Davis, California: The Small City Taking on Elon Musk's Tech Empire with a Bold Divestment Resolution

Key Takeaways

City of Davis, California, City Council to consider resolution banning engagement with Elon Musk-owned companies like Tesla and SpaceX.
Resolution would prohibit new contracts, purchases, or use of Tesla Robotaxis by the city.
Proposal urges CalPERS to divest from Musk company stocks, citing alleged labor, environmental, safety violations, and political activities threatening democracy.
Staff report claims no immediate budgetary impact, but could affect residents relying on Tesla Superchargers.
CalPERS previously opposed Musk’s compensation but holds Tesla stock for profits.
Decision to be discussed at City Council meeting this evening; sourced from Davis Vanguard.
Musk’s recent political involvement, especially in Presidential Election, prompted similar considerations elsewhere, like Baltimore opting for Tesla EV contract.

In the heart of California’s Yolo County, the progressive college town of Davis is making headlines for a audacious proposal: severing all ties with companies controlled by Elon Musk. On February 17, 2026, the Davis City Council convened to debate a resolution that would ban new contracts, purchases, and even the use of Tesla Robotaxis by the city, while urging the massive California Public Employees’ Retirement System (CalPERS) to dump its Tesla stock. This isn’t just local politics—it’s a flashpoint in the growing divide between Musk’s libertarian-leaning empire and left-leaning institutions wary of his influence. ❶

As a blogger specializing in the intersection of technology, sustainable energy, and public policy, I’ve tracked Musk’s companies for over a decade—from Tesla’s EV revolution to SpaceX’s Mars ambitions. This Davis move raises profound questions: Is it principled activism or performative politics? Could it spark a wave of municipal boycotts? And what does it mean for everyday residents hooked on Tesla’s Supercharger network? Let’s dive deep into the details, implications, and my unfiltered analysis.

The Resolution: Breaking Down the Fine Print

The draft resolution, titled “Resolution Ending Engagement With Elon Musk-Controlled Companies and To Encourage CalPERS To Divest Stock In These Companies”, was prepared by City Manager Daryel Dunston at the council’s request following public pressure. ❶ Here’s what it entails:

No New Deals: The city would prohibit entering into contracts, subsidies, or purchases with Musk-linked firms, including Tesla, SpaceX, Neuralink, Starlink, xAI, The Boring Company, and Tesla Robotaxis.
Terminate Existing Ties: Where legally possible, end current contracts and ban payments for Musk platforms like X (formerly Twitter) in city operations.
CalPERS Pressure: Urge the pension giant to exclude Tesla stock from active investments.
Due Diligence Mandate: Scrutinize any future projects involving Musk companies or their lobbyists.

Staff report emphasizes no immediate fiscal hit—Davis has zero current investments or contracts with these firms. But it flags potential limits on future options, like reliable EV charging via Tesla Superchargers, which are open to all EVs and ubiquitous in California. ❶

The meeting on February 17 was the first formal discussion, prompted by public advocates. As of this writing (February 18, 2026), no vote outcome has been publicly reported, but reader comments on the Davis Vanguard article reveal heated debate: critics call it “symbolic grandstanding” distracting from local woes like housing shortages. ❶

The Charges Against Musk: Labor, Environment, and “Threats to Democracy”

Why Musk? The resolution preamble accuses him of overseeing companies with:

Labor Violations: Firings of unionizing engineers at SpaceX, workplace injuries at Tesla factories.
Environmental Lapses: Regulatory probes into Tesla’s Autopilot safety and battery production emissions.
Safety and Compliance Issues: Lawsuits over Neuralink animal testing and Starlink regulatory dodges.
Political Meddling: Amplifying ideologies via X that “threaten democratic norms,” including campaign finance tied to his Trump support in 2024. ❶

These aren’t baseless—federal probes abound, from NLRB cases (recently dropped for SpaceX) to SEC scrutiny. ❷ Yet, Musk defenders point to his companies’ innovations: Tesla’s 50%+ U.S. EV market share accelerating decarbonization, SpaceX slashing launch costs.

CalPERS: The $500 Billion Elephant in the Room

Davis wants CalPERS—a fund serving 2 million Californians with ~$500 billion in assets—to divest Tesla. But history suggests reluctance. CalPERS holds over 5 million Tesla shares (valued at billions), down from 9.2 million in 2024. ❸ ❹

Pay Package Fights: Voted “no” on Musk’s $56B (2024), $1T (2025) packages, citing “exorbitant” governance risks. ❺ ❻
No Divestment: Despite NIWR/LatinoJustice pushes, CalPERS prioritizes returns—Tesla stock has multiplied investments. ❼

Fiduciary duty trumps politics; divestment could cost retirees millions in gains. Recently, a CalPERS-backed fund even bought a Tesla battery factory. ❽

Real-World Impacts: Superchargers, EVs, and Robotaxis

Davis touts sustainability—it’s got a green fleet and bike-friendly streets. But banning Tesla hits home:

Superchargers: Tesla’s network is the most reliable for all EVs; residents could face charging deserts.
Robotaxis: Preemptively nixing autonomous rideshares ignores potential for efficient transit.
Opportunity Costs: Limits SpaceX Starlink for rural broadband or xAI for city AI tools.

No “budgetary impact” now, but future EV procurement? Ford or Rivian alternatives cost more.

The Bigger Picture: Musk’s Politics and Copycat Cities

Musk’s 2024 election role—backing Trump, X algorithm tweaks—ruffled feathers. Baltimore mulled a similar ban but awarded Tesla a $5M EV fleet contract. ❾ No other U.S. cities have enacted bans; a federal petition fizzled. ❿

This echoes BDS movements or fossil fuel divestments, but targeting one innovator risks backlash. Musk relocated X/SpaceX to Texas over CA laws—Musk quips Davis next? ⓫

My Expert Analysis: Virtue Signaling vs. Innovation Killer?

Pros:

Ethical Signal: Aligns procurement with values, pressuring bad actors.
Precedent: Joins 1,500+ institutions divesting fossil fuels ($40T+).

Cons (and why I’m skeptical):

Selective Outrage: Why not Apple (FTC probes), Google (antitrust), or Huawei? Musk’s Trump ties seem the trigger. ❶
Hurts Progressives’ Goals: Tesla drives CA’s EV mandate; boycotts slow net-zero.
Symbolic Waste: Zero current ties—pure politics amid Davis’ $125M budget crunch.

Advice for Cities: