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Electric Vehicle Companies Tap Silicon Valley Cash04:38

Tesla Motors plans to use a former Toyota-GM joint venture factory in California to build its Model S electric sedan.MoreCloseclosemore
Tesla Motors plans to use a former Toyota-GM joint venture factory in California to build its Model S electric sedan.

Last of a three-part series

Detroit has been at the center of the country's auto industry ever since Henry Ford rolled his first Model T off the assembly line in 1908.

But as hard times have fallen on America's Rust Belt, there's a new region hoping to give Detroit a run for its money. Clean-tech entrepreneurs in Silicon Valley are investing in the emerging electric car industry.

Tesla Motor's battery factory in Palo Alto, Calif., is so clean that it looks more like a sterile biotech lab.

"There's a lot of secret stuff going on here. Generally, we restrict access pretty carefully," says JB Straubel, the chief technical officer for Tesla Motors and one of the founders.

The company is best known for its Roadster sports car, which does 0 to 60 miles per hour in less than four seconds — making electric cars seem sexy. A range of over 200 miles has made Tesla's batteries the benchmark for electric vehicles.

But it all comes at a price: A stripped-down Tesla Roadster starts at $109,000. Each battery pack looks like a big black box and weighs about 1,000 pounds.

Batteries For Sale, New Hiring

Tesla builds its own battery packs in California and sells them worldwide. The company has plans to ramp up its manufacturing: This spring Tesla took over a shuttered joint venture Toyota ran with General Motors called New United Motor Manufacturing Inc., also known as NUMMI. Tesla plans to use the facility to build a more affordable electric vehicle — the cheaper, longer-range Model S sedan.

In the midst of high unemployment in Silicon Valley, Tesla is hiring with the goal of expanding from 800 to 2,000 employees in the next few years.

Tesla has received an infusion of cash from Elon Musk, the company's co-founder and CEO, who made his fortune helping to start PayPal. Other venture capitalists are also chipping in, including Google.

Google Dollars

"We think EVs offer so many advantages in terms of environment, economy and security that we thought we should put some of our investor dollars into those kinds of companies," says Dan Reicher, the director of Google's climate change and energy initiatives.

Google has EV charging docks on its sprawling campus in Mountain View, Calif.

Elon Musk, CEO of Tesla Motors, is investing more of his personal fortune in the car company. Other Silicon Valley investors, including Google, are also funding electric car ventures. (AFP/Getty Images)

"We've built a fleet of plug-in cars," Reicher says. "These are Toyota Priuses and we converted them after market."

Google has essentially turned the hybrid Prius into a plug-in so that employees can charge their cars at work. It's this kind of garage-startup mentality that has given Silicon Valley its innovator reputation.

"What's exciting here at Google is just some very, very smart engineers who say, 'Well, we can do that. You got a problem, we'll figure out a way to solve it. You got an opportunity, we'll engineer a way to take advantage of it,'" Reicher says.

Government Investment

It's not just venture capital that's flowing into EV-related companies. The Obama administration is spending $2.4 billion to revitalize electric cars. The company ECOtality has received $100 million in federal funding to help invigorate the market by giving away free chargers in major cities.

"These are no longer your father's chargers, so to speak," says Jonathan Read, CEO of ECOtality. "These chargers are very intelligent. They have all the telecommunications capability in them. And all of this is based on a big network of chargers being interconnected talking to each other and being able to talk to the utilities."

New Jobs In The EV Sector

ECOtality just moved its company headquarters from Arizona to San Francisco to be closer to the action. And like many other companies in this sector, ECOtality is hiring. The company just announced a deal to install its charging docks at some BP gas stations.

Of course, plenty is happening outside of Silicon Valley, including advanced battery research in Boston and Wisconsin. But the new automobile of the 21st century is likely to benefit from the culture of Silicon Valley, where people are used to taking a chip, a cell or an idea and working on it until it becomes something big.

Copyright NPR 2018.

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