Elon Musk says Tesla is moving its headquarters to Austin, Texas

• Tesla is moving its headquarters from the Bay Area to Austin, Texas.
• Elon Musk announced the move during Tesla's annual meeting of shareholders.

Tesla is moving its headquarters from California's Bay Area to Austin, Texas.

Tesla CEO Elon Musk made the announcement during Tesla's annual shareholder meeting on Thursday. Signs were pointing to an imminent move to the Lone Star State even before the event.

Musk stressed that although Tesla's homebase is moving from Palo Alto to Austin, Tesla isn't leaving California altogether. The company still aims to expand output from its Fremont, California, factory by 50%, he said.

"To be clear though, we will be continuing to expand our activities in California," he said. "So this is not a matter of Tesla leaving California."

Tesla decided to move in part because it's difficult for employees to afford houses in the Bay Area, and that some people need to commute from far away, Musk said.

"There's a limit to how big you can scale in the Bay Area," he said.

Tesla has been working on a manufacturing plant outside of Austin since the summer of 2020. Over the last year, Musk moved both his residence and his charitable foundation to the state. Tesla's latest two press releases in late September and early October came out of Austin, fueling speculation about a move.

In May 2020, after butting heads with local officials over coronavirus restrictions, Musk threatened to move all of Tesla's operations to Texas or Nevada.

In recent years and especially during the pandemic, Austin has attracted droves of tech workers from Silicon Valley and elsewhere. Tesla will join companies including Google, Facebook, and Oracle, which all have offices in the city.