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May 29, 2020, 3:44 p.m. EDT

Elon Musk vs. Bay Area officials: These emails show what happened behind the scenes in the Tesla factory fight

Local California officials worked to ensure Tesla’s Fremont facility reopened with proper safety guidelines amid public pressure from carmaker’s celebrity CEO, emails show

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By Jeremy C. Owens and Claudia Assis, MarketWatch , Max A. Cherney


MarketWatch photo illustration/Getty Images, Fremont Police
Fremont, Calif., Police chief Kimberly Petersen, left, worked with Alameda County Public Heath officials to ensure the Tesla factory in her city reopened safely as Tesla Chief Executive Elon Musk, right, took the fight to Twitter.

Kimberly Petersen, chief of police for Fremont, Calif., suspected Elon Musk would not stand by quietly as public health officials idled his Tesla factory.

“We know where this will go,” Petersen wrote in a March 21 email to other local officials, seen by MarketWatch, that detailed her “ongoing conflict with a large and prominent auto manufacturer” in the city, more than a month before Musk decried the COVID-19 closures as “fascist.”

The email is part of a batch of communications that detail what took place as Musk took public his fight with Bay Area officials and threatened first to reopen the factory without permission and then to move California’s only large auto manufacturer out of the state entirely.

Tesla /zigman2/quotes/203558040/composite TSLA +10.78%  continued to operate the factory even after the San Francisco Bay Area became the first large region in the U.S. to issue a shelter-in-place order, claiming a federal exemption to the shutdown. Fremont police eventually convinced Tesla to close its factory, two days after Petersen sent the email to local officials, but Gov. Gavin Newsom then included the same “critical infrastructure” exemption in his statewide order.

“I am more than willing to continue this current course of action, but I need to know your stance on the issue before I engage in a very public fight,” Petersen told Alameda County Interim Health Officer Erica Pan and other local officials in the March 21 email reviewed by MarketWatch.

In a dayslong tweetstorm in early May, Tesla’s chief executive called Pan “ignorant” and announced he was defying regulators and putting the factory back online. “If anyone is arrested, I ask that it only be me,” Musk tweeted.

See also: Three catalysts that could push Tesla stock to new heights

As Petersen predicted, Tesla cited the federal and state exemptions for certain manufacturing work in attempting to reopen. The company sued Alameda County for not allowing the factory to reopen in Fremont, which is located 40 miles east of San Francisco.

Petersen would have been the official to arrest Musk, but she chose not to use her handcuffs. Instead, she worked with local and Tesla officials to determine and then enforce the criteria that Tesla would have to establish in order to reopen the factory, emails between local officials show.

Musk wasn’t directly involved in the correspondence, which were largely civil exchanges between three women who worked for Tesla, the city and county — Petersen, Pan and Tesla vice president for environment, health and safety Laurie Shelby. The calm approach apparent in the emails contrasts with Musk’s brash public style.

Read: Elon Musk gets performance-based payday worth nearly $800 million

Petersen, reached at her desk phone this week, declined to comment on the particulars of the exchange, other than to say the relationship between the city police and Tesla had been professional but “not particularly close.” Tesla did not respond to multiple requests for comment over the course of a week.

Petersen was the only local official or Tesla staffer identified in the emails to speak with MarketWatch for this article, but the communications show she and the Fremont Police Department played a crucial role in a local dispute that became national news. Peterson became a buffer between Tesla and Alameda County, and led the agency that would eventually confirm and enforce rules meant to keep Tesla’s Fremont factory from becoming the nexus of a second wave of coronavirus in the Bay Area.

Musk lashes out on Twitter

After Musk reportedly sent an email to employees on Thursday, May 7, stating that he expected to restart production on Friday afternoon, Fremont police contacted Tesla about its plans to reopen the factory on Friday evening, according to emails between Fremont Police Lt. Brian Shadle and Dan Chia, a senior policy adviser for Tesla.

“Over the past week, I have received several complaints that Tesla was in fact violating the Alameda County Health Order by ordering their employees back to work to re-open the production line,” Shadle wrote in an email in which he requested to visit the site “to meet with you about this potential violation and inspect the facility.”

The next morning, May 9, Musk hurled insults on Twitter, announcing a lawsuit against Alameda County and calling Pan an “unelected and ignorant ‘interim health officer’.”

For more: Elon Musk threatens to move Tesla out of California, files lawsuit

Musk, whose child with pop singer Grimes was born just five days earlier, then threatened to move his company to another state, igniting a much larger media and political firestorm that even brought out governors seeking to woo the company and a California politician with a less diplomatic message.

The emails show that Musk’s outburst likely stemmed from a discussion between Petersen and Tesla officials, though Petersen declined to confirm details of any specific conversations. An hour after Musk’s first tweet, Petersen sent an email to county officials that announced “I have verbally notified [Tesla] that auto manufacturing is still not allowed.”

/zigman2/quotes/203558040/composite
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July 10, 2020 4:00p
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