WASHINGTON — U.S. President Donald Trump’s latest tariff-driven push is to localize production, including building vehicles with more American parts. However, according to auto executives and analysts, production of vehicles entirely in the United States may result in steep financial and logistical hurdles.
A 2025 Ford Expedition SUV assembled by American workers in the Kentucky Truck Plant still doesn’t make the vehicle entirely “Made in the USA.” About 58% of its parts are sourced from outside the USA, including an engine sourced from Mexico, accounting for 22%.
President Trump’s 25% tariffs on imported vehicles and auto parts have prompted companies to highlight U.S. investment. Still, executives say replacing offshore sourcing with domestic production would involve multibillion-dollar investments and long timelines for materials such as steel, aluminium, and semiconductors.
Ford CEO Jim Farley said roughly 15% to 20% of basic vehicle components are not currently viable to produce in the U.S., citing wiring harnesses, fasteners, and semiconductors as examples. Analysts at AlixPartners and Berylls Strategy Advisors estimate that achieving 100% domestic content could raise vehicle costs by $10,000 to $20,000, depending on the model.
Data from S&P Global Mobility indicates an average of 20,000 parts per vehicle, sourced from 50 to 120 countries globally. Cars.com reports the average price of a U.S.-assembled vehicle at $53,200, higher than $40,700 in Mexico and $46,148 in Canada.
Some models, such as the Tesla Model 3 and Honda Ridgeline, currently meet the 75% standard of U.S./Canadian parts content. Cars.com’s “American-Made Index” ranks vehicles using criteria including assembly location, parts content, engine and transmission origin, and domestic workforce.
Experts suggest that while higher U.S. content is possible at scale over time, achieving complete localization would require at least a decade and extensive new infrastructure.
