Electric automaker Tesla announced Thursday that its headquarters will be officially moving from Palo Alto, California, to Texas, but that the company will continue to have a large presence in the Bay Area, reports CBS San Francisco.
“I am pleased to announce that we are moving our headquarters to Austin, Texas,” CEO Elon Musk told attendees at the company’s annual shareholders’ meeting.
It took place in the company’s gigafactory in Austin, which is still under construction.
Musk insisted that moving headquarters doesn’t mean the automaker is leaving the Golden State. “Just to be clear, we’re going to expand our operations in California. It’s not about Tesla leaving California,” he said.
Musk said the company will continue to ramp up production at its huge Fremont factory, but admitted that there are limits to expanding auto production at its Silicon Valley facility.
“We just hit the sides of the bowl. If you go to our factory in Fremont, it’s clogged,” he said.
Musk, who officially moved to Texas last year, also admitted the bat region’s high cost of living.
“It’s hard for people to buy houses, and a lot of people have to come from far away. So we’re going as far as we can, but there’s a limit to how big you can scale in the Bay Area. ” he said.
Musk has previously voiced his frustration with doing business in California.
In the early days of the COVID-19 pandemic, he threatened to relocate the company and took legal action against officials over health orders closing the Fremont factory.
The Bay Area Council, which represents hundreds of large employers, expressed concern about the move and the region’s ongoing housing shortage.
“Mr. Musk’s announcement once again underscores the urgency for California to address our affordability crisis and the many other challenges that make it so difficult for companies to grow here,” said CEO Jim Wunderman.
CBS San Francisco
At the same time, the group said they were glad to hear the Fremont plant would remain open. “We are excited to see that Tesla plans to continue building cars in the Bay Area, which in recent years has become a magnet for global innovation and investment in automotive technology,” said Wunderman.
Tesla joins other Silicon Valley companies that recently relocated their headquarters to Texas.
Hewlett Packard Enterprise, once part of the pioneering Silicon Valley company, announced last December that it would move its headquarters from San Jose to suburban Houston in 2022.
Oracle, founded in 1977 in the Bay Area, also announced plans to move its headquarters from Redwood Shores in Redwood City to Austin. CEO Larry Ellison said he was not moving to the Lone Star State as part of the move, but decided to move to his island in Hawaii.
Michael Bernick, an employment law attorney, said, “This isn’t the first time, but I’d say every time a large company moves, this should be a moment to rethink what we’re doing: we can do better make to keep these companies in California? “
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