Making an announcement in Tesla’s annual shareholder meeting yesterday, Elon Musk informed that Tesla will move its headquarters from Palo Alto, California to Austin Texas.
Tesla in California benefitted from considerable incentives for electric-vehicle buyers and green-energy initiatives apart from being in vicinity of Stanford University and Silicon Valley location near other technology giants like Google, Apple and Facebook.
Musk had started hinting about the move though. Musk threatened last May that a Texas move could be imminent during California’s shelter-in-place orders.
Though Musk clarified that they will be continuing to expand their activities in California, the move to change the corporate headquarters is seen as a major shift for Tesla. Musk has justified by saying that Tesla has approached the limits of its capacity in at the Fremont factory, where Tesla has more than 10,000 workers. He added that the costs and constraints of the Bay Area started being prohibitive. as the company grew, constraints grew such as even workers being unable to park at the offices.
The decision reflects various business concerns like the growth potential of the company, Musk’s place of residence, and the development of his other company, SpaceX, in Texas.
Austin has the capacity of accommodating a larger pool of workers that Tesla is aiming to attract
Austin’s rapid growth, relatively young population, and the presence of a major university like the University of Texas at Austin as factors that favoured the choice. Musk has marked the factory’s proximity to the airport and downtown as positive features.
Tesla noted that nearly $465 million in low-interest loans “to accelerate the production of affordable, fuel-efficient electric vehicles,” precipitated its move.