Tesla says California is still home - for its engineering HQ

Musk on Wednesday announced the news with the state's governor, Gavin Newsom, and the Tesla CEO later told CNBC that putting the engineering hub in California means it is "effectively a headquarters of Tesla."

Tesla in 2010 acquired a plant from a joint venture of General Motors Co (GM.N) and Toyota Motor Corp (7203.T) in Fremont, California, which it still operates and which will increase production this year to more than 600,000 vehicles, Musk said.

Still, Wednesday's announcement marked something of a shift for the billionaire CEO, who had criticized California's regulations and taxes harshly after he moved Tesla's official corporate headquarters to Texas in 2021.

The two states are political and business rivals. Democratic-controlled California, the most populous U.S. state, has more electric vehicles than any other and provided Tesla with tax incentives as it grew. Second-ranked Texas is known for relatively light regulation and is the heart of the nation's oil-and-gas industry.

Musk previously criticized California for "overregulation, overlitigation, overtaxation" and in 2020 clashed with local officials over closure of the company's Fremont factory due to COVID-19. Musk has said he has voted for Democrats in the past, but suggested voting Republican in the 2022 midterm elections. He did thank Newsom, a prominent Democrat, for buying one of Tesla's early Roadster cars.