A deal between the US-based company and the local Detroit automaker is being hailed as a win for both automakers and the state of Michigan.
The deal, worth $2bn, involves the leasing of an additional 300,000 vehicles to the two automakers and their affiliates.
The two companies have previously signed similar leases, including with Ford and General Motors.
The agreement is part of a new partnership between the two companies, with Tesla now offering Tesla leasing services in both cities, while Jeep will provide service and maintenance for the remaining leases.
“It’s the most significant deal we’ve ever had with a local auto supplier,” said John Lott, executive vice president and chief operating officer of Tesla Motors, at the unveiling.
“We are committed to bringing the best of local manufacturing to our customers, and this is a win-win for both companies.”
The leasing agreement also involves a series of upgrades to the company’s production facility in Fremont, with the company bringing in up to 300 employees from other locations.
The new facility is designed to produce about 800,000 cars a year, but it’s expected to produce at least one million vehicles annually.
Jeep’s Detroit facilities were previously used for manufacturing vehicles like the Jeep Grand Cherokee, which is now on loan from the automaker.
It’s expected that this deal will help the company stay competitive with Tesla and other electric-car makers.
“It will help our business grow in the future, and we’re excited to see this move,” said Mr Lott.
Mr Lott said the company had already committed $1bn in infrastructure spending to boost its battery manufacturing capacity in the region, which he said would be a key to its future success.
Jeep has been trying to find more local manufacturing jobs in the US.
Earlier this year, the company announced that it had been unable to hire more than 1,500 full-time employees, with an additional 700 jobs being cut as a result of the automakers decision.
More to come.