Musk threatens to pull Tesla out of California

Elon Musk. AP photo from 2019.

Tesla CEO Elon Musk is threatening to move his electric car company — including its headquarters in Palo Alto — to either Texas or Nevada because Alameda County officials won’t let him reopen his factory in Fremont.

“Frankly, this is the final straw,” Musk tweeted. “Tesla will now move its HQ and future programs to Texas/Nevada immediately.”Palo Alto Mayor Adrian Fine replied to Musk’s tweet, saying, “I would be really sad and disappointed if @Tesla left @cityofpaloalto, and stand ready to help. I truly appreciate having a cutting edge company based here, employing people, paying taxes and helping to solve the climate crisis.”

Musk responded, “Much appreciated, Mayor Fine!

Also in response to Fine’s tweet, Palo Alto Human Relations Commission member Steven Lee, presumably speaking for himself and not the HRC, tweeted, “We should help Mr. Musk grow up! Is Tesla doing great work for climate change? Absolutely. Does Palo Alto benefit from Tesla being HQed here? Yes. But his recent comments are irresponsible and unbecoming of a corporate leader of his stature and we shouldn’t indulge him.”

Moving an auto assembly plant won’t happen overnight, and Musk said that whether the company keeps any manufacturing in Fremont depends on how Tesla is treated in the future. Tesla plans to open a second U.S. plant in Texas.

Tesla opened its headquarters at 3500 Deer Creek Road in 2009 when the company was just getting off the ground. A year later, Tesla bought the former NUMMI factory in Fremont, which had been run jointly by Toyota and General Motors.

“Moving away from Fremont would take at least 12 to 18 months and could add risk to the manufacturing and logistics process in the meantime,” Wedbush Securities analyst Daniel Ives wrote in a note to investors.

In line with Musk’s threat to leave California, Tesla filed a federal court lawsuit against the Alameda County Health Department, accusing it of overstepping federal and state coronavirus restrictions when it stopped Tesla from restarting production at its factory in Fremont. The lawsuit contends Tesla factory workers are allowed to work during California’s stay-at-home order because the facility is considered “critical infrastructure.”

Musk has been complaining on Twitter about the stay-at-home order since the company’s April 29 first-quarter earnings were released, calling the restrictions fascist and urging governments to stop taking people’s freedom.

An order in the six-county San Francisco Bay Area forced Tesla to close the plant starting March 23 to help prevent the virus’ spread, and it was extended until the end of May. Public health experts say the orders have reduced the number of new coronavirus cases nationwide. California Gov. Gavin Newsom allowed the Bay Area counties to continue restrictions while easing them in other areas of the state.

In a statement Saturday, Alameda County’s Health Department said it has been working with Tesla to develop a safety plan allowing the Fremont plant to reopen while protecting workers. “We look forward to coming to an agreement on an appropriate safety plan very soon,” the statement said.

But the statement also said residents and businesses have made sacrifices to protect the health of people in the region. “It is our collective responsibility to move through the phases of reopening and loosening the restrictions of the shelter-in-place order in the safest way possible, guided by data and science,” the department said.

Fremont Mayor Lily Mei wrote in a statement that she is growing concerned about the regional economy without provisions for major manufacturing to resume operations. “We know many essential businesses have proven they can successfully operate using strict safety and social distancing practices,” the statement said.

Emails seeking comment from Newsom have not been returned.

Musk plans to open another U.S. factory to increase output, possibly in Texas, and could move production there once that plant is up and running.

The lack of production in Fremont cuts off Tesla’s revenue and is a big financial strain. On a conference call last month, Musk said the company only has assembly plants in Fremont and Shanghai, and the Fremont facility produces the majority of its vehicles. He called the closure of Fremont a “serious risk.”

Musk’s tweets come as competing automakers are starting to reopen factories elsewhere in the United States. Toyota will restart production on Monday, while General Motors, Ford and Fiat Chrysler all plan to restart their plants gradually on May 18. Tesla is the only major automaker with a factory in California.

Musk’s threats came after a series of bizarre tweets earlier this month, including one that said Tesla’s stock price was too high. Musk also posted parts of the U.S. national anthem and wrote that he would sell his houses and other possessions. — From staff and wire reports


  1. What does Tesla contribute to our city? I’d like to know, but I doubt it’s much beyond ordinary property taxes. I could care less if they stay or go.

  2. Before Musk threatens us taxpayers, I’d like to see him pay back all the loans and subsidies that made his company possible. He shouldn’t be threatening anyone who has been so generous towards him.

  3. Musk’s tweets should be detailing the steps his factory has taken to protecting his workforce from the virus instead of issuing threats and filing lawsuits. If such worker protection is too expensive for his bottom line, or inadequate, worker sickness will follow. Musk should not be allowed to “externalize” the costs of protecting his workforce onto society. Otherwise, what San Diego Assemblywoman Lorena Gonzalez tweeted…

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