Volkswagen Seeks Separate Tariff Deal with US... Plans Tens of Trillions Won Investment

German automaker Volkswagen Group is seeking to negotiate a separate agreement with the Donald Trump administration to lower tariffs. This plan involves investing in the United States to reduce tariffs, independently of the ongoing negotiations between the European Union (EU) and the United States.

On the 26th (local time), German weekly magazine Der Spiegel reported that Volkswagen is presenting the US government with an investment plan worth tens of trillions of won and is considering an agreement to reduce tariffs by the amount of the investment.

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Volkswagen's investments in the US include a new factory being planned by its subsidiary Audi, the development of electric pickup trucks by its American subsidiary Scout Motors, and investments in its partner, US electric vehicle startup Rivian.

Oliver Blume, CEO of Volkswagen Group, stated, "We have already presented our idea to the US President," and added, "After a trade agreement is reached between the EU and the US, our company will take its own measures."

Volkswagen has established a joint venture with Rivian to develop electric vehicle computer systems (architecture), investing $5.8 billion (about 8.03 trillion won) so far. Der Spiegel reported that Volkswagen hopes President Trump will lower tariffs, considering that Rivian might have already gone bankrupt without this capital injection.

Compared to competitors such as BMW and Mercedes-Benz, Volkswagen Group produces fewer vehicles in the US, making it more vulnerable to the impact of tariffs. Among its brands, Audi and Porsche do not have production facilities in the US, so vehicles sold in the US are subject to a minimum tariff rate of 27.5%.

In its earnings announcement on the 25th, Volkswagen Group revealed that US tariffs cost the company 1.3 billion euros (about 2.11 trillion won) in the second quarter of this year. Its operating profit margin fell from 6.5% in the second quarter of last year to 4.7% this year. In particular, Porsche's operating profit in the second quarter plummeted by 91% compared to the same period last year.