Tesla HQ is leaving California behind, will move to Austin, Texas instead

Polycount

Posts: 2,928   +588
Staff member
What just happened? Elon Musk has been talking about moving Tesla's operations to Texas for a while, but soon, those words will turn to concrete actions. As the CEO announced at Tesla's most recent shareholder's meeting, the company's headquarters will move to Austin. The HQ will leave California and what Musk has called 'fascist' Covid-related rules behind, in favor of a region with lower taxes and lower housing prices for employees.

This is a major shift for Tesla. It has been operating out of California for years, and this move will likely be a lengthy process. Of course, Musk himself already lives in Texas, on SpaceX property -- so perhaps this decision just seemed like a natural next step.

At any rate, Musk's reasons for the change are not purely political in nature. Aside from California's restrictive pandemic rules, the CEO also feels there's a "limit" to how big a company can scale in the Bay Area. High housing prices, he says, mean long and overly burdensome commutes for factory workers, who have to seek residence in other, cheaper locations.

However, this does not mean Tesla will shut down its California operations. On the contrary: its Fremont factory will remain, and it will continue to expand production there well into the future. It simply won't be the focus moving forward.

Texas Governor Greg Abbot was obviously quite pleased by the news. On Twitter yesterday, he formally welcomed Musk's decision, noting that the "Lone Star State is the land of opportunity and innovation."

While one could argue that California boasts similar accolades (being the home of the Silicon Valley), it seems whatever cost-benefit analysis Tesla's leadership team performed here weighed more heavily in favor of Texas.

Notably, Tesla isn't allowed to directly sell its vehicles to consumers in Texas due to the state's pro-dealership laws restricting such sales. However, nothing is stopping the company from making its vehicles or basing its operations there, so it remains to be

It remains to be seen what sort of impact this move will have on Tesla in the long term,

Permalink to story.

 

scavengerspc

Posts: 1,732   +1,788
TechSpot Elite
I guess if you have to move operations to Texas, at least choose Austin or San Antonio. The 2 most educated cities in Texas by far and maybe in the whole deep South.
 
Last edited:

CBTex

Posts: 134   +264
I guess if you have to move operations to Texas, at least choose Austin or San Antonio. The 2 most educated cities in Texas and maybe in the whole South.

Not sure why it matters, but San Antonio is behind Houston and Dallas in education levels.

Tesla isn't moving because of education levels. They are moving because of a more business friendly climate and lower real estate costs.
 

scavengerspc

Posts: 1,732   +1,788
TechSpot Elite
Not sure why it matters, but San Antonio is behind Houston and Dallas in education levels.
Really? I was told if I opened an office in Texas that I should choose Austin or San Antonio. And wouldn't a tech company want local access to better educated prospects? Well either way, thanks for that info.

They are moving because of a more business friendly climate and lower real estate costs.
But if that was the reasons why Texas at all? Why not Arkansas or Alabama?
Both have much lower taxes and huge lifetime business incentives.

I honestly think the big reason is to get Texas to lift the restrictions designed to keep Tesla out.
 
Last edited:

Plutoisaplanet

Posts: 570   +918
I guess if you have to move operations to Texas, at least choose Austin or San Antonio. The 2 most educated cities in Texas by far and maybe in the whole deep South.
You'll definitely find other highly educated cities in the South such as Auburn AL or Franklin TN, both with around 60% of 25+ year old population with a bachelor's degree. However they won't be nearly as large in population.
But if that was the reasons why Texas at all? Why not Arkansas or Alabama?
Both have much lower taxes and huge lifetime business incentives.

I honestly think the big reason is to get Texas to lift the restrictions designed to keep Tesla out.
In terms of property taxes, Alabama is definitely among the lowest in the nation but income tax is pretty flat at 5%. Compared to California, that's actually higher until you reach an annual income above $65k+ single/$130k+ married. Arkansas is similar, but with the population of Alabama at 5m and Arkansas at 3m, they're most similar to Nevada which Tesla chose not to move into permanently either (despite investing billions into the state). They were struggling to bring enough talent into the Reno metropolitan area (~500k people). Texas has high property taxes but also 0% income tax (similar to Florida, Nevada, and Tennessee).

I think having a large enough population (and thus talent pool) was another unstated factor in Tesla's move, which is why Texas makes a lot of sense. In addition, SpaceX is expanding majorly in Texas making it especially attractive to Elon Musk who has to travel between his two jobs.
 

p51d007

Posts: 2,891   +2,271
Yeah, but Austin? That's like jumping out of the frying pan, into the fire.
Austin is a HUGE lib mecca.
 

