Elon Musk says Tesla will move HQ from California to Texas

Tesla CEO Elon Musk says the electric car maker will relocate its headquarters from Palo Alto, California, to Austin, Texas

By ALEX VEIGA AP Business Writer

October 8, 2021, 1:18 AM

• 3 min read

Tesla will relocate its headquarters from Palo Alto, California, to Austin, Texas. However, the electric car maker will keep expanding its manufacturing capacity in the Golden State, CEO Elon Musk said Thursday. Musk, who said he was moving to Texas from California last year, gave no timeline when he addressed shareholders at Tesla’s annual meeting. Musk clashed with San Francisco Bay Area health authorities trying to enforce shelter-in-place orders in the early days of the coronavirus pandemic. 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 challenging for many people to become homeowners, translating into long commutes. “We’re taking it as far as possible, but there’s a limit to how big you can scale it in the Bay Area,” he said Thursday. “Just to be clear, though, we will continue expanding 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 three vehicles are built, hoping to increase 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 to 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.

Last year, tech giant Oracle Corp. decided to move its headquarters from Silicon Valley to Austin, saying the move would give its employees more flexibility about where and how they work. One of Silicon Valley’s founding companies, Hewlett Packard Enterprise, has also said it will move to the Houston area. At Thursday’s meeting, Musk also touted the company’s record vehicle deliveries this year noting that global supply-chain disruptions that have led to a shortage of computer chips remain a challenge. “It looks like we have a good chance of maintaining that into the future,” he said. “If we get the chips, we can do it.”

As a result, Tesla’s angular Cybertruck pickup production isn’t likely to begin before the end of 2022, Musk said, estimating that the company would reach “volume” production on the vehicle in 2023. “We should be through our severest supply chain shortages in ’23,” he said. “I’m optimistic that will be the case,” Tesla said last week that it delivered 241,300 electric vehicles in the third quarter even as it wrestled with the shortage of computer chips that have hit the entire auto industry. The company’s sales from July through September beat Wall Street estimates of 227,000 sales worldwide, according to data provider FactSet. Third-quarter sales rose 72% over the 140,000 deliveries Tesla made for the same period a year ago. So far this year, Tesla has sold around 627,300 vehicles. That puts it on pace to beat last year’s total of 499,550.

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