was founded in California, and the state has been home to the electric car company for over 18 years. During this time, Tesla became the world’s most valuable automaker and Californian’s have embraced the brand, accounting for almost half of all Model 3 sales.

Despite this, founder and CEO Elon Musk has little time for sentiment. At a recent shareholder meeting he announced the corporation will be moving its HQ to Austin, Texas.

This follows a fractious year, in which Musk and

California

state lawmakers have sparred over pandemic regulations.

Since the start of the COVID-19 pandemic, Austin has seen a dramatic increase in population.

Why is Tesla moving to Texas?

In his presentation to shareholders, Musk cited California’s lack of affordable housing, in addition to long and costly commutes, as key factors in Tesla’s decision to move away from the "The Golden State."

While there is undoubtedly some truth to this,

Bloomberg

notes that Texas is also attractive to Tesla because of its low tax rates and lax business regulations.

Tesla hopes that by moving to Texas it will be able to expand its appeal beyond the coastal elites, and make inroads into Middle America where EV skepticism remains high.

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The move is a long time coming

Tesla’s decision to leave California follows a tense year and a half between Musk and local officials, with disagreements over pandemic regulations often spilling into public view.

The enigmatic billionaire reacted furiously to Fremont County’s decision to shutter his factory in May 2020, calling the closure "fascist" on a call with Tesla directors.

Musk even went so far as to defy local health officials, and restart production before he was permitted to do so. At the time, he threatened to sue the state of California, and move future Tesla programs to Texas.

As explained by Bloomberg, Musk has already moved his private foundation to Austin, and several members of Tesla’s leadership team have purchased homes in the area.

Not the end for Tesla in California

MORE: California Driver Fails Road Test Because of Tesla's Automated Features

Despite the acrimony between Musk and some high-profile Californian officials, the decision to move Tesla’s HQ is not the end of its operations in the state.

While announcing the move to Austin, Musk emphasized that California’s Tesla factories would remain open, and said he wanted to increase Fremont’s output by as much as 50%.

Tesla has also broken ground on a new "Megafactory" in Lathrop, CA, where it will make energy-storage products for utility companies.

As quoted by Bloomberg, Musk stated, "(Tesla is) continuing to expand in California, significantly, but even more so in Texas."

Tesla

Written By

Alex Healey · Expert Insurance Writer

"Alex Healey is an insurance writer specializing in car insurance and personal finance. Alex’s mission is to create informative, just-in-time content for car owners and buyers. Alex has written articles for Jerry on topics ranging from hybrid vehicle rankings to used car costs. Before joining Jerry, Alex worked as a digital content specialist and editor for brands including InsuranceHotline.com, Rates.ca, and Booking.com. When not writing for Jerry, Alex continues to build his freelance digital content portfolio in the insurance and automotive industries. "

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