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TESLA MOTORS INC
FORM 10-K
(Annual Report)
Filed 02/27/12 for the Period Ending 12/31/11
Address 3500 DEER CREEK RD
PALO ALTO, CA 94070
Telephone 650-681-5000
CIK 0001318605
Symbol TSLA
SIC Code 3711 - Motor Vehicles and Passenger Car Bodies
Industry Auto & Truck Manufacturers
Sector Consumer Cyclical
http://www.edgar-online.com
© Copyright 2012, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.

Table of contents

  • Page 1
    TESLA MOTORS INC FORM 10-K (Annual Report) Filed 02/27/12 for the Period Ending 12/31/11 Address Telephone CIK Symbol SIC Code Industry Sector 3500 DEER CREEK RD PALO ALTO, CA 94070 650-681-5000 0001318605 TSLA 3711 - Motor Vehicles and Passenger Car Bodies Auto & Truck Manufacturers Consumer ...

  • Page 2
    ... Number: 001-34756 Tesla Motors, Inc. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) 91-2197729 (I.R.S. Employer Identification No.) 3500 Deer Creek Road Palo Alto, California (Address of principal executive offices...

  • Page 3
    ...Disclosures About Market Risk Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of...

  • Page 4
    ... concerning our strategy, future operations, future financial position, future revenues, projected costs, expectations regarding demand and acceptance for our technologies, growth opportunities and trends in the market in which we operate, prospects and plans and objectives of management. The words...

  • Page 5
    ...North America, Europe and Asia. Our intent is to offer a compelling customer experience while gathering rapid customer feedback and achieving operating efficiencies, better control over the costs of inventory, warranty service, pricing, and the development of the Tesla brand. Our Tesla stores do not...

  • Page 6
    ... vehicles by up to 30% as compared to our current estimates. We are designing Model S for a significantly broader customer base than the Tesla Roadster. Accordingly, we currently intend to target an annual production rate of approximately 20,000 cars per year beginning in 2013 from our Tesla Factory...

  • Page 7
    ... Model S will offer consumers an attractive cost of ownership when compared to similar internal combustion engine or hybrid electric vehicles. Using only a single electric powertrain enables us to create a lighter, more energy efficient vehicle that is mechanically simpler than currently available...

  • Page 8
    ... In addition, our Model S is being designed to seat five adults, provide best in class storage in the trunk and hood while offering design and performance comparable to, or better than, other premium sedans. Our Vehicles and Products We currently design, manufacture and sell fully electric vehicles...

  • Page 9
    ...S purchase. In addition to the competitive pricing of Model S relative to other premium vehicles, we estimate that customers of electric vehicles will enjoy lower fuel costs. For example, assuming an average of 12,000 miles driven per year, an average electricity cost of 11.0 cents per kilowatt-hour...

  • Page 10
    ... time in future vehicle development. In addition, we believe our strategy of using commercially available battery cells will enable us to leverage improvements in cell chemistries and rapidly introduce planned vehicles with different range options. However, we may make changes to the design of Model...

  • Page 11
    ...: battery pack, power electronics, motor, gearbox and the control software which enables the components to operate as a system. We designed each of these major elements for our Tesla Roadster and plan to use much of this technology in Model S, Model X, our future electric vehicles and powertrain...

  • Page 12
    ... 100,000 miles or seven years, which will result in a decrease to the vehicle's initial range. In addition, based on internal testing, we estimate that our Tesla Roadster would have a 5-10% reduction in range when operated in -20°C temperatures. To date, we have tested hundreds of battery cells of...

  • Page 13
    ...offer a high-voltage fast charge option for Model S with the 60 kWh and 85 kWh battery pack options that will enable the vehicle to charge from Tesla's SuperCharger network that we anticipate may be available in the future. Motor Our powertrains currently use custom designed 3-phase induction motors...

  • Page 14
    ... of our engineering and manufacturing teams will help accelerate the development of new products and allow for faster introduction of product changes. Sales and Marketing Company-Owned Sales We market and sell cars directly to consumers. Until we opened our first store in Los Angeles, California in...

  • Page 15
    ... range from widely attended public events, such as the Detroit, Los Angeles, and Frankfurt auto shows, to smaller events oriented towards sales, such as private drive events. Company-Owned Charging Network, Service and Warranty Tesla SuperCharger Network During 2012, we plan to introduce a network...

  • Page 16
    ...Limited Warranty but before the tenth anniversary of the purchase date of the vehicle. For customers that select this option, we agree to replace the original battery pack of the vehicle with a replacement battery pack which will store at least 53 kilowatt-hours of usable energy. Charges in addition...

  • Page 17
    ... changing operating patterns and adding additional shifts. Powertrain Component Manufacturing In addition to developing our Model S and future vehicle manufacturing capabilities at the Tesla Factory, we are currently designing, developing and manufacturing lithium-ion battery packs, electric motors...

  • Page 18
    ... to use these electric vans in a limited number of customer trials. In February 2012, we received an initial purchase order for the development of a full electric powertrain system for an additional Mercedes Benz vehicle from Daimler. We are negotiating the agreement for production parts for this...

  • Page 19
    .... The agreement supplies us with battery cells to build more than 80,000 vehicles over the next four years. In November 2010, we sold 1,418,573 shares of our common stock to an entity affiliated with Panasonic Corporation at a price of $21.15 per share, which was the average of the trading highs and...

  • Page 20
    ... for Model S in California, (ii) to upgrade our Palo Alto powertrain production facility, and (iii) to expand our current Tesla Roadster assembly operations at our Menlo Park facility. As of December 31, 2011, we have received the tax exemption for approximately $97.9 million in qualifying purchases...

  • Page 21
    ... that can be sold. Under California's Low-Emission Vehicle Regulations, and similar laws in other states, vehicle manufacturers are required to ensure that a portion of the vehicles delivered for sale in that state during each model year are zero emission vehicles. Currently, the states of Arizona...

  • Page 22
    ... safety in the front impact crash test, there were two criteria that were not met in the test. Based on our analysis of additional compliance options in Australia and Japan, we believe such an outcome should not limit our ability to sell the Tesla Roadster in Australia below certain annual volumes...

  • Page 23
    ... for emissions control for certain regulated pollutants for new vehicles and engines sold in California are set by CARB. States that have adopted the California standards as approved by EPA also recognize the Executive Order for sales of vehicles. Regulation-Battery Safety and Testing Our battery...

