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Cars and TransportationUnited States of America

Elon Musk says Tesla is moving to Texas

October 8, 2021

The electric carmaker will leave its headquarters in Silicon Valley for Austin. Musk is one of several tech bosses to have personally left California for states with less regulation.

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Tesla vehicles are being assembled by robots at Tesla Motors Inc factory in Fremont, California
Despite the move, Tesla is still apparently planning to increase production at its plant in Fremont, CaliforniaImage: Reuters/J. White

Tesla will move its headquarters from Palo Alto, California to Texas, the company's chief executive Elon Musk told an annual shareholders meeting on Thursday.

"I'm excited to announce that we're moving our headquarters to Austin, Texas," Musk told those in attendance, who welcomed the news with cheering and applause.

What are the company's plans?

Musk stressed that this was not Tesla leaving California and that the company would continue to expand the main plant in Fremont, California.

He said the intention was to increase production at the plant by 50%, but noted that it was reaching its limits in terms of handling capacity.

Musk also pointed out that housing costs in the Bay Area were prohibitively expensive for potential homeowners, which meant lengthy commutes for employees.

He said the location in Austin was five minutes from the airport and 15 minutes from the downtown area

Tesla sales were also showing strong growth margins.

Tesla's CEO gave no timeframe for move. 

Company's diversity status under scrutiny

While the electric carmaker is on solid ground when it comes to sales and expansion, the company's standing when it comes to diversity and inclusion has raised some questions.

A proposal by a stockholder for the company to disclose more about its diversity efforts was given the green light, according to preliminary results from a shareholder voting session.

Speaking on behalf of the proposal Calvert Research and Management, vice president Kimberly Stokes said: "As shareholders we are concerned that Tesla's lack of focus on equity, diversity and inclusion could hinder the company's ability to innovate in the future."

This follows a court ruling Monday, which ordered the company to pay $130 million (€112.5 million) to a Black former employee who had suffered racist abuse at the hands of colleagues. The matter has brought into focus the company's diversity status.

According to the company's diversity, equity and inclusion impact report from 2020, Black people made up 10% of the total workforce, while only 4% could be found in leadership positions at American operations.

kb/rt (dpa, AFP)