Premium German carmaker Audi has unveiled a new compact electric vehicle as it seeks to strengthen its presence at the smaller end of the European market, where Chinese automakers are rolling out more affordable models and intensifying competition.
Sales at Audi, a unit of Volkswagen, have declined for two consecutive years and fell 7% in the first half of 2026, as fierce competition in China and U.S. tariffs weighed on demand.
"In Europe, we need compact and efficient cars for the future," Audi CEO Gernot Doellner was quoted as saying in a Reuters story.
"Premium cannot just mean more - more power, more resources - it has to mean using resources more intelligently."
The new A2 revives a nameplate used by Audi in the early 2000s, but features updated technology, including power consumption of 12.8 kilowatt-hours per 100 kilometres, making it the most efficient model in the brand’s history, Audi said. The vehicle has a maximum range of 646 kilometres (401 miles).
“The A2 e-tron is more than a new model: It represents Audi’s renewal. It shows how we are rethinking premium for Europe: using resources more intelligently without compromising on quality, technology, or customer experience.
"Developed for the needs of our European customers and built in Ingolstadt, it demonstrates our ambition to shape the future of premium mobility,” Doellner noted in a press release.
The A2 will be built at Audi’s plant in Ingolstadt, Germany, with deliveries scheduled to begin in December.
Last week, Volkswagen’s supervisory board unanimously approved sweeping job cuts as the automaker seeks to counter the impact of tariffs, excess capacity and aggressive Chinese rivals.
Audi’s Neckarsulm plant in south-west Germany is one of four Volkswagen plants in Germany facing possible closure after 2030.
