Those who have followed the NAFTA/USMCA storyline will remember that Volkswagen made a strategic bet on North America when it decided to expand production into Mexico for the Audi Q5 mid-size SUV brand. That was an analytical mistake as Audi does not make any vehicles inside the USA.
The Volkswagen leadership have made several blunders since that initial decision to open plants in Mexico. The massive push on EVs without understanding the USA market was a strategic mistake. The decision to align financial survival with a deep Chinese partnership was another.
Meanwhile, back in both Brussels and Germany the political calculus around energy policy was catastrophic for the entire auto industry. The costs of industrial production skyrocketed, making the price of SUVs for the U.S. market far above the consumer’s pocketbook, and a pre-existing 25% tariff on Trucks/SUVs made things worse.
Essentially, every decision made by Volkswagen/Audi with the North American market in mind was exactly the opposite of what they should have done. In Germany the entire Volkswagen family of autos is shedding 100,000 jobs in a desperate restructuring effort. However, Audi is now looking at North America again and trying to correct their previous mistakes.
President Donald Trump and Audi Chief Executive Gernot Döllner
Audi is now announcing a $4 billion investment in an SUV manufacturing plant in Macon, Georgia. The facility will make the Q7, Q8 and Q9 SUV models in Georgia with the Q5 remaining in Mexico (for now).
GEORGIA – German automaker Audi has announced plans to invest $4 billion in its first American production facility, to be built in Georgia, with the goal of manufacturing up to 200,000 vehicles annually and creating about 4,500 jobs. The decision was revealed during a campaign rally in Perry, Georgia, where President Donald Trump and Audi Chief Executive Gernot Döllner appeared together on stage, highlighting the significance of the investment for both the region and the company.
Construction on the new plant at the Middle Georgia Mega Site is expected to begin in 2027, with the first vehicles rolling off the assembly line in the early 2030s. The facility aims to produce premium SUVs specifically tailored for North American customers, establishing North America as Audi’s third major production pillar alongside Europe and China.
The announcement comes as tariffs and trade pressures have increased costs for European automakers selling vehicles in the United States. Audi’s US tariffs on vehicles, parts, and raw materials cost the company around $1.4 billion last year. Building cars closer to American customers is expected to help the automaker mitigate these costs and strengthen its competitive position.
While the project has been praised by state officials—Georgia Governor Brian Kemp said, “Audi’s decision to establish its first American manufacturing plant here is another defining moment in that journey”—the investment still requires approval from the Volkswagen Group Supervisory Board. Audi Supervisory Board Chairman Manfred Döss has shown support, emphasizing the need for sustainable, long-term competitiveness. (source)
German automakers are all in a situation where they are trying to retain market share and/or find new market moves that make their financial survival more likely.
Remember, Europe wants China to voluntarily limit the number of EVs that come into Europe from Chinese auto companies in order to save their auto sector from complete collapse. However, Europe cannot force Beijing to limit the number of EVs that come into Europe from China, or Beijing might stop selling them carbon credit certificates that will result in fines to the EU automakers, and that might collapse the EU auto sector.
You would think that Europe would just get rid of the net-zero carbon regulations until they can stabilize their market and get back to a reasonable energy policy. Alas, that would mean reversing decades of climate change legislation.
No, the preferred route is to ask Beijing to limit hurting them. Think about this. It’s a remarkable mess.
Meanwhile today….
BERLIN, Oct 26 (Reuters) – Volkswagen could roll out the software currently used in its cars for the Chinese market to its mass-market offering in Europe, according to a media report on Monday, in a move that threatens to sideline its US partner Rivian.
Volkswagen’s ‘China Electronic Architecture’, a system developed for Chinese models in cooperation with local EV maker Xpeng, could form the basis for future cars from the group’s core VW, Skoda and Cupra brands, Manager Magazin reported citing sources. (read more)
Stubborn and stupid is a bad combination.
Add ignorance and hubris.
Deadly.
Every EU country and Britain whose leaders worship at the altar of “Manmade Climate Change” and genuflect to Gaia.
WINNING!
This is exactly what I voted for!
Do EUdiots have to buy carbon offsets for SUVs they manufacture in America?
How about for selling those American made cars in the EU?
No, the EU auto companies only face fines for gasoline powered vehicles made in the EU.
They buy Carbon Credit certificates from China because China makes a lot of EVs. In fact, Beijing is sitting on over $600+ million made by BYD alone from carbon credit certificates sold to Australia. Chinese automakers make just as much from carbon certificate sales as they do from the actual auto sales themselves.
Beijing then uses the money from the sale of the Carbon Certificates to lower the price of the EVs they sell into Europe. So, one way of looking at it is that Europe subsidizes Chinese cars sold in the EU.
Yeah, it’s a hot mess.
Thank goodness Trump is keeping us out of this madness. However, Canada (Carney) is jumping headfirst into it.
It’s almost like the leaders in Europe want to collapse their respective countries to usher in a new world order and strip away all human rights for the serfs so a select few of elites can rule over a slave class that will rent everything and own nothing until their usefulness is exhausted and the get sent to the euthinization chambers.
You forgot the sarc tag…😜
So, Europe is devolving back into feudalism only deeper and with an Islamic twist??
Reading this reminds me of the beginning of Brothers, the new Matthew McConaughey Woody Harralleson sitcom.
“A mostly true rumor.”
Might as well wave in China to provide “security guarantees” vis-a-vis Russia. They have already given Xi their economic freedom. And has you so often have said: “Economic Security is National Security.” That way we can exit NATO, continue to tariff the EU with impunity and focus on the Donroe Doctrice. I will gladly trade the smoldering ashes of Europe for a thriving and vibrant Central and South America (last night’s stolen election aside).
Perhaps that is the topic of the upcoming trilateral meeting between Putin, Xi and President Trump.
We’l see if it’s enough to swing the midterm vote. But it’s Georgia🤷🏿♂️
Sad but true
Wow, look at that. Tariffs work
It’s simple: German car manufacturers will manufacture their vehicles in the USA and sell them tariff-free to Europe.
Yea, well,….. I’ll never buy an Audi.
“Audi’s third major production pillar alongside Europe and China.” The common denominator is they all need to sell into the US market for their business plan to work. Only one option guarantees that. Genius.
The US has the government invented carbon credit financial tool also. That is how Tesla makes money, selling carbon credits to other companies. IMO it is also why Musk is talking about merging Tesla with SpaceX because he foresees Trump getting rid of the carbon credit and making Tesla a division of SpaceX he puts the spotlight on SpaceX emphasizing its AI and Starlink growth, while hiding from view, unless one digs into the SEC filings, the fact that Tesla does not make money selling EVs.
Every Republican running for House or Senate should use this in an ad as an example for what Republicans will do for you, and Democrats won’t.
You have an Audi?
I have an innie.
Uh oh…paging Wordman! You have some competition! LOL
Hands up, everyone who is tired of winning!
Ya mean making cars with more energy rich carbon fuels is easier than using wind and solar? Dang whoda thunk that?
I was a repeat Volkswagen customer for many years. I’ve abandoned VW because long gone is the vaunted German engineering caliber in their vehicles. VW autos are now disposable cars. Cant imagine how far down they will go with Chinese electronics.
How come none of these global leftist corporations want to manufacture on the West Coast? Hmmmmm.
“Europe wants China to voluntarily limit the number of EVs that come into Europe from Chinese auto companies in order to save their auto sector from complete collapse.”
Begging China is a feminine, ‘pretty please‘ approach to negotiations. Thank God America has in the White House a practitioner of the macho art of carrying that big stick with him into any negotiation!