Tesla to base new engineering headquarters in California

Electric car giant Tesla will base its new global engineering headquarters in California, it was announced Wednesday.

Tesla CEO Elon Musk made the announcement alongside California Gov. Gavin Newsom (D), who toured the new facility. The headquarters will be located in the former Hewlett-Packard building in Palo Alto.

Musk called the move "a poetic transition from the company that founded Silicon Valley to Tesla."

The often-controversial Tesla head, who is also the notable owner of Twitter and SpaceX, told CNBC that the building would be "effectively a headquarters of Tesla" and that it's "kind of a dual-headquartered company."

While the engineering division will be based in Palo Alto, Tesla's corporate headquarters moved from Silicon Valley to Austin, Texas, in 2021. Austin is also the site of Tesla's "Gigafactory," a massive plant for manufacturing the company's vehicles that The Verge reported is the second-largest building in the world by volume.

Musk has previously clashed with California for what he cited as "overregulation, overlitigation, overtaxation," and the opening of the engineering headquarters comes as Tesla faces mounting legal battles in the Golden State. This includes a criminal probe into Tesla's self-driving feature, which Musk has often said was near-autonomous, a description that The New York Times reported "surprised and concerned some Tesla employees."

Tesla is also facing a lawsuit in California over alleged discriminatory practices, with the legal filing calling the company's production line "a hotbed for racist behavior."

Despite this, though, industry insiders did not seem all that surprised by Musk's decision to embrace California.

"Given that the Bay Area in California is home to many leading tech companies, it makes sense for Tesla's engineering headquarters to be located there as a way to attract top talent," Seth Goldstein, an analyst at Morningstar, told Reuters.