Volkswagen may scrap US Audi plant over trade costs

German group Volkswagen AG will not be able to build the planned factory for its premium Audi brand in the United States unless tariffs are reduced, VW CEO Oliver Blume said in an interview with Handelsblatt, DPA reported.

“Given the unchanged burden of tariffs, major additional investments cannot be financed. Short-term cost relief and reliable business conditions are also necessary,” Blume said.

He added that talks in Washington with President Donald Trump and US Commerce Secretary Howard Lutnick did not produce the required results, CE Report quotes AGERPRES.

“Anyone who invests, creates jobs and adds value must also benefit on the cost side. We remain open to finding solutions that benefit both sides,” the VW chief said.

Audi, a VW subsidiary, had been considering establishing a factory in the United States since 2023, estimating at the time that new government subsidies would make the facility profitable.

However, the Trump administration has put pressure on European carmakers through its trade policy, which Blume said cost the company €2.1 billion in the first nine months of 2025.

Despite this, Blume outlined a “future-oriented strategy” for VW’s US operations and pointed to clear growth opportunities. He added, however, that the previous target of achieving a 10% market share is no longer realistic, stressing that VW must proceed step by step.

Volkswagen AG announced earlier this month that it sold 8.98 million vehicles globally last year, a decline of 0.5% compared with 2024.

In China, a key market for Volkswagen, sales fell by about 8% to 2.69 million vehicles amid intensifying competition from domestic automakers. Sales in North America also dropped by 10.4% last year due to tariffs imposed by President Donald Trump.

By contrast, Volkswagen AG reported a 3.8% increase in sales in Europe, to 3.38 million vehicles. In South America, growth was even stronger, rising 11.6% to 663,000 units.