Telsa is moving its headquarters to Austin, Texas, Elon Musk announced Thursday night.
Speaking at Tesla’s annual meeting of shareholders, Musk said the decision is necessary because of space constraints in California, though he stressed that Tesla is not pulling out of the Golden State entirely.
“We will be continuing to expand our activities in California,” Musk said during the event, which was held at Tesla’s Gigafactory in Austin. “This is not a matter of Tesla leaving California.”
Tesla wants to “increase output” from its Fremont factory and its Gigafactory in Nevada by 50%, Musk said, but it’s running out of room in California. “If you go to our Fremont factory, it is jammed,” Musk said. “When we first went in there it was like…tiny us and giant factory, and now it’s like spam in a can.”
Musk discusses the move at the 1:01:59 point in the video below:
Musk also argued that it’s “tough for people to afford houses [in California], and a lot of people have to come in from far away.” Tesla HQ is currently in Palo Alto, where the median home sale price is $3.6 million, according to Redfin.
Musk said Austin is ideal given its close proximity to the airport, downtown, and the Colorado River. (“We’re going to create an ecological paradise.”) The median home sale price in Austin is $549,000, Redfin says, but don’t expect it to stay that way.
Musk didn’t offer details on what the HQ switch will mean for California-based employees. The Austin factory is still under construction. “We’ll start production this year, and we’ll deliver some cars from Giga Texas this year, but we won’t reach high-volume production until probably the end of next year,” Musk said today.
Musk has had a testy relationship with California of late. He clashed with officials in May 2020 over the re-opening of a factory despite COVID-19 lockdowns, which prompted a lawsuit he later dropped. He then tweeted that Tesla would move its headquarters to Texas, though by year’s end he had only relocated himself to the area.
As CNBC notes, California has some hefty personal income taxes, while Texas has none.
