Elon Musk Announces Decision of Moving Tesla's California Headquarters to Texas
Tesla CEO Elon Musk announced during the company's shareholder meeting on Thursday that they would be moving their California headquarters to Texas.
Tesla HQ in California Transfers to Austin, Texas
The shareholder meeting happened at Tesla's vehicle assembly plant which is currently under construction outside of Austin on a property that borders the Colorado River and is situated near the city's airport.
Despite the company's decision to move its headquarters from Palo Alto, California, to Austin, Texas, Tesla was planning to increase production in its California plant.
During the announcement, Musk clarified that they would be continuing their expansion in their California plant and their intention was to increase output from Fremont factory and Giga Nevada by 50% because the places were already jammed.
The Tesla CEO added that aside from the fact it was tough for people to afford houses, and people have to come in from far away, he cited that there was a limit on how big the company could scale in the Bay Area.
According to CNBC, Elon Musk stated that despite its coming completion, the plant underway in Austin would be needing some time to reach its full production. The Tesla CEO shared that it would take less time to build a factory for the company than to reach their target high-volume production.
Musk made Tesla's Shanghai plant as an example. The plant abroad was built within 11 months of construction but took a year to reach high-volume production. Musk said that he expected that Tesla's new plant near Austin would follow Shanghai's example.
Meanwhile, the growing dissatisfaction of Musk with the state of California has been apparent for some time. In April 2020, Musk lashed out at California government officials. He called the state government's temporary Covid-related health orders "fascist" in an expletive-laced rant.
Later, after living in the City of Angels for two decades, Musk personally relocated to the Austin area from Los Angeles.
Tesla, Elon Musk Decisions
The relocation enabled the CEO of aerospace company SpaceX, Musk, not only in reducing his personal tax burden but also being closer to his SpaceX launch site situated in Boca Chica, Texas.
The state of California imposed some of the highest personal income taxes in the country on its wealthy residents, but the state of Texas has no personal income tax.
Furthermore, Tesla was not the first company to move its headquarters out of California to the state of Texas. Companies like Oracle and Hewlett Packard were among the tech giants that decided to transfer their head of operations last year.
On the other hand, Texas has been actively recruiting companies via its Texas Economic Development Act, which offers tax breaks, to put new facilities in the state. The city of Austin, with a top tech university and cultural events like South by Southwest, attracted a lot of tech employers.
Business attorney Domenic Romano, who is the managing partner of Romano Law in New York City, stated that from a legal perspective, there's less of a regulatory burden in Texas.
This article is owned by Latin Post
Written by: Jess Smith
WATCH: Musk moving Tesla headquarters to Austin, Texas -CNBC Television
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