Audi has spent years expanding its lineup of electric vehicles, but in most Western markets its EVs have not managed to capture widespread attention. Aside from occasional short-lived spikes in sales, the company has struggled to achieve a true breakthrough. In China, however, the story looks very different. The launch of the all-new AUDI E5 Sportback has sparked enormous excitement, with more than 10,000 pre-orders placed within just thirty minutes of its unveiling. What makes this achievement especially striking is the vehicle’s price point—closer to what customers would expect from a Toyota than from a high-end German luxury brand.
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In China, the E5 Sportback carries a starting price of only 235,900 yuan, which converts to roughly $33,100 or about €28,200 at current exchange rates. This is seen as an exceptional bargain given what the car offers: a 76 kWh battery pack, a rear motor producing 295 horsepower, and an advertised driving range of 618 kilometers based on local testing standards. Higher trims are even more impressive, boasting outputs of up to 776 horsepower. Inside, buyers are treated to a high-tech wraparound digital cockpit, Alcantara and leather materials, and software designed specifically with Chinese customers in mind. The equipment list is filled with advanced features that European buyers usually only see in far more expensive models. To put it into perspective, in Germany the cheapest Audi crossover is the Q2—a small subcompact vehicle priced from around $34,000, equipped only with a modest 116-horsepower three-cylinder engine, and that figure already includes the nation’s value-added tax.
The E5 is also notable for being exclusive to China. Unlike other Audi models that carry the iconic four-ring badge, this car wears a grille marked simply with the word “AUDI.” This departure from tradition is intended to attract a younger, tech-savvy generation. Automotive expert Ferdinand Dudenhöffer called this a smart and liberating move, suggesting that the long-standing ringed logo is weighed down by history that does not resonate with today’s target audience in China.
Some might assume that such competitive pricing comes from lower labor costs in China, but experts say wages only account for about ten percent of the overall cost of manufacturing a car. Instead, several other factors make the E5’s affordability possible. Battery packs are cheaper in China, energy prices are significantly lower, and domestic production tends to be far more efficient. Furthermore, Germany charges a 19 percent value-added tax on vehicles, whereas China applies only 10 percent on regular cars, and in certain cases EVs are exempt altogether depending on incentives and pricing.
Perhaps the most decisive factor, though, is that Chinese automakers are willing to accept thinner profit margins than their German counterparts. In Western markets, such minimal margins are rare, if not unheard of. If the E5 were produced and sold in Europe, analysts suggest it could cost twice as much—or even more. This stark contrast becomes clearer when looking at Germany’s auto industry today. Audi, for instance, has announced plans to cut roughly 7,500 jobs by 2029. Mercedes is undergoing major restructuring, Porsche is scaling back its EV programs, and even BMW—despite weathering the challenges slightly better—has eliminated thousands of temporary positions.
A recent study conducted by EY underscores the severity of the situation. In the past year alone, Germany’s automotive sector lost more than 50,000 jobs, which equals about seven percent of its total workforce. Compared with pre-pandemic levels, the industry now employs 112,000 fewer people. No other domestic industry in Germany has endured job losses on this scale, highlighting just how precarious the future looks for traditional automakers in their home market—especially in contrast to the momentum Audi appears to have found in China with the E5 Sportback.