Elon vs. California: if Tesla can't restart production, it might ditch the Golden State
Just got Elon'd... Tesla has officially filed a lawsuit against Alameda County, CA. The e-car hotshot says the county's order to keep Tesla's Fremont factory closed is unconstitutional, and threatened to leave California altogether:
- The federal gov left reopening up to states — California allowed a phased opening of some businesses (including manufacturing) starting last Friday. But CA Gov. Gavin Newsom said local governments can keep stricter lockdown rules if they want.
- Tesla argues Alameda's decision to keep closed is arbitrary — Tesla's distribution facility in nearby Lathrop has been allowed to operate. But Elon's beef with lockdown orders goes wayyy back to early March.
"Frankly, this is the final straw"... In a tweet-storm, a spurned Elon said Tesla will move its operations to Texas/Nevada immediately. But a Tesla exit would be a loss for California:
- As one of the largest manufacturing employers in California and the only big CA-based car maker, Tesla created 51K jobs for the state (its Fremont factory alone employs 10K workers).
- A Tes-xit would lose CA some serious tax $$$: In 2017, Tesla generated $4.1B in direct spending in CA — Elon could also save billions in taxes by moving Tesla HQ to Texas or Nevada (where state taxes are lower).
Big biz has sway over local government... While local government officials might overlook Elon's child being named "X Æ A-12," they'll have a harder time ignoring the loss of an economic powerhouse. Also, other CA companies could follow Elon's lead. Tesla knows this, and Elon ordered a restart of production in defiance of the public health order on Monday. Tesla has economic incentives to ditch, but risks losing concentrated engineering talent of the Bay Area (and local love).