Tesla President Elon Musk has announced that Tesla has moved its company’s headquarters to Texas at the annual shareholder gathering at the company’s newly constructed Austin plant.
Tesla was born within Silicon Valley in the early 2000s, has decided to move its headquarters in Texas, where its electric car manufacturer’s billionaire chief executive Elon Musk is currently residing. However, it will keep manufacturing cars within San Francisco Bay Area. San Francisco Bay Area.
Musk announced the news Thursday evening during the annual shareholder meeting held at Tesla’s almost complete Texas Gigafactory close to Austin. Musk didn’t provide a specific timeframe for when the present company’s headquarters in Palo Alto would close, although the move isn’t entirely unexpected.
“To be precise, we’ll continue to expand our business within California,” Musk said. “This is not a question of Tesla being forced to leave California. We are looking to increase the output of Fremont and from a current gig located in Nevada by 50 percent.”
Although California remains Tesla’s most important customer base across the U.S. and most significant source of car production, Musk has soured on the state in recent times especially following health officials in Alameda County, where the Tesla’s Fremont factory is situated put in place restrictions to safeguard the health & safety of workers at the beginning of the Covid-19 pandemic that will hit in 2020. Musk’s viewing has become more liberal over the decades, relocated to Austin in 2020.
California Governor Gavin Newsom, a Tesla owner, stated to CNBC in an interview with them in May that he was not “concerned about Elon going away any time soon” following the time that Musk initially suggested he might move on.
However, Musk has become increasingly hostile to the strict regulations in California as he has been wooed by the lure of a more affordable and less-regulated Texas. In September, following the state passed a stringent abortion law and observed its stricter rules regarding voting and loosening restrictions on guns, Texas Gov. Greg Abbott said the billionaire businessman “likes the policies of social policy.”
“California is the home of creativity, is the 5th most populous economy. It is also the home of the most innovative ideas and businesses in the world. Their achievement is not due to these policies but those policies,” declared Erin Mellon, a representative for Newsom.
“We defend our employees, public health, as well as a woman’s rights to make her own choices. These are California’s core values, and we’ll continue to create the most jobs of any state in and outpacing the country’s economic recovery as well as maintaining the lowest rates of COVID-19 cases across the nation,” she said.
Tesla’s move to its headquarters is the first move by an automaker from California after Toyota reveals its plans to relocate its North American office from suburban Los Angeles to suburban Dallas. Electric vehicle startup companies Lucid Motors, Fisker Inc., and Rivian currently have their headquarters in California.
Tesla’s Texas Gigafactory is to begin production of cars before the end of 2021.
“We think this was a wise strategic choice for Tesla because the company is accelerating its efforts to build out its Austin area and, over time, with Cybertruck and increasing Model 3 production, Musk is now increasing on the size of its Texas area, with capacity increasing up to 2022,” Daniel Ives, an equity analyst at Wedbush Securities, said in an article in the research note. “While Fremont will continue to be a major factor for Tesla regarding Model 3 production, we think this is the first step toward Tesla creating Austin its international and domestic central location in the next decade. Its recent anger with California officials could accelerate the process.”
The main issues Musk pointed out were the need for more space, the cost of housing for homes in the Bay Area, and long commutes for employees.
“We’re situated at Austin, five minutes away from the airport and about fifteen minutes away from the downtown area,” Musk said. “We’re creating an eco-friendly paradise in the Colorado River. It’s going to be fantastic.”
Tesla shares increased 1.4 percent during Nasdaq trading Thursday, gaining $793.61.
