Electric car maker Tesla will move its headquarters out of Palo Alto and out of California, CEO Elon Musk said Thursday.
“We’re moving our headquarters to Austin, Texas,“ Musk said, to cheers and loud applause, during the electric car maker’s annual shareholders meeting at its under-construction new auto factory outside Austin.
Musk was quick to follow up with assurances that Tesla is not abandoning California or its car factory in Fremont. “We will be continuing to expand our activities in California,” Musk said.
Tesla plans on “expanding in Fremont” and boosting production there by 50%, Musk said.
“If you go to our Fremont factory, it is jammed,” said Musk, wearing a black T-shirt and black neckerchief and standing on a raised black platform above rows of people in collapsible white chairs. “It’s like, ‘Whoa.’ When we first went in there it was like, we were like a kid in their parent’s shoes. Now we’re like Spam in a can. How do we put more stuff?”
Tesla on Saturday announced it had produced about 238,000 electric vehicles in the third quarter, a record for the company.
Musk and his company fought bitterly with Alameda County over coronavirus-related restrictions that shut down Fremont production for nearly two months. Tesla re-opened the factory in violation of health orders — and saw hundreds of infections among its workers after the reopening. The company also sued the county in May 2020 but dropped the lawsuit less than two weeks later.
While discussing the planned boost to Fremont production and the headquarters move to Texas, Musk took swipes at high-profile Bay Area woes. “It’s tough for people to afford houses,” he said. “And a lot of people have to come in from far away. We’re taking it as far as possible, but there’s a limit to how big you can scale in the Bay Area.”
Musk said Tesla planned on “continuing to expand in California significantly but even more so here in Texas.”
Discussing expansion in California, Musk noted that Tesla has just opened a new battery production plant in Lathrop, just south of Stockton.
“Mr. Musk’s announcement highlights yet again the urgency for California to address our housing affordability crisis and the many other challenges that make it so difficult for companies to grow here,” said Jim Wunderman, President and CEO of the Bay Area Council.
Officials with the regional council took some solace that Tesla would continue operations at the company’s electric vehicle factory in Fremont.
“We’re glad to see that Tesla plans to continue building cars in the Bay Area, which in recent years has increasingly become a magnet for global automotive tech innovation and investment,” Wunderman said.
The new Austin-area plant is five minutes from an airport and 15 minutes from downtown, next to the Colorado River, Musk said, promising an “ecological paradise.”
Ironically, the move will put the company’s headquarters inside a state that does not allow it to sell its cars directly to consumers, as Tesla typically does. Business Insider reports that the company must ship its cars outside of Texas in order to sell them to Texas buyers because of a state law that forbids sales directly to consumers.
Musk late last year said he had moved from southern California to Austin; two days later Redwood City software giant Oracle announced it was moving its headquarters to the same city. Less than two weeks earlier, business-technology titan Hewlett Packard Enterprise said it would move its headquarters from San Jose to Houston.
Tesla’s “Cybertruck” pickup will be produced at the new Austin factory, Musk said, along with an all-terrain vehicle. Musk has long promised a pickup truck, earlier saying it would come as early as 2018. Tesla’s website now tells prospective buyers they can put down a $100 deposit then choose options “as production nears in 2022.”
Musk promised the “least dangerous” ATV, made safe via placing the heavy battery down low and “some things with the suspension,” making it “the ATV that won’t roll.” He added, “You’ve gotta have one with a Cybertruck.”