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Despite a slight decline, some analysts believe that new peaks for Tesla stock price are on the horizon. The company may soon move the headquarters out of California, which will save millions of dollars for Elon Musk in taxes.
Tesla Inc (NASDAQ: TSLA) stock slightly declined yesterday, closing 0.99% down at $811.29 per share. After hours, it was further 0.23% down, at $809.45. However, in the pre-market today, Tesla (TSLA) stock seems to be rebounding. By the moment of writing, it has gained 2.02% and is trading at $827.67. It is expected that Tesla stock may rise further in the pre-market. The all-time high of Tesla stock closing price was $917.42 on February 19, but some analysts believe that new peaks are on the horizon.
The first factor that can lead to new Tesla stock peaks is the company’s plans to resume manufacturing at its Fremont, California, factory. The facility shut down on March 23 because of the coronavirus pandemic. Currently, Tesla is in a battle with the state of California and Alameda County over the reopening efforts. But even despite the lockdown, Tesla delivered the Q1 2020 report and proved that its U.S. production is ramping up. According to the company, it has been Tesla’s best-ever first-quarter performance.
Along with the prospering U.S. market share, Tesla has seen a growing interest in China. Its Shanghai Gigafactory was also temporarily shut down but in comparison with other automakers, Tesla had a lot to be proud of. The company achieved record levels of production, despite significant setbacks.
This year, Tesla stock’s annual change is 93.94%. If TSLA shares record new peaks, this figure will be much higher.
Elon Musk to Move Tesla Headquarters
The latest announcement to be reflected by the stock price is Elon Musk‘s decision to move Tesla’s headquarters out of California. Recently, we have reported about Musk’s lawsuit against Alameda County. It emerged that Tesla is at loggerheads with the U.S. health officials over Fremont’s reopening that contradicts the County’s stay-at-home orders.
As Alameda County Health Care Services Agency and the Public Health Department said, Tesla was “collaborative” but then filed a lawsuit. Besides, Elon Musk called the shareholders for joining him and filing a lawsuit against the county.
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 dependen on how Tesla is treated in the future. Tesla is the last carmaker left in CA.
— Elon Musk (@elonmusk) May 9, 2020
Some outstanding figures have supported Musk. For example, AutoNation’s Mike Jackson believes that the US has now to focus on economic recovery. Therefore, carmakers should reopen to support the economy and meet the increasing demand for vehicles.
“It’s entirely appropriate that the factories reopen. I fully support it. We need the vehicles. As a matter of fact … I would go so far as to say, I support Elon Musk. Tesla should open.”
If Tesla moves to Texas or Nevada, Elon Musk will benefit from reduced taxation. According to tax accountants, the company may save billions of dollars in taxes over time. In California, an income tax rate makes 13.3% on the highest earners. So, Musk would pay $104 million in taxes. Nevada and Texas do not impose an income tax, which means the billionaire would save this sum. Besides, he would save over $7 billion in state taxes on the $55 billion in estimated compensation.