Audi Could Build EV Plant In The US Due To Inflation Reduction Act

Audi is considering building a factory in the United States to take advantage of tax incentives offered under the Inflation Reduction Act (IRA), Automotive News Europe reports. The IRA, which was passed in August 2022, offers subsidies and tax incentives for domestically produced green industry products, including a $7,500 consumer tax credit to buyers of North American-made electric vehicles.

However, Audi is currently not eligible for these incentives since it does not have a plant in the US. Markus Duesmann, CEO of Audi, told the German newspaper Frankfurter Allgemeine Sonntagszeitung in an interview that the IRA has made “building a US plant for electric cars very attractive.”

Duesmann plans to produce electric cars in all of Audi’s locations globally by 2029, with no new combustion-engine models to be introduced beyond 2026.

Audi is considering building the plant either by itself or with other Volkswagen Group brands. It was previously reported that VW plans to build its own plant in the US for the Scout brand, which will sell electric pickups and SUVs.

An Audi spokesperson said the companies were still evaluating options and various scenarios were possible. Carmakers have been localizing production and supply chains to reduce transport and logistics costs, and a growing number of companies are announcing heightened investment in the US over Europe in light of the IRA, which is worrying European officials.

The VW Group has already invested in North America to build up its regional electric vehicle production capacity, including the construction of a battery plant and overhauls of its assembly plant in Puebla and an engine plant in Silao, Mexico.

Plans call for introducing more than 25 new EVs through 2030 across VW’s brands that sell in the US: VW, Audi, Porsche, Bentley, and Lamborghini. It wants to localize “all major design and engineering responsibilities” for top-hat development of EVs for North American consumers by 2030. The Volkswagen brand’s plant in Chattanooga began producing the ID.4 electric crossover last year and is targeting 90,000 EVs in 2023.