Tech

Chamath Palihapitiya defends Elon Musk's decision to open Tesla production in defiance of local authorities

Key Points
  • Social Capital CEO Chamath Palihapitiya defended Elon Musk's reopening of Tesla facilities in defiance of local government orders.
  • Palihapitiya said that local, state and government officials need to be more clear when setting regulations amid the pandemic. 
  • Musk has spent the last several days downplaying the coronavirus pandemic and blasting the local business closure orders on Twitter and in a profane diatribe on Tesla's last earnings call.
VIDEO2:2002:20
Chamath Palihapitiya on Elon Musk's fight with Alameda County

Social Capital CEO Chamath Palihapitiya defended Elon Musk's reopening of Tesla facilities in defiance of local government orders, telling CNBC on Tuesday that local, state and government officials need to be more clear when setting regulations amid the pandemic. 

"The federal government has this specific set of guidelines. People may think they fall into those guidelines. Then states then issue guidelines and then on top of that you have regulations at local levels. When you put them all together it's incredibly confusing," Palihapitiya said Tuesday on "Squawk Box."

"So 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 that you can go and actually get the approvals to do so," he added. 

Musk has been pushing to swiftly resume production at the company's Fremont, California, plant. On Monday, local TV broadcasters showed employees' cars streaming into the company's parking lots. California governor Gavin Newsom said Monday he did not know Tesla had restarted production before getting the go ahead from Alameda County officials. Musk tweeted a confirmation that Tesla had resumed production Monday afternoon, and dared the local sheriff's office to arrest him.

Though a rush to return has been met with heavy resistance from local authorities, Musk threatened Saturday to pull Tesla out of California amid a dispute with Alameda County over the shutdown. Tesla also filed a lawsuit against the county, asking a federal court to invalidate orders by local authorities that have prevented the automaker from resuming production.

Scott Haggerty, supervisor for the Fremont district of Alameda County, told the New York Times on Saturday that the county and Tesla executives were working on a plan to restart the plant May 18, when several automakers in Michigan plan to reopen. But Musk went ahead and opened Tesla factories up on Monday. Tesla said in a blog post Saturday night that it had developed new health and safety measures to protect its workers.

Palihapitiya said that county officials should be working with Musk in order to resume production in a coherent way. 

On Monday afternoon, the Alameda County Sheriff and Alameda County Public Health Care Services Agency said in a statement: "We are actively communicating our feedback and understand Tesla will submit a site-specific plan later today as required under the State of California guidance and checklist for manufacturing issued on May 7. We look forward to reviewing Tesla's plan and coming to agreement on protocol and a timeline to reopen safely."

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