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Tesla will be relocating its headquarters from Palo Alto, California to Austin, Texas, although the electric automaker will continue to expand its manufacturing capabilities in the Golden State, CEO Elon Musk said Thursday.
Musk, who said he would be moving to Texas from California last year, didn’t provide a schedule for the move when he spoke to shareholders at Tesla’s annual meeting.
In the early days of the coronavirus pandemic, Musk came into conflict with San Francisco Bay Area health officials to enforce on-site housing orders. At the time, he threatened to relocate Tesla’s operations to Texas or Nevada.
However, on Thursday, Musk cited the cost of housing in the Bay Area, which has made it difficult for many people to become homeowners, which translates into long drives.
“We’re taking it as far as we can, but there’s a limit to how big you can scale it in the Bay Area,” he said on Thursday. “But to be clear: We will continue to expand our activities in California. It’s not about leaving California. “
Musk emphasized that he plans to expand the company’s Fremont, Calif. Factory, which will build Tesla’s S, X, Y and 3 models, in hopes of increasing production by 50%.
The announcement sparked cheers and applause from the small audience at Tesla’s Austin manufacturing facility, where Musk made his comments, which were broadcast live on the web.
While Tesla’s announcement to expand manufacturing in Fremont applauded, Bay Area corporate leaders lamented the headquarters move as the latest sign of the region’s ongoing problems.
“Mr. Musk’s announcement once again underscores the urgency for California to address our affordability crisis and the many other challenges that make it difficult for companies to grow here,” said Jim Wunderman, president and CEO of Bay Area Council.
Last year, technology giant Oracle Corp. decided to move its headquarters from Silicon Valley to Austin as the move would give its employees more flexibility in how they work and how they work. One of Silicon Valley’s founding companies, Hewlett Packard Enterprise, has also announced plans to move to the Houston area.
At Thursday’s meeting, Musk also promoted the company’s record deliveries of vehicles this year, while also noting that global supply chain disruptions that have resulted in shortages of computer chips continue to be a challenge.
“It looks like we have a good chance of doing this in the future,” he said. “Basically, if we get the chips, we can do it.”
As a result, Tesla’s angular cybertruck pickup is unlikely to begin production until the end of 2022, Musk said, estimating the company would hit “volume” production of the vehicle in 2023.
“We should overcome our worst supply chain bottlenecks in ’23,” he said. “I am optimistic that will be the case.”
Tesla said last week that it shipped 241,300 electric vehicles in the third quarter, despite struggling with the computer chip shortage that hit the entire auto industry.
The company’s July through September sales surpassed Wall Street’s estimates of 227,000 sales worldwide, according to data provider FactSet.
Third-quarter revenue rose 72% from the 140,000 deliveries Tesla made in the same period last year.
So far this year, Tesla has sold around 627,300 vehicles. It is on the right track to surpass last year’s total of 499,550.
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https://apnews.com/article/technology-business-palo-alto-elon-musk-austin-7a9b375a5b69c25564c9ae4dc4fba64e
