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California Is Still Home for Tesla Engineering HQ, Says CEO Musk

Musk announced the news on Wednesday with California Governor Gavin Newsom

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Sadaf Hasan
Sadaf Hasan
Aspiring reporter covering trending topics

UNITED STATES: Elon Musk said on Wednesday that Tesla Inc. (TSLA.O) will make California its global engineering home, indicating that he will not entirely abandon the state, even though the electric vehicle manufacturer’s current corporate headquarters are in Texas.

Musk announced the news on Wednesday with California Governor Gavin Newsom, and the Tesla CEO later told that locating the engineering hub in California means it is “effectively the headquarters of Tesla.”

In 2010, Tesla acquired a plant in Fremont, California, from a joint partnership between General Motors Co. (GM.N) and Toyota Motor Corp. (7203.T), which it still runs and which will boost production this year to more than 600,000 vehicles, said Musk.

Even so, the billionaire CEO, who had harshly criticised California’s rules and taxes after relocating Tesla’s formal corporate headquarters to Texas in 2021, appeared to have changed his tune with Wednesday’s statement.

The two states are economic and political rivals. The most populous and democratically governed state in the union, California, has the highest percentage of electric cars and has given tax breaks to Tesla as it expanded.

The nation’s oil and gas sector is centred in Texas, which is ranked second and is known for having relatively lax regulations.

In 2020, Elon Musk and local officials fought over the closure of the company’s Fremont factory as a result of COVID-19.

Previously, Musk had criticised California for its “overregulation, overlitigation, and overtaxation.”

Musk admitted to voting for Democrats in the past but advised choosing the GOP in the 2022 congressional elections. He did express gratitude to famous Democrat Newsom for purchasing a Tesla Roadster in its early years.

The move of Musk’s headquarters to Texas appears to have been a strategic error, said Stephen F. Diamond, an associate professor of law at Santa Clara University. “It is a reminder of the advantage of building on success in California,” Diamond added.

Musk stated that California should continue to be cautious with regards to taxes and rules.

For his part, Newsom boasted that his state was the nation’s largest manufacturing hub during the event, but he avoided criticising Texas in his comments.

He jokingly said, “Eat your heart out, Germany,” as the news came shortly after Tesla announced it would concentrate battery cell manufacturing in the United States due to federal incentives in the Inflation Reduction Act. One of the first businesses to announce a strategic change as a result of the law is Tesla.

A former Hewlett-Packard building in Palo Alto will house the new Tesla engineering offices. From the organisation that founded Silicon Valley to Tesla, Musk said, “This is a poetic shift.”

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  • Sadaf Hasan
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