Tesla will move its headquarters from Palo Alto, California, to Austin, Texas, although the electric car maker will continue to expand its manufacturing capacity in the so-called “Golden State,” its CEO Elon Musk said Thursday.
Musk gave no deadline for the move when he addressed shareholders at Tesla’s annual meeting.
In the early days of the coronavirus pandemic, Musk had run-ins with San Francisco Bay Area health authorities trying to enforce lockdown orders. At the time, he threatened to move Tesla’s operations to Texas or Nevada.
On Thursday, however, Musk noted that housing in the San Francisco Bay Area has become more expensive, making it difficult for many people to become homeowners, resulting in long commutes from home to work.
“There is a limit to what can be done in the Bay Area,” he said Thursday. “However, just to be clear, we will continue to expand our activities in California. It’s not about leaving California. “
Musk stressed that he plans to expand the company’s factory in Fremont, California, where Tesla’s Model S and Model X vehicles are built, in hopes of increasing its production by 50%.
The announcement drew jubilation and applause from the small audience at Tesla’s Austin manufacturing plant, where Musk delivered his speech, which was streamed live on the internet.
While applauding Tesla’s announcement that it will expand production at Fremont, Bay Area business leaders said the headquarters move was a new sign of the region’s troubles.
“Mr. Musk’s announcement underscores once again the urgency for California to address our housing affordability crisis and the many other challenges that hinder business growth here,” said Jim Wunderman, group president and CEO. of business defense Bay Area Council.
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