Audi Mexico Faces 27.5% US Tariff on Q5 Exports

As of April 2025, Audi Mexico faces a 27.5% tariff on exports of its Q5 model to the United States due to non-compliance with regional content requirements under the USMCA trade agreement. The tariff includes a 25% penalty for failing to meet Value of Regional Content (VRC) thresholds, plus a 2.5% most-favored-nation rate, similar to the rate applied prior to policy changes under Donald Trump’s administration.

The Q5 assembled at Audi’s San Jose Chiapa, Puebla plant currently achieves a VRC of 63%, up from 62% in the previous generation, but still below the threshold for duty-free access. “It is not just about localizing parts; they also have to meet origin rules. That is where we are working closely with suppliers,” said Fernando Martínez, Audi Mexico’s director of corporate relations.

Audi is coordinating with Mexican and US authorities to explore mechanisms that could mitigate the tariff burden. “This is a short-term issue, and we are trying to find ways to avoid paying it,” Martínez added.

Unlike other automakers with US operations, Audi’s only North American manufacturing facility is in Mexico, limiting options to offset the tariff impact. The Puebla plant produced 95,200 units between January and August 2025, a 2.4% decline year-over-year, while exports totaled 89,976 units, down 3.1%, according to Mexico’s national statistics agency, INEGI.

Despite the challenge, Audi continues to supply most global markets—excluding China and India—with Q5 units built in Puebla. The company is also pursuing production of a future electric model at the plant, supporting Audi AG’s goal to end internal combustion vehicle sales by 2033. “The future is electric, and Audi Mexico is working to secure that project,” Martínez said.

In 2024, Audi expanded its capacity by opening a second body shop within its 460-hectare complex, signaling preparations for upcoming electric vehicle production.