Tesla Headquarters Moving to Austin: Elon Musk Announces Shift

Tesla Relocates Headquarters to Austin, Texas

Elon Musk, CEO of Tesla, announced the company’s headquarters will be transitioned from Palo Alto, California, to Austin, Texas. This move follows a recent influx of technology firms and remote professionals establishing themselves within the city.

The announcement was made during the 2021 Tesla, Inc. Annual Meeting of Stockholders. Notably, this year’s meeting was held at the Tesla Austin gigafactory, marking a departure from previous years when the event took place in the Bay Area.

Expansion Plans and California Operations

Despite the headquarters relocation, Musk affirmed Tesla’s continued commitment to expanding operations within California. Specifically, the company intends to increase production capacity at its Fremont gigafactory by 50%.

Currently, the Fremont facility has the capability to manufacture approximately 500,000 Model 3 and Model Y vehicles annually, alongside an additional 100,000 Model S and Model X vehicles per year. Details regarding how this production increase will be achieved were not disclosed.

Past Disputes with Alameda County

Last May, Tesla initiated legal action against Alameda County following the temporary closure of its Fremont manufacturing plant. This closure was implemented to mitigate the spread of COVID-19 and restrict operations of non-essential businesses.

Musk had threatened to relocate his business outside of California. The lawsuit was ultimately dropped within a few weeks, but Musk expressed strong dissatisfaction, stating that the situation represented a breaking point for Tesla’s presence in the state.

Factors Influencing the Relocation

Musk highlighted the challenges of affordability in the Bay Area, noting the long commutes faced by many employees. “It’s tough for people to afford houses and people have to come in from far away,” he stated.

He contrasted this with the accessibility of the Austin location, which is situated just five minutes from the airport and fifteen minutes from Downtown.

Vision for the Austin Facility

Musk articulated Tesla’s vision for the Austin location as “an ecological paradise,” situated near the Colorado River.

Updates on Vehicle Production

During the meeting, updates were provided regarding the production timelines for several key Tesla vehicles. Production of the Cybertruck is now anticipated to begin in late 2022, with “volume production” expected by 2023.

The Tesla Semi and Roadster are slated to follow, with production commencing by the end of 2023.

Supply Chain Challenges

Musk attributed delays in production schedules to ongoing supply chain disruptions, particularly the global semiconductor shortage.

He specifically noted the substantial cell and chip requirements for the Tesla Semi, emphasizing the impact of these shortages.

Both the Semi, unveiled in 2017, and the Cybertruck, unveiled in 2019, have experienced repeated delays primarily due to these supply chain constraints.

Shareholder Votes and Board Elections

Prior to the production updates, shareholders participated in voting on various proposals. These included the re-election of Musk’s brother, Kimbal Musk, and James Murdoch to the board of directors, despite recommendations against their re-election by Institutional Shareholder Services.

Stockholders largely approved the recommendations put forth by the Tesla board, including the ratification of PricewaterhouseCoopers as the company’s independent registered public accounting firm.

However, investors did deviate from board recommendations on three specific proposals.

Changes to Board Election Frequency and Diversity Reporting

Shareholders voted to require Tesla board members to face re-election annually, rather than every three years.

Additionally, they mandated that Tesla publish more detailed information regarding its efforts to diversify its workforce.

This decision followed a recent court order requiring Tesla to pay $137 million in damages to a former Black contract worker, Owen Diaz, who alleged discrimination and racial abuse at the Fremont EV plant.

Emphasis on Diversity and Inclusion

Kimberly Stokes, VP and corporate engagement strategist at Calvert Research and Management, stated: “Research shows that diverse and inclusive teams support more innovation.”

Stokes further noted that Tesla’s 2020 DEI report lacked sufficient data for meaningful comparison and revealed a leadership team that is 83% male and 59% white, despite a majority-minority workforce.

Calvert’s proposal mandates annual diversity and inclusion reports from Tesla, including a comprehensive breakdown of race and gender representation.

This is a developing story. Check back in for updates.