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Audi eyes first U.S. plant under new EV tax credits

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Federally funded electric vehicle tax credits contained in the Cut Inflation Act enacted this summer have prompted the Volkswagen Group, and in particular Audi, to take a hard look at expanding its footprint. manufacturing in North America, potentially including what would be Audi’s first plant in the United States.

In an exclusive interview, Oliver Hoffmann, Head of Technical Development at Audi, said the new rules “will have a huge impact on our strategy here” in North America.

“To be honest, we look right and left: what can be the opportunity for us to come together with a strong [Volkswagen Group] in the background,” Hoffman said, speaking from Audi’s design center in Malibu, Calif. “And now we’re on the right track, especially since the rules have changed and you know that the government is spending a lot on electric vehicles, with special circumstances, and we look forward to seeing how we can meet these requirements.”

He continued: “For us we have great opportunities within the group for that to happen, with our platform release strategies it’s a great opportunity for us. And we’re going to look where we want to produce our cars. in the future.”

Under former CEO Herbert Diess, VW Group brands have pledged to phase out internal combustion vehicles across much of the world by 2035 and have worked to consolidate their dozens of future electric vehicles on a single platform. For the group’s brands that sell new vehicles in the United States – mainly VW, Audi and Porsche – a single shared assembly plant in the United States with locally sourced battery production could help these brands benefit from tax incentives for their electric vehicles, provided they fall under the price limit of $55,000 for sedans, hatchbacks and station wagons, and $80,000 for pickup trucks and SUVs.

The VW ID4, now produced in Chattanooga, is the only group electric vehicle eligible for the Inflation Reduction Act incentives.

Audi’s only North American assembly plant is in San José Chiapa, Mexico, where it builds the Q5 crossover.

The brand’s new Q4 E-tron and Q4 E-tron Sportback compact crossover EVs are built on the same platform as the VW ID4 and could potentially share an assembly line with that vehicle in Chattanooga, though no announcement has not been made. The group recently signed an agreement with the Government of Canada to use minerals mined in Canada for future battery production.

Hoffmann suggested that a decision on expanding Audi EV production in North America could be made in early 2023.

The brand’s electric vehicles are all imported into the United States. He said he and other Audi brand executives have been “really impressed” with how quickly electric vehicles have grown in the United States, despite geographic and charging infrastructure issues.

“I think with these new rules it will also have a huge impact on our strategy here, and to be honest whereabouts of cars here,” Hoffmann said. “We have a strong history here, but for us it’s a huge chance to grow here in [the U.S.]also the premium market with our EV models.”

In other comments, Hoffmann and Audi design chief Marc Lichte said the brand’s recent Sphere concepts are more than just exercises in electric vehicle design, but point to several futuristic traits that will figure prominently. place in the next Audi production vehicles in the second half of this decade.

“I think from 2026 you’ll see a completely different set of our cars,” Hoffmann said, “where we see huge advancements overall, in terms of steering and new technologies. And we we’re really looking forward to showing these cars.”

“The Grandsphere is a concrete teaser of a serious production model,” Lichte said. “I work with my team and engineers from [Hoffmann’s] team right now on this project. The process takes about four or four and a half years, so you know exactly when we’re going to market.”

Lichte said the conversion of internal combustion engine vehicles to electric vehicles has reversed the way cars are designed and developed. Due to battery packaging requirements, Audi now designs the vehicles interior first “and works our way to the powertrain and ultimately the exterior design”.

Lichte also said the skateboard battery pack makes it more difficult to design classic sedans because of the extra height required to accommodate under-cabin energy storage.

“Some of the biggest talks between Ollie and I are over. [roof] height,” said the veteran designer.