It's also beneficial for California itself, as high labor and energy costs and strict environmental guidelines are seeing some manufacturing industry companies--such as Toyota--jump to other states.
Industrial power rates in the state are 55 percent higher than the U.S. average, said California Manufacturers & Technology Association spokesman Gino DiCaro. Workers are also paid more, and getting clearance to expand or open factories can be time-consuming and expensive.
In recent decades, the state has concentrated more on technology, defense and aerospace, rather than car production--but Tesla is a good fit for California and has brought manufacturing back at its Fremont plant--previously co-owned by GM and Toyota.
It makes "perfect sense" for Tesla to invest in the state, said California’s lieutenant governor, Gavin Newsom, "and for this state to invest in their success".
Tesla's workforce is growing fast, and only set to grow further over the next few years.
By the end of 2013, Tesla employed around 5,800 people worldwide--a figure now beaten in California alone.
Once the company's battery gigafactory comes online, that could open up another 6,500 jobs--albeit not in California--while mooted Chinese production would mean an even larger workforce.
Tesla recently revealed its first-quarter earnings for 2014, logging revenue of $713 million on deliveries of 6,457 Model S electric cars.
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