Elon Musk says Tesla’s headquarters will move from California to Texas

California has some of the country's highest income tax rates

At Tesla’s shareholder meeting, Elon Musk announced that the self-driving electric-car company will move its headquarters to Texas from California. The move comes after increased tension between Musk and local politicians due to the company’s response to COVID-19.

In addition, California is also a difficult area for Tesla staff to find affordable housing, and Musk said, “There’s a limit to how big you can scale it in the Bay Area. In Austin, our factory is like five minutes from the airport, 15 minutes from downtown.”

According to CNBC, Musk relocating to Texas would also result in him paying less tax. The state has no personal income tax, whereas Calfornia has some of the United States’ highest income tax rates. Additionally, California has stricter labour laws, whereas Texas is known for cheaper labour and laxer regulation.

However, this move doesn’t mean that the Freemont, California factory will be closed. Musk stated that he expects to expand output from the California and Nevada plants by 50 percent. Musk himself relocated from California to Texas at the end of last year to work on Tesla’s new vehicle production factory there, in addition to the SpaceX launch site in  Texas’s southernmost edge in Boca Chica.
Watch the full shareholder meeting below:

Source: Tesla