The Complex Reality of American-Made Vehicles
Recently, a 2025 Ford Expedition rolled off the production line at Ford’s plant in Kentucky. While this impressive SUV may have been assembled by American workers, at least 58% of its parts derive from international sources, including 22% from Mexico. This situation highlights the intricacies of the global automotive supply chain, which shows that even iconic American brands like Ford heavily rely on foreign components.
The Kentucky assembly facility, employing over 9,000 workers, produces not only the Expedition but also the F-Series pickup trucks and Lincoln Navigator SUVs. This factory exemplifies the type of American manufacturing that lawmakers have pushed for, especially in light of tariffs imposed by President Trump on imported vehicles and parts. These tariffs have prompted automakers to emphasize their domestic investments and efforts to localize their supply chains.
Despite the push for more domestic manufacturing, experts caution that relying solely on American-made parts may not be practical. Manufacturing certain components, such as semiconductors or steel, can still be more cost-effective in other countries, even with tariffs in place. Martin French, a strategist in automotive supply chains, emphasized that some parts may remain cheaper to produce offshore, making it an uphill battle for manufacturers to source everything domestically.
One significant hurdle is the lack of processing plants for essential materials in the U.S. Industries like aluminum and semiconductor manufacturing aren’t sufficiently developed without creating new facilities, which would require substantial time and investment. Estimates suggest that it could take a decade or more to establish the necessary infrastructure, creating an ongoing challenge for the automotive sector.
Moreover, attempting to produce a fully American-made vehicle could raise retail prices significantly, potentially deterring consumers from purchasing. Ford’s CEO, Jim Farley, remarked that if prices climb too high, the company might lose market share. This reflects the delicate balance that automakers must maintain between domestic production and affordability.
Farley noted that 15% to 20% of regularly used vehicle parts are currently very difficult to source in the U.S. These include items like fasteners and wiring harnesses, as well as numerous semiconductor components primarily imported from Asia. On average, a car consists of around 20,000 distinct parts sourced from 50 to 120 different countries, demonstrating the diverse origins of automotive components.
For instance, the Ford F-150 shares its platform with the Expedition and is manufactured entirely in the U.S. However, it consists of roughly 2,700 key parts, excluding smaller components. This trend is crucial for consumers who are increasingly interested in the origins of their vehicles.
To offer some relief for rising costs, U.S. lawmakers could consider implementing tax breaks or incentives for domestic vehicle manufacturers. Yet, achieving a U.S.-made vehicle status comes with complexities that are often underestimated. Tracking the exact origin of components can be challenging, as automakers report the combined percentage of U.S. and Canadian content, not specifically U.S. content alone.
Aiming for a fully American-made vehicle could lead to additional costs that would drastically impact profit margins for manufacturers, forcing them to increase vehicle prices to maintain profitability. Some industry analysts estimate that bringing parts sourcing closer to 100% from the U.S. and Canada could add thousands of dollars to vehicle prices.
Achieving a truly American-made vehicle is a lofty goal, yet the operational costs increase dramatically as manufacturers strive for higher domestic content. Experts from consulting firms like AlixPartners indicate that the investment and logistical hurdles escalate as automakers aim to surpass 90% domestic components in their vehicles.
Obtaining that final portion of parts would require extensive time and financial resources, as reestablishing U.S. supply chains and processing plants for raw materials is a massive undertaking. Estimates suggest it could take more than a decade and billions of dollars to accomplish this feat in a sustainable manner.
Achieving around 75% American and Canadian parts is a significantly more attainable target. Some vehicles already meet this standard, highlighting a more realistic approach that does not enforce unviable practices. Key models, such as the Kia EV6 and Tesla Model 3, illustrate that it is possible to achieve a meaningful domestic content level without excessive investment.
In recent years, a noticeable decline in U.S. and Canadian content in vehicles has been linked to the globalization of supply chains. While certain models previously boasted over 90% domestic content, such figures have diminished as automakers increasingly source components from places like Mexico.
American consumers may face difficulty grasping the real implications of domestic manufacturing claims. For example, a vehicle could be assembled in the U.S. yet still contain a minimal amount of parts sourced from American suppliers. Cars.com’s annual index illustrates these disparities by considering various factors, including assembly location and parts content.
The evolving landscape emphasizes the complexity and reality of the automotive industry. As American interest in homegrown production rises, so does the understanding that achieving a completely American-made vehicle remains a daunting challenge fraught with practical hurdles and cost implications.
