Why Tesla Is Opening New Global Engineering HQ In California, Not Texas

Tesla appears to have had second thought about California after the company moved to Texas due to disputes over Covid rules. Tesla will locate its global engineering headquarters in a former Hewlett-Packard facility in Palo Alto, receiving tax incentives and other inducements from the state.  

But the practical reality is that Tesla needs hundreds of engineers proficient in AI - and California remains the largest source of those skills, especially as Texas' extreme right wing policies on many issues make it unattractive for well educated, highly paid and skilled tech programmers and engineers. JL

Rebecca Bellan reports in Tech Crunch:

The sudden rekindling of Tesla’s relationship with California may be surprising after the EV-maker up and moved its corporate headquarters from Fremont, California to Austin, Texas in 2021 after disputes with the state over COVID-19 restrictions. Musk has also repeatedly criticized California for being over-regulated and burdened with high taxes. Tesla is hiring for new engineering roles in California, which would be a large part of the reason is backing the EV-maker. The focus will be in research development and artificial intelligence.

Tesla is making California the home of its global engineering headquarters.

CEO Elon Musk and California Governor Gavin Newsom announced Wednesday that Tesla’s new engineering HQ will be at the former offices of Hewlett-Packard.

The sudden rekindling of Tesla’s relationship with California may be surprising after the EV-maker up and moved its corporate headquarters from Fremont, California to Austin, Texas in 2021 after disputes with the state over COVID-19 restrictions. Musk has also repeatedly criticized California for being over-regulated and burdened with high taxes.

However, Tesla has maintained operations of its first factory in Fremont, which still houses many engineers.

Tesla tweeted that it’s hiring for new engineering roles in California, which would be a large part of the reason Newsom is backing the EV-maker’s investment back into the state. Sources told CNBC that the focus will be on engineers proficient in research development and artificial intelligence.

“California prides itself on being on the leading and cutting edge of discovery and new ideas and innovation,” said Newsom, noting the state’s long relationship with Tesla. Newsom said he was excited to work with Tesla to both transform the automobile industry and reinforce California’s manufacturing dominance.

Musk said the Fremont factory is expected to produce more than 600,000 vehicles this year.

 

Tesla also said Wednesday that it will focus battery cell production in the United States to take advantage of federal incentives in the Inflation Reduction Act.

Although Tesla is California’s most popular automaker, the company has a difficult relationship with the state. Tesla is being investigated by the federal equal employment agency and is still in the middle of a lawsuit from the state’s Civil Rights Department in regard to complaints from workers that the Fremont factory is rife with racial bias and harassment. The CA Department of Motor Vehicles has also accused Tesla of falsely advertising its Autopilot and Full Self-Driving (FSD) advanced driver assistance systems.

Tesla is expected to go further into details on the announcement on Wednesday during a scheduled livestream event.