  • Page 24
    ...power to suspend licenses to manufacture and sell vehicles in California, following a hearing on the merits, which it has typically exercised only in cases of significant or repeat violations and/or a refusal to comply with DMV directions. Certain states may have specific laws which apply to dealers...

  • Page 25
    ... in the direction of electric-based vehicles. We believe the primary competitive factors in our markets include but are not limited to technological innovation; product quality and safety; service options; product performance; design and styling; product price; and manufacturing efficiency. We...

  • Page 26
    ... manufacturers have announced plug-in versions of their hybrid vehicles. For example, in December 2010, General Motors introduced the Chevrolet Volt, which is a plug-in hybrid vehicle that operates purely on electric power for a limited number of miles, at which time an internal combustion engine...

  • Page 27
    ... of 452 in manufacturing, 315 in powertrain research and development, 276 in sales, marketing and service, 216 in vehicle design and engineering, and 158 in general and administration. Of all of our employees, 1,088 are located in our Northern California offices (including the Tesla Factory), 81 are...

  • Page 28
    ... our Tesla Factory in Fremont, California in October 2010 to produce such vehicles, and we have not yet completely finalized the full vehicle design or our engineering, manufacturing or component supply plans for Model S. In addition, our powertrain component sales, development services revenue and...

  • Page 29
    ... term, our future success will be dependent upon our ability to design and achieve market acceptance of new vehicle models, specifically Model S and Model X. We currently generate a significant percentage of our revenues from the sale of our Tesla Roadsters. We ended the production run of the Tesla...

  • Page 30
    ...planned volume production, our business prospects, operating results and financial condition may be materially and adversely impacted. We have no experience to date in high volume manufacturing of our electric vehicles. We do not know whether we will be able to develop efficient, automated, low-cost...

  • Page 31
    ... in the financing, design, manufacture and launch of Model S could materially damage our brand, business, prospects, financial condition and operating results. Automobile manufacturers often experience delays in the design, manufacture and commercial release of new vehicle models. We experienced...

  • Page 32
    ... consuming, costly and may force us to make additional modifications to a vehicle's design. This supply chain exposes us to multiple potential sources of delivery failure or component shortages for Model S, as well as for our powertrain component sales activities. For example, earthquakes similar to...

  • Page 33
    ... a traditional gasoline engine in terms of range and power, inexperience with servicing electric vehicles, regulations associated with the transport of lithium-ion battery packs and unproven high-volume customer demand for fully electric vehicles. In addition, while we are designing Model S to have...

  • Page 34
    ... delivered only a limited number of Tesla Roadsters to customers and have limited field experience with our vehicles, especially Model S. Additionally, final safety testing for Model S, some versions of which use new, higher density cells in their battery packs, is currently in progress. Accordingly...

  • Page 35
    ... and components for our Model S; develop and equip manufacturing facilities to produce our electric powertrain components; open new Tesla stores and service centers; expand our design, development, maintenance and repair capabilities; increase our sales and marketing activities; and increase our...

  • Page 36
    ... of current battery manufacturers to build or operate battery cell manufacturing plants to supply the numbers of lithium-ion cells required to support the growth of the electric or plug-in hybrid vehicle industry as demand for such cells increases; disruption in the supply of cells due to quality...

  • Page 37
    ... we expect, our business, prospects, financial condition and operating results will be harmed. The market for alternative fuel vehicles is relatively new, rapidly evolving, characterized by rapidly changing technologies, price competition, additional competitors, evolving government regulation and...

  • Page 38
    ... above may cause current or potential customers not to purchase our electric vehicles, which would materially adversely affect our business, operating results, financial condition and prospects. Our success could be harmed by negative publicity regarding our company or products. From time to...

  • Page 39
    ... to market and sell our vehicles. We are dependent upon our ability to fully draw down on our loan facility from the United States Department of Energy, which may restrict our ability to conduct our business. Our plan for manufacturing Model S and for developing our electric powertrain facility...

  • Page 40
    ... been open for less than one year. We have only limited experience distributing and selling our performance vehicles through our Tesla stores. Our success will depend in large part on our ability to effectively develop our own sales channels and marketing strategies. Implementing our business model...

  • Page 41
    ... manufacturer-dealer laws. For example, the state of Colorado required us to obtain dealer and manufacturer licenses in the state in order to operate our gallery in Colorado. In addition, some states have requirements that service facilities be available with respect to vehicles sold in the state...

  • Page 42
    ... purchase, delivery, and sale of the vehicle. Given the high level of reservations, significant cancellations could harm our financial condition, business, prospects and operating results. If we are unable to design, develop, market and sell new electric vehicles and services that address additional...

  • Page 43
    ... our brand, business, prospects, financial condition and operating results. Automobile manufacturers often experience delays in the design, manufacture and commercial release of new vehicle models. We experienced significant delays in launching the Tesla Roadster, which resulted in additional costs...

  • Page 44
    ... manufacturers have announced plug-in versions of their hybrid vehicles. For example, in December 2010, General Motors introduced the Chevrolet Volt, which is a plug-in hybrid vehicle that operates purely on electric power for a limited number of miles, at which time an internal combustion engine...

  • Page 45
    ... time, pricing, reliability, safety, fuel economy, customer service and financing terms. Increased competition may lead to lower vehicle unit sales and increased inventory, which may result in a further downward price pressure and adversely affect our business, financial condition, operating results...

  • Page 46
    ... levels of annual revenue. In addition, we expect our period-to-period operating results to vary based on our operating costs which we anticipate will increase significantly in future periods as we, among other things, design, develop and manufacture our Model S, Model X and electric powertrain...

  • Page 47
    ... from government or financial institutions. This capital will be necessary to fund our ongoing operations, continue research and development projects, including those for our planned Model X crossover, establish sales and service centers, improve infrastructure such as expanded battery assembly...

  • Page 48
    ... sales and service locations within a geographic market. We will need to open additional Tesla stores with service capabilities and standalone service locations, as well as hire and train significant numbers of new employees to staff these centers and act as Tesla Rangers, in order to successfully...

  • Page 49
    ... manufacturers headquartered in Detroit, Japan and the European Union, have greater name recognition, broader customer relationships and substantially greater marketing resources than we do. If we do not develop and maintain a strong brand, our business, prospects, financial condition and operating...

