Business In Gear

Will Tesla's new Model 3 be most 'Made in America' car?

Every year, the Kogod School of Business at American University publishes a ranking of the most 'American-made' cars, with the top spots occupied by a mix of domestic and foreign models. So where might the Tesla Model 3 rank when production begins later this year?

Tesla Motors' mass-market Model 3 electric cars are seen in this handout picture from Tesla Motors (March 31, 2016).
Tesla Motors/Handout via Reuters/File | Caption

For some buyers, where a car is made can be as important as the qualities of the car itself.

"Made in America" can be a powerful selling point, especially after a presidential election in which domestic manufacturing jobs were a hot-button issue.

But in the age of globalization, U.S. automakers no longer have a monopoly on cars with largely American-made content.

Every year, the Kogod School of Business at American University publishes rankings of the most "American-made" cars, with the top spots occupied by a mix of domestic and foreign models.

The rankings are based on such factors as the proportion of American-made parts, labor, and the amount of development work conducted in the U.S.

So where might the Tesla Model 3 rank when it starts production later this year?

In 2016, the Toyota Camry mid-size sedan and Sienna minivan were rated 78.5 percent American-made, while different analyses in past years have dubbed the Camry the "most American" vehicle.

The Honda Accord mid-size sedan was determined to be 81 percent American-made last year, while the Chevrolet Corvette sports car came in at 83 percent. The Ford F-150 full-size pickup truck was at 85 percent, according to the study.

A trio of General Motors crossovers based on the same platform—the Chevy Traverse, GMC Acadia, and Buick Enclave—were rated 90 percent American-made.

The Tesla Model S garnered a 55-percent American-made rating, but the Model 3 could very well take the title of most American-made carElectrek posits.

It all comes down to the batteries, the Tesla fan site suggests.

Tesla currently uses lithium-ion cells supplied by Panasonic, which manufactures them in Japan and elsewhere.

Cells for the Model 3 will be produced at the massive "Gigafactory" near Reno, Nevada, however, where elements of its powertrain will be made as well.

Tesla is also reportedly developing a source of lithium at a location near the Gigafactory, and Nevada officials are trying to incentivize lithium production in the state.

Raw materials sourced from the U.S. would likely boost the Model 3's American-made rating considerably.

Like the Model S and Model X, the Model 3 will be assembled at the Tesla plant in Fremont, California.

The battery pack and cells are a major component in any electric car.

One reason the Nissan Leafs built in Tennessee aren't all-American is that while their cells and battery packs are assembled in an adjacent plant, the high-value electrode material that goes into the cells is still fabricated in Japan and shipped to that factory in large rolls.

Could cells assembled in Nevada, using electrode material fabricated in the same plant, be enough to push the Model 3 past the two electric cars built in the same plant?

We may find out a year from now, when the Kogod School of Business publishes its 2017 American-made rankings.

Tesla reiterated this week that it expects to deliver the first Model 3 electric cars in July, and ramp up production to 5,000 units a week by the end of the year.

If it does, that should give the analysts enough to assess how American it actually is. (As will the domestic-content percentage on the Model 3 window sticker.)

This story originally appeared on GreenCarReports.

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