Tesla CEO Elon Musk has finally come to terms with California.
It was in the Golden State that Tesla made its debut.
In 2010 Tesla bought a Fremont, Calif., factory that had been owned by Toyota (TM) and General Motors (GM) via a joint venture called Nummi for the inconsequential sum of $42 million. In a partnership the Japanese automaker took a $50 million stake in Tesla amid a financial crisis that led to the bankruptcy of GM and Chrysler.
The Fremont plant has become essential to Tesla (TSLA), producing all four of its passenger-vehicle models: the Model 3 and Model S sedans and the Model Y and Model X SUVs. The only Tesla plant to produce all four models, it has annual production capacity of 650,000 vehicles, Tesla said in its fourth-quarter results.
But Musk and Tesla believed that local laws, particularly those regarding worker protection, were hobbling its operations. The lockdowns put in place at the start of the covid-19 pandemic ended up seriously annoying the billionaire.
The Divorce Between Tesla and California
"We only have two car factories right now, one in Shanghai and one in the Bay Area, and the Bay Area produces the vast majority of our cars, all of S and X, and most of the 3 and all of the Y," the billionaire said on April 30, 2020, during Tesla's first-quarter-earnings call.
"So, the extension of the shelter-in-place or, frankly, I would call it, forcibly imprisoning people in their homes against all their constitutional alliance, that's my opinion, and breaking people's freedoms in ways that are horrible and wrong and not why people came to America or built this country."
On May 11, 2020, a defiant Musk said in a tweet that "Tesla is restarting production today against Alameda County rules, I will be on the line with everyone else. If anyone is arrested, I ask that it only be me."
A divorce between Tesla and California became inevitable, and on Dec. 1, 2021, the automaker announced in a regulatory filing that its headquarters was now in Austin.
"On December 1, 2021, Tesla, Inc. relocated its corporate headquarters to Gigafactory Texas at 13101 Harold Green Road, Austin, Texas 78725," the firm wrote. The SEC filing was signed by Chief Financial Officer Zachary J. Kirkhorn.
But on Feb. 22, 2023, to everyone's surprise, Musk and Gavin Newsom, the Democratic Party governor of California, held an event together to announce that Tesla would base its global engineering headquarters in Palo Alto, 40 minutes south of San Francisco.
"We're excited to announce that Tesla's global engineering headquarters will be right here, the former headquarters of Hewlett-Packard," Musk said alongside Newsom, in an event streamed live on Tesla's Twitter account.
Confusion: California or Texas?
This announcement created confusion. Some media saw it as the return of Tesla's headquarters to California.
"Tesla HQ returning to California, Musk announces," a headline from The Hill read.
The discussion was also launched on social networks, where some shared The Hill's article, while fans of the brand disputed it, saying that Tesla remained headquartered in Austin.
"This is not true," tweeted Sawyer Merritt, a self-described Tesla investor. "Tesla HQ will remain in Austin, TX. This new engineering HQ in Palo Alto is just an expansion of Tesla's footprint in CA."
The debate more or less forced Tesla to clear things up. The brand posted a message late on Feb. 23 to say that its headquarters did indeed remain in Austin.
"Our global HQ remains in Austin," the carmaker said on Twitter. "Our new engineering HQ in Palo Alto will serve as the main location for Tesla engineering."
