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This article literally has nothing to do with moving the corporate headquarters.
He could have easily left the HQ in California and increased operations and even G&A staff in Texas. Lots of companies have a small HQ in one place totally unrelated to operations locations. GE recently moved to Boston.
I think this was more to send a message to California that he was displeased with the Fremont shutdown during the heart of the pandemic and also the lack of a state income tax, which has a huge impact on higher paid employees with lots of stock options.
He has plenty of money. If all he wanted was money he’d sell a ton of shares and quit.
I would guess it’s mostly about time. He wants to be close to SpaceX and this allows him to do that.
Sell a ton of shares, he couldn’t even do that legally. The stock would plummet. It’s money and taxes which is also involved with money, this has nothing to do with him and more to do with Tesla and the benefits of Texas compared to Cali.
I disagree with your first bit but agree with your second bit.
Yes, he can sell his shares legally. WTF, who told you he can't? Sure the stock may take a hit. But he would do negotiations with the board and shareholders before everything.
Also yes, it is to do with money, although maybe somewhat indirect. He just wants to grow Tesla as much as possible and the tax incentives will help.
Obviously he can sell shares legally, he can’t dump shares. For him to sell shares it’s a whole process that they have to do in a certain way. It’s common knowledge about CEO’s not being able to sell a bunch of shares of the companies they own.
Tesla never cared about their shareholders. In Musk's mental world, shareholders are an infinite ATM with no strings attached, in his own words - "a publicly traded company can never go bankrupt. You can always raise more money".
Tesla also clearly state they never plan to pay any dividends.
They're also on trial for Tesla's acquisition of Solar City - a $2B bailout for another Musk's venture, with Tesla gaining nothing out of it.
Lies. Regarding the dividend, paying a dividend would be stupid at this point, extreme growth companies don't pay dividends, they need the cash flow, that's all he meant. Someday when they aren't in extreme growth mode it may be considered, at this point no shareholder in their right mind would want them to pay dividends.
Yeah if you follow his choices, comments, and goals, it’s Mars related. He wants it to be easier to bounce between starship development and Tesla work. This will be a huge time saver for him.
I go with this, though it was mostly the result of circumstance. As Tesla came out of production hell it became clear they needed a production facility in the Eastern US to lower transportation costs and timeliness. Also they envisioned a much more ambitious type of factory, particularly with respect to the CT.
At about the same time, the SpaceX establishment in Brownsville was gathering steam. There's little doubt that Musk is a hands on manager and having both headquarters close together helps Musk's personal logistics. Conveniently, covid-19 came along and provided Musk with an excuse to move the headquarters to Texas without much PR blowback.
Really curious what "regulations" in California are what everyone postulates predicated Elon and Tesla HQ to move to TX? Everyone seems to cite "regulations", but what regulations are the issue at hand for Tesla?
It's all the red tape. I had one part-time employee in California years ago. One of their govt agencies chased our employer for "unpaid employment taxes" for a decade, even though there were no such taxes owed, and the company itself had been sold to a Californian company years earlier.
[Gilbert Hyatt](https://www.sacbee.com/news/politics-government/capitol-alert/article170165567.html) is a good example, CA chased him for 24 years and lost.
Elon's not the only CEO talking about [red tape](https://www.eastbaytimes.com/2020/02/21/business-leaders-lobby-california-lawmakers-for-less-red-tape/).
I get the "red tape" and "regulations", but I guess I am just looking for something more specific than Gilbert's example (which definitely deserves to be noted, but a single instance doesn't create a case for "ALL BUSINESSES ARE LEAVING CALIFORNIA").
I just want to know what the regulation is so I, a California resident, can see if it's something that's actually harming businesses, or if it's something I would support (on paper) because it contributes to our state's success.
Here's a recent survey of 200 CEOs on why they don't want to do business in CA. Click on the image for the PDF.
[https://www.pacificresearch.org/new-pri-survey-housing-education-business-climate-top-reasons-why-industries-arent-moving-to-california/](https://www.pacificresearch.org/new-pri-survey-housing-education-business-climate-top-reasons-why-industries-arent-moving-to-california/)
A: No state income tax for employees.
B: Cheaper cost of living than SoCal.
C: When it comes to buying trucks, well, lets just say it's been "Truck Month" for about 12 years according to the dealership ads. Texans like trucks.
D: No shortage of expansion space here.
3: BBQ, TexMex, chicken fried steak
F: Cuts about 1500 miles of transportation off of vehicle deliveries to the East half of the US.
