How much would a fully 100% ‘Made in the USA’ vehicle even cost, is an entirely different, complex, and hotly debated question. Now, industry experts and automakers are trying to figure out just how realistic it is to produce vehicles that only use American and Canadian parts. Ford Motor’s Kentucky Truck Plant recently produced a white 2025 Ford Expedition SUV with bronze exterior trim, underscoring the challenges and costs involved in localizing production.
Just taking federal stamp of the market Current estimates indicate that the average transaction price of a new vehicle in the United States hovers around $48,000. This data is provided by Cox Automotive. However, this number could skyrocket, should manufacturers adopt a strategy of using only domestic parts. Ford CEO Jim Farley addressed some of these concerns in a recent appearance on CNBC’s “Squawk Box.” Profitability is the number one thing, too, he made that clear. Consumers want American-made absolutely 100%.
At least two other auto suppliers executives backed up Farley’s worries. They communicated the challenges of making a truly US-made vehicle, suggesting it would be “unrealistic,” if not unfeasible, in today’s market. They explained that material costs could increase a vehicle’s price tag by thousands of dollars. This massive increase would almost certainly eliminate profitability for automakers and drive consumers to pay extremely high prices.
As Cars.com reports, the United States now stands on the precarious peak as the world’s most expensive place to build a car. The typical price of a US-assembled vehicle is now well over $53,200. As an example, only six vehicles exceed the 75% US/Canada parts content threshold for the 2025 model year. Among these crowd favorites are the Kia EV6, two variants of Tesla’s Model 3 and the Honda Ridgeline AWD Trail Sport.
Manufacturing constraints further complicate the matter. In fact, the supply chain for other critical materials including steel and aluminum, and especially semiconductor chips, is not strong enough here in the US either. So, too, with older processing and production plants. Setting up new facilities or mines will require a major investment of both time and money.
Mark Wakefield is a managing partner and the global lead for AlixPartners’ automotive market. He provided concrete examples and lessons learned on the increasing costs associated with adding more domestic content. He stated, “The cost gets quantumly more the higher the closer you get to 100%.” He explained that going beyond 90% domestic content greatly raises costs, with 95% becoming cost-prohibitive.
“If you did it at really low volume and you’re extremely innovative and different with the vehicle, you could make $300,000-$400,000 vehicles that are all-American,” – Mark Wakefield
Wakefield gives a rough estimate of 10 to 15 years for automakers focused on achieving scale. They could be required to spend up to $100 billion in creating a fully American-made vehicle supply chain. He cautioned that “I don’t think you could do it more than about 95% on average, at any cost at the moment.”
The 2024 Toyota RAV4 is yet another indication of today’s manufacturing climate. It falsely claims 70% US/Canadian parts content while assembled in Canada. This underlines the continued fragility in international supply chains even among manufacturers who are otherwise most committed to reducing their use of them.
Despite these hurdles, consumer demand for American-made vehicles is increasing. Patrick Masterson, Cars.com’s American-Made Index lead researcher, said this year has seen the highest levels of traffic to the index. This boom reflects the deep demand for American-made products. He remarked, “People are concerned about this, perhaps more than ever.”
Ford’s Farley summarized the dilemma facing manufacturers: “We can move everything to the U.S., but if every Ford is $50,000, we’re not going to win as a company.” That tension between consumers’ desire for American-made products and the economic forces at play still marks the automotive scene today.