Tesla Motors Inc. is taking a closer look at California to build a giant electric-car battery factory after state lawmakers proposed new tax breaks and regulatory changes that could speed its construction and lower costs.

California is already the auto maker's corporate headquarters and where it builds its $71,000 and up electric cars. But the company in February had omitted the state from a list of potential sites for a new plant, which would build advanced batteries for its electric vehicles.

Winning the Tesla battery factory would come at a critical time for California. In April, Toyota Motor Corp. decided to move its headquarters to Plano, Texas, after spending decades in suburban Los Angeles.

Tesla's proposed 10-million-square-foot plant could employ up to 6,500 people when finished and cost up to $5 billion. Landing that whale would help reverse the perception that California isn't a competitive market for manufacturers.

"California has set into play various legislative proposals and actions that have enabled it to come back into consideration," a Tesla spokesman said. "Discussions have taken place between us and various representatives of the state and the overtures they are making and conditions they are proposing place them in a better position for consideration."