Tesla Sues Alameda County, Musk Threatens to Pull Company Out of California

Tesla CEO Elon Musk speaks before unveiling the Model Y at Tesla's design studio in Hawthorne, Calif., on March 14, 2019. Jae C. Hong/AP

Tesla on May 9 filed a lawsuit seeking an injunction and declaratory relief against Alameda County’s shelter-in-place order, in a move hoped to allow the automaker to resume operations at its factory in Fremont, California.

CEO Elon Musk announced his company’s intentions to “immediately” file the lawsuit in a series of tweets on May 9, adding that Tesla would relocate its headquarters and future programs out-of-state and appeared to reference the interim health officer of Alameda County, Dr. Erica Pan.

“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!” he wrote.

“Frankly, this is the final straw. Tesla will now move its HQ and future programs to Texas/Nevada immediately,” he said. “If we even retain Fremont manufacturing activity at all, it will be dependent on how Tesla is treated in the future. Tesla is the last carmaker left in CA.”

The lawsuit, which was filed in the U.S. District Court for California’s Northern District, states that “the county is making rules that directly contradict and undermine the policy announced by the governor in his orders,” and that “the county’s orders should be declared void and without legal effect.”

Telsa was forced to suspend operations at its Fremont factory on March 23, following days of arguing with the county over whether the electric vehicle and clean energy company was classed as an “essential business” under Bay Area shelter-in-place orders instituted on March 16, which sought to prevent the spread of the CCP virus, commonly referred to as the novel coronavirus.

On May 7, California Gov. Gavin Newsom issued new guidance allowing some manufacturers to resume operations, a move that won support from Musk, who reportedly sent an internal email to employees about plans to reopen business on May 8, based on the governor’s revised order.

According to the email, Musk stated that limited operation would resume at the Fremont factory with 30 percent of normal headcount per shift but noted that employees who feel uncomfortable returning to work were not obligated to do so.

However, Alameda County, along with several other Bay Area counties and cities, last week extended the stay-at-home orders until the end of May and, during a video-streamed town hall meeting May 8, said that Tesla didn’t have the “green light” to reopen, Reuters reported.

“We’ve been working with them, but we have not given the green light,” Alameda County Health Officer Erica Pan said of Tesla. “We have not said it is appropriate to move forward.”

Alameda County Health Care Services Agency and the Public Health Department on May 9 issued a statement saying the agencies “have been communicating directly and working closely with the Tesla team on the ground in Fremont.”

“This has been a collaborative, good faith effort to develop and implement a safety plan that allows for reopening while protecting the health and well-being of the thousands of employees who travel to and from work at Tesla’s factory. The team at Tesla has been responsive to our guidance and recommendations, and we look forward to coming to an agreement on an appropriate safety plan very soon,” the statement reads, adding:

“We appreciate that our residents and businesses have made tremendous sacrifices and that together we have been able to save lives and protect community health in our region. We need to continue to work together so those sacrifices don’t go to waste and that we maintain our gains. It is our collective responsibility to move through the phases of reopening and loosening the restrictions of the Shelter-in-Place Order in the safest way possible, guided by data and science.”