Speech

Rupert Stadler

International Vienna

Motor Symposium

May 8, 2014

2/10 *The collective fuel consumption of all models named above and available on the German market can be found in the list provided at the end of this document.

(5/2014)

Rupert Stadler

Chairman of the Board of Management of AUDI AG

Speech at the

International Vienna Motor Symposium

Vienna, May 8, 2014

Strategic Technology Mix: Roadmap for Future Mobility

Adapted to Individual Markets and Customers

Check against delivery

Ladies and gentlemen,

The Vienna Motor Symposium is the pinnacle of all European automotive congresses.

Before you dive into the technical details, I will have a look with you at the overall

picture of future mobility. I will talk about the strategic technology mix and show you a

roadmap for the market-specific and customer-specific mobility of the future.

Three aspects are important to me today:

Firstly, the question of the drive system of the future. The more cars there are on the roads around the world, the more important it is for them to have efficient

drive systems.

At the same time, the car is not an autonomous closed system. It increasingly uses data from its environment. That also helps to reduce fuel consumption. And it

makes driving safer and helps to save time. That is why my second point is car-to-

car and car-to-X connectivity.

And thirdly, I will briefly focus on the customers of tomorrow. Technology may never be an end in itself. Our industry is well advised to make its customers and

their needs and desires the measure of all things.

3/10 *The collective fuel consumption of all models named above and available on the German market can be found in the list provided at the end of this document.

(5/2014)

This brings me to the first point, the drive systems: With which concept will we drive

the most efficiently in the future: Fuel cells? Batterie Electric Vehicles? Plug-in

hybrids? Or still with conventional combustion engines, which then might run on

synthetic fuel? The fact is: We will experience the various concepts in parallel for quite

a while. Each of them has its own strengths and weaknesses, and they cannot be

directly compared with each other. One might want to ask what is worth more: the long

range with a diesel engine, or that no local emissions are created by a battery electric

vehicle? A businessman with a lot of business trips would answer that question

differently from an inhabitant of a big city suffering from polluting emissions.

As an OEM, we naturally want to cover as many user profiles as possible. At the same

time, we have to prioritize, due to the high investments required for new technologies,

for example. So in deciding on the successful way, one is faced not only with the

question of what is the best technology, but above all, with the question of the optimal

technology mix. It is an enormous advantage for us at Audi as a premium brand to be

part of the Volkswagen Group. Each brand can focus on the specific needs of its own

target group. With the interplay between the brands, we simultaneously develop a

broad spectrum of expertise and experience.

Let us look into the crystal ball: In the year 2030, according to current studies,

approximately 40 percent of all newly registered cars and light trucks will be electric or

partially electric. Nearly two thirds of them in the form of hybrid drive systems. On the

other hand, that means that more than 80 percent of those newly registered cars and

light trucks will still have a combustion engine on board. The number of diesel engines

is likely to remain stable at todays level.

The combustion engine has the advantage of decades of development. Such a

technology does not simply become obsolete from one day to the next. On the

contrary: We still see potential to further improve diesel and gasoline engines. I believe

that a 15-percent efficiency improvement is possible by 2020.

4/10 *The collective fuel consumption of all models named above and available on the German market can be found in the list provided at the end of this document.

(5/2014)

Making further efficiency improvements is one task. At the same time, it is important

to make progress tangible for our customers. At Audi, we are doing this for example

under the heading of Audi ultra. We call a car an ultra-model if it is the CO2

champion of its model range and is also amongst the frontrunners amongst its

competitors. For example, with the A6 2.0 TDI ultra* with 114 grams of CO2 per

kilometer combined with a maximum power output of 190 horsepower. Or with the

A3 1.6 TDI ultra* with 85 grams of CO2. This means that Audi ultra gives customers a

valid seal of approval for efficiency, which they can use as a guide when buying a new

car.

