How Elon Musk became the engine of the Texas economy

Bloomberg — Elon Musk is now officially Austin’s largest private employer.

Tesla Inc. (TSLA) increased its employee count 86% last year to 22,777 in the fast-growing Texas region, where the automaker produces Model Y SUVs and angular Cybertrucks. As a result, it surpassed grocery chain HEB, according to a new annual compliance report Tesla filed with the Travis County economic development program.

No title providedBoring Company materials at the Tesla factory in Austin, Texas, United States, on Monday, March 25, 2024. (Bloomberg/Jordan Vonderhaar)

Tesla’s massive factory in Texas is the anchor of Musk’s growing presence in the state: He is building a lithium refinery near Corpus Christi. The city of Bastrop, about 30 miles east of Austin, is home to Boring Co. operations and a new SpaceX factory for Starlink satellites. SpaceX also has a massive launch site for its Starship rocket in the Gulf of Mexico, on the southern tip of Boca Chica, and an engine testing facility outside Waco.

Musk’s companies and the related economic activity they generate reach $11.1 billion a year, estimates Ray Perryman, who runs an economic research firm in Waco.

“It is rare for a single individual to build such diverse businesses with substantial impact across multiple regions,” Perryman said. “The direct impact of the companies that Elon Musk has brought to Texas is as great as that of some major manufacturing sectors, such as beverage production or electrical equipment.”

For years, Musk was a creature of California: a Silicon Valley entrepreneur and Hollywood celebrity. He regularly commuted between SpaceX’s headquarters near Los Angeles and Tesla’s expanding operations in the San Francisco Bay area. But Musk chafed at California’s work restrictions during the early days of the pandemic. Months later, Tesla announced that Austin would be the headquarters of its second automotive plant in the United States. Musk personally moved to Texas at the end of 2020.

Its aggressive expansion into Texas has irritated some. Boca Chica residents have complained about noise and debris created by its rocket launches, and in March the state approved a land swap with SpaceX that gives up 43 acres of Boca Chica State Park to the company in exchange for 477 acres. adjacent to Laguna Atascosa, National Wildlife Refuge. The idea is that if damage to the nearby site is unavoidable, the company will compensate the State with a plot of land 10 times larger.

Near the SpaceX facility in McGregor, residents have complained about the thud and rattle of the test engines. And in Bastrop, local organizations rallied against Boring’s permission to dump tens of thousands of gallons of treated wastewater into the Colorado River, although there is now a plan for Musk’s companies to connect to the utility system. the city.

SpaceX has said in filings that it has more than 2,000 workers at its operations in the southern tip of Texas, near Brownsville. Musk’s social media platform X has said it plans to hire 100 people in the capital. His brain implant company Neuralink has 300 people in Austin, according to Opportunity Austin.

Tesla said its lithium factory, which is being built in an unincorporated area about a 30-minute drive from Corpus Christi, will eventually have 162 workers. Waco economic development officials say SpaceX has 600 workers at a rocket engine testing site in McGregor. The Austin area has about 100 Boring workers and about 700 SpaceX employees, Opportunity Austin said.

The site in Bastrop is also the closest the public can get to Musk’s operations. Near the SpaceX and Boring facilities, Musk has erected a steel building with a cafe and grocery store called Boring Bodega, the Prufrock Pub named after the Boring tunnel-boring machine, His & Hers Barbershop, and courts. of pickleball.

“Everyone is trying to prepare and grasp the growth that is coming here,” said Becki Womble, head of the Chamber of Commerce in Bastrop, where two new elementary schools are opening to accommodate estimates that the population will grow. more than five times to 63,000 in 2030.

The facility near Corpus Christi remains a massive construction site, located on a desolate stretch of the southern Texas coastal plains with little industry and not much money to spare. The $380 million project is the county’s largest investment in five years, according to Sarah Tindall, senior vice president of the Corpus Christi Regional Economic Development Corp.

As Musk’s Texas empire grows, he spends a lot of time in Austin, which is home to several people within his orbit. At one point, Musk planned to build a house on a former horse farm he had purchased across the Colorado River from his Gigafactory, according to Walter Isaacson’s biography, but it appears it was never built.

“For Musk, the heart and lungs of this operation will be in Austin going forward nationally,” Wedbush Securities analyst Dan Ives said in a phone interview. “It’s not just about the Gigafactory, it’s about what that means for battery technology and what the entire supply chain around Tesla will follow to Texas.”

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