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Tesla moved its HQ to Austin in a year that saw new records for the EV maker. (Tesla)
California may have been the site of innovation during Tesla's early years, but in 2021, both CEO Elon Musk and the company dug their Austin roots deeper.
Even with competitors like Apple and Ford, Austin is the home base of the company responsible for roughly two-thirds of electric vehicles on the road right now, according to Musk.
With Giga Texas on the brink of production, here are some of the year's highlights for Tesla.
Austin land
At the start of 2021, Tesla's newest gigafactory in southeast Travis County barely had the exterior structure of its 7.9-million-square-foot factory up after starting construction in late 2020. Now, almost a year later, the first phase is just about complete with office space and a Model Y quality control room.
Throughout the year, key updates were made. In April, Tesla filed plans for an additional building at the factory to be part of the “Bobcat Project.” And in July, Musk made a Q2 update from the factory, boasting more than $1 billion in quarterly net income and production of more than 200,000 vehicles.
Then in early October, Musk confirmed Tesla would move its headquarters from the Fremont, California factory to Austin. The move became official at the start of this month, with one analyst suggesting up to 50% of the 10,000 employees there may make the move to Austin.
But besides transplants, the factory has driven record job growth by joining a host of other companies that have promised to relocate or expand in Austin.
Additionally, Tesla added a new 30,000 square-foot showroom in South Austin that opened this fall.
Products
Perhaps one of the most eyed product developments is the production of the Model Y at Giga Texas, with Musk seeming hopeful about demand. Musk has said the Model Y—Tesla's midsize SUV, which starts at $46,690—will be "the best selling car or truck in the world" by next year. Giga Texas is expected to start volume production in 2022.
Another anticipated product, the Cybertruck, has faced its fair share of delays. The futuristic truck, which Tesla recently removed pricing and specs for on its website, is expected to be mass-produced in 2023.
Additionally, the affordable Model 3 and Tesla Semi will be produced at the Austin factory in time.
And outside Giga Texas production, the first Tesla Solar neighborhood—dubbed the nation's most sustainable residential community—will be built in Easton Park, a master-planned community in far Southeast Austin near McKinney Falls State Park. The newly built homes will feature Tesla solar roof tiles and Powerwall battery storage as well as electric vehicle charging stations.
The holidays brought a kid Cyberquad, as well as an update to the fleet that included a TikTok integration and UI changes.
It also expanded its merch in Texas-style with a Giga Texas belt buckle that sold out in less than 24 hours. This year also brought news of a Tesla eatery, Tesla beer, a mega battery for the Texas grid and even the company’s interest in selling electricity.
Jobs
Tesla hired thousands to build its local factory and has made big promises to recruit local residents, saying at least half of the Gigafactory hires will be Travis County residents.
Musk has since updated his plans for the factory, saying it will result in 20,000 direct jobs and 100,000 indirect jobs rather than the initial 10,000 workers that were slated for the site.
However this works out, the company is making some local investments to ensure a trained workforce. Earlier this year, Tesla kicked off a manufacturing program for Austin Community College students, aimed at helping them earn certifications with both in-class lessons and lab experience. High school students can also get their start in the EV industry, with a partnership between Tesla and Del Valle school district creating a path for gigafactory jobs.
Stock
While EV competitor Rivian made an impressive market debut with the biggest American Initial Public Offering since Facebook, Tesla’s stock also showed promise this year. In October, Tesla hit the $1 trillion market cap for the first time, after which its stock shot up to more than $1,045 a share. Shares climbed 50% this year, and in the new year, it's expected to see a 28% gain.
Elon Musk
Time crowned Musk person of the year, noting the societal shift wrought by billionaires and their companies, with Musk as the richest (his current net worth is $266 billion). At the start of January, Musk became the richest person in the world, surpassing Amazon CEO Jeff Bezos. But the two have been neck and neck for the title, and Musk reclaimed it again in September after an Amazon stock decline.
Come summer, he cracked some jokes and became the first non-entertainer or athlete to host SNL in five years. Shortly after, in the summer Musk celebrated his birthday week with flights on his private jet from Austin to Boca Chica and to San Jose.
He’s been discreet about his housing, even while public speculation has run high. Still, he’s offered crumbs of information. In the summer, he talked about his tiny home in Boca Chica, Texas, near Starbase. But last week, the Wall Street Journal published a story on his reportedly temporary dwellings in Austin. The newspaper wrote that he lived in the home of billionaire friend and former PayPal colleague Ken Howery, which Musk denied.
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Popular
A Web3 meetup was held this week at Cosmic Coffee + Beer Garden. (Andrea Guzman/Austonia)
It’s hard to know what Web3 is without first understanding the original versions. The first web is the 90s Internet where people had their own random websites that didn’t link together, making it decentralized. In Web2, we saw the rise of Google, Facebook and other major players who configured standard ways for people to share and receive information.
Ethereum co-founder Gavin Wood and other blockchain developers say a decentralized version of the Internet, Web3, is on the way. Web3 can be thought of as synonymous with cryptocurrency, meaning it is based on the blockchain. Platforms and apps built on Web3 won’t be owned by a central gatekeeper, but rather by users. Those in the Austin crypto community believe to see a growing presence of Web3 in Austin.
Pujaa Rajan, an engineer at financial software company Stripe and adviser for startups, describes herself as a “digital nomad.” She has traveled all over from Hawaii to New York and San Francisco, looking for the crypto community in each place.
Having been in Austin for the past month, Rajan organized a Web3 meetup this week at Cosmic Coffee + Beer Garden in South Austin open to folks working in crypto or the crypto-curious. About 30 people showed up. "Compared to a lot of other cities that I went to, it is a lot more open and community-oriented here, which is what Web3 is all about,” she said.
