Tesla (TSLA) 10-K risk factor changes: FY2019 vs FY2018

We have experienced in the past, and may experience in the future, delays or other complications in the design, manufacture, launch, [removed: production, delivery] and [removed: servicing] [added: production] ramp of [removed: new vehicles and other products such as Model 3, Model Y,] our [added: vehicles,] energy [removed: storage products] [added: products,] and [removed: Solar Roof,] [added: product features, or may not realize our manufacturing cost targets,] which could harm our brand, business, prospects, financial condition and operating results.

We have previously experienced [removed: launch, manufacturing, production] [added: launch] and [removed: delivery] [added: production] ramp delays or other complications in connection with new vehicle models such as Model S, Model X and Model 3, [added: and] new vehicle features such as the all-wheel drive dual motor drivetrain on Model S and the second version of [added: our] Autopilot [removed: hardware, and a significant increase in automation introduced in the manufacture of Model 3.][added: hardware.]

For example, we encountered unanticipated [removed: challenges, such as certain] supply chain [removed: constraints,] [added: constraints] that led to initial delays in producing Model [removed: X.][added: X and an isolated supplier limitation in the manufacture of Model 3.]

[removed: Moreover, in the areas of] [added: Similarly, during our initial] Model 3 production [removed: where] [added: ramp,] we had challenges ramping fully automated processes, such as portions of the battery module assembly line, material flow system and the general assembly line, [added: which] we [removed: reduced] [added: addressed by reducing] the levels of automation and [removed: introduced] [added: introducing] semi-automated or manual processes.

[removed: In addition,] [added: Finally,] because our vehicle [removed: models] [added: models, in particular Model 3 and Model Y, may] share certain [added: parts, suppliers or] production facilities with [removed: other vehicle models,] [added: each other,] the volume or efficiency of production with respect to one model may impact [added: also] the production of other models or lead to bottlenecks that impact the production of all models.

We may also experience similar future delays or other complications in [removed: bringing to market and] [added: launching and/or] ramping production of new vehicles, such as [removed: Model Y, the] Tesla Semi, [removed: our planned pickup truck] [added: Cybertruck] and [added: the] new Tesla Roadster, our energy storage products and [added: the] Solar [removed: Roof.][added: Roof, as well as future features and services such as new Autopilot or FSD features and the autonomous Tesla ride-hailing network.]

Any significant [removed: additional] delay or other complication in the production [added: ramp] of [removed: and delivery capabilities for] our current products or the development, manufacture, [removed: launch, production and delivery] [added: launch] and [removed: servicing capability] [added: production] ramp of our future products, [added: features and services,] including complications associated with expanding our production [removed: capacity,] [added: capacity and] supply chain [removed: and delivery systems] or obtaining or maintaining [added: related] regulatory approvals, [added: or inability to manage such ramps cost-effectively,] could materially damage our brand, business, prospects, financial condition and operating results.

We may be unable to meet our growing [removed: vehicle production, sales and] [added: product sales,] delivery [added: and installation] plans and [added: vehicle] servicing [added: and charging network] needs, [added: or accurately project and manage this growth internationally,] any of which could harm our business and prospects.

In addition, we have used [removed: and may use in the future] a number of new manufacturing technologies, techniques and processes for our vehicles, [removed: which] [added: such as aluminum spot welding systems and high-speed blow forming of certain difficult to stamp vehicle parts, and] we [removed: must successfully] [added: may] introduce [removed: and scale for high-volume production.][added: new processes in the future.]

We have also introduced unique design features in our vehicles with different manufacturing challenges, such as large display screens, dual motor drivetrain, [removed: Autopilot] hardware [added: for our Autopilot] and [added: FSD features and] falcon-wing doors.

In particular, we are targeting [removed: for the first time] with Model 3 [added: and Model Y] a [added: global] mass demographic with a broad range of potential customers, in which we have limited experience projecting demand and pricing our products.

To accommodate [removed: our] [added: growing] volumes, we have deployed a number of delivery models, such as deliveries to customers’ homes and workplaces, some of which have not been previously tested at scale and in different [removed: geographies.][added: geographies and may not ultimately be successful.]

[removed: Moreover,] [added: For example,] significant transit time may be required to transport vehicles [removed: such as Model 3] in volume into [removed: new markets] [added: international markets, and we also saw challenges in initially ramping our logistical channels in China and Europe as we delivered Model 3 there] for the first [removed: time.][added: time in the first quarter of 2019.]

[removed: Finally,] [added: Likewise,] because of our unique expertise with our vehicles, we recommend that our vehicles be serviced by our service centers, Mobile Service technicians or certain authorized professionals that we have specifically trained and equipped.

If we experience delays in adding such servicing capacity or experience unforeseen issues with the reliability of [added: our vehicles, particular higher-volume and newer additions to our fleet such as] Model [removed: 3, which we recently commenced producing at volume,] [added: 3 and Model Y,] it could overburden our servicing [removed: capabilities.][added: capabilities and parts inventory.]

If we [removed: are unable to ramp up] [added: fail] to [removed: meet our sales, delivery and servicing targets globally, or] [added: manage] our [removed: projections on which such targets are based are inaccurate, this] [added: growth effectively, it] could result in negative publicity and damage to our brand and have a material adverse effect on our business, prospects, financial condition and operating results.

Our future growth and success is dependent upon consumers’ willingness to adopt electric vehicles and specifically our [removed: vehicles, especially in the mass market demographic which we are targeting with Model 3.][added: vehicles.]

Our growth is highly dependent upon the [added: worldwide] adoption by consumers of alternative fuel vehicles in general and electric vehicles in particular.

Moreover, the [removed: Model 3] [added: target demographics for our vehicles, in particular the] mass market demographic [removed: is larger, but more competitive, than the demographic] for Model [removed: S] [added: 3] and Model [removed: X, and additional electric vehicles] [added: Y,] are [removed: entering the market.][added: highly competitive.]

If the market for electric vehicles in general and Tesla vehicles in particular does not develop as we expect, [removed: or] develops more slowly than we expect, or if demand for our vehicles decreases in our markets, our business, prospects, financial condition and operating results could be harmed.

We have only [added: relatively] recently [removed: begun high volume] [added: achieved high-volume] production of vehicles, [added: and] are still at an earlier stage and have limited resources relative to our [removed: competitors, and the market for alternative fuel vehicles is rapidly evolving.][added: competitors.]

[removed: We] [added: We] are dependent on our suppliers, the majority of which are single-source suppliers, and the inability of these suppliers to deliver necessary components of our products according to our schedule and at prices, quality levels and volumes acceptable to us, or our inability to efficiently manage these components, could have a material adverse effect on our financial condition and operating [removed: results.][added: results.]

While we believe that we will be able to secure additional or alternate sources of supply for most of our components in a relatively short time frame, there is no assurance that we will be able to do so or develop our own replacements for certain highly customized [removed: components of our products.][added: components.]

[removed: This] [added: However, our] limited, and in [removed: many] [added: most] cases [removed: single source,] [added: single-source,] supply chain exposes us to multiple potential sources of delivery failure or component shortages for [removed: the production of] our [removed: products,] [added: production,] such as those which we experienced in 2012 and 2016 in connection with our slower-than-planned Model S and Model X ramps.

Furthermore, unexpected changes in business conditions, materials pricing, labor issues, wars, governmental changes, [added: tariffs,] natural disasters such as the March 2011 earthquakes in [removed: Japan] [added: Japan, health epidemics,] and other factors beyond our and our suppliers’ [removed: control,] [added: control] could also affect [removed: our] [added: these] suppliers’ ability to deliver components to us on a timely basis.

The loss of any [removed: single] [added: supplier, particularly a single-] or [removed: limited source supplier] [added: limited-source supplier,] or the disruption in the supply of components from [removed: these suppliers] [added: our suppliers,] could lead to product design [removed: changes and] [added: changes, production] delays [removed: in product deliveries] [added: of key revenue-generating products, idle manufacturing facilities, and potential loss of access] to [added: important technology and parts for producing, servicing and supporting] our [removed: customers,] [added: products, any of] which could [removed: hurt our relationships with our customers and] result in negative publicity, damage to our brand and a material and adverse effect on our business, prospects, financial condition and operating results.

We have [removed: also] experienced [added: in the past, and may experience in the future,] cost increases from certain of our suppliers in order to meet our quality targets and development timelines as well as due to our design [removed: changes, and we may experience similar cost increases in the future.][added: changes.]

Additionally, we [removed: are negotiating] [added: continuously negotiate] with existing suppliers [removed: for] [added: to obtain] cost [removed: reductions, seeking] [added: reductions and avoid unfavorable changes to terms, seek] new and less expensive suppliers for certain parts, and [removed: attempting] [added: attempt] to redesign certain parts to make them less expensive to produce.

[removed: There is no assurance that these] [added: Our] suppliers [removed: will] [added: may not] ultimately be able to sustainably and timely meet our cost, quality and volume [removed: needs.][added: needs, requiring us to replace them with other sources.]

Furthermore, as the scale of our vehicle production increases, we will need to accurately forecast, purchase, warehouse and transport [added: components] to our manufacturing facilities [removed: components] [added: and servicing locations internationally and] at much higher volumes.

If we are unable to accurately match the timing and quantities of component purchases to our actual [removed: needs,] [added: needs] or successfully implement automation, inventory management and other systems to accommodate the increased complexity in our supply chain, we may incur unexpected production disruption, storage, transportation and write-off costs, which could have a material adverse effect on our financial condition and operating results.

[removed: Future] [added: Any] problems or delays in expanding Gigafactory [removed: 1] [added: Nevada] or ramping [added: and maintaining] operations there could negatively affect the production and profitability of our products, such as Model [removed: 3] [added: 3, Model Y] and our energy storage products.

To lower the cost of cell production and produce cells in high volume, we have vertically integrated the production of lithium-ion cells [removed: and finished] [added: at Gigafactory Nevada, where we also manufacture] battery packs [added: and drive units] for [removed: Model 3] [added: certain vehicles] and energy storage products [removed: at Gigafactory 1.][added: and assemble our Megapack product.]

[removed: While Gigafactory 1 began producing] [added: Production of] lithium-ion cells [removed: for energy storage products] [added: at Gigafactory Nevada began] in [removed: January 2017] [added: 2017,] and [removed: has since begun producing lithium-ion cells for Model 3,] we have no other direct experience in the production of lithium-ion cells.

Given the size and complexity of this undertaking, it is possible that future events could result in issues or delays in further ramping [added: our products] and expanding production [added: output] at Gigafactory [removed: 1.][added: Nevada.]

In order to achieve our volume and gross margin targets for [removed: Model 3] [added: our vehicles] and [removed: the anticipated ramp in production of] energy storage products, we must continue to sustain and ramp significant cell production at Gigafactory [removed: 1,] [added: Nevada,] which, among other things, requires Panasonic to successfully operate and further ramp its cell production lines at significant volumes.

Although Panasonic has a long track record of producing high-quality cells at significant volume at its factories in Japan, it has [added: relatively] limited experience with cell production at Gigafactory [removed: 1.][added: Nevada.]

In addition, we produce several components for Model [removed: 3,] [added: 3 and Model Y,] such as battery modules incorporating the lithium-ion cells produced by [removed: Panasonic,] [added: Panasonic] and drive [removed: units,] [added: units (including to support Gigafactory Shanghai production),] at Gigafactory [removed: 1.][added: Nevada.]

While we have largely overcome this bottleneck after deploying multiple semi-automated lines and improving our original lines, additional bottlenecks may arise as we continue to increase the production [removed: rate.][added: rate and introduce new lines.]

If we are unable to maintain Gigafactory [removed: 1] [added: Nevada] production, ramp [added: output] additionally over time as needed, and do so cost-effectively, or if we or Panasonic are unable to [removed: attract,] hire and retain a substantial number of highly skilled personnel, our ability to supply battery packs or other components for Model [removed: 3] [added: 3, Model Y] and our other products could be negatively impacted, which could negatively affect our brand and harm our business, prospects, financial condition and operating results.

There is no guarantee that we will be able to successfully and timely introduce and scale any such new processes or features.

In particular, our future business depends in large part on the high-volume production of Model 3 and Model Y, which we believe are our vehicles with the largest markets.

We have limited experience to date in manufacturing Model 3 at high volumes and continuously increasing its production rates, particularly across multiple vehicle manufacturing facilities, which we commenced in the fourth quarter of 2019 with Gigafactory Shanghai coming online.

In order to be successful, we will need to implement, maintain and/or ramp efficient and cost-effective manufacturing capabilities, processes and supply chains and achieve the design tolerances, high quality and maximum output rates we have planned, including at Gigafactory Shanghai, and for Model Y, which we commenced manufacturing at the Fremont Factory in the first quarter of 2020.

Bottlenecks such as those we have experienced in the past with new product ramps and other unexpected challenges may also arise as we ramp production, and it will be important that we address them promptly while continuing to reduce our manufacturing costs.

If we are not successful in doing so, or if we experience issues with our ongoing manufacturing process improvements and cost-down efforts, we could face delays in establishing and/or sustaining our Model 3 and Model Y ramps or be unable to meet our related cost and profitability targets.

Moreover, we will need to hire, train and compensate skilled employees to operate high-volume production facilities to support our vehicle ramp at the Fremont Factory and Gigafactory Shanghai, as well as at Gigafactory Nevada to support the manufacture of battery packs and drive units for certain of our vehicles.

Likewise, we may encounter delays with the design, construction and regulatory or other approvals necessary to build and bring online future manufacturing facilities, including our planned Gigafactory Berlin in Germany.

Concurrent with developing, launching and ramping our products, our success will depend on our ability to continue to significantly increase their sales, deliveries, installations and servicing worldwide, while allocating our available resources among multiple products simultaneously.

We continuously evaluate, and as appropriate evolve, our retail operations and product offerings in order to maximize our reach and optimize our costs, vehicle line-up and model differentiation, and purchasing experience.

However, there is no guarantee that each step in our evolving strategy will be perceived as intended by prospective customers accustomed to more traditional sales models.

Until we ramp local production at Gigafactory Shanghai and in the future at Gigafactory Berlin, we will have to contend with predominantly single-factory vehicle production at the Fremont Factory for numerous international variants.

If our specific demand expectations for these variants prove inaccurate, we may not be able to timely generate sales matched to the specific vehicles that we produce in the same timeframe or that are commensurate with our operations in a given region, which may negatively impact our deliveries and operating results in a particular period.

Likewise, as we develop and grow our energy storage product and solar business worldwide, our success will depend on our ability to correctly forecast demand for our products in different markets.

