When the official rules related to the new US federal EV tax credit were shared, some people were upset that most current and future electric cars and SUVs may not actually qualify for the credit. The US government added specific rules to encourage brands to begin manufacturing EVs on our shores, and it already seems to be working. Audi may join Kia, Hyundai, and others in expanding its North American footprint.
While several foreign automakers already produce vehicles in the US, and some have for many years, Audi has never had a US car plant. It does, however, have a North American hub that produces the Q5 SUV, though it's located in San José Chiapa, Mexico.
As you may know, the Biden Administration's Inflation Reduction Act was passed, and it includes a new US federal EV tax credit. Much like the current credit, it's worth up to $7,500 on the purchase of a new electrified model. However, the new credit is a point-of-sale rebate that's available to all EV makers, as long as they follow a few key rules.
First and foremost, US politicians want electric cars not only to be produced and assembled in the US, but also for their battery materials to be sourced from within, or from a country with which the US has a trade agreement. There are also various caps on vehicle prices, as well as the earnings of buyers. The goal here would be to limit subsidizing high-priced EVs for wealthy people, bringing the focus back to helping everyone eventually afford an EV.
Gallery: 2022 Audi Q4 e-tron
According to a recent article published by Automotive News, Volkswagen Group is seriously considering expanding its production capacity in the US, and it seems it may focus on Audi. The chief of technical development at Audi, Oliver Hoffmann, shared in an interview that the new EV tax credit rules will have a major impact on the brand's strategy. He said:
"To be honest, we are looking right and left: What can be the opportunity for us to get together with a strong [Volkswagen Group] in the background. And now we are on the way, especially as the rules changed and as you know there is big spending of the government for EVs, with special circumstances, and we are looking forward to how we can meet these requirements."
He went on to say that as Audi plans for the future, it will now have to put much more thought into where it may want to produce its upcoming vehicles. As VW aims to phase out gas cars by 2035, a US production center for Audi would certainly help, and it could also be shared with Volkswagen and Porsche. Currently, VW builds the ID.4 electric SUV in Chattanooga, Tennessee, so it may actually already qualify for the credit. The ID.4 is closely related to the Audi Q4 e-tron shown above.
Automotive News also notes that while Volkswagen hasn't made any official announcements, it previously signed an agreement with the Canadian government related to battery materials for its future EVs.
Hoffman concluded that Audi may decide as early as 2023 whether or not the brand will expand North American vehicle production, with a specific focus on EVs.
