Inicio EV Audi looks at EV manufacturing in US to expand market share

Audi looks at EV manufacturing in US to expand market share

Audi looks at EV manufacturing in US to expand market share
An Audi Q4 electric vehicle being manufactured in Germany
An Audi Q4 electric vehicle being manufactured in Germany: currently the company makes no cars in the US © Krisztian Bocsi/Bloomberg

Audi is looking into manufacturing electric cars in the US, including using space in a $2bn plant being built by parent company Volkswagen in South Carolina.

Chief executive Gernot Döllner said the company had discussed “different scenarios on how to produce in the US” as it looks to increase its market share. “There’s more potential for growth in the US,” he said. 

He added that “bigger SUVs” would be part of Audi’s US strategy. While EV sales have taken off in coastal regions, many drivers in inland states still prefer combustion engine models, he added.

Unlike rivals BMW and Mercedes-Benz, Audi makes no cars in the US. Its factory in Mexico makes the Q5 SUV, but many cars it sells in America are exported from Europe. The Q7 and Q8, its largest SUVs, are imported from Slovakia.

The US has had an influx of EV investment in response to the Inflation Reduction Act, which provides generous tax incentives for EVs that are manufactured using batteries produced in the country.

Carmakers such as Hyundai have poured billions into new facilities because of the act, while VW slowed plans for an eastern European battery plant to focus on North American investments. It is building an EV battery factory in Canada, which is in line to receive more than $10bn in subsidies and will operate by 2027.

VW, which has a factory in Chattanooga, Tennessee, has struggled in the US, one reason why it is trying to revive the Scout off-road brand, which has been defunct since 1980. 

Audi has had more success. Its US deliveries rose by 21 per cent last year to 235,000, a faster growth rate than it achieved in China or Europe. Sales of its EVs rose 55 per cent between 2022 and 2023 in the US, it said on Tuesday. 

Döllner also said he would not rule out producing vehicles for the North American market exclusively in the region, a “local for local” strategy employed by other brands such as VW with its “In China, for China” policy.

However, he denied that rowing back on the IRA by a new administration next year would threaten any shift in manufacturing, saying it would not be “that important”.

“[Cancellation of the IRA] would not make it less attractive to us, especially as a premium manufacturer. We are not that reliant on subsidies and the battery incentives [for VW] are already locked in, in Canada,” Döllner said.

“We are planning much more long term than one legislative term.”

Carmakers have warned that cutting subsidies would hurt demand for EVs, which remain more expensive than combustion engine models, and the wider US car industry.

Audi said on Tuesday that 2023 operating profits were €6.3bn, down from €7.6bn a year earlier, mainly because of commodities hedging. Sales increased 13 per cent to €69.9bn.