The Inflation Reduction Act (IRA) has caused a stir in the electric-vehicle market in the U.S., prompting Audi to consider building a new EV factory in the country. With the IRA encouraging domestic EV production, Audi’s response aligns with its ambitious electrification plans for its U.S. fleet.
Changing Tax Credits in IRA Pushes for More EVs to be Assembled in the US
To qualify for some of the changed tax credits laid out in the IRA, EVs increasingly need to be assembled in the U.S. Other recent federal legislation, like the CHIPS and Science Act, are also encouraging companies to make EV components in the country.
Investment in U.S. Factories on the Rise as EV Manufacturing Investment Tops $28 Billion
The IRA has already prompted over $28 billion in EV manufacturing investment announcements, according to the Electric Vehicle Association. Investment in U.S. factories of all types is also rising, with investment increasing from $70 to $75 billion per quarter in 2020 to $88–$105 billion per quarter in 2022.
Audi’s Ambitious Electrification Plans for its U.S. Fleet
Audi of America aims to have one-third of its portfolio electrified by 2025 and invest around $19 billion in developing and producing new hybrid and electric vehicles. A new U.S. plant would fit well with those plans, given that Audi does not currently have any plants in the country.