Tesla Leases 325,000 Sq. Ft. Office Space in Palo Alto, Despite Move to Texas

Tesla has just agreed to lease a large office space in Palo Alto, California, despite CEO Elon Musk announcing earlier this week that the company would be relocating its corporate headquarters from the Bay Area to Texas — reports The Mercury News,

According to the publication’s sources close to the deal, Tesla will be leasing 325,000 sq. feet of space at an office complex located at 1501 Page Mill Road in the Stanford Research Park.

When Tesla announced its recent record-breaking Q3 deliveries, the company’s press release cited the location as Austin, Texas, pointing to a move to the Lone Star State. Musk officially announced the HQ relocation at the company’s new Gigafactory in Austin, Texas, on Thursday.

“We will be continuing to expand California activities,” said Musk during the announcement. “We’re not leaving California. Our intention is to increase output at Fremont and Giga Nevada by 50%,” said the CEO, adding that Fremont was “jammed” with equipment and running out of room.

The new Palo Alto office space falls squarely in line with Tesla’s plans to expand in the Bay Area. The space is owned by tech giant Hewlett Packard, which coincidentally also happens to be moving its headquarters from Silicon Valley to Texas.

Musk said during his announcement that Tesla is limited in scale in the Bay Area, while Texas is home to one of the company’s Gigafactories, a site that’s 5 minutes from the airport and 15 minutes from downtown, and will be producing Tesla’s Cybertrucks sometime next year.

With housing being cheaper in Texas than in Silicon Valley, the move will also benefit Tesla employees and provide more attractive opportunities to prospective hires. In December, 2020, Musk confirmed that he himself had moved from California to Texas.