While we have substantially implemented and improved many aspects of our delivery and service operations, we still have relatively limited experience with, and may face difficulties in, such deliveries and servicing at high volumes, particularly in international markets as we expand.

We are also expanding our installation capabilities for the Solar Roof as we continue its manufacturing ramp by training both our own personnel and third party installers.

If we are not successful in growing this overall installation capability to keep pace with our increasing production, or if we experience unforeseen delays in the production ramp or inaccurately forecast demand for the Solar Roof, our operating results may be negatively impacted.

There is no assurance that we will be able to ramp our business to meet our sales, delivery, servicing, charging and installation targets globally, that our projections on which such targets are based will prove accurate, or that the pace of growth or coverage of our customer infrastructure network will meet customer expectations.

We operate in the automotive industry, which is generally susceptible to cyclicality and volatility.

Moreover, the market for alternative fuel vehicles is rapidly evolving.

Specifically, it is uncertain as to how such macroeconomic factors will impact us as a company that has been experiencing growth and increasing market share in an industry that has globally been experiencing a recent decline in sales.

Our products contain thousands of purchased parts that we source globally from hundreds of direct suppliers.

We attempt to mitigate our supply chain risk by entering into long-term agreements where it is practical and beneficial to do so, including agreements we entered into with Panasonic to be our manufacturing partner and supplier; qualifying and obtaining components from multiple sources where sensible, such as the PV panels for our retrofit solar installations that we purchase from a variety of suppliers; and maintaining safety stock for key parts and assemblies and die banks for components with lengthy procurement lead times.

We may also be impacted by changes in our supply chain or production needs.

Likewise, any significant increases in our production, such as for Model 3 and our expectations for Model Y, has required and/or may in the future require us to procure additional components in a short amount of time.

Outside of the U.S., we have limited manufacturing experience and we may experience issues or delays increasing the level of localized procurement at our Gigafactory Shanghai and in the future at our Gigafactory Berlin.

In addition, the battery cells produced there store large amounts of energy.

Any issues or delays in meeting our projected timelines, costs and production at or funding the ramp of Gigafactory Shanghai, or any difficulties in generating and maintaining local demand for vehicles manufactured there, could adversely impact our business, prospects, operating results and financial condition.

As part of our continuing work to increase production of our vehicles on a sustained basis, and in order to make them affordable in international markets by accessing local supply chains and workforces, we have established Gigafactory Shanghai in China.

Currently, we have installed annual production capacity for 150,000 Model 3 vehicles there that we believe we will eventually be able to push to actual rates of production in excess of such number, and we have commenced construction of the next phase of Gigafactory Shanghai to add Model Y manufacturing capacity at least equivalent to that for Model 3.

The ramp and further expansion of Gigafactory Shanghai are subject to a number of uncertainties inherent in all new manufacturing operations, including ongoing compliance with regulatory requirements, maintenance of operational licenses and approvals for additional expansion, potential supply chain constraints, hiring, training and retention of qualified employees, and the pace of bringing production equipment and processes online with the capability to manufacture high-quality units at scale.

We have limited experience to date with operating manufacturing facilities abroad, and only recently began to sell Model 3 in China.

If we experience any issues or delays in meeting our projected timelines, costs, capital efficiency and production capacity for Gigafactory Shanghai, or in maintaining and complying with the terms of local debt financing that we intend will largely fund it, or in generating and maintaining demand locally for the vehicles we manufacture at Gigafactory Shanghai, our business, prospects, operating results and financial condition could be adversely impacted.

If we are not able to successfully and timely ramp Gigafactory Shanghai, we may continue to be exposed to the impact of such unfavorable tariffs, duties or costs to our detriment compared to locally-based competitors.

We have a global footprint with domestic and international operations and subsidiaries.

| | • | fluctuations in the value of any foreign currencies in which battery cell and related raw material purchases are or may be denominated, such as the Japanese yen, against the U.S. dollar. |

Moreover, prices for solar product components and prices per kWh for lithium-ion battery cells have declined and may continue to decline, which may adversely impact our ability to cost-effectively manufacture such components ourselves.

Such attention includes frequent criticism, which is often exaggerated or unfounded, such as speculation regarding the sufficiency or stability of our management team.

For example, we made certain adjustments to our vehicle prices during 2019 to reflect anticipated changes to our cost structure from periodically optimizing our retail strategy, and as a limited accommodation to customers in consideration of a reduction in the electric vehicle federal tax credit.

Such pricing changes may impact the residual values of our vehicles.

Similarly, we experienced certain challenges in the production of Model 3 that led to delays in its ramp.

If issues like these arise or recur, if our remediation measures and process changes do not continue to be successful, if we experience issues with transitioning to full automation in certain production lines or to other planned manufacturing improvements, or if we experience issues or delays in building our Gigafactory Shanghai in China or commencing and ramping Model 3 production there, we could experience issues in sustaining the Model 3 ramp or delays in increasing Model 3 production further.

Also, if we encounter difficulties in scaling our delivery or servicing capabilities for Model 3 or future vehicles and products to high volumes in the U.S. or internationally, our financial condition and operating results could suffer.

We have experienced in the past, and may experience in the future, delays in realizing our projected timelines and cost and volume targets for the production and ramp of Model 3, which could harm our business, prospects, financial condition and operating results.

Our future business depends in large part on our ability to execute on our plans to manufacture, market and sell the Model 3 vehicle, which we are offering at a lower price point and which we are producing at significantly higher volumes than the Model S or Model X vehicles.

We commenced production and initial customer deliveries of Model 3 in July 2017, and since then have achieved a stabilized production rate.

At the Tesla Factory, we expect to continue to increase our Model 3 production rate to approximately 7,000 units per week on a sustained basis by the end of 2019.

Moreover, in China, we expect to commence production of certain trims of Model 3 for the local market in China in the initial phase of our Gigafactory Shanghai by the end of 2019, and then progressively increase levels of localization through local sourcing and manufacturing.

Inclusive of Gigafactory Shanghai, our goal is to be able to produce 10,000 Model 3 vehicles per week on a sustained basis, and an annualized output rate in excess of 500,000 Model 3 vehicles sometime between the fourth quarter of 2019 and the second quarter of 2020.

However, the timeframe for commencing Model 3 production at Gigafactory Shanghai is subject to a number of uncertainties, including regulatory approval, supply chain constraints, and the pace of installing production equipment and bringing the factory online.

We have limited experience to date in manufacturing vehicles at the high volumes that we recently achieved and to which we anticipate ramping further for Model 3, and to be successful, we will need to complete the implementation and ramp of efficient and cost-effective manufacturing capabilities, processes and supply chains necessary to support such volumes, including at Gigafactory Shanghai.

We are employing a higher degree of automation in the manufacturing processes for Model 3 than we have previously employed and to continue to implement additional automation.

In some cases, we have temporarily reduced the levels of automation and introduced semi-automated or manual processes, at additional labor cost.

Additional bottlenecks may also arise as we continue to ramp production at the Tesla Factory and commence the initial phase of Model 3 production at Gigafactory Shanghai, and it will be important that we address them promptly and in a cost-effective manner.

Moreover, our Model 3 production plan has generally required to date significant investments of cash and management resources, and we expect to deploy some level of additional resources as we further progress our ramp and begin production in new locations in the future, such as China.

Our production plan for Model 3 is based on many key assumptions, including:

| | • | that we will be able to sustain and further expand our high-volume production of Model 3 at the Tesla Factory without exceeding our projected costs and on our projected timeline; |

| --- | --- | --- |

| | • | that we will be able to continue to expand Gigafactory 1 in a timely manner to produce high volumes of quality lithium-ion cells to be integrated into battery modules and finished battery packs and drive unit components for Model 3, including in part to support production in China as the level of local sourcing and manufacturing there progressively increases, all at costs that allow us to sell Model 3 at our target gross margins; |

| | • | that we will be able to build and commence production at additional future facilities, such as at Gigafactory Shanghai, to support our international ramp for Model 3 in accordance with our projected costs and timeline; |

| | • | that the equipment and processes which we have selected for Model 3 production will be able to accurately manufacture high volumes of Model 3 vehicles within specified design tolerances and with high quality; |

| | • | that we will be able to maintain suppliers for the necessary components on terms and conditions that are acceptable to us and that we will be able to obtain high-quality components on a timely basis and in the necessary quantities to support high-volume production; and |

| | • | that we will be able to attract, recruit, hire, train and retain skilled employees to operate our planned high-volume production facilities to support Model 3, including at the Tesla Factory, Gigafactory 1 and Gigafactory Shanghai. |

If one or more of the foregoing assumptions turns out to be incorrect, our ability to meet our Model 3 projections on time and at volumes and prices that are profitable, the demand for and deliveries of Model 3, as well as our business, prospects, operating results and financial condition, may be materially and adversely impacted.

Our plans call for sustaining and further ramping from our significant increases in vehicle production and deliveries, particularly for Model 3.

Our ability to achieve these plans will depend upon a number of factors, including our ability to utilize installed manufacturing capacity to achieve the planned production yield, further install and increase capacity in accordance with our planned timelines and costs, maintain our desired quality levels and optimize design and production changes, as well as our suppliers’ ability to support our needs.

For example, we have introduced highly automated production lines, aluminum spot welding systems and high-speed blow forming of certain difficult to stamp vehicle parts.

We have limited experience developing, manufacturing, selling and servicing, and allocating our available resources among, multiple products simultaneously.

If we are unable to realize our plans, our brand, business, prospects, financial condition and operating results could be materially damaged.

Concurrent with our increasing vehicle production levels, we will also need to continue to significantly increase sales and deliveries of our vehicles.

Although we have a plan for selling and delivering increased volumes of vehicles, we have limited experience in marketing, selling and delivering vehicles at the higher volumes at which we are manufacturing Model 3, and we may face difficulties meeting our sales and delivery goals in both existing markets as well as new markets into which we expand, such as Europe and China where we are beginning to deliver Model 3 for the first time in the first quarter of 2019.

While we are producing numerous variants (including regional versions) of Model 3 in accordance with the demand that we expect for them, if our projections are inaccurate, we may not be able to generate sales matched to the specific vehicles that we have the capacity to produce, based on vehicle production line constraints and long lead times for procuring certain parts.

To date, we have limited experience with such deliveries and servicing at the scale to which we expect to grow, particularly in international markets.

To the extent that such factors lead to delays in our deliveries, our results may be negatively impacted.

Our products contain numerous purchased parts which we source globally from hundreds of direct suppliers, the majority of whom are currently single-source suppliers, although we attempt to qualify and obtain components from multiple sources whenever feasible.

Any significant increases in our production may require us to procure additional components in a short amount of time, and in the past we have also replaced certain suppliers because of their failure to provide components that met our quality control standards.

Moreover, we have signed long-term agreements with Panasonic to be our manufacturing partner and supplier for lithium-ion cells at Gigafactory 1 in Nevada and PV cells and panels at Gigafactory 2 in Buffalo, New York.

If we encounter unexpected difficulties with key suppliers such as Panasonic, and if we are unable to fill these needs from other suppliers, we could experience production delays and potential loss of access to important technology and parts for producing, servicing and supporting our products.

Changes in our supply chain have also resulted in the past, and may result in the future, in increased cost.

Certain suppliers have sought to renegotiate the terms of supply arrangements.

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The following discussion and analysis should be read in conjunction with the consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K.

Overview and 2018 Highlights

Our mission is to accelerate the world’s transition to sustainable energy.

We design, develop, manufacture, lease and sell high-performance fully electric vehicles, solar energy generation systems and energy storage products.

We also offer maintenance, installation, operation and other services related to our products.

Automotive

Our production vehicle fleet includes our Model S premium sedan and our Model X SUV, which are our highest-performance vehicles, and our Model 3, a lower-priced sedan designed for the mass market.

We continue to enhance our vehicle offerings with enhanced Autopilot options, internet connectivity and free over-the-air software updates to provide additional safety, convenience and performance features.

In addition, we have several future electric vehicles in our product pipeline, including Model Y, Tesla Semi, a pickup truck and a new version of the Tesla Roadster.

In 2018, we continued to scale our automotive operations, particularly our ramp of Model 3, and achieved total production of 254,530 vehicles and delivered 245,506 vehicles, representing year-over-year increases of approximately 152% and 138%, respectively.

Energy Generation and Storage

We lease and sell retrofit solar energy systems and sell renewable energy and energy storage products to our customers, and are ramping our Solar Roof product that combines solar energy generation with attractive, integrated styling.

Our energy storage products, which we manufacture at Gigafactory 1, consist of Powerwall, mostly for residential applications, and Powerpack, for commercial, industrial and utility-scale applications.

During 2018, we deployed 1.04 GWh of energy storage products, nearly tripling our 358 MWh of energy storage deployments during 2017.

We also deployed 326 megawatts (“MW”) of solar energy generation during 2018.

Management Opportunities, Challenges and Risks and 2019 Outlook

Automotive Demand, Production and Deliveries

Our goal is to produce the world’s highest quality vehicles as quickly and as cost-effectively as possible with a priority on workplace health and safety.

The worldwide automotive markets for alternative fuel vehicles and self-driving technology are highly competitive and we expect them to become even more so.

A growing number of companies, including established automakers, have announced plans to expand, and in some cases fully transition to, production of electric or environmentally friendly vehicles, and/or to develop self-driving technologies.

However, we believe that the unique features of our vehicles, the safety aspects of each of our vehicles, our constant innovation, our growing brand, the increased affordability introduced with Model 3, the innovation and expansion of our global retail, service and charging operations and infrastructure and our future vehicles will continue to generate incremental demand for our vehicles by making our vehicles accessible to larger and previously untapped consumer and commercial markets.

Model 3 was the best-selling premium vehicle in the United States in 2018.

Vehicles traded in to us by Model 3 customers continue to suggest the existence of a wider addressable market for this vehicle than existing owners of mid-sized premium sedans.

Moreover, as we have offered only the long-range, mid-range and performance variants of Model 3 thus far, we believe that we will see increased demand with the introduction of less expensive variants, such as a version with a base price of $35,000 that we intend to offer in the future, and additional financing options.

We commenced in January 2019 production of Model 3 for Europe and China, each of which we believe has a much larger mid-sized premium sedan market than North America, where we have exclusively delivered Model 3 to date.

We also believe that we have an advantage over our competitors with respect to our battery and powertrain technology, as our vehicles’ EPA-rated range per kWh is expected to be superior to that of other electric vehicles to be introduced in the near term, and we have the ability to improve our vehicles through over-the-air software updates.

We are producing variants (including regional versions) of Model 3 in accordance with the demand that we expect for them, however, and we have finite production capabilities with long lead times associated with procuring certain parts.

