Tesla’s Relocation to Austin Speaks to Production Demands

Tesla Inc. plans to move its headquarters from Palo Alto to Austin, where it is building Gigafactory Texas, a car and battery manufacturing plant. Elon Musk, chief executive officer, made the announcement yesterday.

“I’m excited to announce that we’re moving our headquarters to Austin, Texas,” Musk told the company’s annual meeting held in the Texas factory. “This is not a matter of, sort of, Tesla leaving California,” saying Tesla plans to increase output from its main California factory and Nevada factory by 50 percent.

However, the Fremont, CA factory is “jammed” and housing affordability is a factor, he said. Musk moved to Texas from California in December to focus on the electric carmaker’s new plant and his SpaceX rocket company, which has a launch site in the southern tip of Texas.

Tesla joins Oracle, HP and Toyota Motor Corp. in relocating U.S. headquarters to Texas from California. While Silicon Valley is known as the birthplace of technology and innovation, Texas is known for less stringent regulation, but housing costs have been rising there as of late, according to Business Insider.