Can electric cars restart the California manufacturing base?


Last week Tesla Motors, the red-hot electric car startup, announced it would use some of its $465 million in stimulus funds to start a drive-train manufacturing plant in Palo Alto, the heart of Silicon Valley. Tesla is bucking a trend in bringing manufacturing jobs to the Golden State. But with billions of dollars in stimulus bucks flowing to the electric vehicles sector, will a maverick move by Tesla CEO Elon Musk prove to be a precursor for a rebound in California manufacturing?

The answer, in short, is probably not. "I don't think Tesla is the beginning of a major manufacturing movement. Toyota and GM are closing their last plants in California. We are not a major car manufacturing center and there is no reason once the EV thing got going, that they wouldn't go to places where they make cars cheaply," says Stephen Levy, Director and Senior Economist of the Center for Continuing Study of the California Economy (CCSCE) in Palo Alto.