Audi is weighing plans to build a manufacturing facility in the United States to offset the impact of rising tariffs on vehicle imports from the European Union and Mexico, according to German business daily Handelsblatt. One option reportedly gaining support is constructing a “twin plant” next to Volkswagen’s factory in Chattanooga, Tennessee.
The proximity to Volkswagen’s site, which has been operational since 2011 and currently produces the all-electric ID.4, could allow Audi to tap into established planning, logistics, and supplier networks, reducing both construction costs and time. This approach appears to align with earlier reports from Spiegel suggesting that Audi prefers building a new plant in the southern United States, rather than using existing Volkswagen facilities in Chattanooga or the Scout Motors plant under construction in South Carolina.
Audi currently has no production footprint in the U.S., relying on exports from European factories and a facility in Mexico that assembles the Q5. Under trade policies introduced by President Donald Trump, vehicles imported from Mexico face a 25% tariff, with a further increase to 30% under consideration. Imports from Europe could also see tariffs rise to 15%, up from the long-standing 2.5% level.
Although Audi does not immediately require additional capacity, the company fears higher prices resulting from tariffs could dent U.S. sales, which currently average about 200,000 units annually. The proposed Chattanooga site could produce 150,000 to 200,000 vehicles per year and support Audi’s revised U.S. target of 300,000 to 400,000 units annually.
Globally, Audi aims to raise total deliveries to between 2.2 and 2.3 million vehicles, up from roughly 1.7 million now. The company has not confirmed which models would be built at the potential U.S. facility. According to Handelsblatt, Volkswagen Group CEO Oliver Blume is seeking discussions with the Trump administration that could exchange new U.S. investments for reduced tariffs on imported vehicles, as neither Audi nor Volkswagen plans to localize all production for the American market.