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Elon Musk has announced that Tesla will move its headquarters from California to Texas, following a threat he had been hinting at for several months.
The company has built a new plant in Austin and the CEO confirmed the move at a shareholders meeting on Thursday. He gave no timeline, however, and said the electric car maker would continue to expand its manufacturing capacity in the Golden State.
Musk noted that the cost of housing in the Bay Area has made it difficult for many people to become homeowners and this translates into long journeys. Last year, tech company Oracle decided to move its headquarters from Silicon Valley to Austin, saying the move would give its employees more flexibility in knowing where and how they work.
“We’re going as far as we can go, but there’s a limit to how big you can get in the Bay Area,” he said. “To be clear, we will continue to expand our business in California. It’s not about leaving California.
Musk pointed out that he plans to expand the company’s Fremont, Calif., Plant where Tesla’s Model S and Model X cars are built, in hopes of increasing production by 50%.
The announcement drew cheers and applause from a small audience at Tesla’s Austin manufacturing plant, where Musk delivered his remarks, which were webcast live.
Musk touted the company’s record vehicle deliveries this year, while noting that global supply chain disruptions that have resulted in a shortage of computer chips remain a challenge.
“It looks like we have a good chance of sustaining this in the future,” he said. “Basically, if we get the chips, we can do it.”
As a result, production of Tesla’s Angular Cybertruck pickup is not expected to begin until late 2022, Musk said, estimating the company would reach “volume” production on the vehicle in 2023.
Musk had publicly clashed several times with California officials throughout the pandemic over local restrictions that halted production at the company’s plant. Musk said earlier in the year that he was spending less time in California and had already moved to Texas himself.
In a December 2020 interview, Musk had some harsh words for his former home state. “If a team wins for too long, they tend to get complacent,” Musk said, according to the Verge. “California has won for a long time, and I think they take it for granted.”
Texas could appeal to one of the richest men in the world for its more lenient tax laws. It does not collect personal income tax, while California has some of the highest tax rates in the United States.
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