Ladies and gentlemen,

here in Vienna, on the occasion of the jubilee 25 years of the TDI, we are presenting

to you the new generation of our V6 TDI engines. We have further enhanced their

performance and smoothness, while significantly reducing their fuel consumption and

CO2 emissions. You will hear about the details this afternoon.

Around the globe, four out of ten of the cars we deliver have TDI engines in Germany

the proportion is actually two thirds. People have now discovered the diesel engine

even in the United States: 30 percent of our Q7* customers there choose the TDI. With

the previous generation of the A3*, it was actually 50 percent. That is why we offer two

models of the new-generation A3 with TDI in the USA: the Sedan and the Sportback.

The next stage of development is the electrically boosted turbocharger. Our head of

technology is a great fan of the new e-booster. Professor Hackenberg recently stated:

With the e-booster, you easily gain a lead of at least two car lengths in the first two

seconds at the traffic lights. The e-booster makes it clear: Electronic and electrical

expertise is essential for todays modern drive systems. A 48-volt onboard power

supply makes it possible to use a lot of energy very quickly in the car. Power and torque

are immediately available with the e-booster. And I promise you: This year, we will

present a high-performance car with a new power-diesel engine and an e-booster

covering every feature that defines our brand. Step by step, we will electrify the

engines of the latest generation.

5/10 *The collective fuel consumption of all models named above and available on the German market can be found in the list provided at the end of this document.

(5/2014)

How does this compare with driving electrically in terms of efficiency? That is first of all

a question of your point of view. As a manufacturer; we measure tank-to-wheel. But

that is only one much shortened and partial point of view. It is not a full measure of

sustainability. When customers do not charge their e-cars with regenerative electricity,

zero emissions is often rather deceiving because although there are no emissions

from the car itself, they are created for example by a coal-fired power plant. If

calculations are based on the mix of the European electricity network, a compact-class

battery electric vehicle would easily work out at a well-to-wheel value of 80 g CO2/km.

And one step further in the lifecycle assessment, we also have to consider the energy-

intensive production of batteries. If no green energy is used here, an efficient diesel-

powered car is comparable with a Battery electric vehicle over its entire lifetime. And

under a holistic examination, fuel cells are not automatically the cure-all that some

people believe they are either. Especially due to the high compression of hydrogen at

filling stations: at least 700 bar, which requires a lot of energy.

Do not get me wrong: We need electric cars! And they are definitely a key component of

the technology mix for the sustainable mobility of the future. But in this case,

technology mix means more than what is under the hood. It is about an overall concept

for mobility. In addition to the manufacturers, this also places demands on urban

planners, property developers, electricity suppliers and many other players. Because

there is great potential in the interfaces of mobility. That is why for example we,

together with an electricity supplier, also offer A3 e-tron* customers green electricity

for their cars. It is 100-percent from hydroelectric plants in Germany, Switzerland and

Austria. And with our Audi e-gas-project, we have shown a way to convert green

electricity into synthetic gas. With a special fuel card, drivers of our A3 g-tron* can fill

up with this gas all over Germany, and can thus run their cars with a CO2-neutral impact

with full long-distance viability.

I am sure that some of you would now like to discuss the efficiency of a power-to-gas

plant. And would perhaps advise us that it would be better to use wind power directly

for electric cars. The interesting point here is that we use surplus wind energy: energy

that would otherwise be completely wasted.

6/10 *The collective fuel consumption of all models named above and available on the German market can be found in the list provided at the end of this document.

(5/2014)

With the Audi e-gas that we produce in the worlds biggest power-to-gas plant in

Emsland in northern Germany, 1,500 Audi A3 g-tron* cars can each drive 15,000

kilometers every year with a neutral CO2 impact, which is quite a lot of driving.

We are also developing gasoline and diesel from non-fossil energy sources. Audi

research projects are running on these topics in laboratories in New Mexico and France.