If our Model 3 demand expectations prove inaccurate or we experience delays in introducing planned additional variants, including as we begin offering Model 3 in new markets, we may not be able to timely generate sales matched to the specific vehicles that we have the capacity to produce.

We may also be impacted by trade policies, political uncertainty and economic cycles involving geographic regions where we have significant operations.

Sales of vehicles in the automotive industry also tend to be cyclical in many markets, which may expose us to increased volatility as we expand and adjust our operations and retail strategies.

In addition, the federal tax credit for the purchase of a qualified electric vehicle in the U.S. was reduced to $3,750 for any Tesla vehicle delivered during the first or second quarter of 2019, and will be further reduced to $1,875 for each Tesla vehicle delivered in the third or fourth quarter of 2019 and to $0 for each Tesla vehicle delivered thereafter.

We believe that this phase-out likely pulled forward some vehicle demand into 2018 and could create similar pull-forwards in 2019 before each further step reduction in the federal tax credit.

In the long run, we do not expect a meaningful impact to our sales in the U.S., as we believe that each of our vehicle models offers a compelling proposition even without incentives.

Globally, we are also working to, and in some cases have already begun to, increase the value proposition and affordability of our offerings to customers and offer other financing arrangements over time.

For example, we intend to introduce leasing options for Model 3.

Our Model 3 production ramped dramatically during 2018, and we expect to continue to grow Model 3 production to a sustained rate of 7,000 vehicles per week at our Tesla Factory by the end of 2019 as we ramp international deliveries.

We remain focused on further cost improvements and on increasing the affordability of Model 3.

Furthermore, in January 2019 we commenced construction of our Gigafactory Shanghai in China.

We expect to build a production process that is optimized and simplified for Model 3 production, comprised of stamping, body joining and paint shops and general assembly, at Gigafactory Shanghai to begin production of certain trims of Model 3 for China by the end of 2019.

Accordingly, changes in exchange rates and, in particular, a strengthening of the U.S. dollar have in the past, and may in the future, negatively affect our revenue and other operating results as expressed in U.S. [removed: dollars.][added: dollars as we do not typically hedge foreign currency.]

For the year ended December 31, 2018, we recognized a net foreign currency gain of [removed: $1.5] [added: $2] million in other [removed: income (expense),] [added: (expense) income,] net, with our largest re-measurement exposures from the euro, New Taiwan dollar and Canadian dollar.

For the year ended December 31, [removed: 2017,] [added: 2019,] we recognized a net foreign currency [removed: loss] [added: gain] of [removed: $52.3] [added: $48] million in other [removed: income (expense),] [added: (expense) income,] net, with our largest re-measurement exposures from the [removed: euro,] [added: U.S. dollar, British pound and] Canadian dollar [removed: and Norwegian krone.][added: as our subsidiaries are denominated in various local currencies.]

These changes were applied to our total monetary assets and liabilities denominated in currencies other than our local currencies at the balance sheet [removed: dates] [added: date] to compute the impact these changes would have had on our net income (loss) before income taxes.

These changes would have resulted in an adverse impact of [removed: $175.7] [added: $362] million at December 31, [removed: 2018] [added: 2019] and [removed: $116.0] [added: $176] million at December 31, [removed: 2017.][added: 2018 assuming no foreign currency hedging.]

A hypothetical 10% change in our interest rates would have increased [added: or decreased] our interest expense for the years ended December 31, [removed: 2018] [added: 2019] and [removed: 2017] [added: 2018] by [removed: $8.5] [added: $8] million and [removed: $7.6] [added: $9] million, respectively.

| ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |

| --- | --- |

Index to Consolidated Financial Statements

| | | Page |

| --- | --- | --- |

| [Report of Independent Registered Public Accounting Firm](#REPORT_INDEPENDENT_REGISTERED_PUBLIC_ACC) | | 62 |

| [Consolidated Balance Sheets](#Consolidated_Balance_Sheets) | | 65 |

| [Consolidated Statements of Operations](#Consolidated_Statements_of_Operations) | | 66 |

| [Consolidated Statements of Comprehensive Loss](#Consolidated_Statmnts_of_Cmprehnsve_Loss) | | 67 |

| [Consolidated Statements of Redeemable Noncontrolling Interests and Equity](#Consolidated_Statements_of_Stockholders) | | 68 |

| [Consolidated Statements of Cash Flows](#Consolidated_Statements_of_Cash_Flows) | | 69 |

| [Notes to Consolidated Financial Statements](#Notes_to_Consolidated_Financial_Statemen) | | 70 |

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Tesla, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Tesla, Inc. and its subsidiaries (the “Company”) as of December 31, 2019 and 2018, and the related consolidated statements of operations, of comprehensive loss, of redeemable noncontrolling interests and equity and of cash flows for each of the three years in the period ended December 31, 2019, including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of December 31, 2019, based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019 in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the COSO.

Changes in Accounting Principles

As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019 and the manner in which it accounts for revenue from contracts with customers in 2018.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A.

Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

We design, develop, [removed: manufacture and] [added: manufacture,] sell [added: and lease] high-performance fully electric vehicles [removed: (“EVs”)] and energy generation and storage systems, and [removed: also install and maintain such energy systems and sell solar electricity.][added: offer services related to our products.]

We [removed: have established and] [added: also] continue to grow [added: our customer-facing infrastructure through] a global network of [removed: stores, galleries,] vehicle service centers, Mobile Service technicians, body shops, Supercharger stations and Destination Chargers to accelerate the widespread adoption of our [removed: products, and we continue to develop self-driving capability in order to improve vehicle safety.][added: products.]

Our sustainable energy products, engineering expertise, intense focus to accelerate the world’s transition to sustainable [removed: energy,] [added: energy] and [added: achieve the benefits of autonomous driving, and] business model differentiate us from other companies.

[removed: Our] [added: In order to meet customers’ range, functionality and performance expectations, we have employed our considerable] design and vehicle engineering [removed: capabilities, combined with the technical advancements of our powertrain system, have enabled us] [added: capabilities] to [removed: design and develop electric vehicles that we believe] overcome the design, [removed: styling,] [added: styling] and performance issues that have historically limited broad adoption of electric vehicles.

[removed: In addition,] [added: Finally,] we [removed: are leveraging] [added: have leveraged] our technological expertise in batteries, [added: energy management,] power electronics, and integrated systems [added: from our vehicle powertrain systems] to [removed: manufacture] [added: develop] and [removed: sell] [added: manufacture] energy storage [removed: products.][added: products, including Powerwall, Powerpack and Megapack.]

[removed: In late 2016, we] [added: We] began [removed: production and] deliveries of [added: the current generations of] our [removed: latest generation energy storage products,] Powerwall [removed: 2] and Powerpack [removed: 2.][added: products in late 2016 and 2017, respectively, and of our Megapack product in late 2019.]

Powerwall [removed: 2] is a [removed: 14] [added: 13.5] kilowatt hour (“kWh”) [removed: home] [added: rechargeable lithium-ion] battery with [removed: an] integrated [removed: inverter.][added: inverter, designed to store energy at a home or small commercial facility.]

[removed: However, the] [added: The] electricity produced by [removed: our] solar installations [added: still] represents a [removed: very] small fraction of total U.S. electricity generation.

With tens of millions of single-family homes and businesses in our primary service territories, and many more in other locations, we have a large opportunity to expand and grow this [removed: business.][added: business as we make our retrofit installations more accessible and ramp our innovative Solar Roof.]

We [added: also] believe that residential solar energy generation is gaining [added: favorable regulatory] momentum, as exemplified in part by the state of California recently requiring that new homes be built with solar generation starting in 2020.

Model [removed: S][added: Y]

Model [added: S and Model] X

Future Consumer and Commercial [removed: EVs][added: Electric Vehicles]

Energy Storage [added: Products]

[removed: Our energy storage] [added: These scalable] systems [removed: are] [added: may be] used [removed: for] [added: in homes, commercial facilities and on the utility grid, and are capable of] numerous applications including backup [added: or off-grid] power, [removed: grid independence,] peak demand reduction, demand response, reducing intermittency of renewable [added: energy] generation, [removed: replacement] [added: facilitation] of [added: the use of renewable energy generation over] fossil fuel [removed: generation] [added: generation,] and [added: other grid services and] wholesale electric market services.

Powerpack [removed: 2] [added: and Megapack] can also be combined with renewable energy generation sources to create microgrids that provide communities with clean, resilient and affordable power.

[removed: Along with designing and manufacturing energy storage products, we continue to] [added: We also] develop and advance our software capabilities for the control and optimal dispatch of energy storage systems across a wide range of markets and [removed: applications.][added: applications, which can be sent to our systems through over-the-air updates.]

[removed: Solar] [added: Solar] Energy [removed: Systems][added: Offerings]

The major components of our [added: retrofit] solar energy systems include solar panels that convert sunlight into electrical current, inverters that convert the electrical output from the panels to a usable current compatible with the electric grid, racking that attaches the solar panels to the roof or ground, electrical hardware that connects the solar energy system to the electric grid, and our monitoring device.

In [removed: October 2016,] [added: 2019,] we [removed: unveiled] [added: commenced direct customer and channel partner sales of the third generation of our] Solar Roof, which [removed: integrates solar energy production with] [added: features] aesthetically pleasing and durable glass roofing tiles [removed: and is] designed to complement the architecture of homes and commercial buildings while turning sunlight into electricity.

Our core intellectual property includes our electric [removed: powertrain, our ability to design vehicles that utilize the unique advantages of an electric] powertrain and our [removed: development of] [added: work on developing] self-driving technologies.

Our powertrain consists of our battery pack, power electronics, motor, [removed: gearbox] [added: gearbox,] and control software.

We [added: optimize the] design [added: of the lithium-ion cells we use and of] our battery packs to achieve high energy density at [removed: a low cost] [added: decreasing costs] while also maintaining safety, reliability and long [removed: life.][added: life in the rigors of an automotive environment.]

[removed: We] [added: Moreover, we] maintain extensive testing and R&D capabilities [removed: at the individual cell level, the full battery-pack level and on other critical] [added: for] battery [removed: pack] [added: cells, packs and] systems, and have built an expansive body of knowledge on lithium-ion cell vendors, chemistry [removed: types,] [added: types] and performance characteristics.

We believe that the flexibility [removed: of] [added: that we have built into] our designs, combined with our research and real-world performance data, will enable us to continue to evaluate new battery cells and optimize battery pack system performance and cost for our current and future vehicles.

The primary technological advantages to our [added: proprietary power electronics] designs include the ability to drive large amounts of [added: electrical] current in a small physical package with high efficiency and low [removed: cost.][added: cost, and to recharge on a wide variety of electricity sources at home, at the office or on the road, including at our Superchargers.]

[removed: Vehicle] [added: Vehicle] Control and Infotainment [removed: Software][added: Software]

[removed: We have expertise in developing self-driving systems, and currently] [added: Currently, we] offer in our vehicles [removed: an] [added: certain] advanced driver assist [removed: system that we refer to as Autopilot,] [added: systems under our Autopilot and FSD options,] including auto-steering, traffic aware cruise control, automated lane changing, automated parking, [removed: Summon and] driver warning [removed: systems.][added: systems, and a Smart Summon feature that enables vehicles to be remotely summoned over short distances in parking lots and driveways.]

[removed: Although,] [added: Although] at [removed: present,] [added: present] the driver is ultimately responsible for controlling the vehicle, our [removed: system provides] [added: systems provide] safety and convenience functionality that allows our customers to rely on [removed: it] [added: them] much like the system that airplane pilots use when conditions permit.

This hardware [removed: suite, along with over-the-air firmware updates and] [added: suite enables] field data [removed: feedback loops] from the [removed: onboard] [added: on-board] camera, radar, ultrasonics, and [removed: GPS, enables the system] [added: GPS] to continually [removed: learn] [added: train] and improve [removed: its] [added: our neural network for real-world] performance.

By taking a modular approach to the design of battery systems, we are able to maximize manufacturing capacity to produce [removed: both Powerwall and] [added: our Powerwall,] Powerpack [added: and Megapack] products.

We are continually innovating and developing new technologies to facilitate the growth of our solar energy [removed: systems] business.

For example, [removed: Solar Roof is being designed to work seamlessly with Tesla Powerwall 2 and] we have developed proprietary software to reduce [added: solar energy] system design and installation timelines and [removed: costs.][added: costs, and the Solar Roof is designed to work seamlessly with Powerwall.]

[removed: In addition to the design, development and production of the powertrain, we] [added: We] have created significant in-house capabilities in the design and [added: test] engineering of electric vehicles and their components and systems.

We [removed: design and] [added: design,] engineer [added: and test] bodies, chassis, [added: exteriors,] interiors, heating and cooling and low voltage electrical systems in-house, and to a lesser extent, in conjunction with our suppliers.

[added: For example, given the impact of mass on range, which is very important for passenger vehicles,] Model S and Model X are built with [removed: a] lightweight aluminum [removed: body] [added: bodies] and chassis which incorporate a variety of materials and production methods that help optimize [removed: the weight] [added: vehicle weight, and Model 3 and Model Y are built with a mix] of [removed: the vehicle.][added: materials to be lightweight and safe while also increasing cost-effectiveness for these mass-market vehicles.]

Our team’s expertise in electrical, mechanical, civil and software engineering enables us to create integrated energy storage solutions that meet the [added: various and] particular needs of [removed: all customer types.][added: our customers.]

We also have an in-house [removed: engineering] team that designs a customized solar energy system or Solar Roof for each of our customers, [removed: and which works closely with our energy storage engineering teams to integrate] [added: including] an [added: integrated] energy storage system when requested by the customer.

[removed: Our engineers complete] [added: This team completes] a structural analysis of each building and [removed: produce] [added: produces] a full set of structural design and electrical blueprints that contain the specifications for all system components.

Additionally, [removed: we design] [added: this team specifies] complementary mounting and grounding hardware where required.

We generally sell our products directly to customers, including through our website and retail locations.

We emphasize performance, attractive styling and the safety of our users and workforce in the design and manufacture of our products, and are continuing to develop full self-driving technology for improved safety.

We also strive to lower the cost of ownership for our customers through continuous efforts to reduce manufacturing costs and by offering financial services tailored to our vehicles.

We currently offer or are planning to introduce electric vehicles to address a wide range of consumer and commercial vehicle markets, including Model 3, Model Y, Model S, Model X, Cybertruck, Tesla Semi and a new Tesla Roadster.

Combined with technical advancements in our powertrain system, Autopilot and Full Self-Driving (“FSD”) hardware, and neural net, our electric vehicles boast advantages such as leading range and recharging flexibility; superior acceleration, handling and safety characteristics; a unique suite of user convenience and infotainment features; the ability to have additional features enabled through over-the-air updates; and savings in charging, maintenance and other costs of ownership.

