# embedding_metadata

key: chroma:document
string_value:
Person	in	violation	of	any	Anti-Corruption	Laws,	(ii)	for	the	purpose	of	funding,	financing	or	facilitating	any	activities,	business	or
	
transaction	of	or	with	any	Sanctioned	Person,	or	in	any	Sanctioned	Country,	in	each	case,	to	the	extent	prohibited	for	a	Person
	
required	to	comply	with	Sanctions	or	(iii)	in	any	other	manner	that	would	cause	any	party	to	this	Agreement	to	be	in	violation	of	any
	
Anti-Corruption	Laws,	any	Anti-Money	Laundering	Laws	or	Sanctions.
SECTION	3.13.		
Anti-Corruption	Laws
.		Since	January	1,	2018,	the	Borrower	has	implemented,	maintains	in	effect
	
and	enforces	policies	and	procedures	reasonably	designed	to	promote	compliance	by	the	Borrower,	its	Subsidiaries	and	their
	
respective	directors,	officers,	and,	to	its	knowledge,	its	employees,	agents	and	Affiliates	with	Anti-Corruption	Laws.
(a)	
The	Borrower,	its	Subsidiaries	and	their	respective	directors,	officers,	and,	to	its	knowledge,	its	employees,
	
agents	and	Affiliates	are	in	compliance	with	Anti-Corruption	Laws	and	applicable	Anti-Money	Laundering	Laws	and	have	not
	
engaged,	since	January	1,	2018,	in	(i)	using	any	funds	for	any	unlawful	contribution,	gift,	entertainment	or	other	unlawful	expense
	
relating	to	political	activity,	(ii)	making	or	taking	an	unlawful	act	in	furtherance	of	an	offer,	promise	or	authorization	of	any	direct
	
or	indirect	unlawful	payment	or	benefit	to	any	foreign	or	domestic	government	or	regulatory	official	or	employee,	including	of	any


key: chroma:document
string_value:
government-owned	or	-controlled	entity	or	of	a	public	international	organization,	or	any	person	acting	for	or	on	behalf	of	any	of	the
	
foregoing,	or	any	political	party	or	party	official	or	candidate	for	political	office	or	(iii)	making,	offering,	agreeing,	requesting	or
	
taking	an	act	in	furtherance	of	any	unlawful	bribe	or	other	unlawful	benefit,	including	any	rebate,	payoff,	influence	payment,
	
kickback	or	other	unlawful	or	improper	payment	or	benefit,	in	each	case	of	
sub-clauses	(i)
,	
(ii)
	and	
(iii)
	of	this	
clause	(a)
,	in	violation
	
of	the	Anti-Corruption	Laws.
	
SECTION	3.14.		
Sanctions
.		The	Borrower	has	implemented,	maintains	in	effect	and	enforces	policies	and
	
procedures	reasonably	designed	to	ensure	compliance	by	the	Borrower,	its	Subsidiaries	and	their	respective	directors,	officers,
	
and,	to	its	knowledge,	employees,	agents	or	Affiliates	with	applicable	Sanctions.
(a)	
None	of	the	Borrower	or	any	of	its	Subsidiaries	or	any	of	their	respective	directors,	officers	or,	to	its
	
knowledge,	employees,	agents	or	Affiliates	that	will	act	in	any	capacity	in	connection	with	or	benefit	from	the	credit	facility
	
established	hereby,	is	a	Sanctioned	Person.
	
(b)	
The	Borrower,	its	Subsidiaries	and	their	respective	directors,	officers,	employees	and,	to	its	knowledge,
	
agents	and	Affiliates	are	(i)	in	compliance	with	applicable	Sanctions,	(ii)	not	engaged	in,	directly	or	knowingly	indirectly,	any


key: chroma:document
string_value:
dealings	or	transactions	with	or	benefitting	any	person	or	entity	that	at	the	time	of	the	dealing	or	transaction	is	or	was	a	Sanctioned
	
Person	or	in,	with,	or	benefiting	any	Sanctioned	Country,	in	each	case,	to	the	extent	prohibited	for	a	Person	required	to	comply	with
	
Sanctions	at	the	time	of	the	dealing	or	transaction	and	(iii)	not	the	target	of	a	governmental	investigation	relating	to	Sanctions	nor
	
have	received	notice	of,	or	otherwise	become	aware	of,	any	claim,	action,	suit,	or	proceeding,	or	investigation,	or	inquiry,	formal	or
	
informal,	against	it	with	respect	to	Sanctions.
SECTION	3.15.		
Affected	Financial	Institutions
.	The	Borrower	is	not	an	Affected	Financial	Institution.
SECTION	3.16.		
Plan	Assets;	Prohibited	Transactions
.	The	Borrower	is	not	an	entity	deemed	to	hold	“plan	assets”
	
(within	the	meaning	of	the	Plan	Asset	Regulations).		Neither	the	execution,	delivery	or	performance	of	the	transactions
	
contemplated	under	this	Agreement,	including	the	making	of	any	Loan	hereunder,	will	give	rise	to	a	non-exempt	prohibited
	
transaction	under	Section	406	of	ERISA	or
	
67


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Section	4975	of	the	Code,	assuming	no	portion	of	the	Loan	is	or	will	be	funded	(initially	or	through	participation,	assignment,
	
transfer	or	securitization)	with	plan	assets	of	any	Benefit	Plan.
SECTION	3.17.		
Employment	and	Labor	Relations
.	As	of	the	Effective	Date,	neither	the	Borrower	nor	any	of	its
	
