Blog Tesla Moving Headquarters to Austin, Texas

Tesla is moving its headquarters to Austin, Texas.

Chief Executive Elon Musk announced the move during the company’s annual shareholder meeting. The CEO has relocated to the state and Tesla is currently building a factory near Austin. Tesla’s current HQ is in Palo Alto, Calif.

Last year, Musk disagreed with officials in California over certain coronavirus restrictions that temporarily shut down Tesla’s factory. He signaled at that time that the company may move to Texas. Tesla also released two press releases recently with a dateline of Austin rather than Palo Alto.

Construction at Giga Texas began in July 2020. Production of the Model Y at the factory is expected to begin by the end of the year and ramp up in 2022. The factory will also produce the Cybertruck, which Musk said will not be available until the end of next year. Volume production for Cybertruck will not kick in until 2023.

Musk said Tesla will explore a new factory next year and possibly make a decision in 2023.

 

[Srad600Volt]

I cannot remember EVER caring where my car was made, maybe I should...but I don't. I like my Tesla, but will most likely go Rivian (or even Ford Lightning) as my next EV, for completely different reasons though. Like someone was saying earlier, (most) large corporations will beg for incentives and then use them all up. Once they are asked to pay their share, they bolt to the next place silly enough to give them more incentives. They care about profits above all else, it's the whole point of a corporation. This will continue until states stop giving tax advantages to corporations and make them all pay their share like everyone else does (or is supposed to).

 

[ohmman]

As someone who lived for a couple of decades in Austin and moved to the general Bay Area ten years ago, I can only say that summer will be an adjustment for those who move with the company. Gulf humidity and a 6 month summer can be brutal there. But the cost of living is relatively lower, especially for those who are comfortable with a commute, and the city itself is wonderful. Traffic is comparable to most of the Bay Area, though.

 

[dgpcolorado]

As someone who lived for a couple of decades in Austin and moved to the general Bay Area ten years ago, I can only say that summer will be an adjustment for those who move with the company. Gulf humidity and a 6 month summer can be brutal there. But the cost of living is relatively lower, especially for those who are comfortable with a commute, and the city itself is wonderful. Traffic is comparable to most of the Bay Area, though.

My impression is that real estate is getting pretty expensive in the Austin area, so not so sure how much the cost of living is lower. Some, perhaps, given how crazy Bay Area prices are.

I wonder how many of the current Palo Alto headquarters staff will make the move?

 

[jjrandorin]

My impression is that real estate is getting pretty expensive in the Austin area, so not so sure how much the cost of living is lower. Some, perhaps, given how crazy Bay Area prices are.

I wonder how many of the current Palo Alto headquarters staff will make the move?

I havent researched it, but real estate pricing in the bay area in california is extremely (extremely) expensive. It makes southern california look cheap by comparison, and southern california is not cheap.

A broken down 2 bed 1 bath hovel thats 30 years old in a bad part of town in the bay area is probably a million dollars.

 

[dgpcolorado]

I havent researched it, but real estate pricing in the bay area in california is extremely (extremely) expensive. It makes southern california look cheap by comparison, and southern california is not cheap.

A broken down 2 bed 1 bath hovel thats 30 years old in a bad part of town in the bay area is probably a million dollars.

Musk did mention that a lot of the Tesla staff commute a long way, so I presume that many live in cheaper places in the Central Valley and do that brutal commute to Palo Alto (and Fremont).

 

[lotusland]

But mostly I'm curious which EV you are considering for your next purchase. What do you think will be on par with M3? Or, which EV is closest to the M3 that you would be willing to sacrifice _fill_in_the_blank_ feature because the new car is not a Tesla?

I don't need another M3 as I have one already (P3D-!). I was planning to get a Cybertruck as that is really what I need next. It looks like there will be several other options for trucks in the next year or two, so that works. I love the CT design but I'm OK with a plain-old EV pick-up. As far as what I can give up, that's easy. I'm on an island that will never have SC and has plenty of sunshine, so I don't need the network.

It was clearly just venting...

Ha ha, no. I'm not a cancel-culture guy but I do vote with my wallet. Tesla moving anything other than a factory to Texas --right now -- is about as big a Goofus-and-Gallant moment as humanly possible. I'd react almost the same if they moved the HQ to China. And for those saying that this is all about "corporate decision making", I would argue this is a bad corporate move as well. No place competes with the Valley when it comes to innovation. Texas is known mostly for 2nd-tier companies -- TI, Dell etc. Nothing wrong with those companies but they are about as innovative as, well, Ford.

 

[Vic_F]

How? By giving Tesla millions in tax breaks, supporting EV’s more than any other state, and buying more Tesla’s than anywhere else? Why do cities and states bend over to please people with billions of dollars? Seems to me he should pay for the privilege of operating where ever he sets up shop.

"pay for thew privilege", this assumes the State/govt. owns/controls, is at the center, of civilization as opposed to free markets where govt. is secondary to the individual. Same thing when people view the govt Not Taxing something as a subsidy

 

[dduffey]

Clearly this move is about sending a message, and I for one received it. I love my M3 but my next EV will not be a Tesla.

What's the message?

 

[daniel]

ALL corporations are looking for maximizing profit before anything else. There is no reason to be upset about corporations until they start doing something borderline illegal. Tesla now can introduce a Texas edition of the Cybertruck with a coal rolling functionality.

