Elon Musk, the CEO of Tesla, met with California Governor Newsom at the company's engineering headquarters to discuss potential expansion plans.

• Elon Musk, the CEO of Tesla, will meet with California Governor Gavin Newsom on Wednesday to tour the company's engineering headquarters.

• Elon Musk has been expressing a growing level of criticism regarding the business environment in California.

• The governor's office has stated that since 2009, the state has invested over $3.2 billion in Tesla.

          On Wednesday, Tesla's CEO Elon Musk and his team are meeting with California Governor Gavin Newsom to tour Tesla's new engineering headquarters. Sources familiar with the matter said that the meeting, which is taking place at Tesla's engineering office in Palo Alto, California - also known as HQ2, will likely center on the company's plans to expand and create jobs in the state.

Tesla's expansion plans will prioritize the recruitment of engineers skilled in research and development, particularly in the field of artificial intelligence. To support this expansion, Tesla will take over the lease of the office space previously used by Hewlett-Packard. These plans will help to expedite the development of autonomous driving and robotics technology.

The meeting was initiated by Tesla after previous attempts to arrange talks between the company's CEO and the state's most prominent political figure had been unsuccessful.

This meeting between Tesla CEO Elon Musk and California Governor Gavin Newsom takes place amidst regulatory scrutiny for the company. The California Department of Motor Vehicles has accused Tesla of deceptive advertising practices related to its driver assistance programs called Autopilot and Full Self-Driving. Additionally, the state's civil rights agency has filed a lawsuit alleging racial harassment and discrimination against Black workers at Tesla's car assembly plant and other facilities in California.

According to Tesla's latest annual financial filing with the SEC, district attorneys in several California counties are currently investigating the company's hazardous waste segregation practices for possible violations of related code.

Tesla has not yet responded to the request for comment.

California's strong climate initiatives have played a crucial role in the success of Tesla. The state has invested over $3.2 billion in the company since 2009, and it leads the nation in zero-emission vehicle sales, with nearly 1.4 million sold. Additionally, there are 55 zero-emission vehicle-related manufacturing companies located in California. The governor's office provided this information to highlight the state's significance in Tesla's growth.

Musk has not expressed a favorable stance on California regarding his business.

In March 2020, Musk and California state officials had a disagreement over reopening the Tesla plant in Fremont during the pandemic. Musk wanted his employees to return to work while Covid-19 was affecting businesses across the US. He mischaracterized California's health-related Covid-19 restrictions as "fascist." In 2021, after multiple threats to leave the state, Musk relocated Tesla's headquarters to Austin, Texas, although the company still operates two Mega factories in Fremont and Lathrop, California.

Musk has been vocal about his political stance, stating that California is a one-party state that is overburdened with regulation and high taxes. However, Governor Newsom has praised Musk in several interviews, calling him "one of the greatest innovators of our time." Tesla remains a significant employer in California, with 47,000 employees in the state as of 2022, according to a blog post from January 2023. As of December 31, 2022, the company and its subsidiaries employed 127,855 people worldwide. The company's wages have resulted in $16.6 billion in economic activity for the state, or $44.4 million injected into California's economy each day, according to Tesla.

Despite Musk's criticisms of California, Tesla's significant presence in the state shows that it remains crucial to the company's success, particularly given the state's strong climate initiatives. The meeting between Musk and Governor Newsom, focusing on job creation and expansion efforts in California, could be a sign of continued collaboration between Tesla and the state. However, Tesla's recent legal troubles in California, including allegations of discriminatory workplace practices and hazardous waste-related code violations, suggest that there may be ongoing challenges to the company's relationship with the state.