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Musk Threatens To Move Tesla Out Of California Over COVID-19 Lockdown Restrictions

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Musk Threatens To Move Tesla Out Of California Over COVID-19 Lockdown Restrictions

Benzinga’s Take

Tesla Inc (NASDAQ: TSLA) investors are likely most concerned with the potential costs of moving Tesla’s operations out of the state of California and whether or not Musk’s threats will expedite the reopening of the Fremont plant. Gordon Johnson of GLJ Research has estimated Tesla burns $300 million every week the Fremont plant remains down.

Musk Threatens To Move Tesla Out Of California

A day after Alameda County, California officials said Tesla is not cleared to reopen its Fremont vehicle production plant due to health risks posed by COVID-19, Tesla CEO Elon Musk said he is filing a lawsuit against the county and moving Tesla headquarters out of the state of California.

“Tesla is filing a lawsuit against Alameda County immediately. The unelected & ignorant 'Interim Health Officer' of Alameda is acting contrary to the Governor, the President, our Constitutional freedoms & just plain common sense!” Musk tweeted on Saturday.

“Tesla will now move its HQ and future programs to Texas/Nevada immediately. If we even retain Fremont manufacturing activity at all, it will be dependen[sic] on how Tesla is treated in the future.”

The Background

Musk had told Fremont employees to prepare to return to work and resume production as soon as Friday afternoon. However, Erica Pan, interim health officer for the Alameda County Public Health Department, said Friday the county has not yet given Tesla the green light to reopen its factory.

“We have been working with them looking at some of their safety plans. But no, we have not said that it is appropriate to move forward,” Pan said in an online town hall meeting.

Musk has been a vocal critic of mandatory shelter-in-place orders and said this week on Joe Rogan’s podcast he believes such orders are a violation of civil liberties and in conflict with the U.S. Constitution.

“My opinion is, if somebody wants to stay home, they should stay home, and if somebody does not want to stay home, they should not be compelled to stay home," Musk said.

Musk also criticized California’s emergency measures as “fascist” on Tesla’s first-quarter earnings call.

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