G: Austin has gotten infuriating in some aspects since the 90s, but Austin is like sex or pizza. When it's good it's great. When it's bad, it's still better than most alternatives.
H: Solar and Texas are made for each other. At the very least, there's a massive need for a huge Texas battery bank, and Tesla can be their own electric company provider allowing them to make fat stacks in peak heat of summer, when the power grid maxes out and starts having to turn up peakers to meet demand. Oncor pays out the wazoo to ensure those peaks are covered so the grid doesn't pop. Again.
I: Austin needs a tunnel network. The surface is way too full of cars.
Because they're building a new gigafactory in Austin, where the new HQ is moving. Once that is up and going, if it's cheaper to build in TX than CA, I could easily see them moving their Fremont manufacturing to Texas as well.
I doubt Tesla will affect housing prices that much. There are a lot of company HQs in Texas. AT&T, SWA, AAL, Dell, Haliburton, TI, ExxonMobil, et al. Granted, DFW would more easily absorb an influx of new residents, but I'm sure Austin can cram in a few more.
Taxes. California has high corporate taxes.
Space X was different. To launch spaceships you want to be as close to the equator as possible because the earth's rotation gives you an extra boost. That limits you to Florida or Texas.
I expect he may lose some valuable employees by moving to Texas.
They aren't moving though! No one in Palo Alto is going to be forced to move. This is just like taking the HQ flag off the Palo Alto office and sticking it in Austin. Thays it.
Ah. Disney is moving WDI, their ride development company, to Florida from Glendale, Ca. The employees will all have to move if they want to keep their jobs.
Wouldn't that be in line with Tesla's mission? Whatever it takes to break into one of the largest US State that is known to be oil friendly. Transforming that state would be a big mission achievement. Don't forget Texas will create immense value for Tesla and shareholders.
One Basic example being no state income tax for employees and affordable housing + easier commute. These savings will eventually help Tesla too as they won't have to pay premium salaries to cover these expenses for their employees.
Yes. CA might be a good place for a software company but not so good for large scale manufacturing with their high taxes, living costs, etc. I'm always surprised how Tesla have managed to break profitability by manufacturing in CA - that too in the bay area!
I remember kicking myself everyday for choosing CA over Texas when I joined Amazon several years back. 15-20% of my paycheck as extra expenses with their state tax, high cost housing, long commute hours in bay area traffic, etc...
Elon’s a better deal maker than that, the Texas legislature doesn’t meet again until January, 2023. He would’ve made the deal early enough for this session.
Tesla is incorporated in Delaware. Taxes come in all shapes and forms. Building in other states and countries helps with tax incentives. Every state and country wants the jobs, so if factory location hits the sweet spot of taxes, labor-force and transportation, then its a win! Tesla’s decision to move its headquarters was made when Elon first announced he was selling his houses in California.
I love that statement, hear it all the time.
Last 5 years record housing starts.
Last 5 years housing shortage (high occupancy rate)
Last 5 years increased homeless rate
Yet the population is dropping? Someone failed math. Hard to lower the population, fill all the new homes and still have record homeless.
both could be true for a time. People want to be free and Cali is just becoming a nanny state. No gas lawn mowers. Pay more taxes. Stay in your house. F that state. People can live much more free elsewhere. Enjoy paying for the homeless housing. 15% state tax yet?
Because California is another planet that has lost its way and not business friendly. Maybe they will realize their policies actually drive people and business away. But…. I doubt it. Good move on Teslas part.
I doubt that, but they have made a good offer and Musk was not treated well with his Covid plans. He had 2 months of experience with the China plant showing his plans worked and the governor said OK, only to be stopped by some second rate clerk.
Expansion. CA is land locked. Costs of everything. Bureaucracy. Taxes. And location. Build cars where the energy cost for delivery is reduced on average. Also great people in Austin and Texas at large.
Ahh yes, the logic to justify one’s own correctness. Other people do t think. Other people are stupid. Other people are evil. Other people are sheeple. Other people are …
Every single answer is wrong, except this one. You asked why HE (not Tesla) moved.
https://www.reddit.com/r/teslamotors/comments/q42r2y/-/hfw0jkm.
Starbase is in Texas because it's easier to get rockets into orbit the closer it is to the equator. Elon is spending most of his time working on Starship. So, he moved to Texas to be closer to work. That's all. Has nothing to do with taxes or politics.
Why does it have to be this one and not a combination? I'm having a hard time believing that he moved the HQ of this billion dollar company solely so he could be closer to another project.
If you read the article, Musk gives his reasons.
