How the rise of EVs could reshape Silicon Valley

You’d be forgiven for losing track of which former Big Tech executive has decamped to which electric vehicle maker. In 2021, Ford tapped Apple's VP of special projects, Doug Field, and in 2022, it hired HP’s Roz Ho to lead vehicle software development and brought on Google’s Jae Park in digital product design. Earlier this month, General Motors hired Mike Abbott, another Apple alum. And the Big Tech to EV pipeline is evident in the LinkedIn pages of lower-level employees at tech companies large and small.

But those workers aren’t necessarily abandoning the Bay Area for traditional automotive hubs. Instead, many are staying in Silicon Valley, contributing to a change in the region’s talent landscape.

Auto companies are shifting to where talent is concentrated, Charly Mwangi, a general partner at Palo Alto-based Eclipse Ventures, said.

“There’s still not a willingness for people to relocate en masse to geographies where you typically don’t have a high intensity of that kind of activity, like, say around software,” Mwangi said. “So what you’re actually seeing is the opposite—it’s companies shifting to where the talent density is.”

The EV industry may not be spurring an overnight exodus, but that doesn’t mean it’s not starting to challenge Silicon Valley’s long reign as the country’s top tech hub, according to Brooke Weddle, a partner at McKinsey.

“You’re seeing more of a willingness to burst that Silicon Valley [bubble]; there’s lots of new hotbeds of tech talent that are springing up,” Weddle said. That’s in part because of pandemic-induced work flexibility, but it also represents a “leveling of the playing field” in the tech world, she added.

Fueled by the rapid growth of the EV industry, the pecking order in Silicon Valley is changing. With Ford, Toyota, and Delphi all setting up shop there in the last decade, the Valley is on track to become something of an automotive hub and rewrite a lot of tech labor as we know it: talent distribution across sectors, geographical dispersion, and even the way companies approach hiring.

The EV talent landscape

Despite the economic repercussions of the pandemic, the EV industry is growing rapidly and gaining momentum, with some estimates indicating a 35% growth in EV sales in 2023.

“We’re at a pivot point here, where there’s enough familiarity with the technology, and the technology is now commercial and proven,” Paul DeCotis, a senior partner in consulting firm West Monroe’s energy and utilities practice, said.

Basically, demand for EVs has hit the “if we build it, they will come” point. But staffing to meet that demand has proved to be a challenge: EVs aren’t just a new type of car, but a whole new industry, quite distinct from traditional automotive when it comes to labor needs. And that labor is already in high demand elsewhere.

“The way you interface with an electric vehicle is entirely digital,” Juan Muldoon, a partner at Chicago-based Energize Ventures, said. And that means a different workforce comes into play. “When you open the gamut up to include sort of a digital heartbeat, then you absolutely need a different skill set,” he said.

“There’s a big need for skilled labor that we still haven’t figured out how we’re going to solve,” he added.

The demand for software engineers, which the US Bureau of Labor Statistics projects will grow faster than other occupations through 2031, is one of the biggest growth limiters for the EV industry, Weddle said.

“We have all sorts of other challenges…But we are so far behind in terms of some of these gaps in talent that it will take years to make up for that,” she said.

Cindy Nicola, VP of talent acquisition at Rivian, said that because the industry is so new, the company has focused on transferable skills for hiring decisions, rather than prior experience designing EVs.

“Probably the hardest to find would be in the autonomy space, so just people with that deep learning, machine learning, simulations [experience],” Nicola said. “There’s just a lot of different companies that are trying to recruit in that space, and it’s a newer type of engineering, so it’s very competitive.”

Nicola said whether recruiting front-end, back-end, and full-stack engineers, or data experts, which are also high on Rivian’s recruitment list, hiring is always competitive, even with recent tech layoffs.

Building talent pipelines

So, with software skills in such high demand everywhere in the world of tech, how is the EV industry attracting top Big Tech talent?

Mwangi, who is a former senior director of engineering at Tesla and EVP at Rivian, said that’s not quite the right way to think about this talent shift.

“I actually don’t even think you should think about it as Big Tech and EVs, because some of the EV companies are becoming Big Tech,” he said. “The shift right now, and I’m seeing this day to day, is to the startups.”

Eclipse’s portfolio companies noticed a change in the type and caliber of talent they’re able to attract, and Mwangi attributes this to the priorities of younger workers, who are seeking “stronger missions” and the chance to work in “disruptive technologies,” he said.

“We’re seeing a huge inflow of talent in our portfolio companies that we couldn’t afford before,” he said. “Folks who are graduating from Stanford would have previously gone to Apple; now they want to go to a startup because they’re seeing how much impact they can have in a short amount of time.”

Additionally, there’s the financial forecast of the EV industry. “It’s not like you have to be a bleeding heart, a tree hugger, to say, ‘Hey, I want to work in climate,’” Muldoon said. In fact, he said, it’s the opposite. “Climate is one of the biggest economic opportunities because there are massive industries, transportation, energy, construction, manufacturing, which are changing from the inside out.”

But given the shortage of certain skilled workers, EV companies are also taking the pipeline problem into their own hands.

“What you’re seeing in the EV space but more broadly, is a willingness, and I would say an imperative, for companies to think about how to attract and retain talent in fundamentally different ways,” Weddle said, pointing to the emergence of “employer signaling systems,” in which companies share the skills and capabilities they’ll need for the future with higher education institutions and regional workforce development agencies to help inform curriculums.

To get more talent into the pipeline, Nicola said Rivian has partnered with universities and technical trade schools, as well as with product development organizations, including Formula SAE, a student design competition run by engineering professional organization SAE International.

Redrawing talent maps

The shortage of in-demand tech talent has informed a shift in Rivian’s geographic hiring footprint over the last few years, Nicola said.

“When I started at Rivian, I would say for software…it was predominantly in Palo Alto,” she said. Three years later, she’s focused on hiring in other hubs, including Chicago, near Rivian’s Normal, Illinois, factory. And it’s not just in the US—Rivian is also ramping up software hiring in Serbia, an effort Nicola described as “incredibly successful.”

The EV industry’s growth could serve to boost other areas of the country, according to Sanjay Patnaik, director of the Brookings Institution’s Center on Regulation and Markets.

“When you look at the trends, the top 12 US cities in terms of size are actually losing college graduates, and the aggregate of the next 41 places are gaining them,” Patnaik said, pointing to places like Phoenix and Austin.

“This has the potential to revitalize, probably, some of those areas,” he said. Hybrid work arrangements, coupled with Silicon Valley’s legendarily high cost of living, could ultimately encourage more tech worker mobility toward traditional automotive hubs like Detroit, he said.

“If people have the chance and they find good jobs in other areas, because of the EV trend, we could see some realignment and revitalization in those areas,” Patnaik added.

Dhaval Moogimane, another senior partner at West Monroe who focuses on high-tech industries and software, said the shift could also provide a boost for the premier tech hub by creating more competition for the region.

“The benefit of Silicon Valley has been kind of the confluence of talent, money, and, I think, academia to some degree,” Moogimane said. “Broadly speaking, there’s gonna be more democratization of tech talent, and I don’t know if that’s necessarily a bad thing for Silicon Valley.”