Electric car company Tesla will begin the process of transferring where it is legally registered to Texas following an online poll, its CEO Elon Musk has announced.
The company had been incorporated in Delaware since July 2003, but on Wednesday, Musk asked users on X, formerly Twitter—a platform he also owns—whether it should transfer to the Lone Star State. A resounding 87.1 percent of over 1.1 million people were in favor, to 12.9 percent against.
"The public vote is unequivocally in favor of Texas!" Musk wrote in a follow-up post shortly after the vote closed. "Tesla will move immediately to hold a shareholder vote to transfer state of incorporation to Texas."
The same day Musk launched his poll, a judge in Delaware ruled in favor of Tesla shareholders who said the company's board had improperly approved his $56 billion pay packet. The judge described the pay deal as "an unfathomable sum" that would disadvantage shareholders, Reuters reported.
But the move could make sense for the company. Tesla is already headquartered in Texas, having decided to move from Palo Alto, California, in 2021, and has one of five domestic gigafactories there.
In 2021, it also emerged that Tesla was building a 100-megawatt battery storage project in Angleton, south of Houston. Musk and Texas Governor Greg Abbott were pictured together last May to celebrate breaking ground on a new lithium refinery in Robstown that will produce the key component in electric vehicle batteries.
Texas already has the third-highest number of registered electric vehicles among U.S. states as of the end of 2022, according to figures from the Department of Energy, next to California and Florida.
Musk has appeared to have a falling out with lawmakers in California of late. When moving Tesla's headquarters, the billionaire indicated that a 2020 post in which a California assembly member referred to him with a four-letter word had been a factor in the decision.
It came after Abbott said that the SpaceX proprietor "had to get out of California" over the state's politics while claiming Musk "consistently tells me that he likes the social policies in the state of Texas." Musk previously criticized California Governor Gavin Newsom over his coronavirus pandemic policies.
Companies are usually either incorporated in the state that is their main base of operations or where the legal and tax environment is considered more business-friendly.
To change the state in which Tesla is incorporated, Musk will have to register the company in Texas before legally dissolving it in Delaware. Not all states allow businesses to incorporate themselves elsewhere, but both Texas and Delaware do.
Update 2/1/24, 6:16 a.m. ET: This article was updated to include further information.
Correction 2/1/24, 7:32 a.m. ET: This article was updated with a correction to figures.
Update 2/2/24, 8:02 a.m. ET: The headline to this story was changed.
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