Audi targeting novated leasing with A2 e-tron

AUDI is eyeing novated leasing opportunities with its A2 e-tron battery electric hatchback, which will likely be priced well below the luxury car tax threshold according to the German importer’s local head of product Matthew Dale.

Speaking with GoAuto at the Australian launch of the Audi Q3 in Byron Bay, Mr Dale discussed the opportunities the A2 e-tron has in the compact segment – crucially below the $91,387 luxury car tax (LCT) threshold for fuel efficient vehicles – particularly amid increased demand for EVs.

“I think with A2 e-tron, it’s definitely in a segment of the market that we’re seeing in Australia grow,” he said.

“As you know, everything under the luxury car tax with electrification, it’s a big market and to have a potential future product that sits in that spot there that’s very exciting for us.

“While we’ve done quite well in that space before with A1 and Q2 and compact segment cars, I think having a compact EV talks to the current climate with how fuel prices are going and things like that.

“But the uplift in electrification in Australia … I think last year we were at 14 per cent, which, it’s growing year on year. I mean this time only two years ago we were below 10 per cent. So, we’re starting to see consumer uptake, and I think where the majority of it sits is under that LCT mark.

“We’ve got our first car positioned under (the LCT mark) which is our Q4 e-tron, both SUV and Sportback but it would be nice to have a sibling within a compact range sitting just underneath that. It’s a good opportunity for us as a brand.”

Reviving the A2 nameplate for the first since production of the original MPV-esque hatchback ended in 2005, Audi’s latest yet-to-be-revealed battery electric offering was formally announced in March this year.

The A2 e-tron is poised to take advantage of novated leasing opportunities according to Mr Dale.

“Novated leasing is (an opportunity for us), so anything under the LCT gets the FBT (Fringe Benefits Tax) saving for novated leasing. That is quite a big space, it’s about 30 per cent of the market at the moment and that's where we see opportunities like that,” he added.

Mr Dale also recognises that the LCT could change.

In fact, the LCT has faced total abolition in Australia for some time.

However, Mr Dale points out that even if the LCT changes, the A2 e-tron will still be able to leverage a competitive price tag to find success.

“The LCT could change. You know, there’s talk of it being abolished. There are things like that that obviously we keep a very, very close eye on in terms of our environment that we’re putting a product into,” he continued.

“But should that change, it’s the price point of the market.

“So, regardless of the incentive or where that LCT line sits, it’s that price point in the market that’s quite active in Australia and always has been.”

The Audi A2 e-tron is expected to be based on the MEB platform used across the Volkswagen group by the likes of the Audi Q4 e-tron, Cupra Born, Skoda Elroq, and the Volkswagen ID.4, among several other vehicles.

It will almost certainly slot into Audi’s existing Australian line-up below the Q4 e-tron SUV – the brand’s cheapest electric vehicle currently offered locally – which starts at $84,900 before on-road costs.

When asked about a potential price point for the A2 e-tron, Mr Dale stressed that while pricing is yet to be confirmed, he expects it to sit well below the LCT threshold.

“Pricing (is what) we don’t know at this point, but it would definitely, we would hope, sit well below the LCT mark because that’s where it should sit within that segment – and that’s where the opportunity is for the car,” he noted.

The A2 e-tron is likely to fill the void left in the compact segment by the A1 hatchback and the Q2 small SUV, production for both of which recently ended.

Only one variant of the A1 is currently listed on Audi’s Australian website – the 40 TFSI S Line Sportback – which wears a price tag of $51,500 plus on-road costs.

Meanwhile, the Q2 is priced between $49,400 + ORCs for the entry-level 35 TFSI and $70,800 + ORCs for the range-topping SQ2.

Based on the pricing of the vehicles it is expected to replace and factoring in the price premiums usually fetched by battery electric vehicles, A2 e-tron pricing could start somewhere around the $60,000 mark.

More details on the A2 e-tron – including a confirmed Australian arrival, local specifications, and pricing – are yet to be announced and are expected closer to its official global unveiling later this year.