Restricted	Subsidiaries	is	a	party	to	any	collective	bargaining	agreement	or	other	labor	contract	applicable	to	the	Borrower’s	or	any
	
of	its	Restricted	Subsidiaries’	employees	other	than	in	jurisdictions	where	regulations	mandate	employee	participation	in	industrial
	
collective	bargaining	agreements	and	works	councils	with	certain	consultation	(including	potential	approval,	co-determination	and
	
information)	rights	with	respect	to	the	relevant	entity’s	operations.		As	of	the	Effective	Date,	except	as	would	not	reasonably	be
	
expected,	individually	or	in	the	aggregate,	to	have	a	Material	Adverse	Effect	(i)	there	are	no	strikes,	slowdowns,	lock-outs,	work
	
stoppages	or,	to	the	knowledge	of	any	Responsible	Officer	of	the	Borrower,	threatened	in	writing	against	the	Borrower	or	any	of	its
	
Restricted	Subsidiaries,	(ii)	since	January	1,	2020,	the	Borrower	and	its	Restricted	Subsidiaries	have	been	in	compliance	with	the
	
US	federal	Fair	Labor	Standards	Act	of	1938,	as	amended,	or	any	other	applicable	laws,	regulations	or	legal	requirements	dealing
	
with	wage	and	hour	matters	with	respect	to	the	Borrower	or	any	of	its	Restricted	Subsidiaries	and	(iii)	any	individual	who	performs


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services	for	the	Borrower	or	any	of	its	Restricted	Subsidiaries	who	is	not	treated	as	an	employee	of	the	Borrower	or	such	Restricted
	
Subsidiary	for	any	purpose,	including	income	tax,	withholding	and	remittances	purposes,	has	been	properly	classified	as	a	non-
employee	contractor.
SECTION	3.18.		
Intellectual	Property
.	Each	of	the	Borrower	and	each	of	its	Restricted	Subsidiaries	(i)	owns	or	has
	
the	right	to	use	all	patents,	trademarks,	permits,	domain	names,	service	marks,	trade	names,	copyrights,	licenses,	franchises,
	
inventions,	trade	secrets,	proprietary	information	and	know-how	of	any	type,	whether	or	not	written	(including,	but	not	limited	to,
	
rights	in	computer	programs	and	databases),	formulas,	and	other	intellectual	property	rights	(collectively,	“
Intellectual	Property
”),
	
and	(ii)	has	obtained	assignments	of	all	leases,	licenses	and	other	rights	of	whatever	nature,	in	each	case	that	are	reasonably
	
necessary	for	the	conduct	of	the	business	of	the	Borrower	and	its	Restricted	Subsidiaries,	taken	as	a	whole,	and	without	any	known
	
conflict	with	the	rights	of	others,	except	where	the	failure	to	own	such	Intellectual	Property	or	obtain	waivers	of	such	conflicts
	
would	not,	individually	or	in	the	aggregate,	reasonably	be	expected	to	have	a	Material	Adverse	Effect.
Article	IV
Conditions
SECTION	4.01.		
Effective	Date
.		The	obligations	of	the	Lenders	to	make	Loans	and	of	the	Issuing	Banks	to	issue
	
Letters	of	Credit	hereunder	shall	not	become	effective	until	the	first	date	on	which	each	of	the	following	conditions	is	satisfied	(or
	
waived	in	accordance	with


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string_value:
waived	in	accordance	with	
Section	9.02
):
(a)
The	Administrative	Agent	(or	its	counsel)	shall	have	received	from	each	party	hereto	either	(i)	a
	
counterpart	of	this	Agreement	signed	on	behalf	of	such	party	or	(ii)	written	evidence	satisfactory	to	the	Administrative
	
Agent	(which	may	include	any	Electronic	Signatures	transmitted	by	telecopy,	emailed	pdf.	or	any	other	electronic	means
	
that	reproduces	an	image	of	an	actual	executed	signature	page	of	this	Agreement)	that	such	party	has	signed	a
	
counterpart	of	this	Agreement.
(b)
The	Administrative	Agent	shall	have	received	customary	favorable	written	opinions	(addressed	to	the
	
Administrative	Agent	and	the	Lenders	and	dated	the	Effective	Date)	of	Skadden,	Arps,	Slate,	Meagher	&	Flom	LLP,
	
counsel	for	the	Loan	Parties.		The	Borrower	hereby	requests	such	counsel	to	deliver	such	opinions.
68


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(c)
The	Administrative	Agent	shall	have	received	such	documents	and	certificates	as	the	Administrative	Agent
	
or	its	counsel	may	reasonably	request	relating	to	the	organization,	existence	and	good	standing	of	the	Loan	Parties,	the
	
authorization	of	the	Transactions	and	any	other	legal	matters	relating	to	the	Loan	Parties,	this	Agreement	or	the
	
Transactions,	all	in	form	and	substance	reasonably	satisfactory	to	the	Administrative	Agent	and	its	counsel.
(d)
The	Administrative	Agent	shall	have	received	a	certificate,	dated	the	Effective	Date	and	signed	by	an
	
Authorized	Officer	of	the	Borrower,	certifying	that,	on	and	as	of	the	Effective	Date,	(i)	the	representations	and	warranties
	
contained	in	
Article	III
	and	in	each	other	Loan	Document	are	true	and	correct	in	all	material	respects	on	and	as	of	the
	
Effective	Date,	except	to	the	extent	such	representations	and	warranties	specifically	refer	to	an	earlier	date,	in	which	case
	
they	shall	be	true	and	correct	in	all	material	respects	as	of	such	earlier	date,	(ii)	no	Default	or	Event	of	Default	exists,	or
	
would	result	from	the	Transactions	or	from	the	application	of	the	proceeds	thereof	and	(iii)	compliance	with	
Section	6.01
	
hereof.
(e)
The	Administrative	Agent,	the	Lenders	and	the	Lead	Arrangers	shall	have	received	all	fees	and	other
	
amounts	due	and	payable	on	or	prior	to	the	Effective	Date	for	which	invoices	have	been	presented	at	least	one	(1)	Business
	
Day	prior	to	the	Effective	Date,	including,	to	the	extent	invoiced,	reimbursement	or	payment	of	all	reasonable	and
	
documented	out‑of‑pocket	expenses	required	to	be	reimbursed	or	paid	by	the	Borrower	hereunder.
	
