The deal, whose financial terms were not disclosed, is expected to add over 1,000 engineering and skilled technician jobs in Germany over the next two years, Tesla said in a blogpost.

Several elements of Tesla’s automated manufacturing systems will be designed and produced in Prüm, Germany.

Grohmann Engineering, which would be renamed Tesla Grohmann Automation after the deal, will serve as the initial base for Tesla Advanced Automation Germany headquarters, with other locations to follow.

Elon Musk-led Tesla, which has been seeing an upward trend in its production level, expects exponential improvements in the speed and quality of production, while cutting costs, following the deal.

The Grohmann buy will also help Tesla ramp up its production and reach its target of 500,000 vehicles by the year 2018.

The deal, expected to close next year, is subject to clearance from regulators, including those in Germany.