Electric car company Tesla Motors, which has been moving quickly to keep up with demand for its Model S, is getting a $34.7 million tax break that will help it expand production.
The California Alternative Energy and Advanced Transportation Financing Authority said Tuesday that Tesla will not have to pay sales and use taxes on new equipment worth almost $500 million.
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The company will use that equipment to make 35,000 more vehicles a year.
"I'm pleased we could take this action to encourage Tesla to expand its electric vehicle production in California, which will create green jobs and improve our air quality," said state Treasurer Bill Lockyer.
Lockyer estimates that the tax breaks and expanded production will generate 112 new jobs at Tesla's plant in Fremont.
Tesla is expected to build 21,500 Model S units this year. Most of them will be sold in the U.S., with a smaller percentage in Europe, where the company is still establishing a sales network.