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VW Shelves U.S. Audi Factory Plan as Tariffs Upend Economics

Tariffs under President Trump leave the project uneconomic without stronger U.S. incentives.

Overview

  • CEO Oliver Blume said a large U.S. investment is not feasible under current tariffs, citing about €2.1 billion in duty costs over nine months last year.
  • He said discussions with President Trump and the Commerce Secretary were fair and constructive but produced no deal to move forward.
  • Audi is weighing alternatives such as expanding Volkswagen’s Chattanooga operations or using capacity at Scout Motors’ new South Carolina plant.
  • Scout’s Blythewood facility has enclosed its main assembly building, begun receiving robots, and targets late 2027 for initial production.
  • Trade rules continue to add costs, with U.S. duties on EU cars at 15% and many Mexico-built vehicles facing a 25% rate unless strict local-content thresholds are met.