Tesla Announces It Will Move Headquarters from Palo Alto to Austin, Texas

Tesla will move its headquarters from California to Austin, Texas, where it is building a new factory, its chief executive, Elon Musk, said at the company’s annual shareholder meeting on Thursday.

The move makes good on a threat that Musk issued more than a year ago when he was frustrated by local coronavirus lockdown orders that forced Tesla to pause production at its factory in Fremont. Musk on Thursday said the company would keep that factory and expand production there.

“There’s a limit to how big you can scale in the Bay Area,” he said, adding that high housing prices there translate to long commutes for some employees. The Texas factory, which is near Austin and will manufacture Tesla’s Cybertruck, is minutes from downtown and from an airport, he said.

Musk was an outspoken early critic of pandemic restrictions, calling them “fascist” and predicting in March 2020 that there would be almost no new cases of virus infections by the end of April. In December, he said he had moved himself to Texas to be near the new factory. His other company, SpaceX, launches rockets from the state.

The company is on track to sell about a million cars this year and is planning a major expansion. In addition to the Austin factory, Tesla is building one near Berlin. Its headquarters have been in Palo Alto for more than a decade.

Tesla is one of several California companies to say they were moving to Texas in recent months. Hewlett Packard Enterprise said in December that it was moving to the Houston area, and Charles Schwab has moved to a suburb of Dallas and Fort Worth.

Musk’s decision will surely add fuel to a ceaseless debate between officials and executives in Texas and California about which state is a better place to do business. Gov. Greg Abbott of Texas, and his predecessors, have courted California companies to move to the state, arguing that it has lower taxes and lower housing and other costs. California has long played up the technological prowess of Silicon Valley and its universities as the reason many entrepreneurs start and build their companies there, a list that includes Tesla, Facebook, Google and Apple.

Texas has become more attractive to workers in recent years, too, with a generally lower cost of living. Austin, a thriving liberal city that is home to the University of Texas, in particular has boomed. Many technology companies, some based in California, have built huge campuses there. As a result, though, housing costs and traffic have increased significantly, leaving the city with the kinds of problems local governments in California have been dealing with for years.

Musk’s announcement is likely to take on political overtones, too.

Last month, Abbott invoked Musk in explaining why a new Texas law that greatly restricts abortion would not hurt the state economically. “Elon consistently tells me that he likes the social policies in the state of Texas,” the governor told CNBC.

When asked for a response, Musk did not confirm or deny what Abbott said. “In general, I believe government should rarely impose its will upon the people, and, when doing so, should aspire to maximize their cumulative happiness,” he said on Twitter. “That said, I would prefer to stay out of politics.”

On Thursday evening, a Twitter post by Abbott welcomed the news, saying “the Lone Star State is the land of opportunity and innovation.”

A spokeswoman for Gov. Gavin Newsom of California, Erin Mellon, did not directly comment on Tesla’s move but said in a statement that the state was “home to the biggest ideas and companies on the planet” and that California would “stand up for workers, public health and a woman’s right to choose.”

Musk revealed the company’s move after shareholders voted on a series of proposals aimed at improving Tesla’s corporate governance. According to preliminary results, investors sided with Tesla on all but two measures that it opposed: one that would force its board members to run for re-election annually, down from every three years, and another that would require the company to publish more detail about efforts to diversify its work force.

In a report last year, Tesla revealed that its U.S. leadership was 59 percent white and 83 percent male. The company’s overall U.S. work force is 79 percent male and 34 percent white.

The vote comes days after a federal jury ordered Tesla to pay $137 million to Owen Diaz, a former contractor who said he faced repeated racist harassment while working at the Fremont factory, in 2015 and 2016. Tesla faces similar accusations from dozens of others in a class-action lawsuit.

The diversity report proposal, from Calvert Research and Management, a firm that focuses on responsible investment and is owned by Morgan Stanley, requires Tesla to publish annual reports about its diversity and inclusion efforts, something many other large companies already do.

Investors also re-elected to the board Kimbal Musk, Musk’s brother, and James Murdoch, the former 21st Century Fox executive, despite a recommendation to vote against them by ISS, a firm that advises investors on shareholder votes and corporate governance.

Proposals calling for additional reporting both on Tesla’s practice of using mandatory arbitration to resolve employee disputes and on the human rights impact of how it sources materials failed, according to early results. A final tally will be announced in the coming days, the company said.

Niraj Chokshi is a reporter with The New York Times. Ivan Penn contributed reporting. Copyright, 2021, The New York Times.

12 Comments

  1. Anyone Surprised? It’s Not just Businesses Fleeing CA – “over 135,000 more people left CA than moved in – the 3rd largest net migration loss ever recorded for the state.”

