Audi Sales Down Over 18 Percent Compared to Last Year. May Shift EV Production to U.S.
Thanks to the new U.S. federal EV tax credit rules Audi may begin to build EVs here to help boost sagging sales.
You are likely keenly aware of the global supply chain issues that are impacting automobile manufacturers all over the world. It is not just Audi feeling the pinch but with the release of recent sales figures we see just how big the impact has been. Year to date (YTD) sales total 132,821 vehicles compared to 162,854 at this time last year. That is a decrease of 18.4 percent. Certified Pre-Owned (CPO) sales were hit even harder. 2022 YTD CPO sales are 25,389 versus 40,389 last year. That is a decrease 37.1 percent. But it is not all doom and gloom. The one bright spot are EV sales. The e-tron, e-tron GT, and e-tron Sportback all show sales gains compared to 2021. Audi may leverage the new U.S. federal EV tax credit rules to increase EV sales even more.
Earlier this year, the Inflation Reduction Act was passed, and it changed the rules around the federal EV tax credit. The credit is still worth up to $7,500 on the purchase of a new electric vehicle. However, the rules have changed in order to encourage EV production in the U.S. In order to be eligible for the credit the EV must be produced and assembled in the U.S. And their battery materials must be sourced from within, or from a country with which the U.S. has a trade agreement. So, what does this mean for Audi? Well, Audi has never had a U.S. car plant. But these new rules may change that.
Audi Future Plans
Audi has already announced plans to phase out gasoline vehicles. By 2025 they plan to have a U.S. lineup that will consist of 30 percent of electrified vehicles. These EVs will need to be built somewhere. And this new tax credit rule it may be the time for Audi to consider building in the U.S. According to the website INSIDEEVs a recent article was published by Automotive News stating that Volkswagen Group is considering building EVs in the U.S.
Oliver Hoffman
The chief of technical development at Audi is Oliver Hoffman. In a recent interview Hoffman made it clear that the new EV tax credit rules have Audi rethinking their production strategy. “To be honest, we are looking right and left: What can be the opportunity for us to get together with a strong [Volkswagen Group] in the background. And now we are on the way, especially as the rules changed and as you know there is big spending of the government for EVs, with special circumstances, and we are looking forward to how we can meet these requirements.” Said Hoffman.
Not Just Audi
The change to the EV tax credit rules has several manufactures considering expanding their U.S. manufacturing footprint. Kia and Hyundai have recently announced plans to build EV manufacturing plants in the U.S. It makes sense because a $7,500 credit is substantial for buyers. However, the new rules do have vehicle price and income caps in place. So, building a high-priced Audi EV in the U.S. will likely not qualify for the credit. But a lower-end volume EV built here could pay significant dividends for both Audi and customers. No formal plans have been announced yet by Audi. However, the industry is moving very quickly right now so we would not be surprised to see an announcement within the next few months.
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