Tesla 2016 Annual Report Download - page 13

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·productprice;and
·manufacturingefficiency.
Webelievethatourvehiclescompeteinthemarketbothbasedontheirtraditionalsegmentclassificationaswellasbasedontheirpropulsiontechnology.
Forexample,ModelScompetesprimarilyintheextremelycompetitivepremiumsedanmarketwithinternalcombustionvehiclesfrommoreestablished
automobilemanufacturers,includingAudi,BMW,LexusandMercedes.Ourvehiclesalsocompetewithvehiclespropelledbyalternativefuels,principally
electricity.
Manyestablishedandnewautomobilemanufacturershaveenteredorhaveannouncedplanstoenterthealternativefuelvehiclemarket.Overall,webelieve
theseannouncementsandvehicleintroductionspromotethedevelopmentofthealternativefuelvehiclemarketbyhighlightingtheattractivenessofalternativefuel
vehicles,particularlythosefueledbyelectricity,relativetotheinternalcombustionvehicle.BMW,Daimler,Nissan,Fiat,FordandMitsubishi,amongothers,have
electricvehiclesavailabletoday.Moreover,Porsche,Lexus,Audi,VolkswagenandVolvo,aswellasanumberofprospectiveautomobilemanufacturers,arealso
developingelectricvehicles.ElectricvehicleshavealsoalreadybeenbroughttomarketinChinaandotherforeigncountriesandweexpectanumberofthose
manufacturerstoentertheUnitedStatesmarketaswell.Inaddition,severalmanufacturers,includingGeneralMotors,Toyota,Ford,andHonda,areeachselling
hybridvehicles,andcertainofthesemanufacturershaveannouncedplug-inversionsoftheirhybridvehicles.
Themarketforenergystorageproductsisalsohighlycompetitive.Establishedcompaniesaswellasemergingcompanieshaveintroducedproductsthatare
similartoourproductportfolio.Forinstance,thereareseveralcompaniesprovidingindividualcomponentsofenergystoragesystems(suchascells,battery
modules,andpowerelectronics)aswellasothersprovidingintegratedsystems.
Mostofourcurrentandpotentialcompetitorsinboththeautomotiveandenergystoragemarketshavesignificantlygreaterresourcesthanwedo,maybe
abletodevotegreaterresourcestothemanufacture,saleandsupportoftheirproducts,andhaveotheradvantages.Webelieveourexclusivefocusonelectric
vehicles,electricvehiclecomponentsandenergystorageproducts,aswellasourhistoryofvehicledevelopmentandproduction,however,arethebasisonwhich
wecancompeteintheglobalautomotivemarketinspiteofthechallengesposedbyourcompetition.
Intellectual Property
Aspartofourbusiness,weseektoprotectourintellectualpropertyrightsinvariousways,includingthroughtrademarks,copyrights,tradesecrets,including
know-how,patents,patentapplications,employeeandthirdpartynondisclosureagreements,intellectualpropertylicensesandothercontractualrights.
Additionally,consistentwithourmissiontoacceleratetheadventofsustainabletransport,weannouncedapatentpolicyinwhichweirrevocablypledgedthatwe
willnotinitiatealawsuitagainstanypartyforinfringingourpatentsthroughactivityrelatingtoelectricvehiclesorrelatedequipmentforsolongassuchpartyis
actingingoodfaith.Wemadethispledgeinordertoencouragetheadvancementofacommon,rapidly-evolvingplatformforelectricvehicles,therebybenefiting
ourselves,othercompaniesmakingelectricvehicles,andtheworld.
Segment Information
Weoperateasonereportablesegmentwhichisthedesign,development,manufacturingandsalesofelectricvehicles.
Employees
AsofDecember31,2015,wehad13,058full-timeemployees.Todate,wehavenotexperiencedanyworkstoppages,andweconsiderourrelationshipwith
ouremployeestobegood.
Available Information
Wefileorfurnishperiodicreportsandamendmentsthereto,includingourAnnualReportsonForm10-K,ourQuarterlyReportsonForm10-QandCurrent
ReportsonForm8-K;proxystatementsandotherinformationwiththeSecuritiesandExchangeCommission(SEC).Suchreports,amendments,proxystatements
andotherinformationmaybeobtainedbyvisitingthePublicReferenceRoomoftheSECat100FStreet,NE,Washington,D.C.20549.Informationonthe
operationofthePublicReferenceRoomcanbeobtainedbycallingtheSECat1-800-SEC-0330.Inaddition,theSECmaintainsawebsite(www.sec.gov)that
containsreports,proxyandinformationstatements,andotherinformationregardingissuersthatfileelectronically.Ourreports,amendmentsthereto,proxy
statementsandotherinformationarealsomadeavailable,freeofcharge,onourinvestorrelationswebsiteatir.teslamotors.comassoonasreasonablypracticable
afterweelectronicallyfileorfurnishsuchinformationwiththeSEC.TheinformationpostedonourwebsiteisnotincorporatedbyreferenceintothisAnnual
ReportonForm10-K.
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