Tesla will move its headquarters from Palo Alto, California to Austin, Texas, CEO Elon Musk announced Thursday at the company’s shareholders meeting.
The meeting was held at Tesla’s under-construction vehicle assembly facility outside Austin, on a property on the Colorado River near the city’s airport.
However, the company plans to increase production at its California facility regardless of the relocation of headquarters.
“To be clear, we will continue to expand our operations in California,” Musk said. “Our intention is to increase the production of Fremont and Giga Nevada by 50%. If you go to our factory in Fremont, it’s stuck. “
But he added,” It’s hard for people to afford a house, and people have to come from far away … There is a limit to how big you can scale in the Area of the Bay. “
Regarding the ongoing Austin facility, he noted that even after it was completed, it would take some time to reach full production.
Tesla takes less time to build a factory than it does to achieve high-volume production, Musk said. For example, Tesla’s Shanghai facility took 11 months to build but took a year to reach high-volume production. He expects Tesla’s new plant near Austin to follow Shanghai’s lead.
Musk’s growing dissatisfaction with California has been in evidence for some time. In April 2020, in a Tesla call for profit, Musk struck out at California government officials who described his Covid-related temporary health orders as “fascist” in vocabulary.
Musk later personally moved to the Austin area from Los Angeles, where he had lived for two decades.
In that way, Musk, who is also CEO of the aerospace company SpaceX, has been able to reduce his personal tax burden and be closer to a SpaceX launch site in Boca Chica, Texas.
The Tesla board of directors awarded Musk an executive compensation package that can earn him huge stock bonuses due to the automaker’s increased market capitalization and some other financial goals. If he sells options that expire in 2021, he could generate more than $ 20 billion in revenue this year, according to InsiderScore.
California has some of the highest personal income taxes in the country for its wealthy residents, but Texas has no personal income tax.
Tesla is not the first company to move its headquarters from California to Texas. Oracle and Hewlett Packard, for example, are among the tech giants that took this step last year.
Texas actively recruits businesses through its Texas Economic Development Act, which provides tax breaks for new facilities in the state. Austin attracts tech employers with a world-class tech college and cultural events like South by Southwest.