Audi sees the U.S. plant as a boost to the Auto Inflation Act for automakers

Audi sees the U.S. plant as a boost to the Auto Inflation Act for automakers

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

The premium carmanufacturer that sold around 190,000 units carand last year in the United States, which accounted for 11% of its total sales, it does not yet have a plant in the country and is currently not eligible for the tax incentives and subsidies offered under the Inflation Reduction Act (IRA) acquired and made in North America.

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

It is also restricting battery minerals and component sourcing in the region to try to extract Chinese inputs.

Audi plans electric production cars by 2030 at all locations worldwide, and no new internal combustion engine models will be presented after 2026.

“The IRA built an American electrical plant carIt’s very attractive,” said Audi CEO Markus Duesmann 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 Friday that Volkswagen plans to build its own factory in the United States Scout brandwhich will produce electric pick-ups and SUV trucks.

When asked if the two plans were related, an Audi spokesperson said that different scenarios were possible and that the companies were still considering options.

CarIn recent years, manufacturers have sought to reduce exports and imports in major markets such as the United States, China and Europe and instead localize production and supply chains to reduce transportation and logistics costs.

But the a growing number of companies now new investments are being announced in the US over Europe given the IRA, which worries European officials.

Carmanufacturer Stellantis STLAM.MI On Thursday, he said he was already working to localize battery supply and electric vehicle production, but the IRA “has given us a further incentive to accelerate”.

Tesla Inc TSLA.O there is reduced designs manufactures batteries at its Brandenburg site in Germany and prefers cell manufacturing in the US because of the IRA.

Volkswagen’s plant in Chattanooga, Tennessee, began production of the ID.4 last year and plans to produce 90,000 electric cars by 2023.

Sources close to the company told the Reuters news agency last May that the plant will be expanded to include the production of the ID electric van. It sounds like it, but the Scout brand will make off-road electric vans and SUVs that require a new platform.

Volkswagen is also upgrading its plants in Puebla and Silao, Mexico, to begin building electric vehicles, engines and related components by 2025.

THE carits maker is due to placement in March how it will transform its manufacturing network worldwide to increase production of electric vehicles.

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