It’s pack up for Tesla in Delware, CEO Elon Musk is taking it back to Texas

Tesla, the electric car giant, is packing its bags and heading to Texas. CEO Elon Musk announced this move after conducting a public poll on X (formerly Twitter), where 87.9 percent of over 1.1 million people voted in favor of the Lone Star State.

Online Poll Drives the Decision

Musk, known for his unpredictability, posted a poll on his social media platform X, asking whether Tesla should shift its legal registration to Texas. The response was clear – an overwhelming majority voted yes. Musk exclaimed in a post, “The public vote is unequivocally in favor of Texas!”

From Delaware to Texas: A change in incorporation

Originally incorporated in Delaware in 2003, Tesla has decided to sever ties with the state. Musk promptly declared, "Tesla will move immediately to hold a shareholder vote to transfer the state of incorporation to Texas." This move comes amid a legal tussle in Delaware, where a judge rejected Musk's hefty $56 billion pay packet.

Texas: More than just a new legal address

Texas has been a significant hub for Tesla, serving as its headquarters since 2021. The Lone Star State is home to one of Tesla's gigafactories and a 100-megawatt battery storage project in Angleton. Musk and Texas Governor Greg Abbott celebrated the groundbreaking of a new lithium refinery in Robstown, a key component in electric vehicle batteries.

Texas, a hotspot for electric vehicles

Already boasting the third-highest number of registered electric vehicles in the U.S. by the end of 2022, Texas is a natural fit for Tesla's operations. According to the Department of Energy, Texas trails only California and Florida in electric vehicle adoption. This aligns with Musk's vision for a sustainable and electric future.

Musk's discontent with California: A driving factory

Musk's decision to move Tesla's headquarters from Palo Alto, California, in 2021 was influenced by disagreements with California lawmakers. A past incident where a California assembly member used strong language against Musk played a role in the CEO's decision-making process.

Musk and Texas: A mutual appreciation

Musk's relationship with Texas seems to be flourishing. Governor Abbott stated that Musk "had to get out of California" due to political reasons, and Musk appreciates Texas' social policies. The move to Texas aligns with Musk's criticism of California Governor Gavin Newsom's pandemic policies.

Business-friendly environment: A key consideration

Companies often choose states for incorporation based on a business-friendly environment. Texas fits the bill, as it is known for its favorable legal and tax conditions. To finalize the move, Musk will register Tesla in Texas and then legally dissolve its Delaware incorporation, a process facilitated by both states. With an overwhelming public mandate and strategic considerations, Tesla is set to become a Texan at heart.