It’s confirmed: Tesla is moving its headquarters out of California.
According to CNBC, Tesla CEO Elon Musk announced during a shareholder meeting Thursday that the electric car maker would be calling Austin, Texas its new home.
CNBC said the event “took place at Tesla’s vehicle assembly plant under construction outside of Austin on a property that borders the Colorado River, near the city’s airport.”
Why the move?
Musk has made it clear that the move is, at least in part, the result of California’s not-so-business-friendly policies. And he’s not the only business leader drawing that conclusion.
Over the last year, several companies have ditched the Democrat-dominated California for the GOP-led Texas, including Oracle and Hewlett Packard. Texas, for its part, has been encouraging businesses to call the Lone Star State home with its recent Economic Development Act, which offers tax breaks to companies that create new facilities in the state.
Musk foreshadowed the move of Tesla’s headquarters last year when he personally moved from California to Texas after having resided in the Golden State for decades. One of the key differences between the two states is that California has overbearing personal income taxes, whereas Texas has no personal income tax.
Musk’s personal move came in April of 2020 after he criticized the California government for its coronavirus restrictions.
In general, the CEO has said that he would prefer not to get involved in politics. But he has said the “government should rarely impose its will upon the people, and, when doing so, should aspire to maximize their cumulative happiness,” as CNBC notes.
Just because Musk is moving Tesla’s headquarters out of California doesn’t mean that the company is leaving the state altogether.
“To be clear, we will be continuing to expand our activities in California,” Musk said on Thursday, according to CNBC. “Our intention is to increase output from Fremont and Giga Nevada by 50%. If you go to our Fremont factory it’s jammed.”
But it just isn’t financially feasible for the company — or its employees — to keep its headquarters there, the CEO insinuated.
“It’s tough for people to afford houses, and people have to come in from far away,” he said of California, according to CNBC. “There’s a limit to how big you can scale in the Bay Area,” Musk concluded.