American electric vehicle giant Tesla Inc. recently announced that it will transfer its legal domicile from Delaware to Texas, a decision supported by the company's CEO Elon Musk and most netizens and shareholders. Musk said this is to avoid Delaware's high tax burden, as well as to seek a more favorable business environment and manufacturing base.
According to Newsweek on February 1, Musk posted on the social platform "X" (formerly Twitter) on January 31, asking netizens whether they approve of Tesla's move to the "Lone Star State" (that is, Texas). Of the more than 1.1 million people who participated, 871% said yes, 12Nine percent disagreed. Shortly after the vote, Musk wrote in a follow-up post: "The public voted unequivocally in favor of Texas! Tesla will act immediately and hold a shareholder vote to transfer the company's domicile to Texas. ”
Musk's proposal may be related to a legal dispute he encountered in Delaware. According to reports, on January 30, local time, a judge in Delaware, the United States, ruled that the $56 billion compensation incentive plan awarded to Musk by the Tesla board of directors in 2018 was invalid because the board failed to prove that the plan was fair. The plan allows Musk to hold more than 100 million Tesla** options (issued in 12 installments) after achieving his performance goals, but it has sparked opposition and lawsuits from some Tesla shareholders. If Musk fails to change this ruling through appeal, his fortune will shrink significantly and drop to the third richest in the world.
Delaware's tax rate is also a factor in Musk's dissatisfaction. It is known to netizens morrisAccording to Zhang's analysis, Delaware's state tax rate is 135%, compared to 0% in Texas, and corporate taxes are extremely low. Musk has publicly stated that some of his options expire in early 2022 and must be sold**, which is estimated to be subject to a 53% 57% tax. Musk posted on "X" that "never register a company in Delaware". He later added, "If you want shareholders to decide the company's affairs, I recommend registering a company in Nevada or Texas." ”
In addition to the tax benefits, Texas has other factors that attract Tesla. It is reported that Musk has a deep relationship with Texas. He plans to create a university in Austin, the capital of Texas, and his social media platform "X" has also set up a content moderation center in Austin. Tesla moved its headquarters from California to Texas in 2021 and built one of its five Gigafactories in the United States. Texas' industrial base and manufacturing talent are also Tesla's strengths. According to the U.S. Department of Energy, by the end of 2022, Texas had the third-highest number of registered electric vehicles among U.S. states, behind California and Florida.
Tesla's relocation of its headquarters may bring more economic benefits and employment opportunities to Texas, and may also promote the development of the state's electric vehicle market. However, there are also concerns that Tesla's arrival will bring more traffic congestion and environmental pollution to Texas, as well as cultural conflicts with local residents. Whether the relocation of Tesla's headquarters will bring better development prospects to Musk and Tesla remains to be tested by time and the market.