Tesla to move engineering HQ to Silicon Valley in reversal for Musk on California

Breanne Deppisch

February 22, 04:18 PM February 22, 04:18 PM

Tesla will make its new global engineering headquarters in Silicon Valley, California, Tesla CEO Elon Musk and Gov. Gavin Newsom (D-CA) announced Wednesday, with plans to take over the Palo Alto office space formerly occupied by Hewlett Packard.

The news represents an about-face for Musk, whose relationship with the state of California, and with Newsom, by extension, had grown increasingly strained in recent years.

Speaking outside the former HP headquarters, Newsom touted the announcement as "another proof point of the renewable energy vibrancy that is California.” Tesla is "a huge part" of "our success, both California [and] America's success — and I'm here because we don't take that for granted," he said, turning to Musk. "And we appreciate the investments you're making here today."

Neither offered much in the way of details, and they did not specify how many, if any, jobs the new engineering headquarters would create. They did not take questions.

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Tesla was founded in San Carlos, California, in 2003 and until recently had called the state home to its entire operation.

But long-simmering tensions reached a head in 2020 when early state measures aimed at stopping the spread of COVID-19 forced Tesla to close its Fremont factory temporarily.

In December 2021, Musk announced he would relocate Tesla’s headquarters to Austin, Texas, citing frustrations with California’s pandemic response as one of the main reasons.

“California used to be the land of opportunity, and now it is ... becoming more so the land of sort of overregulation, overlitigation, overtaxation,” Musk said at the time, adding that it had become “increasingly difficult to get things done” in California.

Still, Tesla maintains a large business presence in the Golden State, which is home to a hardware and engineering facility in Palo Alto, its Fremont auto plant, and a battery development and testing facility in San Diego.

California is now home to 44 manufacturing headquartered companies in the electric vehicle space, Newsom noted Wednesday, "but none that dominate like Tesla."

"And so it's a point of pride always has been for me that Tesla is a California company started here," he said.