(f)


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string_value:
(f)
(i)	The	Borrower	shall	have	paid	in	full	all	of	its	obligations	under	the	Existing	Credit	Agreement,	(ii)	the
	
Existing	Credit	Agreement	(and	the	commitments	thereunder)	shall	have	terminated	and	be	of	no	further	force	and	effect,
	
(iii)	all	guarantees	and	security	interests	granted	in	connection	with	the	Existing	Credit	Agreement	shall	have	been
	
terminated	and	released	(or	arrangements	reasonably	satisfactory	to	the	Administrative	Agent	shall	have	been	made	with
	
respect	to	such	termination	and	release)	(each	of	the	foregoing	
clauses	(i)
,	
(ii)
	and	
(iii)
,	collectively,	the	“
Payoff
”)	and	(iv)
	
the	Administrative	Agent	shall	have	received	evidence	satisfactory	to	it	that	the	Payoff	has	occurred	or	shall	occur
	
substantially	simultaneously	with	the	Effective	Date.
	
(g)
(i)	The	Administrative	Agent	shall	have	received	all	documentation	and	other	information	reasonably
	
requested	by	the	Administrative	Agent	or	any	Lender	pursuant	to	applicable	“know	your	customer”	and	Anti-Money
	
Laundering	Laws,	including	the	Act;	
provided
	that	such	documentation	has	been	requested	at	least	five	(5)	Business	Days
	
prior	to	the	Effective	Date	and	(ii)	each	Lender	that	has	reasonably	requested	a	Beneficial	Ownership	Certification	shall,	to
	
the	extent	the	Borrower	qualifies	as	a	“legal	entity	customer”	under	the	Beneficial	Ownership	Regulation,	have	received	a
	
Beneficial	Ownership	Certification	(
provided
	that	upon	the	execution	and	delivery	by	such	Lender	of	its	signature	page	to
	
this	Agreement,	the	condition	set	forth	in	this	
clause	(ii)


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string_value:
clause	(ii)
	shall	be	deemed	to	be	satisfied).
(h)
The	Administrative	Agent	shall	have	received	the	audited	consolidated	financial	statements	and	unaudited
	
interim	financial	statements	of	the	Borrower	for	the	three	most	recent	fiscal	years	and	the	most	recent	interim	period,	as
	
applicable,	ended	prior	to	the	Effective	Date	as	to	which	such	financial	statements	are	available,	in	each	case,	which	will
	
be	deemed	delivered	to	the	Administrative	Agent	when	filed	by	the	Borrower	with	the	SEC	on	Form	10-K	or	Form	10-Q,	as
	
applicable.
The	Administrative	Agent	shall	notify	the	Borrower	and	the	Lenders	of	the	Effective	Date,	and	such	notice	shall	be	conclusive	and
	
binding.		Notwithstanding	the	foregoing,	the	obligations	of	the	Lenders	to	make	Loans	and	of	the	Issuing	Banks	to	issue	Letters	of
	
Credit	hereunder	shall	not	become	effective	unless	each	of	the	foregoing	conditions	is	satisfied	(or	waived	pursuant	to	
Section	9.02
)
	
at	or	prior	to	3:00
	
69


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p.m.,	New	York	City	time,	on	March	31,	2023	(and	in	the	event	such	conditions	are	not	so	satisfied	or	waived,	the	Commitments
	
shall	terminate	at	such	time).		For	purposes	of	determining	compliance	with	the	conditions	specified	in	this	
Section	4.01
,	each	of
	
the	Lenders	and	Issuing	Banks	party	hereto	as	of	the	Effective	Date	shall	be	deemed	to	have	consented	to,	approved	or	accepted	or
	
to	be	satisfied	with,	each	document	or	other	matter	required	hereunder	to	be	consented	to	or	approved	by	or	acceptable	or
	
satisfactory	to	such	party	unless	the	Administrative	Agent	shall	have	received	written	notice	from	such	party	prior	to	the	Effective
	
Date	specifying	its	objection	thereto.
SECTION	4.02.		
Each	Credit	Event
.		The	obligation	of	each	Lender	to	make	a	Loan	under	the	Facility	on	the
	
occasion	of	any	Borrowing	(other	than	any	conversion	to	or	continuation	of	any	Loan),	and	of	each	Issuing	Bank	to	issue,	amend	to
	
increase	the	amount	thereof,	renew	or	extend	any	Letter	of	Credit,	is	subject	to	the	satisfaction	of	the	following	conditions:
(a)
The	representations	and	warranties	of	the	Borrower	set	forth	in	this	Agreement	(except	the	representations
	
set	forth	in	
Sections	3.04(c)
	and	
3.05
)	shall	be	true	and	correct	in	all	material	respects	on	and	as	of	the	date	of	such
	
Borrowing;	
provided
	that	any	representation	or
	warranty	that	is	qualified	as	to	“materiality”,	“Material	Adverse	Effect”	or
	
similar	language	shall	be	true	and	correct	(except	the	representations	set	forth	in	
Sections	3.04(c)
	and	
3.05
)	as	so	qualified


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string_value:
and	
3.05
)	as	so	qualified
	
on	such	respective	dates.
(b)
	
At	the	time	of	and	immediately	after	giving	effect	to	such	Borrowing	or	the	issuance,	amendment,
	
renewal	or	extension	of	such	Letter	of	Credit,	as	applicable,	no	Default	or	Event	of	Default	shall	have	occurred	and	be
	
continuing.
Each	Borrowing	(other	than	any	conversion	or	continuation	of	any	Loan)	and	each	issuance,	amendment	to	increase	the	amount
	
thereof,	renewal	or	extension	of	a	Letter	of	Credit	shall	be	deemed	to	constitute	a	representation	and	warranty	by	the	Borrower	on
	
the	date	thereof	as	to	the	matters	specified	in	
Sections	4.02(a)
	and	
(b)
.
		
