Tesla will relocate its headquarters from Palo Alto, California, to Austin, Texas, though the electric car maker will keep expanding its manufacturing capacity in the Golden State, CEO Elon Musk said Thursday.
Musk, who last year said he was moving to Texas from California, gave no timeline for the move when he addressed shareholders at Tesla’s annual meeting.
In the early days of the coronavirus pandemic, Musk clashed with San Francisco Bay Area health authorities trying to enforce shelter-in-place orders. At the time, he threatened to relocate Tesla’s operations to Texas or Nevada.
On Thursday, however, Musk cited the cost of housing in the Bay Area that has made it tough for many people to become homeowners, translating into long commutes.
“We’re taking it as far as possible, but there’s a limit how big you can scale it in the Bay Area,” he said Thursday. “Just to be clear, though, we will be continuing to expand our activities in California. This is not a matter of leaving California.”
Musk stressed he plans to expand the company’s factory in Fremont, California, where Tesla’s Models S, X, Y and 3 vehicles are built, in hopes of increasing its output by 50%.
The announcement drew cheers and applause from the small audience at Tesla’s manufacturing plant in Austin, where Musk delivered his remarks, which were webcast live.
While applauding Tesla’s announcement that it will expand production in Fremont, Bay Area business leaders bemoaned the headquarters move as the latest sign of the region’s ongoing issues.
“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 business advocacy group Bay Area Council.
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