Elon Musk Moves to Texas, Takes Jab at Silicon Valley

Mr. Musk likened California to a sports team with a long winning streak, saying, “They do tend to get a little complacent, a little entitled, and then they don’t win the championship anymore.” California, he said, “has been winning for a long time. And I think they’re taking them for granted a little bit.”

Mr. Musk made the comments Tuesday during The Wall Street Journal’s CEO Council annual summit in an interview with Editor in Chief Matt Murray.

Startup executives and employees have fled the San Francisco Bay Area for cheaper locales since the pandemic has led to remote working conditions. Last week, Hewlett Packard Enterprise, whose origins trace back to the founding of Silicon Valley, said it planned to shift its headquarters to Texas. The exodus has led many tech leaders and industry watchers to question whether the geographic region is losing relevance as the nation’s leading tech hub.

Palantir Technologies Inc., founded in the Bay Area in 2003, moved its headquarters to Denver this year. Chief Executive Alex Karp, who co-founded the company, linked the departure to what he says is a view in Silicon Valley that is out of touch with American principles and societal needs.

Mr. Musk echoed that sentiment, arguing the San Francisco Bay Area “has too much influence on the world.” That power is shifting, he said. “I think we’ll see some reduction in the influence of Silicon Valley.”

Mr. Musk also criticized governments’ role more broadly for regulations and bureaucracy that stifled startup creation and favored monopolies or duopolies. He called for the government to “just get out of the way” of innovators.

“You have a forest of redwoods and the little trees can’t grow,” said Mr. Musk.

Mr. Musk’s criticism comes despite a successful year for Tesla, which is based in California, and his own ascent to become the second-richest person in the world. Tesla has benefited from government emissions-credit programs that have helped the company’s bottom line. Tesla so far this year has earned $1.18 billion by selling emissions credits to other auto makers.

Mr. Musk has been a critic of regulators in the past. He threatened to move Tesla’s operations out of California while sparring with authorities there in May, after local shelter-in-place orders required him to shut down his lone U.S. car factory as part of measures to slow the spread of the new coronavirus. He criticized local officials at the time as “breaking people’s freedoms” by imposing the curbs.

The executive later filed a lawsuit against Alameda County, home of the Tesla factory, and defied local authorities by proceeding to reopen the plant, daring them to arrest him. The county eventually blessed the plant’s reopening and didn’t pursue an arrest.

Mr. Musk said last month that he had tested positive for Covid-19 and was experiencing mild symptoms, after repeatedly playing down the risks of the illness and raising doubts about the accuracy of tests. He has been criticized by public-health researchers for recklessly spreading misinformation about the coronavirus.

Texas has no state income tax, and Mr. Musk this year qualified for billions of dollars in stock-option compensation as part of a pay-package agreement. Mr. Musk filed paperwork in late October to move his personal foundation from California to Austin, Texas, according to local records. The move was previously reported by Bloomberg.

Tesla also said earlier this year that it would build a new car plant in Austin, its second in the U.S. and first outside Silicon Valley, which would start producing cars next year. Mr. Musk’s rocket company, Space Exploration TechnologiesCorp., or SpaceX, also has operations in Texas. That has led to Mr. Musk spending a lot of time in Texas.

The auto maker said Tuesday that it would raise up to $5 billion through new sales of stock, the second time this year it is raising that amount of money to finance its expansion plans. Mr. Musk has said Tesla plans to make around 20 million cars annually in a few years, up from around 500,000 in 2020. The funds would help retire debt, Mr. Musk said, and give the company a larger war chest.

SpaceX launched four astronauts into orbit last month, marking the company’s first full-fledged operational mission with humans on board and beginning regularly scheduled commercial flights to the International Space Station.

Tesla, despite a temporary factory closure early in the pandemic, is on pace to meet its pre-pandemic goal of delivering around 500,000 cars this year, or roughly 36% more than last year. It is also well-positioned to achieve its first full calendar year of profitability after posting a record profit of $331 million in the third quarter.

Mr. Musk said both Tesla and SpaceX retain large operations in California.

Write to Heather Somerville at [email protected]