Amid lockdown dispute, Musk says he will move Tesla out of California
Tesla Inc CEO Elon Musk speaks at an opening ceremony for Tesla China-made Model Y program in Shanghai, China January 7, 2020. REUTERS/Aly Song/
May 9, 2020
(Reuters) – Tesla Inc’s <TSLA.O> chief executive Elon Musk tweeted on Saturday that Tesla will move its headquarters and future programs to Texas or Nevada from California immediately.
“If we even retain Fremont manufacturing activity at all, it will be dependen (sp) on how Tesla is treated in the future,” he wrote on Twitter, referring to the facility in the San Francisco Bay area that is Tesla’s only U.S. vehicle factory.
Musk also tweeted about suing Alameda County, California, after its health department said the electric carmaker must not reopen the Fremont factory as local lockdown measures to curb the spread of the coronavirus remain in effect.
Alameda County said on Saturday that it has been working with Tesla to develop a safety plan that “allows for reopening while protecting the health and well-being of the thousands of employees” that work at the factory and that it looks forward to coming to an agreement on a safety plan very soon.
But Fremont Mayor Lily Mei expressed concern about the potential economic implications of continuing the shelter-in-place order without provisions for manufacturers such as Tesla to resume. Mei on Saturday urged the county to work with businesses on “acceptable guidelines for re-opening.”
Musk had told employees on Thursday that limited production would restart at Fremont on Friday afternoon.
Tesla builds more than 415,000 cars per year at the Fremont plant and moving the entire production facility would be a massive undertaking.
Dan Ives, a Wedbush analyst, on Saturday estimated it could take the company 12 to 18 months to relocate production.
The threat to relocate the facility also comes as Tesla aims to ramp up production at Fremont of its Model Y sport utility vehicle, the carmaker’s most profitable vehicle to date.
California Governor Gavin Newsom had said on Thursday that manufacturers in the state would be allowed to reopen. But Alameda County, where the Fremont factory is located, is scheduled to remain shut until the end of May with only essential businesses allowed to reopen.
Musk, who sparred with California officials in March over whether Tesla had to halt production at Fremont, has criticized the lockdown and stay-at-home orders, calling them a “serious risk” to U.S. business and “unconstitutional.”
Tesla shares have risen 127% since March 18, their recent closing low, including a 16.8% gain in the last trading week to close at $819.42 on Friday.
(Reporting by Sabahatjahan Contractor and Maria Ponnezhath in Bengaluru, Tina Bellon and Sinéad Carew in New York; Editing by Daniel Wallis and Chris Reese)