In furtherance of our mission to accelerate the world’s transition to sustainable energy, we have also developed an expertise in solar energy systems.

We sell and lease retrofit solar energy systems for residential and commercial customers, and alternatively provide certain customers with access to our solar energy systems through power purchase or subscription-based arrangements.

We also offer the Solar Roof, which features attractive and durable glass roof tiles integrated with solar energy generation.

Our approach to the solar business emphasizes simplicity, standardization and accessibility to make it easy and cost-effective for customers to adopt clean energy, while reducing our customer acquisition costs.

Drawing on our solar business expertise, we can also offer integrated systems combining energy generation and storage.

Like our vehicles, our energy storage products can be remotely updated over-the-air with software or firmware improvements.

Automotive

Model 3 is a four-door mid-size sedan that we designed for manufacturability with a base price for mass-market appeal, which we began delivering in July 2017.

We currently manufacture Model 3 at the Fremont Factory as well as at Gigafactory Shanghai, where we are ramping production with an installed annual production capacity for 150,000 Model 3 vehicles.

We currently offer Model 3 in rear-wheel drive and dual motor all-wheel drive variants, including a Performance version of the latter.

Model Y is a compact sport utility vehicle (“SUV”) built on the Model 3 platform with the capability for seating for up to seven adults, which we began producing in January 2020 and expect to commence delivering in the first quarter of 2020.

We currently manufacture Model Y at the Fremont Factory, and are further ramping production there and making preparations for production next at Gigafactory Shanghai.

We currently offer Model Y in dual motor all-wheel drive Long Range and Performance versions.

Model S is a four-door full-size sedan that we began delivering in June 2012.

Model S introduced Tesla vehicle mainstays such as a large touchscreen driver interface, Autopilot hardware, over-the-air software updates, and fast charging through our Supercharger network.

Model X is a mid-size SUV with seating for up to seven adults, which we began delivering in September 2015.

Model X introduced features including unique falcon wing doors for easy access to passenger seating and an all-glass panoramic windshield.

Model S and Model X feature the highest performance characteristics and longest ranges that we offer in a sedan and SUV, respectively.

These vehicles are equipped with a standard dual motor all-wheel drive powertrain, and are also available in Performance versions with enhanced acceleration and/or top speed and styling.

We manufacture Model S and Model X at the Fremont Factory.

In addition, we have unveiled a number of planned electric vehicles to address a broader cross-section of the vehicle market, including specialized consumer electric vehicles in Cybertruck and the new Tesla Roadster and a commercial electric vehicle in Tesla Semi.

Powerpack and Megapack are fully integrated energy storage solutions for commercial, industrial, utility and energy generation customers, comprised of up to 232kWh (AC) battery packs and up to 700 kilovolt-ampere (at 480V) inverters for Powerpack and up to 3 megawatt hour (“MWh”) (AC) battery packs and up to 1.54 megavolt-ampere inverters for Megapack, multiple units of which may be grouped together to form larger installations, capable of reaching gigawatt hours (“GWh”) or greater.

We purchase the majority of these components, and we do so from multiple sources to ensure competitive pricing and adequate supply.

We also design and manufacture certain components for our solar energy products.

In addition to selling retrofit solar energy systems to customers and certain channel partners, we also make them available through lease and power purchase agreement (“PPA”) arrangements, currently with 20-year terms and typically with renewal options, and a subscription-based sale of solar power, which is currently available in California.

We are ramping the volume production of this version of the Solar Roof at Gigafactory New York, and are increasing our installation capabilities by training our personnel and third party partners.

Automotive

Our core vehicle technology competencies include battery and powertrain engineering and manufacturing, as well as our ability to design vehicles that utilize the unique advantages of an electric powertrain.

Battery and Powertrain

The power electronics in our electric powertrain govern the flow of electrical current throughout our vehicles as needed, convert direct current from the battery pack into alternating current to drive our vehicles’ motors (and vice versa from an external electricity source to charge the battery pack), and provide regenerative braking functionality.

We are also developing vehicle powertrain technology featuring three electric motors for further increased performance.

We have expertise in developing technologies, systems and software to achieve self-driving vehicles.

We are equipping all new Tesla vehicles with hardware needed for full self-driving in the future, including a new powerful and proprietary on-board computer that we introduced in 2019.

These systems relieve our drivers of the most tedious and potentially dangerous aspects of road travel, and the field data feedback loops from the on-board hardware, as well as over-the-air firmware updates, allow us to improve them over time.

Energy Generation and Storage

We currently produce and sell three fully electric vehicles: the Model S sedan, the Model X sport utility vehicle (“SUV”) and the Model 3 sedan.

All of our vehicles offer high performance and functionality as well as attractive styling.

We commenced deliveries of Model S in June 2012 and have continued to improve Model S by introducing performance, all-wheel drive dual motor, and Autopilot options, as well as free over-the-air software updates.

We commenced deliveries of Model X in September 2015.

Model X offers seating for up to seven people, all-wheel drive, and our Autopilot functionality.

We commenced deliveries of Model 3, a lower-priced sedan designed for the mass market, in July 2017, and we have significantly ramped its production.

We are now embarking on the delivery of Model 3 in international markets and are focusing on lowering manufacturing costs while continuing to increase its production rate.

We also intend to bring additional all-electric vehicles to market in the future, including Model Y, the Tesla Semi truck, a pickup truck and a new version of the Tesla Roadster.

The production of fully electric vehicles that meet consumers’ range and performance expectations requires substantial design, engineering, and integration work on almost every system of our vehicles.

As a result, our customers enjoy several benefits, including:

| | • | Long Range and Recharging Flexibility. Our vehicles offer ranges that significantly exceed those of any other commercially available electric vehicle. In addition, our vehicles incorporate our proprietary on-board charging system, permitting recharging from almost any available electrical outlet, and also offer fast charging capability from our proprietary Supercharger network. |

| --- | --- | --- |

| | • | High-Performance Without Compromised Design or Functionality. Our vehicles deliver instantaneous and sustained acceleration, an advanced Autopilot system with active safety and convenience features, and over-the-air software updates. |

| | • | Energy Efficiency and Cost of Ownership. Our vehicles offer an attractive cost of ownership compared to internal combustion engine or hybrid electric vehicles. Using only an electric powertrain enables us to create more energy-efficient vehicles that are mechanically simpler than currently available hybrid or internal combustion engine vehicles. The cost to charge our vehicles is less compared to fueling internal combustion vehicles. We also expect our electric vehicles will have lower relative maintenance costs than other vehicles due to fewer moving parts and the absence of certain components, including oil, oil filters, spark plugs and engine valves. |

We sell our vehicles through our own sales and service network which we are continuing to grow globally.

The benefits we receive from distribution ownership enable us to improve the overall customer experience, the speed of product development and the capital efficiency of our business.

We are also continuing to build our network of Superchargers and Destination Chargers in North America, Europe and Asia to provide alternative convenient options for fast charging.

Powerpack 2 is an infinitely scalable energy storage system for commercial, industrial and utility applications, comprised of up to 210 kWh (AC) battery packs and up to 650 kVa (at 480V) inverters.

Similar to our electric vehicles, our energy storage products have been developed to receive over-the-air firmware and software updates that enable additional features over time.

Finally, we sell and lease solar energy systems (with or without accompanying energy storage systems) to residential and commercial customers and sell renewable energy to residential and commercial customers at prices that are typically below utility rates.

Since 2006, we have installed solar energy systems for hundreds of thousands of customers.

We also intend to ramp production of our innovative Solar Roof product.

We manufacture our vehicle products primarily at our facilities in Fremont, California, Lathrop, California, Tilburg, Netherlands and at our Gigafactory 1 near Reno, Nevada.

We manufacture our energy storage products at Gigafactory 1 and Tesla solar products at our U.S. facilities including in Buffalo, New York (Gigafactory 2).

In January 2019, we began construction of our Gigafactory Shanghai in China, where we intend to commence production of certain trims of Model 3 for the local market by the end of 2019.

Vehicles

Model S is a fully electric, four-door, five-adult passenger sedan that offers compelling range and high performance and our all-wheel drive dual motor system, which we also offer in a performance version.

Model S 100D is the longest range all-electric production sedan in the world, and the performance version with the Ludicrous speed upgrade is the quickest accelerating production vehicle available.

Model S introduced a 17 inch touch screen driver interface, our advanced Autopilot hardware to enable both active safety and convenience features, and over-the-air software updates.

We believe the combination of performance, safety, styling, convenience and energy efficiency of Model S positions it as a compelling alternative to other vehicles in the luxury and performance segments.

Model X is the longest range all-electric production sport utility vehicle in the world, and offers high performance features such as our fully electric, all-wheel drive dual motor system and our Autopilot system.

Model X can seat up to seven adults and incorporates a unique falcon wing door system for easy access to the second and third seating rows.

Model X is sold in all markets where Model S is available.

Model 3 is our third generation electric vehicle, which we began delivering in July 2017.

Model 3 and its drive units are currently produced at high volumes at the Tesla Factory in Fremont, California and at Gigafactory 1, respectively, and we intend to begin production of certain vehicle trims for China at our Gigafactory Shanghai by the end of 2019.

We have offered a number of variants of Model 3, including performance, dual motor, single motor, long-range and medium-range, and intend to offer in the future a variant of Model 3 at a starting price of $35,000.

In addition to our volume-produced consumer EVs, including future vehicles such as Model Y and a pickup truck, we are planning to introduce additional types of vehicles to address a broader cross-section of the vehicle market, including commercial EVs such as the Tesla Semi truck, and a new version of the Tesla Roadster.

We have started to accept reservations for the Tesla Semi truck and the new Tesla Roadster.

Using the energy management technologies and manufacturing processes developed for our vehicle powertrain systems, we developed energy storage products for use in homes, commercial facilities and on the utility grid.

Advances in battery architecture, thermal management and power electronics that were originally commercialized in our vehicles are now being leveraged in our energy storage products.

For a description of our material pending legal proceedings, please see Note [removed: 17, Commitments] [added: 16, *Commitments] and [removed: Contingencies,] [added: Contingencies*,] to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

In addition, the following matters are being disclosed pursuant to Item 103 of Regulation S-K because they relate to environmental regulations and aggregate civil penalties could potentially exceed $100,000.

The Bay Area Air Quality Management District (the “BAAQMD”) has issued notices of violation to us relating to air permitting for the Fremont Factory, but has not initiated formal proceedings.

We dispute certain of these allegations and are working to resolve them with the BAAQMD.

Further, we assert that there has been no related adverse community or environmental impact.

While we cannot predict the outcome of this matter, including the final amount of any penalties, it is not expected to have a material adverse impact on our business.

We have also received an information request from the U.S. Environmental Protection Agency (the “EPA”) under Section 114(a) of the Clean Air Act of 1963, as amended (the “Clean Air Act”).

The EPA is reviewing the compliance of our Fremont Factory operations with applicable requirements under the Clean Air Act, and we are working with the EPA in responding to this request.

While the outcome of this matter cannot be determined at this time, it is not currently expected to have a material adverse impact on our business.

| ITEM 4. | MINE SAFETY DISCLOSURES |

| --- | --- |

Not applicable.

PART II

| ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |

| --- | --- |

Market Information

Our common stock has traded on The NASDAQ Global Select Market under the symbol “TSLA” since it began trading on June 29, 2010.

Our initial public offering was priced at $17.00 per share on June 28, 2010.

Holders

As of February 7, 2020, there were 1,685 holders of record of our common stock.

A substantially greater number of holders of our common stock are “street name” or beneficial holders, whose shares are held by banks, brokers and other financial institutions.

Dividend Policy

We have never declared or paid cash dividends on our common stock.

We currently do not anticipate paying any cash dividends in the foreseeable future.

Any future determination to declare cash dividends will be made at the discretion of our board of directors, subject to applicable laws, and will depend on our financial condition, results of operations, capital requirements, general business conditions and other factors that our board of directors may deem relevant.

Stock Performance Graph

This performance graph shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference into any filing of Tesla, Inc. under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

The following graph shows a comparison, from January 1, 2015 through December 31, 2019, of the cumulative total return on our common stock, The NASDAQ Composite Index and a group of all public companies sharing the same SIC code as us, which is SIC code 3711, “Motor Vehicles and Passenger Car Bodies” (Motor Vehicles and Passenger Car Bodies Public Company Group).

Such returns are based on historical results and are not intended to suggest future performance.

Data for The NASDAQ Composite Index and the Motor Vehicles and Passenger Car Bodies Public Company Group assumes an investment of $100 on January 1, 2015 and reinvestment of dividends.

We have never declared or paid cash dividends on our common stock nor do we anticipate paying any such cash dividends in the foreseeable future.


Unregistered Sales of Equity Securities

None.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

| ITEM 6. | SELECTED CONSOLIDATED FINANCIAL DATA |

| --- | --- |

The following selected consolidated financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K and from the historical consolidated financial statements not included herein to fully understand factors that may affect the comparability of the information presented below (in millions, except per share data).

| | | Year Ended December 31, | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

For the fiscal year ended December 31, [removed: 2018][added: 2019]

[removed: Tesla, Inc.][added: TESLA, INC.]

| Title of each class | [added: Trading Symbol(s)] | Name of each exchange on which registered | [added: |]

| Common [removed: Stock, $0.001 par value] [added: stock] | [added: TSLA] | The [removed: NASDAQ Stock] [added: Nasdaq Global Select] Market [removed: LLC] | [added: |]

The aggregate market value of voting stock held by non-affiliates of the registrant, as of June 30, [removed: 2018,] [added: 2019,] the last day of the registrant’s most recently completed second fiscal quarter, was [removed: $46.57] [added: $31.54] billion (based on the closing price for shares of the registrant’s Common Stock as reported by the NASDAQ Global Select Market on June 30, [removed: 2018).][added: 2019).]

As of February [removed: 12, 2019,] [added: 7, 2020,] there were [removed: 172,721,487] [added: 181,341,586] shares of the registrant’s Common Stock outstanding.

Portions of the registrant’s Proxy Statement for the [removed: 2019] [added: 2020] Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein.

Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, [removed: 2018.][added: 2019.]

ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, [removed: 2018][added: 2019]

| Item 1. | | [removed: [Business](#Item_1)] [added: [Business](#ITEM_1_BUSINESS)] | | 1 |

| Item 1A. | | [Risk Factors](#ITEM_1A_RISK_FACTORS) | | [removed: 16] [added: 15] |

| Item 1B. | | [Unresolved Staff Comments](#ITEM_1B_UNRESOLVED_STAFF_COMMENTS) | | [removed: 37] [added: 34] |

| Item 2. | | [Properties](#ITEM_2_PROPERTIES) | | [removed: 38] [added: 35] |

| Item 3. | | [Legal [removed: Proceedings](#ITEM_1_LEGAL_PROCEEDINGS)] [added: Proceedings](#LEGAL_PROCEEDINGS)] | | [removed: 38] [added: 35] |

| Item 4. | | [Mine Safety Disclosures](#ITEM_4) | | [removed: 38] [added: 35] |

| Item 5. | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#Item_5) | | [removed: 39] [added: 36] |

| Item 6. | | [Selected [added: Consolidated] Financial Data](#Item_6) | | [removed: 41] [added: 38] |

| Item 7. | | [Management’s Discussion and Analysis of Financial Condition and Results of Operations](#Item_7) | | [removed: 42] [added: 39] |

| Item 7A. | | [Quantitative and Qualitative Disclosures About Market Risk](#ITEM_7A_QUANTITATIVE_QUALITATIVE_DISCLOS) | | [removed: 68] [added: 60] |

| Item 8. | | [Financial Statements and Supplementary Data](#Item_8) | | [removed: 69] [added: 61] |

| Item 9. | | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#Item_9) | | [removed: 139] [added: 127] |

| Item 9A. | | [Controls and Procedures](#Item_9A) | | [removed: 139] [added: 127] |

| Item 9B. | | [Other Information](#Item_9B) | | [removed: 139] [added: 128] |

| Item 10. | | [Directors, Executive Officers and Corporate Governance](#Item_10) | | [removed: 140] [added: 129] |

| Item 11. | | [Executive Compensation](#Item_11) | | [removed: 140] [added: 129] |

| Item 12. | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#Item_12) | | [removed: 140] [added: 129] |

| Item 13. | | [Certain Relationships and Related Transactions, and Director Independence](#Item_13) | | [removed: 140] [added: 129] |

| Item 14. | | [Principal Accountant Fees and Services](#Item_14) | | [removed: 140] [added: 129] |

| Item 15. | | [Exhibits and Financial Statement Schedules](#ITEM_15_EXHIBITS_FINANCIAL_STATEMENT_SCH) | | [removed: 140] [added: 129] |

| Item 16. | | [Summary](#ITEM_16_SUMMARY) | | [removed: 172] [added: 155] |

| --- | --- | --- | --- |

| [Signatures](#SIGNATURES) | | | | 156 |

10-K 1 tsla-10k_20181231.htm 10-K

| --- | --- | --- |

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

| [Signatures](#SIGNATURES) | | | | 173 |

The following table sets forth the [removed: location, approximate current occupancy size and primary use] [added: location] of our [removed: principal leased and] [added: primary] owned [removed: facilities:][added: and leased manufacturing facilities.]

[removed: In addition to the properties included in the table above, we also lease] [added: Our principal facilities include] a large number of properties in North America, Europe and Asia [added: utilized] for [removed: our] [added: manufacturing and assembly, warehousing, engineering,] retail and service locations, Supercharger sites, [removed: solar installation] and [removed: maintenance warehouses and regional] administrative and sales [removed: offices for our solar business.][added: offices.]

We are headquartered in Palo Alto, California.

Our facilities are used to support both of our reporting segments, and are suitable and adequate for the conduct of our business.

We primarily lease such facilities with the exception of some manufacturing facilities.

| Primary Manufacturing Facilities | | Location | | Owned or Leased |

| --- | --- | --- | --- | --- |

| Fremont Factory | | Fremont, California | | Owned |

| Gigafactory Nevada | | Sparks, Nevada | | Owned |

| Gigafactory New York | | Buffalo, New York | | Leased |

| Gigafactory Shanghai | | Shanghai, China | | * |

| * | We own the building and the land use rights with an initial term of 50 years. The land use rights are treated as operating lease right-of-use assets. |

| --- | --- |

| Location | | Approximate Size of Facilities (in Square Feet) | | | | Primary Use | | Lease Expiration Date |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Fremont, California | | | 5,500,000 | | | Manufacturing, administration, engineering, service, delivery and warehouse | | Owned building |

| Sparks, Nevada | | | 5,024,350 | | * | Gigafactory 1, production of lithium-ion battery cells and vehicle drive units | | Owned building |

| Tilburg, Netherlands | | | 1,688,217 | | | Manufacturing, administration, engineering and service | | November 2023 - June 2028 |

| Fremont, California | | | 1,237,772 | | | Administration, manufacturing and engineering | | October 2025 - June 2030 |

| Livermore, California | | | 1,002,703 | | | Warehouse | | October 2026 |

| Lathrop, California | | | 885,867 | | | Warehouse and manufacturing | | September 2024 - February 2030 |

| Sparks, Nevada | | | 632,445 | | | Warehouse | | December 2019 - December 2020 |

| Lathrop, California | | | 496,888 | | | Manufacturing | | Owned building |

| Palo Alto, California | | | 350,000 | | | Administration and engineering | | January 2022 |

| Taipei City, Taiwan | | | 283,790 | | | Warehouse, administration and service | | February 2022 |

| Elkridge, Maryland | | | 176,651 | | | Warehouse | | October 2023 |

| Grand Rapids, Michigan | | | 176,606 | | | Manufacturing | | May 2025 |

| Draper, Utah | | | 154,846 | | | Administration | | October 2027 |

| Hawthorne, California | | | 132,250 | | | Engineering | | December 2022 |

| Bethlehem, Pennsylvania | | | 130,971 | | | Warehouse | | April 2022 |

* These facilities are currently in construction and the approximate square footage as presented represent the current occupancy as of December 31, 2018.

Our properties are used to support both of our reporting segments.

We will begin leasing a 1.1 million square feet solar manufacturing facility (Gigafactory 2 in Buffalo, New York) for an initial term of 10 years and a 0.9 million square feet warehouse and manufacturing facility in Lathrop, California for an initial term of 11.5 years upon construction completion of the facilities.

Additionally, we purchased the land use rights with an initial term of 50 years for Gigafactory Shanghai in December 2018 and began construction of the facility in January 2019.

Once construction has completed, we expect the building to have a capacity of 4.5 million square feet.

| 1. | Financial statements (see [removed: Index] [added: *Index] to Consolidated Financial [removed: Statements] [added: Statements*] in Part II, Item 8 of this report) |

| 3. | The exhibits listed in the following [removed: Index] [added: *Index] to [removed: Exhibits] [added: Exhibits*] are filed or incorporated by reference as part of this report |

[removed: INDEX] [added: INDEX] TO [removed: EXHIBITS][added: EXHIBITS]

| [removed: 4.14] [added: 4.15] | | [Indenture, dated as of May 22, 2013, by and between the Registrant and U.S. Bank National Association.](http://www.sec.gov/Archives/edgar/data/1318605/000119312513231437/d542515dex41.htm) | | 8-K | | 001-34756 | | 4.1 | | May 22, 2013 | | |

| [removed: 4.15] [added: 4.16] | | [removed: [Second] [added: [Third] Supplemental Indenture, dated as of March 5, 2014, by and between the Registrant and U.S. Bank National [removed: Association](http://www.sec.gov/Archives/edgar/data/1318605/000119312514084484/d686051dex42.htm).] [added: Association.](http://www.sec.gov/Archives/edgar/data/1318605/000119312514084484/d686051dex44.htm)] | | 8-K | | 001-34756 | | [removed: 4.2] [added: 4.4] | | March 5, 2014 | | |

| [removed: 4.16] [added: 4.17] | | [Form of [removed: 0.25%] [added: 1.25%] Convertible Senior Note Due March 1, [removed: 2019] [added: 2021] (included in Exhibit [removed: 4.17).](http://www.sec.gov/Archives/edgar/data/1318605/000119312514084484/d686051dex42.htm)] [added: 4.19).](http://www.sec.gov/Archives/edgar/data/1318605/000119312514084484/d686051dex44.htm)] | | 8-K | | 001-34756 | | [removed: 4.2] [added: 4.4] | | March 5, 2014 | | |

| [removed: 4.17] [added: 4.18] | | [removed: [Third] [added: [Fourth] Supplemental Indenture, dated as of March [removed: 5, 2014,] [added: 22, 2017,] by and between the Registrant and U.S. Bank National [removed: Association.](http://www.sec.gov/Archives/edgar/data/1318605/000119312514084484/d686051dex44.htm)] [added: Association.](http://www.sec.gov/Archives/edgar/data/1318605/000119312517092269/d341621dex42.htm)] | | 8-K | | 001-34756 | | [removed: 4.4] [added: 4.2] | | March [removed: 5, 2014] [added: 22, 2017] | | |

| [removed: 4.18] [added: 4.19] | | [Form of [removed: 1.25%] [added: 2.375%] Convertible Senior Note Due March [removed: 1, 2021] [added: 15, 2022] (included in Exhibit [removed: 4.19).](http://www.sec.gov/Archives/edgar/data/1318605/000119312514084484/d686051dex44.htm)] [added: 4.21).](http://www.sec.gov/Archives/edgar/data/1318605/000119312517092269/d341621dex42.htm)] | | 8-K | | 001-34756 | | [removed: 4.4] [added: 4.2] | | March [removed: 5, 2014] [added: 22, 2017] | | |

| [removed: 4.19] [added: 4.20] | | [removed: [Fourth Supplemental Indenture,] [added: [Indenture,] dated as of [removed: March 22,] [added: August 18,] 2017, by and [removed: between] [added: among] the [removed: Registrant] [added: Registrant, SolarCity,] and U.S. Bank National [removed: Association.](http://www.sec.gov/Archives/edgar/data/1318605/000119312517092269/d341621dex42.htm)] [added: Association, as trustee.](http://www.sec.gov/Archives/edgar/data/1318605/000156459017017989/tsla-ex41_7.htm)] | | 8-K | | 001-34756 | | [removed: 4.2] [added: 4.1] | | [removed: March 22,] [added: August 23,] 2017 | | |

| [removed: 4.20] [added: 10.22] | | [Form of [added: Call Option Confirmation relating to] 2.375% Convertible [removed: Senior Note Due] [added: Notes due] March 15, [removed: 2022 (included in Exhibit 4.21).](http://www.sec.gov/Archives/edgar/data/1318605/000119312517092269/d341621dex42.htm)] [added: 2022](http://www.sec.gov/Archives/edgar/data/1318605/000119312517092269/d341621dex101.htm).] | | 8-K | | 001-34756 | | [removed: 4.2] [added: 10.1] | | March 22, 2017 | | |

| 4.21 | | [removed: [Indenture, dated as] [added: [Form] of [added: 5.30% Senior Note due] August [removed: 18, 2017, by and among the Registrant, SolarCity, and U.S. Bank National Association, as trustee.](http://www.sec.gov/Archives/edgar/data/1318605/000156459017017989/tsla-ex41_7.htm)] [added: 15, 2025](http://www.sec.gov/Archives/edgar/data/1318605/000156459017017989/tsla-ex41_7.htm).] | | 8-K | | 001-34756 | | [removed: 4.1] [added: 4.2] | | August 23, 2017 | | |

| [removed: 4.23] [added: 4.22] | | [Indenture, dated as of September 30, 2014, between SolarCity and Wells Fargo Bank, National Association](http://www.sec.gov/Archives/edgar/data/1408356/000119312514364676/d795789dex41.htm) | | 8-K(1) | | 001-35758 | | 4.1 | | October 6, 2014 | | |

| [removed: 4.24] [added: 4.23] | | [First Supplemental Indenture, dated as of November 21, 2016, between SolarCity and Wells Fargo Bank, National Association, as trustee to the Indenture, dated as of September 30, 2014, between SolarCity and Wells Fargo Bank, National Association, as trustee.](http://www.sec.gov/Archives/edgar/data/1318605/000119312516773705/d292845dex42.htm) | | 8-K | | 001-34756 | | 4.2 | | November 21, 2016 | | |

| [removed: 4.25] [added: 4.24] | | [Indenture, dated as of December 7, 2015, between SolarCity and Wells Fargo Bank, National Association](http://www.sec.gov/Archives/edgar/data/1408356/000156459015011312/scty-ex41_15.htm) | | 8-K(1) | | 001-35758 | | 4.1 | | December 7, 2015 | | |

| [removed: 4.26] [added: 4.25] | | [First Supplemental Indenture, dated as of November 21, 2016, between SolarCity and Wells Fargo Bank, National Association, as trustee to the Indenture, dated as of December 7, 2015, between SolarCity and Wells Fargo Bank, National Association, as trustee.](http://www.sec.gov/Archives/edgar/data/1318605/000119312516773705/d292845dex43.htm) | | 8-K | | 001-34756 | | 4.3 | | November 21, 2016 | | |

| [removed: 4.27] [added: 4.26] | | [Indenture, dated as of October 15, 2014, between SolarCity and U.S. Bank National Association, as trustee.](http://www.sec.gov/Archives/edgar/data/1408356/000119312514371976/d800964dex41.htm) | | S-3ASR(1) | | 333-199321 | | 4.1 | | October 15, 2014 | | |

| [removed: 4.28] [added: 4.29] | | [removed: [Third] [added: [Fourth] Supplemental Indenture, dated as of October 15, 2014, by and between SolarCity and the Trustee, related to SolarCity’s [removed: 3.00%] [added: 4.00%] Solar Bonds, Series [removed: 2014/3-3.](http://www.sec.gov/Archives/edgar/data/1408356/000119312514372769/d805349dex44.htm)] [added: 2014/4-7](http://www.sec.gov/Archives/edgar/data/1408356/000119312514372769/d805349dex45.htm).] | | 8-K(1) | | 001-35758 | | [removed: 4.4] [added: 4.5] | | October 15, 2014 | | |

| [removed: 4.29] [added: 4.30] | | [removed: [Fourth] [added: [Eighth] Supplemental Indenture, dated as of [removed: October 15, 2014,] [added: January 29, 2015,] by and between SolarCity and the Trustee, related to SolarCity’s 4.00% Solar Bonds, Series [removed: 2014/4-7](http://www.sec.gov/Archives/edgar/data/1408356/000119312514372769/d805349dex45.htm)] [added: 2015/4-7.](http://www.sec.gov/Archives/edgar/data/1408356/000119312515025584/d860676dex45.htm)] | | 8-K(1) | | 001-35758 | | 4.5 | | [removed: October 15, 2014] [added: January 29, 2015] | | |

