Tesla moves home after 18 in search of taxes, rules, lower cost of living

U.S. electric car maker Tesla moves headquarters to Austin, Texas as new factory for Model Y and much-anticipated Cybertruck nearing completion, as it leaves California after state headquarters of the company for 18 years.

CEO Elon Musk announced the move to the Austin plant on Thursday at the electric carmaker’s shareholders meeting.

Tesla was founded in 2003 and was initially headquartered in San Carlos, California. He announced a move to Palo Alto, the leafy Silicon Valley suburb home to Stanford University and several venture capital firms, in 2009, a year before it went public.

But the company has grown from a struggling startup to the world’s most valuable automaker, and Texas – located in the middle of both coasts – has become its center of gravity in the United States.

Tesla is the latest Californian company to move to Texas, where taxes, cost of living, and labor regulations are lower.

“Tesla welcomes you! Austin Mayor Steve Adler said in an email. “It’s a tech company that creates the clean, mid-skilled manufacturing jobs Austin needs,” he added.

The automaker joins a number of other tech companies operating in Austin. Dell is based in the city, and Apple and Facebook have a big presence there. Oracle also said last year that it was moving its headquarters to Austin from Silicon Valley.

Musk said Tesla would not give up on California, noting that the electric car maker would continue to expand manufacturing in the state and aim to boost production at its Fremont auto plant – and battery plant by 50%. in Nevada.

There were several indications that such a move was imminent. Musk – the richest person in the world with an estimated fortune of $ 214 billion according to the Bloomberg Billionaires Index – moved his own foundation to Texas in December. Tesla’s chief financial officer Zachary Kirkhorn has bought a home in Austin, and Tesla has issued its last two city press releases.

Musk himself moved to Texas last year, to focus on two top priorities for his businesses: the new Starship spacecraft from his space company SpaceX, which is still in development on the Gulf Coast near Brownsville. , and the Tesla Gigafactory in Austin. Texas does not tax personal income, while California imposes the highest personal income taxes on its wealthiest residents in the country.

Texas is the company’s third-largest market in the United States, after California and Florida.

Musk’s long-standing relationship with California deteriorated in the spring of 2020, during the first wave of the coronavirus. When Alameda County ordered production at the Tesla factory in Fremont to stop, Musk openly challenged public health officials to shut it down late and reopen early, criticizing the rules.

The boycott was briefly continued, but Tesla continued to expand its footprint in the state, and a giant new factory is being built in Lathrop to make mega-packs, the energy storage product Tesla sells to utilities.