Posted on 10/07/2021 3:35:14 PM PDT by American Number 181269513
Tesla is moving its headquarters from Palo Alto, California, to Austin, Texas, CEO Elon Musk announced at the company’s shareholder meeting on Thursday.
The meeting took place at Tesla’s vehicle assembly plant under construction outside of Austin on a property that borders the Colorado River, near the city’s airport.
However, the company plans to increase production in its California plant regardless of the headquarters move.
“To be clear we will be continuing to expand our activities in California,” Musk said. “Our intention is to increase output from Fremont and Giga Nevada by 50%. If you go to our Fremont factory it’s jammed.”
But, he added, “It’s tough for people to afford houses, and people have to come in from far away....There’s a limit to how big you can scale in the Bay Area.”
Regarding the plant underway in Austin, he noted that it would take some time to reach full production even after it’s completed.
“In Tesla-land it takes longer to build the factory than to get to high volume production once the factory is built,” Musk said. For example, Tesla’s Shanghai plant was built in 11 months, but took a year to reach high volume production. He expects Tesla’s new plant near Austin will follow Shanghai’s example.
Musk’s growing dissatisfaction with California has been apparent for some time. In April 2020, on a Tesla earnings call, Musk lashed out at California government officials calling their temporary Covid-related health orders “fascist” in an expletive-laced rant.
Later, Musk personally relocated to the Austin area from Los Angeles, where he had lived for two decades.
Doing so enabled Musk, who is also CEO of aerospace company SpaceX, to reduce his personal tax burden and be closer to a SpaceX launch site in Boca Chica, Texas.
Tesla’s board granted Musk an executive compensation package that can earn him massive stock awards based on the automaker’s market cap increases and some other financial targets. If he sells options set to expire in 2021, he could generate proceeds of more than $20 billion this year, according to InsiderScore.
California levies some of the highest personal income taxes in the country on its wealthy residents, but Texas has no personal income tax.
Tesla is not the first company to its headquarters out of California to Texas. Oracle and Hewlett Packard are among the tech giants who decided to make that move last year, for example.
Texas has been actively recruiting companies via its Texas Economic Development Act offering tax breaks to put new facilities in the state. Austin, with a top tech university and cultural events like South by Southwest, is a draw for tech employers.
Making such a move is not particularly burdensome, explained business attorney Domenic Romano, managing partner of Romano Law in New York City. A Delaware business that has operated as a “foreign” corporation with headquarters in California, like Tesla has, could relocate its domicile by establishing a facility in a new state, hiring there. and relocating key employees.
They would not have to shut down operations in other states, although they typically do pare them back.
“From a legal perspective, there’s less of a regulatory burden in Texas,” Romano said. “It’s a more business- and employer -riendly state in many ways. You have to jump through far fewer hoops in Texas or Florida as an employer than you do in California in terms of reporting requirements and more.”
Texas Gov. Greg Abbott said the Tesla CEO supported his state’s “social policies” as well. However, Elon Musk declined to weigh in on Texas’ restrictive new abortion law after Abbott made that claim.
“In general, I believe government should rarely impose its will upon the people, and, when doing so, should aspire to maximize their cumulative happiness,” Musk wrote on Twitter at that time. “That said, I would prefer to stay out of politics,” said Musk.
Tesla has generally garnered a huge amount of support from the state of California since it was founded there in 2003. It has enjoyed grant funding, tax breaks, incentives and favorable policies from the likes of the California Air Resources Board, California Energy Commission and California Alternative Energy and Advanced Transportation Financing Authority, among others.
90% of tax revenue from Tesla just left California.
All their IP too...
After the shake-up, Texas is gonna be a GREAT Nation.
All the bragging about CA being the “13th largest economy in the world” or whatever just took a solid kick in the crotch.
More librats for a purpling state.
Gloat away, Texans, but at some point the influx of ex-Californians is going to hurt you. I know, I know: “the people leaving California are the conservatives!” And, yeah, that is certainly true of *some* of them, but it is not truse of all of the. Rest assured to that the ranks of Texas liberals are increasing. Good luck.
Texas was the right move but Austin?
I expect the FAA to really go after Musk/SpaceX now. Musk has basically given the finger to CA, and biden many times. The liberals are going to be pissed off.
“outside of Austin on a property that borders the Colorado River…” Really?
Austin is already proud of being weird, so Californicators should fit right in.
God luck Texas. You wanted all these California companies. Now you got em. Complete with a army of Woke voters.
New math and now new geography.
Ya, we have a Colorado River too.
Be better if he moved tha factories out of China to the USA.
Tesla’s Chinese factory is HUGE.
That jumped out at me as well. Somebody is geographically challenged.
I guess all those frothing pro-aborts didn’t scare Musk away.
No facts to back up my contention, but I suspect that Texas will be OK as long as they ensure that their voting process is not subject to massive fraud. Which is why the Dems in Texas are caterwauling non-stop about the requirement to present IDs when they vote.
Sure, California leans left, but I suspect the tilt wouldn't be that massive IF Democrat voter fraud wasn't institutionalized.
I live in California, but it deserves the trash talk it gets
these days. Despite it being severely harmed by Communist
ideology run amuck, it still cranks out a GDP of $3,183 T as
of 2019. It was $2.987 T in 2020. In 2019, it made up 14.6%
of the total GDP of the United States.
I went to 2019, because complete figures are not as easy to
come by for 2020.
The last year I found a standing rating for it, it was fifth
in the world in GDP. That includes nations. I believe it
still remains 5th today.
I have no idea what California could accomplish, if it just
had a good Governor and state Legislature that had a level
headed pro business approach in the state.
It’s leadership is trying to destroy it, just like
Washington is going full tilt against U. S. Citizens.
There are conflicting numbers out there for the GDP figure
this entity provided. I don’t know what to make of that.
It would seem the figures should be pretty static. The
state was credited with being 5th by each entity out there.
I didn’t hunt and peck for the best figures for the state.
This was the first source I ran into, and I bumped into
other figures as I tried to find decent numbers for 2020.
At any rate, here is where I pulled these figures from.
https://bulloakcapital.com/blog/if-california-were-a-country/
Really? I did not know that.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.