German automaker Audi reportedly contemplating building its first electric vehicle production plant in the United States to qualify for the new federal tax credits of up to $7,500 under the Inflation Reduction Act, according to an exclusive interview with CEO Markus Duesmann.
“The IRA has made building a US plant for electric cars very attractive.”
Audi CEO Markus Duesmann (via Frankfurter Allgemeine Sonntagszeitung)
Audi may develop the US plant with other VW brands
Interestingly, the Volkswagen Group subsidiary stated the possibility of developing the plant with other VW brands. That said, Audi may not be independent in the project if it ever proceeds.
“Both are possible. But the probability that we do it within the group is high.”
Audi CEO Markus Duesmann (via Frankfurter Allgemeine Sonntagszeitung)
The proclamation aligns with CTO Oliver Hoffmann, who told Automotive News in October 2022 that Audi is eyeing the US for its next production plant.
Previous reports have also suggested that VW will construct a US production plant for the electric pickup and SUVs of the Scout brand. Interestingly, the said plant is reported to also cater to Audi’s EV production in the US. However, it is still not yet confirmed.
Why is a US plant necessary?
Audi is required to construct its EVs in the US. Apart from that, it must purchase and assemble most of the battery components either there or through a free-trade partner to qualify for the $7,500 tax credits.
However, it must be noted that these provisions are not currently being implemented. We have to wait until the US Department of Treasury provides its guidance, which is anticipated sometime in March.
In light of the IRA, an increasing number of EV makers are now declaring increased investment in the US over Europe. It is an obvious effect of the newly passed legislation that aims to boost local manufacturing and cut foreign reliance on critical minerals.
