Tesla Sweeps Top Spots In Cars.com American Made Index. Ford, GM Fall Off. -- Barrons.com
8:00 am ET June 21, 2023 (Dow Jones) Print
Al Root
Tesla swept the top four spots on the Cars.com annual list of the most American-made cars, quite an achievement for Elon Musk's company. But the big surprise is who didn't make the top 10 list.
The 2023 top 10, in order, are: The Tesla (TSLA) Model Y, 3, X, and S. The Passport from Honda Motor (HMC) is fifth and ID.4 from Volkswagen (VOW.Germany) is sixth. Then comes the Honda Odyssey, Acura MDX, Honda Ridgeline, and Acura RDX.
Ford Motor (F) and General Motors (GM) didn't make the top 10.
Tesla makes vehicles for the U.S. market in two plants located in California and Texas. It also makes batteries for its vehicles in Nevada. In 2022, Tesla's four models -- the Y, 3, X, and S -- captured four of the top six spots.
Acuras are made by Honda, and many of the Honda vehicles on the list are manufactured in Lincoln, Ala.
So what happened to Ford and GM? In 2022, GM had two vehicles on the list. The Corvette and GMC Canyon. Ford's Lincoln Corsair came in at number three that year. None made the 2023 list.
One issue for Ford and GM is their vehicles are North American-made. They have plants producing vehicles and parts in the U.S., Canada, and Mexico.
Without spelling out exactly what happened, Cars.com Detroit Bureau Chief Aaron Bragman points out that components get re-sourced with major systems moving from plant to plant. An engine that was once manufactured in the U.S. might be moved to a facility in Mexico. "Same engine, different plant," he says.
While falling to make the 2023 top 10, Ford and GM are plenty American. GM has 18 vehicles in the top 100, the most of any auto maker. Ford, Toyota Motor (TM), and Honda tied for second with 13 each.
What is more, GM has about 104,000 U.S. employees, according to its annual proxy statement. Ford has about 88,000 U.S. employees, according to the company's social impact report. Both figures likely top Tesla in the U.S.
Tesla ended 2022 with about 127,000 employees worldwide. It doesn't break down employment by region and didn't respond to a request for comment. Tesla has significant operations in China and Europe. Tesla is also building a plant in Mexico.
Cars.com (ticker: CARS) has produced a version of the American Made index since 2006. The list provides auto makers with bragging rights, but it can also mean cash in their pockets.
"It's important to [car] shoppers...which is why we do this," says Bragman. "The purpose of what we do is to help shoppers make the most informed [buying] decisions they can."
American-made is one factor in a buying decision. Cars.com finds that half of customers asked say they are willing to pay more for a car if it creates U.S. jobs.
Being the most American-made means the most U.S. jobs. One primary automotive assembly job can create more than six other jobs, according to Oxford Economics. Auto plants need parts and auto-related workers need services in communities surrounding a manufacturing site.
The emergence of the ID.4 on the list was one thing Bragman found particularly interesting. "I think that might potentially presage a trend that's coming over the next few years...a result of the Inflation Reduction Act."
That law passed in mid-2022, requires EVs to be assembled in North America to qualify for purchase tax credits. There are also requirements for local sourcing of batteries and battery materials.
Cars are set to get even more American thanks to new EV laws. And Tesla's dominance of the American-made list is a good reminder that mass-market electric vehicles are an American innovation.
Bullish
