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Tesla to Move its Headquarter from California to Texas

Tesla to Move Headquarter from California to Texas Musk at Investors' Meeting

The American sustainable energy vehicle company, Tesla Inc., is now officially moving its headquarters. Since its inception in 2003, the company has been headquartered in Palo Alto, California, United States. On Thursday evening at the company’s shareholder’s meeting, Elon Musk declared the shift from California to Texas. In the previous years, the stockholders’ meetings took place in the Bay Area, but this time, it occurred at the Tesla Austin gigafactory.

During the meeting, Musk also added, “To be clear though, we will be continuing to expand our activities in California. This is not a matter of Tesla leaving California. Our intention is to actually increase output from Fremont and from a gig in Nevada by 50%.” So, he made it very clear of expanding the business in California as well. But the strategies to boost the production level remain undisclosed.

Texas has recently been experiencing a plethora of tech companies and commuting workers. However, moving headquarters to such a giant clean energy company is a major decision. But it wasn’t a surprise to the people because, after the pandemic lockdown, Musk proposed his idea of relocating Tesla’s headquarters out of California.

On May 9, 2020, Musk tweeted, “Frankly, this is the final straw. Tesla will now move its HQ and future programs to Texas/Nevada immediately. If we even retain Fremont manufacturing activity at all, it will be dependent on how Tesla is treated in the future. Tesla is the last carmaker left in CA.” He also filed a lawsuit against Alameda County for shutting off the company’s manufacturing unit in Fremont, California. He was unhappy to see the business restrictions and announcement of production as unessential.

Musk proposed different reasons for shifting other than the filed lawsuit and business restriction in the city during the lockdown. He mentioned, “It’s tough for people to afford houses and people have to come in from far away.” He also added, “There’s a limit to how big you can scale it in the Bay Area. In Austin, our factory is like five minutes from the airport, 15 minutes from Downtown.”

The recommendations of the Tesla Board got approved by the Stockholders of the company. But a few disapprovals were also presented during the meeting. The shareholders were not in favor of conducting elections every three years but wanted to run elections annually. They also wanted Tesla to present a more detailed report on efforts for polarization of the workforce with extensive division of race and gender. 

Eyebrows have been raised on the timing of the latter proposals because Tesla was ordered to pay $137 million to a former Black contract worker in a discrimination lawsuit two days before. Owen Diaz made allegations of discrimination and racial abuse during his working hours at the EV plant in Fremont. In addition, investors believe that the company’s 2020 DEI report lacks sufficient information for comparing and drawing conclusions on the majority and minority of the workforce. The report then revealed that the company occupies 83% males and 59% whites.

Elon Musk was excited to announce the relocation at the 2021 Annual Meeting of Stockholders, live-streamed. In the meeting, he said the production at the new headquarters may initiate at the end of 2022 and take a year for “volume production.” The delay, according to him, is because of a shortage of multiple supply chains and less number of ongoing semiconductors.  

At the same time, Austin is full-hearted, welcoming the company. Steve Adler, the city’s mayor, posted, “We welcome Tesla home! It’s a tech company that creates the clean manufacturing, middle-skill jobs Austin needs. We’re one of the safest big cities, with a strong innovative, entrepreneurial, environmentally focused culture and Tesla fits right in. Tesla is now an even larger part of a community that works together to meet our challenges and to enjoy a magical city.”

Image Source: Engadget

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