SAN FRANCISCO (BLOOMBERG) – Tesla will move its corporate headquarters to Austin, Texas, where a brand new factory for the Model Y and forthcoming Cybertruck is nearing completion.
Chief executive Elon Musk announced the move on Thursday (Oct 7) during the electric-vehicle maker’s shareholder meeting from the Austin plant.
Tesla has been based in Palo Alto, California, the leafy Silicon Valley suburb that is home to Stanford University and several venture capital firms, since its founding in 2003. But the company has grown from scrappy start-up to the world’s most valuable automaker and Texas – centrally located between the two coasts – has become its centre of gravity in the United States.
Mr Musk said Tesla is not abandoning California, noting the electric-car maker will continue to expand manufacturing in the state and aims to boost production at its vehicle factory in Fremont – and at its Nevada battery plant – by 50 per cent.
“We will continue to expand our activities in California. This is not a matter of Tesla leaving California,” he said.
California Governor Gavin Newsom’s office and the state’s economic development agency did not immediately respond to requests for comment.
Mr Musk moved to Texas himself to focus on two big priorities for his companies: SpaceX’s new Starship vehicle, under development on the Gulf Coast near Brownsville, and Tesla’s Gigafactory in Austin. Texas has no personal income tax, while California imposes the highest personal income levies in the nation on its wealthiest residents.
Mr Musk, the world’s richest person according to the Bloomberg Billionaires Index, moved his private foundation to Texas in December last year.
Texas is the company’s third-biggest market in the US after California and Florida, though years of opposition from auto dealers mean it cannot sell its electric cars directly there.
In 2010, Tesla purchased a shuttered auto plant across the San Francisco Bay in Fremont. Roughly 10,000 people work at the plant, a former joint venture between General Motors and Toyota Motor, and scores of other Tesla employees work at showrooms, service centres and offices throughout the region.
Mr Musk’s long-term relationship with California soured in the spring of last year during the first wave of the coronavirus. When Alameda County ordered production stopped at Tesla’s plant in Fremont, Mr Musk openly defied public health officials by closing late and reopening early, blasting the rules as “fascist” on an earnings call.
He briefly sued the county, but Tesla has continued to expand its footprint in the Golden State. A new “Megafactory” that will make Mega packs – the energy-storage product Tesla sells to utilities – is under construction in the Central Valley city of Lathrop.