Uncle Al

Posts: 8,351   +7,164
Once again the boy genius shows he just doesn't know his history ... one can only hope when he gets COVID he will finally wake up and understand the truth ....
 

Dimitriid

Posts: 1,330   +2,593
Once again the boy genius shows he just doesn't know his history ... one can only hope when he gets COVID he will finally wake up and understand the truth ....

Oh I believe he understands covid19 dangers perfectly: he just doesn't cares how many of his employees have to die to it as long as his production rates aren't affected.

Joke's on him though: Yes Texas will probably let him evade all taxes (That is, even more) and become far more tyrannical to his employees, but he better hope the weather holds up undefinitely otherwise too cold? Tesla factory shuts down. Too hot? Again, rolling blackouts. Gas speculation? Yep, more rolling blackouts, etc.

Texas truly is a perfect storm of unreliability to run something as critical as a factory so it doesn't bodes well long term
 

merikafyeah

Posts: 268   +217
Not surprising considering CA is the 2nd-worst state in the country for businesses behind only NY. There's been a not-so-subtle exodus of businesses out of NY state and CA is seeing something very similar. Dictator Newsom could take the lion's share of blame for this economic downturn but really the cracks have been growing for decades and covid only broke the dam.
 

Tantor

Posts: 214   +413
Not surprising considering CA is the 2nd-worst state in the country for businesses behind only NY. There's been a not-so-subtle exodus of businesses out of NY state and CA is seeing something very similar. Dictator Newsom could take the lion's share of blame for this economic downturn but really the cracks have been growing for decades and covid only broke the dam.
Not surprising considering CA is the 2nd-worst state in the country for businesses behind only NY. There's been a not-so-subtle exodus of businesses out of NY state and CA is seeing something very similar. Dictator Newsom could take the lion's share of blame for this economic downturn but really the cracks have been growing for decades and covid only broke the dam.

Very true. California is garbage. But it isn't just the CA leftist attitude towards business. It's their attitude towards White people, specifically White Males. CA's heyday started in the late 1960's when they were the beneficiary of huge waves of White Flight seeking to escape Detroit and other racially troubled cities. That era is now over... forever.
 

CBTex

Posts: 134   +264
Austin = lower real estate costs? Are you really from Texas?
Tesla isn’t building in downtown Austin where real estate is expensive. They are building east of the city where real estate is peanuts compared to the San Francisco Bay Area.
 

scavengerspc

Posts: 1,732   +1,788
TechSpot Elite
Most real work is done by techs with 2 year or less degrees.
But with a company like Tesla, "real work" is only done by 1\3 of the work force.
And all of them are robots. :D
I'm sure you know it is always most desirable to draw from local talent, be it blue collar, white collar, or anywhere in between.

When was the last time you saw an engineer pick up a wrench?

I'm an Architect and I deal with Engineers a lot, and I agree with that completely. Engineers think hand and power tools are icky.
 

netman

Posts: 680   +269
Very Good Mr. Musketeer: Stay there and enjoy the Texas extreme heat, torrential rain, golf-sized hails, hurricanes and tornadoes....!
 

Austinturner

Posts: 314   +396
What is there to do in Texas? California has good beaches, mountains, forests and deserts for camping, weekends away etc. It was expensive though and the cities like LA are full of traffic and pollution.

Genuine question from an Aussie who has visited california but not texas.
 

captaincranky

Posts: 17,654   +6,442
What is there to do in Texas? California has good beaches, mountains, forests and deserts for camping, weekends away etc.
About the whole "forests in California" thing. Most of them burned down during the last two summers.
Genuine question from an Aussie who has visited california but not texas.
Well, Texas has a psychotic governor, the strictest abortion laws in the galaxy. (Musk better not knock up one of his girlfriends while he's there, either that, or have his private jet fueled, "in case of emergency").

But, AFAIK, your can slitt strap on a holster with a Colt 45, and prance around like Bill Dalton. (Nor really sure about that though).

While esa tragedia actualmente pasado in SoCal, I'm fairly certain that in Tejas you'd hear plenty of talk of, "border walls, immigrants, & deportation".

 
Last edited:

Austinturner

Posts: 314   +396
About the whole "forests in California" thing. Most of them burned down during the last two summers.