Notwithstanding	the	foregoing,	these	conditions	shall	not	apply	to	any	borrowing	of	an	ABR	Loan	under	the	Facility	in	connection
	
with	the	repayment	of	a	Loan	under	
Section	2.13
.
		
Article	V
Affirmative	Covenants
Until	the	Commitments	have	expired	or	been	terminated	and	the	principal	of	and	interest	on	each	Loan	and	all
	
fees	payable	hereunder	shall	have	been	paid	in	full,	and	all	Letters	of	Credit	shall	have	expired	or	terminated	(other	than	those	for
	
which	accommodations	reasonably	acceptable	to	the	applicable	Issuing	Bank	have	been	made)	without	any	pending	draw,	and	all
	
LC	Disbursements	shall	have	been	reimbursed,	the	Borrower	covenants	and	agrees	with	the	Lenders	that:
SECTION	5.01.		
Financial	Statements;	Other	Information
.		The	Borrower	will	furnish	to	the	Administrative	Agent:
(a)


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string_value:
(a)	
within	ninety	(90)	days	after	the	end	of	each	fiscal	year	of	the	Borrower,	its	audited	consolidated	balance
	
sheet	and	related	statements	of	operations,	stockholders’	equity	and	cash	flows	as	of	the	end	of	and	for	such	year,	setting	forth	in
	
each	case	in	comparative	form	the	figures	for	the	previous	fiscal	year,	all	reported	on	by	PricewaterhouseCoopers	LLP	or	other
	
independent	public	accountants	of	recognized	national	standing	(without	a	“going	concern”	or	like	qualification	or	exception	and
	
without	any	qualification	or	exception	as	to	the	scope	of	such	audit)	to	the	effect	that	such	consolidated	financial	statements
	
present	fairly	in	all	material	respects	the	financial	condition	and	results	of	operations	of	the	Borrower	and	its	Consolidated
	
Subsidiaries	on	a	consolidated	basis	in	accordance	with	GAAP;
70


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(b)	
within	sixty	(60)	days	after	the	end	of	each	of	the	first	three	fiscal	quarters	of	each	fiscal	year	of	the
	
Borrower,	its	consolidated	balance	sheet	and	related	statements	of	operations	and	stockholders’	equity	as	of	the	end	of	and	for	such
	
fiscal	quarter	and	the	then	elapsed	portion	of	the	fiscal	year,	setting	forth	in	each	case	in	comparative	form	the	figures	for	the
	
corresponding	period	or	periods	of	(or,	in	the	case	of	the	balance	sheet,	as	of	the	end	of)	the	previous	fiscal	year,	all	certified	by	one
	
of	its	Authorized	Officers	as	presenting	fairly	in	all	material	respects	the	financial	condition	and	results	of	operations	of	the
	
Borrower	and	its	Consolidated	Subsidiaries	on	a	consolidated	basis	in	accordance	with	GAAP,	subject	to	normal	year-end	audit
	
adjustments	and	the	absence	of	footnotes;
(c)	
concurrently	with	any	delivery	of	financial	statements	under	
clauses	(a)
	or	
(b)
	above,	a	certificate	of	an
	
Authorized	Officer	of	the	Borrower,	substantially	in	the	form	of	
Exhibit	B
	hereto	(or	such	other	form	as	may	be	reasonably
	
acceptable	to	the	Administrative	Agent),	(x)	certifying	as	to	whether	a	Default	has	occurred	and,	if	a	Default	has	occurred,
	
specifying	the	details	thereof	and	any	action	taken	or	proposed	to	be	taken	with	respect	thereto	and	(y)	setting	forth	reasonably
	
detailed	information	demonstrating	compliance	with	
Section	6.01
;	and
	
(d)	
within	a	reasonable	time	following	any	reasonable	written	request	therefor	by	the	Administrative	Agent	or


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string_value:
any	Lender,	(x)	such	other	information	regarding	the	operations,	business	affairs	and	financial	condition	of	the	Borrower	or	any
	
Restricted	Subsidiary,	or	compliance	with	the	terms	of	this	Agreement	and	(y)	information	and	documentation	reasonably	requested
	
by	the	Administrative	Agent	or	any	Lender	for	purposes	of	compliance	with	applicable	“know	your	customer”	and	Anti-Money
	
