With help from the state of California, Tesla Motors [NSDQ:TSLA] is looking to significantly expand its production capacity.
Tax breaks will allow the company to save up to $34.7 million on $415 million of new manufacturing equipment, which will allow Tesla to add capacity for 35,000 more electric cars at the ex-GM/Toyota NUMMI plant in Fremont, California.
Tesla is already on track to build 21,500 Model S electric cars this year, so the added capacity should give it plenty of room for future growth.
In addition to continued Model S production, Tesla plans to introduce the Model X electric crossover in late 2014, as well as a sub-$40,000 car--tentatively called Model E--that could debut as soon as the 2015 Detroit Auto Show.
Between the three models, the extra capacity shouldn't go to waste. Tesla will also likely continue to produce electric powertrain components for partners Daimler and Toyota.
In return for the tax break, California hopes to see economic growth. California normally taxes the purchase of manufacturing equipment, but it gives out grants for clean technology companies in order to stimulate growth. Tesla obviously fits into that category.
Tesla could reportedly add 112 permanent jobs, and the benefits of added vehicle sales and increased local employment are expected to help as well. the company previously received tax breaks on $612 million of equipment during the refurbishment of its Fremont plant.
According to the California Alternative Energy and Advanced Transportation Financing Authority, which issues the tax exemptions, there should be a $24.4 million net benefit to the state.