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Analysis-Tesla speeds the EV industry’s South by Southwest drive By Reuters

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© Reuters. FILE PHOTO Elon Musk is the Chief Executive of Tesla Motor. He spoke at South by Southwest Interactive Festival in Austin Texas on March 9, 2013. REUTERS/Gerry Shih/File photo

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Tina Bellon and Hyunjoo Shin

AUSTIN (Reuters) – Tesla (NASDAQ) Inc’s decision that it will move its headquarters from Palo Alto (California) to Austin, Texas accelerates the transfer of jobs in the electric vehicle industry to the Southern and Western U.S states which offer lower taxes, less regulation, and more unionization than those found along the coast Blue states, where the majority of electric cars are sold.

Existing automakers as well as startups in electric vehicle manufacturing have committed $24 Billion to new facilities in Texas and Arizona.

Elon Musk, CEO made the announcement at No. The CEO of Tesla Musk made the announcement at Thursday’s No.

It is not uncommon for states to compete for jobs in electric vehicles. Many electric vehicle investors and buyers from Democratic-leaning Blue States like California, which are based on strong climate policies, call California home.

Many of these states are Republican Red States that are gaining EV job opportunities. They are supportive of fossil fuel industries and are open to electric vehicle manufacturing and jobs through subsidies and regulatory streamlining.

“The Lone Star State of Texas is the land for opportunity and innovation. After Tesla’s announcement, Texas Governor Greg Abbott sent a tweet welcoming them.

Tesla, world’s largest automaker, is now faced with the task of taking full advantage of Texas’s business climate while not alienating the talented workers from San Francisco Bay Area’s thriving technology sector. The company must also consider Tesla customers living in politically more liberal states like New York or California.

Tesla is not looking to exclude this large, influential market. They are not willing to face criticisms from advocacy groups or be attacked for looking for large incentives packages or abandoning California in a time of crisis,” John Boyd principal at Boyd Company site selection firm.

Detroit’s automakers such as Ford Motor (NYSE.) Co. have an identical problem. Ford and SK Innovation, its South Korean partner in battery development, announced last week that they would spend $11 billion in Tennessee to build an electric vehicle assembly and manufacturing facility. This will be larger than Dearborn’s Rouge building.

These new, complex operations and other related ones in Kentucky could result in 11,000 jobs.

Ford quickly responded to the United Auto Workers union by pledging union employment. However, in Tennessee and Kentucky union membership can be optional and other workers in these states who work in auto manufacturing have rejected UAW organizing efforts.

California regulators made it impossible for Tesla to produce during the first months of the COVID-19 pandemic. Musk was unable to resolve the dispute with California. Musk threatened to leave California with Tesla’s future programs and headquarters.

Musk, who is considered one of the most successful people on earth, stated that he recently moved to Texas. California’s income tax rate is up to 13.3% while Texas does not tax personal income.

California however, was responsible for 15% of Tesla’s 2020 global deliveries.

Musk claimed that Tesla is not leaving California completely with the headquarters move. On Thursday, Musk also stated that Tesla’s Fremont assembly line and Reno battery factory in Nevada will see 50% more production. According to one source, employees of Tesla’s Palo Alto offices hope engineers will stay in Silicon Valley. But, finance staffers might move.

Texas officials have to resolve the awkward problem of Tesla not being able to sell vehicles to Texas residents directly.

Austin is one of the most rapidly-growing U.S. cities, with its population increasing by 30 percent between 2010 and 2020 to around 2.3million.

Austin, and Travis County where the Tesla factory is situated, like other Texas large cities, are managed by Democrats. This sets it apart from many conservative, red-leaning, sparsely populated Texas counties.

Austin is a tech hub. It’s home to Dell Technologies (NYSE 🙂 Inc) as well as large Silicon Valley businesses like Alphabet (NASDAQ 🙂 Inc. Software for businesses Oracle Corp (NYSE:) announced in December that it would be moving its headquarters from New York to Austin.

South Korean conglomerate Samsung Electronics is close to initiating construction of a $17 million semiconductor plant just north of Austin.

Steve Adler, Austin’s Democratic Mayor, welcomed the announcement, stating that Tesla would create the “clean manufacturing and middle-skill jobs Austin requires.”

Austin, known for its eccentric culture, is home to many large music festivals like Austin City Limits or South by Southwest. These events draw large audiences each year.

Local residents have resisted the dramatic growth of the Californian workforce, and there are reports that buyers from out of state purchased Austin homes for double their asking prices, which frustrates many Austinites.

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