Report: Audi Shelves A1, A2 Electric Projects

Volkswagen AG's Audi unit has cancelled plans to produce the A2 electric city car and appears likely to drop the A1 e-tron extended range hybrid, according to Car, which cites unnamed sources.

The U.K.-based magazine says Audi management doesn't think it can sell enough A2 EVs at the projected €40,000 ($50,300) price to make the project viable.

Audi showed the front-drive A2 in concept form at the Frankfurt auto show last autumn. The 12.5-foot-long four-seater was intended to revive the A2 nameplate, which adorned a piston-powered car produced by the company between 1995 and 2005.

Car says cost, complexity and the weak European car market also appear to have killed the A1 e-tron, an extended-range electric version of Audi's A1 small car.

Audi unveiled the e-tron iteration as a near-production prototype at the 2010 Geneva auto show and used a small fleet of the cars to conduct real-world testing in Munich last year.

The company said the car could travel 30 miles on power from its lithium-ion battery and an additional 125 miles when a generator powered by a 20-hp gasoline Wankel rotary engine was used to partly recharge the battery.

Last year Audi said it would introduce its first EV in 2012 and derive 5% of its global volume from such cars by 2020.