Tesla Inc (NASDAQ: TSLA) is moving its headquarters from California to Texas, CEO Elon Musk disclosed in the annual investor meeting last night.
Tesla is not completely abandoning California
The leading U.S. electric car manufacturer is already building a Giga factory in its new home town. The first Model Ys produced at the Austin plant are likely to hit the road later this year.
According to Musk, Tesla is not “completely abandoning” California, and its existing plant in Fremont will expand production in the coming years.
Shares of the $776 billion company are down more than 1.5% on Friday morning. The announcement comes only days after Tesla said it delivered more-than-expected vehicles in the third quarter.
Gene Munster’s remarks on Tesla’s move to Texas
Loup Ventures’ Gene Munster attributes Tesla’s move to lenient regulations, lower tax rates, and cheaper land in Texas. On CNBC’s “Squawk Box”, he said more affordable land doesn’t only help cut manufacturing costs, but it also attracts skilled workforce.
In Palo Alto, a 2,000 sq ft house costs $4 million. On average, an AI engineer makes up to $250,000 a year. So, a $4 million house is a really difficult task. In Austin, it’s comparatively cheaper.
In the shareholder meeting, Musk agreed that the company was facing significant cost pressures due to the ongoing supply chain constraints but said the long-term goal was to make cars “as affordable as possible”. Musk is “cautiously optimistic” that the global chip shortage will resolve “soon”.
Also on Thursday, billionaire investor Cathie Wood said she was moving her investment management firm from New York to Florida.
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