<p>Photo via <a href="http://www.flickr.com/photos/nitot/3909552769/" target="_blank">Tristan Nitot</a>/Flickr.</p>

A $34.7 million California tax break will allow Tesla Motors to broadly expand its production of battery-electric cars and powertrains.

Tesla won't have to pay sales and use taxes on new manufacturing equipment, which will allow the company to increase annual production by 35,000 cars, reports the San Francisco Chronicle. Tesla now produces 21,500 Model S sedans per year.

Tesla plans to begin producing the Model X SUV in 2014, and in early 2015 is expected to introduce the more affordable Model E battery-electric sedan, which will sell for $40,000.