Tesla CEO Elon Musk announced on Thursday that the company will be moving its headquarters out of California and into Texas, according to CNN.
“I’m excited to announce that we’re moving our headquarters to Austin, Texas,” Musk announced to a shareholders’ meeting on Thursday. The company, which specializes in electric vehicles, had been based out of California since its foundation in San Carlos, with its first factory built in Fremont and its current headquarters located in Palo Alto.
Musk said that part of the reason for his decision is the fact that there is a “limit to how big you can scale in the [San Francisco] Bay area.” Specifically, he referred to the extremely high costs of housing, as well as lengthy commutes to and from work. For contrast, the median price of a home in Palo Alto is currently $3.3 million, while Austin’s median home price is $588,000. Tesla’s factory in Austin is just five minutes from the Austin-Bergstrom International Airport (ABIA) and 15 minutes from the downtown area.
Musk himself had already moved to Texas last year, and his other most prolific company, the aerospace technology company SpaceX, is currently operating in South Texas as it works on the development of its new line of space vessels, the Starship.
Despite the significant move, Musk noted that the company would not be shuttering its operations in California; Tesla will instead aim to increase its output in Fremont, as well as Nevada, by about 50 percent in the near future.
Musk had first hinted at the possibility of moving Tesla’s base of operations out of California back in May of 2020, after the company clashed with local officials in Alameda County over lockdown measures during the Chinese coronavirus pandemic. Musk had suggested on Twitter that he might move the company’s headquarters to either Texas or Nevada.