Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Review of Related Person Transactions

In accordance with the charter for the Audit Committee of the Board and our written Policies and Procedures with Respect to Related Person Transactions (“RPT Policy”), our Audit Committee reviews and approves any related person transactions.

For purposes of these procedures, “related person” and “transaction” have the meanings contained in Item 404 of Regulation S-K.

Under the RPT Policy, the Audit Committee must review and approve all transactions in which (i) Tesla or one of its subsidiaries is a participant, (ii) the amount involved exceeds $120,000 and (iii) a related person has a direct or indirect material interest, other than transactions available to all Tesla employees generally.

In assessing a related person transaction brought before it for approval, the Audit Committee considers, among other factors, whether the related person transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the related person’s interest in the transaction. The Audit Committee may then approve or disapprove the transaction in its discretion, or may request additional information.

Related person transactions will be disclosed in the applicable SEC filing as required by the rules of the SEC.

Related Person Transactions

Elon Musk is an executive officer, director and/or significant shareholder of SpaceX, X, xAI and TBC. In March 2025, xAI and X effected a transaction under which xAI and X became wholly-owned subsidiaries of a new parent company named X.AI Holdings Corp. On February 2, 2026, xAI Holdings was acquired by and became a wholly owned subsidiary of SpaceX pursuant to a merger transaction.

As previously disclosed, on January 16, 2026, Tesla entered into an agreement with xAI Holdings to invest approximately $2.00 billion to acquire shares of Series E Preferred Stock of xAI Holdings. As a result of the SpaceX and xAI Holdings merger, Tesla’s right to acquire shares of Series E Preferred Stock of xAI under the previously disclosed agreement with xAI Holdings was converted into the right to acquire shares of Class A common stock of SpaceX in accordance with the terms of the underlying merger agreement. Tesla completed its investment of approximately $2.00 billion to acquire shares of Class A common stock of SpaceX on March 12, 2026.

SpaceX is party to certain commercial, licensing and support agreements with Tesla. Under these agreements, Tesla incurred expenses of approximately $11.4 million in 2025 and $1.5 million through February 2026. Tesla also recognized revenue of approximately $143.3 million in 2025, primarily for the sale of vehicles at rates generally available to unaffiliated third parties under the same or similar circumstances, and approximately $0.1 million through February 2026.

Since April 2016, SpaceX has invoiced Tesla for our use of an aircraft owned and operated by SpaceX at rates determined by Tesla and SpaceX, subject to rules of the Federal Aviation Administration governing such arrangements. Tesla incurred expenses of approximately $0.4 million in 2025 and approximately $0.02 million through February 2026.

As part of a multi-platform advertising campaign, Tesla directly or indirectly purchased advertising on X, and incurred expenses of approximately $3.3 million in 2025.

xAI is party to certain commercial, consulting and support agreements with Tesla. Under these agreements, Tesla incurred expenses of approximately $4.0 million in 2025 and $0.2 million through February 2026. Tesla also recognized revenue of approximately $430.1 million in 2025 and approximately $78.1 million through February 2026, primarily for the sale of our Megapack products. In addition, Tesla recognized approximately $0.3 million in 2025 and $0.03 million through February 2026 in Other Income (expense) for consulting and support services provided to xAI.

TBC is party to certain commercial agreements with Tesla. Under these agreements, Tesla incurred expenses of approximately $0.9 million in 2025.

We are party to a service agreement with a security company, owned by Elon Musk and organized to provide security services concerning him, including in connection with his duties to and work for Tesla. Tesla incurred expenses of approximately $4.8 million for such security services in 2025 and approximately $1.3 million through February 2026, representing a portion of the total cost of security services concerning Elon Musk.

JB Straubel is the Chief Executive Officer of Redwood. Redwood is party to commercial agreements with Tesla. Under these agreements, Tesla incurred expenses of approximately $3.3 million in 2025 and $0.7 million through February 2026. Tesla also recognized approximately $12.9 million in 2025 and approximately $1.1 million through February 2026 as a reduction of cost of revenues for the sale of certain scrap materials to Redwood.

A son-in-law of Jack Hartung has been a non-executive, salaried employee of Tesla since December 2016, and does not share a household with Mr. Hartung. He is currently a Senior Program Manager at Tesla and earned total compensation for fiscal year 2025, including the value of equity incentives, of approximately $150,000. This compensation was determined in accordance with Tesla’s compensation practices applicable to employees with similar qualifications and responsibilities and holding similar positions.

Other Transactions

Tesla periodically does business with certain entities with which our directors are affiliated. Such transactions are done on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances.

In the ordinary course of business, we enter into offer letters with our executive officers. We have also entered into indemnification agreements with each of our directors and officers. The indemnification agreements and our certificate of formation and bylaws require us to indemnify our directors and officers to the fullest extent permitted by applicable law.

Director Independence

The Board periodically assesses, with the recommendation of the Nominating and Corporate Governance Committee, the independence of its members as defined in the listing standards of Nasdaq and applicable law. The Board undertook an analysis for each director and director nominee and considered all relevant facts and circumstances, including the director’s other commercial, accounting, legal, banking, consulting, charitable and familial relationships. The Board determined that with respect to each of its current members and director nominees, other than Elon Musk, who is our Chief Executive Officer, and Kimbal Musk, who is Elon Musk’s brother, there are no disqualifying factors with respect to director independence enumerated in the listing standards of Nasdaq or any relationships that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, and that each such member is an “independent director” as defined in the listing standards of Nasdaq and applicable laws.

In particular, the Board reviewed the following considerations: