Volkswagen Mulls Scout, Audi EV Assembly Plant in the US Thanks to IRA Incentives

Volkswagen weighs Scout, Audi EV assembly plant in the US thanks to IRA incentives 8 photos
Photo: Volkswagen | Collage
Scout CEO Scott KeoghVolkswagen Scout EV Pickup Truck and SUV rendering by TopElectricSUV.comVolkswagen Scout EV Pickup Truck and SUV rendering by TopElectricSUV.comScout Motors' renderings of its future vehicles: an electric SUV and an electric pickup truckScout Motors homepageScout CommunitiesFront-end teaser of the new still-unnamed Scout SUV
Volkswagen is set to begin production of the electric light truck under the Scout brand in 2026. Thanks to generous incentives under the Inflation Reduction Act, the German carmaker has decided to drop contract manufacturing plans and instead pursue building its own plant. At the same time, Audi is also looking to start production in the U.S. for the same reasons.
Volkswagen acquired the Scout brand in 2021 and is now preparing to launch an electric pickup truck and an SUV to capitalize on the brand’s off-road prowess. The Scout electric off-roaders are set to start production in 2026, with initial plans to commission production to a contract manufacturer. Magna and Foxconn have been shortlisted for the task, but this plan is now doomed, thanks to the very generous IRA incentives.

Instead of paying another company to assemble the trucks, Volkswagen is considering building them itself in a new local factory. A decision has not yet been made, although it is highly likely. Many car companies have announced plans to set up EV production facilities in the U.S. in light of the Inflation Reduction Act. Volkswagen is already producing the ID.4 in Tennessee, but the group is mulling building at least another plant to accommodate future EV models.

Apart from Scout, Audi is also looking to build its own U.S. assembly plant. Audi’s boss, Markus Deusmann, told Frankfurter Allgemeine Sonntagszeitung that the carmaker is weighing building an EV factory in the U.S. The move aims to take advantage of the subsidies offered through the Inflation Reduction Act, making local production more enticing. It is unclear whether Audi and Scout vehicles would be assembled in the same plant.

Considering they have very different vehicle lineups, it’s highly unlikely that a common factory makes sense. Still, Audi could build the Audi Q4 e-tron alongside the Volkswagen ID.4 in Chattanooga, thanks to their similarities. On the other hand, Scout could operate a separate production facility that could also produce Volkswagen trucks, provided the German carmaker wants to use the upcoming Scout vehicle platform for its products.

With $430 billion on the table, the IRA is the perfect carrot-and-stick strategy to incentivize North American production, while at the same time encouraging local supply chains for key battery materials and components. Volkswagen has not yet announced any strategic changes due to the IRA. Still, it is expected to stick with initial plans to invest over $7 billion in North America to add 25 new EVs by 2030.

Other carmakers, including Hyundai-Kia and Toyota, have announced plans to start EV production in the U.S. to benefit from the IRA subsidies and tax credits. Earlier this week, Tesla officially announced that it’s fast-tracking U.S. battery production while putting similar plans at Giga Berlin on the back burner. The move worries EU officials, who might see other companies abandoning their European plans in favor of U.S. production.
If you liked the article, please follow us:  Google News icon Google News Youtube Instagram
About the author: Cristian Agatie
Cristian Agatie profile photo

After his childhood dream of becoming a "tractor operator" didn't pan out, Cristian turned to journalism, first in print and later moving to online media. His top interests are electric vehicles and new energy solutions.
Full profile


Would you like AUTOEVOLUTION to send you notifications?

You will only receive our top stories