Elon Musk, a big libertarian, is not really a fan of the strict containment measures taken by California since the explosion of the Covid-19 pandemic. He had already had the opportunity to make this known quite loudly in a vitriolic tweet of which he has the secret, going so far as to claim that the confinement of the San Francisco Bay area was a "fascist" measure, triggering by return an unprecedented wave of hostility towards him.
It must be said that the crisis also falls very badly for Tesla, which after a very good financial year 2019 was very probably preparing to achieve another record year, especially with the start of the marketing of its Model Y, much awaited by those who had Zapped the Model 3 stage in order to fall back on an equivalent car but in SUV format, so with more interior space. Tesla has had difficult years and remains a fragile business. The inexorable ramp-up in production is therefore vital for the Californian brand.
However, while production resumed in its Chinese factory – and then suddenly stopped again last week for an unconfirmed reason probably linked to a shortage of certain parts for the Model 3 – the Fremont factory in California, where all Tesla are made for the American and European markets, has been completely shutdown since March 23.
Trial for improper confinement?
Anticipating a relaxation of containment and noting that some countries were beginning to "reopen", Elon Musk, no longer holding on to it, had announced, probably a little prematurely, that production in Fremont would gradually resume from Friday May 8.
Tesla had planned to employ about 30 percent of its workers on Friday as part of its reopening plan, defying orders to stay at Alameda County home. In fact, Tesla's boss based the reopening on new guidelines released Thursday by California Governor Gavin Newsom, which allow manufacturers to resume operations. Directives welcomed by Musk, who then sent an internal email to employees about plans to reopen based on the governor's revised order. What Musk ignored, however, was that the governor's directives were accompanied by a warning that local authorities could maintain more restrictive rules. This is what happened with the county of Alameda, where the Tesla factory resides, which extended home support orders until the end of May.
It didn't take much to spark the buzzing entrepreneur. An anger that was expressed very quickly in two ways: judicially and economically. Tesla has indeed decided to take the county of Alameda to court on Saturday in order to invalidate this decree to extend containment. The lawsuit, which seeks an injunction and a declaration against Alameda County, has been filed in the United States District Court for the northern district of California. Elon Musk, in an avenging tweet, also threatened to immediately move Tesla’s headquarters and future programs to the state of Texas or Nevada, where Tesla already has a battery production plant, the Gigafactory: "Frankly, it is the drop of water that makes the vase overflow. Tesla will now move its headquarters and future programs to Texas / Nevada immediately. Whether we keep even Fremont’s manufacturing business will depend on how Tesla is treated in the future. Tesla is the last remaining automaker in California. "
It should be noted that Tesla's headquarters are located in Palo Alto, in the county of Santa Clara, and that it is the Fremont factory that is concerned, located in the county of Alameda.
Blow of mouth and blow of bluff? Certainly both. We know that the boss of Tesla is not close to a prank when it comes to protecting his businesses, and more specifically Tesla, but we can also easily imagine that moving only Tesla's head office to another state would probably cause significant organizational inconvenience to the brand, even if the shortfall for the very rich state of California would probably be significant. However, it also seems difficult to move the production unit, which is Tesla's real source of revenue for the county of Alameda.
As for the trial, it is probably a warning shot that we will not hear about in a few days, each of the parties certainly having better things to do than get bogged down in endless proceedings while the lifting containment is just a couple of weeks.