Volkswagen CEO Oliver Blume doesn’t mince words when the math doesn’t work. In a Handelsblatt interview, he said the automaker won’t build a planned U.S. Audi factory unless tariffs drop—because “large additional investment cannot be funded” under current conditions. That’s not corporate hedging. It’s a direct warning about what happens when tariff policy makes billion-dollar factory bets too risky to take.
For Audi buyers, this isn’t abstract trade policy. It’s the difference between paying import tariffs baked into sticker prices or buying domestically built cars that sidestep those costs entirely. And right now, VW is signaling the tariff math doesn’t close.
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Why Local Production Shields You From Price Swings
Blume’s concern has hard numbers behind it. VW reported that tariffs cost the company €2.1 billion ($2.5 billion) in the first nine months of 2025 alone. That’s money extracted from margin and passed along through tighter inventory, reduced incentives, and higher transaction prices. Audi, which imports most of what it sells here, sits dead center in the blast zone.
Building locally changes the equation. Domestic production cuts tariff exposure, stabilizes supply chains, and keeps pricing predictable. That’s why Audi explored U.S. manufacturing since 2023, with locations like Chattanooga and South Carolina in the mix. But Bloomberg reported this week that those plans now look far less certain than they did six months ago.
The fallout shows up fast at the consumer level. Finance arms tighten lease terms first when residual value forecasting gets murky. Popular trims vanish as automakers simplify lineups to protect what’s left of their margins. Incentives become regional lotteries based on port timing and inventory depth. You won’t see a press release—you’ll just find the Q5 configuration you wanted listed as “unavailable” when you try to build one online.
The irony cuts deep. Tariffs pitched as pro-manufacturing tools can kill manufacturing investment when the policy environment feels unstable. Automakers won’t commit billions to factories if trade rules might shift before construction finishes. When that confidence evaporates, companies default to importing and passing the tariff cost straight to you.
My Verdict
If Audi doesn’t build in America, American buyers lose—period. You’ll pay more, wait longer, and get fewer trim choices while VW absorbs tariff hits or pushes them downstream. Blume’s message is unusually blunt: predictable trade policy matters more than political theater. Until Washington delivers that stability, expect German luxury badges to carry steeper price tags and thinner dealer inventory than they should.
