Tesla makes California the home of its global engineering headquarters.

CEO Elon Musk and California Governor Gavin Newsom announced Wednesday that Tesla’s new technical headquarters will be in the former offices of Hewlett-Packard.

The sudden resurgence of Tesla’s relationship with California may come as a surprise after the electric car maker moved its corporate headquarters from Fremont, California to Austin, Texas in 2021 following disputes with the state over COVID-19 restrictions.

Musk has also repeatedly criticized California for being overly regulated and burdened with high taxes.

However, Tesla has kept its first factory in Fremont operating, where many engineers are still based.

Investment

Tesla tweeted that it was hiring for new engineering roles in California, which would be a big reason why Newsom supports the electric car maker’s investment back in the state.

Sources told CNBC that the focus will be on engineers who are proficient in research development and artificial intelligence.

“California prides itself on being at the forefront of discovery and new ideas and innovation,” Newsom said, noting the state’s long-standing relationship with Tesla.

Newsom said he is excited to work with Tesla to both transform the auto industry and strengthen California’s manufacturing dominance.

Musk said the Fremont plant is expected to produce more than 600,000 vehicles this year.

Tesla also said Wednesday it would focus its battery cell production in the United States to take advantage of federal incentives in the Inflation Reduction Act.

Although Tesla is California’s most popular automaker, the company has a complicated relationship with the state.

Tesla is under investigation by the federal Equal Opportunity Agency and is still in the midst of a lawsuit from the state Department of Civil Rights over employee complaints that the Fremont factory is rife with racial bias and harassment.

The CA Department of Motor Vehicles also accused Tesla of falsely advertising its Autopilot and Full Self-Driving (FSD) advanced assistance systems.

Tesla is expected to go into more detail about the announcement on Wednesday during a planned live streaming event.

Musk has previously criticized California for “over-regulation, over-litigation, over-taxation” and clashed with local officials in 2020 over the closure of the company’s Fremont factory due to COVID-19.

Musk said he has voted Democratic in the past, but suggested voting Republican in the 2022 midterm elections. He thanked Newsom, a prominent Democrat, for buying one of the first Tesla Roadsters.

Sources: Techcrunch | reuters