President Donald Trump’s tariff approach has caught the eye of global automakers, prompting a shift in manufacturing to the U.S., especially for electric and hybrid models.
Recently, Volkswagen Group (VW), which ranks as the second largest car manufacturer worldwide, along with its luxury brand Audi, has announced plans to produce some of its crossover SUVs and electric models in the United States.
Industry analysts suggest this shift could lead to job creation.
Currently, Audi’s vehicles are mainly assembled in countries like Germany, Hungary, Mexico, Slovakia, Spain, and China. However, a spokesperson for the company stated that they are looking to strengthen their localization efforts in the U.S. and are considering various scenarios. A decision is expected by the end of this year in collaboration with the Volkswagen Group.
Trump has maintained that the 25% tariffs will help revitalize U.S. production, believing that domestically manufactured vehicles enjoy a distinct price advantage.
According to German trade outlets, Audi is evaluating three potential sites in the U.S. One of the locations is Chattanooga, Tennessee, where Volkswagen is currently developing an electric crossover that could easily be modified for Audi production.
Another potential site is reported to be in South Carolina, where VW is launching a new factory dedicated to electric pickups and SUVs under the Scout Motors brand.
Interestingly, many of the reported plans involve electric vehicles. During his campaign, Trump was vocally against government mandates regarding electric vehicle requirements, arguing that market demand should dictate their success.
In response to the tariffs, both Honda and Hyundai have also announced intentions to manufacture electric or hybrid models in the U.S. Tesla, on the other hand, is already producing its vehicles domestically.
Other foreign automakers are taking notice as well. Mercedes-Benz is expanding its production in the U.S., with plans to add another model at its plant in Tuscaloosa, Alabama, starting in 2027.
Meanwhile, BMW is reportedly ready to adapt to the new customs regulations, as it already produces one of its best-selling models at its Spartanburg, South Carolina facility.
Additionally, other foreign companies like Volvo, Subaru, and Toyota are also manufacturing vehicles in the U.S., with many plants situated in southern states.
