Here’s a look at Tesla’s decision to move its headquarters from California to Texas in a departure by Elon Musk from the Golden State.
The move to Texas came about six months before Musk announced that the Tesla WFH policy would allow for far less remote work, as he felt working from home was “morally wrong.”
Where is Tesla headquarters now?
Tesla CEO Elon Musk officially moved Tesla’s corporate headquarters from California to Austin, Texas, in December 2021.
However, it still employs some workers in California, largely in its Fremont Gigafactory.
Despite the move to Texas, the carmaker continues to produce many of its cars at its factory in Fremont, though Musk has stated that he intends to move production out of the Golden State eventually, and Tesla layoffs have affected hundreds of jobs in California so far in 2024.
Why did Elon Musk move Tesla to Texas?
At the time, Musk said he’d moved Tesla’s main headquarters because it has grown difficult for employees to afford houses in the Bay Area, causing some employees to commute from far away, Musk said.
“There’s a limit to how big you can scale in the Bay Area,” he said. But that wasn’t the whole story.
Musk and California officials had been at odds prior to the move. In 2020, the billionaire threatened to pull all of Tesla’s operations out of California because he disagreed with the state’s response to the pandemic, including its shelter-in-place orders.
The state had also launched a series of regulatory probes regarding Tesla’s treatment of its workers, as well as the marketing of its self-driving technology. In 2022, a California regulator sued Tesla, alleging racial discrimination at the Fremont factory based on “hundreds of complaints from workers.”
The California Department of Motor Vehicles also accused the company of intentionally misleading customers in the advertising for its Autopilot and Full Self-Driving features.
Layoffs followed when Musk announced he planned to cut 10% of salaried staff as he had a “super bad feeling” about the economy. Hundreds of the employees laid off were from the Autopilot team as the electric-vehicle maker shuttered the California facility.
One likely contributing factor behind the move was that Musk stood to save an estimated $2.5 billion in capital gains taxes by moving his residence and business from California to Texas.
In spite of Tesla’s manufacturing presence in the Lone Star State, franchise laws in Texas prohibit the company from selling cars directly to customers, which it does in most other states, but that does not seem to have deterred Musk from moving even more of his business to Texas.
Musk plans to move SpaceX and X to Texas
Elon Musk controls many more businesses than Tesla alone, and he plans to move two more of them to Texas. The billionaire posted on his own social media platform, X, formerly known as Twitter, that he planned to move the headquarters of X as well as SpaceX to his new home state. The news prompted other rivaling space startups in California to try and recruit Tesla employees.
A SpaceX and X move would be another blow to the California economy and a boon for that of Texas. It’s not clear when the move will happen — or if it’s even definite — but it would follow a familiar pattern for Musk’s businesses.
