Volkswagen announced on January 25 that its decision to build a factory in the U.S. hinges on whether the U.S. government will lift automotive tariffs.
In an interview with the German business newspaper Handelsblatt, Volkswagen Chief Executive Officer (CEO) Oliver Blume stated that the company would not proceed with plans to construct an Audi plant in the U.S. unless car tariffs are reduced.
Audi has been exploring the establishment of a U.S. production base since 2023, initially finding economic justification for the investment due to subsidy programs. However, the landscape shifted when the Trump administration imposed tariffs on European automakers.
Blume revealed that Volkswagen has incurred costs of 2.1 billion EUR (about 2.5 billion USD) over the past nine months due to the Donald Trump administration’s tariffs.
He emphasized that unless the tariff burden changes, the company cannot sustain large-scale additional investments. Blume stressed the urgent need for both immediate cost reductions and a stable, long-term business environment.
While acknowledging that growth opportunities for Volkswagen’s U.S. operations still exist, Blume conceded that the goal of achieving a 10% market share is no longer feasible. Instead, the company plans to pursue gradual development moving forward.
Volkswagen is expected to unveil its five-year investment plan in March. Two years ago, the automaker scaled back its five-year investment plan from 180 billion EUR (about 215 billion USD) to 160 billion EUR (about 192 billion USD).