Audi’s Keogh Calls Tesla ‘Cool,’ Defends Dealer Model

Audi AG views electric carmaker Tesla Motors Inc. as a luxury-brand competitor while questioning its choice to skip dealers and sell directly to consumers, Audi’s top executive in the Americas said.

Any automaker that can sell vehicles for more than $100,000 is a competitor in the luxury market, Scott Keogh, president of Audi of America, said today in an interview at Bloomberg’s Washington office. He called Tesla, based in Palo Alto, California, “cool” and “the talk of the town.”

“What the industry as a whole can learn from them is continue to push innovation, continue to have the challenger spirit,” Keogh said.

Audi, Volkswagen AG’s luxury unit, expects to sell more than 150,000 vehicles in the U.S. this year, setting a record for sales in the country that’s its third-largest market, Keogh said. Tesla has said it plans to sell 21,000 Model S sedans worldwide this year. Both companies have redefined the luxury brand, moving it away from “granite” and “furs,” Keogh said.

Tesla has tangled with auto dealers in U.S. courts and state legislatures because it eschews the dealer model that other automakers use.

“My view of dealers is crystal clear because I have personally seen the leverageable advantage of a dealer,” Keogh said. He cited dealers’ personal connections to prospective customers through schools and other communities.

He said Audi, while building its U.S. marketing strategy around clean-diesel technology, plans to join Tesla in selling plug-in electric vehicles, something California will require under its zero-emission vehicle mandate. Diesel will be one of four ways Audi meets U.S. fuel-economy standards, along with plug-in hybrids, plug-in electrics and improvements to the internal combustion engine, Keogh said.

Paying fines to meet fuel-economy standards, as German automakers have done in the past, won’t be part of Audi’s strategy to meet the requirements in the future, Keogh said, saying that’s not a “sustainable” approach.

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