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Tesla is moving its headquarters from Palo Alto, California, to Austin, Texas, CEO Elon Musk announced at the company's shareholder meeting on Thursday.

The meeting took place at Tesla's vehicle assembly plant under construction outside of Austin on a property that borders the Colorado River, near the city's airport.

However, the company plans to increase production in its California plant regardless of the headquarters move.

"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%. If you go to our Fremont factory it's jammed."

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

Regarding the plant underway in Austin, he noted that it would take some time to reach full production even after it's completed.

Musk’s growing dissatisfaction with California has been apparent for some time. In April 2020, on a Tesla earnings call, Musk lashed out at California government officials calling their temporary Covid-related health orders “fascist” in an expletive-laced rant.

Later, Musk personally relocated to the Austin area from Los Angeles, where he had lived for two decades.

Doing so enabled Musk, who is also CEO of aerospace company SpaceX, to reduce his personal tax burden and be closer to a SpaceX launch site in Boca Chica, Texas.

California levies some of the highest personal income taxes in the country on its wealthy residents, but Texas has no personal income tax.

Tesla is not the first company to its headquarters out of California to Texas. Oracle and Hewlett Packard are among the tech giants who decided to make that move last year, for example.

Texas has been actively recruiting companies via its Texas Economic Development Act offering tax breaks to put new facilities in the state. Austin, with a top tech university and cultural events like South by Southwest, is a draw for tech employers.

Tesla has generally garnered a huge amount of support from the state of California since it was founded there in 2003. It has enjoyed grant funding, tax breaks, incentives and favorable policies from the likes of the California Air Resources Board, California Energy Commission and California Alternative Energy and Advanced Transportation Financing Authority, among others.