Perhaps no single company has made more impact on the economy of Texas than Tesla, headed by Elon Musk. Tesla now ranks as the second largest employer in central Texas.
Growth at the EV manufacturer is likely to continue. At a recent conference and expo hosted by the Austin Regional Manufacturers Association, director of manufacturing at Tesla’s gigafactory, Jason Shawhan, said the company expects employment to triple from current levels to near 60,000, when production of its long-awaited Cybertruck finally ramps up.
Although it was not until December 2021 that Tesla officially made Texas its U.S. headquarters, construction on the gigafactory began in July 2020. Tesla rolled EV number five million off the line in September.
Vertical integration is part of the Tesla production strategy. The gigafactory’s 10-million-square-foot production floor space allows the company to build driving units, battery packs and its proprietary battery cells. It makes its own castings and has plastic injection molding and stamping press lines, along with its general assembly, body shop and paint shop.
Finding qualified workers is one of the company’s biggest challenges, Shawhan said. Employment has grown by more than 50 per cent since the end of 2022, so much so the company was running out of employee parking spaces.
Many employees face commutes not only from Austin but also from Pflugerville, Round Rock, Manor, San Antonio, Bastrop and Kyle. The company reportedly runs a daily shuttle for 1,000 employees who live in the city of Killeen more than 70 miles to the north. Some even come from as far away as Houston.
The so-called “Tesla Effect” has attracted many suppliers now setting up shop near the Austin plant.
French auto parts giant HBPO Plastic Omnium Modules will soon open its newly-constructed 340,000-square-foot facility, about a dozen miles away from the gigafactory. Plastic Omnium claims to be “the world market leader for the ‘face of the car,’ the front-end module,” saying that every sixth vehicle front end installed around the world comes from one of its nearly three dozen plants. Hiring notices for approximately 800 job openings have been posted for months.
Everyone seems to want to locate near the gigafactory. Other Tesla suppliers known to have made investments in nearby Kyle include automotive body manufacturer Simwon North America Corp. and plastic manufacturing and injection molding specialist Plastikon Industries Inc., CelLink Corp., maker of high-conductance circuits based in San Carlos, Calif., has a new facility in Georgetown. Tesla itself has plans to lease nearly a million square feet of warehouse space in Kyle, having already leased more than 400,000 square feet in San Antonio.
Local leaders are quick to praise Tesla as a regional investment magnet, particularly in terms of creating a growing auto manufacturing sector in central Texas. They see the future development of an automotive manufacturing corridor, stretching from Tesla’s proposed new factory in Mexico to the General Motors assembly plant in Dallas.
Musk’s investment ventures in Texas go beyond EV manufacturing and spread beyond the area immediately surrounding the Tesla gigafactory outside Austin.
Rocket maker Space X and tunnel builder The Boring Company have been connected to about 450 acres of land owned by Tesla. Hundreds of thousands of feet of industrial space has been constructed, which themselves will employ many hundreds of employees judging from recently job postings. Over in Travis County southeast of Austin, Musk’s brain-computer interface start-up Neuralink has nearly two dozen job openings now posted. The venture received approval in September to recruit patients for clinical trials.
Given that the employment at Tesla has increased so rapidly and causes so much employee commuting, plans are underway to build more housing closer to the facility, spurring the growth of area’s residential construction industry.
Plans have been recently filed for as many as 400 apartments to be built on a 17-acre property in Balstrop, 30 minutes away. Many more housing projects are underway in the area, including hundreds of luxury apartments and duplexes.
Balstrop has seen a surge in population, largely due to the Tesla gigafactory and more recently Elon Musk’s other Texas-based ventures. Musk has even mused about building his own company town called Snailbrook near the SpaceX and boring company facilities, although there is local scepticism about his plans.
There seems to be almost no end in sight for Musk’s affection for the Lone Star State.