Elon Musk is moving his company out of California.

Elon Musk, CEO of electric car manufacturer Tesla, announced today that he is moving the company’s primary headquarters out of its longtime home in Palo Alto, California over to Austin, Texas. Tesla already has a new assembly plant under construction in the Austin vicinity, close to the city’s airport.

Tesla will relocate its headquarters from Palo Alto, California, to Austin, Texas, though the electric car maker will keep expanding its manufacturing capacity in the Golden State, CEO Elon Musk says. https://t.co/xUympIXuPN

— ABC News (@ABC) October 8, 2021

While California will no longer be Tesla’s main base of operations, they have no intention of stopping their expansion in the state. “To be clear we will be continuing to expand our activities in California,” Musk said at a shareholder meeting. “Our intention is to increase output from Fremont and Giga Nevada by 50%. If you go to our Fremont factory it’s jammed.”

As for his reasoning for leaving California, Musk explained that “It’s tough for people to afford houses, and people have to come in from far away… There’s a limit to how big you can scale in the Bay Area.”

Elon Musk said Tesla would move its headquarters from California to Austin, Texas, making good on a threat after virus lockdowns last year.https://t.co/fih8sa3g8a

— The New York Times (@nytimes) October 8, 2021

Musk has had a long-standing feud with the Californian government over factory closures enforced last year in the interest of COVID-19 pandemic safety. Musk has repeatedly threatened to move Tesla’s HQ out of the state in response to the restrictions, as well as in search of a generally easier place to do business.

“From a legal perspective, there’s less of a regulatory burden in Texas,” business attorney Domenic Romano told CNBC. “It’s a more business- and employer-friendly state in many ways. You have to jump through far fewer hoops in Texas or Florida as an employer than you do in California in terms of reporting requirements and more.”