After making a big show of moving its headquarters to Texas, Tesla recently announced plans to open a new headquarters in California.
Key Details
- Musk was reportedly giddy to announce on February 22 that Tesla’s new engineering headquarters would be based again in Palo Alto—giving California Governor Gavin Newsom a tour of the new facilities. Hewlett-Packard previously owned the space.
- The new facility will be what Musk calls a “dual-headquartered company,” with its main headquarters in Texas and its research facility in California.
- Musk did not address the reason for the move, although The Daily Mail alleges that Tesla may have received special tax breaks. CNBC notes that the move also coincides with recent legal trouble in California.
Why It’s Important
The move back is a curious one, given Musk’s public pronouncements against the business climate in California. Musk criticized the state for its overbearing tax burdens and regulations, despite Governor Newsom repeatedly praising Musk and Tesla. Musk rarely criticized Newsom, with whom he shares a good working relationship. The company remains is a prominent job creator for the state, with more than 47,000 employees—roughly a third of Tesla’s workforce.
Elon Musk made a show of moving his flagship company Tesla from Palo Alto, California, to Austin, Texas, in late 2021, planning to move headquarters to his planned Tesla Gigafactory and selling his $30 million home. As he notes, Texas offered better real-estate opportunities, more opportunities for expansion, cheaper labor, and tax incentives, calling Austin the “biggest boomtown that America has seen in 50 years.”
The new headquarters may be an attempt to earn Tesla back into the good graces of the state or take advantage of recent Silicon Valley tech layoffs to hire new talent, as the headquarters will focus on research development and artificial intelligence.
Backing Up A Bit
As CNBC notes, the move coincides with recent legal troubles Tesla is facing from the California Department of Motor Vehicles, having been accused of engaging in illicit advertising practices for its self-driving technologies. The company’s factories have also faced repeated civil-rights litigation over claims of racial harassment at its California facilities.
As we previously reported, Tesla is also facing pressure from investors following a poor earnings report and allegations that his work with Twitter distracts his work, resulting in devalued stock and unfulfilled growth expectations.
Notable Quotes
“This was HP’s original headquarters, and so I think it’s a poetic transition from the founders of Silicon Valley to Tesla. We’re very excited to make this our global engineering headquarters. And we’re a California-Texas company,” says Musk.
“Tesla is a California company. It started here first. We say about our state, the future happens here first. We are America’s coming attraction,” says Governor Newsom.