The Governor of California, Arnold Schwarzenegger, addressed the media at Tesla's San Carlos facility about new incentives for Tesla and other spawning electric car companies to continue production of vehicles in the state. With discussions of moving Tesla production to New Mexico, a CAEATFA program that was approved last Wednesday would exempt automakers from sales and use tax when purchasing the manufacturing equipment to build electric vehicles. This initiative can save automakers like Tesla millions of dollars when it comes time to build a new fabrication facility in California.

Although these incentives were evidently directed at the Tesla's second vehicle, the Model S, the automaker had not yet announced where the "multi-use sport sedan" would be produced in California. The official sale date is also still not known but according to Tesla, the new Model S will travel 225 miles on a single charge and cost $60,000.

The Governor, and soon to be Tesla owner, said that he was disappointed with Tesla's initial announcement to move to New Mexico. But with this new initiative, it looks like the automaker will stay in the Golden State after all.

+ Autoblog: Tesla confirms Model S sedan, 225-mile range and $60k