| [removed: 4.30] [added: 4.53] | | [removed: [Seventh] [added: [Forty-Seventh] Supplemental Indenture, dated as of [removed: January 29,] [added: May 1,] 2015, by and between SolarCity and the Trustee, related to SolarCity’s [removed: 3.00%] [added: 4.00%] Solar Bonds, Series [removed: 2015/3-3.](http://www.sec.gov/Archives/edgar/data/1408356/000119312515025584/d860676dex44.htm)] [added: 2015/11-5.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015003189/scty-ex44_2015042711.htm)] | | 8-K(1) | | 001-35758 | | 4.4 | | [removed: January 29,] [added: May 1,] 2015 | | |

| 4.31 | | [removed: [Eighth] [added: [Ninth] Supplemental Indenture, dated as of [removed: January 29,] [added: March 9,] 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.00% Solar Bonds, Series [removed: 2015/4-7.](http://www.sec.gov/Archives/edgar/data/1408356/000119312515025584/d860676dex45.htm)] [added: 2015/5-5.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015001420/scty-ex4_2015030929.htm)] | | 8-K(1) | | 001-35758 | | [removed: 4.5] [added: 4.2] | | [removed: January 29,] [added: March 9,] 2015 | | |

| 4.32 | | [removed: [Ninth] [added: [Tenth] Supplemental Indenture, dated as of March 9, 2015, by and between SolarCity and the Trustee, related to SolarCity’s [removed: 4.00%] [added: 5.00%] Solar Bonds, Series [removed: 2015/5-5.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015001420/scty-ex4_2015030929.htm)] [added: 2015/6-10.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015001420/scty-ex4_2015030930.htm)] | | 8-K(1) | | 001-35758 | | [removed: 4.2] [added: 4.3] | | March 9, 2015 | | |

| 4.33 | | [removed: [Tenth] [added: [Eleventh] Supplemental Indenture, dated as of March 9, 2015, by and between SolarCity and the Trustee, related to SolarCity’s [removed: 5.00%] [added: 5.75%] Solar Bonds, Series [removed: 2015/6-10.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015001420/scty-ex4_2015030930.htm)] [added: 2015/7-15.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015001420/scty-ex4_2015030931.htm)] | | 8-K(1) | | 001-35758 | | [removed: 4.3] [added: 4.4] | | March 9, 2015 | | |

| 4.34 | | [removed: [Eleventh] [added: [Fourteenth] Supplemental Indenture, dated as of March [removed: 9,] [added: 19,] 2015, by and between SolarCity and the Trustee, related to SolarCity’s [removed: 5.75%] [added: 3.60%] Solar Bonds, Series [removed: 2015/7-15.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015001420/scty-ex4_2015030931.htm)] [added: 2015/C3-5.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015001843/scty-ex44_201503198.htm)] | | 8-K(1) | | 001-35758 | | 4.4 | | March [removed: 9,] [added: 19,] 2015 | | |

| 4.35 | | [removed: [Thirteenth] [added: [Fifteenth] Supplemental Indenture, dated as of March 19, 2015, by and between SolarCity and the Trustee, related to SolarCity’s [removed: 2.60%] [added: 4.70%] Solar Bonds, Series [removed: 2015/C2-3.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015001843/scty-ex43_201503197.htm)] [added: 2015/C4-10.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015001843/scty-ex45_201503199.htm)] | | 8-K(1) | | 001-35758 | | [removed: 4.3] [added: 4.5] | | March 19, 2015 | | |

| [removed: 4.36] [added: 4.37] | | [removed: [Fourteenth] [added: [Nineteenth] Supplemental Indenture, dated as of March [removed: 19,] [added: 26,] 2015, by and between SolarCity and the Trustee, related to SolarCity’s 3.60% Solar Bonds, Series [removed: 2015/C3-5.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015001843/scty-ex44_201503198.htm)] [added: 2015/C8-5.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015002014/scty-ex44_201503268.htm)] | | 8-K(1) | | 001-35758 | | 4.4 | | March [removed: 19,] [added: 26,] 2015 | | |

| [removed: 4.37] [added: 4.38] | | [removed: [Fifteenth] [added: [Twentieth] Supplemental Indenture, dated as of March [removed: 19,] [added: 26,] 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series [removed: 2015/C4-10.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015001843/scty-ex45_201503199.htm)] [added: 2015/C9-10.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015002014/scty-ex45_201503269.htm)] | | 8-K(1) | | 001-35758 | | 4.5 | | March [removed: 19,] [added: 26,] 2015 | | |

| [removed: 4.38] [added: 4.36] | | [Sixteenth Supplemental Indenture, dated as of March 19, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C5-15.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015001843/scty-ex46_2015031910.htm) | | 8-K(1) | | 001-35758 | | 4.6 | | March 19, 2015 | | |

| 4.39 | | [removed: [Eighteenth] [added: [Twenty-First] Supplemental Indenture, dated as of March 26, 2015, by and between SolarCity and the Trustee, related to SolarCity’s [removed: 2.65%] [added: 5.45%] Solar Bonds, Series [removed: 2015/C7-3.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015002014/scty-ex43_201503267.htm)] [added: 2015/C10-15.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015002014/scty-ex46_2015032610.htm)] | | 8-K(1) | | 001-35758 | | [removed: 4.3] [added: 4.6] | | March 26, 2015 | | |

| 4.40 | | [removed: [Nineteenth] [added: [Twenty-Fifth] Supplemental Indenture, dated as of [removed: March 26,] [added: April 2,] 2015, by and between SolarCity and the Trustee, related to SolarCity’s 3.60% Solar Bonds, Series [removed: 2015/C8-5.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015002014/scty-ex44_201503268.htm)] [added: 2015/C13-5.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015002374/scty-ex44_201504029.htm)] | | 8-K(1) | | 001-35758 | | 4.4 | | [removed: March 26,] [added: April 2,] 2015 | | |

| 4.41 | | [removed: [Twentieth] [added: [Twenty-Sixth] Supplemental Indenture, dated as of [removed: March 26,] [added: April 2,] 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series [removed: 2015/C9-10.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015002014/scty-ex45_201503269.htm)] [added: 2015/C14-10.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015002374/scty-ex45_2015040210.htm)] | | 8-K(1) | | 001-35758 | | 4.5 | | [removed: March 26,] [added: April 2,] 2015 | | |

| [removed: 4.42] [added: 4.89] | | [removed: [Twenty-First] [added: [One Hundred-and-Twenty-First] Supplemental Indenture, dated as of [removed: March 26,] [added: August 31,] 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series [removed: 2015/C10-15.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015002014/scty-ex46_2015032610.htm)] [added: 2015/C97-15.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015007649/scty-ex46_10.htm)] | | 8-K(1) | | 001-35758 | | 4.6 | | [removed: March 26,] [added: August 31,] 2015 | | |

| [removed: 4.43] [added: 4.48] | | [removed: [Twenty-Fourth] [added: [Thirty-Eighth] Supplemental Indenture, dated as of April [removed: 2,] [added: 21,] 2015, by and between SolarCity and the Trustee, related to SolarCity’s [removed: 2.65%] [added: 4.70%] Solar Bonds, Series [removed: 2015/C12-3.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015002374/scty-ex43_201504028.htm)] [added: 2015/C27-10.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015002724/scty-ex43_201504217.htm)] | | 8-K(1) | | 001-35758 | | 4.3 | | April [removed: 2,] [added: 21,] 2015 | | |

| [removed: 4.44] [added: 4.42] | | [removed: [Twenty-Fifth] [added: [Twenty-Ninth] Supplemental Indenture, dated as of April [removed: 2,] [added: 9,] 2015, by and between SolarCity and the Trustee, related to SolarCity’s 3.60% Solar Bonds, Series [removed: 2015/C13-5.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015002374/scty-ex44_201504029.htm)] [added: 2015/C18-5.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015002503/scty-ex44_201504098.htm)] | | 8-K(1) | | 001-35758 | | 4.4 | | April [removed: 2,] [added: 9,] 2015 | | |

| [removed: 4.45] [added: 4.43] | | [removed: [Twenty-Sixth] [added: [Thirtieth] Supplemental Indenture, dated as of April [removed: 2,] [added: 9,] 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series [removed: 2015/C14-10.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015002374/scty-ex45_2015040210.htm)] [added: 2015/C19-10.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015002503/scty-ex45_201504099.htm)] | | 8-K(1) | | 001-35758 | | 4.5 | | April [removed: 2,] [added: 9,] 2015 | | |

| [removed: 4.46] [added: 4.62] | | [removed: [Twenty-Eighth] [added: [Sixtieth] Supplemental Indenture, dated as of [removed: April 9,] [added: May 26,] 2015, by and between SolarCity and the Trustee, related to SolarCity’s [removed: 2.65%] [added: 3.60%] Solar Bonds, Series [removed: 2015/C17-3.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015002503/scty-ex43_201504097.htm)] [added: 2015/C43-5.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015004617/scty-ex43_201505267.htm)] | | 8-K(1) | | 001-35758 | | 4.3 | | [removed: April 9,] [added: May 26,] 2015 | | |

| [removed: 4.47] [added: 4.71] | | [removed: [Twenty-Ninth] [added: [Seventy-Ninth] Supplemental Indenture, dated as of [removed: April 9,] [added: June 29,] 2015, by and between SolarCity and the Trustee, related to SolarCity’s 3.60% Solar Bonds, Series [removed: 2015/C18-5.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015002503/scty-ex44_201504098.htm)] [added: 2015/C60-5.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015005299/scty-ex44_201506298.htm)] | | 8-K(1) | | 001-35758 | | 4.4 | | [removed: April 9,] [added: June 29,] 2015 | | |

| [removed: 4.48] [added: 4.46] | | [removed: [Thirtieth] [added: [Thirty-Fifth] Supplemental Indenture, dated as of April [removed: 9,] [added: 14,] 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series [removed: 2015/C19-10.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015002503/scty-ex45_201504099.htm)] [added: 2015/C24-10.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015002569/scty-ex45_201504149.htm)] | | 8-K(1) | | 001-35758 | | 4.5 | | April [removed: 9,] [added: 14,] 2015 | | |

| [removed: 4.49] [added: 4.44] | | [Thirty-First Supplemental Indenture, dated as of April 9, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C20-15.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015002503/scty-ex46_2015040910.htm) | | 8-K(1) | | 001-35758 | | 4.6 | | April 9, 2015 | | |

| [removed: 4.50] [added: 4.45] | | [removed: [Thirty-Third] [added: [Thirty-Fourth] Supplemental Indenture, dated as of April 14, 2015, by and between SolarCity and the Trustee, related to SolarCity’s [removed: 2.65%] [added: 3.60%] Solar Bonds, Series [removed: 2015/C22-3.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015002569/scty-ex43_201504147.htm)] [added: 2015/C23-5.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015002569/scty-ex44_201504148.htm)] | | 8-K(1) | | 001-35758 | | [removed: 4.3] [added: 4.4] | | April 14, 2015 | | |

| [removed: 4.51] [added: 4.74] | | [removed: [Thirty-Fourth] [added: [Eighty-Fourth] Supplemental Indenture, dated as of [removed: April] [added: July] 14, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 3.60% Solar Bonds, Series [removed: 2015/C23-5.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015002569/scty-ex44_201504148.htm)] [added: 2015/C65-5.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015005438/scty-ex44_201507148.htm)] | | 8-K(1) | | 001-35758 | | 4.4 | | [removed: April] [added: July] 14, 2015 | | |

| 4.14 | | [Waiver to Fifth Amended and Restated Investors’ Rights Agreement, dated as of May 1, 2019, between the Registrant and certain holders of the capital stock of the Registrant named therein.](http://www.sec.gov/Archives/edgar/data/1318605/000119312519135910/d730491dex41.htm) | | 8-K | | 001-34756 | | 4.1 | | May 3, 2019 | | |

| 4.27 | | [Fifth Supplemental Indenture, dated as of May 7, 2019, by and between Registrant and U.S. Bank National Association, related to 2.00% Convertible Senior Notes due May 15, 2024.](http://www.sec.gov/Archives/edgar/data/1318605/000156459019016764/tsla-ex42_7.htm) | | 8-K | | 001-34756 | | 4.2 | | May 8, 2019 | | |

| 4.28 | | [Form of 2.00% Convertible Senior Notes due May 15, 2024 (included in Exhibit 4.27).](http://www.sec.gov/Archives/edgar/data/1318605/000156459019016764/tsla-ex42_7.htm) | | 8-K | | 001-34756 | | 4.3 | | May 8, 2019 | | |

| 4.119 | | [Description of Registrant’s Securities](https://www.sec.gov/Archives/edgar/data/1318605/000156459020004475/tsla-ex4119_652.htm) | | — | | — | | — | | — | | X |

| 10.8 | | [2019 Equity Incentive Plan.](http://www.sec.gov/Archives/edgar/data/1318605/000119312519171236/d763161dex42.htm) | | S-8 | | 333-232079 | | 4.2 | | June 12, 2019 | | |

| 10.9 | | [Form of Stock Option Agreement under 2019 Equity Incentive Plan.](http://www.sec.gov/Archives/edgar/data/1318605/000119312519171236/d763161dex43.htm) | | S-8 | | 333-232079 | | 4.3 | | June 12, 2019 | | |

| 10.10 | | [Form of Restricted Stock Unit Award Agreement under 2019 Equity Incentive Plan.](http://www.sec.gov/Archives/edgar/data/1318605/000119312519171236/d763161dex44.htm) | | S-8 | | 333-232079 | | 4.4 | | June 12, 2019 | | |

| 10.11 | | [Employee Stock Purchase Plan, effective as of June 12, 2019.](http://www.sec.gov/Archives/edgar/data/1318605/000119312519171236/d763161dex45.htm) | | S-8 | | 333-232079 | | 4.5 | | June 12, 2019 | | |

| 10.24 | | [Form of Call Option Confirmation relating to 2.00% Convertible Senior Notes due May 15, 2024](http://www.sec.gov/Archives/edgar/data/1318605/000119312519135910/d730491dex101.htm). | | 8-K | | 001-34756 | | 10.1 | | May 3, 2019 | | |

| 10.35†† | | [2019 Pricing Agreement (2170 Cells) with respect to 2014 Gigafactory Agreements, executed September 20, 2019, by and among the Registrant, Tesla Motors Netherlands B.V., Panasonic Corporation and Panasonic Corporation of North America, on behalf of its division Panasonic Energy Corporation of North America.](http://www.sec.gov/Archives/edgar/data/1318605/000156459019038256/tsla-ex105_428.htm) | | 10-Q | | 001-34756 | | 10.5 | | October 29, 2019 | | |

