Tesla Motors Inc (NASDAQ:TSLA) surpassed Toyota Motor Corp (ADR) (NYSE:TM) as the largest employer in the auto industry in the State of California.
The electric car manufacturer has 6,000 employees in California this year compared with the 5,300 people employed by the Japanese and world’s largest automaker. The number of employees of Toyota Motor Corp (ADR) (NYSE:TM) in the state is expected to decline as it plans to transfer its U.S. headquarter from California to Plano, Texas by 2017.
Bloomberg noted that the electric car manufacturer is an outlier as many company are doubling down on manufacturing products in the state because of high labor, energy costs, and strict environmental regulations for setting up new plants. Other states such as Texas are attracting manufacturers by offering lower taxes and lesser bureaucracy.
Gino Dicaro, spokesperson for the California Manufacturers & Technology Association commented, “Tesla’s scaling up here in California is terrific news. It’s also an exception — and we certainly need more of them.” He added that manufacturing goods in the state is not easy or cheap citing the reason that industrial power rates are 55% higher than the U.S. average, and worker’s compensation premiums are among the highest in the country.
Furthermore, DiCaro said obtaining a permit to open or expand factories in the stake requires more time and money for companies.
According to Simon Sproule, spokesperson for Tesla Motors Inc (NASDAQ:TSLA) the company is planning to hired additional 500 employees in California by the end of the year. He said the company plans to hire new workers for the former Chrysler-Daimler distribution site in Lathrop, which was recently rented by Tesla and undergoing renovation. Last month, Lathrop City Manager Steve Salvatore confirmed that the electric car manufacturer was granted permit for manufacturing modification.
On the other hand, Diarmuid O’Connell, vice president for business development said the electric car manufacturer already hired more than 3,000 employees since early last year to expand the production for its Model S vehicle and in preparation for it’s the manufacturing of the Model X sports utility vehicle. According to him, “It’s poorly understood how much Tesla has invested in the state of California and how much it’s added in just the past 18 months.”
Tesla Motors Inc (NASDAQ:TSLA) is also a bigger local employer compared with other high-growth technology companies based in the state such as Twitter Inc (NYSE:TWTR) with 3,000 employees worldwide based on its recent regulatory filing. The electric car manufacturer’s factory is located in Fremont, which is close to San Francisco.