Thu. May 19th, 2022

Tesla CEO Elon Musk says he is moving his company’s headquarters from California to Texas, citing house prices as a major issue for his employees.

No timeline was given for the move from Palo Alto, California, to Austin, Texas, which was announced to shareholders Thursday at Tesla’s annual meeting.

Musk clashed with health officials in the San Francisco area at the start of the COVID-19 pandemic over rules and announced last year that he wanted to move the company’s headquarters to Texas or Nevada.

Musk said, however, that the cost of housing in the San Francisco Bay Area made it difficult for many people to become homeowners, which turned 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.

Elon Musk at a Tesla inauguration ceremony in 2020 in Shanghai
Tesla Inc’s CEO first threatened to move after an overdose with health authorities over pandemic residence orders.(

Reuters: Aly Song / File photo

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“To be clear, however, we will continue to expand our operations in California. It is not a matter of leaving California.”

Musk stressed that he plans to expand the company’s plant in Fremont, California, where Tesla’s models S, X, Y and 3 are built, in hopes of increasing production by 50 percent.

The announcement elicited cheers and applause from the small audience at Tesla’s factory in Austin, where Musk provided his address.

While welcoming Tesla’s announcement that it will expand production in Fremont, business executives lamented the relocation of headquarters as the latest sign of the California region’s ongoing problems.

“Musk’s announcement underscores once again the urgency of California to address our housing crisis and the many other challenges that make it so difficult for businesses to grow here,” said Jim Wunderman, chairman of the Bay Area Council’s business advocacy group.

Last year, tech giant Oracle Corp. decided to relocate its headquarters from Silicon Valley to Austin, saying the move would give its employees more flexibility in 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.

Musk celebrates success during a challenging year

Musk also noted Tesla’s record deliveries this year, noting that global supply chain disruptions leading to a shortage of computer chips remain a challenge.

“It looks like we have a good chance of maintaining that in the future,” he said.

“Basically, if we get the chips, we can do it.”

As a result, production of Tesla’s angular Cybertruck pickup is unlikely to begin until the end of 2022, Musk said, estimating that the company would reach “volume” production on the vehicle by 2023.

“We should be through our most serious shortage of supply chains [2023],” he said.

“I’m optimistic that will be the case.”

Tesla said last week that it delivered 241,300 electric cars in the third quarter, despite the lack of computer chips that have hit the entire automotive industry.

The company’s July-September sales beat Wall Street estimates of over 227,000 sales worldwide, according to data provider FactSet.

Sales in the third quarter increased 72 percent compared to the 140,000 deliveries Tesla made in the same period a year ago.

So far this year, Tesla has sold about 627,300 cars.

AP

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