| 10.36†† | | [2019 Pricing Agreement (Japan Cells) with respect to 2011 Supply Agreement, executed September 20, 2019, by and among the Registrant, Tesla Motors Netherlands B.V., Panasonic Corporation and SANYO Electric Co., Ltd.](http://www.sec.gov/Archives/edgar/data/1318605/000156459019038256/tsla-ex106_429.htm) | | 10-Q | | 001-34756 | | 10.6 | | October 29, 2019 | | |

| 10.37†† | | [Amended and Restated Factory Lease, executed as of March 26, 10\`9, by and between Tesla, Inc. and Panasonic Energy North America, a division of Panasonic Corporation of North America, as tenant.](http://www.sec.gov/Archives/edgar/data/1318605/000156459019026445/tsla-ex103_198.htm) | | 10-Q | | 001-34756 | | 10.3 | | July 29, 2019 | | |

| 10.38†† | | [Lease Amendment, executed September 20, 2019, by and among the Registrant, Panasonic Corporation of North America, on behalf of its division Panasonic Energy of North America, with respect to the Amended and Restated Factory Lease, executed as of March 26, 2019.](http://www.sec.gov/Archives/edgar/data/1318605/000156459019038256/tsla-ex107_430.htm) | | 10-Q | | 001-34756 | | 10.7 | | October 29, 2019 | | |

| 10.50 | | [Amendment and Restatement in respect of ABL Credit Agreement, dated as of March 6, 2019, by and among certain of the Registrant’s and Tesla Motors Netherlands B.V.’s direct or indirect subsidiaries from time to time party thereto, as borrowers, Wells Fargo Bank, National Association, as documentation agent, JPMorgan Chase Bank, N.A., Goldman Sachs Bank USA, Morgan Stanley Senior Funding Inc. and Bank of America, N.A., as syndication agents, the lenders from time to time party thereto, and Deutsche Bank AG New York Branch, as administrative agent and collateral agent.](http://www.sec.gov/Archives/edgar/data/1318605/000119312519095913/d625340dex1068.htm) | | S-4/A | 3 | 33-229749 | | 10.68 | | April 3, 2019 | | |

| 10.51 | | [Eleventh Amendment to Credit Agreement, dated as of February 1, 2019, in respect of the ABL Credit Agreement, dated as of June 10, 2015, among Tesla, Inc., Tesla Motors Netherlands B.V., the lenders from time to time party thereto, Deutsche Bank AG New York Branch, as administrative agent and collateral agent and as Collateral Agent, and the other agent parties thereto.](http://www.sec.gov/Archives/edgar/data/1318605/000156459019013462/tsla-ex101_342.htm) | | 10-Q | | 001-34756 | | 10.1 | | April 29, 2019 | | |

| 10.59†† | | [Amendment No. 6 to Amended and Restated Loan and Security Agreement, dated as of August 16, 2019, by and among Tesla 2014 Warehouse SPV LLC, Deutsche Bank Trust Company Americas, New York Branch, as Administrative Agent, and the Lenders and Group Agents from time to time party thereto.](http://www.sec.gov/Archives/edgar/data/1318605/000156459019038256/tsla-ex101_221.htm) | | 10-Q | | 001-34756 | | 10.1 | | October 29, 2019 | | |

| 10.67†† | | [Letter of Consent, dated as of June 14, 2019, by and among LML 2018 Warehouse SPV, LLC, Deutsche Bank AG, New York Branch, as Administrative Agent, and the Group Agents party thereto, in respect of the Loan and Security Agreement, dated as of August 17, 2017 and as amended from time to time, by and among LML Warehouse SPV, LLC, Tesla Finance LLC, and the Lenders, Group Agents and Administrative Agent from time to time party thereto.](http://www.sec.gov/Archives/edgar/data/0001318605/000156459019026445/tsla-ex101_197.htm) | | 10-Q | | 001-34756 | | 10.1 | | July 29, 2019 | | |

| 10.68†† | | [Amendment No. 1 to Loan and Security Agreement, dated as of August 16, 2019, by and among LML 2018 Warehouse SPV, LLC, Deutsche Bank Trust Company Americas, as Paying Agent, and Deutsche Bank AG, New York Branch, as Administrative Agent, and the Lenders and Group Agents from time to time party thereto.](http://www.sec.gov/Archives/edgar/data/1318605/000156459019038256/tsla-ex102_222.htm) | | 10-Q | | 001-34756 | | 10.2 | | October 29, 2019 | | |

| 10.69 | | [Amendment No. 2 to Loan and Security Agreement, dated as of December 13, 2019, by and among LML 2018 Warehouse SPV, LLC, Deutsche Bank Trust Company Americas, as Paying Agent, and Deutsche Bank AG, New York Branch, as Administrative Agent, and the Lenders and Group Agents from time to time party thereto.](https://www.sec.gov/Archives/edgar/data/1318605/000156459020004475/tsla-ex1069_647.htm) | | — | | — | | — | | — | | X |

| 10.82†† | | [Grant Contract for State-Owned Construction Land Use Right, dated as of October 17, 2018, by and between Shanghai Planning and Land Resource Administration Bureau, as grantor, and Tesla (Shanghai) Co., Ltd., as grantee (English translation).](http://www.sec.gov/Archives/edgar/data/0001318605/000156459019026445/tsla-ex102_737.htm) | | 10-Q | | 001-34756 | | 10.2 | | July 29, 2019 | | |

| 10.83†† | | [Facility Agreement, dated as of September 26, 2019, by and between China Merchants Bank Co., Ltd. Beijing Branch and Tesla Automobile (Beijing) Co., Ltd. (English translation).](http://www.sec.gov/Archives/edgar/data/0001318605/000156459019038256/tsla-ex103_488.htm) | | 10-Q | | 001-34756 | | 10.3 | | October 29, 2019 | | |

| 10.84†† | | [Statement Letter to China Merchants Bank Co., Ltd. Beijing Branch from Tesla Automobile (Beijing) Co., Ltd., dated as of September 26, 2019 (English translation)](http://www.sec.gov/Archives/edgar/data/1318605/000156459019038256/tsla-ex104_431.htm). | | 10-Q | | 001-34756 | | 10.4 | | October 29, 2019 | | |

| 10.85†† | | [Fixed Asset Syndication Loan Agreement, dated as of December 18, 2019, by and among Tesla (Shanghai) Co., Ltd., China Construction Bank Corporation, China (Shanghai) Pilot Free Trade Zone Special Area Branch, Agricultural Bank of China Shanghai Changning Sub-branch, Shanghai Pudong Development Bank Co., Ltd., Shanghai Branch, and Industrial and Commercial Bank of China Limited, China (Shanghai) Pilot Free Trade Zone Special Area Branch (English translation).](https://www.sec.gov/Archives/edgar/data/1318605/000156459020004475/tsla-ex1085_648.htm) | | — | | — | | — | | — | | X |

| 10.86†† | | [Fixed Asset Syndication Loan Agreement and Supplemental Agreement, dated as of December 18, 2019, by and among Tesla (Shanghai) Co., Ltd., China Construction Bank Corporation, China (Shanghai) Pilot Free Trade Zone Special Area Branch, Agricultural Bank of China Shanghai Changning Sub-branch, Shanghai Pudong Development Bank Co., Ltd., Shanghai Branch, and Industrial and Commercial Bank of China Limited, China (Shanghai) Pilot Free Trade Zone Special Area Branch (English translation).](https://www.sec.gov/Archives/edgar/data/1318605/000156459020004475/tsla-ex1086_649.htm) | | — | | — | | — | | — | | X |

| 10.87†† | | [Syndication Revolving Loan Agreement, dated as of December 18, 2019, by and among Tesla (Shanghai) Co., Ltd. China Construction Bank Corporation, China (Shanghai) Pilot Free Trade Zone Special Area Branch, Agricultural Bank of China Shanghai Changning Sub-branch, Shanghai Pudong Development Bank Co., Ltd., Shanghai Branch, and Industrial and Commercial Bank of China Limited, China (Shanghai) Pilot Free Trade Zone Special Area Branch (English translation).](https://www.sec.gov/Archives/edgar/data/1318605/000156459020004475/tsla-ex1087_650.htm) | | — | | — | | — | | — | | X |

| 104 | | Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101) | | | | | | | | | | |

| †† | Portions of this exhibit have been redacted in compliance with Regulation S-K Item 601(b)(10). |

| --- | --- |

| Exhibit | | | | Incorporated by Reference | | | | | | | | Filed |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Number | | Exhibit Description | | Form | | File No. | | Exhibit | | Filing Date | | Herewith |

| | | | | | | | | | | | | |

| 4.22 | | [Form of 5.30% Senior Note due August 15, 2025](http://www.sec.gov/Archives/edgar/data/1318605/000156459017017989/tsla-ex41_7.htm). | | 8-K | | 001-34756 | | 4.2 | | August 23, 2017 | | |

| 4.118 | | [One Hundred-and-Fourteenth Supplemental Indenture, dated as of August 24, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 3.60% Solar Bonds, Series 2015/C90-5.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015007546/scty-ex44_8.htm) | | 8-K(1) | | 001-35758 | | 4.4 | | August 24, 2015 | | |

| 4.119 | | [One Hundred-and-Fifteenth Supplemental Indenture, dated as of August 24, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C91-10.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015007546/scty-ex45_9.htm) | | 8-K(1) | | 001-35758 | | 4.5 | | August 24, 2015 | | |

| 4.120 | | [One Hundred-and-Sixteenth Supplemental Indenture, dated as of August 24, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C92-15.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015007546/scty-ex46_10.htm) | | 8-K(1) | | 001-35758 | | 4.6 | | August 24, 2015 | | |

| 4.121 | | [One Hundred-and-Eighteenth Supplemental Indenture, dated as of August 31, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 2.65% Solar Bonds, Series 2015/C94-3.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015007649/scty-ex43_7.htm) | | 8-K(1) | | 001-35758 | | 4.3 | | August 31, 2015 | | |

| 4.122 | | [One Hundred-and-Nineteenth Supplemental Indenture, dated as of August 31, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 3.60% Solar Bonds, Series 2015/C95-5.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015007649/scty-ex44_8.htm) | | 8-K(1) | | 001-35758 | | 4.4 | | August 31, 2015 | | |

| 4.123 | | [One Hundred-and-Twentieth Supplemental Indenture, dated as of August 31, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C96-10.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015007649/scty-ex45_9.htm) | | 8-K(1) | | 001-35758 | | 4.5 | | August 31, 2015 | | |

| 4.124 | | [One Hundred-and-Twenty-First Supplemental Indenture, dated as of August 31, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C97-15.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015007649/scty-ex46_10.htm) | | 8-K(1) | | 001-35758 | | 4.6 | | August 31, 2015 | | |

| 4.125 | | [One Hundred-and-Twenty-Second Supplemental Indenture, dated as of September 11, 2015, by and between SolarCity and the Trustee, related to SolarCity’s Solar Bonds, Series 2015/R1.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015007928/scty-ex42_56.htm) | | 8-K(1) | | 001-35758 | | 4.2 | | September 11, 2015 | | |

| 4.126 | | [One Hundred-and-Twenty-Third Supplemental Indenture, dated as of September 11, 2015, by and between SolarCity and the Trustee, related to SolarCity’s Solar Bonds, Series 2015/R2.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015007928/scty-ex43_57.htm) | | 8-K(1) | | 001-35758 | | 4.3 | | September 11, 2015 | | |

| 4.127 | | [One Hundred-and-Twenty-Fourth Supplemental Indenture, dated as of September 11, 2015, by and between SolarCity and the Trustee, related to SolarCity’s Solar Bonds, Series 2015/R3.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015007928/scty-ex44_58.htm) | | 8-K(1) | | 001-35758 | | 4.4 | | September 11, 2015 | | |

| 4.128 | | [One Hundred-and-Twenty-Sixth Supplemental Indenture, dated as of September 14, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 2.65% Solar Bonds, Series 2015/C99-3.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015007969/scty-ex43_7.htm) | | 8-K(1) | | 001-35758 | | 4.3 | | September 15, 2015 | | |

| 4.129 | | [One Hundred-and-Twenty-Seventh Supplemental Indenture, dated as of September 14, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 3.60% Solar Bonds, Series 2015/C100-5.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015007969/scty-ex44_8.htm) | | 8-K(1) | | 001-35758 | | 4.4 | | September 15, 2015 | | |

| 4.130 | | [One Hundred-and-Twenty-Eighth Supplemental Indenture, dated as of September 14, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C101-10.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015007969/scty-ex45_9.htm) | | 8-K(1) | | 001-35758 | | 4.5 | | September 15, 2015 | | |

| 4.131 | | [One Hundred-and-Twenty-Ninth Supplemental Indenture, dated as of September 14, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C102-15.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015007969/scty-ex46_10.htm) | | 8-K(1) | | 001-35758 | | 4.6 | | September 15, 2015 | | |

| 4.132 | | [One Hundred-and-Thirty-First Supplemental Indenture, dated as of September 28, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 2.65% Solar Bonds, Series 2015/C104-3.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015008193/scty-ex43_7.htm) | | 8-K(1) | | 001-35758 | | 4.3 | | September 29, 2015 | | |

| 4.133 | | [One Hundred-and-Thirty-Second Supplemental Indenture, dated as of September 28, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 3.60% Solar Bonds, Series 2015/C105-5.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015008193/scty-ex44_8.htm) | | 8-K(1) | | 001-35758 | | 4.4 | | September 29, 2015 | | |

| 4.134 | | [One Hundred-and-Thirty-Third Supplemental Indenture, dated as of September 28, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C106-10.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015008193/scty-ex45_9.htm) | | 8-K(1) | | 001-35758 | | 4.5 | | September 29, 2015 | | |

| 4.135 | | [One Hundred-and-Thirty-Fourth Supplemental Indenture, dated as of September 28, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C107-15.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015008193/scty-ex46_10.htm) | | 8-K(1) | | 001-35758 | | 4.6 | | September 29, 2015 | | |

| 4.136 | | [One Hundred-and-Thirty-Sixth Supplemental Indenture, dated as of October 13, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 2.65% Solar Bonds, Series 2015/C109-3.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015008369/scty-ex43_7.htm) | | 8-K(1) | | 001-35758 | | 4.3 | | October 13, 2015 | | |

| 4.137 | | [One Hundred-and-Thirty-Seventh Supplemental Indenture, dated as of October 13, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 3.60% Solar Bonds, Series 2015/C110-5.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015008369/scty-ex44_8.htm) | | 8-K(1) | | 001-35758 | | 4.4 | | October 13, 2015 | | |

| 4.138 | | [One Hundred-and-Thirty-Eighth Supplemental Indenture, dated as of October 13, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C111-10.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015008369/scty-ex45_9.htm) | | 8-K(1) | | 001-35758 | | 4.5 | | October 13, 2015 | | |

