LOS ANGELES — On a sunny afternoon this fall, automotive engineers and marketers with Mullen Automotive welcomed new customers to check out a fleet of brands, including SUVs, utility trucks and a sports car. The customers got test rides with experts and a look at future products.
But the startup automaker isn’t located in Motor City, Michigan. It’s in Los Angeles.
The auto industry is experiencing a bloom of startups not seen since the early 20th century. But where Metro Detroit and its deep resources of human, entrepreneurial talent were at the center of the 20th-century auto revolution — a sort of automotive Silicon Valley — that startup synergy has shifted today to California.
Startup automakers like Mullen, Canoo Inc., Lucid Motors, Tesla Inc., Faraday Future, Fisker Inc. and others draw on extensive automotive — and software — talent needed to make a new generation of electric vehicles. While automakers of all varieties — startups, legacy, foreign transplants — still rely on Detroit’s extensive expertise, the EV gold rush, electronics revolution and non-union manufacturing have democratized the auto industry away from Michigan towards California and southern auto plants.
Even companies like Rivian Automotive Inc. and Bollinger Motors, which opened their first offices in Metro Detroit, lean heavily on California for talent and capital.
Mullen now owns a 60% stake in Oak Park-based Bollinger, a rare EV startup headquartered in Michigan. While Bollinger’s Oak Park operation is focused on heavy-duty, heavily-government-subsidized Class 4 and 5 commercial trucks, Mullen wants to manufacture the brand’s consumer-focused B1 SUV and B2 pickup truck.
“We plan to produce the Bollinger models along with the rest of our product portfolio: the Mullen 5 SUV, GT sportscar, and Class 1 and 3 vehicles,” said Mullen sales director Robert Sanseverino as he stood in front of the Bollinger B2 pickup in Mullen’s sprawling consumer display in Pasadena’s Santa Anita Park.
Sanseverino, a retired, 30-year Ford marketing veteran, is an example of California’s sprawling, human infrastructure essential to startups like Mullen. Sanseverino’s vice president for commercial sales is Don Borthwick, another Ford veteran.
“We started producing the Mullen Three at our assembly plant in Tunica, Mississippi, this summer,” said Borthwick of the company’s Class 3 EV truck — rebadged from a vehicle sold in China by SAIC Motor, China’s largest automaker. Mullen Three production will be followed by the Mullen One — a rebadged EV cargo van created by China’s Wuling Motors.
“These commercial vehicles get us on an early revenue path, then we can move to the retail market in 2025 and our Bollinger, Mullen 5 and GT models,” said Borthwick.
Part of California’s attraction to startups is its healthy EV market — Tesla’s Model Y and 3 are the best-selling models here — that accounts for over 40% of U.S. EV sales. Battery-powered vehicles are as fashionable as Lululemon and Nike clothing in the country’s biggest state economy.
“I was attracted to the styling of the Mullen 5 when I saw it at the LA Auto Show in 2021,” said Tom Aylesbury, 60, of Pasadena, while ogling a Mullen 5. “I like the Bollinger, too, but I’m looking for a small SUV, and I find the Tesla hard to operate.”
Not only does California’s government subsidize EV sales, it’s also requiring companies to buy EVs for their commercial fleets — a target of Mullen’s Class 1-3 models.
But California is also attractive to startups because EVs — whose simpler, electric-motor drivetrains don’t depend on Detroit’s vast internal combustion engine expertise — are the cutting edge of a fundamental shift in the industry toward digitization. From electronic suspension and navigation systems to electric motors, vehicles today require extensive computer coding to run.
The center of the coding universe is California.
“The core of automobiles now — especially the EVs that all these startups are making — is software,” said veteran iSeeCars.com auto analyst Karl Brauer, who lives in Orange County south of LA. “And the most fertile soil in the world for programmers is the West Coast. There are massive numbers of coders here. They are young, they like California sunshine and they are in demand.”
Brauer points to Irvine-based Rivian and CEO RJ Scaringe, who initially located in the Detroit suburb of Plymouth “where he got industry cred for hiring veterans who knew how to screw a car together.”
“Ultimately, Scaringe moved company headquarters here, which is where Tesla and Lucid and Fisker and these other EV companies are and where the coding talent is. And, honestly, where the weather is perfect, and you don’t have to put up with long winters in the Michigan Rust Belt,” Brauer said.
These inherent California advantages are buttressed by an auto infrastructure that mirrors Michigan in many ways. Los Angeles has been home to cutting-edge auto design for years, courtesy of Pasadena’s ArtCenter College of Design. It’s produced luminaries such as Tesla design boss Franz Von Holzhausen, Fisker CEO Henrik Fisker, Lucid exterior design manager Jiyeon Jenny Ha, and Acura brand manager Jon Ikeda.
Major automakers have maintained design shops here to take advantage of the ArtCenter’s pipeline of talent. The state’s racing and performance-car culture has attracted engineering talent found in LA-based Honda Performance Development and the Toyota Research and Development center. Tesla built its first factory on the bones of NUMMI manufacturing, a former joint GM-Toyota operation in San Francisco’s Bay Area.
Even as Toyota pulled up stakes in LA and moved its North American headquarters to Texas, many of its employees stayed behind and were gobbled up by EV startups.
Employees like Raul Garcia, 40, of Costa Mesa, a skilled testing technician who went to work for EV startup Faraday rather than move out of state.
“I worked for Faraday for eight years as a technician testing drivability, range and powertrains,” said Garcia. “In startups, you’re all over the place, doing different things, and I liked that.”
Mullen Engineering Build Manager Mitchell Dyche got his mechanical engineering degree from California State Polytechnic University-Pomona in 2010 and did stints with motorsports programs and performance carmaker Saleen before Mullen signed him up. He showed off the Mullen 5 RS (the 5’s performance variant) with neck-snapping, Tesla Plaid-like acceleration.
Will California’s EV startup boom bring the same sustained auto employment that the Motor City has enjoyed for a century?
Tesla’s trillion-dollar valuation is the model, but most startups don’t know where their next capital meal is coming from.
“There are a lot of startups offering work in LA like Canoo, Rivian and Mullen — but there is a lot of fluctuation depending on funding,” said Garcia, now a Toyota associate auto technician in LA. “I went back to work at Toyota TRD in their fuel cell program. TRD has a start-up feel to it, and we have rich parents (in Toyota), which gives more security.”
Nearly 300 startups tried to make a go of it in the early 1900s, but you can count the number of viable 21st-century startups on two hands. They are competing against a mature industry and customer base comfortable with ICEs. Mullen, for example, his picked niche EV segments — Class 1 and 3 utility vehicles — that legacy automakers ignore. As it gets into volume segments like pickups and SUVs with its Bollinger and Mullen models, capital requirements will skyrocket.
Analyst Brauer predicts a shakeout: “There has been a lot of government money supporting these companies, and — while the traditional automakers have taken a while to get into the EV space — they are there now. There is a culling coming.”
California is also a difficult place to do business with high taxes and regulations that helped drive Toyota, Nissan — even its golden child, Tesla — out of state. Both Michigan and California have lost manufacturing to right-to-work, low-energy-cost states. Mullen, Rivian, Fisker, Lucid and Tesla have all located manufacturing outside California in plants where they can move quickly, unencumbered by union rules.
“With modern production methods continuing to move to computer-assisted design and more software, developers can be anywhere,” Brauer said. “From design to engineering to production, automakers have multiple locations to choose from.”