The company will delay building a tech center in Ingolstadt.

Volkswagen Group’s international diesel emissions scandal will not just have ill affects on the VW brand. According to insiders speaking to Reuters, the massive costs from dealing with the cheating diesel engines will also force Audi to delay major technology investments in Germany. Depending on how things go, the Four Rings will potentially face a hard fight of keeping up with rivals BMW and Mercedes-Benz down the road.

The budget cuts will have the worst effects on Audi’s investments in future technologies, like autonomous vehicles, electrification, and connectivity. According to Reuters, the automaker’s tech center and test track in Ingolstadt, Germany, for developing these next-gen innovations will face a delay “for the foreseeable future.”

Audi’s works council in Germany isn’t happy about the cuts, Reuters reports. The members were already upset about the E-Tron electric crossover being built in Brussels, Belgium, instead of Ingolstadt. The latest decision to reduce investments in Germany reportedly only made them angrier about the situation.

The adjustments to Audi’s development budget won’t affect upcoming products like launching the E-Tron in 2018. The vehicle will mean the Four Rings will have a contender in the upcoming fight among the German electric crossovers. The other contenders will be BMW’s upcoming electric variant of the X3, and Mercedes will possibly build a production version of its Generation EQ concept from the Paris Motor Show.

Audi boss Rupert Stadler recently said that the company would have an electric sedan and city car ready by the end 2020. He didn’t divulge many details about them but suggested a driving range of 218 to 280 miles (350 to 450 kilometers) for the smaller vehicle.

Spiegel also reports that Stadler wants Audi to share more modular components with other VW Group brands. He gave the example of the next-gen A8 sharing parts with future vehicles from Porsche and Bentley.

Source: Reuters, Spiegel

Gallery: Audi to make all-electric Q6 in Brussels starting 2018