Stock

: Tesla is transferring its headquarters to Austin, Texas, Musk tells buyers

Tesla Inc. is officially moving its headquarters to the Austin, Texas area, CEO Elon Musk told investors Thursday.

Tesla
TSLA,
+1.39%
in California will continue to expand "significantly, but even more here in Texas," said Musk.

"It's hard for people to afford houses (in the San Francisco Bay Area) and a lot of people have to come from afar," said Musk. "There are limits to how big you can scale in the Bay Area."

Musk spoke at Tesla's annual meeting held at the Texas factory under construction, which was webcast. Musk said in December that he moved to Texas and split his time between that state and California.

Back then, Musk compared the western state to a team that has been winning over time and becoming complacent, saying Silicon Valley has "too much influence in the world."

Musk and the San Francisco Bay Area health authorities were at a stalemate in May 2020 when the Fremont, California factory was closed under on-site protection orders to contain the spread of COVID-19.

Musk reopened the plant despite local orders, sparking Twitter and litigation that even led President Donald Trump to intervene.

When asked if Tesla would build more factories soon, Musk said the company could begin "exploring locations for future locations" soon and possibly make a decision in 2023.

Texas is one of several US states where Tesla cannot sell its vehicles directly to people due to franchise laws. The stores in such states are essentially showrooms where customers buy vehicles online.

Opening the meeting, with shareholders voting largely on Tesla's recommendation, Musk said Tesla is having a "fantastic year" but is not immune to the ongoing chip and auto parts shortages that have plagued the auto industry and more.

Read: The Californian port crisis and confused supply chains are fueling a container boom. Will it burst?

Even so, Tesla is confident it will be able to increase sales and production "for quite a while" by more than 50% per year, Musk said. "Basically we can do it if we get the chips," he said.

Read: Tesla's "impressive" third-quarter sales drive the stock, and Wall Street analysts are raising estimates

The company continues to focus on cutting costs, he said. The company has had to raise vehicle prices due to soaring spending amid the scarcity, but hopes to bring prices down soon to make them more affordable, Musk said.

“The sheer sum of money we spend flying parts around the world” to get around the scarcity “really isn't great,” he said.

It was a "constant struggle" to get enough chips and other auto parts, Musk said. He reiterated his expectations that production of the Tesla Cybertruck, an all-electric pickup truck, will begin next year and go into series production by 2023.

Barrons: How Tesla avoids the chip problems that hit GM and other automakers

Tesla's utility vehicle, the Semi, and the redesigned Roadster, a luxury sports car, are expected in 2023, he said. Tesla and others are likely to have overcome supply chain shortages by 2023, Musk said.

One of the Tesla-backed proposals to cut directors' terms in office didn't seem to get the majority it needed to pass. Tesla wanted directors to serve staggered two-year terms.

Tesla stock was down 0.3% on its last post-trading review after closing its regular trading day up 1.4%.

Tesla stock is up 12% so far this year, compared to gains of around 17% for the S&P 500 index.
SPX,
+ 0.83%

Related Articles