Elon Musk’s announcement earlier this month that Tesla is moving its headquarters from Palo Alto in California to Austin, Texas came as a surprise to his employees, according to a California official.
“Elon didn’t tell his team,” said Dee de Meyers, the economic czar to California Governor Gavin Newsom, when asked if the state had previously been informed of Musk’s plans.
“We later spoke to the leadership in his California offices, who didn’t know until he made this announcement,” she said on a conference call with the press.
Myers, head of the California Bureau of Business and Economic Development, added that Tesla has made a “tremendous investment” in California, where the company was founded and still has a sprawling factory in Fremont.
At the time of his surprise announcement, Musk said that despite moving the headquarters, Tesla would continue to expand operations at its Fremont plant by up to 50 percent.
“I don’t think anyone knows exactly what moving their headquarters means,” Myers said on the call.
“From a California perspective, they’re not going anywhere.”
Tesla has yet to officially inform investors and regulators that its headquarters will be leaving Palo Alto.
Tesla representatives did not immediately respond to a Washington Post request for comment.
But earlier this month, during a shareholder meeting, Musk — who himself left Los Angeles to move to the Austin area last year — announced the change, citing rising housing costs and other impediments to corporate expansion.
Musk, the world’s richest man with a net worth of more than $290 billion, is expected to save thanks to his move to the Lone Star State, which does not tax personal income.
California imposes some of the highest personal income taxes in the country.
The super-billionaire owns a slew of Tesla stock options that are set to expire this year and are expected to be liquidated, which could bring him a net profit of more than $20 billion, depending on the share price.
Other than his personal fortune, Musk has repeatedly clashed with California lawmakers during the COVID-19 pandemic.
His announcement of the headquarters move came a year after he first threatened to move Tesla to Texas or Nevada amid a battle with state health officials over COVID-19 restrictions.
The company was told it could not reopen its factory last year when coronavirus lockdown measures were still in place.
“Honestly, this is the straw that broke the camel’s back,” Musk said on Twitter at the time. “Tesla will now move its headquarters and future programs to Texas/Nevada immediately. If we keep manufacturing activity in Fremont at all, it will depend on how we handle Tesla in the future.”
He then defied shutdown orders and ordered production to be restarted in California until officials agreed to reopen the company’s facilities with safety measures in place.
Other big tech companies, including Oracle and Hewlett Packard, also left California for Texas last year.
State officials have been courting companies to take this step, and are demanding significant tax breaks to put new facilities in the state through the Texas Economic Development Act.
Austin, with its relatively low cost of living and home to a strong university as well as popular events like South by Southwest, has been a hotspot for tech companies and their workers.