Well, Texas has a psychotic governor, the strictest abortion laws in the galaxy. (Musk better not knock up one of his girlfriends while he's there, either that, or have his private jet fueled, "in case of emergency").

But, AFAIK, your can slitt strap on a holster with a Colt 45, and prance around like Bill Dalton. (Nor really sure about that though).

While esa tragedia actualmente pasado in SoCal, I'm fairly certain that in Tejas you'd hear plenty of talk of, "border walls, immigrants, & deportation".

Yeah I’ve heard about how conservative it is, that may attract some people while turning others away (opposite people to california probably). I was more thinking its just a big city in the middle of nowhere with nothing much attractive about the location.
 

scavengerspc

Posts: 1,732   +1,788
TechSpot Elite
Yeah I’ve heard about how conservative it is, that may attract some people while turning others away (opposite people to california probably). I was more thinking its just a big city in the middle of nowhere with nothing much attractive about the location.
When you think of Texas, think of a desolate wasteland. You know, scorching, with plenty of tumbleweeds.

Something to keep in mind first. Everything I put here is easily researchable and although not all are year to year, they are always in the fight.
Let me know if you want more. There are plenty more.

Texas ranks 4th in child poverty levels.
Texas is the only state that has no laws prohibiting discrimination.
Texas ranks 49th in number of poor covered by Medicaid.
Texas ranks 48th in percent of population with employer-based healthcare
Texas goes out of their way to stop people from voting. (FREEDOM!)
Texas prohibits sales of an American car simply because it is electric. (FREEDOM!)
Texas ranks 1st in carbon dioxide and other toxic emissions
Texas consistently leads America in percent living below the poverty level
Texas has the worst beaches in America, and maybe in the world.
Texas by far produces more hazardous waste than any other state.
Texas ranks first in percentage of uninsured kids.
Texans take ZERO responsibility for things when times are tough, yet claims credit when things are good or get fixed even though they did nothing to help fix it. And many times it's things they fought against.
Texas has a power grid that is worse than some 3rd world countries.
Texas has a surprising number of people who are very good friends of mine.
Texas leads America in putting the DUMB in Freedom.

And worst of all, Texas keeps talking about seceding, BUT THEY DON'T DO IT! And I can promise you if they do, nobody is going to try to talk them out of it.
 
Last edited:

captaincranky

Posts: 17,654   +6,442
And worst of all, Texas keeps talking about succeeding, BUT THEY DON'T DO IT! And I can promise you if they do, nobody is going to try to talk them out of it.
If they did secede, you would likely have hundreds of thousands of refugees demanding to be taken to Afghanistan.

BTW, great research.

And yes, I'm prone to flights of fancy and hyperboly. So, what?.

And also, you spelled "seceding" so badly, it's a "malapropism".
 

Austinturner

Posts: 314   +396
When you think of Texas, think of a desolate wasteland. You know, scorching, with plenty of tumbleweeds.

Something to keep in mind first. Everything I put here is easily researchable and although not all are year to year, they are always in the fight.
Let me know if you want more. There are plenty more.

Texas ranks 4th in child poverty levels.
Texas is the only state that has no laws prohibiting discrimination.
Texas ranks 49th in number of poor covered by Medicaid.
Texas ranks 48th in percent of population with employer-based healthcare
Texas goes out of their way to stop people from voting. (FREEDOM!)
Texas prohibits sales of an American car simply because it is electric. (FREEDOM!)
Texas ranks 1st in carbon dioxide and other toxic emissions
Texas consistently leads America in percent living below the poverty level
Texas has the worst beaches in America, and maybe in the world.
Texas by far produces more hazardous waste than any other state.
Texas ranks first in percentage of uninsured kids.
Texans take ZERO responsibility for things when times are tough, yet claims credit when things are good or get fixed even though they did nothing to help fix it. And many times it's things they fought against.
Texas has a power grid that is worse than some 3rd world countries.
Texas has a surprising number of people who are very good friends of mine.
Texas leads America in putting the DUMB in Freedom.

And worst of all, Texas keeps talking about succeeding, BUT THEY DON'T DO IT! And I can promise you if they do, nobody is going to try to talk them out of it.
Seems like you would have to really like the conservative policies to want to live there. We don’t have that kind of state independence and differences in Australia, we mostly choose a state based on jobs, the weather and where your family lives (either to be close to them or to get away from them!).