Volkswagen’s luxury unit Audi will reportedly receive hundreds of millions of dollars in state tax incentives, along with grants from the local administration to build a USD 4 billion assembly plant in the state of Georgia, and is considering a second phase.
Audi announced plans on October 25 to build its first US assembly plant near Macon, Georgia, to open in the early 2030s that will produce 200,000 SUVs annually and employ 4,500 workers.
The German automaker is now considering a second phase that would cost another USD 3 billion and add 3,000 American workers by 2033, according to documents released by the Mid-Georgia Gateway Development Authority.
The American state will be providing Audi the 1,500-acre site, USD 458 million in tax incentives, and more than USD 120 million in grants for infrastructure, rail improvements, environmental site remediation, and construction.
Another USD 430 million will be given to the German automaker for addressing issues like water, road improvements, utility, and workforce training and recruitment.
President Trump’s administration has reportedly promised tariff relief to Audi to help secure the plant’s future.
US officials told Audi executives the government plans to offer broad relief from tariffs for automakers making significant investments in US production, reported Reuters.
Two sources briefed on the matter said Audi has pushed the US to reduce the 15% tariffs it pays on imports from the EU to 7.5%, but that the US Commerce Department was expected to agree to around 10%.
“The tariff relief program aims to prod automakers to add US production or other investments,” the sources added.
Trump’s tariffs on autos, steel, aluminum, and parts cost Audi around 1.2 billion euro (USD 1.4 billion) last year, as it imports all its vehicles for the American market from Europe or Mexico.
Audi Chief Executive Gernot Doellner stood alongside Trump at a midterm campaign rally in Georgia where the US president said the automaker planned to build an assembly plant that will produce 200,000 SUVs annually.
“This decision was preceded by many months of careful planning and intense negotiations,” Doellner said. “If the American president invites you, you accept the invitation. That is what respect for the office and for the country in which we invest demands.”
Audi’s American expansion plans, however, depend on Volkswagen’s supervisory board, which must make a final decision on the investment for it to go ahead.
And politics makes things complicated, with Trump’s tariffs adding pressure on the German industries, including automakers, with a massive number of job cuts and possible plant closures weighing big on the European giant’s economic prospects.