“Made in America” was once a very big deal. Then globalization kicked in, and today, it means a lot less than it used to. However, there are those trying to put more life into the old concept. Electric vehicle maker Tesla (NASDAQ:TSLA) is among them. Tesla’s investors aren’t unhappy about the notion either, as Tesla is up slightly in Wednesday afternoon trading.
Basically, the U.S. offered Tesla—and most any other electric car maker willing to follow the terms—a deal it couldn’t refuse: a tax credit of up to $7,500 for electric vehicles. However, for 2023 models, there’s one important caveat: 40% of the battery’s primary materials and half of its parts need to be sourced from either North America outright or a country that has a free-trade agreement with the U.S.
Tesla, meanwhile, is building the necessary battery cells right on U.S. soil at its pilot plant in Fremont, California. Now, it’s moving capacity out of Germany—where it recently established a gigafactory—and bringing it back to the U.S. to take advantage of the tax credits. The gigafactory won’t be mothballed over the effort. Reports suggest that the rest of production on Teslas in Europe will still take place therein. However, the battery packs will travel a bit more to power Europe’s Teslas. Meanwhile, Tesla’s U.S. battery production isn’t new either; it put $3.6 billion behind an expansion at the Nevada facility to up its battery production therein.
Meanwhile, analysts are very much behind Tesla. Analyst consensus calls Tesla a Moderate Buy, though 22 out of 31 analysts have Buy recommendations on the stock. Six have a Hold recommendation, while the remaining three say Sell.
