Tesla magnate Elon Musk announced on Tuesday, Dec. 8, that he has moved to Texas, according to The Daily Mail. Musk, now the world’s second-richest person, is one of the highest-profile executives to leave California during the coronavirus pandemic. He was also the state’s richest taxpayer.
The move comes amid Musk’s increasing developments in the Lone Star State. With Tesla’s new factory being built in Texas, Musk said his move “made sense.”
But Musk, who has long been a critic of California’s tax policies, also took a jab at the Golden State, criticizing its 13.3 percent income tax rate, the highest in the U.S.
Musk had also clashed with California Gov. Gavin Newsom and Alameda County authorities in late spring when he defied health orders and resumed production at Tesla factories in Fremont. Musk had slammed the state’s lockdowns. Soon after, he threatened to move Tesla’s headquarters to Texas or Nevada and quickly put many of his properties in California up for sale.
Over the summer, Musk reportedly built an entity for his private foundation, the Musk Foundation, in Austin, Texas. Musk then merged this location with the foundation’s headquarters in California, according to a report by Bloomberg. The foundation’s location in Austin is now the only surviving entity.
Winning for too long
Despite moving to Texas, Musk said Tuesday at The Wall Street Journal‘s CEO Council Summit that Tesla, Inc. and Space Exploration Technologies Corp. or SpaceX will maintain major operations in California despite having a number of facilities in Texas.
“[It’s] worth noting that Tesla is the last car company still manufacturing cars in California,” he said. The state also used to be the center of aerospace manufacturing, a field that Musk’s SpaceX is now dominating.
Nonetheless, Musk slammed what he deemed to be the “outsized influence in the world” of California’s Silicon Valley. But this influence will likely be reduced because of the pandemic, he added.
Musk also likened California to a team that has been “winning for too long,” explaining that the team will tend to get complacent and feel “a little entitled” over time.
Meanwhile, over at the Lone Star State, Gov. Greg Abbott has welcomed Musk’s relocation with open arms. In July, he told CNBC that Musk told him he had got a Texas driver’s license and is now a “bona fide Texan.”
In what was a clear jab directed at their rival state, Abbott also claimed that Musk was building a Tesla facility in Texas because they would give him the freedom to “expand the way he wanted to expand.” Tesla reportedly received tens of millions of dollars in property tax breaks from Texas to build their newest facility there.
But aside from giving Texas a one-up against California, relocating to Texas could save Musk millions of dollars in income tax, thanks to the state’s loose tax laws. Texas leaders have used these laws to entice companies and residents from California to move.
However, despite his recent relocation, Musk’s relationship with California is likely to endure. Thousands of his own employees work in the Golden State. His five sons with ex-wife Justine Musk also reside there.
More magnates relocating
Musk is one of the many executives and venture capitalists from Silicon Valley who relocated to Texas during the coronavirus pandemic. Joe Lonsdale, the co-founder of the software company Palantir and an investor of Musk’s tunnel start-up, The Boring Company, recently moved to Austin.
Jared Birchall, former senior vice president of investment banking company Morgan Stanley and member of the Musk Foundation’s small board of directors, also purchased a house in Austin in August.
Meanwhile, prominent venture capitalist Keith Rabois, who is known for his executive roles in LinkedIn and PayPal, said he plans to move to Miami. He cited Silicon Valley’s liberal politics as reasons to move.
Read the latest updates on the coronavirus pandemic at Pandemic.news.
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