I see Tesla's decision as very much a political one, not an economic one. But as I said, I cannot talk about my reasons, due to the forum rules against politics. I guess I shouldn't have been surprised, though. I'll wait a while to let my feelings settle before I decide if I need to change my attitude toward Tesla.

 

[daniel]

What's the message?

It's political. But we're not allowed to discuss politics here.

 

[David29]

My sense from Elon's remarks at the annual meeting was that Tesla would remain a large presence in California and is actually expanding their manufacturing there. So apparently "moving the headquarters" may not mean moving all the people and functions now in Palo Alto.

 

[alexgr]

It's political. But we're not allowed to discuss politics here.

Then, in the best spirit of muskiism you can talk about not politics. For example, Tesla moved to not a blue state because not a red state failed to push not a political agenda down the CEO's throat.

 

[David29]

"pay for thew privilege", this assumes the State/govt. owns/controls, is at the center, of civilization as opposed to free markets where govt. is secondary to the individual. Same thing when people view the govt Not Taxing something as a subsidy

On this note, is it still illegal for Tesla to sell cars in Texas? If so, I would wonder how tesla failed to use the leverage of its prospective large investment to extract a change in the law to allow them to sell cars. Without that concession for this large a move, my guess is they have lost that battle. or have they?

 

[Srad600Volt]

On this note, is it still illegal for Tesla to sell cars in Texas? If so, I would wonder how tesla failed to use the leverage of its prospective large investment to extract a change in the law to allow them to sell cars. Without that concession for this large a move, my guess is they have lost that battle. or have they?

Yes, it is still illegal. They have circumvented the law by opening stores on Native American land where the law cannot be enforced. Texans can then purchase from the Native land (in New Mexico).

Tesla opens store on Native land

The electric car company can only sell and service its vehicles freely in about a dozen states, while it faces restrictions in others. This time, it used a new approach

indiancountrytoday.com

 

[alexgr]

My sense from Elon's remarks at the annual meeting was that tesla would remain a large presence in California and is actually expending their manufacturing there. So apparently "moving the headquarters" may not mean moving all the people and functions now in Palo Alto.

My people of business tell me that it's all but certain that Tesla moves HQ to Texas primarily due to the difference in local taxation and local relocation tax bonuses. It is unlikely that relocating the manufacturing facilities will be tax-beneficial in any short time. Tesla may exit CA, but unlikely before the production solidly covers the demand, which is likely to require 1 or 2 more gigafactories (other than Austin) in the US fully operational (NET 2024 is my guess).

 

[Unclepaul]

It is not at all unusual for a startup to begin in California. The talent pool is great here plus tons of venture financing is available.
Most startups begin to move away from California when the outrageous costs of living and very high taxes make it essential to move to a lower cost area to be able to compete on a World Wide scale.
Next step is often to move much of the production off shore, where labor costs are the least.

Tesla is not unique in doing this...indeed it is a trend.

Tesla was able purchase the abandoned GM/Toyota plant for pennies on the dollar. California was willing to give them tax breaks because the unemployment levels were high and rising when he did so.

Now it is hard to find quality people looking for relatively hard manufacturing jobs. Uber high unemployment checks plus rising minimum and standard wages have made profitable operations difficult in the state.

Even super profitable companies like Apple are doing most of their manufacturing off shore.

Forget the politics. Moving to Austin is a no brainer for a company wanting to be more profitable.

 

[alexgr]

Yes, it is still illegal. They have circumvented the law by opening stores on Native American land where the law cannot be enforced. Texans can then purchase from the Native land (in New Mexico).

Tesla opens store on Native land

The electric car company can only sell and service its vehicles freely in about a dozen states, while it faces restrictions in others. This time, it used a new approach

indiancountrytoday.com

I wonder if Tesla considers opening the stores on Nations' land in Oklahoma. Can be done by the border with Texas (1 hour drive from [somewhere in] Dallas).

 

[Vic_F]

My guess is that as the Fremont plant is depreciated Tesla will wind down production in CA. Years yes, decade... nope

 

[chinney]

By the time my Model 3 needs replacing, which I hope and expect will be many years from now, I anticipate having a lot of options. The mainstream auto manufacturers are behind Tesla now in most aspects of the technology, but that probably will not last forever. I would consider a Ford EV, if they improve their game (and also start making sedans again). I might also consider VW, although with some hesitance. A potential Apple EV would be something that I might contemplate as well. And the Korean manufacturers are starting to make some interesting electric cars.

Don't get me wrong. I love my Model 3 - best car I have owned - and I appreciate all that Tesla has done to advance the EV project. But I am tired of EM's antics. I just about cancelled my Tesla order just before getting it due to his latest public comments and behaviours at the time. I actually let a Tesla rep know how dismayed I was. But I was very committed to going electric, and Tesla was the best choice, and still is in my view. That will not necessarily be the case in a few years - not for me anyhow.

I forgot to mention Lucid. Their technology actually seems to be pretty advanced, based on what I have read. So far they are positioned as a niche luxury EV maker, but that could change. I would definitely look into a Lucid EV in a few years, if they become a more accessible auto manufacturer.

 

[deonb]

Clearly this move is about sending a message, and I for one received it. I love my M3 but my next EV will not be a Tesla.

Same here. I have 3 Teslas - none of them (or my current Truck) will be replaced with a Tesla. I supported the company since 2012 at a time when it was most financially vulnerable. I feel ... defeated.