And now imagine the maximum scenario: e-tron plug-in hybrid drive under the hood

and e-fuel in the tank. We will drive electrically in urban areas and with synthetic

gasoline and diesel outside cities. In this way, we will achieve CO2-neutral mobility

without limiting our cars range.

At this point, I would like to tell you a bit about our PHEV strategy. Two years ago, I

already discussed the pros and cons of electric mobility here at the motor symposium in

detail. One thing is clear: The market ultimately decides on success and failure. That is

why customers must not perceive e-mobility as having weaknesses. That is the only way

it can reach its full potential as an efficiency technology; because only then will we put

enough e-cars on the road. We have decided to start our drive into the future of the

automobile with plug-in hybrids, because we see the biggest everyday benefits for our

customers in PHEV at the current stage of technology. Because they do not require

them to accept compromises in terms of range, safety, or long-term quality. They drive

a typical daily distance electrically and free of emissions. But they have the certainty

that they could drive well over 900 kilometers with the TFSI engine. With the

A3 e-tron*, with standard fuel consumption of 1.5 liters per 100 kilometers, which

means 35 grams of CO2 per kilometer.

This is how our customers will get to know electric driving without having to check the

battery charge continually and nervously. I am convinced that this will get better

when the customers have gained positive experience. That requires infrastructure and

technology suitable for everyday use. And that is why we will adapt the battery electric

Audi models very precisely to customers expectations.

7/10 *The collective fuel consumption of all models named above and available on the German market can be found in the list provided at the end of this document.

(5/2014)

Our e-tron strategy has two more advantages: On the one hand, it allows us to offer our

efficiency technologies throughout the model range. We will launch one new e-tron

model every year. And on the other hand, we will integrate these cars into the same

production lines as the other models; we do not need a separate plant for electric cars.

This means that we will produce in accordance with demand and will thus minimize the

entrepreneurial risk.

We are now leaving our traditional area of competence with my second point: How do

we use information from the cars environment to make driving more efficient and

safer? This is a matter of optimally controlling mobility everywhere and at all times,

that is, in every specific situation.

Think for example of the possibilities that arise from anticipatory information provided

by the navigation system. When the car already knows for example that it can roll down

the next hill, a predictive efficiency assistant informs the driver when to take his or her

foot from the accelerator. This can save more than ten percent propulsion energy in

customer use. We will soon put this assistant into series production. And we are

already working hard on other aspects. In addition to navigation data, in the future we

will also use real-time traffic data, information from environmental sensors, and car-

to-car communication. This allows us to calculate the ideal gear-shifting strategy; we

can optimally control heat management or exhaust-gas after-treatment, and can make

the operation of electric drive more efficient. An anticipatory drive system also offers

customers more comfort and more driving pleasure two points that are generally

lacking in my next example: looking for a parking space.

Studies have shown that a third of urban traffic in Berlin consists of drivers looking for

parking spaces. The point is: There are always free parking spaces somewhere; the trick

is finding them. Car-park routing systems with road signs are common practice

nowadays. The next step is central software for parking spaces that is directly

connected with cars navigation systems. This might not only show the parking spaces

that are currently vacant, but also forecast where a space will soon be available. For

example, because it knows that a soccer match will soon finish in a stadium nearby.

8/10 *The collective fuel consumption of all models named above and available on the German market can be found in the list provided at the end of this document.

(5/2014)

Perhaps the driver has already informed the system via voice input what he or she

wants to do in the city. The software then reserves in advance exactly the vacant

parking space that minimizes the drivers walking distance. In the past, this topic was

reduced to the idea of the car-friendly city. Today, its all about the city-friendly car.

With our Audi Urban Future Initiative, we show: The car taking (its) place in the city.

The ideal situation is when the two sides approach each other.

When cars communicate not only with the infrastructure, but with each other, swarm

intelligence is created. That enhances safety for example when a car driving ahead

warns the cars behind it of an icy road surface. And it will help us to reduce traffic

congestion. Traffic researchers assume that road capacity would already be quadrupled

if every tenth car regularly passed on its position and speed, and if this information

were used for anticipatory, computer-calculated driving.

