AG will build a new factory for its premium Audi brand in Georgia and expand a facility in South Carolina, Donald Trump will announce Saturday, as the US president looks to notch a political win in the final stretch of the midterm election cycle.

The German automaker is also hopeful the announcement will yield potential relief from tariffs that have severely eroded profits.

Volkswagen will build a new plant in Macon, Georgia, to manufacture the Audi Q7, Q8 and Q9 models, with construction of the greenfield project due to begin soon, according to a US official involved in the talks. The facility will have the capacity to produce 200,000 vehicles per year, the official said.

Volkswagen will also expand its Scout Motors plant under construction in Blythewood, South Carolina, adding 25,000 units per year of capacity for a model yet to be determined, said the official, who spoke on condition of anonymity to detail the plans. Trump is set to tout the Volkswagen announcement Saturday night during a political rally in Perry, Georgia — a short drive from Macon — where he is trying to boost Republican candidates who are either trailing or effectively tied with Democrats in the polls.

In exchange, Trump and the company will remain in talks on some kind of tariff reprieve, though any changes would apply to all manufacturers who expand US production, not just Volkswagen and its brands, the official said. Talks are focused on a potential deal that would give some sort of proportional tariff relief credit to manufacturers that bring concrete commitments of new production to the US, the official said.

It generally takes years to build a new auto assembly plant, meaning production likely won’t begin until later this decade. Audi presented the proposal in the last few weeks to Commerce Secretary Howard Lutnick, who relayed it to Trump, the official said. The White House didn’t immediately respond to a request for comment and a spokeswoman for Audi declined to comment.

The new site gives Trump a fresh commitment of investment and jobs in the battleground state, where polls show GOP Senate candidate Mike Collins trailing Democratic incumbent Jon Ossoff — but a governor’s race that is essentially a tossup. Trump has been campaigning to drum up support for Republicans to avert broad GOP defeats in the midterm elections next month, with key races in traditionally red states such as Kansas and Texas now considered to be in play for Democrats.

Unlike rivals BMW AG and Mercedes-Benz Group AG, Audi relies exclusively on imports from Europe and Mexico in the US, subjecting it to punishing tariffs. Its top-selling Q5 SUV is hit particularly hard because it does not comply with the USMCA, the trade pact with Canada and Mexico Trump negotiated in his first term. Audi’s US sales were down 16% this year through September.

Europe’s biggest carmaker has considered adding another American manufacturing site on and off for years, including dating back to 2018 during Trump’s first term. Audi had repeatedly delayed a decision, with VW CEO Oliver Blume saying the group cannot afford to pay high tariffs and heavily invest in new production capacity at the same time.

Selecting Georgia places Audi’s new plant in one of America’s foremost political battleground states, creating an incentive for both Democrats and Republicans to back the deal, or at least not upend it.

Trump won Georgia in 2016 and 2024, while Joe Biden prevailed in 2020. The Peach State is currently represented by two Democratic senators, both of whom are considered potential presidential contenders. The governor’s race underway is a coin-flip and one of the most closely watched in the nation, with Trump’s rally and announcement Saturday aimed at boosting Republican Rick Jackson.

The announcement comes as the president zigzags across the country in a pre-voting campaign blitz, even as polls show his popularity at or near all-time lows and Republicans facing the prospect of a substantial defeat on Nov. 3.

VW, which owns Audi and Porsche, is trying to reset a US business that has long fallen short of its ambitions. Blume has identified North America as one of VW’s biggest remaining growth opportunities, particularly in rugged SUVs and pickups that produce large profits where the group has little presence. It’s also grappling with waning sales in China, which had long been a key source of growth and earnings for the German carmaker.

To better compete in the US, Audi plans to introduce the Q9 this year, its biggest SUV aimed at winning market share from models like the Mercedes GLS and General Motors Co.’s Cadillac Escalade. The new model will be made in Slovakia, meaning it too would be subject to Trump’s auto tariffs.

Volkswagen owns a factory in Tennessee that was organized by the United Autoworkers Union in 2024, and is building the plant in South Carolina that will produce Scout Terra SUVs and Travelers pickups. Audi has previously signaled that making vehicles at the latter would be an option.