Musk Threatens to Pull Tesla Out of California Over Shutdown

Elon Musk lashed out at the California county blockingTesla Inc. from reopening its only U.S. car plant, threatening to immediately move the company’s headquarters and future programs to other states and cease manufacturing at its factory.

The chief executive officer said Tesla will file a lawsuit against Alameda County, a day after its health officer said itwasn’t appropriate for the carmaker to move forward with plans to reopen. Musk, who has called government shutdown orders to contain the coronavirus “fascist,” said Tesla will decide whether to keep producing cars in Fremont, California, based on how it’s treated going forward.

The tweets raise pressure on California Governor Gavin Newsom and San Francisco Bay area officials who wereamong the first in the U.S. to implement shelter-in-place orders and have been cautious about lifting them. Musk, 48, has arguably been the tech sector’s loudest voice advocating for the reopening of the economy, which hasdrawn criticism from some of his peers in the business community and cheers from conservative political circles.

Tesla has roughly 20,000 employees in the region, including its headquarters in Palo Alto. Moving the headquarters and future programs to Texas and Nevada, where Tesla has its massive battery plant, is a threat that would be relatively easier for Musk to follow through on.

But the Fremont plant is the only place in the world where Tesla makes the Model S, X and Y, and the company has sunk billions of dollars into the facility over the years.

“Picking up and leaving isn’t really an option right now,” Ben Kallo, an analyst at Robert W. Baird & Co., said by phone. “I don’t know if you can quickly say ‘I’m leaving.’”

Musk has been scouting locations for a new U.S. factory to build the Cybertruck and has hinted it could be constructed in Texas, where part of Tesla’s chip team is based. His rocket company Space Exploration Technologies Corp. also has operations in the state.

Local officials in Fremont and Alameda County did not immediately respond to a request for comment Saturday morning.

— With assistance by Maria Jose Valero

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