| 4.139 | | [One Hundred-and-Thirty-Ninth Supplemental Indenture, dated as of October 13, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C112-15.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015008369/scty-ex46_10.htm) | | 8-K(1) | | 001-35758 | | 4.6 | | October 13, 2015 | | |

| 4.140 | | [One Hundred-and-Forty-First Supplemental Indenture, dated as of October 30, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 3.00% Solar Bonds, Series 2015/23-3.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015008995/scty-ex43_7.htm) | | 8-K(1) | | 001-35758 | | 4.3 | | October 30, 2015 | | |

| 4.141 | | [One Hundred-and-Forty-Second Supplemental Indenture, dated as of October 30, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.00% Solar Bonds, Series 2015/24-5.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015008995/scty-ex44_8.htm) | | 8-K(1) | | 001-35758 | | 4.4 | | October 30, 2015 | | |

| 4.142 | | [One Hundred-and-Forty-Third Supplemental Indenture, dated as of October 30, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.00% Solar Bonds, Series 2015/25-10.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015008995/scty-ex45_9.htm) | | 8-K(1) | | 001-35758 | | 4.5 | | October 30, 2015 | | |

| 4.143 | | [One Hundred-and-Forty-Fourth Supplemental Indenture, dated as of October 30, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.75% Solar Bonds, Series 2015/26-15.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015008995/scty-ex46_10.htm) | | 8-K(1) | | 001-35758 | | 4.6 | | October 30, 2015 | | |

| 4.144 | | [One Hundred-and-Forty-Sixth Supplemental Indenture, dated as of November 4, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 2.65% Solar Bonds, Series 2015/C114-3.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015009335/scty-ex43_7.htm) | | 8-K(1) | | 001-35758 | | 4.3 | | November 4, 2015 | | |

| 4.145 | | [One Hundred-and-Forty-Seventh Supplemental Indenture, dated as of November 4, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 3.60% Solar Bonds, Series 2015/C115-5.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015009335/scty-ex44_8.htm) | | 8-K(1) | | 001-35758 | | 4.4 | | November 4, 2015 | | |

| 4.146 | | [One Hundred-and-Forty-Eighth Supplemental Indenture, dated as of November 4, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C116-10.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015009335/scty-ex45_9.htm) | | 8-K(1) | | 001-35758 | | 4.5 | | November 4, 2015 | | |

| 4.147 | | [One Hundred-and-Forty-Ninth Supplemental Indenture, dated as of November 4, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C117-15.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015009335/scty-ex46_10.htm) | | 8-K(1) | | 001-35758 | | 4.6 | | November 4, 2015 | | |

| 4.148 | | [One Hundred-and-Fifty-First Supplemental Indenture, dated as of November 16, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 2.65% Solar Bonds, Series 2015/C119-3.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015010841/scty-ex43_7.htm) | | 8-K(1) | | 001-35758 | | 4.3 | | November 17, 2015 | | |

| 4.149 | | [One Hundred-and-Fifty-Second Supplemental Indenture, dated as of November 16, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 3.60% Solar Bonds, Series 2015/C120-5.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015010841/scty-ex44_8.htm) | | 8-K(1) | | 001-35758 | | 4.4 | | November 17, 2015 | | |

| 4.150 | | [One Hundred-and-Fifty-Third Supplemental Indenture, dated as of November 16, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C121-10.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015010841/scty-ex45_9.htm) | | 8-K(1) | | 001-35758 | | 4.5 | | November 17, 2015 | | |

| 4.151 | | [One Hundred-and-Fifty-Fourth Supplemental Indenture, dated as of November 16, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C122-15.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015010841/scty-ex46_10.htm) | | 8-K(1) | | 001-35758 | | 4.6 | | November 17, 2015 | | |

| 4.152 | | [One Hundred-and-Fifty-Sixth Supplemental Indenture, dated as of November 30, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 2.65% Solar Bonds, Series 2015/C124-3.](http://www.sec.gov/Archives/edgar/data/1408356/000156459015011167/scty-ex43_7.htm) | | 8-K(1) | | 001-35758 | | 4.3 | | November 30, 2015 | | |

| Date: February [removed: 19, 2019] [added: 13, 2020] | | /s/ Elon Musk |

| /s/ Elon Musk | | Chief Executive Officer and Director (Principal Executive Officer) | | February [removed: 19, 2019] [added: 13, 2020] |

| /s/ Robyn Denholm | | Director | | February [removed: 19, 2019] [added: 13, 2020] |

| /s/ Ira Ehrenpreis | | Director | | February [removed: 19, 2019] [added: 13, 2020] |

| /s/ Lawrence J. Ellison | | Director | | February [removed: 19, 2019] [added: 13, 2020] |

| /s/ Antonio J. Gracias | | Director | | February [removed: 19, 2019] [added: 13, 2020] |

| /s/ James Murdoch | | Director | | February [removed: 19, 2019] [added: 13, 2020] |

| /s/ Kimbal Musk | | Director | | February [removed: 19, 2019] [added: 13, 2020] |

| /s/ Kathleen Wilson-Thompson | | Director | | February [removed: 19, 2019] [added: 13, 2020] |

SIGNATURES

| /s/ Zachary J. Kirkhorn | | Chief Financial Officer (Principal Financial Officer) | | February 13, 2020 |

| Zachary J. Kirkhorn | | | | |

| /s/ Vaibhav Taneja | | Chief Accounting Officer (Principal Accounting Officer) | | February 13, 2020 |

| Vaibhav Taneja | | | | |

| /s/ Stephen T. Jurvetson | | Director | | February 13, 2020 |

SIGNATURES

| /s/ Deepak Ahuja | | Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | | February 19, 2019 |

| Deepak Ahuja | | | | |

| /s/ Brad W. Buss | | Director | | February 19, 2019 |

| Brad W. Buss | | | | |

| /s/ Linda Johnson Rice | | Director | | February 19, 2019 |

| Linda Johnson Rice | | | | |

| | | Director | | |

| --- | --- |

Not applicable

PART II

| --- | --- |

Market Information

Our common stock has traded on The NASDAQ Global Select Market under the symbol “TSLA” since it began trading on June 29, 2010.

Our initial public offering was priced at $17.00 per share on June 28, 2010.

Holders

As of January 31, 2018, there were 1,145 holders of record of our common stock.

A substantially greater number of holders of our common stock are “street name” or beneficial holders, whose shares are held by banks, brokers and other financial institutions.

Dividend Policy

We have never declared or paid cash dividends on our common stock.

We currently do not anticipate paying any cash dividends in the foreseeable future.

Any future determination to declare cash dividends will be made at the discretion of our board of directors, subject to applicable laws, and will depend on our financial condition, results of operations, capital requirements, general business conditions and other factors that our board of directors may deem relevant.

Stock Performance Graph

This performance graph shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference into any filing of Tesla, Inc. under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

The following graph shows a comparison, from January 1, 2014 through December 31, 2018, of the cumulative total return on our common stock, The NASDAQ Composite Index and a group of all public companies sharing the same SIC code as us, which is SIC code 3711, “Motor Vehicles and Passenger Car Bodies” (Motor Vehicles and Passenger Car Bodies Public Company Group).

Such returns are based on historical results and are not intended to suggest future performance.

Data for The NASDAQ Composite Index and the Motor Vehicles and Passenger Car Bodies Public Company Group assumes an investment of $100 on January 1, 2014 and reinvestment of dividends.

We have never declared or paid cash dividends on our common stock nor do we anticipate paying any such cash dividends in the foreseeable future.


Unregistered Sales of Equity Securities

Exercises of Warrants

In connection with the offering in 2013 of our 1.50% Convertible Senior Notes due 2018, we sold warrants to each of Goldman, Sachs & Co. and Morgan Stanley & Co. LLC (the “Warrantholders”).

Between October 1, 2018 and October 31, 2018, we issued an aggregate of 132,977 shares of our common stock to the Warrantholders pursuant to their exercise of such warrants, which were net of the applicable exercise prices.

Such shares were issued pursuant to an exemption from registration provided by Rule 3(a)(9) of the Securities Act.

Private Placement to CEO

On November 9, 2018, we sold 56,915 shares of our common stock to our CEO in a private placement pursuant to an exemption from registration provided by Rule 4(a)(2) of the Securities Act, at a per share price equal to the last closing price of our stock prior to the execution of the purchase agreement, and received total cash proceeds of $20.0 million.

Conversion of Convertible Senior Notes

On December 17, 2018, we issued 10 shares of our common stock to a former holder of the 1.625% Convertible Senior Notes due in 2019 issued by our subsidiary in connection with such holder’s conversion of $8,000 in principal amount of such notes.

Such shares were issued pursuant to an exemption from registration provided by Rule 3(a)(9) of the Securities Act.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None

| --- | --- |

The following selected consolidated financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K to fully understand factors that may affect the comparability of the information presented below (in thousands, except per share data).

| | | Year Ended December 31, | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | 2018 (2) | | | | 2017 | | | | 2016 (1) | | | | 2015 | | | | 2014 | | |

| Consolidated Statements of Operations Data: | | | | | | | | | | | | | | | | | | | | |

| Total revenues | | $ | 21,461,268 | | | $ | 11,758,751 | | | $ | 7,000,132 | | | $ | 4,046,025 | | | $ | 3,198,356 | |

| Gross profit | | $ | 4,042,021 | | | $ | 2,222,487 | | | $ | 1,599,257 | | | $ | 923,503 | | | $ | 881,671 | |

| Loss from operations | | $ | (388,073 | ) | | $ | (1,632,086 | ) | | $ | (667,340 | ) | | $ | (716,629 | ) | | $ | (186,689 | ) |

| Net loss attributable to common stockholders | | $ | (976,091 | ) | | $ | (1,961,400 | ) | | $ | (674,914 | ) | | $ | (888,663 | ) | | $ | (294,040 | ) |

| Net loss per share of common stock attributable to common stockholders, basic and diluted | | $ | (5.72 | ) | | $ | (11.83 | ) | | $ | (4.68 | ) | | $ | (6.93 | ) | | $ | (2.36 | ) |

| Weighted average shares used in computing net loss per share of common stock, basic and diluted | | | 170,525 | | | | 165,758 | | | | 144,212 | | | | 128,202 | | | | 124,539 | |

| | | As of December 31, | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | 2018 (2) | | | | 2017 | | | | 2016 (1) | | | | 2015 | | | | 2014 | | |

| Consolidated Balance Sheet Data: | | | | | | | | | | | | | | | | | | | | |

| Working (deficit) capital | | $ | (1,685,828 | ) | | $ | (1,104,150 | ) | | $ | 432,791 | | | $ | (29,029 | ) | | $ | 1,072,907 | |

| Total assets | | | 29,739,614 | | | | 28,655,372 | | | | 22,664,076 | | | | 8,067,939 | | | | 5,830,667 | |

| Total long-term obligations | | | 13,433,874 | | | | 15,348,310 | | | | 10,923,162 | | | | 4,125,915 | | | | 2,753,595 | |

| | (1) | We acquired SolarCity Corporation (“SolarCity”) on November 21, 2016. SolarCity’s financial positions have been included in our financial positions from the acquisition date. See Note 3, Business Combinations, of the notes to the consolidated financial statements for additional information regarding this transaction. |

| --- | --- | --- |

| | (2) | Includes the impact of the adoption of the new revenue recognition accounting standard in 2018. Prior periods have not been revised. See Note 2, Summary of Significant Accounting Policies, of the notes to the consolidated financial statements for further details. |

| --- | --- | --- |

| --- | --- |

Index to Consolidated Financial Statements

| | | Page |

| --- | --- | --- |

| [Report of Independent Registered Public Accounting Firm](#Report_of_Independent_Registered_Public) | | 70 |

| [Consolidated Balance Sheets](#Consolidated_Balance_Sheets) | | 72 |

| [Consolidated Statements of Operations](#Consolidated_Statements_of_Operations) | | 73 |

| [Consolidated Statements of Comprehensive Loss](#Consolidated_Statmnts_of_Cmprehnsve_Loss) | | 74 |

| [Consolidated Statements of Redeemable Noncontrolling Interests and Equity](#Consolidated_Statements_of_Stockholders) | | 75 |

| [Consolidated Statements of Cash Flows](#Consolidated_Statements_of_Cash_Flows) | | 76 |

| [Notes to Consolidated Financial Statements](#Notes_to_Consolidated_Financial_Statemen) | | 77 |

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Tesla, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Tesla, Inc. and its subsidiaries (the “Company”) as of December 31, 2018 and 2017, and the related consolidated statements of operations, of comprehensive loss, of redeemable noncontrolling interests and equity, and of cash flows for each of the three years in the period ended December 31, 2018, including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018 in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for revenue from contracts with customers in 2018.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control over Financial Reporting appearing under Item 9A.

Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/PricewaterhouseCoopers LLP

San Jose, California

February 19, 2019

| --- | --- |

None

| --- | --- |

Evaluation of Disclosure Controls and Procedures

We conducted an evaluation as of December 31, 2018, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures.

Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2018, our disclosure controls and procedures were effective to provide reasonable assurance.

During the fourth quarter of 2018, we further enhanced our disclosure controls in accordance with the September 29, 2018 settlement with the SEC regarding Elon Musk’s social media posts on August 7, 2018.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting.

Internal control over financial reporting is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

Our management concluded that our internal control over financial reporting was effective as of December 31, 2018.

Our independent registered public accounting firm, PricewaterhouseCoopers LLP, has audited the effectiveness of our internal control over financial reporting as of December 31, 2018, as stated in their report which is included herein.

Limitations on the Effectiveness of Controls

Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements and projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the fourth fiscal quarter of the year ended December 31, 2018, which has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

| --- | --- |

None

PART III

| --- | --- |

The information required by this Item 10 of Form 10-K will be included in our 2019 Proxy Statement to be filed with the Securities and Exchange Commission in connection with the solicitation of proxies for our 2019 Annual Meeting of Stockholders and is incorporated herein by reference.

The 2019 Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.

| --- | --- |

The information required by this Item 11 of Form 10-K will be included in our 2019 Proxy Statement and is incorporated herein by reference.

| --- | --- |

The information required by this Item 12 of Form 10-K will be included in our 2019 Proxy Statement and is incorporated herein by reference.

| --- | --- |

The information required by this Item 13 of Form 10-K will be included in our 2019 Proxy Statement and is incorporated herein by reference.

| --- | --- |

The information required by this Item 14 of Form 10-K will be included in our 2019 Proxy Statement and is incorporated herein by reference.