With all of the recent auto industry discussions about Chinese tariffs and job creation, people are paying more attention than ever to which companies assemble their vehicles in America, and which companies outsource their production. It has become a matter of pride to buy American. In fact, a number of large corporations purposely choose to purchase American-made trucks from the Big Three, Ford Chevrolet, and GM, in order to show support for American businesses.
It may, therefore, come as a surprise to Big Three customers that those companies are not as American as they thought. In fact, according to a report by Time, Tesla was the most American automaker in the world in 2017, with fully 100% of its U.S.-sold vehicles assembled domestically. So does that mean that the Cybertruck will be the most American truck?
Tariffs and Chinese production
Although it may seem that Tesla is on board with American made products, the increased cost of business due to the Chinese tariffs has them moving some of their production to China.
According to a report by the BBC, not only does the move help Tesla to avoid Chinese tariffs, it opens Tesla up to the Chinese market. To sweeten the deal, China also voided the 10% vehicle tax for Tesla vehicles, making them a more attractive option in the largest car market in the world.
With the poor reception of Tesla’s Cybertruck in the United States, one has to wonder whether Tesla will be interested in maintaining its top ranking as the most American automaker. Will the truck be made in America?
A potential resurgence
On the other hand, Ford, Fiat-Chrysler, and GM have all indicated that they intend to bring at least some production back to the U.S. in 2020. Although Ford is still one of the world’s top automakers, they and other American automakers have been hit hard by steel tariffs and Chinese auto duties over the last year, to the point that they began cutting salaries and announced the potential layoff of 20,000 people.
These companies have temporarily halted plans to build a plant in Mexico, but have yet to announce specific plans for additional production facilities in the U.S. With most American plants operating at 95% capacity, increased production will necessitate the construction of new facilities, which may not be a cost automakers want to front in the current unstable environment.
Shifting industry needs
Although the trade war with China has created a new atmosphere for American automakers, the auto industry has been faced with a number of changes in the past few years that may affect their decision to return production to the U.S.
Shifting production is both expensive and time-consuming, but there may be more on the way. With interest in electric vehicle production on the rise, automakers can expect to see a change in the market and corresponding production adjustments in the near future.
How all this will play into the amount of production done in America remains to be seen. Automakers know that consumers want American made trucks and cars, but the logistics of making them don’t always add up.
Soon we will figure out where exactly Tesla is producing the Cybertruck. It seems like it has a real chance to be the most American made truck on the market, time will tell if that helps its sales or not.