Tesla Moves Headquarters To Texas Due To High Operation Costs

The Chief Executive Officer of Tesla, Elon Musk, has announced plans to move its headquarters from California to Austin, Texas, where it is currently building a massive car and battery manufacturing factory.

Musk made the disclosure during Tesla’s annual shareholder meeting which was held at the factory in Texas.

With the decision, Tesla has joined the list of major organizations, like Oracle, HP, and Toyota, who have moved their headquarters from California to Texas.

California is known for its relatively high living costs, while Texas is noted for its cheaper labour and less stringent regulation.

“I’m excited to announce that we’re moving our headquarters to Austin, Texas,” the CEO said.

He explained that there is a limit to how big you can scale in the state due to the high housing prices, which translates to long commutes for employees who live elsewhere.

Before now, Tesla’s headquarters has been in Palo Alto, California in the heart of Silicon Valley since the early 2000s, while its main production facility is in nearby Fremont, California.

He however assured shareholders and the public that production in Fremont would continue, with plans to boost vehicle output by 50 per cent by 2022.

Musk had previously threatened to move the company out of California due to pandemic restrictions that kept the Fremont factory closed for an extended period. He personally relocated from California to Texas a few months later.

The move to Texas, however, means that Tesla is now based in a state where it can no longer sell its cars to buyers directly, as has been its approach from the beginning, due to Texas’ pro dealership laws.

It also means that Musk will be paying significantly less taxes as the state has no personal income tax, whereas California has very high income tax rates.