Skeptical Audi returns to electric sports cars

By Andreas Cremer BERLIN (Reuters) - More than two years since abandoning electric cars, Audi has returned with the R8 e-tron, in a move that looks more like an attempt to keep its options open than a full conversion to the technology. Battery-powered cars have failed to live up to their initial hype, with drivers put off by the slow rollout of recharging stations, limited range and high prices -- despite generous sales incentives in some markets. By 2020, fewer than one in 20 vehicles produced is forecast to be equipped with electrified powertrains, business consultants KPMG said in a survey in January. Audi, the flagship brand of German carmaker Volkswagen , has been reluctant to embrace the technology, arguing it was better to make diesel cars cleaner or focus on hybrids that combine a combustion engine with battery power. It flirted with an electric R8 sports car in 2009, promising a thrilling performance but an underwhelming range of 134 miles. It wasn't enough, and Audi dropped the concept in 2012, the year rival Tesla's Model S came out with double the range. However Tesla's success, and that of arch rival BMW with its "i" series of electric cars, appears to have convinced Audi there is a market for electric supercars after all. A fully electric R8 may also help Audi get closer to meeting rigid EU emissions limits. Audi came 18th last year in a survey of Europe's 20 top-selling brands' average CO2 output, auto industry forecaster JATO said on Tuesday. At the Geneva auto show, Audi unveiled an emission-free version of its 165,000-euro ($184,619) R8 that can drive 450 kilometers (280 miles) before needing to recharge, which takes less than two hours. The battery's capacity has almost doubled to 92 kilowatt-hours (kWh) from 49 kWh in the aborted 2012 model, a source close the matter said. That has helped more than double the range of the carbon-fiber R8 e-tron which surges to 100 kilometers an hour in 3.9 seconds, compared with 3.2 seconds for the 540-horsepower model. Audi may also launch two battery-powered serial models by 2018, a sports car and a sports-activity vehicle with over 500 km of range to rival Tesla's upcoming Model X SUV, two company sources told Reuters. MINIMIZING THE RISK However, analysts said Audi was treading cautiously, not least because it only plans to build the R8 e-tron by request. "Such projects are no practicable means to leverage electric driving over the short term," said PwC analyst Christoph Stuermer. "They only help minimize the business risk." Sales of the R8 e-tron probably won't exceed 100 a year through 2022, research firm IHS Automotive forecast. By comparison, IHS expects deliveries of Tesla's Model S to grow 14 percent to 41,396 cars by 2022 from 36,364 this year. Electric supercars have a mixed track record. Mercedes stopped making the 416,000-euro SLS electric drive last year due to poor demand, while Porsche's 768,000-euro 918 Spyder hybrid sold all 918 models. Analysts said the R8 e-tron, Audi's first all-electric production car, could act as a "halo" product to draw customers to its showrooms and help it gauge interest in more battery-powered and hybridized cars. While Audi has incurred a three-digit million-euro cost to develop the model, there will be no fixed production costs because it will be custom-made, one company source said. Nonetheless, Audi views the project as a step change. "It's beyond any question" that battery cars have become more important to Audi," Chief Executive Rupert Stadler told Reuters in January. "I'm very happy that (R&D boss) Ulrich Hackenberg is stepping up the pace on electric cars." ($1 = 0.8937 euros) (Additional reporting by Edward Taylor; Editing by Mark Potter)