california-city-anti-musk-resolution-ban-tesla-spacex-contracts-political-analysis

The intersection of technology and politics has produced another flashpoint: Taha Abbasi reports that a California municipality is weighing a formal resolution to ban all contracts with Elon Musk-controlled companies, including Tesla and SpaceX. The draft document — titled “Resolution Ending Engagement With Elon Musk-Controlled Companies and To Encourage CalPERS To Divest Stock In These Companies” — represents the most aggressive institutional anti-Musk action attempted to date.

This isn’t social media noise or protest signage. This is an official city government document that, if adopted, would prohibit municipal purchases of Tesla vehicles, ban Starlink internet contracts, end any SpaceX-adjacent procurement, and call on California’s largest pension fund to sell its Tesla stock holdings. As Taha Abbasi examines both the politics and the practicalities, the resolution reveals more about the tension between political sentiment and technological reality than its authors likely intended.

What the Resolution Would Actually Do

The resolution creates three distinct obligations. First, it bars the city from entering new contracts with any company where Elon Musk holds a controlling interest. For a California city in 2026, this is remarkably broad. Tesla vehicles are among the most popular fleet purchases for municipalities committed to electrification goals. Starlink has become increasingly important for emergency communications, particularly in disaster-prone areas. SpaceX launches the satellites that provide weather data, GPS navigation, and communication infrastructure that city services rely on.

Second, the resolution urges CalPERS — which manages retirement benefits for approximately 2 million California public employees including teachers, firefighters, police officers, and government workers — to divest its holdings in Tesla stock. CalPERS held significant Tesla positions as of early 2026, meaning this recommendation, if followed, could impact the retirement savings of the very public employees the city claims to represent.

Third, the resolution includes language “encouraging” other municipalities and state agencies to adopt similar positions, attempting to create a cascading effect of institutional divestment and procurement bans. Taha Abbasi notes this strategy mirrors approaches used in fossil fuel divestment campaigns, but applied to a clean energy and technology company — an ironic inversion that highlights the political rather than environmental motivation.

The Self-Defeating Logic

Here’s where the resolution’s practical implications become almost farcical. Many California cities have aggressive electrification goals. They’ve committed to converting municipal fleets to electric vehicles. They’ve invested in EV charging infrastructure. They’ve adopted building codes that encourage or require EV-ready construction. And the company that makes the most reliable, most widely serviced, and most extensively networked electric vehicles in California is… Tesla.

Banning Tesla purchases doesn’t advance electrification — it constrains it. Alternative EV options exist, but none match Tesla’s Supercharger network coverage in California, service center density, or over-the-air update capability. Municipal fleet managers choosing EVs need vehicles that work reliably every day with minimal downtime. As of February 2026, Tesla remains the safest bet for that requirement in most California use cases.

The Starlink angle is even more problematic. California faces regular wildfire seasons, earthquakes, and other natural disasters that can destroy terrestrial communications infrastructure. Starlink has proven its value as emergency backup communication in exactly these scenarios. Banning Starlink contracts during California’s next disaster season could literally endanger public safety.

The CalPERS Divestment Problem

The pension divestment recommendation raises serious fiduciary questions. CalPERS has a legal obligation to maximize returns for its beneficiaries — not to make political statements with their retirement savings. Tesla’s stock has been one of the market’s strongest performers. Politically motivated divestment from a high-performing stock could expose CalPERS to legal challenges from retirees who argue their returns were sacrificed for political purposes.

As Taha Abbasi has analyzed, Tesla’s market cap now exceeds all other major automakers combined. Divesting from the largest automotive company in the world because of disagreements with its CEO is a fiduciary decision with real financial consequences. The precedent it would set — allowing political sentiment to override investment merit — could undermine pension fund governance nationwide.

The Bigger Question

What Taha Abbasi finds most concerning about this resolution is the precedent it attempts to establish: that a CEO’s political views or public statements can serve as grounds for institutional boycotts of the companies they lead. CEOs at major companies hold a wide range of political views. If municipalities begin boycotting companies based on CEO politics, the implications extend far beyond Tesla — every major government contractor, technology provider, and service company becomes subject to political litmus tests.

The technologies that will define the coming decades — electric vehicles, autonomous driving, satellite internet, space exploration, renewable energy — don’t have political affiliations. A Supercharger doesn’t check voter registration before delivering electrons. A Starlink satellite provides internet to progressive and conservative communities equally. SpaceX launches NASA astronauts regardless of who’s in the Oval Office. Attempts to politicize these technologies harm the communities that depend on them — and in California, that’s everyone.

This resolution will likely fail, as similar proposals in other cities have. But its existence is a symptom of a broader disease: the belief that technological progress can be weaponized as political punishment. It can’t — at least not without punishing the people the technology serves. And in California, where Tesla employs tens of thousands of workers, operates the Fremont factory, and provides the backbone of the state’s EV infrastructure, the people this resolution would punish most are the ones it claims to protect.

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About the Author: Taha Abbasi is a technology executive, CTO, and applied frontier tech builder. Read more on Grokpedia | YouTube: The Brown Cowboy | tahaabbasi.com