On Saturday night, at a campaign rally in Perry, Georgia, President Donald Trump announced that Audi would build a factory down the road. Audi’s chief executive, Gernot Döllner, was standing next to him. On Sunday Döllner held a media roundtable to explain himself, as CNBC’s Michael Wayland reported, and as Reuters reported, what he had to explain was really two separate things: why Audi wants a plant in America, and why it let Trump announce it ten days before the Nov. 3 midterms.
The first one is easy. The plant would cost about $4 billion and be Audi’s first in the U.S. It is supposed to start building the Q7, Q8 and Q9 SUVs in the early 2030s, with capacity of up to 200,000 vehicles a year, roughly half of which Audi says will be exported outside the U.S. Georgia Governor Brian Kemp’s office says the investment will create about 4,500 jobs at the Middle Georgia Megasite, and the state is a bit more precise about timing than Audi is, putting commercial production in 2031. Audi’s own announcement casts North America as a third pillar of its manufacturing network, next to Europe and China.
The reason is mostly tariffs. Right now Audi imports every car it sells in the U.S. from Europe or Mexico, which means every one of them gets taxed at the border. Audi says Trump’s tariffs on cars, steel, aluminum and parts cost it about €1.2 billion ($1.4 billion) last year. The tariff on cars from Germany has since come down to 15% from 25%, which is better, though 15% of the price of a luxury SUV is still real money. A car built in Georgia and sold in Georgia doesn’t cross a border, so nobody taxes it. Meanwhile sales have been bad: Audi’s U.S. deliveries fell 16% from 2024 to 2025 and were roughly flat through the third quarter of this year. Mercedes-Benz and BMW already build cars in the U.S., and Döllner pointed out that Audi is the last of the big German luxury brands to do it.
“The United States is the second largest premium market in the world, and today we are not fully exploiting this potential. We are changing that.”
Fine. Now the second thing. Döllner said the Trump administration asked Audi to announce the plant at the rally, which was promoting Republicans. Georgia has competitive races for both Senate and governor this year, and Trump is keen to show that his auto tariffs are bringing manufacturing home. That argument has run a bit ahead of the data, and a $4 billion factory makes much better rally material than an industry chart. Here is how Döllner described the timing:
“It was … a three-year project that, at the end, by coincidence, led to that moment yesterday.”
He also told reporters: “If the American president invites you, you accept the invitation. That is what respect for the office and for the country in which we invest demands.” Translation: you are about to put $4 billion into a country whose president personally sets the tariff rate on the products you sell there, and he has asked for a favor. That is the whole calculation. Döllner said Audi looked at more than 70 locations over “many months” and went through “intense” negotiations with public officials. He would not give full details of the deal with the U.S., including whether it comes with any tariff relief. I’d say that is the most interesting thing he didn’t say.
Meanwhile, in Germany
The announcement lands in the middle of a hard restructuring at Volkswagen, Audi’s parent, which plans to cut 50,000 jobs and close four German plants, an Audi factory among them, between 2031 and 2034. According to leaked board documents first reported by WirtschaftsWoche and covered by Carscoops, that Audi plant is Neckarsulm, reportedly scheduled to stop production in 2034. Put the dates next to each other: Georgia starts making cars around 2031, and a German Audi plant stops around 2034. Döllner says that is a coincidence too, more or less:
“This is not a decision against Germany. Germany remains the backbone of Audi. We develop our cars here. Our technologies are created here, and Georgia does not take any task away from us in Germany.”
As a statement about engineering, that is presumably true. The design work stays in Germany. But the American market only buys so many Audis, and today all of them are built in Europe or Mexico. If 100,000 or so a year get built in Georgia for American buyers instead, that is 100,000 or so fewer built somewhere else. That’s not an accusation. It’s just what happens when you add capacity in one place and are cutting it in another.
German labor certainly sees it that way. A spokesperson for IG Metall, the metalworkers’ union, said it was “hard to understand” why Döllner would extend a hand to Trump during an election, adding: “Trump has never failed to make it clear what he is after: he wants to weaken our domestic economy, particularly the automotive sector.”
Who actually decides
This is where the corporate governance comes in. Trump announced the plant, but Volkswagen’s supervisory board has to approve the investment before it happens. German supervisory boards are half employee representatives, and VW’s deputy chair is Christiane Benner, who also runs IG Metall. Her line was more careful than her spokesperson’s. A new U.S. plant is “right and necessary” for the company’s position in that market, she said, but “firm prospects for workers at all sites, particularly those here in Germany, must be clearly defined and set out.” Olaf Lies, premier of Lower Saxony, which is Volkswagen’s second-largest shareholder, said the U.S. expansion was an opportunity as long as German workers also benefit.
Put those statements together and you have a negotiating position: yes to Georgia, as long as Germany gets something in writing. I’d guess that is roughly how the vote goes. The people who have to approve the American factory are mostly the people who lose if it means a German factory closes, and they are not opposing it. They are setting a price.
Audi of America President Vito Paladino said more details on U.S. investment and production are coming. In the meantime, Audi is spending $4 billion on the assumption that American tariffs on German cars will still be in place in the early 2030s, and that is the one point on which Audi’s management and IG Metall seem to agree.