Elon Musk threatens to pull Tesla out of California

FILE PHOTO: Elon Musk listens at a press conference following the first launch of a SpaceX Falcon Heavy rocket at the Kennedy Space Center in Cape Canaveral, Florida, U.S., February 6, 2018. REUTERS/Joe Skipper/File Photo

Tesla CEO Elon Musk is well-known for his erratic, often poorly thought out, tweets. On Saturday, he did it once again. This time, he threatened to move Tesla’s headquarters and Fremont production facility out of California due to local restrictions related to the COVID-19 pandemic.

Earlier in the week, Alameda County health officials told Tesla that it isn’t ready to reopen its factory yet. In response, Musk tweeted that his company is filing a lawsuit against the county and that he is considering moving Tesla out of the state altogether.

Whether or not his tweets are just an angry tirade or have genuine implications remains unknown.

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Big Talk

Since the coronavirus pandemic began, Musk has been a vocal critic of the lockdown measures associated with it. Like many, he disapproves of the widespread business shutdowns and the fact that the economy has ground to a halt.

Tesla’s Fremont plant is a major part of its operation. The facility manufactures its Model S, Model 3, Model X, and Model Y electric cars. As such, having it shut down for an extended period of time is detrimental to its business. The plant shut down on March 23 in response to a shelter-in-place order.

The Fremont factory employs roughly 10,000 workers. Keeping those individuals safe is obviously more important than producing cars. What Musk argues is that his company is equipped to do both simultaneously. Tesla recently announced a plan that would bring back approximately 30 percent of its Fremont workforce.

The Alameda County Health Department then told Tesla that the company doesn’t meet the criteria needed to reopen amid the shelter-in-place order–which is still in effect. Part of Musk’s frustration is likely due to the fact that California governor Gavin Newsom released guidance allowing some manufacturing to resume in the state. However, that doesn’t supersede county-level rulings.

Musk tweeted, “Tesla is filing a lawsuit against Alameda County immediately. The unelected & ignorant “Interim Health Officer” of Alameda is acting contrary to the Governor, the President, our Constitutional freedoms & just plain common sense!”

Indeed, the company’s lawyers filed a suit in the U.S. District Court in the Northern District of California just hours later.

Moving On?

While a lawsuit is one thing, moving the company’s entire operation is another. In the Twitter tirade, Musk went on to add, “Frankly, this is the final straw. Tesla will now move its HQ and future programs to Texas/Nevada immediately. If we even retain Fremont manufacturing activity at all, it will be dependen on how Tesla is treated in the future. Tesla is the last carmaker left in CA.”

The idea of moving Tesla to Texas is particularly interesting as Musk’s other venture, SpaceX, also has a strong presence there. Whether or not the company will follow through with the plan remains to be seen. Moreover, it isn’t clear what will happen to Tesla’s 10,000 Fremont employees if it does move locations.

It’s worth taking Musk’s tweets with a grain of salt as they aren’t always well thought out. Likewise, it’s important for consumers to continue following local social distancing orders.


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