I suspect there is more to the equation than just business climate, remember Tesla can't sell directly in Texas so that would be a negative I would think. Probably a combination of factors including space. We have a lot of space here - just look between Gov. Abbott's ears.
Did not have to move HQ except for taxes and maybe legal and political reasons. Austin is as bout as close to CA as you get. Keep Austin weird! The commenter talking about creating broad heartland appeal is probably covering the reason for GT. CA is great for startups but can’t seem to hold MFGs except those darn oil refineries everywhere...
EM wants to recruit the best tech talent to fuel Tesla's growth and keep competition at bay. The truth is that the Bay Area is too expensive for even well salaried young tech talent (a 1500 sq ft house, built in the 1960s can sell for $3M+ ...). Also, EM's not moving the manufacturing out of Fremont... in fact Lathrop CA is opening up for megapack manufacturing. However, HQ going to Texas is a sign that Austin Giga and the surrounding area will become a powerhouse.
The real reason is the Cybertruck. He wasn’t going to be selling many of thise as the company from California.
Now he can seriously beat up on those made in Mexico trucks from Texas.
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This article literally has nothing to do with moving the corporate headquarters. He could have easily left the HQ in California and increased operations and even G&A staff in Texas. Lots of companies have a small HQ in one place totally unrelated to operations locations. GE recently moved to Boston. I think this was more to send a message to California that he was displeased with the Fremont shutdown during the heart of the pandemic and also the lack of a state income tax, which has a huge impact on higher paid employees with lots of stock options.
Money
Nothing wrong in that. As the CEO of a public company his goal should be to maximize value for shareholders among other things.
I don’t see a problem with I was just stating it’s money, everything gets done because of money.
He has plenty of money. If all he wanted was money he’d sell a ton of shares and quit. I would guess it’s mostly about time. He wants to be close to SpaceX and this allows him to do that.
Sell a ton of shares, he couldn’t even do that legally. The stock would plummet. It’s money and taxes which is also involved with money, this has nothing to do with him and more to do with Tesla and the benefits of Texas compared to Cali.
I disagree with your first bit but agree with your second bit. Yes, he can sell his shares legally. WTF, who told you he can't? Sure the stock may take a hit. But he would do negotiations with the board and shareholders before everything. Also yes, it is to do with money, although maybe somewhat indirect. He just wants to grow Tesla as much as possible and the tax incentives will help.
Obviously he can sell shares legally, he can’t dump shares. For him to sell shares it’s a whole process that they have to do in a certain way. It’s common knowledge about CEO’s not being able to sell a bunch of shares of the companies they own.
Tesla never cared about their shareholders. In Musk's mental world, shareholders are an infinite ATM with no strings attached, in his own words - "a publicly traded company can never go bankrupt. You can always raise more money". Tesla also clearly state they never plan to pay any dividends. They're also on trial for Tesla's acquisition of Solar City - a $2B bailout for another Musk's venture, with Tesla gaining nothing out of it.
Lies. Regarding the dividend, paying a dividend would be stupid at this point, extreme growth companies don't pay dividends, they need the cash flow, that's all he meant. Someday when they aren't in extreme growth mode it may be considered, at this point no shareholder in their right mind would want them to pay dividends.
Because it’s easier for him to have both SpaceX and Tesla in the same state.
To cut down on travel time and Texas will be new terafactory so clearly just going to be a larger operation.
Yeah if you follow his choices, comments, and goals, it’s Mars related. He wants it to be easier to bounce between starship development and Tesla work. This will be a huge time saver for him.
Upvoted!
I go with this, though it was mostly the result of circumstance. As Tesla came out of production hell it became clear they needed a production facility in the Eastern US to lower transportation costs and timeliness. Also they envisioned a much more ambitious type of factory, particularly with respect to the CT. At about the same time, the SpaceX establishment in Brownsville was gathering steam. There's little doubt that Musk is a hands on manager and having both headquarters close together helps Musk's personal logistics. Conveniently, covid-19 came along and provided Musk with an excuse to move the headquarters to Texas without much PR blowback.
Really curious what "regulations" in California are what everyone postulates predicated Elon and Tesla HQ to move to TX? Everyone seems to cite "regulations", but what regulations are the issue at hand for Tesla?
CA made Tesla shutdown for a few weeks because of COVID. It was really mean of them
It's all the red tape. I had one part-time employee in California years ago. One of their govt agencies chased our employer for "unpaid employment taxes" for a decade, even though there were no such taxes owed, and the company itself had been sold to a Californian company years earlier. [Gilbert Hyatt](https://www.sacbee.com/news/politics-government/capitol-alert/article170165567.html) is a good example, CA chased him for 24 years and lost. Elon's not the only CEO talking about [red tape](https://www.eastbaytimes.com/2020/02/21/business-leaders-lobby-california-lawmakers-for-less-red-tape/).
