Tesla picks Palo Alto for second engineering HQ
Tesla designated Palo Alto as its second headquarters for global engineering on Wednesday, restoring the title to the city after the electric car maker moved its head office to Austin, Texas, in late 2021.
The engineering hub will be within offices formerly occupied by Hewlett Packard at 1501 Page Mill Road.
Despite the Austin move, Tesla never left Palo Alto and signed the 325,000-square-foot lease for the Palo Alto offices in 2021. It is also expanding its megafactory in Fremont, which CEO Elon Musk said on Wednesday was the most productive car factory in North America, with more than 600,000 cars built annually.
Other tech giants founded in Silicon Valley have moved their headquarters to Texas in recent years, including Oracle and Hewlett Packard Enterprise, though they’ve maintained some Bay Area offices.
On Wednesday, at an on-site event with Musk, Gov. Gavin Newsom touted the news as evidence of California’s economic strength and the payoff of the state’s support for Tesla.
“California ... prides itself on being on the leading and cutting edge of discovering new ideas and innovation,” Newsom said. “I think today is just another proof point of the renewal and the energy and the vibrancy that is California.”
Tesla has received more than $3.2 billion in subsidies and other credits from California, Newsom’s office previously estimated.
The number of jobs planned at the new headquarters wasn’t disclosed. Tesla said last month that it had 47,000 employees in California and has spent more than $5 billion on local facilities, which also include sites in Lathrop (San Joaquin County), Hawthorne (Los Angeles County) and San Diego.
Musk has also been in San Francisco frequently since his $44 billion takeover of Twitter in October, as he has implemented a slew of business changes.
“At Tesla we’re looking forward to an existing partnership with California to ... transition the world to sustainable energy as quickly as possible,” Musk said on Wednesday, also acknowledging the state’s strength for engineering and manufacturing.
But, the tech mogul, who is the world’s secondrichest man, has also repeatedly criticized the state.
“California used to be the land of opportunity,” Musk said at a virtual conference last May. He said the state has since become “the land of taxes, overregulation and litigation and this is not a good situation.”
He went on to reference Newsom’s own inability to speed up business growth.
“If you had a gun to (Newsom’s) head and said, ‘We need to start building this factory right now,’ he couldn’t do it,” Musk said at the time. “There are so many regulatory agencies and so many litigators in California that want to stop you from doing anything that, even if you’re the governor of the state, you cannot get it done.”
In 2021, Musk cited the Bay Area’s high housing costs and a “limit to how big you can scale” as reasons for Tesla’s headquarters move to Texas.
Though Newsom said it was a “point of pride” that Tesla is a California company, the electric car maker is embroiled in legal challenges and investigations from multiple state agencies.
The California Civil Rights Department sued Tesla last year over alleged racial discrimination and harassment in its Fremont factory. The agency said it received hundreds of complaints from Black workers who said they were subject to racial slurs and discrimination over job roles, pay and discipline. Tesla previously said it “strongly opposes all forms of discrimination and harassment.” The company countersued the agency, alleging it violated state law by not holding a public hearing or seeking public comment.
The California Department of Motor Vehicles also alleged Tesla falsely advertised its autopilot and full self-driving features as fully autonomous driving when they are not. Separately, the U.S. Department of Justice is also investigating the features.
Tesla reported record revenue of $24.3 billion in the fourth quarter, beating expectations. Its stock has soared more than 83% in 2023, recovering about three-quarters of its losses of the past year.
Tesla is close to announcing a Mexico car factory as its newest location, which would be its first in the country, Reuters reported.