Audi of AmericaResponsibility Report 2015

Letter from the President

Audi energyMaking carbon neutral mobility a reality

TDI clean dieselDelivering unmatched efficiency and performance

Fuels of the futurePartnering to revolutionize fuel production

Sustainable sales and servicePromoting a more progressive customer experience

Veterans to techniciansMatching highly skilled Veterans with sophisticated automotive technology

2

1

6

8

10

14

Letter from the President

At Audi, we are constantly striving for ultimate performance. That is as true for our

approach to sustainability as it is for our vehicles.

Our goal is to make every aspect of mobility sustainable and responsible — for the

customers we serve, the drivers we delight, the professionals we employ, the dealers

with whom we partner, the communities in which we operate, and the planet we share.

The Audi brand’s commitment to sustainable mobility has been the driving force behind

key innovations, including our TDI clean diesel engines, cylinder on demand technology,

and a series of advances involving ultra-lightweight materials.

This commitment also manifests itself in environmental and talent sustainability

initiatives, such as Audi energy, the Audi Progressive Retail Experience, and the Veterans

to Technicians program.

As AUDI AG chairman Rupert Stadler has said, “A courageous company must… accept

responsibility for its employees and society as a whole.”

Automotive companies often think in terms of quarters, model years, or, at the far end

of the horizon, the several-year window from concept to consumer. As a company that

is well into its second century, we strive to be a rarity among automobile makers: a

company that thinks in terms of generations.

Best regards,

Scott Keogh

President

Audi of America, Inc.

Page 2 | Audi of America Responsibility Report 2015

Audi energyAudi energy can make carbon neutral mobility a reality

When customers purchase an A3 Sportback e-tron, they’ll not only be

experiencing the first Audi plug-in hybrid vehicle in the United States, they’ll

also be experiencing the closest thing to carbon neutral driving available

today. This is achieved by an initiative we call Audi energy.

Audi has committed to offsetting the greenhouse gas emissions from every A3

Sportback e-tron. This includes assembly plant production, all shipping logistics

to the U.S., and 50,000 miles of driving. We hope to extend this commitment

to other e-tron vehicles as well.

To reach carbon neutrality, Audi is working with California-based renewable

energy and carbon offsets provider 3Degrees, which has received multiple

awards from the EPA and the Department of Energy. We achieve these carbon

savings through investments in the following programs:

U.S. landfill gas captureAccording to the EPA, municipal solid waste landfills are the

country’s third-largest source of methane, a greenhouse gas

25 times more potent than carbon dioxide. Audi of America is

supporting projects to capture the gas at five landfills across

the United States. Once captured, the gas can be flared off

or, ideally, used to generate power. Located in Virginia, Utah,

Nebraska, and Texas (where there are two), the projects offset a

combined 227,502 metric tons of CO2-equalivalent greenhouse

gas emissions per year. These offsets are verified by the Climate

Action Reserve.

Conservation forestry (Kenya)Deforestation and forest degradation are responsible for almost

20 percent of the world’s greenhouse gas emissions. In 2008,

the United Nations launched the UN-REDD Programme to

create financial incentives to reduce emissions in designated

developing nations where communities often rely on slash

and burn agriculture in order to survive. Audi of America is

supporting the Wildlife Works REDD+ Project to preserve

500,000 acres of highly threatened forest in the Kasigau

Corridor region of Kenya. In addition to producing about 1.2

million metric tons of carbon offsets annually, the Wildlife

Works Kasigau Corridor project has created more than 500 jobs

while generating essential funding for water projects, schools,

medical care, and even wildlife protection.

Page 4 | Audi of America Responsibility Report 2015

Residential solar and energy storageOwners of electric plug-in vehicles are significantly more

likely to own home rooftop solar systems. Through a

partnership with Silicon Valley-based solar products

manufacturer SunPower, which makes the most efficient

and reliable solar panels on the market today, Audi is

offering optional home solar systems with all of our

vehicles in all 50 states. For a limited time, Audi customers

will also receive exclusive access to SunPower’s new energy

storage solution, allowing them to power their homes in

the case of an outage. 

Level 2 chargerAlthough we based our carbon neutrality calculation on a

highly conservative model that assumes drivers will use

gasoline 100 percent of the time, we know that e-tron

owners want to drive electric. And we want to encourage

e-tron owners to further reduce well-to-wheel carbon

emissions by driving on electric power as much as possible.

