By Bethany Blankley

The electric car giant Tesla is moving its headquarters from Palo Alto, California, to Austin, Texas, its CEO, Elon Musk, announced Thursday.

Musk, who has had a running feud with California Gov. Gavin Newsom and several state lawmakers, made the announcement at a shareholder meeting held at Tesla’s vehicle assembly plant being built near Austin. Last year, Musk broke ground for the new plant, which is near the airport.

The company will continue its production operations in California and Nevada, Musk said.

“To be clear, we will be continuing to expand our activities in California,” Musk said. “Our intention is to increase output from Fremont and Giga Nevada by 50 percent. If you go to our Fremont factory, it’s jammed.”

But, he added, the cost of living in California was making it difficult for his workers.

“It’s tough for people to afford houses, and people have to come in from far away," he said. "There’s a limit to how big you can scale in the Bay Area.”

Musk made national news last April when on a Tesla earnings call he criticized the state’s shutdown policy, referring to COVID-related orders as “fascist.” After public altercations with elected officials on Twitter and threats of lawsuits, Musk also moved his family to Texas, after having lived in Los Angeles for about 20 years.

His aerospace company, SpaceX, is also located in the border town of Boca Chica, Texas.

Tesla follows a plethora of companies that have left California to relocate their headquarters in Texas, including, Oracle, Hewlett Packard and others.

According to the California Policy Center’s “California Book of Exoduses,” a list its compiled of all of the companies that have left California since 2005, a handful of companies have been announcing they’ve been leaving every month. Most are leaving for Texas, but others moved to Arizona, Idaho, North Carolina, Tennessee and a few other states.

Last month, OrangeGrid and Cangsuhan Cutlery were the latest to announce their exodus. OrangeGrid, a workflow-based solutions fintech, is relocating its southern California headquarters to Flower Mound in northern Texas. The California knife maker is relocating its headquarters from southern California to the Austin suburb of Leander. Both are expected to generate multiple millions of dollars in revenue and hire hundreds of employees.

In August, AECOM and MD7 announced they were relocating to the Dallas area. The architectural and engineering consulting conglomerate has operated in Dallas for years but is now moving its headquarters from Los Angeles. The mobile infrastructure consultancy announced that it was relocating its corporate headquarters from San Diego to Allen, Texas.

Other companies moving operations or headquarters to Texas in the last few months include arcade amusement company Andamiro USA from Gardena, Calif., to Irving, Texas; Anaheim-based plastics manufacturer Nessei to San Antonio; and prepaid debit card company, Green Dot, from Pasadena to Austin.

Many cite California’s high tax burden and cost of living as reasons for leaving. In 2020, California, for the first time in the state’s recorded history, recorded a population decline. Those leaving cited high taxes, high cost of living, and an increasing regulatory burden as their reasons.

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