It seems a change in American EV subsidies favoring domestic production of cars and batteries is netting a result of car manufacturers moving new production to American factories. One of the latest rumors surrounds Audi, and perhaps that should be no surprise given what we know about Volkswagen Group investment in their new (also old) EV SUV and truck brand Scout.
When it comes to rumors around German car brands, the German automotive industry press is always an interesting place to watch. Sources for magazines like Automobilwoche are often board level executives, meaning that the rumors are likely and the only thing that could stop them is a change of position by those very same board members. Notably, those executives also tend to float ideas in the press to gauge reaction from key groups ranging from the general public to the German labor unions.
More recently, news around new Volkswagen Group production in the USA has centered around Scout. The storied former truck company was acquired several years go in a commercial vehicle acquisition and a plan was quickly hatched to dust off the badge and launch anew, using Volkswagen Group component sets and assembling a team of executives led by former Audi of America boss Scott Keogh. Most recently serving as Volkswagen Group President, Keogh’s transition to Scout almost seems like a demotion on the surface of it, but dig below and you see a highly talented executive who has the unique position of being both American and well trusted in Germany. As the marketing mind who took Audi to the Super Bowl, placed them in Marvel movies and hired NFL Films to produce the Truth in 24 documentaries, he’s also got a track record for highly creative and successful action.
Not surprisingly, the American bonafides of Scout would likely be somewhat eroded being built somewhere else, so recent automotive industry talked as seemed to confirm Scout would go with domestic production… which makes sense. Scout will also likely be using Audi’s PPE architecture for its vehicles, meaning a domestic production point for Scout could also mean domestic production for Audi (Q6 e-tron, A6 e-tron, etc.) and possibly even Porsche (Macan). While any of that would simply be speculation, a recent story in Automobilwoche states that Audi AG CEO Markus Duesmann reportedly shared with Frankfurter Allgemeine Sonntagszeitung that it is conceivable Audi will produce in the Scout plant.
So where could that plant be located? Scout hasn’t confirmed just yet, but back when Audi was considering production locations for Q5 that ultimately resulted in the San Jose Chiapa plant, Volkswagen’s Chattanooga, TN plant location where the Atlas is produced was seriously considered. It was reported at the time that Volkswagen had more land there to double capacity, and the supplier infrastructure is already in place. Since then, VW ID.4 production has already begun, and in theory a second group plant could take shape.
The Q5 Mexican production thinking is highly relevant here. Audi hand planned worldwide Q5 production, and exportation of American-built cars would have been more costly due to tariff laws. Several key markets for which the Q5 was planned had restrictively high tariffs for American produced vehicles, whereas Mexican produced vehicles did not share those impediments. For Scout, that cost may be worth accepting because it establishes Scout as a definitively American brand. For Audi, the difference might be specific regional North American production of a key volume model such as the Q6 e-tron. Time will tell.