SAN FRANCISCO — Tesla Inc. will move its corporate headquarters to Austin, Texas, where a new factory for the Model Y and forthcoming Cybertruck is nearing completion.
CEO Elon Musk announced the move Thursday during the EV maker’s shareholder annual meeting from the Austin plant.
Tesla has been based in Palo Alto, Calif., the leafy Silicon Valley suburb that is home to Stanford University and several venture capital firms, since its founding in 2003. But the company has grown from scrappy startup to the world’s most valuable automaker and Texas — centrally located between the two coasts — has become its center of gravity in the U.S.
Musk said Tesla isn’t abandoning California, noting the company will continue to expand manufacturing in the state and aims to boost production at its vehicle factory in Fremont — and at its Nevada battery plant — by 50 percent.
“We will continue to expand our activities in California. This is not a matter of Tesla leaving California,” he said.
California Gov. Gavin Newsom’s office and the state’s economic development agency didn’t immediately respond to requests for comment.
Musk moved to Texas himself to focus on two big priorities for his companies: SpaceX’s new Starship vehicle, under development on the Gulf Coast near Brownsville, and Tesla’s Gigafactory in Austin. Texas has no personal income tax, while California imposes the highest personal income levies in the nation on its wealthiest residents.
Musk, the world’s richest person according to the Bloomberg Billionaires Index, moved his private foundation to Texas in December.
Texas is the company’s third-biggest market in the U.S. after California and Florida, though years of opposition from auto dealers mean it can’t sell its electric cars directly there.
Shuttered plant
In 2010, Tesla purchased a shuttered auto plant across the San Francisco Bay in Fremont. Roughly 10,000 people work at the plant, a former joint venture between General Motors and Toyota Motor Corp., and scores of other Tesla employees work at showrooms, service centers and offices throughout the region.
Musk’s long-term relationship with California soured in the spring of 2020 during the first wave of the coronavirus. When Alameda County ordered production stopped at Tesla’s plant in Fremont, Musk openly defied public health officials by closing late and reopening early, blasting the rules as “fascist” on an earnings call.
He briefly sued the county, but Tesla has continued to expand its footprint in the Golden State. A new “Megafactory” that will make Mega packs — the energy-storage product Tesla sells to utilities — is under construction in the Central Valley city of Lathrop.
Other business
Meanwhile, shareholders followed board guidance on several key questions, including re-electing Kimbal Musk and James Murdoch as board directors.
Proxy advisory firm Institutional Shareholder Services had recommended that Tesla investors not re-elect the two directors because of concerns about excessive compensation packages to non-executive board members.
Shareholders also voted against a stockholder proposal asking for a study into the impact of Tesla’s use of mandatory arbitration on workplace harassment and discrimination.
The proposal, opposed by the board, was thrown into the spotlight after a Black former contract worker on Monday won a $137 million jury award against Tesla over workplace racism.
Reuters contributed to this report.