Tesla Dominates the 2024 Made in America Auto Index

Tesla has once again cemented its position as a leader in American manufacturing, earning the top spots in the 2024 Made in America Auto Index issued by American University’s Kogod School of Business. This marks the second consecutive year Tesla has led the rankings, reflecting its strong commitment to sourcing and assembling components domestically.

The annual index evaluates vehicles based on their U.S. and Canadian parts content, providing consumers with valuable insights into the economic impact of their purchases. In a year marked by global supply chain challenges and evolving trade policies, Tesla’s dominance highlights its innovative approach to manufacturing and dedication to supporting the domestic economy.

What Is the Made in America Auto Index?

The Made in America Auto Index was created in 2013 as a consumer research tool for determining the domestic content of vehicles sold in the United States. Frank DuBois, a supply chain expert at the Kogod School of Business, created the index, which grades vehicles according to seven criteria. This includes:

• Profit Margin: Percentage of revenue retained by the manufacturer.
• Labor: Amount of U.S. labor involved in manufacturing.
• Research and Development: Location of R&D activities.
• Inventory and Capital: Domestic investments in production.
• Engine, Transmission, and Body/Chassis: Content sourced from the U.S. or Canada.

The data gives each vehicle a “Total Domestic Content” score, which shows how much it contributes to the local economy.

DuBois underlined its relevance, saying, “This index empowers buyers by revealing the hidden layers of a vehicle’s origins. It’s more than just buying a car; it’s also about comprehending the broader economic implications of that decision.“

Tesla: A Clear Leader in Domestic Manufacturing

Tesla’s performance on the 2024 index is unrivaled. The brand has won the top five places, and its vehicles have some of the greatest domestic content percentages in the industry.

• Tesla Model 3 Performance – Tops the list with an 87.5% domestic content score.
• Tesla Model Y Long Range and Standard Model Y – Tied for second place, each with 85% domestic content.
• Tesla Cybertruck – A new entry in third place with 82.5% domestic content.
• Tesla Model S and Model X – Tied for fourth, achieving 80% domestic content.

Tesla’s Gigafactories in Nevada, Texas, and California are vital to its success, producing key components like batteries and electric motors. These plants highlight Tesla’s vertically integrated approach, which lowers dependency on foreign suppliers while increasing efficiency.

Teslas have the highest amount of American content.

— Elon Musk (@elonmusk) December 11, 2024

Shifting Trends in Automotive Manufacturing

When the index debuted in 2013, established American automakers like Ford, General Motors, and Chrysler led. Over the last decade, however, foreign manufacturers such as Honda, Toyota, and Volkswagen have dramatically boosted their material sourced in the United States, posing a challenge to traditional competitors.

Tesla’s climb up the rankings reflects a larger industry trend. Manufacturers are expanding their investments in U.S. facilities to satisfy changing customer expectations and government policies. DuBois stated:

“Foreign automakers have recognized the value of localizing production, and it’s reshaping the competitive landscape.”

Policy Impacts: How Trade Agreements Influence Rankings

Recent regulations, such as the Inflation Reduction Act of 2022 and the United States-Mexico-Canada Agreement (USMCA), have encouraged automakers to source parts domestically. These policies promote the production of electric vehicle (EV) components, such as batteries, in North America.

For Tesla, these policies are perfectly aligned with its goal. By manufacturing a major amount of its EV components in-house, Tesla not only increases domestic content but also benefits from tax breaks. This twofold advantage allows Tesla to continue its dominance in the next years.

Tesla: Challenges in Achieving 100% Domestic Content

Despite its success, Tesla is not completely immune to global supply chain dependencies. Some Tesla models continue to use parts sourced from China, such as seats and dashboard components. DuBois stated: “Tesla still has Chinese content in their vehicles, which highlights the complexities of global manufacturing.”

Manufacturers may transfer more of their sourcing to the United States to comply with new tariffs and take advantage of domestic incentives.

“We expect to see drastic changes in the amount of American-sourced content in vehicles sold in the U.S. as carmakers adjust to a new reality,” according to DuBois.

Tesla: Stock Reaches New Milestones

Tesla’s shares rocketed to new heights, reaching a record intraday high of $424.88 and a record closing price of $424.77. Tesla’s shares have tripled in value over the last year, climbing from a 52-week low of $138.80 to secure its market leadership. With a market capitalization of over $1.31 trillion, Tesla is currently worth more than the next 27 automakers combined, demonstrating its supremacy in the automotive and technology sectors.

Following the U.S. presidential election, analysts attribute this meteoric rise in stock prices to several factors, including advancements in artificial intelligence (AI) and robotics. Tesla set a new monthly sales record in China in November with 79,000 vehicles sold, followed by a remarkable 21,900 units sold in the first week of December alone.

For Tesla, this situation gives a chance to strengthen its leadership. With its vertically integrated approach and emphasis on sustainability, Tesla is well-positioned to overcome the difficulties ahead and continue to shape the future of American manufacturing.