Tesla Motors Inc Could Replace Ford As ‘Made in America’ Brand

Tesla Motors Inc Could Replace Ford As ‘Made in America’ Brand
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Tesla Motors Inc (NASDAQ:TSLA) may soon snatch the title of the most ‘Made in America’ vehicle from Ford, according to a report from Morgan Stanley. Presently, Ford’s F-150 pickup truck leads cars.com’s American-Made index, which ranks on factors like where the raw material is procured from, where is the manufacturing plant, where the car is assembled and in which markets the vehicle is sold.

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A lot depends on Gigafactory

Ford’s F-150 pickup truck has been the top-selling vehicle for 32 straight years in U.S., and for 37 years it has been the top-selling truck. The iconic truck has been the most American-made vehicle, but that could change soon, and Tesla Motors Inc (NASDAQ:TSLA) could soon replace the brand once the $6-billion gigafactory that would manufacture lithium-ion batteries is operational.

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Morgan Stanley analysts claim that after the gigafactory is up and running; more than 90% of the parts used in Tesla’s cars would be from America. Presently, Ford’s F-150 pickup truck uses 75% American parts.

Recently, Tesla Motors Inc (NASDAQ:TSLA) revealed plans to procure raw material only from North America to develop its 500,000 battery packs each year. In an email to Bloomberg, Tesla said, “It will enable us to establish a supply chain that is local and focused on minimizing environmental impact while significantly reducing battery costs.”

A long way to go for Tesla

However, there is still a lot to be done before Tesla Motors Inc (TSLA) is actually able to replace Ford. The electronic vehicle maker first has to complete the construction of gigafactory, and then has to start producing batteries at a smoother pace. The gigafactory is expected to staff around 6,500 people, and the company claims that by 2020, the factory would produce more lithium-ion batteries than the whole industry currently makes.

There’s also a good chance that the competition for the made in America brand could get tougher in times ahead. Recently, Ford announced that it might shift some of the production from Mexico back to the U.S. Topping the list of the made in America brand is certainly not a push factor for sales, now, but back in 1980s, when the Japanese firms were invading the local market the factor was a lot more affective. Despite this, ceding the title to Tesla Motors Inc (NASDAQ:TSLA) is something that Ford will not like.

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Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at amanjain@valuewalk.com
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