Audi might have decided to keep ICE alive for longer than initially expected, but that won’t affect the planned rollout of new EVs. One of them will be an entry-level model similar to the ICE-powered Audi A3, which is expected to debut next year.

The news were shared by Audi CEO Gernot Döllner during an interview with the German newspaper Süddeutsche Zeitung. Döllner described the upcoming model as “an electric vehicle in the same class as the A3”. He also revealed that the EV will be produced in Ingolstadt, starting in 2026.

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The current generation of the Audi A3 was introduced in 2020 based on the MQB architecture and received a mid-lifecycle update in 2024. This means that the (as yet unnamed) EV that could adopt the A2 E-tron or A3 E-tron moniker will be a standalone offering that’ll be sold alongside the A3 rather than replacing it.

The timing of the launch of the compact-sized Audi makes us believe it will ride on the existing MEB architecture, which is already used by the Audi Q4 e-tron and the entire VW ID family. The new EV-dedicated SSP platform is expected to arrive in 2028 or 2029, underpinning the VW Golf Mk9 and future electric iterations of the VW T-Roc, Skoda Octavia, and Cupra Leon.

Chances are that the new Audi will adopt a five-door hatchback bodystyle which is more popular in Europe than four-door sedans. Of course, no one can rule out the possibility of a small crossover, similar to the A3 AllStreet. In any case, the EV will likely inherit the latest styling language of the Ingolstadt brand, combined with high-tech features in the cabin and competitive range figures.

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The entry-level EV could be Audi’s version of the upcoming VW ID.2 that’s also expected to arrive in production form in 2026. If this turns out to be the case, its pricing will be higher than the sub-€25k VW, in line with the more premium market positioning of the Audi brand within the VW Group.

Besides the upcoming A3-sized EV, Audi’s CEO has also revealed that the company will introduce a new model in China this April, which is being developed locally with the help of SAIC.

The German brand is currently going through a tough period due to weaker than expected EV adoption, tough competition, and political uncertainty. It recently announced plans of eliminating 7,500 jobs in Germany by 2029 in a “socially responsible” manner.

Audi and their works council have reached an agreement that aims to reduce labor costs and increase flexibility at German production sites. The automaker also said they’re extending a “job protection plan until the end of 2033.”

The company didn’t go into many specifics, but noted economic conditions are becoming “increasingly tougher,” while they’re also forced to deal with “political uncertainties” and new competition. This is a perfect storm of bad news and it’s being complicated by slower than expected electric vehicle adoption.

More: VW Confirms More Than 35,000 Job Cuts In Germany, Golf Production Moving To Mexico

Unfortunately, this means cuts but they won’t be as deep as the ones at Volkswagen. However, Audi is still planning on a “socially responsible reduction” of up to 7,500 jobs by 2029.

Aside from eliminating employees, Audi aims to reduce bureaucracy and put a renewed focus on their product portfolio. The latter has become a problem as important models, such as the Q7, have grown stale.

Audi will also “reduce personnel costs by adjusting payments above the collective wage agreement and variable payments for pay-scale employees.” The automaker didn’t spell things out, but it sounds like managers and the Board of Management will be taking a pay cut. The automaker also mentioned a retooled profit sharing program to help “future-proof” the company.

As for the so-called job protection plan, Audi will invest around €8 ($8.7 / £6.7) billion into Germany through 2029. In Ingolstadt, this will pave the way for a new entry-level EV as well as production of the redesigned Q3, which will also be built in Győr, Hungary.

Audi was tight-lipped about plans for Neckarsulm, but hinted the “electronic architecture of combustion-engine vehicles will be developed further, significantly increasing their competitiveness.” The company also said they’re examining the possibility of building an “additional model” at the plant.

Rainer Schirmer, Vice Chairman of the General Works Council, said “We were able to future-proof both sites. For Neckarsulm, this means, among other things, that we were able to secure a ‘future fund’ for plant development, which we can use to set up new production platforms – for future electric models. To this end, Neckarsulm is to be expanded as an AI and digitalization center for the entire Audi Group.”

Audi CEO Gernot Döllner said the deal was a “strong agreement for the future of the company” and one that will strengthen their competitiveness. However, he noted “Audi must become faster, more agile, and more efficient” and this “cannot be done without personnel adjustments.”

Despite confirming the needs for cuts, Döllner said there would be “no layoffs due to operational reasons until the end of 2033. In these difficult economic times, this is good news for all employees.”

While Audi didn’t go into detail, Handelsblatt is reporting the company aims to save around €1 ($1.1 / £0.8) billion annually at their German sites. They also noted the Neckarsulm plant will build “large electric sedans,” while Ingolstadt could make the A3 – presumably in electric form judging by Audi’s statement.

Speaking of production, Audi has a Trump problem as they don’t have any plants in the United States. If the trade war worsens, the four-ring brand might set up shop at Volkswagen’s Chattanooga plant.

Audi also appears to have abandoned plans to go electric-only. This is a major change as, less than a year ago, they were adamant “we will transform our product portfolio and switch completely to electric vehicles. Our customers will experience the last major world premieres of new model lines with conventional drive systems in the course of 2026.” While the automaker didn’t exactly admit defeat, they acknowledged the continued development of ICE-powered vehicles.