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

By Tina Bellon and Hyunjoo Jin

AUSTIN, Texas (Reuters) -Tesla Inc’s decision to move its headquarters to Austin, Texas, from Palo Alto, California, accelerates the shift of electric vehicle industry jobs to Southern and Western U.S. states that offer lower taxes, lighter regulation and less unionization than the coastal Blue states where most electric vehicles are sold.

Electric vehicle startups and established automakers have lined up $24 billion in investments in new factories in Texas, Arizona, Oklahoma, Tennessee and Kentucky.

CEO Elon Musk’s announcement https://www.reuters.com/business/autos-transportation/tesla-moving-headquarters-austin-texas-says-ceo-musk-2021-10-07 during the No. 1 EV maker’s annual meeting on Thursday puts an exclamation point on the shift in the U.S. auto industry’s center of gravity – and also highlights the tensions it could create.

The competition among states for electric vehicle jobs is intense, and has a political dimension. Democratic-leaning Blue States such as California are home to many electric vehicle buyers and EV company investors, who have strong views on climate policy.

Many of the states getting EV jobs are politically conservative Red states, whose Republican governors are both supportive of the fossil fuel industry and eager to welcome electric vehicle manufacturers and their jobs with subsidies and regulatory streamlining.

“The Lone Star State is the land of opportunity and innovation. Welcome,” Texas Governor Greg Abbott tweeted on Thursday after Tesla (NASDAQ:) announced its move.

Tesla, the world’s most valuable automaker, now faces the challenge of taking advantage of the Texas business climate without alienating workers recruited from the San Francisco Bay Area’s vibrant technology industry. It also has to consider the big base of Tesla vehicle customers in more politically liberal states such as California and New York.

“Tesla does not want to invite criticisms or attacks from public advocacy groups accusing them of looking for a large incentive package or abandoning California at a time when the state is in peril,” said John Boyd, principal of Boyd Company, a site selection firm.

California Governor Gavin Newsom, a Democrat, on Friday praised Musk for having invested in California, including its SpaceX facility, and creating jobs.

But Newsom said the state also offered hundreds of millions of dollars in tax subsidies to Tesla. “Our regulatory environment helped create a company and grow that company.”

UNIONIZING

Detroit automakers such as Ford Motor (NYSE:) Co have an analogous problem. Ford said last week it and South Korean battery partner SK Innovation would invest $11 billion https://www.reuters.com/article/ford-motor-electric-idCAKBN2GN299 to develop a sprawling electric vehicle…