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Why Tesla Moving to Texas Is a Non-Factor For the Business Long-Term

By Nicholas Rossolillo and Jason Hall – Oct 14, 2021 at 6:20PM

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The move to Texas doesn't mean operations in California are closing down.

Tesla (TSLA 3.23%) recently announced it's relocating its headquarters from California to Texas. On the surface, this looks like a big deal. But for the business long term, it's not much of a factor. contributors Jason Hall and Nicholas Rossolillo discuss why in this Motley Fool Live segment from "The 5" recorded on Oct. 8.

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Jason Hall: Nick, I'll read this one and then you'll go and then I'll go and then we'll let Jeremy bring it home. Elon Musk. That's just say whatever you want. No, I'm kidding. Here we go. He moved to Texas last year. As basically was expected, Tesla's headquarters is about to make the move from Palo Alto to Austin, follows a very public spat that Musk has had with politicians in California.

If we think about going through the lockdowns, there was a time when he defiled the local municipal governments and refused to shutdown Tesla's manufacturing facility, he eventually won. But usually, try to stay on the good side of your government, your political leadership, your regulators. Nevertheless, Musk way to get right even when the decision was announced, one of the local politicians even told Tesla, good riddance. Here we go. Here's the question. Does this news change your opinion on Tesla stock in any way? Then here's the real question. Are you bullish or bearish?

Nicholas Rossolillo: This is a dangerous topic. I think it's a non-factor ultimately at the end of the day. I think the Fremont, California factory is going to remain, that's going to continue turning out electric vehicles at least for the time being.

Hall: Until they don't need it, right. That's the thing.

Rossolillo: Until they don't need it, that could be a long time though. They are still working on manufacturing factory. There's the one for Berlin, there is the one over in China. Tesla needs more manufacturing and that's one of the things that they've been working on for years to come, increasing manufacturing capacity. The presence in California is not going to disappear because they do need it. But yeah, I mean, eventually I think it's just almost like Elon Musk is, he can make some comments sometimes that are dubious. But he's also, eventually, a man of his word.

Hall: Yeah, that's a good way to put it.

Nicholas Rossolillo and his clients own shares of Tesla. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

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