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Musk Says Tesla's Moving its Headquarters from California to Texas

Despite threats last year of fleeing the state over COVID-19 restrictions, Musk reassures shareholders, 'This is not a matter of Tesla leaving California.'

Tesla  (TSLA) - Get Tesla Inc Report CEO Elon Musk said at the annual shareholder meeting Thursday that the company will move its headquarters from Palo Alto, Calif. to Austin, Texas.

Musk, who already has begun living in Texas, has talked for many months about such a move. Tesla has a factory in Austin, and operations for his SpaceX firm are based there.

As far back as May of 2020, Musk said the "final straw" had been broken, that he was suing over California and Alameda County's COVID-19 shutdown restrictions and that the electric vehicle maker would pack up and drive Tesla operations out of California.

"Tesla will now move its HQ and future programs to Texas/Nevada immediately. If we even retain Fremont manufacturing activity at all, it will be (dependent) on how Tesla is treated in the future. Tesla is the last carmaker left in CA," Musk said in a series of Twitter posts at the time.

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At Thursday's shareholder meeting, Musk said, “I’m excited to announce we are moving our headquarters to Austin, Texas.”

“Just to be clear, though, we will be continuing to expand our activities in California. This is not a matter of Tesla leaving California,” he said.

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But a move of the company’s corporate headquarters signals a major shift for Tesla, which traces its roots to Silicon Valley and has drawn from a lush environment of incentives both for electric vehicle buyers and green energy initiatives to propel its growth. The company’s proximity to Stanford University has provided a rich landscape of engineers to choose from — and its Silicon Valley location placed it within the radius of numerous technology companies, including Google, Apple and Facebook.

Tesla stock added 1.39% on Thursday to close at $793.61. Shares were down about 0.44% in after-hours trade.