Elon Musk chooses California as Tesla's global engineering headquarters

Tesla Inc. is doubling down on its presence in California by establishing its global engineering headquarters in Palo Alto. The move comes after CEO Elon Musk moved the company's headquarters from Silicon Valley to Texas in 2021, citing limited scalability in the Bay Area.

Despite the move, more than a third of Tesla's global workforce is in California, with many working in Fremont, where the company's first auto plant is located. Musk saying Tesla would continue to invest in California was a big change from his previous comments. As the Wall Street Journal has pointed out, Musk has in the past compared the Golden State to a winning sports team, cashing in on its reputation for success. The state tends to "get a little complacent," Musk said, "a little bit allowed, and then they don't win the championship anymore."

Wednesday night with Governor Gavin Newsom in attendance, Musk sounded more optimistic, promising at the Palo Alto event that Tesla will “build the future here.”

Tesla has not been immune to layoffs hitting other California tech giants. It laid off more than 200 people in 2022 by closing its San Mateo office, which houses employees working on Tesla's advanced driver assistance system, Autopilot.

By the end of the decade, Tesla aims to sell 20 million vehicles a year. Additionally, the company recently revealed potential expansions to its $775 million plant in Austin, Texas.

In Palo Alto, Musk expressed optimism, saying Tesla would "build the future here." Despite his previous criticisms, he acknowledged California's importance to the company, saying Tesla still employs about 48,000 Californians and the state will remain an integral part of the company's growth.