Laundering	Laws,	including	the	Act	and	the	Beneficial	Ownership	Regulation.	Notwithstanding	the	foregoing,	neither	the	Borrower
	
nor	any	Subsidiary	shall	be	required	to	disclose	or	permit	inspection	or	discussion	of,	any	document,	information	or	other	matter	(i)
	
that	constitutes	non-registered	intellectual	property,	trade	secrets,	proprietary	information,	or	strategy	level	detail	with	respect	to
	
operational	performance	(except	insofar	as	it	relates	to	determining	compliance	by	the	Borrower	or	any	Subsidiary	with	the
	
requirements	of	this	Agreement),	(ii)	in	respect	of	which	disclosure	to	the	Administrative	Agent	or	any	Lender	(or	their	respective
	
representatives	or	contractors)	is	prohibited	by	applicable	law	or	any	binding	agreement	or	(iii)	that	is	subject	to	attorney	client	or
	
similar	privilege	or	constitutes	attorney	work	product.
Subject	to	the	next	succeeding	sentence,	information	delivered	pursuant	to	this	
Section	5.01
	to	the	Administrative	Agent	shall
	
promptly	be	made	available	by	the	Administrative	Agent	to	the	Lenders	by	posting	such	information	on	the	DebtDomain	website	on
	
the	Internet	at	
http://www.debtdomain.com
.	Information	delivered	pursuant	to	this	
Section	5.01
	may	also	be	delivered	by	electronic


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string_value:
may	also	be	delivered	by	electronic
	
communication	pursuant	to	procedures	approved	by	the	Administrative	Agent	pursuant	to	
Section	9.01(b)
	hereto.	Notwithstanding
	
anything	herein	to	the	contrary,	financial	information	required	to	be	delivered	pursuant	to	
Sections	5.01(a)
	and	
(b)
	(in	each	case,
	
solely	to	the	extent	such	financial	information	is	included	in	materials	filed	with	the	SEC)	shall	be	deemed	to	have	been	delivered	to
	
the	Administrative	Agent	on	the	date	on	which	such	information	is	available	via	the	EDGAR	system	of	the	SEC	on	the	Internet;
	
provided
	that,	in	each	case,	the	Borrower	shall	(i)	to	the	extent	such	information	required	to	be	provided	under	
Section	5.01(a)
	is
	
not	included	in	materials	filed	with	the	SEC,	separately	deliver	to	the	Administrative	Agent	an	audit	report	and	the	opinion	of
	
PricewaterhouseCoopers	LLP	or	other	independent	certified	public	accountants	of	national	recognized	standing	satisfying	the
	
requirements	set	forth	in	
Section	5.01(a)
	if	such	information	is	not	available	via	the	EDGAR	system	of	the	SEC	on	the	Internet,
	
promptly	deliver	email	copies	of	any	such	documents	to	the	Administrative	Agent	if	the	Administrative	Agent	or	any	Lender
	
requests	the	Borrower	to	furnish	such	copies	until	written	notice	to	cease	delivering	such	copies	is	given	by	the	Administrative
	
Agent
SECTION	5.02.		
Notices	of	Material	Events
.		The	Borrower	will	furnish	to	the	Administrative	Agent	prompt
	
written	notice	of	the	following,	upon	becoming	aware	of	such	event:
71


key: chroma:document
string_value:
(a)	
the	occurrence	of	any	Default;
(b)	
the	occurrence	of	any	event,	development	or	circumstance	that	has	had	or	would	reasonably	be	expected	to,
	
individually	or	in	the	aggregate,	have	a	Material	Adverse	Effect;
(c)	
the	filing	or	commencement	of	any	action,	suit	or	proceeding	by	or	before	any	arbitrator	or	Governmental
	
Authority	against	or	affecting	the	Borrower	or	any	Restricted	Subsidiary	as	to	which	there	is	a	reasonable	possibility	of	an
	
adverse	determination	and	that,	if	adversely	determined,	that	would	reasonably	be	expected	to,	individually	or	in	the
	
aggregate,	result	in	a	Material	Adverse	Effect;	and
(d)	
any	change	in	the	information	provided	in	the	Beneficial	Ownership	Certification	delivered	to	such	Lender
	
that	would	result	in	change	to	the	list	of	beneficial	owners	identified	in	such	certification.
Each	notice	delivered	under	this	
Section	5.02
	(other	than	in	the	case	of	
clause	(d)
)	shall	be	accompanied	by	a	statement	of	an
	
Authorized	Officer	or	other	representative	of	the	Borrower	setting	forth	the	details	of	the	event	or	development	requiring	such
	
notice	and	any	action	taken	or	proposed	to	be	taken	with	respect	thereto.		The	Administrative	Agent	shall	promptly	deliver	such
	
notice	to	the	Lenders.
SECTION	5.03.		
Existence;	Conduct	of	Business
.		The	Borrower	will,	and	will	cause	each	of	its	Restricted
	
Subsidiaries	to,	do	or	cause	to	be	done	all	things	necessary	to	preserve,	renew	and	keep	in	full	force	and	effect	its	legal	existence
	
(other	than	with	respect	to	the	maintenance	of	the	existence	of	the	Borrower)	and,	in	its	commercially	reasonable	business


key: chroma:document
string_value:
judgment,	the	rights,	licenses,	permits,	privileges	and	franchises	material	to	the	conduct	of	its	business	on	a	consolidated	basis
	
except	to	the	extent	that	failure	to	do	so	would	not	reasonably	be	expected	to,	individually	or	in	the	aggregate,	result	in	a	Material
	
Adverse	Effect;	
provided
	that	the	foregoing	shall	not	prohibit	any	merger,	consolidation,	liquidation	or	dissolution	permitted	under
	
Section	6.03
.
SECTION	5.04.		
Payment	of	Obligations
.		The	Borrower	will,	and	will	cause	each	of	its	Restricted	Subsidiaries	to,
	
pay	its	obligations	(other	than	in	respect	of	any	Indebtedness),	including	Tax	liabilities,	that,	if	not	paid,	would	reasonably	be
	
expected	to,	individually	or	in	the	aggregate,	result	in	a	Material	Adverse	Effect	before	the	same	shall	become	delinquent	or	in
	
default,	except	where	(a)	the	validity	or	amount	thereof	is	being	contested	in	good	faith	by	appropriate	proceedings,	(b)	the
	
