Tesla will move its headquarters from Palo Alto, California to Austin, Texas, CEO Elon Musk said Thursday.
Musk, who said last year that he was moving from California to Texas, did not give a timeline for the move when he addressed shareholders at Tesla’s annual meeting.
In the early days of the corona virus epidemic, Musk clashed with health officials in the San Francisco Bay Area, where efforts were made to enforce asylum orders. At the time, he threatened to move Tesla’s operations to Texas or Nevada.
On Thursday, however, Musk cited the cost of living in the Bay Area, which has made it difficult for many people to own a home, translating into long journeys.
“We are taking it as much as possible, but there is a limit to how big you can make it in the Bay Area,” he said Thursday. “Just to be clear, though, we will continue to expand our activities in California. This is not about leaving California.
Musk stressed that he plans to expand the company’s factory to Fremont, California, where Tesla’s Model S, X, Y and 3 vehicles have been built, with the expectation of a 50 percent increase in production.
The announcement was greeted with applause from a small audience at Tesla’s manufacturing plant in Austin, where Musk made his comments, which were webcast live.
Appreciating Tesla’s announcement that it would increase production in Fremont, Bay Area business leaders lauded the headquarters move as the latest sign of the region’s ongoing problems.
“Mr. Musk’s announcement once again sheds light on California’s immediate response to our housing crisis and many other challenges that make it difficult for companies to thrive here.
Last year, tech giant Oracle Corporation decided to move its headquarters from Silicon Valley to Austin, saying the move would give its employees more flexibility about where and how they would work. Hewlett-Packard Enterprise, one of Silicon Valley’s founding companies, has also said it will relocate to the Houston area.
At Thursday’s meeting, Musk also called for the company’s record delivery of vehicles this year, noting that disruptions to the global supply chain have led to a shortage of computer chips.
“It looks like we have a good chance of maintaining it in the future,” he said. “Basically, we can do that if we get chips.”
As a result, production of Tesla’s angular cyber truck pickup is unlikely to begin before the end of 2022, Musk said, adding that the company is expected to reach “volume” production on the vehicle in 2023.
“We must go through the worst supply chain shortages in 23 years,” he said. “I’m hopeful.”
Tesla said last week that it delivered 241,300 electric vehicles in the third quarter, even as it struggled with a shortage of computer chips that affected the entire auto industry.
From July to September, the company’s sales surpassed Wall Street’s worldwide sales estimates of 227,000, according to a data set fact sheet.
Third-quarter sales rose 72 percent from Tesla’s 140,000 shipments for the same period a year earlier.
So far this year, Tesla has sold 627,300 vehicles. It beat it to a total of 499,550 last year.