Elon Musk Selects California as Tesla's Global Engineering HQ Gov. Gavin Newsom joined the company's CEO in making the announcement, though Musk has criticized California before.

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, over a third of Tesla's global workforce is in California, with many working in Fremont, the location of the company's first car plant. Musk affirming Tesla would continue to invest in California was a big change from his previous comments. As the Wall Street Journal pointed out, Musk, in the past, compared the Golden State to a winning sports team, coasting on its reputation for success. The state tends "to get a little complacent," Musk said, "a little entitled, and then they don't win the championship anymore."

Wednesday evening with Gov. Gavin Newsom in attendance, Musk was more optimistic, pledging at the Palo Alto event that Tesla will "build the future here."

Tesla hasn't been immune to layoffs striking other California tech giants. It laid off over 200 people in 2022 by closing its San Mateo office location, home to staffers working on Tesla's advanced driver-assistance system, Autopilot.

By the decade's end, Tesla aims to sell 20 million vehicles annually. In addition, the company recently revealed potential expansions at its Austin, TX-area plant worth $775 million.

In Palo Alto, Musk expressed optimism, saying Tesla would "build the future here." Despite his earlier criticism, he recognized California's importance to the company, stating that Tesla still employs around 48,000 Californians and that the state will remain an integral part of the company's growth.