Seeing employees work far away, difficult to buy a house, Elon Musk has just announced to move Tesla’s headquarters to another state

CNBC reported that CEO Elon Musk announced at Tesla’s shareholder meeting yesterday that the company is moving its headquarters from Palo Alto, California to Austin, Texas.

The meeting took place at a Tesla vehicle assembly plant under construction near Austin on a plot of land bordering the Colorado River, near the city’s airport. However, Elon Musk emphasized that the company plans to increase production at the California factory regardless of where the headquarters is relocated.

“I want to make it clear that Tesla will continue to expand its operations in California. The goal is to increase production from the two Fremont and Giga Nevada plants by 50%. However, if you go to the Fremont plant, it is very easy to encounter congestion. Street”.

Musk added: “People can’t afford to buy a home here and so have to come from afar…. There’s a limit to how much expansion can be done in the Bay Area.”

Regarding the plant being built in Austin, Musk noted that it will take some time to reach full production even once completed.

Musk said building a factory takes less time than waiting for that factory to reach large production. For example, Tesla’s Shanghai factory was built in 11 months, but it took a year to reach mass production levels. He hopes Tesla’s new factory near Austin will do the same thing as the one in Shanghai.

In fact, Musk has expressed growing discontent towards California. In April 2020, during a Tesla earnings call, Musk lashed out at California government officials, calling their temporary Covid-related health orders “fascist”.

After that, Musk personally moved to Austin from Los Angeles, where he lived for two decades.

Doing so allows Musk, who is also the CEO of aerospace company SpaceX, to reduce his personal tax burden and be closer to SpaceX’s launch site in Boca Chica, Texas.

Tesla’s board of directors has approved large bonus packages for Musk when he leads the company to achieve specific business goals. Most of these bonus packages are stock options. According to InsiderScore, if Musk sells call options that are due to expire in 2021, he could raise more than $20 billion this year.

Meanwhile, California has a reputation for levying some personal income taxes, especially for the richest, the highest in the country whereas, Texas has no personal income tax.

Tesla isn’t the first company to move its headquarters out of California to Texas. Oracle and Hewlett Packard are also tech giants that decided to make the same move last year.

Texas has actively recruited companies through the Texas Economic Development Act that provides tax breaks. Austin, with a top tech university and cultural events like South by Southwest, is an attraction for tech companies.

According to the lawyer, moving Tesla’s headquarters is not too difficult. A business already operating as a “foreign” corporation with headquarters in California, like Tesla, can relocate by establishing a headquarters in a new state, hiring there, and relocating employees. key member. They won’t have to close operations in other states.

“From a legal perspective, there’s less of a legal burden in Texas,” said Romano, “it’s a much more business- and employer-friendly place in many ways.”

Texas Governor Greg Abbott said the Tesla CEO also supports his state’s “social policies.”

Tesla has generally received massive support from the state of California since its founding there in 2003. The company has enjoyed grants, tax breaks, incentives, and favorable policies. is different.