Tesla has already built a factory in Texas, and it now appears the company is set to move more of its operations away from California into the southern state. Texas and other locations in the South are appealing to auto manufacturers because southern states tend to shy away from unions. No unionized labor means less costs for building vehicles, and southern states have become a safe haven for corporations with tax breaks and incentives.
Tesla CEO Elon Musk announced Thursday that the automaker intended to move its headquarters from Palo Alto, California, to Austin, Texas. Tesla is also building a large factory and a battery manufacturing complex in Texas as well. Tesla certainly isn’t the first high-tech company to ditch California for Texas.
Toyota Motors is moving its US headquarters to Texas, as is Hewlett-Packard Enterprise. Southern states are appealing for large companies due to an extensive workforce and lower cost of living. While Tesla may be moving its headquarters to Austin, Musk was clear that Tesla isn’t leaving California altogether.
Musk says that Tesla plans to increase output at its California factory and its Nevada factory by 50 percent. Like many other automakers, Tesla is currently struggling to build as many vehicles as it wants due to the chip shortage. Musk has also left California for the Lone Star State, noting that Fremont, California, where its factories are located has a high cost of living, making it difficult for workers to afford homes.
Musk has threatened to leave California in the past. Notably, during the height of the COVID pandemic, Musk threatened to leave California if the government didn’t allow him to open his factory and get his employees back to work.