On the campaign trail before his election victory in November 2024, President Trump used the future of the U.S. auto industry as a key slice of his greater economic policy, as he made some bold promises to promote domestic growth during his presidency.
In a speech in front of a crowd in Savannah, Ga., in September, the now-president proposed tax benefits for foreign automakers willing to set up shop in the U.S. and threatened those who dared import their cars onto American soil.
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“I want German car companies to become American car companies. I want them to build their plants here,” Trump said.
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“I will give you the lowest taxes, the lowest energy costs and the lowest regulatory burden and free access to the best and biggest market on the planet, but only if you make your product here in America,” he said.
“If you don’t make your product here, then you will have to pay a tariff, a very substantial tariff, when you send your product into the United States.”
Workers assemble the new all electric Porsche Macan at the Porsche assembly plant on May 6, 2024 in Leipzig, Germany.
Jens Schlueter/Getty Images
No substitute for American car production
According to a new report by the German business publication Handelsblatt, Trump’s threat of imposing tariffs on imported goods has automakers in the country worried, including one of the world’s largest — the Volkswagen Group.
Trump considers the word ‘tariff’ as “the most beautiful word in the dictionary,” but the threat of tariffs is not particularly rosy for Vee-Dub. Sources close to the situation told the publication that the Volkswagen Group is considering shifting some production of U.S.-bound Porsche and Audi cars to the U.S.
The Handelsblatt report does not mention which specific Porsche or Audi models would be built in the U.S. or when VW will shift its production lines stateside, but it does mention that the new South Carolina plant intended for VW’s new Scout Motors EV brand could dedicate some space for Audi production.
Scout Motors’ new plant is currently under construction in Blythewood, S.C. Built at a price tag of $2 billion, Scout’s new plant will employ about 4,000 workers and will produce the off-road-oriented Traveler SUV, Terra pickup, and partially gas-powered Harvester series-hybrid models.
The report also mentions that Audi and Porsche production could also take place at VW’s plant in Chattanooga, Tenn. Currently, its UAW-represented workforce produces the Volkswagen Atlas SUV and the Volkswagen ID.4 electric crossover.
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“[The Europeans] treat us very, very badly,” says President Trump
Porsche and Audi are in a precarious situation regarding tariffs, as both German luxury and performance car brands do not produce any cars in the United States. The report in the German business publication comes as President Trump’s 25% tariff on imports from Mexico and Canada is set to be effective on Feb. 1.
Additionally, he has also vowed to punish the European Union with tariffs on the basis of “fairness.”
“The European Union is very, very bad to us,” he said on Jan. 21.
“They don’t take our cars. They don’t take our cars at all. […] We have a $350 billion deficit with the European Union. They treat us very, very badly. So they’re going to be in for tariffs.”
Porsche’s top U.S. seller, the compact Macan crossover SUV, is currently made in Lezipig, Germany, in a factory shared with the Panamera sedan. Almost all of the Porsche lineup is made in Germany, save for the Cayenne SUV, which is made in Bratislava, Slovakia, and Malaysia.
Audi makes its vehicles in various places outside of Germany, except for the United States. Its top-selling vehicle in the U.S. is the Q5 crossover SUV. In 2018, production of North American variants shifted from Ingolstadt, Germany to San José Chiapa, México.
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Volkswagen’s alleged toying with American production comes at a precarious time for the German brand, as its year-end sales have not been promising in 2024.
Global sales across the VW group fell 2.3% in 2024 despite the diverse automaker selling over 9 million cars. On their EV side, the group delivered 744,800 EVs last year, a figure down 3.4% from 2023.
However, sales at the prolific Porsche and Audi brands are showing that U.S. buyers are shunning their premium products.
While sales of its prolific 718 and 911 sports cars are up year-over-year, sales of the Porsche Macan in the United States are down about 6.56%, from 26,947 units in 2023 to 25,180 in 2024.
Things are faring much worse at the Audi, as U.S. sales of many of the four rings’ models are down double digits. Its’ bestseller, the Q5, saw a 23% drop year-over-year in the U.S., from 74,145 units in 2023 to 56,799 in 2024.
Volkswagen AG is traded on OTC markets in the United States as VLKAF and on the Frankfurt Stock Exchange under the ticker VOW.
