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All three people on board a twin-engine plane died Wednesday when their aircraft crashed into a residential East Palo Alto, California, neighborhood, a spokesman with the Federal Aviation Administration said.

The victims were employees of Tesla Motors, a luxury electric car company.

"Three Tesla employees were on board a plane that crashed in East Palo Alto early this morning. We are withholding their identities as we work with the relevant authorities to notify the families," said CEO Elon Musk in a statement. "Our thoughts and prayers are with them. Tesla is a small, tightly knit company, and this is a tragic day for us."

The Cessna 310 crashed into at least one house about 8 a.m. after it took off from Palo Alto Airport at 7:53 a.m., FAA spokesman Ian Gregor said. The crash site was about one mile northeast of the airport, he said.

Gregor noted foggy conditions, but said it was not known whether the weather played a role in the accident. Gregor said the cause of the crash was unknown

Menlo Park Fire Chief Harold Schapelhouman told CNN affiliate KGO-TV of San Francisco, California, that the plane clipped a utility tower, "skidded down a street and ricocheted off a home," starting several fires.

Resident Heather Starnes told CNN affiliate KTVU-TV of Oakland, California, that she saw the crash as she was leaving her home to take her daughter to school.

"We heard something and it blew up in the air," she told KTVU. "There was this big explosion. Part of it hit my neighbor's house who has a day care and part of it hit my neighbor's other house. They are burning."

All three deaths were on the plane and no one on the ground was injured, the chief said.

"Overall, it could have been much worse this morning," Schapelhouman said.

At least two houses and several vehicles caught fire, he said.

One of the houses was used as a day care center, but no children were there at the time, he said.

About 28,000 customers lost power when a transmission tower was hit, the City of Palo Alto said on its Web site. It is unclear when residents will have their power restored. Residents were also asked to limit their use of water until generators are set up to help with pumping water.