BERLIN, Germany: Audi is moving forward with plans to expand production in North America, and CEO Gernot Doellner said a decision on location is expected this year.

The Volkswagen-owned luxury automaker is considering either building a new facility or utilizing an existing Volkswagen Group plant as it looks to strengthen its presence in the U.S. market.

"We have various options: We could go into existing Volkswagen Group plants, or we could build up additional capacity," Doellner said. "We will make a decision this year."

Audi has been evaluating North American production expansion since 2023, spurred by tax incentives under the Inflation Reduction Act passed by former U.S. President Joe Biden. However, renewed tariff threats from President Donald Trump—including a potential 25 percent levy on all car imports—have added urgency to the decision.

The Volkswagen Group, which has a strong presence in Mexico and is building a battery plant in Canada, is among the most exposed to potential tariffs. VW CFO Arno Antlitz previously stated that the company is prioritizing U.S. production to mitigate risks.

While Doellner declined to specify whether Audi's new site would be in the United States, tariffs on imports from Mexico and Canada could make domestic production the most viable option.

Audi currently operates a plant in Puebla, Mexico, where it builds the Q5 SUV and has committed to manufacturing an additional electric vehicle. Meanwhile, Volkswagen's Tennessee plant produces the electric ID.4 and two SUV models, and its Scout subsidiary is constructing another U.S. factory set to begin production in late 2026.

For Audi, the U.S. remains a key market. Nearly 197,000 vehicles were sold in the country last year, accounting for 11 percent of its global sales.

Despite the political and economic uncertainties, Doellner emphasized that Audi's expansion plans are part of a long-term strategy rather than a reaction to recent policy changes.

"We have a long-term strategy oriented towards the market and customer needs rather than short-term changes," he said.

With tariffs looming and competition in the electric vehicle segment intensifying, Audi's decision on North American production is expected to shape its growth trajectory in the coming years.