  • Page 50
    ...that our advertising claims are fully supported. To date, we have limited experience selling our electric vehicles and we may not be successful in attracting and retaining a large number of customers. For example, a significant number of our stores have been open for less than one year and a portion...

  • Page 51
    ... use these funds for working capital and other general corporate purposes. California laws, and potentially the laws of other states, restrict the ability of licensed auto dealers to advertise or take deposits for vehicles before the vehicles are available to the dealer from the manufacturer. In...

  • Page 52
    ...of Tesla stores, this could lead to a decrease in sales of our vehicles and could negatively impact our business, prospects, financial condition and operating results. We have opened Tesla stores in major metropolitan areas throughout North America, Europe and Asia. We plan to open additional stores...

  • Page 53
    ... the Model S sedan, to upgrade our Palo Alto powertrain production facility, and to expand our current Tesla Roadster assembly operations at our Menlo Park facility. If we fail to meet these conditions, we would be unable to take full advantage of this tax incentive and our financial position could...

  • Page 54
    ... year's funding became available. As an additional example, there is considerable discussion at the federal level over tax reform. Discussions have included reducing or even eliminating the current $7,500 tax credit available to purchasers of qualified alternative fuel vehicles, including the Tesla...

  • Page 55
    ... affect our business, prospects, operating results and financial condition. Our research and development efforts may not be sufficient to adapt to changes in electric vehicle technology. As technologies change, we plan to upgrade or adapt our vehicles and introduce new models in order to continue...

  • Page 56
    ... our executive officers and other key technology, sales, marketing, engineering, manufacturing and support personnel and any failure to do so could adversely impact our business, prospects, financial condition and operating results. We have in the past and may in the future experience difficulty in...

  • Page 57
    ...affiliates as of the date of the DOE Loan Facility. Mr. Musk's shares of our capital stock are held directly by his personal trust. Many members of our management team are new to the company or to the automobile industry, and execution of our business plan and development strategy could be seriously...

  • Page 58
    ... and trucking and freight companies, and work stoppages or strikes organized by such unions could have a material adverse impact on our business, financial condition or operating results. If a work stoppage occurs, it could delay the manufacture and sale of our performance electric vehicles and have...

  • Page 59
    ... costs and business models based on the internal combustion engine could lead them to pass regulations that could reduce the compliance costs of such established manufacturers or mitigate the effects of government efforts to promote alternative fuel vehicles; and changes to regulations governing...

  • Page 60
    ...Model X, and our future electric vehicles, we will need to comply with various additional safety regulations and requirements that were not applicable to the sales of our Tesla Roadsters, with which it may be expensive or difficult to comply. For example, we will need to pass a range of impact tests...

  • Page 61
    ... financial condition and operating results could be materially and adversely affected. We provide a three year or 36,000 miles New Vehicle Limited Warranty with every Tesla Roadster, which we extended to four years or 50,000 miles for the purchasers of our 2008 Tesla Roadster. In addition, customers...

  • Page 62
    ...; the costs associated with enforcing patents, confidentiality and invention agreements or other intellectual property rights may make aggressive enforcement impracticable; current and future competitors may independently develop similar technology, duplicate our vehicles or design new vehicles in...

  • Page 63
    ... similar technology. In addition, patents issued to us may be infringed upon or designed around by others and others may obtain patents that we need to license or design around, either of which would increase costs and may adversely affect our business, prospects, financial condition and operating...

  • Page 64
    ...our business, operating results and financial condition. If our suppliers fail to use ethical business practices and comply with applicable laws and regulations, our brand image could be harmed due to negative publicity. Our core values, which include developing the highest quality electric vehicles...

  • Page 65
    ... rights, to require us to register shares of our common stock owned by them for public sale in the United States, subject to the restrictions of Rule 144. In addition, we have registered shares previously issued or reserved for future issuance under our equity compensation plans and agreements...

  • Page 66
    ...to secure other loans. In addition, our DOE Loan Facility requires Mr. Musk and certain of his affiliates, until one year after we complete the project relating to the Model S Facility, to own at least 65% of the Tesla capital stock held by them as of the date of the DOE Loan Facility, and a failure...

  • Page 67
    ... component and systems development and sales. We are in the process of transitioning our powertrain component and systems production activities to the Tesla Factory. In May 2010, we entered into an agreement to purchase an existing automobile production facility located in Fremont, California...

  • Page 68
    ... Date Location (1) Primary Use Palo Alto, California Hawthorne, California Maidenhead, United Kingdom (1) 350,000 132,250 8,870 Administration, engineering services and powertrain development services Vehicle engineering and design services Administration, sales, service and marketing services...

  • Page 69
    ... under our loan facility with the United States Department of Energy, which restrict or limit our ability to pay dividends, 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...

  • Page 70
    ...cash dividends on our capital stock nor do we anticipate paying any such cash dividends in the foreseeable future. Unregistered Sales of Equity Securities On July 2, 2010, we sold 2,941,176 shares of our common stock to Toyota Motor Corporation at a price of $17.00 per share, for aggregate proceeds...

  • Page 71
    ... From the effective date of the registration statement through December 31, 2011, we have used the net proceeds of the offering for working capital purposes, including expenditures for inventory, personnel costs, equipment and other operating expenses. Purchases of Equity Securities by the Issuer...

  • Page 72
    ... common stock effected in May 2010. 2011 Year Ended December 31, 2010 2009 2008 (in thousands, except share and per share data) 2007 Consolidated Statements of Operations Data: Revenues: Automotive sales Development services Total revenues Cost of revenues (1): Automotive sales Development services...

  • Page 73
    ..., we completed the purchase of our Tesla Factory and certain of the manufacturing assets located thereon. In January 2010, we issued a warrant to the DOE in connection with the closing of our DOE loan facility to purchase shares of our Series E convertible preferred stock. This convertible preferred...

  • Page 74
    ...our network of Tesla stores. We were incorporated in Delaware in July 2003, opened our first store in Los Angeles, California in May 2008, and introduced our first vehicle, the Tesla Roadster, in early 2008. We are targeting our second vehicle, the Model S sedan, for a significantly broader customer...

  • Page 75
    ... the purchase of the Tesla Factory from New United Motor Manufacturing, Inc. (NUMMI). With the opening of our Santana Row store in 2011, we launched what we believe to be a new and unique retail experience designed to engage and inform potential customers about electric vehicles in general, learn...

