Volkswagen's planned $4 billion Audi plant in Georgia is tied to tariff relief on EU-built vehicles imported into the US, with negotiations suggesting Audi pressed for duties to be cut from 15% to 7.5%, while the US Commerce Department reportedly prepared a compromise closer to 10% for automakers making large domestic investments.
The Georgia facility will produce approximately 200,000 units annually and employ roughly 4,500 people, focusing on the Q7, Q8 and Q9 SUVs. Tariffs on vehicles, parts, steel and aluminium cost Audi €1.2 billion (US$1.4 billion) in 2025, rendering the company's US business unprofitable even under the revised 15% rate. Audi Chief Executive Gernot Doellner has declined to confirm whether tariff concessions are part of the deal, but Reuters and the Wall Street Journal reporting suggests relief was central to the decision.
The relief would arrive years before the Georgia plant produces its first vehicle. A cut to 10% would reduce Audi's duty burden on EU-built vehicles by a third throughout construction and ramp-up. Audi is the only German premium brand besides Porsche without US production and must import all vehicles it sells there from Europe or Mexico.
Fellow Volkswagen Group brand Porsche has rejected a US factory, with CFO Jochen Breckner stating the company will absorb the 15% tariff and keep production in Europe, as lower volumes cannot justify a dedicated plant and sports cars rely on a dense European supplier network.
The plant will open after President Trump leaves office in 2029, and a reduction to 7.5% could be easily reversed by his successor. The investment still requires approval from Volkswagen's supervisory board, where labour holds half the seats. IG Metall leader Christiane Benner has demanded firm guarantees for German sites, with talks scheduled to begin on 24 November. Volkswagen is cutting at least 100,000 jobs, and Audi's Neckarsulm plant has no secure future beyond the early 2030s.