Tesla Moving Headquarters From California to Texas, Elon Musk Announces

The decision was made because there is more space in Texas to expand operations and it has a more affordable cost of living. Musk himself, after a spat with the California authorities, already moved to a suburb of Austin from Los Angeles, where he lived for more than 20 years.

Tesla CEO Elon Musk announced Thursday that the leading electric vehicle maker is moving its headquarters from Silicon Valley to Texas.

"I'm excited to announce that we're moving our headquarters to Austin, Texas," Musk said at an annual shareholder meeting, which took place at Tesla’s vehicle assembly plant outside of Austin, near the city’s airport.

Tesla aims to increase output from Fremont, California by 50 percent, although he says the plant is hitting its limits on how much more it can handle.

"When we first went in there, it was like a kid in his parents' shoes; tiny us and this giant factory," Musk said of its inaugural plant in Silicon Valley.

Musk reiterated that Tesla was ramping up deliveries and growing strong, despite the shortages of computer chips and other components.

“To be clear we will be continuing to expand our activities in California,” Musk added. “Our intention is to increase output from Fremont and Giga Nevada by 50%. If you go to our Fremont factory it’s jammed.”

Though California remains Tesla’s biggest market in the US, the state reportedly paved stricter policies and set restrictions to protect worker safety and health during the early days of the COVID-19 pandemic. Because of this, Musk felt more compelled to appeal to cheaper, less-regulated Texas, and moved to Austin in 2020.

Among the issues, Musk cited were the company’s need for additional space, expensive home prices in the Bay Area, and long commutes for workers.

“We’re here in Austin and our factory is like five minutes from the airport, 15 minutes from downtown,” Musk said.

“We're going to create an ecological paradise here on the Colorado River. It’s gonna be great.”

Tesla seems to be following in the footsteps of companies Hewlett Packard Enterprise Co. and Oracle Corp., which moved their corporate headquarters to Texas earlier in the COVID-19 pandemic.