Tesla Officially Moving to Texas, Elon Musk Confirms Austin HQ

Matt Posky
by Matt Posky

Tesla CEO Elon Musk has officially announced that his company would be moving house this week. Currently nestled upon the bosom of Silicon Valley in Palo Alto, CA, the automaker has expressed its intent to establish a new base of operations in Austin, TX. While this situation has been a long time coming, it’s not quite the prompt walkout that everyone was predicting 17 months ago.

At the start of the pandemic, Musk found himself at odds with local officials pushing strict COVID lockdowns. The CEO had wanted to keep the all-important Fremont facility up and running at the start of 2020, suggesting workers could simply choose to stay home without there being any negative repercussions (or pay). Told again to shut down, Tesla sued Alameda County on the grounds that its orders were unconstitutional and violated a return-to-work mandate recently issued by Governor Gavin Newson. Before long, Elon Musk was openly confessing he was fed up with the state of California and would be relocating the business.

“The unelected [and] ignorant ‘Interim Health Officer’ of Alameda [County] is acting contrary to the Governor, the President, our Constitutional freedoms [and] just plain common sense,” Musk tweeted in May of 2020. “Frankly, this is the final straw. Tesla will now move its HQ and future programs to Texas/Nevada immediately.”

While the CEO found new allies in the state, ire from some Californian officials grew to a point where it became routine to see them cursing him out online. But the fracas also encouraged the State of Texas to start talking business. Musk had previously hinted that he was interested in building a facility there and Lone Star State began offering bigger tax breaks and less regulation than what would be allowed in California.

One year later, the courtship appeared to have paid off. News broke that Tesla was quietly launching projects in Texas via its Gambit Energy Storage subsidiary and everyone started to wonder how long before the brand abandoned its coastal home.

But it’s not going to be Texas Or Bust. Despite Elon Musk’s prolonged spell of crapping on the state that has been Tesla’s home since its founding in 2003, he noted that the company will continue operations there. Freemont Assembly (which currently manufactures the Model S, Model 3, Model X, and Model Y) will remain active, with the CEO stating that Tesla hopes to expand its production capacity by 50 percent. The same was said of its Nevada Gigafactory.

Truth be told, the taxation and regulatory situation probably plays a much larger role than anyone wants to admit. Elon may not like Californian politics, but the automaker has a vested interest in the Golden State and sells the brunt of its product there. There’s little reason to burn a bridge when you’ll be the one that has to pay for it.

“We will continue to expand our activities in California,” he told investors on Thursday, “This is not a matter of Tesla leaving California.”

There’s no reason to doubt him on the claim. In addition to repeated expansions of the Fremont plant, Tesla recently broke ground on a new facility based in Lathrop, CA. The site will be responsible for constructing the company’s new Megapacks, which it believes will catapult it into the burgeoning energy storage business. But Tesla’s new headquarters will be in Austin and likely to keep future investments allocated somewhere between America’s coastlines.

[Image: Jag_cz/Shutterstock]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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5 of 36 comments
  • El scotto El scotto on Oct 08, 2021

    Stanford Graduates. It'll be hard to get them to move to Texas. Management will stay in Palo Alto. At the most extreme, I could see idiot politicians bragging that good Elon is building hyper loops between the Tesla hangar, the Tesla plant, and Elon's house. All with tax breaks. In the ultimate ace of shameless self-aggrandization, some politician will claim one of his ancestors was named Elon and was one of the 1st Texas Rangers.

    • See 2 previous
    • EBFlex EBFlex on Oct 09, 2021

      @conundrum “ issue propaganda and “academic” nonsense from “think tanks” to fill the minds of people like EB Flex with the idea that free markets conquer all.” Awe cute. Another commentator who’s obsessed with me. Tell me again how moving to a state that allows the company to keep more of its money rather than handing it over to sun-human liberal politicians that will waste it on programs to encourage pronoun usage or eliminate the sale of flavored tobacco a bad thing?

  • Aja8888 Aja8888 on Oct 09, 2021

    One thing about where this new plant is near Austin is that it has the ability to expand where the Fremont plant is kind of limited. Plus, I would think that this Austin facility is going to be the centerpiece for Tesla given that it will be making batteries and vehicles.

  • Bob65688581 We bought zillions of German cars, despite knowing about WWII slave labor. Refusing to buy something for ideological reasons is foolish.Both the US and the EU have imposed tariffs, so the playing field is level. I'll buy the best price/quality, regardless of nationality.Another interesting question would be "Would you buy one of the many new European moderate-price EVs?" but of course they aren't sold here.Third interesting question: "Why won't Stellantis sell its best products in America?"
  • Freshblather No. Worried there will be malicious executable code built into the cars motherboard that could disable the Chinese cars in the event of hostilities between the west and China.
  • Bd2 Absolutely not - do not want to support a fascist, totalitarian regime.
  • SCE to AUX The original Capri was beautiful. The abomination from the 90s was no Capri, and neither is this.It looks good, but too similar to a Polestar. And what's with the whacked price?
  • Rover Sig Absolutely not. Ever.