Tesla Motors Inc. 2013 Model S (James Lipman/MCT )
SACRAMENTO -- A state panel has granted a $34.7-million tax break to Tesla Motors Inc., which makes high-tech electric vehicles at facilities in Fremont and Palo Alto.
The California Alternative Energy and Advanced Transportation Financing Authority this week approved the credit on sales and use taxes that Tesla would have paid for equipment to expand its production of electric cars and power trains.
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"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, who chairs the agency's board.
Tesla will be exempt from paying sales and use taxes on the purchase of as much as $415 million in manufacturing equipment. State officials estimate that the tax break will pay off for California by creating $24 million in new economic activity.
The credit could help Tesla ramp up production of its Model S car by 35,000 units a year, the treasurer's office reported.