Pujaa Rajan, an engineer at financial software company Stripe, organized a Web3 meetup in Austin during a visit. (Andrea Guzman/Austonia)
ATX DAO member Roberto Talamas, who stopped by the event, talked about the crypto group’s expansion. Web3, in Talamas’ view, expands on the previous versions which allowed people to read, then read and write. Now, he says, people can read, write and own. To Talamas, blockchain technology has powered that ownership aspect, and it can be utilized through groups like a DAO, a group that pools together capital and goes on to make investments or take on blockchain-based projects.
“The ecosystem of work with (Web3) companies here in Austin is still relatively small,” Talamas said. “And that’s one of those things that we’re trying to deal with at ATX DAO is to do all the advocacy work needed to make Austin the best Web3 city.”
Part of that community, however, has gotten a bad rep for being “crypto bros.” Rajan acknowledged that Web3 involves both finance and technology, which are fields women have historically been excluded from. But, she says the decentralization aspect creates a clean slate and a new means to form groups. “I feel like we can kind of take back the power or create a world for ourselves,” Rajan said.
The meetup at Cosmic brought together crypto users to talk about the prospects of Web3. (Andrea Guzmán/Austonia)
Meetup attendee Jonathan Hillis also talked about the idea that Web3 creates an opportunity to start over and how this could be something that grows in Austin. Born and raised in the capital city, Hills has left his Bay Area Web2 Instacart job behind to live in a cabin outside Dripping Springs last year. He and his wife, along with a group of internet friends formed a DAO called Cabin, and he's now writing on the Web3 version of Medium, known as Mirror.
When it comes to the state of Web3, four cities stand out. “The dam broke in Covid,” Hillis said. “Everybody no longer had to live in the Bay Area for tech.”
San Francisco is still rooted in Web2 traits with Big Tech and software as a service venture. New York is financial technology. Miami is another major player. But with Austin, Hillis sees a lot of potential.
“Austin is great at being a place for independent online creators of many types—musicians, but also artists,” Hillis said. “What excites me about Web3 is the opportunities for putting creators at more of the center of the value capture.”
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(Philip Taylor/Flickr)
For Carson Stanch, who moved to Austin from Brooklyn, New York, to be near family, Austin's lower cost of living was just an added bonus. According to the latest data from the U.S. Bureau of Economic Analysis, a $100 bill is worth $98.20 in Austin when compared to the national average in 2020, while it's worth just $84.53 in New York.
Houston native Carson Stanch moved from Brooklyn, New York to Austin just before the pandemic. (Carson Stanch)
Stanch soon realized she was a trendsetter—or perhaps a fortune teller—as the pandemic hit a few months after her move. No longer willing to spend extra money on their more expensive apartments, Stanch said many of her friends and other New Yorkers left the city amid COVID lockdowns.
"It's so expensive to live there (and) all of the reasons why you live in New York, you couldn't really do anymore," Stanch said.
Garrett Watson, a senior policy analyst with the Tax Foundation who wrote a 2018 report on the value of $100 in U.S. metros, told Austonia the report factors in the costs of goods and services with residents' incomes and compares them to the national average. The result is price parity, a number that varies drastically across the country—for instance, a $100 bill won't get you near as far in Austin as it would in more rural parts of the Hill Country.
While a Ben Franklin note was worth $4 more in New York in 2020 when compared to 2018, a $100 bill decreased by $1.60 in value in Austin. Austin's cost of living also saw the 12th-highest increase among U.S. metros from the 2010 to 2020 census.
And as the pandemic's nationwide housing boom gained extra momentum in Austin, peaking at a median home price of $575,000 in June 2021, Watson said the value of $100 could have dropped even further.
"There's just been a chronic hunger for building houses on the coasts and in certain cities in the heartland," Watson said. "Especially this year, we're seeing more and more discussion about that in Austin, and so that is a big, big factor."
Price parity bleeds into other factors as well—in San Francisco, where the value of $100 sits at $82.63, residents are nearly 18% poorer than their higher incomes suggest. But with higher incomes than the U.S. average, they may find themselves more flush with cash when moving to a cheaper city like Austin.
Many out-of-towners have used that extra change to make housing offers much higher than the asking price, Redfin chief economist Daryl Fairweather told Fox7 Austin.
"All those migrants are bringing with them high-paying jobs who are used to much more expensive housing and they’re willing to pull out all the stops to win these homes and move to Austin," Fairweather said.
But Austin is catching up to those traditional hotspots: the area was predicted to be the most expensive metro outside of the Golden State by the end of 2021.
In just two years, Stanch said she's seen some signs.
"I feel like I look around certain areas of Austin (and) they do feel more similar to downtown Brooklyn," Stanch said. "Some businesses I see might tend to cater to folks who have a little more income."
So why not move to, say, Florence, Alabama, where money is almost 20% more valuable?
Watson said the difference comes down to the value of amenities—something the study can't track.
"Part of the value in New York City is all the amenities that you're near, the value of Broadway, the value of being able to get food delivered to your door," Watson said. "So that may be reflected in people's willingness to pay higher prices... there's a lot of really great reasons why people may want to be in Austin from an identity perspective that you can't get in other parts of Texas."
In Austin, tech salaries rose 5% from 2020-2021 as big-name corporations like Oracle and Tesla—alongside Tesla's billionaire owner Elon Musk—flocked to the nation's new "boomtown." With an ever-increasing job market, eclectic culture and reputation as one of the world's best cities for move-ins, Austin's appeal might still offset its price.
But for Stanch and many others, there may still come a time when price wins over location.
"If I was to the point where homebuying was more important than being near friends and family, then I would move to get the home," Stanch said. "I think that's kind of part of my plan."
