Elon Musk, the CEO of Tesla, stated Thursday that the company's headquarters would be relocated from Palo Alto, California, to Texas.

Musk remarked during a shareholders meeting, "I'm excited to announce we're moving our headquarters to Austin, Texas," to applause.

"Just to be clear," Musk continued, "we will continue to expand our activities in California." "So this isn't a case of Tesla leaving California in some way."

According to the eccentric billionaire, the corporation is still trying to raise output at its Fremont, California factory and a Nevada unit by 50%. However, he claims that expansion chances in California are limited and that the high cost of living is a barrier.

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

According to him, the Austin factory will be five minutes from the airport and 15 minutes from downtown.

Musk, who is also the CEO of SpaceX, recently relocated from California to Texas. His news of the HQ relocation comes a year after he threatened to relocate Tesla to Texas or Nevada over COVID-19 limitations with state health officials.

When the coronavirus closure restrictions were still in effect last year, the firm was advised it couldn't reopen its production.

Musk stated on Twitter at the time, "Frankly, this is the final straw." "Tesla will immediately relocate its headquarters and future programs to Texas/Nevada. It will depend on how Tesla is treated in the future if Fremont manufacturing activity is maintained at all."

He then violated the company's lockdown instructions and ordered production to resume in California until regulators agreed to reopen the plants with safety precautions in place.