Tesla CEO Elon Musk announced Thursday that the automaker is joining the exodus of Silicon Valley tech companies to Texas.

Tesla will move its headquarters from Palo Alto, Calif., to Austin, Texas, Musk said at the company’s annual shareholder meeting, following through on a threat he made more than a year ago when he was frustrated by local coronavirus lockdown orders that forced Tesla to pause production at its factory in Fremont, Calif.

Production will continue at Fremont but Musk said Tesla’s ability to scale up in the San Francisco Bay Area is limited.

“You go to our Fremont factory, it is jammed,” he said. “We’re like Spam in a can.”

As The Wall Street Journal reports, “Tesla is following in the footsteps of companies including Hewlett Packard Enterprise  — a descendant of what Bill Hewlett and Dave Packard started in a Palo Alto, Calif., garage — and Oracle, which moved their corporate headquarters to Texas earlier in the COVID-19 pandemic.”

The state has appealed to tech companies with lower taxes and less regulation than California and more affordable real estate.

“It’s tough for people to afford houses [in the Bay Area], and a lot of people have to come in from far away,” Musk noted.

The shareholder meeting took place at Tesla’s vehicle assembly plant under construction outside of Austin on a property near the city’s airport. Musk said in December that he had moved himself to Austin to be near the new factory.

The decision to move Tesla’s HQ “will surely add fuel to a ceaseless debate between officials and executives in Texas and California about which state is a better place to do business,” The New York Times said.

A spokeswoman for California Gov. Gavin Newsom said the state was “home to the biggest ideas and companies on the planet” and that California would “stand up for workers, public health, and a woman’s right to choose.”

Texas Gov. Greg Abbott has banned mask and vaccine mandates and signed a law that allows private citizens to sue abortion providers.

Justin Sullivan via Getty Images

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