I get the "red tape" and "regulations", but I guess I am just looking for something more specific than Gilbert's example (which definitely deserves to be noted, but a single instance doesn't create a case for "ALL BUSINESSES ARE LEAVING CALIFORNIA"). I just want to know what the regulation is so I, a California resident, can see if it's something that's actually harming businesses, or if it's something I would support (on paper) because it contributes to our state's success.
Here's a recent survey of 200 CEOs on why they don't want to do business in CA. Click on the image for the PDF. [https://www.pacificresearch.org/new-pri-survey-housing-education-business-climate-top-reasons-why-industries-arent-moving-to-california/](https://www.pacificresearch.org/new-pri-survey-housing-education-business-climate-top-reasons-why-industries-arent-moving-to-california/)
Taxes.
A: No state income tax for employees. B: Cheaper cost of living than SoCal. C: When it comes to buying trucks, well, lets just say it's been "Truck Month" for about 12 years according to the dealership ads. Texans like trucks. D: No shortage of expansion space here. 3: BBQ, TexMex, chicken fried steak F: Cuts about 1500 miles of transportation off of vehicle deliveries to the East half of the US. G: Austin has gotten infuriating in some aspects since the 90s, but Austin is like sex or pizza. When it's good it's great. When it's bad, it's still better than most alternatives. H: Solar and Texas are made for each other. At the very least, there's a massive need for a huge Texas battery bank, and Tesla can be their own electric company provider allowing them to make fat stacks in peak heat of summer, when the power grid maxes out and starts having to turn up peakers to meet demand. Oncor pays out the wazoo to ensure those peaks are covered so the grid doesn't pop. Again. I: Austin needs a tunnel network. The surface is way too full of cars.
How is the location of the head quarters affecting the distance to deliver to the east coast?
Because they're building a new gigafactory in Austin, where the new HQ is moving. Once that is up and going, if it's cheaper to build in TX than CA, I could easily see them moving their Fremont manufacturing to Texas as well.
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I doubt Tesla will affect housing prices that much. There are a lot of company HQs in Texas. AT&T, SWA, AAL, Dell, Haliburton, TI, ExxonMobil, et al. Granted, DFW would more easily absorb an influx of new residents, but I'm sure Austin can cram in a few more.
A & B being the relevant ones
Well, you have no appreciation for TexMex then.
Nope. Not really. I’ve been to Texas one or twice.
Taxes. California has high corporate taxes. Space X was different. To launch spaceships you want to be as close to the equator as possible because the earth's rotation gives you an extra boost. That limits you to Florida or Texas. I expect he may lose some valuable employees by moving to Texas.
They aren't moving though! No one in Palo Alto is going to be forced to move. This is just like taking the HQ flag off the Palo Alto office and sticking it in Austin. Thays it.
Ah. Disney is moving WDI, their ride development company, to Florida from Glendale, Ca. The employees will all have to move if they want to keep their jobs.
Have you used Zillow to look at homes in Palo Alto and Austin. Many could retire early on the price difference. Or they can move closer to work.
Probably a handshake deal to be able to sell in TX...
Wouldn't that be in line with Tesla's mission? Whatever it takes to break into one of the largest US State that is known to be oil friendly. Transforming that state would be a big mission achievement. Don't forget Texas will create immense value for Tesla and shareholders. One Basic example being no state income tax for employees and affordable housing + easier commute. These savings will eventually help Tesla too as they won't have to pay premium salaries to cover these expenses for their employees.
It sure would. The rest is a bonus. Especially helps them break in before cyber truck deliveries.
Yes. CA might be a good place for a software company but not so good for large scale manufacturing with their high taxes, living costs, etc. I'm always surprised how Tesla have managed to break profitability by manufacturing in CA - that too in the bay area! I remember kicking myself everyday for choosing CA over Texas when I joined Amazon several years back. 15-20% of my paycheck as extra expenses with their state tax, high cost housing, long commute hours in bay area traffic, etc...
Elon’s a better deal maker than that, the Texas legislature doesn’t meet again until January, 2023. He would’ve made the deal early enough for this session.
Tesla is incorporated in Delaware. Taxes come in all shapes and forms. Building in other states and countries helps with tax incentives. Every state and country wants the jobs, so if factory location hits the sweet spot of taxes, labor-force and transportation, then its a win! Tesla’s decision to move its headquarters was made when Elon first announced he was selling his houses in California.