To do that, we are making recharging at home more

convenient than ever. Every new A3 Sportback e-tron comes

with a free Audi-designed mobile charger that works with

120V or 240V and can be carried in the vehicle or mounted

on a garage wall. In addition, Audi of America has partnered

with Bosch Automotive Service Solutions to offer premium

240V conversion and charger installation services, ensuring

that A3 Sportback e-tron owners have the ability to recharge

their vehicles whenever and wherever they want.

Page 6 | Audi of America Responsibility Report 2015

TDI clean dieselAudi pioneered turbocharged diesel engines with direct injection,

introducing TDI engines in Europe in 1989. Since then, Audi has sold over

57,000 cars with the TDI system in the United States.

In the past 5 years, nearly 7 percent of our models sold were diesel

powered. Today, we offer the A3, A6, A7, A8, Q5, and Q7 with

diesel engines.

We remain committed to diesel because we believe it offers an

unmatched mix of efficiency and performance. If one third of Americans

drove clean diesel, America could reduce its dependence on foreign oil by

1.5 million barrels a day, more than the amount currently imported from

Saudi Arabia.

And thanks to particulate filters that eliminate diesel soot and an AdBlue

emissions system that scrubs nitrous oxide emissions, our diesel engines

comply with the world’s most demanding emissions laws.

We know clean diesel can work: Our race cars have won at the 24 Hours of

Le Mans eight times in the last ten years running on TDI engines.

The Audi R18 e-tron quattro has won at Le Mans in three of the last four years, demonstrating that TDI clean diesel and e-tron technology are a winning combination.

Page 8 | Audi of America Responsibility Report 2015

Fuels of the futureBeyond our commitment to making Audi vehicles cleaner

today, Audi is also working to revolutionize fuel production

for the future.

In 2011, AUDI AG formed a strategic partnership

with Joule Unlimited, a biofuels company based

in Massachusetts, to develop sustainable, carbon

neutral fuels.

As Joule’s exclusive automotive partner, Audi has invested

in a plant in Hobbs, New Mexico, where Joule is producing

Audi e-diesel and Audi e-ethanol — synthetic fuels derived

from carbon dioxide, sunlight, and brackish water that

cannot be used for agriculture.

“This facility is the first of its kind able to generate

sustainable fuels directly from sunlight and CO2,” says

Joule president and CEO Paul Snaith. “Together with Audi,

we can achieve a completely new dimension in unleashing

the potential of biofuels — without the disadvantages that

have hindered their use to date.”

Although the project is still in the development phase,

Audi hopes to begin commercial production of the new

carbon neutral fuels in the future.

The first facility of its kind able to generate sustainable fuels directly from sunlight and CO2

Page 10 | Audi of America Responsibility Report 2015

Sustainable sales and service

Our commitment to sustainability and responsibility

does not end with the vehicles we sell — it also applies

to where and how we sell them. Audi has more than 280

dealerships in the United States, employing over 15,000

people and servicing the 1.4 million Audi vehicles on the

road today. Through several design, sales, and service

initiatives, Audi dealers are helping to make every aspect

of the customer experience more sustainable.

Progress in design

As sales continue to climb, more and more

Americans are visiting Audi dealerships

nationwide. In 2007, Audi introduced

new “Terminal” design guidelines so that

the luxury and efficiency of our vehicles

would be matched by the dealerships in

which they are sold. The design update

was followed two years later by the

announcement of a $1 billion investment in

dealership construction and enhancements.

By consolidating space, limiting waste

areas, and using natural light, the Terminal

dealerships save up to 30–40 percent in

costs, achieved in part by a significant

reduction in energy usage. There were

61 Terminal dealerships completed by

the end of 2014, with an additional 34

expected in 2015.

One of the main energy costs associated with dealerships is

lighting. Audi of America offers dealers the option of purchasing

an LED lighting package, which lasts longer and has lower

lifetime costs than the metal halide lighting used in the past.

Today, the vast majority of new Audi facilities are utilizing LED

lighting technology.

In November 2012, Audi celebrated the opening of Audi Pacific,

its first LEED Gold dealership in the United States. Located in

Torrance, California, Audi Pacific features one of the largest

Audi showrooms in the country.

