Volkswagen Group is considering establishing production facilities in the United States for its premium brands, Audi and Porsche, in response to potential tariffs on car imports proposed by U.S. President Donald Trump. Currently, both brands manufacture their vehicles outside the U.S., with Audi operating a plant in Mexico and Porsche producing exclusively in Europe. The proposed tariffs could impact imports from neighboring countries, potentially affecting models like Audi’s Q5 and the upcoming Q8 e-tron, as well as Porsche’s European-manufactured vehicles.
According to sources cited by Handelsblatt, the group is exploring several options to mitigate these potential challenges. One proposal involves Audi and Porsche jointly producing large electric SUVs based on the Scalable Systems Platform (SSP) by the end of the decade. Details regarding production capacities and potential locations remain under discussion.
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Another possibility includes leveraging the Scout brand’s new facility in South Carolina, where production is slated to begin at the end of 2026. The plant, designed for an annual output of 200,000 vehicles, could potentially accommodate an Audi model, internally referred to as ‘Hardqore.’
A more probable scenario, as reported by Handelsblatt, is the expansion of Volkswagen’s existing plant in Chattanooga, Tennessee. The facility currently has a capacity of 200,000 vehicles, producing models such as the Atlas and the ID.4 electric SUV. Expansion plans could involve the production of large electric SUVs for Audi and Porsche, though platform compatibility and other specifics are still under consideration.
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The final decision is pending further clarification on the proposed tariffs, as their structure and rates will significantly influence model selection, production volumes, and plant assignments.
This move comes as Audi and Porsche’s competitors, including Mercedes-Benz and BMW, have long-established production facilities in the U.S., making them less susceptible to potential import tariffs. Moody’s estimates that a 10% tariff on car imports from Europe could reduce Volkswagen Group’s operating profit by a similar margin, given the high profitability of the affected models.
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Discussions about U.S. production are not new for Audi. In 2022, the company considered building a plant in the U.S. in response to the Inflation Reduction Act’s subsidy rules. At that time, a decision was anticipated in early 2023, with a multi-brand plant under consideration. However, no such facility has been established to date.
As the situation evolves, Volkswagen Group continues to assess its options to navigate the potential challenges posed by the proposed tariffs and to strengthen its presence in the U.S. market.