Newsom praises ‘extraordinary’ Elon Musk despite Tesla HQ move to Texas

Gov. Gavin Newsom lavished praise on Elon Musk on Friday, despite the Tesla CEO’s announcement one day earlier that he wants to relocate his company’s headquarters from California to Texas, albeit the governor argued that California has contributed to the electric automaker’s success.

“I have reverence and deep respect for that individual,” Newsom said, “but I also have deep reverence and respect for the state and what we represent and what we’ve done to support those investments.”

The remarks highlighted Newsom’s long-standing ties to Musk and Silicon Valley in general, while also allowing the Democratic governor to highlight California’s role as an incubator of innovation. Newsom described Musk as “one of the world’s greatest thinkers and entrepreneurs” who has “spent enormous sums of money in our state to generate thousands and thousands of jobs.”

Republicans seized on Musk’s plans to relocate to Texas on Thursday, saying it was another proof that California businesses are plagued by regulations, taxes, and high living costs. This comes after Hewlett Packard Enterprise and Oracle revealed plans to relocate to Texas in December.

Newsom downplayed the significance of Tesla’s headquarters relocation, pointing out that Musk announced plans to speed up manufacturing at a California factory and mentioning Musk’s commercial space travel company SpaceX leased office space in Long Beach. The governor also claimed that California aided Tesla’s success, citing millions of dollars spent to fund the expanding electric car industry.

“Our regulatory environment helped create that company and grow that company,” Newsom said. “It took his ingenuity and entrepreneurial genius but it also took a regulatory environment to encourage it here, to nurture it.”

Elected figures in Democratic-leaning California have mixed feelings about Musk and the corporation he founded. Tesla’s status as a forerunner in the low-emission vehicle market is a source of pride in the environmentally aware state, and its Fremont plant provides well-paying manufacturing employment.

According to official data, California also has a disproportionately large percentage of the nation’s electric vehicle industry, accounting for 42 percent of U.S. EV registrations in 2020 while having only approximately 12 percent of the population.

According to public records, Tesla has spent more than $3 million lobbying the California Legislature and state authorities since 2017. It has sent more than $400,000 in campaign donations to California political action committees in the last two election cycles, and it has distributed that money as follows: During the 2019-2020 legislative session, the company’s funds were directed into campaigns in roughly half of the state’s legislative districts.

However, California labor groups and its allies have clashed with Tesla over what they say unequal working conditions and tactics to stifle worker organization. Democrats in the state legislature have attempted to link public funding to stricter labor rules.

Tesla broke a public health directive last year by opening its Fremont facility despite a stay-at-home mandate that Musk called “fascist.” Tesla eventually reached an agreement with local officials to end the standoff, which saw Tesla sue its home county and threaten to leave California.

“I receive tweets like that probably on an hourly basis,” Newsom said, “and I’m staying here.”

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