Investment in state's green car industry increases

Publication Date
Author
David R. Baker
Source
San Francisco Chronicle
Year Published
2011

California's small but growing electric car industry has become an investment magnet, attracting more venture capital than its competitors in any other state or country.

Now, will jobs follow?

In the first half of this year, California companies developing plug-in vehicles, advanced hybrids, charging stations and related equipment brought in $467 million in venture capital, according to a new report from the Next 10 public policy group. That's 69 percent of all the venture capital invested in electric vehicles around the globe, and 74 percent of the capital invested in the United States.

For all of 2010, California's electric car companies landed $840 million, or 60 percent of the worldwide total.

Those figures do not include money that big, established automakers are pouring into their own electric vehicle programs. But they do show that California could take a leading position as the field grows.

"We think California is fast becoming the world's advanced car capital, and we are benefiting economically from our leadership," said F. Noel Perry, founder of Next 10.

California also tied with Michigan in the number of electric vehicle-related patents registered from 2008 through 2010, with each state having 300. Only Japan and South Korea had more.

The number of jobs generated by the industry so far in California is harder to determine.

The consulting firm Collaborative Economics, which researched and wrote the report for Next 10, counted just 1,800 electric vehicle jobs in the state. But those figures come from a database whose information is nearly 2 years old, representing employment in January 2010. The report's authors consider the database to be the most precise available, even if the information isn't current.

The number of electric vehicle jobs in the state today is almost certainly higher. Tesla Motors alone now has more than 1,000 workers in California and will likely add more as it begins production of its Model S sedan in Fremont next year. Coda Automotive, which moved into a new headquarters in Los Angeles in November, has more than 220 jobs.

"You might look at that and say, '1,800? So what?' " said Tracey Grose, the report's lead author. "We are really in the early stages. It's definitely an emerging industry."

So far, the electric vehicle industry in California has benefited from the state's high-tech workforce, venture capital network and supportive government policies. Its future growth, however, will depend on consumer demand for the vehicles.

There again, California has an advantage. Most Californians have a strong environmental bent, and many pride themselves on buying the latest technology. General Motors chose to introduce its plug-in hybrid Chevy Volt last year in California, as well as a handful of other markets, to capture those coveted "early adopters." The first customer to receive Nissan Motor Co.'s new, all-electric Leaf sedan was a Redwood City tech executive who picked up his car last December.

Still, GM recently reported that it will probably sell 8,000 Volts nationwide this year, about 20 percent fewer than expected. Consumers may be curious, but many remain daunted by the price and limited range of electric-only cars.

"They've got true believers buying these cars right now," said John O'Dell, senior editor of Edmunds Green Car Advisor. "And that's really who's buying them. I've got a lot of car nuts in my neighborhood, but I'm the only one driving a Leaf."