Tesla is officially moving its headquarters from Palo Alto, California, to Austin, Texas, CEO Elon Musk announced at the company’s shareholder meeting.
The meeting took place yesterday at Tesla’s new plant that is under construction outside of Austin. Musk also operates SpaceX in Texas. He personally moved to Texas last year.
“To be clear we will be continuing to expand our activities in California,” Musk said. “Our intention is to increase output from Fremont and Giga Nevada by 50%. If you go to our Fremont factory it’s jammed.”
“It’s tough for people to afford houses, and people have to come in from far away. There’s a limit to how big you can scale in the Bay Area.”
Attorney Domenic Romano, managing partner of Romano Law in New York City, said:
“From a legal perspective, there’s less of a regulatory burden in Texas. It’s a more business- and employer-friendly state in many ways. You have to jump through far fewer hoops in Texas or Florida as an employer than you do in California in terms of reporting requirements and more.”
Musk’s growing dissatisfaction with California has been apparent for some time. In April 2020, on a Tesla earnings call, Musk lashed out at California government officials calling their temporary Covid-related health orders “fascist” in an expletive-laced rant.
Later, Musk personally relocated to the Austin area from Los Angeles where he had lived for two decades.
Doing so enabled Musk, who is also CEO of aerospace company SpaceX, to reduce his personal tax burden and be closer to a SpaceX launch site in Boca Chica, Texas.
Tesla’s board granted Musk an executive compensation package that can earn him massive stock awards based on the automaker’s market cap increases and some other financial targets. If he sells options set to expire in 2021, he could generate proceeds of more than $20 billion this year, according to InsiderScore.
California levies some of the highest personal income taxes in the country on its wealthy residents, but Texas has no personal income tax.
Tesla is not the first company to move its headquarters out of California to Texas. Oracle and Hewlett Packard are among the tech giants who decided to make that move last year, for example.
Elon Musk said Tesla would move its headquarters from California to Austin, Texas, making good on a threat after virus lockdowns last year.https://t.co/fih8sa3g8a— The New York Times (@nytimes) October 8, 2021
Tesla said it will move its headquarters to Austin, Texas, from its longtime base in Silicon Valley https://t.co/xGLcYZHhrA— The Wall Street Journal (@WSJ) October 8, 2021