Volkswagen boss tells Trump administration what needs to happen or he’s pulling billions in US investment

Volkswagen Group’s CEO has given President Donald Trump’s administration a clear warning: the company will cancel plans for a new US production plant unless automotive tariffs are reduced significantly. Oliver Blume, who leads the German car company that owns brands like Audi and Porsche, said the current tariff costs make new investments impossible.

“If the burden of tariffs remains unchanged, a large additional investment is not financially viable,” Blume said. He needs lower costs in the short term and stable business conditions for the long run. So far, talks with the US government haven’t produced any positive results.

According to Brussels Signal, the numbers show why Volkswagen is concerned. The auto tariffs President Trump put in place in 2024 have already cost Volkswagen Group €2.1 billion in just the first three quarters of 2025. That’s a huge amount of money lost on taxes alone, making any new plant investment very risky.

Trade policy imbalances are pushing major automakers away from US investment

The plant at risk is an Audi facility that Volkswagen first announced in 2023. By May 2025, the company was looking at three possible locations, including Chattanooga, Tennessee, and Columbia, South Carolina. These would be high-tech manufacturing jobs that states want, but they’re now uncertain because of trade policy. The uncertainty reflects broader concerns about Trump’s controversial economic vision that many business leaders find troubling.

This US investment problem comes as Volkswagen finalizes its five-year investment plan. The company is already cutting spending globally, reducing its budget from €180 billion down to €160 billion for new models, technology, and factories. Blume said more cuts might be needed before the company presents its final plan in March alongside its 2025 annual results.

If the US doesn’t offer better conditions, Volkswagen is ready to focus elsewhere. Blume said Europe will remain the company’s most important market, and they’re investing €10 billion in battery production in Spain. They’re also planning a new family of small electric cars under the VW, Cupra, and Skoda brands for the European market.

Blume is also pushing for better industrial policy in Europe with less red tape and fair trade conditions. He criticized how Europe has responded to US tariffs, pointing out a major imbalance. European carmakers pay 15 percent tariffs when exporting vehicles to the US, while US producers only pay 10 percent when exporting to Europe, and that 10 percent might soon disappear.

“This deal is asymmetrical and contorts competition,” Blume said. If the US wants major foreign investment in car manufacturing, especially for electric vehicles, they need to fix that imbalance. Some former Trump supporters now regret backing his trade policies after seeing their economic impact. Otherwise, the money will go to countries that offer better long-term stability.