At a shareholder meeting on Thursday, Oct.7, Tesla CEO Elon Musk announced Tesla’s decision to relocate its headquarters from Palo Alto, California, to Austin, Texas. This announcement comes after previous statements tweeted by Musk in 2020 foreshadowing a move. 

“Frankly, this is the last straw,” Musk said. “Tesla will now move its HQ and future programs to Texas/Nevada immediately.”

Those original statements were brought on by COVID-19 lockdown restrictions California imposed on manufacturing activity at its factory in Fremont.

The electric car company says it doesn’t have plans to stop production at its California plants, but issues created by factors such as housing costs and commutes in Palo Alto are relieved by a move to Austin. Musk cited that the new vehicle assembly plant is only a few minutes from downtown and close to the airport. The shareholder meeting was held from this site, which is currently still under construction.

“To be clear we will be continuing to expand our activities in California,” Musk said. “It’s tough for people to afford houses, and people have to come in from far away….There’s a limit to how big you can scale in the Bay Area.”

Jointly with Musk’s frustration with California state corporate regulations, Texas government laws (or lack thereof) benefit the company and himself. In particular, Texas has no personal income taxes whereas California has some of the highest in the country. Texas Governor Greg Abbott welcomed Tesla to Texas on Twitter.

“The Lone Star State is the land of opportunity and innovation,” Governor Abbott said. “Welcome.”

Tesla is not the only firm that is moving its headquarters to Texas. Tech giants Oracle and Hewlett Packard are amongst those leaving Silicon Valley to join the high-tech companies in the Austin metropolitan area– the so-called “Silicon Hills”. A date for Tesla’s move has not yet been announced, and how its presence will affect Austin and its residents is yet to be seen.