Tesla Receives $10M Grant

California Energy Commission has granted $10 million to Tesla Motors, Inc. ( TSLA - Snapshot Report ) to help the latter purchase assembly equipments for its Fremont, California, factory and hire 500 workers. The additional workers will be engaged in building rechargeable sport-utility vehicle in California.

Tesla will be utilizing the fund for manufacturing electric car, the Model X sport-utility vehicle. Model X is the best among the SUVs designed by the company, coined together with performance and brilliant functionality. The company will be further investing $50 million for the expansion of the manufacturing capacity in the Fremont plant and purchase of equipment for the components of Model X.

Tesla acquired the Fremont plant in 2010, which was initially started by General Motors Company ( GM - Analyst Report ) and later operated as a joint venture between Toyota Motor Corporation ( TM - Analyst Report ) and General Motors. Currently, the plant employs 1,500 people and makes Model S sedans. The Model S is an electronic vehicle that intensively uses aluminum, which reduces weight and produces zero emissions while offering rapid acceleration and enhanced performance.

Tesla initially intended to produce 5,000 units of the Model S in 2012. However, the company reduced the guidance to 3,000 vehicles starting at $57,400. The company has not divulged any specific pricing guidance for Model X, which features distinctive falcon-wing doors. The production of the SUV is currently underway and the company plans to introduce the model in 2014.

Palo Alto, California-based Tesla designs and manufactures electric vehicles and electric vehicle power train components for partners including Toyota and Daimler AG ( DDAIF ) . Currently, Tesla retains a Zacks #3 Rank, which translates into a short-term Hold rating.