Last year, Elon Musk threatened to move Tesla’s headquarters from California to Texas in the wake of the authorities’ response to the COVID 19 pandemic, which was deemed “excessive” by the always controversial mogul. Musk, who at one time called the lockdown and restrictions on the industry “fascist,” even threatened to close the Fremont factory.
“Even how we keep going at Fremont will depend on how Tesla is treated in the future. Tesla is the last remaining automaker in California. ” The brand’s CEO even encouraged the company’s other investors to sue Alameda County after authorities prevented the manufacturer from resuming production in May 2020.
The mayor of Palo Alto came to express his concern about this situation through the social network Twitter: «This is the mayor of Palo Alto. I’d be really sad and disappointed if Tesla left Palo Alto, and I’m ready to pitch in. I appreciate having a leading company based here, employing people, paying taxes, and helping to solve the climate crisis “.
Despite everything, Musk has finally made good on his threat: at the company’s last shareholders meeting, the executive announced that Tesla’s headquarters will move to Texas, where he is currently building a huge industrial complex (Giga Austin). However, the executive has tried to calm things down by stating that Tesla will continue to expand its presence in California.
Tesla may be interested in low Texas taxation
Among other things, the company plans to increase vehicle production at Fremont by 50%. The reasons given by Musk are the difficulties to continue growing in the Bay Area, where the price of houses is very high for workers. The businessman is confident that Tesla will be more competitive in Austin.
However, there have been many voices that have pointed out that the true motivation for this movement would be the low taxation of the Texas state, because in addition to not having personal income taxes (California, on the other hand, has some of the rates of this highest rates in the United States), provides significant exemptions for businesses to build industrial facilities under the Texas Economic Development Act. Additionally, Texas labor regulations are laxer than California’s.
Some have not hesitated to call Musk’s strategy a stab in the back of California, which has not only subsidized Tesla in different ways over the years, helping to keep it afloat during times when it racked up multi-million dollar losses. But without its strict environmental regulations, this state would not have become the huge electric car market that it is today.