Borrower	or	such	Restricted	Subsidiary	has	set	aside	on	its	books	adequate	reserves	with	respect	thereto	in	accordance	with	GAAP
	
and	(c)	the	failure	to	make	payment	pending	such	contest	would	not	reasonably	be	expected	to,	individually	or	in	the	aggregate,
	
result	in	a	Material	Adverse	Effect.
SECTION	5.05.		
Maintenance	of	Properties;	Insurance
.		The	Borrower	will,	and	will	cause	each	of	its	Restricted
	
Subsidiaries	to,	(a)	keep	and	maintain	all	tangible	property	material	to	the	conduct	of	the	business	of	the	Borrower	and	its


key: chroma:document
string_value:
Restricted	Subsidiaries,	taken	as	a	whole,	in	good	working	order	and	condition,	ordinary	wear	and	tear	excepted	except	to	the
	
extent	that	the	failure	to	do	so	would	not	reasonably	be	expected	to	have	a	Material	Adverse	Effect	and	(b)	maintain	insurance
	
(including	self-insurance)	as	the	Borrower	believes	(in	its	good	faith	judgment)	to	be	reasonable	and	prudent.
SECTION	5.06.		
Books	and	Records;	Inspection	Rights
.		The	Borrower	will,	and	will	cause	each	of	its	Restricted
	
Subsidiaries	to,	keep	proper	books	of	record	and	account	sufficient	to	permit	the	preparation	of	consolidated	financial	statements	in
	
accordance	with	GAAP.		The	Borrower	will,	and	will	cause	each	of	its	Restricted	Subsidiaries	to,	permit	any	representatives
	
reasonably	acceptable	to	the	Borrower	designated	by	the	Administrative	Agent	or	any	Lender,	upon	reasonable	prior	notice,	at	their
	
72


key: chroma:document
string_value:
own	expense	(unless	a	Default	has	occurred	and	is	continuing)	to	visit	and	inspect	its	properties	during	normal	business	hours,	to
	
examine	and	make	extracts	from	its	books	and	records,	and	to	discuss	its	affairs,	finances	and	condition	with	its	officers	and
	
independent	accountants,	all	at	such	reasonable	times	not	to	exceed,	for	all	such	designated	representatives	collectively,	one	time
	
in	any	fiscal	year	(with	visits	by	designated	representatives	of	the	Lenders	to	be	coordinated	through	the	Administrative	Agent)
	
(
provided
	that	such	limitation	shall	not	apply	at	any	time	a	Default	has	occurred	and	is	continuing).
SECTION	5.07.		
Compliance	with	Laws
.		The	Borrower	will,	and	will	cause	each	of	its	Restricted	Subsidiaries	to,
	
comply	with	all	laws,	rules,	regulations	and	orders	of	any	Governmental	Authority	applicable	to	it	or	its	property,	except	(a)	in	such
	
instances	where	any	alleged	non-compliance	is	being	contested	in	good	faith	by	appropriate	proceedings	or	(b)	where	the	failure	to
	
do	so	would	not	reasonably	be	expected	to,	individually	or	in	the	aggregate,	result	in	a	Material	Adverse	Effect.
		
SECTION	5.08.		
Anti-Corruption	Laws	and	Sanctions
.		The	Borrower	will	maintain	in	effect	and	enforce	policies
	
and	procedures	reasonably	designed	to	promote	compliance	by	the	Borrower,	its	Subsidiaries	and	their	respective	directors,
	
officers,	and,	to	its	knowledge,	its	employees,	agents	and	Affiliates	with	Anti-Corruption	Laws	and	applicable	Sanctions.
SECTION	5.09.		
Further	Assurances
.
	
(a)


key: chroma:document
string_value:
Further	Assurances
.
	
(a)	
If	(I)(A)	the	Borrower	or	any	Loan	Party	establishes,	creates	or	acquires	after	the	Effective	Date	any	direct
	
wholly-owned	Domestic	Subsidiary	(or	any	existing	wholly-owned	Domestic	Subsidiary	becomes	a	direct	wholly-owned	Domestic
	
Subsidiary	of	the	Borrower)	other	than	an	Excluded	Subsidiary	or	(B)	any	direct	wholly-owned	Domestic	Subsidiary	ceases	to	be	an
	
Excluded	Subsidiary	or	(II)	any	direct	wholly-owned	Domestic	Subsidiary	(other	than	an	Excluded	Subsidiary)	becomes	a	guarantor
	
with	respect	to	any	Specified	Borrower	Indebtedness,	then	(x)	with	respect	to	the	foregoing	
clause	(I)
,	the	Borrower	will	promptly
	
notify	the	Administrative	Agent	of	such	occurrence	and	within	sixty	(60)	days	(as	such	date	may	be	extended	from	time	to	time	by
	
the	Administrative	Agent	in	its	sole	discretion)	after	such	date	or	(y)	with	respect	to	the	foregoing	
clause	(II)
,	on	such	date	on	which
	
such	direct	wholly-owned	Domestic	Subsidiary	becomes	a	guarantor	with	respect	to	such	Specified	Borrower	Indebtedness,	in	each
	
case,	such	wholly-owned	Domestic	Subsidiary	shall	(i)	become	party	to	the	Guarantee	Agreement,	by	executing	and	delivering	to
	
the	Administrative	Agent	a	counterpart	of	the	Guarantee	Agreement	or	a	counterpart	of	a	Joinder	Agreement	(as	defined	in	the
	
Guarantee	Agreement)	(or	other	applicable	joinder	agreement	reasonably	satisfactory	to	the	Administrative	Agent	and	the


key: chroma:document
string_value:
Borrower),	as	applicable	and	(ii)	execute	and	deliver,	or	cause	to	be	executed	and	delivered,	all	other	relevant	documentation	of	the
	
type	described	in	
Sections	4.01(b)
	and	
(c)
	with	respect	to	such	direct	wholly-owned	Domestic	Subsidiary.
	
