Core Viewpoint - Traditional automotive giants are collectively retreating from aggressive electric vehicle (EV) commitments, signaling a shift towards a more pragmatic approach in the face of market realities [1][3][14] Strategic Retreat - Audi has officially withdrawn its goal for full electrification by 2033, abandoning a clear timeline for phasing out internal combustion engines [1] - The cancellation of Audi's "odd-even naming system" in early 2025 is seen as a metaphor for the contraction of its electrification strategy [4] - The closure of Audi's Brussels factory, a historical site for EV production, highlights the challenges faced in the electric vehicle market, with Q8 e-tron sales declining significantly [4][6] Market Realities - Audi's global sales are projected to drop by 11.8% in 2024, the largest decline among major competitors, with electric vehicle sales down 8% to 164,000 units, representing only 9.81% of total sales [6] - The cancellation of EV subsidies in Germany has led to a 33% drop in Audi's domestic electric vehicle sales, reflecting broader market weaknesses in Europe [6] - The overall European EV market has seen a decline of 10.8% in July 2024 and a staggering 43.9% in August 2024, marking the lowest sales in three years [6] Dual-Track Strategy - Audi plans to introduce 10 plug-in hybrid models by 2025, allowing for a transitional approach while meeting emission regulations [8] - The SSP platform will be designed to accommodate both electric and combustion engines, providing flexibility to adjust production based on market conditions [8][10] - Other traditional automakers are also adopting a dual-track strategy, balancing electric and combustion models to mitigate risks associated with a full transition to electric vehicles [10] Technological and Economic Considerations - The transition to full electrification poses significant supply chain challenges for major manufacturers, with electric vehicle production costs being substantially higher than their combustion counterparts [7] - The reliance on software development has hindered the rollout of new electric models, as seen with Audi's Q6 e-tron delays due to issues at its software subsidiary [6][10] Market Adaptation - Audi is pursuing a more aggressive strategy in the Chinese market, collaborating with local companies to develop tailored electric vehicle offerings [11] - The shift in strategy reflects a broader industry trend where traditional automakers are reassessing their approaches to electrification, focusing on profitability and sustainability rather than solely on electric vehicle production [13][14]