Page 12 | Audi of America Responsibility Report 2015

Progressive retailIn January 2014, Audi of America began introducing the Audi

Progressive Retail Experience, a set of digital tools that improves

our customer sales and service experience and dramatically

reduces the amount of paper used at Audi dealerships nationwide.

Featuring e-brochures via the Sales Assist app, paper-free vehicle

inspection and delivery processes via the eDelivery app, and

electronic transaction and service tools, the Audi Progressive Retail

Experience is taking a big step toward making the interaction

between Audi dealers and customers more sustainable.

Our comprehensive approach to sustainable mobility encompasses

more than new vehicles; it also includes processes to reduce

environmental impact while servicing Audi vehicles already on

the road.

Carbon neutral synthetic oilAudi is now recommending carbon neutral engine oil as the service

oil for all Audi engines, whether they run on gasoline or diesel.

In addition, Audi service centers collected more than 1.1 million

gallons of oil for second use in 2014 — enough to power 1,500

average households for a year.

Battery recyclingFor every Audi Genuine Battery installed, one is recycled. The old

battery is crushed and its components separated; the polypropylene

case is melted down and used to produce new cases; and the lead

is heated to remove impurities and then reused to make new lead

plates. In 2014, more than 45,000 batteries were recycled.

Tire recyclingTypical methods for disposing of tires can result in air pollution,

soil and water contamination, and excessive use of landfill space.

Through our internal recycling program, participating Audi

dealerships submitted over 36,000 tires to be recycled in 2014.

These tires were repurposed to create mulch for playgrounds,

crumb rubber that was utilized in rubberized asphalt, and

tire-derived fuel.

SmartWay transportation partnersThe EPA SmartWay program is a public-private initiative aimed

at reducing the environmental impact of supply chains. Audi of

America uses EPA SmartWay partners Black Horse Carriers and

CEVA Logistics to transport parts to dealerships across the country.

Audi recommends Castrol EDGE Professional OE engine oils. These oils

were certified as CO neutral in June 2014 by BSI PAS2060, the standard for

measuring neutralized emissions. Castrol earned this certification for EDGE

Professional products by investing in a portfolio of emission reduction projects,

including reforestation in Kenya, clean electricity generation in China, and

wind farms in New Caledonia.

In 2013, CEVA Logistics received a SmartWay

Excellence Award for its outstanding

environmental performance, including an

emphasis on fuel-efficient driving and

eco-sustainable warehouse facilities.

Audi is instituting paperless, tablet-based employee

training. Five years ago, the Audi Academy Technician

Program spent more than $650,000 annually on printing.

By early 2016, the Academy expects to eliminate its

printing costs entirely.

Page 14 | Audi of America Responsibility Report 2015

Veterans to techniciansIn early 2013, as Audi of America president Scott Keogh

traveled the country for the Audi brand’s annual series

of dealer forums, there was one concern that came up

in every conversation: Audi dealership managers were

facing a shortage of service technicians capable of

handling today’s sophisticated automotive technology.

At the same time, Veterans of the wars in Iraq and

Afghanistan were coming home and looking for jobs.

Many of the returning soldiers had developed high-tech

skills working on jets, helicopters, and other advanced

military equipment. Recognizing a potential solution,

Audi of America Director of Strategy Reinhard Fischer

approached Keogh with an idea: What if the company

worked to place Veterans in jobs as Audi service

technicians?

Audi of America launched the Veterans to Technicians

program in May 2013. The program recruits former

military technicians using a vast network of Veterans’

organizations and military transition assistance centers,

and then trains and places them in service department

roles at Audi dealerships across the country.

In the first year of the program, more than 100 Veterans

secured positions at Audi dealerships nationwide. Today,

that number is 200 and counting, with every branch

of military service represented. “The Veterans placed

through the Audi Veterans to Technicians program have

already made a profound, positive impact on the high

level of customer service found at Audi dealers across the

United States,” Fischer says.

With the brand experiencing record sales in the U.S., the

demand for Audi technicians is expected to soar, and the

Veterans to Technicians program will remain integral to

the company’s growth.

Audi of America

2200 Ferdinand Porsche Dr, Herndon, VA 20171

(703) 364-7000