Tesla moving its headquarters to Texas from its longtime California base in Silicon Valley

For more than a decade, Tesla had its Silicon Valley headquarters in Palo Alto, California. Elon Musk announced on Thursday that Tesla is moving its headquarters to Austin, Texas.

"I'm excited to announce we're moving our headquarters to Austin, Texas," Musk said during the electric car company's annual shareholders meeting, garnering applause from the audience.

"Just to be clear though, we will be continuing to expand our activities in California," the Telsa CEO emphasized. "So this is not a matter of, sort of, Tesla leaving California."

Musk noted that the exorbitant real estate prices in California were a consideration for the relocation.

"It's tough for people to afford houses and a lot of people have to come in from far away," Musk said. "We're taking it as far as possible but there's a limit to how big you can scale it in the Bay Area."

The median home price in Palo Alto is $3.3 million versus $588,000 in Austin, according to Realtor.com.

Dan Ives – an analyst with Wedbush Securities – told the Austin American-Statesman, "This is a major strategic move for Tesla that makes a ton of sense. The tea leaves were there for Tesla to make this move and it's a huge feather in the cap for Austin."

Tesla has nearly completed building a massive $1.1 billion "Gigafactory" in east Austin and has already posted job listings for the plant that will manufacture the electric car company's new Cybertruck model and the Model Y small SUV. The factory is five minutes from the airport and 15 minutes from Austin's downtown.

Elon Musk has been an outspoken opponent against California's stringent COVID-19 health orders.

During a Tesla earnings call in April 2020, Musk declared lockdown orders to be "fascist" and demanded California politicians "give people back their God-damn freedom."

"I think the people are going to be very angry about this and are very angry. It's like somebody should be, if somebody wants to stay in the house that's great, they should be allowed to stay in the house and they should not be compelled to leave," the SpaceX founder said. "But to say that they cannot leave their house, and they will be arrested if they do, this is fascist. This is not democratic. This is not freedom. Give people back their God-damn freedom."

Musk first floated the idea of moving the electric vehicle company out of California in May 2020. After coronavirus orders temporarily shut down Tesla's factory in Fremont, Musk declared that local leaders were "acting contrary" to "our Constitutional freedoms & just plain common sense!"

"Tesla is filing a lawsuit against Alameda County immediately. The unelected & ignorant 'Interim Health Officer' of Alameda is acting contrary to the Governor, the President, our Constitutional freedoms & just plain common sense!" Musk wrote on Twitter. "Frankly, this is the final straw. 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."

At the time, Assemblywoman Lorena Gonzalez – who represents San Diego – responded to Tesla's head by lashing out, "F*** Elon Musk."

Musk personally moved to Texas in December 2020.

"If a team has been winning for too long, they do tend to get a little complacent, a little entitled and then they don't win the championship anymore," Musk said during the Wall Street Journal's annual CEO Council summit. "California has been winning for a long time. And I think they're taking that for granted a little bit."

Musk's SpaceX aerospace company established a "Starbase" launch site in South Texas this year.

Tesla becomes the latest big-name company to ditch California. Oracle, Palantir, and Hewlett-Packard Enterprise relocated their headquarters out of California in 2020.