Volkswagen Group Seeking U.S. BEV, Battery Plants

Audi CEO Markus Duesmann confirms the company is looking at a plan for a U.S. manufacturing plant for Audi battery-electric-vehicles that could be shared with the planned Scout brand.

This is the second mention of a U.S. plant for BEVs in six months, with a VW Group executive stating last August that a site for a BEV pickup was also on the table. It is not out of the question that one plant could serve all three needs on a common BEV tech stack and chassis — the Scout SUV, VW pickup and Audi SUV. Both Audi and Scout, the latter expected to go into production in 2026, operate as standalone operating units within the VW Group.

Duesmann stated in an interview with Frankfurter Allgemeine Sonntagszeitung that no decision had been made yet, but incentives built into the Inflation Reduction Act signed into law last August made it an attractive time to build a plant in the U.S. The automaker has one existing U.S. plant, in Chattanooga, TN.

Scout, a storied SUV brand VW Group acquired in 2021 with plans to relaunch it as a battery-electric light truck, is expected to begin production in 2026 in the U.S. VW had considered contract manufacturers Foxconn and Magna as a hedge against small sales volumes, but has decided to build the plant on its own. That decision, says one VW insider, points to “the logic of building multiple vehicles at one plant to serve the group.”

Where a plant would be located is up for grabs, but VW has had a good experience at its Tennessee plant and would likely want to take advantage of the supplier parks that have taken root in the region. VW is expected to build a battery plant and would want that in the region as well, along the rail lines that serve its plants.

The $430 billion Inflation Reduction Act offers subsidies and tax incentives for domestically produced “green” industry products, including a $7,500 consumer tax credit to buyers of North American-made EVs, as well as the build-out of hydrogen hubs to serve a growing future demand for hydrogen-powered trucks and stationary power. It also includes a restriction on battery minerals and component sourcing to the region, in an attempt to balance China’s current dominance of the rare-earth metals market.

There is also a build-out underway of semiconductor manufacturing in North America to balance the concentrated supply base of chips in the Far East. Automakers and other industries are still feeling the pinch from a restricted supply of chips during the past two years,  a challenge expected to last through 2024.