ELECTRIVE — 2025-06-23
Automotive Industry
In light of high import tariffs imposed by US President Donald Trump, Audi is seriously considering building its own production facility in the United States. Importing vehicles from Germany or Mexico has become too costly. However, the option of manufacturing at the VW Group’s existing US site or that of VW's sub-brand Scout has not been ruled out.
Of all the German carmakers, Audi is particularly hard hit by the Trump administration’s tariffs. Unlike BMW, Mercedes-Benz and Volkswagen, Audi does not have a factory in the US. But with President Trump introducing additional 25 per cent tariffs on vehicles imported from Germany and Mexico – where Audi’s main plants are located – the carmaker faces a serious challenge. Although tariffs on vehicles from Mexico have since been reduced to 15 per cent, it remains a significant burden.
The current situation is economically unsustainable for Audi. Just absorbing the tariffs would severely impact its bottom line, while passing the additional cost on to customers would be difficult to justify. This has created mounting pressure in Ingolstadt – and the German brand may now regret not setting up a dedicated US facility sooner. In early May, it emerged that Audi is looking into launching local production.
Now, faced with Trump’s revived tariff policy, Audi is ready to make a swift decision about a US-based manufacturing strategy. According to German magazine Der Spiegel, an all-new factory currently appears more likely than earlier options, including shared production at VW’s existing Chattanooga plant in Tennessee, where the all-electric ID.4 is already built, or at the Scout Motors facility under construction in Blythewood, South Carolina, where the foundation stone was laid in February 2024.
Der Spiegel says that if Audi decides to build its own factory, it would most likely be in the south, allowing the company to leverage the existing supplier network of the VW Group. Such a factory would reportedly employ between 3,000 and 4,000 workers. Series production could begin in late 2027 or early 2028.
However, before the Audi board makes a final decision on US production, the company plans to await the outcome of ongoing trade talks between the US and the EU. Final tariff terms may yet be reduced. On the other hand, the early months of Donald Trump’s second term have underlined his unpredictability – and whether any future agreement would provide lasting certainty remains unclear.
Regardless of the outcome, establishing a local production footprint would bring more than just tariff-free status for US-built and sold vehicles. Audi could also benefit from credit mechanisms for cars manufactured domestically but exported abroad – with those credits potentially offsetting duties on imports from Germany or Mexico. Such a model would be especially advantageous for larger vehicles like the Q8.