Tesla CEO Elon Musk announced on Thursday, Oct. 7, that the company would relocate its headquarters from California to Texas, following the similar moves by Oracle and Hewlett Packard.
At the company’s shareholder meeting, Musk said Tesla is moving the head office from Palo Alto, California, to Austin, Texas, CNBC reported.
Despite the headquarters move, Musk confirmed that his company will maintain the plan to increase production in its California plant, but it would be tough for the workers to afford houses there.
“To be clear we will be continuing to expand our activities in California. Our intention is to increase output from Fremont and Giga Nevada by 50%. If you go to our Fremont factory it’s jammed,” Musk said.
At present, Tesla’s assembly plant in Austin is under construction, and Musk said it would take some time for the plant to reach full production.
According to CNBC, Musk made the above announcement as he is increasingly dissatisfied with California. Last April, Musk lashed out at California government officials, calling their temporary COVID-19-related health orders “fascist.”
Later, Musk personally relocated to the Austin area from Los Angeles, where he had lived for two decades.
Moving to Texas could help Musk, who is also CEO of aerospace company SpaceX, be closer to a SpaceX launch site in Boca Chica and also reduce his personal tax burden in the state.
California levies some of the highest personal income taxes on wealthy residents in the United States, but Texas has no personal income tax.
That maybe a reason that not only Tesla, but Oracle, Hewlett Packard and other tech giants have decided to move their headquarters out of California to Texas.
Texas has been actively recruiting companies via its Texas Economic Development Act offering tax breaks to put new facilities in the state, according to CNBC.
For Tesla, the company has not been happy with one set of regulations in Texas which bans direct sales of cars. In this state, car companies sell their vehicles through independent, franchised dealerships.