The German automaker is having a production rethink thanks to the Inflation Reduction Act.
In August, the Inflation Reduction Act was signed into law, and while this initially seemed to be a huge driver for investment, it's not perfect. Japan, Germany, South Korea, and China have issues with the Act and have noted that it may be illegal, breaking multilateral trade agreements. Representatives from these countries and from America have been discussing ways to keep everyone happy, but for the manufacturers, things are especially tricky.
Do you jump in and spend a fortune on a new American production facility, or do you wait for more clarity on the Act? For Audi, the best course forward may be to open its first assembly plant on US soil.
In an interview with Automotive News, Oliver Hoffmann, head of technical development for Audi, said that the new rules imposed by the IRA "will have a huge impact on our strategy here."
"To be honest, we are looking right and left: What can be the opportunity for us to get together with a strong [Volkswagen Group] in the background," said the executive. "And now we are on the way, especially as the rules changed, and as you know, there is big spending of the government for EVs, with special circumstances, and we are looking forward to how we can meet these requirements."
This sounds similar to Nissan's initial stance on the matter, with the Japanese automaker saying it would sift through the 725-page Act to find a loophole, except that Hoffman has gone a step further: "For us, we have big opportunities within the group to make this happen, with our platform spreading strategies, this is a big opportunity for us. And we will look where we want to produce our cars in the future."
Clearly, Audi is taking its time to choose the best course of action, but its connection to the Volkswagen Group affords it unique benefits. For example, the Chattanooga plant where the Volkswagen ID.4 is produced could potentially be retooled to build a new Audi Q4 e-tron, which shares the same platform.
Hoffman has suggested that a decision on the matter of adding America to its list of countries that produce Audi EVs could come early next year, and although all of the brand's current EVs are obviously imported to the US, the growth here has been promising. Hoffman noted that he and other Audi executives have been "really impressed" at how quickly the EV market has grown in America in spite of geographic and charging infrastructure challenges.
All of this could justify the expense of setting up shop in the US, but with most Audi EVs still far too expensive to qualify for tax credits and future models unlikely to get any less luxurious, don't expect to see an affordable Audi electric car anytime soon, no matter where it's built.
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