  • Page 76
    ... Tesla Roadster and powertrain components, development services activities with our strategic partners, advanced engineering work on the planned Model X and pursuing new electric powertrain opportunities with automobile manufacturers. In January 2012, we concluded the production run of our current...

  • Page 77
    ... sales of Model S in 2013. As pre-production expenses and development and prototyping costs cannot be capitalized, we expect our operating expenses to continue increasing due to our ongoing activities to prepare the Tesla Factory for production, refine Model S through our engineering and testing...

  • Page 78
    ... sales revenue from sales of the Tesla Roadster, including vehicle options, accessories and destination charges, vehicle service and sales of zero emission vehicle, or ZEV credits. We also recognize automotive sales revenue from the sales of electric vehicle powertrain components, such as battery...

  • Page 79
    ...Services Revenue from development services arrangements consist of revenue earned from the development of electric vehicle powertrain components for other automobile manufacturers, including the design and development of battery packs, chargers and sample vehicles to meet a customer's specifications...

  • Page 80
    ... we sell additional Tesla Roadsters and powertrain components and as we repair or replace items under warranty, we will acquire additional information on the projected costs to service work under warranty and may need to make additional adjustments. Further, a small change in our warranty estimates...

  • Page 81
    ...fair value of each stock-based award was estimated on the grant date for the periods below using the Black-Scholes option-pricing model with the following weighted-average assumptions. 2011 Year Ended December 31, 2010 2009 Risk-free interest rate: Stock options ESPP Expected term (in years): Stock...

  • Page 82
    ... public market for our common stock, our Board of Directors determined the fair value of our common stock by considering a number of objective and subjective factors, including the following our sales of convertible preferred stock to unrelated third parties; our operating and financial performance...

  • Page 83
    ... each month over three years, assuming continued employment through each vesting date. In addition, to create incentives for the attainment of clear performance objectives around a key element of our current business plan-the successful launch and commercialization of Model S-the Board of Directors...

  • Page 84
    ... appropriate discount rates for various components of our business. For example, the discount rates used to value the cash flow projections from the Model S business factored in the low cost debt we expected to raise from the U.S. Department of Energy. Range of Discount Rates Valuation Date May 15...

  • Page 85
    ... date and any change in fair value is recognized as a component of other expense, net, on the consolidated statements of operations. In January 2010, we issued a warrant to the DOE in connection with the closing of the DOE Loan Facility to purchase shares of our Series E convertible preferred stock...

  • Page 86
    ... of our comparator companies increases relative to the average simulated value of our stock warrant, the fair value of our DOE warrant increases since the economic cost associated with prepaying our outstanding loans under the DOE Loan Facility and replacing the funds with market interest rate debt...

  • Page 87
    ... and out of Level I and Level II fair value measurements and to describe the reasons for the transfers. In addition, in the reconciliation of fair value measurements using Level III inputs, a reporting entity will be required to disclose information about purchases, sales, issuances and settlements...

  • Page 88
    ... charges, vehicle service and sales of zero emission vehicle credits. Powertrain component and related sales represent the sales of electric vehicle powertrain components, such as battery packs and battery chargers, to other manufacturers. Vehicle, options and related sales for the year ended...

  • Page 89
    ... partially offset by higher selling prices from an expanded offering of vehicle options to our customers as well as higher average selling prices outside of the United States. Powertrain component and related sales for the year ended December 31, 2010 were $21.6 million, compared to $0.4 million for...

  • Page 90
    ... revenue, respectively. In October 2010, we also entered into a Phase 1 contract services agreement with Toyota for the development of a validated powertrain system, including a battery pack, power electronics module, motor, gearbox and associated software, which will be integrated into an electric...

  • Page 91
    ... profit and gross margin to be similarly impacted. Research and Development Expenses Research and development expenses consist primarily of personnel costs for our teams in engineering and research, supply chain, quality, manufacturing engineering and manufacturing test organizations, prototyping 90

  • Page 92
    ... as powertrain development activities, a $10.7 million increase in professional and outside services costs related to Model S engineering, design and testing activities, and a $1.6 million increase in office, information technology and facilities-related costs to support the growth of our business...

  • Page 93
    ... our operations, increase our sales and marketing activities to handle our expanding market presence and prepare for the planned Model S commercial launch by July 2012, and as we support the requirements of being a public company. We plan to open additional stores and service centers during 2012...

  • Page 94
    ... of Model X. The acceleration of the development of future vehicles, investments in new technologies, increased in-sourcing of manufacturing capabilities, investments to expand our powertrain activities or further expand our sales and service network, may require us to raise additional funds through...

  • Page 95
    ... be made available under the first term loan facility to finance up to 80% of the costs eligible for funding for the powertrain engineering and the build out of a facility to design and manufacture lithium-ion battery packs, electric motors and electric components (the Powertrain facility). Up to an...

  • Page 96
    ... lease term and final disposition of the leased vehicle. As such, our cash and working capital requirements will be directly impacted and if leasing volume increases significantly, the impact may be material. However, after taking into consideration our current and planned sources of operating cash...

  • Page 97
    ...from our customers. Reservation payments consist of reservation payments that allow potential customers to hold a reservation for the future purchase of a Tesla Roadster, Model S or Model X. For our Tesla Roadsters manufactured to specification, our current purchase agreement requires the payment of...

  • Page 98
    ... increase in accounts receivable. In October 2010, we entered into a Phase 1 contract services agreement with Toyota for the development of a validated powertrain system, including a battery pack, power electronics module, motor, gearbox and associated software, to be integrated into an electric...

  • Page 99
    ...of $74.9 million. The increase in capital purchases was driven primarily by $65.2 million of payments made in relation to our purchase of our Tesla Factory located in Fremont, California from NUMMI, and certain manufacturing assets located thereon to be used for our Model S manufacturing, as well as...

  • Page 100
    ... 2010, we completed the purchase of our Tesla Factory located in Fremont, California from NUMMI. NUMMI has previously identified environmental conditions at the Fremont site which affect soil and groundwater, and is currently undertaking efforts to address these conditions. Although we have been...

  • Page 101
    ...and short-term marketable securities are held for working capital purposes. We do not enter into investments for trading or speculative purposes. We believe that we do not have any material exposure to changes in the fair value as a result of changes in interest rates due to the short term nature of...

