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I'm astounded that they ever tried to operate a factory in the Bay Area to begin with. Forget about regulations and taxes. The real issue is cost of living. You
by api 6y ago
I'm astounded that they ever tried to operate a factory in the Bay Area to begin with. Forget about regulations and taxes. The real issue is cost of living. You're going to have to pay all employees 2-3X what you'd have to pay them elsewhere, and it's not like they're keeping any of that. It's all going to rent/mortgage payments.
- delfinom 6y agoAustin is comparatively better but not a whole lot. The big three cities in Texas are getting extremely expensive with ridiculous traffic to boot.
- skellington 6y agoAustin is still dirt cheap compared to the Bay Area if you're not living in the core area. The housing around where the Gigafactory is going to be is very affordable.
- seltzered_ 6y agoFully Automated Luxury Traffic Jams
- mariojv 6y agoAverage rent for a 1 bedroom apartment in Fremont is 70% more expensive than one in Austin right now: https://www.rentcafe.com/average-rent-market-trends/us/tx/austin/ https://www.rentcafe.com/average-rent-market-trends/us/tx/au... https://www.rentcafe.com/average-rent-market-trends/us/ca/fremont/ https://www.rentcafe.com/average-rent-market-trends/us/ca/fr... If you drive even a little further out, living costs are far cheaper, too. Austin proper is not that large. In a nearby town less than 15 miles from downtown Austin, I see 2800 sqft. houses renting on Zillow for $200-300/month cheaper than what I paid in Bay Area rents for a 1 bedroom ~600 sqft. apartment almost 10 years ago. Not that it won't ever get there, but Texas cities have a ways to go to catch up with some of the CA housing prices.
- toomuchtodo 6y agoTesla was strapped for cash at the time and picked up Fremont, which used to be the joint venture NUMMI facility between GM and Toyota, for almost nothing. It was a necessary concession to bootstrap Tesla. Arguably, they have outgrown the need for such a small facility after Texas and the next battery facility are built. https://en.wikipedia.org/wiki/NUMMI https://en.wikipedia.org/wiki/NUMMI
- chubot 6y agoI wouldn't assume that... The employees Tesla hires are somewhat disjoint from the ones that VC-backed startups/FAANG are hiring (with some software overlap, but I'm not sure where they do software). And the employee pool surrounding the Fremont area is somewhat disjoint from the pool surrounding SF/Palo Alto as well.
- FreedomToCreate 6y agoThey don't pay Tesla assembly workers much, very comparable to what GM and Ford pay in the Detroit Metro Area. Ford pay 13-30 dollars(source:payscale.com) while Tesla pays 18-30 dollars (source - father in law who works on the line). Most people are older men who never got a college education or younger men following the same path. They all live in multifamily units in the bay area, and thats how they afford it. Even with the sky high cost, these people see the bay area as their home and are not going to pick up and leave, so they is always labor available for manufacturers.
- btian 6y agoThey bought a $1B factory for $50M when they didn't have much cash. Building a new factory in Texas was not an option.
- m463 6y agoI expect there are a lot of the required engineers available in the area. And that's where the company started.