"Today I am a happy governor because I always like when I hear that companies move to California and jobs come to California," said Schwarznegger.
BYD is a Chinese manufacturer of electric cars, solar panels and battery-storage technology. The company will set up its North American headquarters in a former Hyundai dealership in downtown Los Angeles.
"Here's a good example of how companies are coming to California because of our energy policy, rather than with some of the greedy oil companies of Texas who are claiming that we should roll back our environmental progress that we are making here," said Schwarzenegger. "But they're just jealous because this is a nightmare for the Texan oil companies. This company is a nightmare for them."
Initially, BYD plans to employ only 150 workers at its offices on South Figueroa, but city officials are confident the company, which employs 150,000 workers in China, will grow quickly here.
"One can imagine once they start here, there will be a multiplier effect, the suppliers, all the folks involved, it will grow," said L.A. City Councilman Bill Rosendahl.
To encourage the expansion, the city plans to waive a portion of port fees BYD would pay on cars and other products that it imports through Los Angeles.
Villaraigosa noted that pressure is growing to water down California's ambitious climate change laws. He says a "green-tech" company like BYD shows job growth and the environment are not mutually exclusive.
"The growth sector in the L.A. and California economy is in in green tech, clean tech, and L.A. is leading the way," said Villaraigosa.
BYD didn't exist until 15 years ago, but since then it has grown 70 percent per year in China. It is enough that investor Warren Buffet recently put $300 million in the company.
The electric cars will test-marketed in California next year.