    A Failing One Party State: Worst Business Climate, Highest Poverty Rate, Highest Welfare Population, Largest Vagrancy/Homeless Population, Largest Illegal Alien Population…
    And Endless Taxes & Spending on ‘woke’ pet projects.

    ————-“Companies Are Fleeing California. Blame Bad Government.” (Bloomberg)—–
    Silicon Valley remains the world’s preeminent tech hub. But that won’t last if lawmakers there keep antagonizing businesses.
    ——————–“poor governance and animosity toward business”—————

    “Far from welcoming experimentation, it has sought to undermine or stamp out home-rental services, food-delivery apps, ride-hailing firms, electric-scooter companies, facial-recognition technology, delivery robots and more, even as the pioneers in each of those fields attempted to set up shop in the city. It tried to ban corporate cafeterias — a major tech-industry perk…”

    “….a tech hub is more than the sum of its parts. ….each new tech job creates 5 additional jobs in other industries, a multiplier effect about 3 times larger than that for manufacturing. ”

    “…no state can antagonize its companies so extravagantly and expect them to stay put forever.
    As every Californian knows, the open road is all too inviting.”

  2. How many bay area liberal zombie workers will follow the company to Austin? Texas deserves better than our liberal turds dirtying the waters over there.

  3. @TRI: Austin has already been ruined by liberals/ liberal policies – they at least have a taxpaying base that is fighting to Keep Vagrancy under control.

    ——“Austin’s Revolt against a Homelessness Surge” (May2021 NR) ——-
    On July 1, 2019, a public camping ordinance took effect that made unregulated, open public camping lawful in nearly all public spaces in Austin. …consequences were profound immediately. Homeless shelters emptied, homeless individuals began traveling to Austin..

    Austin incentivized Vagrancy as a lifestyle choice and did nothing to prepare for the consequences of the policy shift.
    The…homeless population over the past two years doubled, from 2,500 to 5,000. Meanwhile, public safety, public health, tourism, and the image of our city have all been harmed.

    Organize against Liberal Policies:
    – In December 2020 a petition drive to put an ordinance to reinstate the public camping Ban in Austin on the ballot. …After just 50 days, we turned in 27,000 validated signatures.
    – 9 of 10 council members and our mayor opposed our effort and campaigned aggressively in favor of continuing the disastrous public camping ordinance.
    – After a 10 week campaign, Save Austin Now PAC, secured a landslide election victory in Austin (58%–42%),
    -This result came in a city with just 21% Republican voters.
    In the end, we won the votes of at least 40% Democrats, at least 85% independents, and 90% Republicans.

  4. CA Patriot:

    You used the term ‘we’ referring to Austinites. Are you some kind of expat?

  5. WilliamA, I just forgot to close a quote – everything below the article title is a partial quote.
    I never was a Texas resident – although I used to travel to Austin several times a month back in the late 90’s – early 2000’s.
    I also had several chances to move to Austin back when the Tech Boom in Austin was growing and everyone was selling their CA homes – sinking the capital gains into a new large house/estate in the Round Rock and nicer areas due to the tax codes at the time.

  6. “The quality of life in the commentary sections of our local online publications would improve markedly if the likes of CA Parrot, Assless and Informer would follow their libertarian instincts and relocate…” — Facendo Guaio

    As self-appointed arbiter of the quality of local life, staunch proponent of political cleansing, and proud supporter of relocation camps, Facendildo Guano reveals himself worthy of standing shoulder-to-shoulder with the great tyrants of history. In fairness, he’s just asking his enemies to leave, for now. That’s a relief. The terror of broken windows, public harassment, and economic ruin is still in its nascency, and it’s at least another election victory before the cattle cars arrive.

  7. The ‘troubled’ child retorts with middle-school name calling? My aren’t we clever?

    And I agree, New Hampshire offers many paradise – ranked the 2nd best state to live in in the U.S. New Hampshire ranks first for Opportunity and Crime & Corrections and fourth for the Natural Environment, and fifth for Education.
    New Hampshire is one of the safest and healthiest states in America.

    I enjoyed a great stay with the family using a friends vacation home right on Lake Winnipesaukee (the largest lake in the state) with access to their boat while living in New England in the early 90’s.

    And who could argue with the State Motto – “Live Free or Die” …

    But there are some, like FG, who refuse to pull their own weight and prefer
    A motto like Big Gov’t “Wet-Nurse me until I Die”

    just sad, very sad.

  8. FacpedoGuaio:

    You and Econoclast both share a love for Italian phrases. What amazes me is the same incoherent drivel you both manage to spew. Almost like you are twins.

    I know you are beholden to the state for everything you have. Those who are tired of supporting the leisure class are getting tired and leaving for greener pastures.

  9. I feel for Texas, If they are smart they would take that unused boarded fence and put it around Austin and declare the city as part of California.

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