Elon Musk said that Tesla’s engineering HQ would not be relocated from California

After Tesla decided to move its corporate headquarters to Texas, many believed that the electric car maker would leave California entirely. However, Elon Musk, the company’s CEO, stated that this is not the case. Tesla will make California a home for its global engineering department.

Musk made the announcement this Wednesday, February 22nd, announcing the news with Gavin Newsom, the state’s governor. According to him, leaving the engineering hub in California means that it will effectively remain the company’s headquarters.

Previously, Tesla acquired its California plant in 2010, when it purchased it from a joint venture of Toyota Motor Corp and General Motors Co. The location, Fremont, California, operates to this day. Not only that, but Musk said that the plan is to have it increase production in 2023. If everything goes as planned, this plant will produce over 600,000 vehicles by the end of the year.

California is overtaxed and overregulated, according to Musk

The announcement does mark a significant shift for Musk and Tesla alike. Musk has criticized California, its regulations, and even its taxes rather harshly in the past after already moving Tesla’s official HQ to Texas back in 2021. Texas is California’s biggest business and political rival.

California is an overwhelmingly Democrat-controlled state and currently the country’s most populous state. It also has more electric cars than any other state in the country. As Tesla grew, it even managed to get some tax incentives. At this time, Texas is second-ranked in most of these aspects. However, the state’s regulations remain relatively light in comparison, plus it acts as the heart of the US oil and gas industry.

As such, it is a perfect new market for Tesla to move into. On the other hand, Musk called California overregulated, pointing out issues like overtaxation and overlitigation, and it even clashed with the local authorities in 2020 over the closure of the Fremont factory, back when COVID-19 pandemic led to lockdowns.

Musk even said that the ideology of the Democrats has made him change his mind about who to vote for in midterm elections of 2022. In the past, he supported the Democrats, but he suggested that Republicans got his vote in the midterms. Even so, he thanked Governor Newsom, a prominent Democrat, for purchasing one of the early Tesla Roadsters.

While Musk has effectively left California, he stil said that the state needs to be cautious when it comes to taxes and regulations. As for Newsom, he bragged that California remains the biggest manufacturing center in the country. However, that was not said in order to provoke Texas. Musk also recently announced that Tesla would focus the production of its battery cells in the US from now on, following recent federal incentives promised in the Inflation Reduction Act.