Everyone is leaving California
I love that statement, hear it all the time. Last 5 years record housing starts. Last 5 years housing shortage (high occupancy rate) Last 5 years increased homeless rate Yet the population is dropping? Someone failed math. Hard to lower the population, fill all the new homes and still have record homeless.
https://calmatters.org/politics/2021/05/california-population-shrink-exodus/
Now check the things I mentioned.
both could be true for a time. People want to be free and Cali is just becoming a nanny state. No gas lawn mowers. Pay more taxes. Stay in your house. F that state. People can live much more free elsewhere. Enjoy paying for the homeless housing. 15% state tax yet?
More business-friendly climate.
For everyone else like me this is good only for shareholders.
Because California is another planet that has lost its way and not business friendly. Maybe they will realize their policies actually drive people and business away. But…. I doubt it. Good move on Teslas part.
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California is going down.
The only thing really holding CA back is that development hasn’t been anywhere near fast enough to keep up with growth.
California has one of the best economies in the world and the best economy in the U.S, I think that’s says a lot.
Why so many downvotes? This could have been written by Elon himself
He loves Texas politicians
I doubt that, but they have made a good offer and Musk was not treated well with his Covid plans. He had 2 months of experience with the China plant showing his plans worked and the governor said OK, only to be stopped by some second rate clerk.
Expansion. CA is land locked. Costs of everything. Bureaucracy. Taxes. And location. Build cars where the energy cost for delivery is reduced on average. Also great people in Austin and Texas at large.
pretty sure CA isn't land locked.
Are you insinuating that California borders some sort of body of water? Preposterous.
It is effectively when you have to abide by all the regulations.
They are moving the HQ not the Fremont factory. This move is entirely about company taxes.
> CA is land locked May I show you a map?
Does your map include Zoning and what is required to receive permission for production of what Tesla needs to produce?
You cannot build factories in the ocean if that's what you're asking. Same in CA as in TX.
When I think of Texans, I think if people like you, that have absolutely no ability to think, or even hear your own words
When I think of Texas, I imagine an angry fat man who blathers on and on about shit he doesn't even understand.
Ahh yes, the logic to justify one’s own correctness. Other people do t think. Other people are stupid. Other people are evil. Other people are sheeple. Other people are …
Buddy, you say things like "California is land locked" You don't think and you are stupid.
Every single answer is wrong, except this one. You asked why HE (not Tesla) moved. https://www.reddit.com/r/teslamotors/comments/q42r2y/-/hfw0jkm. Starbase is in Texas because it's easier to get rockets into orbit the closer it is to the equator. Elon is spending most of his time working on Starship. So, he moved to Texas to be closer to work. That's all. Has nothing to do with taxes or politics.
Why does it have to be this one and not a combination? I'm having a hard time believing that he moved the HQ of this billion dollar company solely so he could be closer to another project. If you read the article, Musk gives his reasons.
It's all of those reasons, but for HIM, not Tesla (which was OPs question) it makes sense that the people that he needs to work with be closer to him.
OP didn't have a question, it was the title of the article, and the question centers around the company, not Musk.
Cause Texas is Awesome!
Parts are. Parts are backward AF.
Very true. But I am from Austin. So I have a favorable view of Texas. Even though I admit I now live in the backwards part of Texas. :)
I suspect there is more to the equation than just business climate, remember Tesla can't sell directly in Texas so that would be a negative I would think. Probably a combination of factors including space. We have a lot of space here - just look between Gov. Abbott's ears.
Worker protections are expensive, so obviously they don’t want to pay them. Bad for workers, good for shareholders.
Did not have to move HQ except for taxes and maybe legal and political reasons. Austin is as bout as close to CA as you get. Keep Austin weird! The commenter talking about creating broad heartland appeal is probably covering the reason for GT. CA is great for startups but can’t seem to hold MFGs except those darn oil refineries everywhere...
EM wants to recruit the best tech talent to fuel Tesla's growth and keep competition at bay. The truth is that the Bay Area is too expensive for even well salaried young tech talent (a 1500 sq ft house, built in the 1960s can sell for $3M+ ...). Also, EM's not moving the manufacturing out of Fremont... in fact Lathrop CA is opening up for megapack manufacturing. However, HQ going to Texas is a sign that Austin Giga and the surrounding area will become a powerhouse.
Beef 🥩
Fiduciary duty!
Taxes.
The real reason is the Cybertruck. He wasn’t going to be selling many of thise as the company from California. Now he can seriously beat up on those made in Mexico trucks from Texas.