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Tesla’s Next Move

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While the coronavirus has ravaged the economy and shuttered many a business, some are still in the market for growth. Automaker Tesla has announced plans for a massive electric-vehicle manufacturing plant that would offer 10,000 jobs to whatever lucky city it decides to call home. Currently, Austin and Tulsa find themselves in that unique position of shared potentiality. Though Tesla officials have repeatedly refused to comment on their selection, at an April earnings meeting, Tesla CEO Elon Musk said a decision will be made by the end of July. 

Why make a move in the middle of a pandemic? The automaker has outgrown its Fremont, California factory which employs 10,000 and their battery factory in Reno, Nevada which employs another 6,500. They need space to manufacture their Cybertruck or Tesla Semi, and if demand is as high as Musk predicts, the company will need a second production line for the Model Y, Tesla’s new small luxury SUV. It makes sense to locate their next factory in middle America, with a strong manufacturing workforce built into the culture. Proximity to the east coast is important as well, to meet rising demand and lower transportation costs of new vehicle purchases. 

Competition for one of the few big project acquisitions in the COVID-era has both cities making moves to win the factory prize. Beyond the factory itself, Tesla’s arrival will spur additional local economic development as suppliers and other auxiliary businesses are likely to follow. It’s a bit like déjà vu for Texas, after San Antonio lost the bid in 2014 for what became the Reno, Nevada factory. If Austin prevails, local economic development officials say that San Antonio could benefit this time around, with Tesla’s infusion sparking an automobile-manufacturing corridor extending from Toyota’s pickup plant on the South Side to the Austin area. Unconfirmed sources are already reporting that Austin will likely be the official choice. Plus, on June 18, Texas’ comptrollers’ office announced the company’s land-use application for a parcel near the Austin airport. In response, Musk tweeted: “Tesla has an option to purchase this land, but has not exercised it.” The company has also negotiated a tax incentive with the local school district which could save Tesla up to $68 million over a decade. Richard Suttle Jr, a local attorney for Tesla, called the development a potential game-changer, saying: “The jobs that will be available to all segments of our community will help us through the recovery and keep Austin’s economy strong. If they come here, it will create thousands of entry-level jobs that do not require a college education. That’s what our economy needs.”

Four-hundred and fifty miles north of Austin, Tulsa has put on quite the show of affection to attract the automaker, transforming their iconic 75-foot-tall Golden Driller into an homage to Musk himself. Originally a symbol of Tulsa’s status as an oil and gas center, the statue has been painted with the Tesla logo, the belt buckle which used to say Tulsa now reads “Tesla” and the face wears a Musk mask. Mayor G.T. Bynum recently tweeted a rendering of a Tesla Cybertruck outfitted as a Tulsa police car. He said: “While I cannot comment on potential projects, it is clear that Tesla and Tulsa were forged in the same spirit, both founded by pioneers who dreamt big and made it happen. Both trying to change the world with a new kind of energy. Both investing big in what matters most: people. Tulsa is a city that doesn’t stifle entrepreneurs — we revere them. And as Tesla continues to rapidly change transportation all around the world, I can’t imagine a better place for them to further that important work than Green Country.”

Wherever Tesla ends up, they’ll be bringing lessons learned at their previous factories in Fremont, Reno and Shanghai as they build their powerful new home. Tesla’s chief financial officer, Zachary Kirkhorn, says: “There’s significant efficiencies by having as much as possible and similar product lines under the same roof and as much vertical integration as possible all in one facility.” We’re talking mega potential here for American manufacturing and beyond. 


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