National Post (National Edition)
California, Tesla romance strained
Musk reopens factory against state orders
The love affair between California and Elon Musk has started to sour.
Musk’s electric-car company, Tesla Inc., is California’s dream of a greener economy made real, growing from scrappy Silicon Valley startup to the world’s second-most-valuable automaker. Politicians point to his Los Angeles rocket company, SpaceX — poised to carry astronauts to the International Space Station on Wednesday — as an emblem of Golden State ingenuity.
But Musk, seeking a fertile market for his pickup truck and an economical place to build it, is staging a show of pique. He has slammed coronavirus shutdowns as “fascist” and reopened his California factory against local government orders. He is considering Texas for a factory that would plant Tesla’s flag in a red state where trucks reign supreme and appeal to a new swath of customers: conservatives.
“Elon raising this issue and being seen as anti-California will resonate a lot with people on the right,” said Subodh Bhat, a marketing professor at San Francisco State University. “He’s always been a provocateur.”
California has been a nurturing partner for Musk, 48. Its bold climate goals and incentives juiced the market for Tesla’s sleek sedans and SUVs, with purchasers receiving US$266.8 million in state rebates over the years. More than 40 per cent of the company’s new U.S. vehicle registrations in 2019 were in California, according to IHS Markit. A full decade since Tesla’s IPO, consumers can still apply for a US$2,000 rebate from the state if they buy a Model 3 or a Model Y.
Yet when Alameda County shutdown orders stopped production at Tesla’s plant in Fremont, Musk defied local health officials by closing late and reopening early. He briefly sued the county, and threatened to move his Palo Alto headquarters to Texas or Nevada.
“This is the final straw,” he wrote in a May 9 tweet, after county officials said the company wasn’t authorized to reopen the plant. “If we even retain Fremont manufacturing activity at all, it will be dependent on how Tesla is treated in the future.”
Some legislators told him to get lost (in less-printable words), editorial writers and columnists wished him good riddance, and a state panel denied SpaceX US$656,000 for job training.
Musk and Tesla declined to comment for this story.
“Even if the move was years in the future, just the announcement that Tesla was leaving would be a huge black eye for California,” said Dan Schnur, who teaches political communications at the University of California at Berkeley and the University of Southern California.
In 2014, Tesla drew several states into a competition to win its massive battery plant, dubbed the Gigafactory. This time, the prize is a plant to build the angular Cybertruck pickup. Florida and Oklahoma have made pitches — Tulsa’s “Golden Driller,” a 75-foot statue of an oil worker, was transformed into the image of Musk with a Tesla logo. But Texas is by far the nation’s largest truck market. Republican Gov. Greg Abbott said this month that he’d talked to Musk.
“He’s genuinely interested in Texas and genuinely frustrated with California,” Abbott told a Wichita Falls television station.
John Boyd, principal of a Princeton, N.J., site-selection firm, said Texas, Oklahoma and Florida all are making personal appeals to Musk. “In California, you have an elected official telling him to go F himself,” Boyd said.
Long a hero to the environmental left, Musk has increasingly taken to saying things that play better on the right. He spent months downplaying the coronavirus, much as President Donald Trump did. And Musk’s vast social media following has made him one of the most prominent voices calling for a quick restart to the economy, with tweets like “FREE AMERICA NOW.”
He recently advised his Twitter followers to “take the red pill,” a reference to the 1999 science fiction film the Matrix that has been adopted by factions of the alt-right as shorthand for a political awakening. Ivanka Trump replied that she’d already taken it. And on Friday, the president said he would go to Florida on Wednesday to watch the launch of SpaceX’s manned test mission.
That all may play well in ornery Texas, where officials were reluctant to impose stay-home orders, and where Musk has a foothold. SpaceX has an engine-testing facility in McGregor and a rocket production facility in Boca Chica. Texas is already Tesla’s third-biggest U.S. market, even though opposition from auto dealers means it can’t sell cars there directly.