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Was Tesla founder Elon Musk lying to all of us? His fights with the City of Palo Alto are legendary and it has been expected that he would move the headquarters from this northern California location to Texas. But while announcing the move was underway, Tesla was leasing a lot more office space in Palo Alto. So what’s going on?

Tesla needs more office space in Palo Alto despite the move to Texas

Tesla manufacturing
Tesla manufacturing in Fremont | Getty

A Reuters source says that the company doesn’t have enough office space for Palo Alto engineers, so it is leasing more. It is leasing an additional 325,000 square feet from HP Inc. based on reporting in the real estate Registry. This was the former home base for Hewlett Packard. 

Now Musk says it will continue to expand in California as well as at its Nevada battery facility. Originally, Musk gave the reason for the move to Texas was over a lack of space and the high cost of living. There are 750 employees at the Palo Alto former headquarters. 

In all, Tesla has 12,000 employees in the surrounding San Francisco Bay area according to the Silicon Valley Institute of Regional Studies. The building is already underway for a Tesla Megafactory in Northern California. So this number will undoubtedly increase. 

More than just Tesla have left the Silicon Valley

Tesla manufacturing
Tesla manufacturing in Fremont | Getty

Interestingly, HP is a spinoff of Hewlett Packard Enterprise. It also has its headquarters in Palo Alto but is moving to Texas. It was founded in Palo Alto in 1939. Besides Tesla and Hewlett Packard, Oracle and Palantir recently moved out of the Golden State. 

The reasons for leaving are varied. Some say it is harder to hire good people as the population is not expanding. Others cite concerns over regulations, high taxes, and the high cost of living. Surveys in the Bay Area show that over half of all workers would move if offered remote work. 

But the underlying reasons for Tesla’s departure are varied. It has historically maddening parking issues at the Fremont facility. In 2017 Tesla started paying workers to ride bikes to the factory. Palo Alto has limits on how large parking lots can be.

Alameda County has also been a thorn in Musk’s side

Elon Musk Tesla
Elon Musk, Tesla founder | Getty

Elon Musk Admits, ‘I Dig My Own Grave a Lot,’ in Honest Twitter Exchange

And the Alameda County public health agency prevented Tesla from resuming production at Fremont over health concerns related to COVID-19. Tesla eventually began production in defiance of the health order. Musk tweeted, “I will be on the line with everyone else. If anyone is arrested I ask that it only be me.” 

Musk uses Twitter to lash out at detractors, government agencies, and others who get in his way or threaten Tesla’s progress. Lately, he has toned down the tweets as he met with ridicule from investors and company management. If it’s not good for business, Elon will adjust.