Here's What Kara Swisher And Chamath Palihapitiya Think About Elon Musk's Threats To Leave California

Elon Musk may be irking his factory hosts with threats of legal action and corporate emigration, but he isn’t losing investors yet.

The Context

Last week, after Alameda County officials said Tesla Inc TSLA was not cleared to reopen its Fremont factory due to coronavirus concerns, Musk threatened to move the company’s headquarters to another state.

“Frankly, this is the final straw,” Musk tweeted. “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.”

Recode’s Kara Swisher said the threat probably isn’t empty, and she wouldn’t be shocked by a move to Nevada.

“If anyone would do it, it would be him, I guess,” Swisher told CNBC. “...I wouldn’t doubt that he would do it compared to other people. I don’t think it’s an idle threat necessarily, but I think he’s just sort of expressing his frustration.”

Musk’s threats drew the ire of a California assemblywoman, who criticized the state’s subsidization of Tesla. But investors stood by the company through it all.

Why It's Important

Tesla’s stock has surged 8% after Musk stood his ground with the local officials. Social Capital CEO Chamath Palihapitiya said he, too, sides with Musk. “I have been and continue to be a huge supporter of his,” Palihapitiya told CNBC.

“I don’t think he’s saying ‘local laws be damned,” he added. “I think he was actually trying to get time with the folks in Alameda.”

In fact, he empathizes with Musk’s frustrations and noted that disparities among local, state and federal guidelines have fostered confusion.

“If you’re a business owner and you're trying to figure out how to get back to work because you believe the risks are manageable, there’s no clear way for you to go and get the approval to do so,” Palihapitiya said. “If the federal government says yes, and then the state government says yes, and then the local government says no, what are you to do?”

'Contrast With Bezos'

Still, Swisher said she thinks Musk could make a better case for himself by proactively outlining safety precautions rather than venting on Twitter.

“It’s really interesting to contrast him with Jeff Bezos, who is sort of doing these things where they are hardening Amazon for the next virus or whatever, is going to spend the money to be safe, and things like that,” Swisher said. “This is very Elon… I think cooperation could probably go a long way here.”

What’s Next

Despite his threats, Musk ordered Tesla to restart production at its Fremont factory on Sunday. He expects formal consequences.

“Tesla is restarting production today against Alameda County rules,” Musk said in a Monday tweet. “I will be on the line with everyone else. If anyone is arrested, I ask that it only be me.”

Tesla's stock traded around $830 per share at time of publication.

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Photo by Steve Jurvetson via Wikimedia.