Toyota CEO Akio Toyoda, Tesla Motors CEO Elon Musk and California Governor Arnold Schwarzenegger held a joint press conference today in which they announced that Toyota would be teaming up with Tesla to produce the Model S electric car in California.

Tesla Model S production will take place in the recently closed NUMMI factory in Fremont. Toyota, the previous owner of the factory, will invest $50 million for a private placement of Tesla common stock and will a production system and possibly some of Toyota’s suppliers.

Schwarzenegger, for his part, offered a sales tax abatement to Tesla for all capital equipment expenditures in retooling the factory. Tesla estimates put the value of the abatement at approximately $20 million over the course of three years or so.

Tesla stated that the Model S production will likely see the return of about 1,000 of the former Toyota factory employees as they look to produce about 20,000 Model S electric cars per year. Tesla also hinted at the possibility of increasing production to a point of requiring  10,000 workers.