ish city car, and then it migrated into a sedan-ish sportback-y type thing, and then we pushed very aggressively to make it an SUV." Keogh says the vehicle will hit showrooms "after 2018." The SUV layout naturally lends itself to batteries, but it also boils down to a simple bureaucratic advantage: "We get [government CO2 and fuel economy] credits for volume," says Keogh. "It's not just enough for a car to be there, it's got to be a car that a lot of people want to buy." Sized between a Q5 and a Q7, the E-Tron Quattro resides in a target-rich environment, a 600,000 - 700,000 unit segment. Add Audi's goals of electrifying 25 percent of its lineup by 2025, and a high volume, medium/large SUV simply makes sense.

Audi will offer A3 TDI owners same goodwill package

Audi will offer a Goodwill Package, similar to the one Volkswagen has offered owners, for the German brand's emissions-cheating diesel four-cylinder engine. Participating customers will receive a $500 prepaid Visa, a $500 gift card for Audi dealers, and three years of 24-hour roadside assistance. "We are offering this Audi A3 TDI Goodwill Package as a sincere token of our appreciation for your patience," the company wrote on its customer website. This offer will only extend to the A3 TDI. A second EPA violation covers an estimated 85,000 vehicles in the US with VW's Group's 3.0-liter TDI V6 like the 2016 A6, A7, A8 and Q5, and the models are also under a stop sale. However, these owners aren't eligible for the Goodwill Package at this time. "Audi is currently investigating the allegations" against the six-cylinder engines, according to the explanation on the site's FAQ. Owners need to register their VIN on the company's website to apply for the Goodwill Package. They'll receive the items in the mail around four weeks later, but will then need to take the affected vehicle and the package to the dealer to activate the cards. Like the VW program, people have until April 30, 2016, to apply for the offer. VW Group of America CEO Michael Horn said last week around 120,000 people already registered for the brand's Goodwill Package. Related Video:

Volkswagen may 'carve out' Lamborghini to list on the stock exchange

FRANKFURT — Volkswagen is drawing up plans to set up Lamborghini as a more independent unit, and is discussing long-term supply deals that could make it easier to list it on the stock exchange, two sources familiar with the matter told Reuters. "Volkswagen is in the process of carving out Lamborghini, and to organize future supply and technology transfer deals," one of the sources familiar with the matter told Reuters. The Italian sportscar brand, which is currently a division of Audi, could be partially listed, with Volkswagen retaining a controlling stake, the first person familiar with the talks said. There is no formal decision to divest Lamborghini, a second source said, adding that the timetable of any deal remained unclear. "This is a first step which gives VW the option to list the unit further down the line," the second source told Reuters. A third source familiar with the discussions said the future of Bugatti, Lamborghini and Ducati was discussed during a supervisory board meeting last Friday. The possibilities for how to electrify the Lamborghini and Bugatti brands through partnerships and investors was discussed, the third source said. Bankers and potential cornerstone investors in an IPO have been approached by the carmaker, the sources said. Volkswagen declined to comment. Volkswagen Group's Chief Executive Herbert Diess on Wednesday said the carmaker will announce "important steps" about the company's future before the close of the year. Volkswagen is reviewing what role its high-performance brands Lamborghini, Bugatti and Ducati will play within the multi-brand carmaker as part of broader quest for more economies of scale, senior executives told Reuters. A global clampdown on combustion-engined vehicles has forced carmakers to accelerate development of low-emission technology for mainstream models, leaving Volkswagen managers struggling to find resources to electrify low volume sportscar models. Related Video: