California Grants Tesla $10 Million To Build The Model X Electric SUV

California regulators on Wednesday approved a $10 million grant to Tesla Motors to help manufacture its next electric car, the Model X sport utility vehicle.

Tesla will pony up $50 million to match the California Energy Commission grant, which will be used to expand manufacturing capacity at its factory in Fremont, Calif., and to purchase equipment to make components for the Model X.

It was something of a love fest for Tesla at the energy commission meeting in Sacramento as commissioners and other regulators praised Tesla as an innovator that has brought automotive manufacturing back to California while creating clean cars and more than 1,500 jobs.

“Tesla has the unique distinction of being the only automaker to actually ask us to increase our targets under zero emission rules,” said Ryan McCarthy, the science and  technology policy advisor to the chair of the California Air Resources Board. “I think the Model X is going to be the next embodiment of delivering on that unique vision and capability.”

“Tesla’s Gen 3 vehicle could ultimately be a game changer for electric vehicles and air quality and public health in California,” added McCarthy, referring to Tesla’s plans to build an electric car in the $30,000 range.

Its latest car, the Model S sedan, sells between $50,000 and $100,000 and the Model X, which is based on the Model S platform, is expected to sell in that price range.

“Too often we’re portrayed in the press as only producing an electric sports car,” Mike Taylor, Tesla’s vice president of finance, told the commissioners. “I think that misses the point of what Tesla Motors is trying to do and why it’s important for California. Our mission has always been to aggressively promote electric vehicles for the masses.”

Taylor said the $10 million grant would contribute to the hiring of an expected 700 additional workers when the Model X goes into production in 2014.

“I particularly applaud you for your continuing efforts to diversify the vehicle fleet,” commissioner Carla Peterman told Taylor. “The introduction of the sedan and now the SUV model will allow for further penetration and mass adoption.”

“I look forward to these vehicles becoming cheaper over time so that even government employees can afford them,” she added.

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