Audi, a subsidiary of Volkswagen VWLGY, is set to expand production in North America, focusing on key models for the U.S. market.

In an interview with Reuters, CEO Gernot Doellner stated that the company will decide this year whether to build a new facility or utilize an existing Volkswagen Group plant. This move aligns with a broader industry trend of localizing production closer to the U.S. in response to increasing protectionist policies.

Audi, which currently operates a plant in Mexico, has been exploring additional North American production since 2023, influenced by tax incentives from the Inflation Reduction Act.

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“We have various options: We could go into existing Volkswagen Group plants or build additional capacity,” Doellner told Reuters. “We are open to solutions and are evaluating various options. We will make a decision this year,” he added.

Earlier, Volkswagen had opposed Trump’s proposed 25% tariffs on Mexican imports, warning of potential economic harm to U.S. consumers and the global auto industry. The looming threat of these tariffs has also prompted Doellner to establish a clear timeline for Audi’s North American expansion.

In January, XPeng and Volkswagen announced plans to develop a super-fast charging network in China, providing EV owners access to over 20,000 chargers. This initiative follows Volkswagen’s 2023 investment in XPeng and their joint plans to launch co-branded EV models by 2026.

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Price Action: VWAGY shares are down by 0.66% to $10.51 at the last check on Friday.

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