Due to Biden’s Inflation Reduction Act, Audi might produce electric vehicles in the U.S.

Without a doubt, the Inflation Reduction Act is causing huge changes in the U.S. electric car sector, both for consumers and manufacturers.

Audi CEO Markus Duesmann stated late last week that while no decisions have been made, the new law makes production EVs in US “extremely attractive.”

If Audi builds EVs in the United States, it will be the latest company to do so. Since the signing of the IRA in August of last year, over $28 billion in EV manufacturing investments have been announced for the United States.

The IRA’s attacks continue unabated.

The Inflation Reduction Act (IRA), which became law in August of last year, shook up the market for electric vehicles in the United States. Audi is the latest automaker to respond to a change in the way the law encourages domestic EV manufacturing, announcing on Friday that it is investigating the construction of a new EV factory in the United States.

Audi CEO Markus Duesmann told the German daily Frankfurter Allgemeine Sonntagszeitung, “The IRA has made developing a U.S. facility for electric cars more attractive.” According to Reuters, Duesmann stated that if Audi builds EVs in the United States, it would likely be in a joint facility with the Volkswagen Group. The Washington Post quotes Duesmann as saying, “Decisions have not yet been taken, but the Volkswagen Group will likely produce additional automobiles for the U.S. market in the future.”

While Volkswagen has a plant in Chattanooga, Tennessee, Audi currently has no plants in the United States, and its e-tron electric vehicles are assembled in Brussels, Belgium. Audi’s nearest production location to the United States is in San Jose Chiapa, Mexico, where the Q5 is manufactured. Increasingly, EVs must be built in the U.S. to qualify for some of the modified tax benefits outlined in the IRA. Additional recent government legislation, particularly the CHIPS and Science Act, encourages companies to manufacture EV components, including as batteries and silicon chips, in the United States.

According to the Electric Vehicle Association, between the August signing of the IRA and the end of 2022, approximately $28 billion in EV manufacturing investment announcements have been made. The Washington Post reported that according to data from the Bureau of Economic Analysis, investment in all sorts of U.S. manufacturers will increase from approximately $70 to $75 billion per quarter in 2020 to $88–$105 billion per quarter in 2022. According to an analyst with whom the newspaper spoke, the sector anticipates that these numbers will continue to rise as more incentives become available.

Audi has big plans to electrify its U.S. fleet. Audi of America has stated that by 2025, one-third of its portfolio will be electrified. Audi has also announced that it will invest approximately $19 billion in the development and production of future hybrid and electric vehicles. These concepts would be well-suited for a new U.S. facility.