Audi considers U.S. plant as Inflation Reduction Act subsidies lure carmakers

BERLIN — Volkswagen-owned Audi may build a factory in the United States in light of the Inflation Reduction Act, it said on Friday, the latest company to consider investments in the region to take advantage of the subsidies it offers.

The premium carmaker, which sold around 190,000 cars in the U.S. last year, accounting for 11% of its total sales, does not yet have a plant in the country, and is at present not eligible for tax incentives and subsidies offered under the Inflation Reduction Act (IRA) for vehicles sourced and made in North America.

The $430-billion IRA was passed last August and offers subsidies and tax incentives for a swathe of domestically produced green industry products, including a $7,500 consumer tax credit to buyers of North American-made electric vehicles.

It also includes a restriction on battery minerals and component sourcing to the region, in an attempt to phase out Chinese inputs.

Audi plans to produce electric cars in all its locations globally by 2030, with no new combustion-engine models to be introduced beyond 2026.

"The IRA has made building a U.S. plant for electric cars very attractive," Audi Chief Executive Markus Duesmann said in an interview with German newspaper Frankfurter Allgemeine Sonntagszeitung, adding that it would most likely build a joint plant with the Volkswagen Group.

Industry publication Automobilwoche reported on Friday that Volkswagen planned to build its own plant in the U.S. for the Scout brand, which will make electric pick-ups and SUV trucks.