The downfall of Audi's CEO won't affect the company's plans to take on Tesla, experts say

Audi’s Q2
  • Audi CEO Rupert Stadler was arrested on Monday in Germany.
  • He was taken into custody due to concerns that he could interfere with an investigation into devices that Volkswagen– Audi’s parent company – installed in its vehicles to deceive emissions tests.
  • Like the rest of the auto industry, Audi is on the verge of a significant shift toward electric vehicles.
  • Analysts said Stadler’s arrest won’t disrupt Audi’s electrification plans.

Audi CEO Rupert Stadler was arrested on Monday in Germany.

German prosecutors said he was taken into custody because of concerns that he could interfere with an investigation into devices that Volkswagen – Audi’s parent company – installed in its vehicles to deceive emissions tests. Stadler is the highest-ranking Volkswagen employee to be arrested as a result of the devices. On Tuesday, Audi sales head Abraham Schot was named the company’s interim CEO.

Like the rest of the auto industry, Audi is on the verge of a significant shift toward electric vehicles.

Audi will release its first, fully-electric vehicle, the e-tron Quattro SUV, in Europe later this year and in the United States in early 2019. The company plans to introduce a sportback version of the e-tron in 2019, as well as an electric sports car, compact car, and grand tourer in the coming years. By 2021, the company plans to introduce hybrid technology into all of its core models. And by 2025, Audi plans to spend over $US46 billion on electrification, autonomy, and digitization, and offer electrified options for all of its vehicles.

According to Edmunds senior analyst Ivan Drury, Stadler’s arrest won’t derail those plans.

“Audi’s push for electrification through its niche e-tron lineup has persisted for years,” he said in an email to Business Insider. “While the arrest of CEO Rupert Stadler is sure to cause some hiccups in the short-term, the long-term strategy stays the same, regardless of who is in charge.”

Autotrader executive analyst Michelle Krebs said Audi was likely aware of the possibility that Stadler could be arrested and planned for it.

“I don’t think this changes their course as a company at all,” she told Business Insider. “The possibility that this arrest could happen I think was probably baked into the mix. I don’t think it came as a shock.”

In 2015, Volkswagen admitted to installing devices in around 11 million vehicles that allowed the vehicles to expel lower emissions during government-mandated tests than they would on the road. Customers of affected vehicles were able to sell them back to Volkswagen or have their vehicles repaired to meet emissions regulations.

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