Audi is reportedly considering opening a new manufacturing plant in the southern United States, just miles from Volkswagen’s existing facility in Chattanooga, Tennessee. According to Handelsblatt, the move would allow Audi to leverage VW’s established logistics and infrastructure, significantly cutting down on construction costs and startup time.
The location also benefits from Volkswagen Group’s well-developed supplier network in the region, another major advantage for ramping up operations efficiently. This aligns with a Der Spiegel report from June, which noted Audi’s preference for building a dedicated US site in the South, rather than using existing facilities like VW Chattanooga or the Scout Motors plant under construction in Blythewood, South Carolina.
One of the key motivators behind Audi’s potential expansion is the intensifying trade policy under the Trump administration. Currently, Audi has no manufacturing operations in the US, relying instead on exports from Europe and its Mexican plant, which assembles the Q5 (including ICE and PHEV versions).
All other Audi models sold in America are imported directly from Europe. But those shipments are now subject to steep tariffs, 25% for Mexican imports, with a hike to 30% already announced. Exports from the EU may soon face 15% import duties, up from the long-standing 2.5%, though still below the temporary maximum of 27.5%.
Although Audi currently doesn’t need more production capacity, the company is concerned that higher retail prices could weaken demand in its critical US market. The brand currently sells around 200,000 units a year in the States, but top executives aim to push that number to 300,000–400,000 annually. Globally, Audi is targeting 2.2 to 2.3 million units per year, up from roughly 1.7 million.
If greenlit, the Chattanooga-area plant could add 150,000 to 200,000 units of yearly capacity. No specific models have been confirmed for local production, but the goal is protect US sales by avoiding tariff-driven price hikes.
Meanwhile, Volkswagen Group CEO Oliver Blume is reportedly negotiating with the Trump administration to secure trade concessions in exchange for new US investments. While it’s unlikely Audi or VW will shift all production stateside, local assembly will become a vital part of their North American strategy.
