During the annual shareholders meeting held last Thursday, October 7, the king of electric cars has announced he will be moving Tesla headquarters from Silicon Valley’s Palo Alto, CA to Austin, TX. However, he gave no timeframe for the move. “I’m excited to announce that we’re moving our headquarters to Austin, Texas,” said Musk during the meeting.
Tesla is only one of the several tech companies to have been relocated from California to other states with less stringent regulations and lower costs. Musk also said that housing costs in the Bay Area are very expensive, meaning long commuting times for employees.
It’s tough for people to afford houses, and people have to come in from far away….There’s a limit to how big you can scale in the Bay Area.
Elon Musk, CEO of Tesla
The future location in Austin is only five minutes from the airport and 15 minutes from downtown. Moreover, Tesla sales are also showing positive signs in that area. The CEO also pointed out that Tesla is not leaving California as the company would continue to expand the main plant in Fremont, CA, with the intention to increase the plant’s production by 50% regardless of the headquarters move.
“To be clear we will be continuing to expand our activities in California,” said Musk. “Our intention is to increase output from Fremont and Giga Nevada by 50%. If you go to our Fremont factory it’s jammed,” he added.
Musk has always had a difficult relationship with California, threatening several times to move Tesla headquarters and future programs to Texas during the closure of Tesla’s factory in Fremont due to Covid-19, among other occasions.
Musk also noted that it would take some time to reach full production in the new plant in Texas, even after it’s completed. According to Musk, Tesla’s new plant in Austin will follow Shanghai’s example, where the plant was built in 11 months, but reached high-volume production after an entire year.
Although Tesla’s sales and expansion are strong, the company’s diversity and inclusion status seems to be uncertain. According to preliminary results from a shareholder voting session, a stockholder proposed to disclose more information about Tesla’s diversity efforts. The resolution was filed by Calvert Research and Management, whose vice president Kimberly Stokes declared: “As shareholders we are concerned that Tesla’s lack of focus on equity, diversity and inclusion could hinder the company’s ability to innovate in the future.”
Last Monday, a court ruling ordered the company to pay $137 million to a Black employee who sued for racial discrimination. The former employee had suffered racist abuse at the hands of colleagues. This issue has cast a light on Tesla’s diversity status.
