Tesla 2014 Annual Report Download - page 48

Table of Contents
In addition, as the automotive industry moves towards greater use of electronics for vehicle systems, NHTSA and other regulatory bodies
may in the future increase regulation for these electronic systems as concerns about distracted driving increase. Such concerns could affect
electronic systems in Model S, including those used with the 17 inch display screen in Model S, which could reduce the appeal of Model S or
require adjustments to the display screen’s functionality.
As we are currently delivering vehicles in Europe and as we begin to deliver vehicles in Asia, we also become subject to additional laws
and regulations applicable to the import, sale and service of automobiles in those regions, with which we have little or no experience complying.
To the extent the laws change, some or all of our vehicles may not comply with applicable international, federal, state or local laws, which
would have an adverse effect on our business. Compliance with changing regulations could be burdensome, time consuming, and expensive. To
the extent compliance with new regulations is cost prohibitive, our business, prospects, financial condition and operating results will be
adversely affected.
We retain certain personal information about our customers and may be subject to various privacy and consumer protection laws.
We use our vehicles’ electronic systems to log information about each vehicle’s condition, performance and use in order to aid us in
providing customer service, including vehicle diagnostics, repair and maintenance, as well as to help us collect data regarding our customers’
charge time, battery usage, mileage and efficiency habits and to improve our vehicles. We also collect information about our customers through
our website, at our stores and facilities, and via telephone. Our customers may object to the processing of this data, which may negatively impact
our ability to provide effective customer service and develop new vehicles and products. Collection and use of our customers’ personal
information in conducting our business may be subject to federal and/or state laws and regulations in the United States and foreign jurisdictions
including, in particular, various jurisdictions in Europe, and such laws and regulations may restrict our processing of such personal information
and hinder our ability to attract new customers or market to existing customers. We may incur significant expenses to comply with privacy,
consumer protection and security standards and protocols imposed by law, regulation, industry standards or contractual obligations. Although we
take steps to protect the security of our customers’
personal information, we may be required to expend significant resources to comply with data
breach requirements if third parties improperly obtain and use the personal information of our customers or we otherwise experience a data loss
with respect to customers’ personal information. A major breach of our network security and systems could
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• the amendment or rescission of federal greenhouse gas tailpipe emission regulations administered by EPA under the authority of the
Clean Air Act could reduce new business opportunities for our powertrain sales and development activities;
• the amendment or rescission of California’s zero emission vehicle regulations administered by the California Air Resources Board
under the California Health & Safety Code could reduce new business opportunities for our powertrain sales and development
activities, as well as our ability to monetize ZEV credits not only in California, but also in the eleven additional states that have
adopted the California program;
• increased sensitivity by regulators to the needs of established automobile manufacturers with large employment bases, high fixed
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 the export of our products could increase our costs incurred to deliver products outside the United
States or force us to charge a higher price for our vehicles in such jurisdictions.