We will very soon put piloted driving at up to 60 km/h into series production. We have

developed a pilot that takes over the work of steering, braking and accelerating in

traffic jams. This means that drivers gain valuable time a lot of valuable time! In

Mexico City, a car driver spends an average of 30 days in traffic jams each year. Even

though the responsibility always remains with the drivers, we give them the maximum

possible support with assistance systems. This enhances safety and also efficiency by

the way. Not only in terms of fuel consumption; Audi drivers are always connected with

their private and professional environment when on the road. Not looking at their

mobile phones, but with integrated access to their contacts and personal messages. No

dangerous searching for CDs, but an integrated personal music library. The Audi will

become the biggest and safest mobile device.

This brings me to my last point for today: Customers of tomorrow and their mobility

behavior in our digitalized and individualized world. At present, there are more than

one billion cars on the roads worldwide. By the year 2030, this number could triple. In

the future, there will not be the one typical customer. The more people drive cars, the

more diverse their desires and requirements will become.

9/10 *The collective fuel consumption of all models named above and available on the German market can be found in the list provided at the end of this document.

(5/2014)

Will I really only drive my own car in ten years time? Or will it be for example one of up

to three models that I can use each year with a select package? A convertible in the

summer, an Avant for the main family holiday, and an SUV for the winter, for example.

That is possible with us by means of the flexible rental model Audi select. We have

quite a lot of ideas in store.

Will I travel only by car in ten years time? Or will the various forms of transport be so

intermodally connected by then that we will have an optimum of time, ecological

efficiency, and personal comfort? An app will then be the central mobility planner. On

the basis of my calendar and the current traffic situation, the app will make

recommendations on when I should leave and how I should travel to my destination.

The third question: Will I drive the whole time myself in ten years time? Surely not. I

will certainly use the intelligent assistance of piloted driving in traffic jams and when

parking.

And fourthly: Will I have to drive to the office to work in ten years time? Or will my

work already start when I get into the connected car? Because I will be in my usual

digital environment.

These four questions alone show that our world is changing in every respect. Let us use

technical progress to improve sustainability. And let us overcome the boundaries

between mobility and immobility. Individual mobility is the foundation of our economic

and social life. Viewed in this light, the coming two days here in Vienna are not only

about drive systems for the cars of today and tomorrow. They are also about a major

factor for growth and prosperity.

I hope you all have an interesting Vienna Motor Symposium!

End

Contact:

Communications Product and Technology Christian Bangemann

Phone +49 841 89-32260

10/10 *The collective fuel consumption of all models named above and available on the German market can be found in the list provided at the end of this document.

(5/2014)

Fuel consumption of the models named above: Audi A3 1.6 TDI ultra: Combined fuel consumption in l/100 km: 3.2; Combined CO2-emissions in g/km: 85 Audi A3 Sportback: Combined fuel consumption in l/100 km: 7.0 - 3.3; Combined CO2-emissions in g/km: 162 88 Audi A3 Sedan: Combined fuel consumption in l/100 km: 7.0 - 3.3; Combined CO2-emissions in g/km: 162 - 88 Audi A3 Sportback e-tron: Combined fuel consumption in l/100 km: 1.5; Combined CO2-emissions in g/km: 35 Audi A3 Sportback g-tron: Combined fuel consumption: CNG 3.3 - 3.2 kg/100 km, petrol 5.2 - 5.0 l/100 km Combined CO2-emissions : CNG 92 - 88 g/km, petrol 120 - 115 g/km Audi A6 2.0 TDI ultra Combined fuel consumption in l/100 km: 4.4; Combined CO2-emissions in g/km: 114 Audi Q7 Combined fuel consumption in l/100 km: 10.7 - 7.2; Combined CO2-emissions in g/km: 249 - 189