  • Page 102
    ... DATA Index to Consolidated Financial Statements Page Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets Consolidated Statements of Operations Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) Consolidated Statements of...

  • Page 103
    ... Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Tesla Motors, Inc.: In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of Tesla Motors...

  • Page 104
    ...thousands, except share and per share data) December 31, 2011 December 31, 2010 Assets Current assets Cash and cash equivalents Short-term marketable securities Restricted cash Accounts receivable Inventory Prepaid expenses and other current assets Total current assets Operating lease vehicles, net...

  • Page 105
    ... Contents Tesla Motors, Inc. Consolidated Statements of Operations (in thousands, except share and per share data) 2011 Year Ended December 31, 2010 2009 Revenues Automotive sales Development services Total revenues Cost of revenues Automotive sales Development services Total cost of revenues Gross...

  • Page 106
    ... concurrent private placements at $28.76 per share Issuance of common stock upon exercise of stock options, net of repurchases Issuance of common stock under employee stock purchase plan Stock-based compensation Comprehensive loss: Net loss Unrealized loss on short-term marketable securities, net...

  • Page 107
    ... vehicles Prepaid expenses and other current assets Other assets Accounts payable Accrued liabilities Deferred development compensation Deferred revenue Reservation payments Other long-term liabilities Net cash used in operating activities Cash Flows From Investing Activities Purchases of marketable...

  • Page 108
    ... in operations through December 31, 2011. As of December 31, 2011, we had $280.3 million in cash and cash equivalents and short-term marketable securities. We are currently selling the Tesla Roadster and are developing the Model S sedan which we currently expect to introduce commercially in 2012. In...

  • Page 109
    ... prior to production of a Tesla Roadster manufactured to specification, the reservation payment becomes nonrefundable when the customer enters into a purchase agreement. In a limited number of circumstances, we may deliver a vehicle to a customer without all of the options ordered by the customer if...

  • Page 110
    ...revenues. Additionally, within three months of purchasing a vehicle, we provide customers with a one-time option to replace the battery packs in their vehicles at any time after the expiration of the New Vehicle Limited Warranty but before the tenth anniversary of the purchase date of their vehicles...

  • Page 111
    ... Revenue Revenue from development services arrangements consist of revenue earned from the development of electric vehicle powertrain components for other automobile manufacturers, including the design and development of battery packs, chargers and sample vehicles to meet a customer's specifications...

  • Page 112
    ...capital. Investments are of a short-term nature and include investments in corporate debt securities. As of December 31, 2011 and 2010, our accounts receivable were derived primarily from sales of powertrain components to Daimler and the development of powertrain systems for Toyota Motor Corporation...

  • Page 113
    ... increase functionality of the asset are capitalized and depreciated ratably to expense over the identified useful life. Land is not depreciated. In October 2010, we completed the purchase of our Tesla Factory located in Fremont, California and certain manufacturing assets and spare parts located...

  • Page 114
    ... tax benefits are classified as income tax expense. Stock-based Compensation We recognize compensation expense for costs related to all share-based payments, including stock options. The fair value of share-based payment awards are estimated on the grant date using an option pricing model. Stock...

  • Page 115
    ...battery pack sales, and we accrue warranty reserves at the time a vehicle or production powertrain component is delivered to the customer. Warranty reserves include management's best estimate of the projected costs to repair or to replace any items under warranty, based on actual warranty experience...

  • Page 116
    ... state laws and regulations for the protection of the environment, including those related to the discharge of hazardous materials and remediation of contaminated sites. In October 2010, we completed the purchase of our Tesla Factory located in Fremont, California from New United Motor Manufacturing...

  • Page 117
    ... to the manufacturing of our Model S, including building improvements at our Tesla Factory in Fremont, California as well as tooling and manufacturing equipment and capitalized interest expense. We will start depreciating these assets upon commencement of our Model S production. Interest expense...

  • Page 118
    ... stock warrant liability. All of our cash equivalents and current restricted cash, which are comprised primarily of money market funds, are classified within Level I of the fair value hierarchy because they are valued using quoted market prices or market prices for similar securities. Our short-term...

  • Page 119
    ... fair value hierarchy for our financial assets and financial liabilities that are carried at fair value was as follows (in thousands): December 31, 2011 Fair Value Level I Level II Level III Fair Value December 31, 2010 Level I Level II Level III Money market funds Corporate note Commercial paper...

  • Page 120
    Table of Contents 5. Purchase of Tesla Factory and Assets Tesla Factory In May 2010, we entered into an agreement to purchase an existing automobile production facility located in Fremont, California from NUMMI, which is a joint venture between Toyota, and Motors Liquidation Company, the owner of ...

  • Page 121
    ... these assets. We currently estimate that manufacturing and related assets will have an estimated useful life of up to 15 years. 6. Reservation Payments Reservation payments consist of payments that allow potential customers to hold a reservation for the future purchase of a Tesla Roadster or Model...

  • Page 122
    ... round of financing at the per share price of such securities. On December 24, 2008, warrants to purchase 3,439,305 of the shares of Series D convertible preferred stock were extinguished as a result of the election of certain holders of the February 2008 convertible notes to exchange their notes...

  • Page 123
    ... be made available under the first term loan facility to finance up to 80% of the costs eligible for funding for the powertrain engineering and the build out of a facility to design and manufacture lithium-ion battery packs, electric motors and electric components (the Powertrain Facility). Up to an...

  • Page 124
    ...and the successful development of commercial arrangements with third parties for the supply of powertrain components. For the Model S Facility, the draw conditions include our achievement of progress milestones relating to the design and development of Model S and the Tesla Factory. Certain advances...

  • Page 125
    .... In addition, events of default include a failure of Elon Musk, our Chief Executive Officer, Product Architect and Chairman, and certain of his affiliates, at any time prior to one year after we complete the project relating to the Model S Facility, to own at least 65% of capital stock held by...

  • Page 126
    ... vary depending on the average outstanding balance of the loan during the contractual vesting period, and decisions to prepay would be influenced by our future stock price as well as the interest rates on our loans in relation to market interest rates, we measured the fair value of the warrant using...

  • Page 127
    ..., we entered into a common stock purchase agreement with an entity affiliated with Panasonic Corporation (Panasonic) pursuant to which we issued and sold an aggregate of 1,418,573 shares of our common stock at a price of $21.15 per share, which was the average of the trading highs and lows of our...