(b)	
If,	as	of	the	last	day	of	any	fiscal	quarter	of	the	Borrower,	the	aggregate	consolidated	total	assets	(excluding
	
intercompany	assets)	of	all	Immaterial	Subsidiaries	(which	for	purposes	of	this	Section	5.09(b)	does	not	include	any	Excluded
	
Subsidiaries	that	are	not	Immaterial	Subsidiaries)	exceeds	12.5%	of	Consolidated	Total	Assets	(as	set	forth	in	the	most	recent
	
consolidated	balance	sheet	of	the	Borrower	and	its	Consolidated	Subsidiaries	delivered	to	the	Lenders	pursuant	to	this	Agreement
	
and	computed	in	accordance	with	GAAP)	or	the	aggregate	consolidated	total	revenues	of	all	Immaterial	Subsidiaries	exceeds	12.5%
	
of	the	consolidated	total	revenues	of	the	Borrower	and	its	Consolidated	Subsidiaries	(as	set	forth	in	the	most	recent	income
	
statement	of	the	Borrower	and	its	Consolidated	Subsidiaries	delivered	to	the	Lenders	pursuant	to	this	Agreement	and	computed	in
	
accordance	with	GAAP)	then,	within	ninety	(90)	days	after	the	end	of	any	such	fiscal	quarter	(or,	if	such	fiscal	quarter	is	the	fourth
	
fiscal	quarter	of	the	Borrower,	within	one	hundred	and	twenty	(120)	days	thereafter)	(as	either	such	date	may	be	extended	by	the


key: chroma:document
string_value:
Administrative	Agent	in	its	reasonable	discretion)),	the	Borrower	shall	cause	one	or	more	Immaterial	Subsidiaries	to	take	the
	
actions	specified	in
	
73


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string_value:
Section	5.09(a)(i)
	and	
(ii)
	above;	
provided
,	
however
,	such	actions	shall	only	be	required	to	the	extent	that,	after	giving	effect	to	such
	
actions,	the	aggregate	consolidated	total	assets	(excluding	intercompany	assets)	of	all	Immaterial	Subsidiaries	do	not	exceed	12.5%
	
of	Consolidated	Total	Assets	and	the	aggregate	consolidated	total	revenues	of	all	Immaterial	Subsidiaries	do	not	exceed	12.5%	of
	
consolidated	total	revenues	of	the	Borrower	and	its	Consolidated	Subsidiaries	(as	set	forth	in	the	most	recent	income	statement	of
	
the	Borrower	and	its	Consolidated	Subsidiaries	delivered	to	the	Lenders	pursuant	to	this	Agreement	and	computed	in	accordance
	
with	GAAP).
SECTION	5.10.		
ERISA
.
		
(a)	
The	Borrower	will	deliver	to	the	Administrative	Agent	(in	sufficient	copies	for	all	Lenders,	if	the
	
Administrative	Agent	so	requests):
	
(i)	promptly	and	in	any	event	within	fifteen	(15)	days	after	receiving	a	request	from	the	Administrative	Agent	a
	
copy	of	the	most	recent	IRS	Form	5500	(including	the	Schedule	B)	with	respect	to	a	Plan;
(ii)	promptly	and	in	any	event	within	thirty	(30	)days	after	any	Responsible	Officer	of	the	Borrower	knows	that
	
any	ERISA	Event	has	occurred	that,	either	individually	or	in	the	aggregate,	could	reasonably	be	expected	to	have	a
	
Material	Adverse	Effect,	a	certificate	of	an	Authorized	Officer	of	the	Borrower	describing	such	ERISA	Event	and	the	action,


key: chroma:document
string_value:
if	any,	proposed	to	be	taken	with	respect	to	such	ERISA	Event	and	a	copy	of	any	notice	filed	with	the	PBGC	or	the	IRS
	
pertaining	to	such	ERISA	Event	and	any	notices	received	by	any	Loan	Party,	any	Subsidiary	of	the	Borrower	or,	to	the
	
Borrower’s	knowledge,	any	ERISA	Affiliate	from	the	PBGC	or	any	other	governmental	agency	with	respect	thereto;
	
provided	
that	in	the	case	of	such	ERISA	Events	under	
paragraphs	(b)
,	
(c)
	and	
(d)
	of	the	definition	thereof,	the	30-day	notice
	
period	set	forth	above	shall	be	a	10-day	period,	and,	in	the	case	of	such	ERISA	Events	under	
paragraphs	(g)
	and	
(i)
	of	the
	
definition	thereof,	in	no	event	shall	notice	be	given	later	than	ten	(10)	days	after	the	occurrence	of	any	such	ERISA	Event;
	
and
(iii)	promptly,	and	in	any	event	within	thirty	(30)	days,	after	a	Responsible	Officer	of	the	Borrower,	becomes
	
aware	that	there	has	been	(A)	an	increase	in	the	unfunded	liabilities	with	respect	any	Plan	(taking	into	account	only	Plans
	
with	positive	unfunded	liabilities)	that,	either	individually	or	in	the	aggregate,	could	reasonably	be	expected	to	have	a
	
