It turned out that Tesla was not only building a factory in Austin, Texas – but also moving its headquarters to the city from California. Elon Musk announced the move at the company’s last annual shareholders’ meeting, where he also explained that Tesla still plans to expand production at its California plant by 50 percent. He explained, however, that there is a “size constraint in the Gulf area” because house prices are high, meaning long commuting trips for workers who have to live elsewhere.
The move is not entirely surprising: Musk threatened to relocate Tesla’s headquarters from California after coronavirus bans forced the company to suspend production in the state. He even called the locking measures “fascist” during the earnings call in 2020, and then personally moved from LA to Austin a few months later. However, it is worth noting that Tesla is now in a country where it cannot sell its cars directly to customers, which was its approach from the beginning, due to the sales law.
As CNBC notes, moving Musk to Texas means he would pay less taxes. The state has no personal income tax, while California has some of the highest income tax rates in the country. Furthermore, the state offered companies tax breaks for building facilities in the state under the Texas Economic Development Act.
During the meeting, shareholders also voted on proposals to improve corporate governance. The New York Times they said they agreed on most of the proposals other than the money the company opposed, one of which would require the company to publish reports on its efforts to diversify its workplace. Tesla said in a report last year (PDF) that his leadership in the U.S. is still mostly white and male, while his workforce is 79 percent male and 34 percent white. Just a few days ago, the company was ordered to pay $ 137 million in compensation to a former Black worker. The prosecutor accused the car manufacturer of turning a blind eye to discrimination and racial abuse while working at her factory in Fremont, California.
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