Why did Elon Musk move Tesla from California to Texas?

Elon Musk

Why did Elon Musk move Tesla from California to Texas?

Tesla says it will move its headquarters from Palo Alto, California, to Austin, Texas, although the electric car maker will continue to expand its manufacturing capacity in the Golden State.

CEO Elon Musk did not provide a timetable for the move late Thursday when he addressed the company's shareholders at Tesla's annual meeting.

Musk noted that the cost of housing in the Gulf region has made it difficult for any employee to become a homeowner. So he decided to move its headquarters from Silicon Valley to Austin.

"We are taking it as far as possible, but there is a limit to how broad it can be in the Bay Area," he said. "To be clear, we will continue to expand our activities in California. This is not a question of leaving California."

Musk stressed that he plans to expand the company's plant in Fremont, California, where Tesla's Model S and Model X cars are made, with the hope of increasing production by 50%.

The ad drew cheers and applause from a small audience at Tesla's manufacturing plant in Austin,

Musk has promoted the company's record auto-delivery this year, noting that global supply chain disruptions that have led to computer chip shortages remain a challenge.

"It seems we have a good chance of sustaining that in the future," he said. "If we get the chips, we can do that."

As a result, Musk said that Tesla's Cybertruck angular truck isn't likely to start production before the end of 2022, estimating that the company will reach "volume" production on the car in 2023.

Tesla said last week sold 241,300 electric vehicles in the third quarter even as it grappled with computer chip shortages that have hit the entire auto industry.

According to data provider FactSet, the company's July-September sales beat Wall Street estimates of 227,000 sales worldwide.

Third-quarter sales are up 72% from 140,000 deliveries Tesla made for the same period last year. This year, Tesla sold 627,300 vehicles. That puts it on track for a healthy win over last year's total of 499,550.