What Does ‘Made in America’ Mean? For Cars, It’s Hard to Define

Global automakers and their suppliers have invested billions of dollars over the last few decades in building vehicles and their various components in America. Battery, parts and vehicle assembly plants in South Carolina, Ohio, Alabama, Kentucky, Texas, Georgia, Mississippi, Indiana and Tennessee, among others, blur the line between the designation of what is made in America and assembled in America, of globally sourced parts.

Add to that the already fuzzy designations of designed and engineered in America when most companies have design studios around the globe and engineering efforts take prototype vehicles to extreme locations far outside the confines of the U.S.

In 2023, for the first time, non-domestic automakers surpassed their domestic competition, building 4.94 million cars in the U.S. Detroit’s Big Three (Ford, Stellantis and General Motors) built just 4.6 million, according to Autos Drive America, a lobbying organization that works on behalf of U.S. operations of international motor vehicle manufacturers. Lucid, Rivian and Tesla accounted for 754,342 vehicles produced in the U.S.

Results from the 2024 sales year are not yet public for all automakers.

Stellantis is the parent company of the Jeep, Dodge, Chrysler and Ram brands in the U.S., but it is headquartered in the Netherlands. General Motors is home to the Buick, Chevrolet, Cadillac and GMC brands. Ford Motor Company produces Ford and Lincoln models.

When assembly location, parts content, engine origin, transmission origin and U.S. manufacturing workforce are considered, many foreign automakers produce vehicles with more American content than the Big Three.

The Cars.com American-Made Index lists two Teslas, three Hondas, a Volkswagen and a Toyota ahead of the Jeep Gladiator, the eighth-most American-made vehicle, the first model from the Big Three on the list. The next four spots feature another Tesla, a Lexus, a Toyota and the Acura RDX.

“Many U.S. automakers manufacture key models abroad. For instance, Ford’s Bronco Sport and Maverick are produced in Hermosillo, Mexico. The Mustang Mach-E also comes from Mexico. While Cadillac remains an all-American brand, Buick’s Encore GX and Envista are made in South Korea. The Chrysler Pacifica is assembled in Canada. And the GMC Sierra 1500 is produced in Indiana or Mexico, while the Chevrolet Silverado 1500 may come from the U.S., Mexico or Canada,” Patrick Masterson, lead American-Made Index researcher at Cars.com, told Newsweek.

Imported vehicles accounted for half of all 2024 vehicle sales, Masterson said.

On February 1, the Trump administration announced a 25 percent additional tariff on imports from Canada and Mexico to the U.S. and an additional 10 percent tariff on imports from China. On February 3, a temporary pause on the tariffs with Canada and Mexico was announced as they took steps to appease the U.S. president’s concerns about drug trafficking and border security.

Should tariffs be reinstated, Masterson said vehicle availability is likely to suffer as automakers may slow or halt production of certain models for the U.S. market. Additionally, reduced new-car supply could drive up used-car prices.

The Trump administration’s tariff plan for Canada and Mexico is not a one-size-fits-all scenario for car companies. Vehicles within a company portfolio could be subjected to different tariffs, depending on where the parts and vehicles come from.

Analysts at Bernstein Research estimated that the 25 percent tariffs on both countries would be a headwind of up to $110 million per day for the auto industry, hurting the Detroit automakers most. Nearly half—around 40 percent—of Stellantis’ domestic sales are comprised of vehicles made in Mexico or Canada. For GM, the total is about one-third; for Ford, it’s about a quarter. That’s in addition to billions in imported components needed to assemble each model.

Analysts at global investment bank Jefferies said that tariffs at the level Trump instituted via executive order could add about 6 percent, or $2,700, to the average U.S. vehicle prices for car shoppers.

“With respect to possible tariffs, we are working across our supply chain, logistics network and assembly plants so that we are prepared to mitigate near-term impacts. Many of these actions are no cost or low cost,” Mary Barra, General Motors’ CEO, said during the company’s 2024 fourth-quarter earnings call on January 28.

“What we won’t do is spend large amount of capital without clarity. Whatever happens on these fronts, we have a very broad and deep portfolio, and we’ll be agile and execute as efficiently as possible,” she said.

Analysts from S&P Global explained to Newsweek that the auto industry has long lead times for products, five to 10 years, and can’t make changes every time a new administration steps in. Retooling existing plants takes several years and millions of dollars; building new ones takes even longer. The global trading web of parts suppliers is another huge piece of the puzzle that would have to be unwound.

Many recent investments in America’s auto industry follow trendy localization plans for vehicle production globally. Volvo and Polestar invested in an assembly plant in Ridgeville, South Carolina, to produce their cars and three-row battery-electric SUVs, to be sold in the U.S. Ground broke on the plant’s construction in September 2015, and the company did not start making vehicles until 2018. Volvo EX90 and Polestar 3 production did not commence until 2024.

On January 29, Honda announced it was upping its investment in Ohio from $700 million to $1 billion for the creation of a manufacturing plant for electrified vehicles. This is in addition to the $3.5 billion investment in a new battery manufacturing plant that will export some of its products to other countries.

“The EV battery plant, which is a part of our EV Hub in Ohio, will be the starting point for the global production of the new Honda 0 Series EVs. The Honda EV Hub is playing a critical role in developing the knowledge and expertise for EV technology and production to be shared with other Honda plants in North America and globally,” a Honda representative told Newsweek.

Hyundai Motor Group, parent company of the Hyundai, Kia and Genesis brands, has invested $20.5 billion in America since it entered the U.S. market in 1986, creating more than half a million jobs with a footprint in all 50 states. It has more than 60 affiliated establishments in the U.S., including Boston Dynamics, Kia America, Glovis America Inc. (a logistics and transportation company) and Mobis Parts America.