Why Audi is moving into United States to make electric cars

Admin l  Friday, February 24, 2023

 

BERLIN – Audi, a subsidiary of Germany’s Volkswagen group, would like to build electric cars in the United States in the future.  Audi chief executive pointed to new green subsidies aimed at boosting US domestic production.

Audi does not own a plant in the US yet, but Volkswagen does. With the new subsidies introduced last year, building a plant for electric cars in the US has become “highly attractive,” chief executive Markus Duesmann told the Frankfurter Allgemeine Sonntagszeitung newspaper.

The auto executive was referring to the US Inflation Reduction Act, which includes $369 billion in subsidies and tax credits aimed at promoting electric vehicles and green infrastructure.

A controversial aspect of the law is a $7,500 electric vehicle tax credit that is limited to cars built in North America and with critical minerals for batteries sourced domestically or from a free trade agreement partner, which the EU is not.

EU officials have vociferously criticized the new law.

“Decisions have not yet been made, but the Volkswagen Group will probably build more cars for the US market there in the future as well than before,” Duesmann said. A separate Audi plant or a plant with other VW Group brands is possible, he said. However, there is a high probability that we will do it as part of the group.

Volkswagen has a large plant in Chattanooga, Tennessee, which will henceforth also build e-cars. Audi has so far supplied the US market from its SUV plant in Mexico and its other sites. Last year, Audi sales in the US fell by 5% to 187,000 vehicles.

According to Duesmann, more than 20 new Audi models would come onto the market in the next two years, half of them fully electric.

Audi is currently building its own plant in the northern Chinese metropolis of Changchun, where up to 150,000 electric cars a year will be built for the Chinese market on the basis of the PPE luxury platform developed with Porsche.

So far, Audi has been producing in Changchun at FAW Volkswagen’s plants and in Shanghai at SAIC Volkswagen.