Why California Declared Tesla an “Essential” Business in New Coronavirus Lockdown

(The Motley Fool) – California is closing down again amid a rise in COVID-19 cases, but this time around Tesla (NASDAQ:TSLA) has been designated an “essential” business that wouldn’t need to comply with the new restrictions.

That’s just as well, because the last time California shut down and kept Tesla off the list of preferred businesses, CEO Elon Musk just ignored the orders and kept on producing his electric cars.

Perhaps to avoid another round of brinkmanship that saw Musk musing about moving his company out of state because of the orders, California has deemed Tesla workers to be an “essential workforce.”

Spoiling for a fight
Back in March when the coronavirus outbreak was first declared a pandemic, Musk resisted closing his Fremont factory when health officials were saying it would just require two weeks to “bend the curve” on getting the crisis under control.

After coming under much criticism, Musk eventually relented and closed Tesla’s production facilities, but faced no official sanction for defying the order.

When the state began allowing businesses to reopen, Alameda county kept its shutdown orders in place and Musk took to Twitter to voice his displeasure and mulled moving Tesla out of state. The county eventually relented.

Most analysts didn’t think it would be feasible for the carmaker to move because it would cost an estimated $1 billion and would interrupt production goals. Future programs could still be located elsewhere, though, as Musk was recently on Twitter again saying that as much as he loved California, the state “has the winning-for-too-long problem.”

While California’s state health regulators have deemed Tesla essential, Alameda county could still impose more restrictive rules, but for now is conforming to state guidelines.

Investing legends and Motley Fool Co-founders David and Tom Gardner just revealed what they believe are the 10 best stocks for investors to buy right now… and Tesla, Inc. wasn’t one of them.


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