  • Page 128
    ... including officers and directors. Nonqualified stock options and stock purchase rights may be granted to our employees and consultants. Generally, our stock options vest over four years and are exercisable over a period not to exceed the contractual term of ten years from the date the stock options...

  • Page 129
    ... Additional information regarding all stock options outstanding and exercisable as of December 31, 2010 is summarized below: Options Outstanding Weighted Average Remaining Contractual Life (in years) Number Options Exercisable Weighted Average Remaining Contractual Life (in years) Weighted Average...

  • Page 130
    ... value of each option award and Employee Stock Purchase Plan (the ESPP) on the grant date using the Black-Scholes option pricing model and the weighted average assumptions noted in the following table. 2011 Year Ended December 31, 2010 2009 Risk-free interest rate: Stock options ESPP Expected term...

  • Page 131
    ... objectives around a key element of our current business plan-the successful launch and commercialization of Model S-the Board of Directors approved an additional option grant to our Chief Executive Officer totaling an additional 4% of our fully-diluted shares prior to such grant as of December...

  • Page 132
    ... eligible compensation, subject to any plan limitations. The purchase price of the shares on each purchase date is equal to 85% of the lower of the fair market value of our common stock on the first and last trading days of each six-month offering period. During the year ended December 31, 2011, 223...

  • Page 133
    ... 2011 and 2010 consisted of the following (in thousands): December 31, 2011 December 31, 2010 Deferred tax assets: Net operating loss carry-forwards Research and development credits Deferred revenue Inventory and warranty reserves Depreciation and amortization Accruals and others Total deferred tax...

  • Page 134
    ...is our intention to utilize these earnings to fund future foreign expansions including but not limited to, hiring of additional personnel, capital purchases, expansion into larger facilities, and potential new dealerships. Federal and state laws can impose substantial restrictions on the utilization...

  • Page 135
    ... that we operate in one reporting segment which is the design, development, manufacturing and sales of electric vehicles and electric vehicle powertrain components. The following tables set forth revenues and long-lived assets by geographic area (in thousands). Revenues 2011 Year Ended December...

  • Page 136
    ...development of a validated powertrain system, including a battery pack, power electronics module, motor, gearbox and associated software, which will be integrated into an electric vehicle version of the Toyota RAV4. Pursuant to the agreement, Toyota will pay us up to $60.0 million for the successful...

  • Page 137
    ...services related to the supply of the electric powertrain system. We plan to begin delivery of the electric powertrain system to Toyota for installation into the Toyota RAV4 EV in 2012 and as such, no payments have been received and no revenue has been recognized to date under this agreement. Future...

  • Page 138
    ... Liabilities In May 2010, we entered into an agreement to purchase an existing automobile production facility located in Fremont, California from NUMMI (see Note 5). NUMMI has previously identified environmental conditions at the Fremont site which affect soil and groundwater, and until recently...

  • Page 139
    ...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...

  • Page 140
    ... fiscal year to which this report relates. ITEM 11. EXECUTIVE COMPENSATION The information required by this Item 11 of Form 10-K will be included in our 2012 Proxy Statement and is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED...

  • Page 141
    ... of the Registrant's capital stock named therein Registration Rights Agreement between the United States Department of Energy and the Registrant dated as of January 20, 2010 Amendment to Registration Rights Agreement between the United States Department of Energy and the Registrant dated as of May...

  • Page 142
    ...to Purchase Shares of Common Stock issued by the Registrant to the United States Department of Energy dated May 21, 2010 Fifth Amendment to Fifth Amended and Restated Investors' Rights Agreement, dated as of May 30, 2011, between Registrant and certain holders of the Registrant's capital stock named...

  • Page 143
    ...10.19 10.20 January 29, 2010 January 29, 2010 Commercial Lease between the Registrant and The S-1 Board of Trustees of The Leland Stanford Jr. University dated July 25, 2007 License Agreement between the Registrant and MS Kearny Northrop Avenue, LLC dated July 23, 2009 S-1 10.21 10.22 333-164593...

  • Page 144
    ...of Contents Exhibit Number Incorporated by Reference Exhibit Filed Herewith Exhibit Description Form File No. Filing Date 10.23†Supply Agreement for Products and Services between Lotus Cars Limited and the Registrant dated July 11, 2005 Amendment No. 1 to Supply Agreement between Lotus Cars...

  • Page 145
    ... Number Incorporated by Reference Exhibit Filed Herewith Exhibit Description Form File No. Filing Date 10.31†Modification to Terms and Conditions between BorgWarner TorqTransfer Systems Inc. and the Registrant dated September 22, 2008 ZEV Credits Agreement between American Honda Motor...

  • Page 146
    ... States Department of Energy and the Registrant dated as of June 15, 2011 Limited Waiver to the Loan Arrangement and - Reimbursement Agreement between the United States Department of Energy and the Registrant dated as of February 22, 2012 Note Purchase Agreement by and among the Federal Financing...

  • Page 147
    ... and New United Motor Manufacturing, Inc. dated October 19, 2010 Sale and Purchase Agreement between Registrant and New United Motor Manufacturing, Inc., dated August 13, 2010 Addendum No. 1 to the Sale and Purchase Agreement between Registrant and New United Motor Manufacturing, Inc., dated...

  • Page 148
    ...Phase 1 Contract Services Agreement between Registrant and Toyota Motor Corporation dated October 6, 2010 Amendment No. 3 to Supply Agreement between Lotus Cars Limited and the Registrant dated June 13, 2011 Supply and Services Agreement between Toyota Motor Engineering & Manufacturing North America...

  • Page 149
    ... ** †XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, and...

  • Page 150
    ... Tesla Motors, Inc. Date: February 27, 2012 /s/ Elon Musk Elon Musk Chief Executive Officer (Principal Executive Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities...

  • Page 151
    ... to time prior to the date hereof, the " Arrangement Agreement "), between Tesla Motors, Inc. (the " Borrower ") and the United States Department of Energy (" DOE "). Unless otherwise defined herein, terms defined in the Arrangement Agreement and used herein shall have the meanings given to them in...

  • Page 152
    ... full faith and credit of the United States, in each case maturing not more than 360 days from the date of the acquisition thereof; (iii) marketable securities that are direct obligations of any member of the European Economic Area, Switzerland or Japan, or any agency or instrumentality thereof or...

