Tesla is moving its headquarters from Silicon Valley to Austin, Texas, where it is building a massive car and battery complex.
Chief Executive Elon Musk announced the plans on Thursday at the company's annual shareholder meeting.
Texas is known for its cheap labor market and less stringent regulation.
But Musk did not bring up politics in his speech and he stressed that Tesla's operations in California would still grow.
'This is not a matter of… Tesla leaving California,' he said, adding that the company plans to increase output from its main California factory and Nevada factory by 50%.
Musk has had a rocky relationship with California, which has relatively high taxes and living costs.
Last year, he threatened to move Tesla HQ and future programs out of the state during a row over the closure of a factory due to the health crisis.
He himself relocated from California to Texas in December to focus on a new plant and SpaceX.
The rocket company has a launch site in the souther tip of Texas.
Oracle, HP and Toyota Motor have also moved their headquarters from California to Texas.