The German luxury car manufacturer Audi plans to build an electric car factory in the USA to take advantage of subsidies under the Inflation Reduction Act (IRA), announced CEO Markus Duesmann.
– “We do not yet have a factory in the USA. However, thanks to the Inflation Reduction Act passed by the US government, building an electric car factory in the USA has become, of course, very attractive,” Duesmann said in an interview with Frankfurter Allgemeine Sonntagszeitung.
The law was passed in August last year and offers $430 billion in subsidies and tax incentives for ‘green’ products made domestically, including a tax credit of $7,500 for buyers of electric vehicles produced in the USA. To qualify for the subsidies, manufacturers must source battery minerals and parts from North America, which Washington is trying to use to push Chinese suppliers out of the market. Car manufacturers have recently been sourcing batteries mainly from nearby suppliers, but a large portion of the raw materials in those batteries still likely comes from China or passes through the Asian giant.
Audi will most likely build the factory together with its parent company Volkswagen (VW), which plans to produce more cars for the US market in the USA in the future, Duesmann added. The Volkswagen Group has not yet announced strategic changes related to the US law, but reported in March last year that by 2030, it plans to invest at least $7.1 billion in the USA and offer customers 25 new models of electric vehicles.
In 2022, it launched production of the electric crossover ID.4 at its factory in Chattanooga, Tennessee, while also expanding facilities in Mexico that are expected to produce electric vehicles, engines, and components from the middle of the decade.
