Audi unveils first look of its A6 Avant e-tron concept

Yahoo Finance's Pras Subramanian details Audi's EV push beginning this year and the automotive manufacturer's lowered production forecast for 2022 amid rising commodity prices.

Video Transcript

BRAD SMITH: Continuing with the theme of electric vehicles, as the industry ramps up its ambition and production, we've got Audi's investor day now under the belt. And Yahoo Finance's own automotive reporter, Pras. Subramanian joining us now with more on what to expect from Audi going forward from here. What was announced, Pras?

PRAS SUBRAMANIAN: Hey, Brad. So today, Audi sort of went over their 2021 and their 2022 forecast, which includes, of course, a big EV push. You know, 2021 was a good year for them. They delivered just a few less cars than they did in 2020 but they actually made $6 billion in operating profit. And that was based on almost $60 billion in revenue.

For 2022, lots of uncertainty here. They're, of course, concerned about the Russia-Ukraine impact, the Felicity Ace cargo ship sinking, that they lost thousands of vehicles with. But outlook is still pretty good, they still see around 1.8 million to 1.9 million vehicles next year-- this year, and revenue between $69 billion and $73 billion. So that's still pretty strong for them.

Key to this push is, of course, EVs. They want to have about 20 EVs out by 2026. And one of those will be this new A6 Avant e-tron this is a-- seen here in concept form, this is a wagon all-electric, possible 400-mile plus range. And in a high-spec trim, it can get over-- zero to 60 in under four seconds, very impressive. I'm a fan of these wagons. I think they look really sleek. They're really-- these fast hopped-up wagons are pretty cool. The problem is they don't really sell that well here in the States. So we'll see if it does come to the US.

BRAD SMITH: Pras, I got to be honest with you, man, I just, I love a good station wagon. I know it's not a popular opinion out there but I don't know, they just from a functionality perspective, I just think they get things done and it's still low to the ground, good center of gravity. That's just me, we'll see if they can make station wagons sexy for Volkswagen, for Audi, for all of the manufacturers that are out there, Mercedes Benz as well. But this also comes at a time where we know S&P Global Mobility, formerly IHS Markit, they're lowering some of their expectations for production in the future. What do we need to know there?

PRAS SUBRAMANIAN: Yeah, Brad, it's actually a problem for many global automakers. Audi did mention that themselves, that they had to actually stop production and export activities in Russia. And they mentioned that it had put tremendous interference with their supply chain.

So you see here, S&P Global Mobility talking about how they're cutting their forecast by 2.5 million cars a year to around 81.6 million cars this year and about 85 million-- I'm sorry, 88 million cars next year. They see a worst-case scenario if even 4 million cars lost this year because they're saying the downside risk here is enormous because of the war, because of the chip shortage, higher prices for raw materials and commodities.

And from Ukraine for instance, there's a wire harness shortage, right? The disruption there. It's a critical component for cars, every car needs one. So when you don't have that, you can't actually make sellable, drivable cars. And the problems are not just in Europe, right? It's also in China, we've seen COVID picking up there, plant closures there, including Tesla's plant in Shanghai.

BRAD SMITH: Yahoo Finance's own Pras Subramanian, giving us the latest on all of the auto manufacturing news, the movement, and even some of the expectations going forward from here from major manufacturers, and those who are covering the industry. Pras, appreciate the time this afternoon.