Volkswagen AG plans to build a new factory for its premium Audi brand in Georgia and expand an existing facility in South Carolina, a move that comes as tariffs have severely eroded the German automaker's profits. President Donald Trump is expected to announce the Georgia factory and South Carolina expansion on Saturday.
The plans were reported Saturday by Bloomberg, which described Volkswagen as hopeful that the announcement will yield potential relief from tariffs that have battered its bottom line. The timing also lines up with Trump seeking a political win in the final stretch of the midterm election cycle, according to the same report.
A Reversal From Months of Uncertainty
The news marks a striking shift from where things stood just months ago. Audi's U.S. factory ambitions had previously been described as halted amid the impact of Trump-era tariffs on the brand's profits, according to Automotive News, which also reported that Volkswagen might cancel U.S. Audi plant plans entirely without a tariff rethink from Trump. As recently as Thursday, German outlet mittelstand-nachrichten.de reported that Audi was in advanced planning for its own Georgia factory but had not reached a final decision, and that in the meantime Audi models were being considered for short-term production at the Scout plant in South Carolina, built on the Scout platform.
The financial pressure behind that back-and-forth is steep. Audi recorded a U.S. deficit of more than 1 billion euros last year because of U.S. import tariffs, per mittelstand-nachrichten.de, and senior Volkswagen decision-makers reportedly expect a U.S. loss of around 800 million euros for this year.
Billions in Tariff Costs Companywide
The Georgia and South Carolina plans land against a backdrop of mounting tariff damage across Volkswagen's broader operations. CEO Oliver Blume said in May that tariffs represent a burden of 5 billion euros, or $5.88 billion, per year on the company's operating profit, according to Reuters. Separately, Volkswagen reportedly incurred $2.5 billion in tariff costs during the first three quarters of 2025, per Yahoo Finance, which also reported that the company walked back a previously stated goal of capturing 10% market share in the United States in favor of more gradual growth.
Those losses have rippled into Volkswagen's global workforce. The company's restructuring plan includes more than 50,000 additional job cuts, with about half expected to land in Germany, Reuters reported in a separate September piece on the road ahead for the automaker's restructuring. Volkswagen had also already cut its workforce in China from 90,000 to 70,000 amid falling sales there, according to the same report.
The tariffs at the center of the dispute stem from a 2025 policy action. The Congressional Research Service notes that Trump imposed 25% tariffs on vehicle imports effective April 2025, with exemptions for the U.S. content of USMCA-compliant vehicles, and on certain automobile parts effective May 2025, according to Congress.gov.
Georgia's Track Record With Big Auto Investment
Georgia has already landed one marquee auto investment that offers a point of comparison. Hyundai Motor Group and the state announced an $8 billion deal for a manufacturing plant in Coastal Georgia expected to create roughly 14,500 jobs, according to The Current GA. The Hyundai Motor Group Metaplant America and seven onsite affiliates had confirmed 4,365 of 8,500 promised hires as of June, per the outlet's reporting, while the facility itself received around $2.1 billion in state and local tax breaks, credits and other inducements plus $50 million in cash. Nine Hyundai suppliers in the region separately promised about 5,200 jobs in exchange for incentives including roughly $22 million in cash, the same report found.
South Carolina, meanwhile, already hosts Volkswagen's Scout Motors project, which the state has touted as a $2 billion investment with the potential to create 4,000 or more permanent jobs, according to the South Carolina Department of Commerce. Vehicle production at the Blythewood site is targeted to begin by the end of this year, with the facility potentially producing more than 200,000 Scout vehicles annually at full capacity, the agency says.
What remains unclear is how the new Georgia and South Carolina plans will be structured. The reporting reviewed does not specify the Georgia plant's location, construction timeline, investment amount or projected job count, nor does it confirm whether either state has offered incentives for the Audi or Volkswagen projects. It also does not establish whether tariff relief has actually been granted or promised — only that Volkswagen is hopeful the announcement will produce it.
