“After exhaustive review of regulatory, tax, and operational conditions, we have made the difficult decision to consolidate all vehicle production at our Texas and Florida facilities,” Musk wrote on X. “California has been home to SpaceX since day one, but the cumulative burden of high taxes, overregulation, and hostile policy environment has become unsustainable. We thank our talented California team and are working to offer relocation packages to those who wish to continue with SpaceX.”

The announcement comes amid escalating tensions between Musk and Newsom, who has repeatedly criticized the billionaire’s influence and publicly clashed with him over COVID policies, free speech, immigration enforcement, and state business regulations. Newsom’s office has not yet issued a formal response, but sources close to the governor say he was “blindsided” and has called an emergency meeting with economic development officials and legislative leaders for Thursday morning.

“SpaceX isn’t just a company — it’s one of California’s crown jewels,” said one senior Sacramento aide who spoke on condition of anonymity. “This isn’t just about jobs. It’s about prestige, innovation leadership, and tax revenue. The governor knows this looks catastrophic.”

The Hawthorne closure will eliminate an estimated $1.2 billion in annual economic output for Los Angeles County alone, according to preliminary analyses by the UCLA Anderson School of Management. The ripple effects are expected to hit suppliers, engineering firms, restaurants, housing markets, and local tax bases hard. SpaceX has already begun internal discussions about relocation packages, including moving incentives to its Starbase facility in Boca Chica, Texas, and the Kennedy Space Center operations in Florida.

Newsom has long positioned California as the global leader in innovation and clean tech, frequently touting the state’s role in space exploration. But the governor’s relationship with Musk has deteriorated sharply in recent years, with public barbs over Twitter/X content moderation, COVID lockdowns, high-speed rail delays, and California’s business climate. Musk has repeatedly threatened to move operations out of state, and last year relocated Tesla’s corporate headquarters to Texas.

Critics of Newsom wasted no time linking the closure directly to state policies.
“Gavin Newsom’s war on business just claimed its biggest victim yet,” said Republican Assembly Minority Leader James Gallagher. “High taxes, endless regulations, and hostility toward innovators drove SpaceX away. This is what happens when Sacramento puts ideology over jobs.”

Progressive defenders of Newsom argue the move is more about Musk’s personal grievances and Texas’ lower taxes and fewer environmental rules. “Elon Musk has been looking for an exit ramp for years,” said Assemblymember Isaac Bryan (D-Los Angeles). “This isn’t about California failing — it’s about one billionaire punishing a state that won’t bow to him.”

Whatever the root cause, the closure is a major blow to California’s image as the unrivaled hub of aerospace and advanced manufacturing. SpaceX’s Hawthorne facility has been responsible for building nearly every Falcon 9 rocket and Crew Dragon capsule that has flown NASA astronauts to the International Space Station.

As the news spread Thursday morning, Hawthorne city officials called an emergency council meeting, while labor unions representing aerospace workers expressed deep concern about the loss of union-scale jobs.

Governor Newsom is expected to address the closure publicly later today. Sources say he will likely emphasize efforts to retain remaining SpaceX operations in California (including some R&D functions) and promise “aggressive outreach” to keep talent and supply-chain jobs in-state.

But for many Californians — especially in the South Bay — the damage is already done.

SpaceX didn’t just close a factory.
It sent a message.And right now, that message is echoing louder than any press release from Sacramento.