Is It Time to Call Tesla the Future of Made In America? Not Quite.
When you think car and you think America, what comes to mind?
If it was Ford's F-150 pickup truck, than you're on the money. (I mean, check it out: pretty darn American looking). In addition to being the country's top selling vehicle last year, the pickup truck also landed in the top spot on Cars.com's American-Made index, which measures how "American" a car is based on factors like where the car's parts come from, whether the car is assembled in the U.S. and if it is bought in large numbers by American consumers.
But according to a recent report by Morgan Stanley, Ford F-150 better watch its tail lights. Why? Tesla is fast approaching. The report predicts that once the Elon Musk-led company opens its $6 billion battery factory, Tesla vehicles will zoom into the top spot.
Does this mean the future of Made in America, as Quartz reports, lies in Musk's hands?
It all depends on how you define "Made in America." If the motivation behind the Made in America movement is job creation -- that American manufacturers need to keep and create more jobs here -- then the answer is no, probably not. At least not for a while.
That’s because, despite the amount of press Tesla and Elon Musk get, it’s still a fringe player in the automotive industry.
Sales of Tesla's battery-powered vehicles, priced from about $70,000, totaled around 22,450 last year. “With 6,900 deliveries in the [fourth] quarter [Tesla's Model S sedan] is still a niche vehicle,” Kevin Tynan, an auto analyst for Bloomberg Industries told Bloomberg. According to the company's annual report, as of December 31, 2013, it had 2,964 full-time employees world-wide. (The percentage of those employees who work in the U.S. was not released in the report. An inquiry to Tesla was not immediately returned).
Meanwhile, Ford sold a total of 6.3 million vehicles last year, with 3.1 million in North America alone. The company employed 181,000 people globally, with 84,000 of those employees working in North America (while the report did not specifically list the number of American employees, a 2011 estimate put the automotive maker at employing 65,000 Americans, a number that has surely grown as the auto industry has continued to recover since the recession).
Once Tesla sets up its so-called "gigafactory," the company predicts that it will employ an additional 6,500 Americans. But that's not slated to happen until 2020, by the company's own estimate (Tesla has yet to narrow down the factory's location to a single state).
All of this is to say that even if Tesla eventually does manage to nab the top spot on Cars.com's "American-Made index," let's not get ahead of ourselves. Larger, if admittedly less flashy, auto makers are still embodying the term "made in America" to the fullest. Which, in our estimation, rests less on the concept that their car parts are assembled in the U.S. and more on the fact that they continue to employ a whole ton of Americans.