Tesla CEO Elon Musk and his security detail leave the company’s local office in Washington, January 27, 2023.
Jonathan Ernest | Reuters
Tesla CEO Elon Musk and his team met with California Governor Gavin Newsom on Wednesday to tour Tesla’s new technical headquarters.
Sources close to the governor told CNBC that the meeting at Tesla’s engineering office in Palo Alto, Calif., focused on the company’s efforts to create jobs and grow in the state.
The expansion will focus on hiring engineers skilled in research development and artificial intelligence. Tesla takes over the lease of the offices, previously occupied by Hewlett-Packard. The plans will help accelerate efforts to produce self-driving and robotic technology.
“It was HP’s original headquarters, so I think it’s a poetic transition from the Silicon Valley founders to Tesla and we’re very excited to make it our global engineering headquarters,” Musk told CNBC. “And we’re a California-Texas company.”
Tesla initiated the meeting after several previous attempts to arrange talks between the state’s best-known politician and the most outspoken billionaire failed.
Musk said the new facility is “actually a Tesla headquarters” and is “sort of a dual-headquarters business.” Tesla’s headquarters are in Austin, Texas.
It comes as Tesla faces regulatory scrutiny in the state. The California Department of Motor Vehicles has formally accused Tesla of engaging in deceptive marketing and advertising practices with respect to its branded driver assistance programs, Autopilot and Full Self-Diving. And the state’s civil rights agency sued Tesla for racist harassment and discrimination against black workers that has persisted for years at the company’s car assembly plant and other facilities. in California.
Meanwhile, according to Tesla’s latest annual financial filing with the SEC, district attorneys in various California counties are “investigating Tesla’s waste separation practices” for violations of the hazardous waste-related code.
Tesla did not immediately respond to a request for comment.
California and its strong climate initiatives have been integral to Tesla’s success. California leads the national zero-emission vehicle market with nearly 1.4 million ZEVs sold and is home to 55 ZEV-related manufacturing companies.
But Musk’s views on California haven’t been so friendly when it comes to his business.
When the pandemic hit in March 2020, Musk and state officials clashed over reopening the Tesla factory in Fremont, California. At the time, Musk was pushing for his employees to return to work as covid affected businesses across the country. Musk mistakenly called California’s health-related covid restrictions “fascist”.
In 2021, following repeated threats to leave the state, Musk moved Tesla’s headquarters to Austin, Texas. The company owns and operates two mega-factories in Fremont and Lathrop, Texas.
Musk spoke with CNBC about his current thoughts on California.
“I think California should be wary of taxes and regulations that go too far,” he said. “Objectively, Tesla has only increased its presence in California. Both in terms of manufacturing and engineering and personnel. Every year we have increased our workforce in California without exception.”
Since then, Musk has clarified his political stance, calling California a one-party state burdened with excessive regulation and high taxes. Despite those comments, Governor Newsom has praised Musk in several interviews with CNBC, calling him “one of the greatest innovators of our time.”
Musk, meanwhile, pointed out that Tesla is still a major employer in the state and is expanding its operations. In Q4 2022, for example, Tesla boasted of a new Megapack factory in Lathrop, California.
“I’m not anti-California,” he told CNBC. “You have to strike a balance and say there are a lot of good things about California and there are challenges. California could make it easier to manufacture, but we encourage lawmakers to consider their actions long-term. .”
Tesla said it had 47,000 employees in California in 2022, according to a January 2023 blog post. As of December 31, 2022, the company and its subsidiaries had 127,855 employees worldwide. The company said its salaries drive $16.6 billion in economic activity for the state “or $44.4 million injected into the California economy every day.”
CNBC’s Lora Kolodny contributed to this report.