California Grants Tesla $28 Million Tax Break to Build Cars In-State

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We knew Tesla was eyeing California to build its next vehicle - the Model S sedan - but to ensure that happens, the state has crafted an unusual tax incentive deal.

The state will temporarily hold approximately $320 million in equipment and tools as its own property, which will prevent Tesla from having to pay sales tax. According to Reuters, that allows the EV manufacture to shave more than9 percent off the cost of the equipment.

Tesla will still be pumping nearly $238 million into the production facility, which has yet to be built. The company hasn't announced where it plans on locating the plant, but reports suggest it will likely be located in the metropolitan Los Angeles area. The company already has a powertrain production facility in Palo Alto, which will witness a $59-million upgrade in the near future.

Source: Reuters

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