Please ensure Javascript is enabled for purposes of website accessibility

The Most American-Made Car: Soon to Be Tesla Motors Inc.’s Model S?

By Daniel Sparks - Jul 4, 2014 at 1:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Ford F-150 may soon lose its most American-made title to Tesla's Model S and the electric-car makers planned affordable car.

Ford (F 2.21%) retained its bragging rights this year on Cars.com's just-released annual list of the top American-made cars. The F-150 ranked first, thanks to continued strong sales and domestic-parts sourcing. But one new American automaker soon may be poised to become more red, white, and blue than any other manufacturer in the world: electric-car maker Tesla Motors (TSLA 4.67%).

Tesla's Fremont factory in California. Image source: Tesla Motors.

Bragging rights that matter
In a country that values domestic pride, "American-made" often serves as a marketing tool. But what if Ford lost this bragging right to Tesla? Would it be yet another sign that Tesla is destined to play a big role in the U.S.?

There's no doubt about it: Once Tesla's Gigafactory is built, Tesla's once small operation will have officially transitioned to an American-made auto empire. Tesla's planned Gigafactory is no small undertaking. The $5 billion project has multiple states vying for it. Texas Gov. Rick Perry was even driving around in California in a Tesla Model S while making his intentions clear on Twitter: Texas wants Tesla's Gigafactory.

The Gigafactory, which Tesla says will build lithium-ion batteries at a scale of 500,000 vehicles by 2020, will employ approximately 6,500 people, the company says. In addition to Tesla's Gigafactory, the company is making its mark on U.S. soil by rapidly expanding its Tesla-branded Supercharging stations.

Then, of course, there is Tesla's Fremont factory, which the company says won't be maxed out until it hits production levels of 500,000 cars per year.

Tesla's planned Supercharger locations by 2015. The locations above will put a station within Tesla driving range of 98% of the U.S. population. Image source: Tesla Motors.

Morgan Stanley analyst Adam Jonas is already calling Tesla "the most important car company in the world." If Tesla's vehicles became the most American-made, it could be a more meaningful marketing tool for the much smaller Tesla than it is for Ford.

Unlike Ford, Tesla relies almost completely on the media and word-of-mouth marketing to generate awareness about its vehicles. It pays for no advertising, and offers no promotions. Getting the top American-made title would be just one more bragging right Tesla could add to its long list of accolades to help generate buzz.

More American-made than the F150?
Today, Tesla claims that its electric sedan has about 55% American- and Canadian-made content. But the vehicle is about to get an American-made boost.

Model S. Image source: Tesla Motors.

After the Gigafactory is built, and thanks to Tesla's proposed efforts to source Gigafactory materials from the U.S., about 90% of Model S content could come from the U.S -- a figure that would beat out any other vehicle sold in the Land of the Free.

Fortunately, for both consumers and Tesla investors, Tesla's American-made cars will be available at more affordable prices by then. In conjunction with the Gigafactory, Tesla is planning to bring to market a fully electric vehicle with a starting price around $35,000. This more-affordable Tesla will put the automaker in a whole different ballgame.

Tesla CEO Elon Musk has said that the more-affordable Tesla will be slightly smaller than the Model S, and have a range of more than 200 miles. The planned time stamp on both the Gigafactory battery production ramp, and the launch of the more affordable Tesla, is 2017.

If Ford doesn't find a way to source more parts in the U.S., Tesla may soon make the most American-made vehicles.

Daniel Sparks owns shares of Tesla Motors. The Motley Fool recommends Ford and Tesla Motors. The Motley Fool owns shares of Ford and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Tesla, Inc. Stock Quote
Tesla, Inc.
TSLA
$900.09 (4.67%) $40.20
Ford Motor Company Stock Quote
Ford Motor Company
F
$16.18 (2.21%) $0.35
Morgan Stanley Stock Quote
Morgan Stanley
MS
$91.66 (1.62%) $1.46

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
400%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/14/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.