Audi is considering building its first U.S. plant to take advantage of EV incentives granted through the recent Inflation Reduction Act, Reuters reported last week, citing comments made by the automaker.

The IRA, passed last August, offers incentives to firms to manufacture in North America, including a $7,500 tax credit to buyers of EVs made locally.

Audi already has a plant in Mexico that builds the Q5 and related Q5 Sportback, but a plant in the U.S. could potentially be built in partnership with Volkswagen. Automobilwoche reported last week that VW is looking to build a U.S. plant to handle production of the modern Scout electric SUV and pickup truck due in 2026.

An Audi spokesperson told Reuters that various scenarios were possible and that these were still being evaluated.

There was no mention of what vehicle Audi would build at a U.S. plant, though Audi design chief Marc Lichte recently hinted that there was space in Audi's lineup for a rugged SUV similar to the Land Rover Defender and Mercedes-Benz G-Class. Such a vehicle would make sense if Audi were to share any VW plant building the rugged, body-on-frame Scouts.

VW already has a U.S. plant in Chattanooga, Tennessee, though it is being expanded to handle production of vehicles based on the MEB platform designed for mainstream EVs. The plant already builds the MEB-based VW ID.4 and there are rumors VW may add ID.Buzz production at the site.

According to Reuters, VW will give an update on its EV production plans in March.