Since U.S. President Donald Trump imposed tariffs of 25 percent on imported automobiles in early April (followed by levies on some imported components), many have wondered just how automakers would respond. Thus far, some have opted to raise prices somewhat, while others have announced plans to shift production to the U.S. as a way to circumvent these tariffs. However, many have also questioned just how much more expensive a 100 percent American made vehicle might be – if such a thing existed – and now we have a potential answer for that, too.
CNBC recently spoke with a number of automotive suppliers and analysts to try and get a clearer picture of what a 100 percent American made vehicle might actually cost, and came away with some interesting data points. One expert said that it costs $5,000 or more just to get a vehicle that consists of 70 percent U.S. or Canadian sourced content to 75 or 80 percent, and another $5,000-$10,000 to up that percentage to 90 or more.
Given the fact that the average transaction price of a new vehicle in the U.S. is currently around $48,000 – with roughly $30,000 of that vehicle coming from materials and parts – changing all of that to domestic content would add roughly $10,000-$20,000 to the cost of a vehicle, analysts say. Trouble is, making such a thing happen is also something that analysts note would be difficult and time consuming as well.
Two automotive supplier executives said that it would be “unrealistic” if not impossible for an automaker to built a profitable 100 percent American made vehicle at the moment, given the state of current supply chains. Another estimated that the cost of an American-made full-size pickup would increase by as much as $7,000 if companies sources as many parts as possible from the U.S. and Canada right now, too. Trouble is, America simply doesn’t produce enough things like steel, aluminum, semiconductor chips, and raw materials to justify such a move, either, and it would take around a decade to reach that point.
Ford CEO Jim Farley recently touched on this subject in a separate interview, in which he admitted that the company could move Ford Maverick production to the U.S., but only if it made financial sense. The exec noted that the automaker can’t just sell vehicles costing “$50,000 or more,” and added that 15-20 percent of the parts used in today’s vehicles are difficult, if not impossible, to source from the U.S., such as small fasteners, wiring harnesses, and semiconductors.
The crossover may not be around much longer, either.
Yet another place we might see additional lighting elements.
Another low-mile modern pickup.
The automaker hasn't given up on the more advanced tech.
Though it missed out on an overall win.
Plaintiffs claimed that the frequently upfitted model doesn't have an adequate suspension setup.
View Comments
No one in their right mind will pay anything close to that. But we do have an awful lot of mashed potato brains these days.
I ordered and took delivery of a 2021 Mustang Mach 1, with 5.0L, 480 HP, and 6 speed manual trans in 2021. After I received it I discovered it was built with 99% US content. I thought the was high and glad it was that high.
If it would had an Auto trans, than it would not have been that high as those are imported at that time.
I wonder what part was imported?? Something that I did not need or want, maybe.
99% sounds suspiciously high - I thought the 5.0 was from Windsor and the 6-speed was from China. In any event, I'm envious. That's a great car!
This pure nonsense, if they were originally here we would have those industries here and making American made products. The auto industry sold Americans out, all in the name of profit to subsidize corporate officers salaries.
Trump still doesn't realize that the tariffs are paid by Americans and NOT the exporting countries.
I don't believe those figures at all. I can't US vehicles are not 90 per cent US made, the price will not rise by much. Australian cars were 80 per cent Aussie for decades. We only ceased production because the government kept pumping up wages. You can't pay factory workers two grand a week.