Elon Musk meets with California Gov. Newsom at Tesla's new engineering headquarters to discuss expansion

Tesla CEO Elon Musk and his unit are gathering Wednesday with California Governor Gavin Newsom and touring Tesla's caller engineering headquarters. Sources adjacent to the politician told CNBC the gathering astatine Tesla's engineering bureau successful Palo Alto, California, which is being dubbed HQ2, is expected to absorption connected the company's efforts to make jobs and grow successful the state.

The enlargement volition absorption connected hiring engineers proficient successful probe improvement and artificial intelligence. Tesla is taking implicit the lease for the bureau space, antecedently occupied by Hewlett-Packard. The plans volition assistance accelerate efforts to nutrient autonomous driving and robot technology.

Sources said Musk initiated the gathering aft respective erstwhile attempts to acceptable up talks betwixt the state's astir well-known person and the astir outspoken billionaire failed to materialize.

It comes arsenic Tesla faces regulatory scrutiny successful the state. The California Department of Motor Vehicles has formally accused Tesla of engaging successful deceptive selling and advertizing practices wherever its operator assistance programs, brand-named Autopilot and Full Self-Diving, are concerned. And the state's civilian rights bureau has sued Tesla alleging racist harassment of, and favoritism against, Black workers that has persisted for years astatine the company's car assembly works and different facilities successful California.

Meanwhile, according to Tesla's astir caller yearly fiscal filing with the SEC, territory attorneys successful antithetic California counties are "conducting an probe into Tesla's discarded segregation practices," for hazardous waste-related codification violations.

Tesla did not instantly respond to a petition for comment.

California and its beardown clime initiatives person been integral to Tesla's success. According to the governor's office, the authorities has invested much than $3.2 cardinal successful Tesla since 2009. California leads the nation's zero-emission conveyance marketplace with astir 1.4 cardinal ZEVs sold and it's location to 55 ZEV-related manufacturing companies.

But Musk's views connected California person not been truthful affable erstwhile it comes to his business.

As the pandemic deed successful March 2020, Musk and authorities officials clashed implicit reopening the Tesla works successful Fremont, California. At the time, Musk was pushing for his employees to instrumentality to enactment portion covid was affecting businesses crossed the country. Musk mischaracterized California's health-related covid restrictions arsenic "fascist."

In 2021, following repeated threats to permission the state, Musk moved Tesla's headquarters to Austin, Texas. The institution owns and operates 2 Megafactories successful Fremont and Lathrop, Texas.

Since then, Musk has made his governmental stance clear, characterizing California arsenic a one-party authorities that is burdened with overregulation and precocious taxes. Despite those comments, Governor Newsom has praised Musk successful aggregate interviews with CNBC, calling him "one of the top innovators of our time."

Musk, meanwhile, has emphasized that Tesla is inactive a large leader successful the authorities and is expanding its operations. In the 4th fourth of 2022, for example, Tesla boasted astir a caller Megapack mill successful Lathrop, California.

Tesla said it had 47,000 employees successful California successful 2022, according to a January 2023 blog post. As of Dec. 31, 2022, the institution and its subsidiaries had 127,855 employees worldwide. The institution said its wages resulted successful $16.6 cardinal successful economical enactment for the authorities "or $44.4 cardinal injected into California's system each day."

CNBC's Lora Kolodny contributed to this report.