Electric vehicle company Tesla is moving its headquarters from Palo Alto, California to Austin, Texas. The announcement was made by the company’s founder Elon Musk on Thursday at a shareholder’s meeting held at Tesla’s vehicle assembly plant under construction outside of Austin.
Although it is changing headquarters, Tesla’s plan is to continue production, at an increased rate, in its California plant. Elon Musk said that “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”.
The Tesla boss also added that “It’s tough for people to afford houses, and people have to come in from far away. There’s a limit to how big you can scale in the Bay Area”.
The California plant will continue to increase its production even though it will no longer be Tesla’s headquarter, as it will take quite some time for the ongoing Austin plant to reach its full production level after being completed.
As explained by founder Elon Musk, while building a Tesla plant takes less time, it takes more time for the plant to reach its full level of production. It is expected that Tesla’s Austin plant will follow in the shadows of its Shanghai counterpart which was completed in eleven months and took a whole year to reach its highest level of production.
Texas is seeing huge companies move their headquarters to its shores. For example, Hewlett Packard (hp) and Oracle were some of the biggest companies to move their headquarters to Texas. Through its Texas Economic Development Act that offers tax breaks to put new facilities in the state, Texas has been attracting tech employees.
“From a legal perspective, there’s less of a regulatory burden in Texas. It’s a more business- and employer-friendly state in many ways. You have to jump through far fewer hoops in Texas or Florida as an employer than you do in California in terms of reporting requirements and more”, Domenic Romano, managing partner of Romano Law in New York City said regarding Tesla Headquarters move.