Tesla’s Impact on US Manufacturing Growing by the Day

Tesla’s Impact on US Manufacturing Growing by the Day

Oct 19, 2016

By Eric Schaal, CheatSheet

If you have followed any of the 2016 presidential campaign, you probably heard the recurring theme of lost U.S. manufacturing jobs and how to get them back. Some politicians suggest becoming protectionist and burning trade pacts with foreign nations. Meanwhile, others say low-wage jobs that disappeared won’t come back and the time has come for new industries to blossom. Yet all have ignored the success of American-made electric vehicles.

Actually, Tesla offers an example of how a mid-21st-century American business might look. By focusing exclusively on electric cars, solar power, and energy storage, the Palo Alto-based company planted its flag in the future. Unsurprisingly, the effort involved the creation of thousands of manufacturing jobs. From a rapidly expanding automotive plant to the world’s largest battery factory now in the works, Tesla is officially a force in the new economy out West.

The EV and green energy company may soon have another flag to plant — this time on the East Coast. In mid-October, Tesla announced it would collaborate with Panasonic on the production of photovoltaic cells and modules for solar installations in a Buffalo facility. Taken as a whole, Tesla’s impact on U.S. manufacturing is already significant and poised to grow exponentially in the coming years.

The Gigafactory and the battery boom

Tesla officially opened its battery Gigafactory near Sparks, Nevada, in the summer of 2016. Designed to double the world’s battery production and eventually be the biggest building on the planet, we have only glimpsed the beginning. By the time the EV maker ramps up production and starts supplying batteries for Model 3, the Gigafactory’s workforce will increase about seven times.

Elon Musk, the company founder and CEO, said the factory could very well employ 10,000 people by 2020. At that point, the automaker will have at least three vehicles and an annual production goal of 1 million cars. The many service jobs and related opportunities make Tesla a serious economic force in what used to be a Nevada desert.

The expanding Fremont plant

While the Gigafactory churns out the batteries, employees assemble the Model S and X at the Tesla Factory in Northern California. The automaker employs over 6,000 people at the plant, making it Fremont’s largest employer. According to a Los Angeles Times report, Tesla submitted a plan to double its footprint to 9.1 million square feet as it ramps up production. Another 3,000 employees should join the Fremont workforce in the next few years.

The car company’s impact on the Bay Area manufacturing scene is far more extensive. San Francisco Business Times estimated about 50 businesses provide parts and services to Tesla already. For a company that has a market share of less than 1%, there is no telling what the coming expansion will mean to the area economy. Ironically, the Fremont factory occupies a space where a General Motors plant used to be.

Solar in Buffalo

Once Tesla’s merger with SolarCity becomes official, the automaker will transform from an automaker with a battery business to a complete energy and transportation provider. Musk pointed out the importance of energy generation in his original plan for Tesla, and that will be a reality soon. According to an October company statement, producing cells for solar systems will bring Tesla to a new manufacturing site next year: upstate New York.

We see more than a little significance in the company’s first movements in the East. Fremont planning officials (along with Musk himself) noted even the company’s expanded plant would have a production cap near 500,000 cars per year. As production increases, we see a lot of sense having another plant on the other side of the country, where the electric vehicle boom has yet to begin in earnest.

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