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Elon Musk: Tesla Moving Company HQ To Texas, Will Continue Expanding Fremont Factory

AUSTIN, Texas (CBS SF) – Electric automaker Tesla announced that its headquarters will officially move from Palo Alto to Texas, but will continue to have a major presence in the Bay Area, CEO Elon Musk said.

"I am excited to announce that we are moving our headquarters to Austin, Texas," Musk told attendees at the company's annual shareholders meeting on Thursday. The meeting was held at the company's Gigafactory in Austin, which is still under construction.

Musk insisted that moving the company headquarters does not mean the carmaker is departing the Golden State. "Just to be clear though, we will be continuing to expand our activities in California. This is not a matter of Tesla leaving California," he said.

The CEO said that the company will continue to expand output at its massive factory in Fremont, but acknowledged there are limits to expanding car production at its facility in the Silicon Valley.

"We are just hitting the sides of the bowl. If you go to our Fremont factory, it is jammed," he said.

Musk, who officially moved to Texas last year, also acknowledged the area's high cost of living.

"It's tough for people to afford houses, and a lot of people have to come in from far away. And so, we're taking it as far as possible, but there's a limit to how big you can scale in the Bay Area," he said.

Musk has expressed frustrations with doing business in California in the past. During the early days of the COVID-19 pandemic, he threatened to move the company elsewhere and pursued legal action against officials over health orders that shut down the Fremont factory.

The Bay Area Council, which represents hundreds of large employers, expressed concern over the move and the region's ongoing housing woes.

"Mr. Musk's announcement highlights yet again the urgency for California to address our housing affordability crisis and the many other challenges that make it so difficult for companies to grow here," said CEO Jim Wunderman.

At the same time, the group said it was glad to hear the Fremont plant would stay open. "We're glad to see that Tesla plans to continue building cars in the Bay Area, which in recent years has increasingly become a magnet for global automotive tech innovation and investment," Wunderman said.

Tesla joins other Silicon Valley companies that have recently moved their headquarters to Texas. Hewlett Packard Enterprise, once a part of the pioneering Silicon Valley firm, announced last December that it would move its headquarters from San Jose to a suburb of Houston in 2022.

Oracle, which was founded in the Bay Area in 1977, also announced that the company would move its headquarters from the Redwood Shores area of Redwood City to Austin. CEO Larry Ellison said he was not moving to the Lone Star State as part of the move, instead opting to move to his island in Hawaii.

Michael Bernick, an employment attorney, said "This isn't a first time but I would say any time a large business moves it should be a moment for reconsideration of what are we doing. Can we do better to keep these companies in California?"

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