AUSTIN, Texas (CN) — Tesla CEO Elon Musk announced during an annual stockholder meeting Thursday that the company’s headquarters will be moving from Palo Alto, California to Austin, Texas. Musk’s announcement comes a year after he made threats to leave California for Texas over Covid-19 restrictions.
“I am excited to announce that we are moving our headquarters to Austin, Texas,” said Musk speaking from Tesla’s Austin “Gigafactory."
Despite moving its headquarters to Texas, the company will continue its presence in California. Musk told shareholders that factories located in California and Nevada will be increasing production by 50%.
Giving a glimpse into what drove the decision to move, Musk expressed limitations in California such as housing prices. The median home costs $3.3 million in Palo Alto compared to $588,000 in Austin, according to Realtor.com.
“It’s tough for people to afford houses and a lot of people have to come in from far away, and we have taken it as far as possible but it is limited to how big you can scale it in the Bay Area,” he said.
Musk initially voiced plans to move the company’s headquarters to Texas or Nevada due to growing frustration over Covid-19 restrictions that forced production to halt in California. At that time Musk said officials in Alameda County were acting “contrary to… common sense” by limiting production at the Fremont manufacturing plant.
Musk announced last year that he himself had moved to the Lone Star State. Critics accused him of doing so due to Texas having no state income tax.
During the meeting, Musk did not mention a time frame as to when the company will begin the transition to Texas.
Taking to Twitter, Texas Governor Greg Abbott responded with support of the move calling Texas “land of opportunity and innovation.”
Austin Mayor Steve Adler welcomed the tech giant, posting to Twitter, “we welcome Tesla home!”
“It's a tech company that creates the clean-manufacturing, middle-skill jobs Austin needs. We’re one of the safest big cities, with a strong innovative, entrepreneurial, environmentally-focused culture,” Adler wrote.
The facility Musk gave the news from is an over 2,000-acre facility where Tesla will manufacture their Cybertruck, the companies first electric utility vehicle. Tesla announced plans to build a production plant back in July of 2020.
Tesla will not be the only company led by Musk that has a presence in the Lone Star State. SpaceX, which Musk founded and is still headquartered in California, manufactures aerospace transportation rockets and has a launch base near Brownsville, Texas. The base, referred to as a Starbase by the company, has hosted tests of SpaceX’s latest rocket technologies.
Tesla will just be one of many large tech companies that have set up shop in the Austin area. Apple, Facebook and Google are just some of the many companies that have established auxiliary campuses outside of their headquarters in California. The growing presence of high-tech companies in the Austin area has led to many dubbing it the “silicon hills,” a reference to Silicon Valley.
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