High Import Tariffs May Eliminate Audi's Top-Selling Model in the U.S. | Carscoops

      The Q5 is Audi's most popular model in the United States, making up about a third of its sales in the first quarter.

      However, it will be impacted by a 25% tariff on the auto industry and a 25% tariff on goods from Mexico.

      Dealers currently have a two-month inventory of Q5s that will not yet be influenced by these tariffs.

      During the first quarter of this year, the Audi Q5 represented approximately one-third of all new cars sold by the German manufacturer in the U.S. Nevertheless, Q5 models might soon start to vanish from dealership inventory due to President Trump’s expansive tariffs.

      More: Audi Halts All US Vehicle Exports Due to Tariffs

      While numerous automakers are still determining which tariffs apply to them, Trump has generated a confusing level of uncertainty with policies that allow for significant interpretation. Insider sources regarding Audi’s approach suggest that the brand anticipates facing three new tariffs, culminating in an astonishing total of 52.5%.

      Tariff Breakdown

      The initial impact is a 25% tariff on imported vehicles and any non-U.S. components. The second involves another 25% tariff on cars imported from Mexico. Additionally, a 2.5% charge is imposed for not fully adhering to the USMCA free-trade agreement.

      An Audi spokesperson told Bloomberg that the brand intends to continue selling the Q5 in the United States and is exploring ways to lessen the impact of the tariffs. They likely hope that Trump will reconsider the auto tariffs and pause them, as he recently did for similar tariffs affecting numerous countries.

      If Audi plans to maintain the Q5's sales domestically, it’s difficult to envision how they can justify it without implementing significant price increases.

      Production of the latest generation Q5, shown in the image above, has already commenced at Audi’s facility in Mexico.

      Audi's Options

      The Q5 models sold in the U.S. are produced at the company’s San Jose Chiapa plant in Mexico. Currently, only the previous generation is available in America, despite the new Q5 also being manufactured at the same location. This plant creates vehicles for the global market, and as a result, the Q5 was not designed to comply with USMCA standards. According to Bloomberg, merely 2% of the Q5’s components are sourced from the U.S. or Canada.

      Volkswagen chief executive Oliver Blume stated that the global automotive giant is awaiting further clarity from the U.S. government before making any investment decisions, including potentially constructing vehicles domestically. Audi models subject to tariffs are presently being held at U.S. ports, and dealers are believed to maintain around a two-month supply of cars that will not be subject to the tariffs.

      Reports indicate that VW was considering the possibility of producing some Porsche and Audi models at a plant currently being built in South Carolina for the Scout Traveler and Scout Terra. However, no plans have been confirmed, and this would not serve as a short-term solution, as production is not expected to commence until late 2026.

      Audi continues to sell the previous generation of the Q5 in America.