Tesla moved its headquarters from California to Texas. So did Chevron.

Time to panic?

Not so fast, says a June report from Public Policy Institute of California (PPIC).

Although high-profile companies moving out of California have made headlines and raised concerns, the report from the nonpartisan think tank found that the number of firms whose headquarters have left the state was small. The report also named tax and regulatory burdens as likely factors in the relocations.

Not Even 2 Percent Left

Between 2011 and 2021, a net of 789 headquarters, or 1.9 percent of the state’s more than 47,000 corporate headquarters, left California, said the report. Roughly half of those that relocated were in manufacturing, wholesale trade, or business services.

In that period, between 147 and 213 companies moved their headquarters out of California each year, with the flow trending upward since 2017, while fewer companies moved their headquarters from other states to California, and that number showed a declining trend, from 137 in 2011 to 68 in 2021, the report said.

Notably, during that time, far more headquarters were launched or closed, with 7,250 or 17 percent of the total opening, and 12,700 or 30 percent of the total shutting down, the report said. It found no clear upward or downward trends.

“So these things are much, much larger than the relocation counts, and that’s important to keep in mind,” said report coauthor David Neumark at a virtual briefing June 24. “The focus on relocation should not be in any way exclusive.

“If I showed you a lot more headquarters are just closing in California, or there’s a lot fewer births of headquarters in California, that should be more alarming because those numbers are so much bigger,” said Neumark, a distinguish professor of economics and adjunct fellow at PPIC.

Moreover, most of the companies that moved their headquarters out of California have kept some branches and jobs in the state, according to PPIC.

Low Taxes, Less Regulation

The report also pointed to factors that may explain the relocations.

Over the period studied, California’s tax and regulatory burden was largely unchanged, but most other states have reduced taxes and regulatory burdens, “which means that California has gotten relatively worse,” said Neumark.

Texas stood out as the top place for relocation, followed by Nevada, New York, Florida and Arizona. And Texas had a big lead—more than 400 corporate headquarters made the switch from California to Texas, double the number that chose Nevada.

California still has several traits that can both attract and retain businesses, including a highly educated and innovative workforce, a good climate, and quality-of-life amenities, the report said.

And California remains the state that hosts the most Fortune 500 companies, with 58 and 57 such companies in 2025 and 2024, respectively, according to Fortune magazine’s Fortune 500 list. Texas and New York took second and third place each year.