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Audi CEO says brand's EVs are almost as profitable as its other cars

After, oh, a hundred years or so of building vehicles primarily powered by internal combustion engines, automakers around the world have been and still are pumping billions of dollars into the development of electric vehicle technology. Everything from platforms and batteries to motors and the software to control it all requires untold hours of development, and that takes time and money. Fortunately, it's not going to take long for that massive investment to start paying off, at least according to Audi CEO Markus Duesmann, who told Reuters in an interview that "The point where we earn as much money with electric cars as with combustion engine cars is now, or ... next year, 2023. They are very even now, the prices." As a brand, Audi contributed more than a quarter of overall profit for the massive Volkswagen Group, which has such powerhouse brands as Volkswagen and Porsche among others. Under the Audi umbrella are Lamborghini, Bentley and Ducati, and it seems those high-end branches aren't going anywhere, at least for now. "These brands ... are very valuable very profitable brands, where we can even expand the synergy level in the future," Duesmann said in the interview. "There are no plans whatsoever to get rid of them." Despite the overall profitability of the brand, the ongoing global chip crisis is causing headaches. "We had a very strong first half in 2021. We do expect a much weaker second half," said Duesmann, who added, "We really have trouble." In fact, so serious is the trouble that the brand is forced into "a day-to-day troubleshooting process" to limit the chip-shortage damage. The good news for the automaker is that Audi has been able to boost its profit margin from 8% prior to the pandemic in 2019 to 10.7% in the first half of 2021. The bad news is that various chip shortages aren't expected to get a whole lot better over the rest of the year. Related video:

Bentley expands hybrid lineup to Bentaya S and Azure models

People often joke that buyers of ultra-luxury vehicles from Rolls-Royce and Bentley don’t care about gas prices, but even if thatÂ’s true, a lot of people still may not want to own the rolling embodiment of earthÂ’s impending doom. Rolls-Royce will go all-electric by 2030, and its British rivals at Bentley are hard at work on the brandÂ’s first EV, expected by 2025. In the meantime, the Brits at Bentley have come up with hybrid powertrains, and the automaker recently announced an expansion of hybrid options for its only SUV, the Bentayga. The automaker says that 100 percent of Bentayga Hybrid owners use their SUVs in full electric mode, with half staying within the vehicleÂ’s electric range. The Bentayga S and Azure are now available with hybrid powertrains, meaning half of BentleyÂ’s lineup is electrified. Rather than focusing solely on improving efficiency, Bentley implemented a plug-in hybrid system that offers up to 27 all-electric miles of range, a 6-percent surge in power, and a 15-percent improvement in torque. The Bentayga S Hybrid, for example, delivers 455 horsepower. All Bentaygas get almost 300 pound-feet of torque just from the electric motor. All Bentayga hybrids come with a 3.0-liter V6, and Bentley says that the S Hybrid can reach 62 mph (100 km/h) from a standstill in 5.3 seconds. The SUV got 15-percent stiffer dampers that shift damping force based on the selected drive mode, and Bentley says a new Hybrid Sports Exhaust “brings a stirring symphony of sound within the cabin.” It sounds a lot like fake engine noises to us, and Bentley notes that the sounds can be adjusted differently for front and rear passengers. The Bentayga Azure Hybrid is a more luxury-focused variant that features intense noise-canceling technologies and unique interior touches to improve comfort and a sense of well-being. The Azure is up to 26-percent quieter than its rivals on the road, and Bentley says it tuned the SUV to deliver 27 percent fewer vibrations. Buyers can choose from 15 different interior materials and color combinations, and 22-inch 10-spoke wheels come standard.

The UK votes for Brexit and it will impact automakers

It's the first morning after the United Kingdom voted for what's become known as Brexit – that is, to leave the European Union and its tariff-free internal market. Now begins a two-year process in which the UK will have to negotiate with the rest of the EU trading bloc, which is its largest export market, about many things. One of them may be tariffs, and that could severely impact any automaker that builds cars in the UK. This doesn't just mean companies that you think of as British, like Mini and Jaguar. Both of those automakers are owned by foreign companies, incidentally. Mini and Rolls-Royce are owned by BMW, Jaguar and Land Rover by Tata Motors of India, and Bentley by the VW Group. Many other automakers produce cars in the UK for sale within that country and also export to the EU. Tariffs could damage the profits of each of these companies, and perhaps cause them to shift manufacturing out of the UK, significantly damaging the country's resurgent manufacturing industry. Autonews Europe dug up some interesting numbers on that last point. Nissan, the country's second-largest auto producer, builds 475k or so cars in the UK but the vast majority are sent abroad. Toyota built 190k cars last year in Britain, of which 75 percent went to the EU and just 10 percent were sold in the country. Investors are skittish at the news. The value of the pound sterling has plummeted by 8 percent as of this writing, at one point yesterday reaching levels not seen since 1985. Shares at Tata Motors, which counts Jaguar and Land Rover as bright jewels in its portfolio, were off by nearly 12 percent according to Autonews Europe. So what happens next? No one's terribly sure, although the feeling seems to be that the jilted EU will impost tariffs of up to 10 percent on UK exports. It's likely that the UK will reciprocate, and thus it'll be more expensive to buy a European-made car in the UK. Both situations will likely negatively affect the country, as both production of new cars and sales to UK consumers will both fall. Evercore Automotive Research figures the combined damage will be roughly $9b in lost profits to automakers, and an as-of-yet unquantified impact on auto production jobs. Perhaps the EU's leaders in Brussels will be in a better mood in two years, and the process won't devolve into a trade war. In the immediate wake of the Brexit vote, though, the mood is grim, the EU leadership is angry, and investors are spooked.