  • Page 153
    ... amount at any time invested in Limited Cash Equivalents; (ii) shares of any money market mutual fund (x) that has net assets of not less than $500,000,000, (y) where the maximum weighted average maturity of such fund's portfolio is sixty (60) days and (z) that has a credit rating of Aaa (or the...

  • Page 154
    ...certain Blocked Account Control Agreement (Initial Debt Service Account), dated as of January 20, 2010, among Tesla Motors, Inc., PNC Bank, National Association, and Midland Loan Services, Inc. (predecessor to PNC Bank, National Association, doing business as Midland Loan Services, a Division of PNC...

  • Page 155
    ..., amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Arrangement Agreement or any other Loan Document in similar or different circumstances. (b) On and after the Amendment Effective Date, each reference in the Arrangement...

  • Page 156
    provided in the Loan Documents, and (d) each of Borrower and the Guarantors acknowledges that such guarantee and/or grant continues in full force and effect in respect of, and to secure, the Secured Obligations. SECTION 7. Governing Law . THIS AMENDMENT, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES...

  • Page 157
    ... as of the day and year first above mentioned. UNITED STATES DEPARTMENT OF ENERGY By: /s/ David Frantz Name: David Frantz Title: Acting Director, ATVM Loan Program TESLA MOTORS, INC. By: /s/ Deepak Ahuja Name: Deepak Ahuja Title: CFO TESLA MOTORS NEW YORK LLC By: Tesla Motors, Inc., its sole...

  • Page 158
    ... Motors, Inc. Department of Energy Loan Facility Non Dedicated Cash Accounts Dedicated Account and Initial Debt Service Account PNC i) Marketable securities that are direct obligations of the U.S. or where principal/interest are fully guaranteed by the U.S. Maturities up to 360 days from date...

  • Page 159
    ... combined capital and surplus of at least $500 million or (b) has the highest rating obtainable from S&P and Moody's Money market funds that have net assets of not less than $500M and The Fidelity Funds, Government Fund, class three shares, CUSIP: 316175603 Average maturity of assets is 60 days or...

  • Page 160
    ... to time prior to the date hereof, the " Arrangement Agreement "), between Tesla Motors, Inc. (the " Borrower ") and the United States Department of Energy (" DOE "). Unless otherwise defined herein, terms defined in the Arrangement Agreement and used herein shall have the meanings given to them in...

  • Page 161
    ... and payable on the Quarterly Payment Dates occurring on December 15, 2012, March 15, 2013 and June 15, 2013 (which shall be deemed to be the " Initial Debt Service Payment Dates ") pursuant to Section 2.13(d) of the Arrangement Agreement, until such payments have been made in full. (c) Compliance...

  • Page 162
    ..., amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Arrangement Agreement or any other Loan Document in similar or different circumstances. (b) On and after the Waiver Effective Date, each reference in the Arrangement...

  • Page 163
    .... The parties may deliver such counterparts by facsimile or electronic transmission in Electronic Format. Each party hereto agrees to deliver a manually executed original promptly following such facsimile or electronic transmission. SECTION 8. Headings . Paragraph headings have been inserted in...

  • Page 164
    IN WITNESS WHEREOF, the parties hereto have executed this Waiver as of the day and year first above mentioned. UNITED STATES DEPARTMENT OF ENERGY By: /s/ Frances Nwachuku Name: Frances Nwachuku Title: Director, Portfolio Management Division [Signature Page to Limited Waiver]

  • Page 165
    ... NEW YORK LLC By: Tesla Motors, Inc., its sole member By: /s/ Deepak Ahuja Name: Deepak Ahuja Title: Chief Financial Officer TESLA MOTORS LEASING, INC. By: /s/ Deepak Ahuja Name: Deepak Ahuja Title: Chief Financial Officer TESLA MOTORS MA, INC. By: /s/ Deepak Ahuja Name:Deepak Ahuja Title: President...

  • Page 166
    ... by Tesla Motors, Inc. SUPPLY AGREEMENT Among TESLA MOTORS, INC., PANASONIC INDUSTRIAL COMPANY, DIVISION OF PANASONIC CORPORATION OF NORTH AMERICA, and PANASONIC CORPORATION, ACTING THROUGH ENERGY COMPANY. October 5, 2011 [***] Information has been omitted and filed separately with the Securities...

  • Page 167
    ... Motors, Inc. THIS SUPPLY AGREEMENT is entered into as of this 5th day of October, 2011 (the "Effective Date") among: Tesla Motors, Inc ., a Delaware corporation, with its principal place of business at 3500 Deer Creek, Palo Alto, California 94304, U.S.A. ("Tesla"); and Panasonic Industrial Company...

  • Page 168
    ..." means Panasonic. "Tesla Application" means any product into which a Tesla battery pack is installed. A Tesla Roadster is an example of a Tesla Application. 2. Scope of Agreement; Term. a) Scope of Agreement . This Agreement sets forth the terms and conditions governing the purchase and supply of...

  • Page 169
    ... Requested by Tesla Motors, Inc. prior written consent of Panasonic and the payment by Tesla of any rescheduling charges specified by Panasonic. b) Order Requirements . An Order shall (i) identify the Items requested and (ii) state the quantity, date, time, mode and place of delivery, and price of...

  • Page 170
    ... Tesla Motors, Inc. c) Pricing Components . The Contract Prices, and any quotations for Items, shall include all finishing, testing, inspecting and packaging fees, applicable royalties and all applicable taxes (excluding sales, use and similar taxes). Any quotations for Items shall include all costs...

  • Page 171
    ...-day, next-day, etc.) in a specific Order and Panasonic has previously agreed that it can provide such shipping service level, Panasonic will ship such Items in accordance with the shipping service level included in an Order; provided, however, that Tesla shall be responsible for any increased costs...

  • Page 172
    ..., service, operation testing, checkout or maintenance by Tesla or any third party, or (d) failure by Tesla or any third party to follow the instructions, cautions, warnings, and notes set forth in the Specification, and any other direction from Panasonic. End User Return and Notification . Tesla...

  • Page 173
    ... FOR WHICH THE ITEMS WERE ORIGINALLY DESIGNED, AND THAT TESLA SHOULD TAKE PROPER STEPS TO PROTECT THE MODULE AND ITEMS INSIDE THE MODULE FROM SUCH CONDITIONS. NO ACTION OR SUIT SHALL BE BROUGHT ON AN ALLEGED BREACH OF THE WARRANTIES SET FORTH IN THIS AGREEMENT Information has been omitted and filed...

