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Musk to Move Tesla HQ from Palo Alto to Austin, Texas

Oct. 8, 2021
“There’s a limit to how big you can scale in the Bay Area,” said the electric vehicle CEO.

It’s official: Tesla Motors is moving its headquarters east to the Lone Star State. CEO Elon Musk announced the move in the company’s annual meeting with shareholders on October 8. Tesla will continue to operate and even expand its first manufacturing site in Fremont, California, but its headquarters will relocate to Austin, Texas.

In responses to questions, Musk also provided an update on Tesla’s response to semiconductor shortages and production schedules.

Despite earlier conflicts with Bay Area authorities, Musk cited the expense of housing as a primary motivation for the move but added the company has plans to increase production in Fremont by 50%.

“I’m excited to announce that we’re moving our headquarters to Austin, Texas,” Musk said, who conducted the call remotely from Austin. “This is not a matter of Tesla Leaving California. As I said, our intention is to actually increase output from Fremont” by 50%.

Despite the plans to ramp up production in California, Musk emphasized that Tesla had outgrown its original headquarters by the bay: “It’s tough for people to afford houses and a lot of people have to come in from far away. … There is a limit to how big you can scale in the Bay Area.” Tesla’s Austin location, he contrasted, is “5 minutes from the airport, 15 minutes from downtown.” Musk did not provide a timeline for the move.

In the question-and-answer segment, Musk provided an update on production schedules for Tesla’s angular electric “Cybertruck,” noting that myriad supply difficulties had pushed volume production of that vehicle to 2023.

“We were basically limited by multiple supply chain shortages, not just chips,” Musk said.

Musk has raised the possibility of moving Tesla’s headquarters out of California before, although in a different context. In the summer of 2020, Musk tussled with Alameda county health officials twice over COVID-19 shutdown orders: In March, Musk initially resisted a county order to shutdown by claiming Tesla counted as an “essential business,” and in May, Musk furiously threatened to move company headquarters to Texas or Nevada “immediately” after county officials said their shutdown order would last about a week longer than the state of California’s.

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