Tesla engineering HQ returning to California, Musk announces

Editor’s note: This story has been updated to clarify that only the engineering headquarters will return to California.

(KTLA) – Tesla is returning to California.

Elon Musk announced during a joint press conference with California Gov. Gavin Newsom that Tesla would be returning its global engineering headquarters to California, two years after a dramatic exit that saw the electric car company leave the Golden State for a facility in Austin, Texas.

Tesla will open up shop in the former home of Hewlett Packard in Palo Alto, Musk said. The facility will serve as the company’s engineering headquarters while the corporate headquarters remains in Austin.

The move returns Tesla to the world’s center of technology and innovation, and puts Musk in closer to proximity to the headquarters of Twitter, which the billionaire tech entrepreneur purchased last year in a massive social media shakeup.

Musk called the move into HP’s old building a “poetic transition from the company that founded Silicon Valley to Tesla.”

Newsom applauded the decision to return Tesla to California, saying that the state remains on the forefront of “discovery and new ideas and innovation.”

“We say about our state, the future happens here first. We are America’s coming attraction,” Newsom said.

The governor, who has known for Musk for decades, said it was a point of personal pride to have Tesla in California.

“Tesla is a California company,” Newsom said. “It started here first.”

Newsom added that California has been committed to supporting Tesla and other electric vehicle brands for years and has proven that through legislative policy and regulations.

But for Newsom, whom Musk said was one of the first people to purchase a Tesla Roadster in 2007, bringing back the electric sports car company was critical to secure California’s place as the nation’s automobile leader.

“We are able to lay claim to 44 manufacturing headquarter companies in the electric vehicle space, but none that dominate like Tesla,” Newsom said.

California is already the largest car manufacturer in America and Musk said Tesla’s Fremont plant is the busiest plant in North America with plans to produce more than 600,000 vehicles in the coming year.

Newsom has been a proponent of electric vehicles and revolutionizing America’s energy production, and said he hopes the partnership between Musk and California will allow the state to “dominate in this space and change the way we produce and consume energy in this state, and this nation and the world we are trying to build.”

Musk said he was excited for that partnership and hoped to do just that.

Tesla moved its headquarters out of California in late 2021 to set up shop in Austin. At the time of the move, Musk was in an ongoing battle with Alameda County public health officials over his desire to reopen the Fremont manufacturing plant in the middle of the coronavirus pandemic.

Daniel Ives, an analyst for multibillion-dollar investment firm Wedbush, said at the time that he believed Tesla’s move would be massively beneficial for the company due to tax breaks offered by Texas and the cheaper cost of labor.

Musk moved his residence from California to Texas, where there is no state personal income tax.

Musk did not specifically address the reasoning for returning Tesla’s headquarters to Silicon Valley. It’s unclear if the state offered any incentives for the company to return, or if Musk simply wanted to be closer to the Twitter headquarters, which is located in San Francisco.

Despite the spat with public health officials more than two years ago, Newsom offered nothing but words of praise for the controversial tech figure, saying Musk and Tesla is a major reason for California’s success in the electric vehicle industry.

“We don’t take that for granted and we appreciate the investments you’re making,” Newsom said.

The two also shared a laugh when discussing their own finances over the past several years.

Musk said that Newsom likely put down a $100,000 deposit for his first Tesla in 2007. Newsom countered that that purchase was made when he “had money” and joked that both he and Musk had similar net worths at the time.

“Your [networth] went negative, and I got a pension, so eat your heart out,” Newsom said.

The Associated Press contributed to this report.