Audi Weighs US Production to Offset Tariffs

Audi is “seriously” evaluating the possibility of producing vehicles in the United States as part of a strategy to expand its industrial footprint in North America and mitigate the impact of import tariffs, company sources said. The move comes as the automaker faces duties of 27.5% on vehicles imported from Mexico and 15% on those shipped from Europe, increasing costs in one of its key markets.

Audi, part of the Volkswagen Group, has been assessing options for several years to strengthen its position in the US market, which remains central to its global sales strategy. However, the company said uncertainty surrounding tariff policies has so far delayed a final investment decision. Sources indicated that ongoing changes in trade measures have prevented the company from committing to a multibillion-dollar project.

As part of its evaluation, Audi is considering shifting production of some models to the Volkswagen plant in Chattanooga, Tennessee. According to company sources, the facility has “more than enough capacity” to accommodate Audi vehicles. Such a move would reduce exposure to import tariffs and improve cost efficiency in the US market.

Currently, Audi does not operate its own manufacturing plants in the United States and relies primarily on imports from Europe and Mexico. This structure has increased its vulnerability to trade barriers, particularly as tariffs have risen in recent years. The company produces its Q5 model in Mexico, which has been identified as one of the products most affected by US import duties.

The potential shift reflects a broader industry trend toward localizing production in major markets. Automakers are adjusting supply chains to respond to trade restrictions, regulatory requirements and incentive frameworks, particularly as the transition toward electric vehicles accelerates. For Audi, expanding US production would support its long-term growth strategy and reduce reliance on cross-border shipments.

At the same time, the company continues to expand its global product portfolio. Audi recently introduced the Q9, marking its entry into the segment, with production planned in Bratislava, Slovakia. For the Asian market, the company is already commercializing the E5 Sportback through a joint venture with SAIC Motor.

Audi also unveiled the A2 e-tron prototype, which will be manufactured at its headquarters in Ingolstadt starting in September, with a market launch expected in early next year. In addition, the company presented the Concept C, a model scheduled for release next year as part of its product pipeline.

The evaluation of US production highlights the operational impact of tariffs on global automakers and underscores the importance of geographic diversification in manufacturing. Audi’s final decision will depend on the evolution of trade policies and its assessment of long-term cost structures in North America.

In 2025, Mexico’s automotive exports declined 2.7% to 3.38 million units, with the United States absorbing 78.4% of total shipments, underscoring continued dependence on the US market. Within this context, Audi exported 140,687 vehicles in 2025, a 2.2% decrease compared with 143,783 units in 2024.

Mexico’s President Claudia Sheinbaum said her administration will seek the elimination of tariffs on steel, aluminum and vehicles during the upcoming review of the USMCA with the United States and Canada, held on March 10. “That is our position. We clearly want tariffs on vehicles to reach zero, and if not, at least there should not be higher quotas on Mexican vehicles than those applied to cars produced in Europe or Korea,” she said. Sheinbaum added that this position has been communicated directly to Donald Trump, as well as through bilateral working groups.

Industry representatives in both Mexico and the United States have aligned with this position, calling for the removal of tariffs imposed under Section 232, which include a 25% duty on Mexican vehicle exports. Rogelio Garza, president of the Asociación Mexicana de la Industria Automotriz (AMIA), said the measure represents the “worst-case scenario for Mexico if it remains unchanged,” warning that it undermines investment certainty and reduces the benefits of the trade agreement.

Garza added that even a favorable outcome in the USMCA review would be limited if Section 232 tariffs remain in place. “It will be of no use to reach a good agreement if there is a Section 232 measure that impacts us,” he said. He also noted that Mexico faces a competitive disadvantage compared to countries such as Japan and South Korea, which export vehicles to the United States under lower tariff rates of around 15%, while Mexican exports face a 25% duty.