Tesla has partnered with automated manufacturing company Grohmann Engineering. The company is looking to use the German firm's expertise in automation to drive up its auto manufacturing abilities. Tesla company CEO Elon Musk said that this is the first "significant" acquisition in the company's history.

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Tesla had been collaborating with the German firm for over a year. The acquisition will help the companies to work even closer together. Grohmann will keep collaborating with third parties including other automotive companies, even after its acquisition.

Grohmann will act as Tesla's new subdivision in Germany. It will work towards boosting the automation element in the processes. The subdivision will also help in improving the efficiency of the operational system. "Companies are people, and we're very honored that [founder Klaus Grohmann] will be staying on," Musk said.

The acquisition will help Tesla in designing elements of its automated manufacturing systems as it will receive the assistance of the Advanced Automation team in Prüm, Germany. Tesla has boosted its vehicle production by 400 percent in the last four years.

Tesla expects that the acquisition will improve both the quality and speed of its output. It is also likely that it will lead to cost reduction at the same time. The company plans to add over 1,000 jobs to its new Advanced Automation division. The German firm currently has nearly 700 employees on its roll.

The deal is contingent upon receiving approval from German regulators. The financial details of the acquisition were not disclosed. Both the parties expect the deal to be closed in early 2017.