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Despite the relocation of its headquarters to Texas, Tesla is still acquiring more office space in Palo Alto as it plans to increase output.
According to reports, electric car maker Tesla Inc (NASDAQ: TSLA) is expanding its business presence in Palo Alto despite moving its headquarters to Texas. Tesla reached an agreement to lease office space from IT giant HP Inc, near the automaker’s current headquarters in Palo Alto.
Last week, company CEO Elon Musk announced that Tesla was relocating its headquarters from Palo Alto, California to Austin, Texas. The electric automaker is in the process of building a massive car and battery manufacturing complex in the Lone Star State. Besides, Texas offers relatively cheaper labor and less stringent regulation, and Musk himself moved there in December last year. However, the billionaire reiterated at the time that the shift in operations would not impact Tesla’s presence in California. Now his company seems to be making good on that vow by expanding its offices in Palo Alto.
Furthermore, Musk said that Tesla, “plans to increase output from its main California factory and Nevada factory by 50%.” Real estate news provider, the Registry, earlier reported that Tesla rented 325,000 square feet at 1501 Page Mill Road from HP Inc. Tesla, which earlier ascribed the Texas move to lack of space, currently has 750 employees in Palo Alto. In addition, the car company has an overall workforce of 12,000 employees in the San Francisco Bay Area. However, Musk did not elaborate on how many staff would shift base to Texas.
Tesla’s Palo Alto Move Marks a Growing Exodus Trend among Corporations
With this move, Tesla joins several other companies that have relocated their US headquarters from the West Coast to Texas. They include computer technology firm Oracle, leading Japanese car company Toyota, and even HP’s spinoff unit – Hewlett Packard Enterprise. Reasons given by some of these companies for the relocation have to do with California’s high taxes and living costs.
Musk occasionally had a strained relationship with California during Tesla’s time there. Before now, the CEO threatened to relocate the company’s headquarters and future programs after a faceoff with authorities over the closure of Tesla’s factory in Fremont, California due to COVID. At a meeting, Musk famously displayed a clothing accessory emblazoned with the words “Don’t Mess With T.” The ‘T’ was Tesla-stylized and an obvious reference to the popular phrase, “Don’t Mess With Texans.”
Tesla shares were trading higher on Tuesday morning. Analysts point to several reasons for this, including a solid performance from the automaker’s Shanghai plant, and an overall bullish market day. Tesla’s stock climbed 2% at one point during the trading day.
The car company recently announced record third-quarter deliverables, which rose 73% YoY from significant sales momentum. Furthermore, its new factories in Berlin and Austin will start producing cars before the year runs out. This is advantageous as demand for fully electric vehicles seems likely to increase significantly going forward. However, Tesla is yet to release its earnings report for the recently-ended quarter. The company plans to do so next week.
TSLA is currently trading at $805.72 in the pre-market.