  • Page 174
    ... agreed quality plan. Panasonic shall also provide Tesla with the following information regarding the Items: i. ii. iii. QC inspection process flowchart. [***] Panasonic agrees to the Quality Requirements attached hereto as Attachment 6. h) 10. Quality Control of the Finished Products. a) Tesla...

  • Page 175
    ... Tesla battery packs, the Modules, Tesla Application and the Finished Products (including circuit and equipment matching issues) and their respective assembly, manufacture or placement, sale, use, operation, storage, transportation, or otherwise, whether the claim is brought by Tesla, its customers...

  • Page 176
    ... DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY WORK DELAYS, LOST GOODWILL, PROFIT, REVENUE OR SAVINGS, LOSS OF USE, COST OF CAPITAL, COST OF SUBSTITUTE EQUIPMENT, FACILITIES OR SERVICES, OR DOWNTIME COSTS, EVEN IF SUCH PARTY HAS BEEN ADVISED OR IS...

  • Page 177
    ...or injury to any person or damage to any property resulting, directly or indirectly, from the manufacture, assembly, purchase, sales, use, operation, storage, transportation, or disposal of the battery packs, the Modules and/or the Finished Products; except to the extent that Tesla shall be exempted...

  • Page 178
    ... of: Manager, Trade Compliance, Tesla Motors, 3500 Deer Creek, Palo Alto, CA 94304; or any agent so designated by Tesla in writing. In case Tesla would export the Items and/or the Finished Products from any country, Tesla shall comply with applicable export control laws and regulations in such...

  • Page 179
    ...The parties agree that the 1980 United Nations Convention on Contracts for the International Sales of Goods, as amended to date, shall not apply to this Agreement. Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested...

  • Page 180
    ...the use of alternate sources, workaround plans or other commercially reasonable means. Either Party shall have the option to terminate this Agreement, should the Parties not have been able to find a solution to resolve the Force Majeure Event within one hundred eighty (180) days after the occurrence...

  • Page 181
    ... of precedence shall apply: (i) Supply Agreement; (ii) Attachment 1; (iii) other Attachments; (iv) Order. Any printed terms of any purchase order of Tesla, or acknowledgment of Panasonic, and any other terms, provisions or conditions in any purchase order of Tesla, or acknowledgment of Panasonic...

  • Page 182
    ... through Energy Company 1-1 Matsushita-cho, Moriguchi City, Osaka, 570-8511 Japan Attention: [***], Industrial Battery Marketing & Sales Office, Corporate Industrial Marketing and Sales Division Or to such other addresses as may hereafter be designated by like notice. [***] Information has been...

  • Page 183
    ... of North America By: Printed name: Thomas A. Gebhardt Title: President Date: Panasonic Corporation, Energy Company By: Printed name: Masato Ito Title: President Date: [***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been...

  • Page 184
    ... No Name 1 2 3 4 5 6 [***] List of Items, Pricing Mechanism [***] Price Adjustment Mechanism Process Invoicing Requirements Nominated Representatives Leveraging Tesla Brand Marketing Quality Requirements Information has been omitted and filed separately with the Securities and Exchange Commission...

  • Page 185
    Confidential Treatment Requested by Tesla Motors, Inc. Attachment 1 List of Items, Pricing Mechanism [***] CELL PRICING 1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15 Volume (MM) 1/ [***] Cell Price (JPY) 2/ Baseline Commodity Assumptions [***] [***] [***] [***] [***] [***] [***] [***] [***] ...

  • Page 186
    Confidential Treatment Requested by Tesla Motors, Inc. Attachment 2 [***] Price Adjustment Mechanism Process Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. 20

  • Page 187
    ... To: Tesla Motors, Inc. Bill To Address: 3500 Deer Creek, Palo Alto, California, 94304, U.S.A. Tesla Buyer Name Purchase Order Number, Item Number(s), Tesla Part Number Item Description(s), which is/are consistent with all other commercial invoices and documents, Ship To Quantity, Ship To Date(s) or...

  • Page 188
    ... 2 3 (a) Notices to Tesla: Kurt Kelty Tesla Motors, Inc. (with a copy to Legal Department) (with a copy to Supply Chain Management) 3500 Deer Creek Palo Alto, CA 94304 Fax: [***] E-mail: [***] (b) Notices to Panasonic: Bob Rauh Director - Battery Sales Group Panasonic Industrial Company, Division of...

  • Page 189
    ... by Tesla Motors, Inc. Attachment 5 Leveraging Tesla Brand Marketing 1. Definitions . In this Attachment 5, the following capitalized terms shall have the meanings specified below. (a) " Tesla Marketing Materials " means all marketing materials that promote Tesla's products and vehicles that...

  • Page 190
    ..., icons, or an alteration thereof, as or as part of a company name, trade name, product name, or service name except as specifically noted in these guidelines. (b) Supplier shall not use the Tesla Marketing Materials or any other Tesla-owned graphic symbol, logo, or icon on or in connection with web...

  • Page 191
    ...'s enhanced market position and sales. When such agreements are made by Parties, the agreed sum shall be paid to Tesla in a mutually agreed term, including deduction from Item costs. [***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential...

  • Page 192
    ... be responsible for the quality control of the Items it supplies to Tesla, including, without limitation, adequate inspection and testing of Items prior to delivery. Notice of Defective Products or Services . Panasonic shall make commercially reasonable efforts to give Tesla written notice [***] of...

  • Page 193
    ...Statement on Form S-8 (No. 333-167874) of Tesla Motors, Inc. of our report dated February 27, 2012 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 10-K. /s/ PricewaterhouseCoopers LLP San Jose, California February 27...

  • Page 194
    ... in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and Any fraud, whether or not material, that involves management or other employees who...

  • Page 195
    ... in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and Any fraud, whether or not material, that involves management or other employees who...

  • Page 196
    ...of the Securities Exchange Act of 1934 and (ii) that the information contained in such Form 10-K fairly presents, in all material respects, the financial condition and results of operations of Tesla Motors, Inc. Date: February 27, 2012 /s/ Deepak Ahuja Deepak Ahuja Chief Financial Officer (Principal...