Tesla goes to Texas: Elon Musk officially announces Austin move!

Austin, Texas - Tesla is moving on up to Texas! The company's headquarters are relocating from Palo Alto, California to Austin, CEO Elon Musk has announced.

Elon Musk moved to Austin, Texas in 2020 – now his company is following suit.
Elon Musk moved to Austin, Texas in 2020 – now his company is following suit.  © Collage: 123RF/capybara1 & IMAGO/ZUMA Wire

Speaking at the company’s annual shareholders meeting on Thursday, he added little detail and did not explain why he’s making the move or how the move will affect the headcount at the Palo Alto offices, located in the San Francisco Bay Area, which include research and development operations.

However, Musk emphasized that "this is not a matter of leaving California" and said the Fremont, California auto assembly plant and the Nevada plant near Reno will each grow by 50 per cent, though he gave no timeline. "Our Fremont plant is jammed, whoa," he said. "We’re continuing to expand in California significantly."

The tech billionaire moved to Austin himself late last year and has sold several homes in Los Angeles. He said recently that he plans to cash in on many of his Tesla stock options soon. Taxes are much lower in Texas, both for businesses and individuals.

Database software giant Oracle last year announced a headquarters move from Silicon Valley to Texas. Oracle founder Larry Ellison sits on Tesla’s board of directors.

Earlier this year, Los Angeles engineering giant Aecom, whose name is emblazoned on one of the city’s skyscrapers, said it is moving its headquarters to Dallas-Fort Worth.

Billions in subsidies, but too much "red tape"

Tesla has enjoyed billions in subsidies and tax breaks from California and the federal government.
Tesla has enjoyed billions in subsidies and tax breaks from California and the federal government.  © 123rf/jetcityimage

Musk last year expressed deep disenchantment with the Golden State. During a standoff with authorities over his plans to reopen operations in Fremont amid stay-at-home orders aimed at containing the spread of Covid-19, he tweeted, "Frankly, this is the final straw. Tesla will now move its HQ and future programs to Texas/Nevada immediately."

When a county director of public health told Musk he had to suspend manufacturing, Musk called her order "fascist" and volunteered to be arrested. The county reversed course, allowing the Fremont factory to stay open.

Manufacturers across the state complain about California’s living costs, business costs, taxes, bureaucratic red tape and they see as cumbersome regulations.

But Tesla has enjoyed billions in subsidies from the state and the federal government and gets state tax breaks from the California Alternative Energy and Advanced Transportation Financing Authority. The California Department of Motor Vehicles, meanwhile, is allowing Tesla to test driverless vehicles on public highways free of the regulations the DMV applies to all other autonomous vehicle developers.

Tesla was founded in 2003 by Martin Eberhard and Marc Tarpenning in Silicon Valley. Musk joined the company the following year and won the right to call himself a co-founder as part of a lawsuit settlement.

In 2010, Tesla bought a defunct General Motors/Toyota assembly plant in Fremont. In late 2019 the company opened an assembly plant in Shanghai, and it currently is building assembly plants in Austin and Brandenburg, Germany.

The Shanghai plant now makes more vehicles than the one in Fremont, Musk said, adding that there is "less drama" there than in Fremont. On Monday, a jury ordered Tesla to pay a contract worker $137 million in a case that alleged rampant and company-tolerated racism at the Fremont factory.

Abbott drags Musk into abortion debate

Texas Gov. Greg Abbott said he frequently speaks to Elon Musk.
Texas Gov. Greg Abbott said he frequently speaks to Elon Musk.  © IMAGO/ZUMA Wire

After Texas enacted one of the country’s most restrictive abortion bans, Governor Greg Abbott cited companies relocating offices from California to Texas as proof that business owners prefer the state’s social policies and personally name checked Musk, with whom he said he spoke frequently. "Elon had to get out of California in part because of the social policies of California," Abbott said on CNBC.

Responding to Abbott’s claim, Musk said, "In general, I believe government should rarely impose its will upon the people, and, when doing so, should aspire to maximize their cumulative happiness. That said, I would prefer to stay out of politics."

The annual meeting started off with several proposals to improve workforce equity and inclusion at Tesla, and one to have Tesla study the effects of employee mandatory arbitration agreements on workers and on the company.

All were rejected by a majority vote of shareholders.

Cover photo: Collage: 123RF/capybara1 & IMAGO/ZUMA Wire

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