Newsom praises the “extraordinary” Elon Musk despite Tesla headquarters relocating to Texas

California Governor Gavin Newsom speaks at a school in San Francisco on September 7th. | Justin Sullivan / Getty Images

OAKLAND – Governor Gavin Newsom praised Elon Musk on Friday despite the Tesla CEO announcing the day before that he was moving his company’s headquarters from California to Texas despite the governor claiming California helped make the electric car maker the what he is today.

“I have a great awe and respect for this person,” said Newsom, “but I also have a deep awe and respect for the state and what we represent and what we have done to support these investments.”

The comments underscored Newsom’s enduring ties to Musk and Silicon Valley, which were capitalized, and enabled the Democratic governor to emphasize California’s role as an incubator for innovation. Newsom noted that he has known Musk for two decades and praised him as “one of the greatest innovators and entrepreneurs in the world” who “has invested countless sums of money in this state to create thousands and thousands of jobs.”

Republicans swiftly picked up on Musk’s move to Texas on Thursday, saying it was further evidence that California businesses are overwhelmed by regulations, taxes and the high cost of living. This came after Hewlett Packard Enterprise and Oracle announced in December that they would move to the Lone Star State.

Newsom downplayed the importance of Tesla’s headquarters relocation, noting that Musk had announced plans to ramp up production at a California facility, citing Musk’s commercial space company SpaceX, which leases office space in Long Beach. The governor also argued that California fueled Tesla’s success, citing the millions of dollars California spent subsidizing the burgeoning electric car industry.

“Our regulatory environment has helped build and grow this company,” said Newsom. “It took his ingenuity and entrepreneurial genius, but also a regulatory environment to encourage and promote it here.”

Elected officials in deeply Democratic California have a mixed relationship with Musk and the company he has built. Tesla’s role as the flagship of the low-carbon vehicle market is a source of pride in the green state, and its Fremont, Bay Area facility is a source of well-paying manufacturing jobs.

California also has a disproportionate share of the country’s electric vehicle market, which accounts for 42 percent of U.S. electric vehicle registrations in 2020, though it only has about 12 percent of the population according to federal data.

Tesla has spent more than $ 3 million lobbying California lawmakers and state regulators since 2017, records show. In the last two election cycles, it has directed and distributed more than $ 400,000 in campaign contributions to California political action committees: in 2019-2020, the company’s money went into races for nearly half of the state’s legislative districts.

But the California unions and their allies have also argued with Tesla over what they call uneven working conditions and efforts to suppress the labor organization. Democrats in the state legislature have tried to tie public subsidies to stricter labor standards.

Last year, Tesla defied a public health order by opening its Fremont facility despite a stay-at-home mandate that Musk derided as “fascist.” Tesla eventually negotiated a deal with local officials to defuse the stalemate that saw Tesla suing its home district and threatening to leave California.

This dynamic has fueled the sharpness between Musk and elected officials. MP Lorena Gonzalez (D-San Diego), a staunch union ally who has criticized Tesla’s labor practices, responded to the conflict at the Fremont plant with a tweet “F * ck Elon Musk” last year. Musk signals on Thursday that contributed to his decision to move – an answer Newsom suggested was unfounded.

“I probably get such tweets every hour,” Newsom said, “and I’m staying here.”

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