At their shareholder meeting, Elon Musk and Tesla announced that they would be moving their headquarters, currently located in the Bay Area of California. According to CNBC, in addition to the headquarters relocation, they will also build a brand-new factory near the Austin Bergstrom International Airport and the Colorado River.
Reporters from the New York Times have determined that the new factory is slated to build a mass-production version of Tesla’s eccentric and highly-awaited Cybertruck.
Musk has a plethora of reasons for both his company’s move and the relocation of his residence. Elon Musk became upset over COVID-19 restrictions in his Fremont, California plant earlier this year, saying through Twitter that it was his “final straw”.
“The unelected & ignorant ‘interim Health Officer’ of Alameda is acting contrary to the Governor, the President, our Constitutional freedoms & just plain common sense,” Elon wrote after Alameda County shut down production.
Likewise, Musk himself began the process of moving his personal life and residence to Texas. Musk first told “close friends” in secret about his exact relocation plans but recently became more open about his intentions.
Musk, who has seen a 782% increase this past year in the value of Tesla stock, will appreciate the tax haven that Texas offers. According to the independent Tax Foundation, Texas is ranked #11 on the lowest tax burden for businesses, making it a tempting location for an ever-growing number of companies.
On the other hand, California is one of the highest tax destinations in the nation. Elon Musk’s income tax would be relatively non-existent in Texas, and the move offers more opportunities for Tesla’s expansion due to lower regulations and restrictions.
Texas is also much cheaper to live in than California, especially in the Bay Area. BestPlaces ranks California’s average cost of living index at 149.9/100, while Texas’ at 93.9/100. To have a location where all employees could afford to live near the factory is crucial to Tesla’s production, Musk says.
On Thursday, Governor Abbott welcomed Tesla to the Lone Star State with a tweet. “The Lone Star State is the land of opportunity and innovation. Welcome.”