At the end of last year, Elon Musk kissed California goodbye. Tesla’s chief executive sold his Bel-Air mansions and said he had moved to Texas. But while he also threatened to shut down the California electric car maker’s plant in Fremont, these threats now seem to boast.
The company recently applied for authorization from city officials to transform an assembly line that now passes through an outdoor tent into a permanent structure. This would expand the current plant by 64,000 square feet, although it is unclear whether it would increase production capacity.
The news of the license application was first reported by Teslarati online news publication. Although the license application indicates commitment to the site, there is no guarantee that the project will be completed. It is also unclear whether the construction would cut the current production of Model 3 and Model Y, which now passes through the tent. Tesla also makes Model X and Model S cars in Fremont. Tesla did not respond to requests for comment and does not have a media relations department.
Musk’s threats to leave California weighed heavily, given Tesla’s massive drive to increase production elsewhere. It already operates another plant in Shanghai, and major new plants are currently under construction in Austin, Texas, and near Berlin.
Musk threatened to shut down Fremont for the first time in May, when the factory was shut down by health officials in Alameda County when the COVID-19 pandemic began to spread across the United States. He defied orders and reopened the factory, inviting the authorities to arrest him.
Alameda County public health officer at the time, Erica Pan, relented and allowed the factory to remain open. (Pan was later named state epidemiologist by Governor Gavin Newsom.)
Several months later, Musk reiterated his threat to close Fremont in an interview with Automotive News. When he announced that he would personally leave California for Texas in December, soon followed by announcements that Hewlett Packard Enterprise and Oracle were moving their headquarters to Lone Star State, it sparked a debate in the technology industry about whether California was hospitable enough for business and whether Austin or another city could recreate the success of Silicon Valley with start-ups.
Still, there is no sign that Musk is seriously considering moving Tesla’s headquarters in Palo Alto or the Hawthorne headquarters of his rocket company, SpaceX.
It remains to be seen whether Tesla will sell enough vehicles to justify all of its new plants. The company sold about 500,000 cars last year from its plants in Fremont and Shanghai. The company said it is capable of building 500,000 at the Fremont plant alone.
The Berlin plant encountered several delays, even as Tesla’s sales in Europe fell, falling 10% in 2020, according to Schmidt Automotive Research. The company’s electric car market share in Europe fell from first to third place, behind Volkswagen and Renault.