Material	Adverse	Effect,	(B)	an	increase	since	the	date	the	representations	hereunder	are	given	or	deemed	given,	or	from
	
any	prior	notice,	as	applicable,	in	potential	withdrawal	liability	under	Section	4201	of	ERISA,	if	the	Loan	Parties,	the


key: chroma:document
string_value:
Subsidiaries	of	the	Borrower	and	the	ERISA	Affiliates	were	to	withdraw	completely	from	any	and	all	Multiemployer	Plans
	
that,	either	individually	or	in	the	aggregate,	could	reasonably	be	expected	to	have	a	Material	Adverse	Effect,	(C)	that	any
	
contribution	required	to	be	made	with	respect	to	a	Foreign	Pension	Plan	has	not	been	timely	made,	except	where	the
	
failure	to	do	so,	either	individually	or	in	the	aggregate,	could	not	reasonably	be	expected	to	have	a	Material	Adverse	Effect
	
or	(D)	the	adoption	of	any	amendment	to	a	Plan	which	results	in	an	increase	in	contribution	obligations	of	any	Loan	Party
	
or	any	Subsidiary	that,	either	individually	or	in	the	aggregate,	could	reasonably	be	expected	to	have	a	Material	Adverse
	
Effect,	a	detailed	written	description	thereof	from	an	Authorized	Officer	of	the	Borrower.
74


key: chroma:document
string_value:
(b)	
The	Borrower	and	each	of	its	applicable	Subsidiaries	shall	ensure	that	all	Foreign	Pension	Plans
	
administered	by	it	obtains	or	retains	(as	applicable)	registered	or	tax-qualified,	as	applicable,	status	under	and	as	required	by
	
applicable	law	and	is	administered	in	a	timely	manner	in	all	respects	in	compliance	with	all	applicable	laws	and	the	terms	of	each
	
relevant	Foreign	Pension	Plans,	except	where	the	failure	to	do	any	of	the	foregoing,	either	individually	or	in	the	aggregate,	would
	
not	be	reasonably	likely	to	result	in	a	Material	Adverse	Effect.
SECTION	5.11.		
Use	of	Proceeds
.	The	Borrower	will	use	the	proceeds	of	the	Loans	and	Letters	of	Credit	only	as
	
provided	in	
Section	3.12
.
Article	VI
Negative	Covenants
Until	the	Commitments	have	expired	or	terminated	and	the	principal	of	and	interest	on	each	Loan	and	all	fees
	
payable	hereunder	have	been	paid	in	full	and	all	Letters	of	Credit	have	expired	or	terminated	(other	than	those	for	which
	
accommodations	acceptable	to	the	applicable	Issuing	Bank	have	been	made),	in	each	case,	without	any	pending	draw,	and	all	LC
	
Disbursements	shall	have	been	reimbursed,	the	Borrower	covenants	and	agrees	with	the	Lenders	that:
SECTION	6.01.		
Minimum	Liquidity
.		The	Borrower	will	not	at	any	time	permit	the	Consolidated	Liquidity	to	be
	
less	than	$1,000,000,000.
	
SECTION	6.02.		
Liens
.		The	Borrower	will	not,	and	will	not	permit	any	Restricted	Subsidiary	to,	create,	incur,


key: chroma:document
string_value:
assume	or	permit	to	exist	any	Lien	on	any	property	or	asset	now	owned	or	hereafter	acquired	by	it,	or	assign	or	sell	any	income	or
	
revenues	(including	accounts	receivable)	or	rights	in	respect	of	any	thereof,	except:
(a)
	
Permitted	Encumbrances;
	
(b)
	
any	Lien	on	any	property	or	asset	of	the	Borrower	or	any	Restricted	Subsidiary	existing	on	the	date	hereof
	
and	set	forth	in	
Schedule	6.02
;	
provided
	that	(i)	such	Lien	shall	not	apply	to	any	other	property	or	asset	of	the	Borrower	or
	
any	Restricted	Subsidiary	(other	than	the	proceeds	and	products	thereof	and	accessions	and	improvements	thereto)	and
	
(ii)	such	Lien	shall	secure	only	those	obligations	which	it	secures	on	the	date	hereof	and	extensions,	renewals	and
	
replacements	thereof	that	do	not	increase	the	outstanding	principal	amount	thereof	except	by	the	amount	of	any	accrued
	
interest,	premiums	or	fees	payable	by	the	Borrower	or	such	Restricted	Subsidiary	in	respect	of	such	obligations;
(c)
	
any	Lien	existing	on	any	property	or	asset	prior	to	the	acquisition	thereof	by	the	Borrower	or	any	Restricted
	
Subsidiary	or	existing	on	any	property	or	asset	of	any	Person	that	becomes	a	Restricted	Subsidiary	after	the	date	hereof
	
prior	to	the	time	such	Person	becomes	a	Restricted	Subsidiary;	
provided
	that	(i)	such	Lien	is	not	created	in	contemplation
	
of	or	in	connection	with	such	acquisition	or	such	Person	becoming	a	Restricted	Subsidiary,	as	the	case	may	be,	(ii)	such


key: chroma:document
string_value:
Lien	shall	not	apply	to	any	other	property	or	assets	of	the	Borrower	or	any	Restricted	Subsidiary	(other	than	the	proceeds
	
and	products	thereof	and	accessions	and	improvements	thereto)	and	(iii)	such	Lien	shall	secure	only	those	obligations
	
which	it	secures	on	the	date	of	such	acquisition	or	the	date	such	Person	becomes	a	Restricted	Subsidiary,	as	the	case	may
	
be	and	extensions,	renewals	and	replacements	thereof	that	do	not	increase	the	outstanding	principal	amount	thereof
	
except	by	the	amount	of	any	accrued	interest,	premiums	or	fees	payable	by	the	Borrower	or	such	Restricted	Subsidiary	in
	
respect	of	such	obligations;
75


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string_value:
(d)
	
Liens	on	fixed	or	capital	assets	acquired,	constructed	or	improved	by	the	Borrower	or	any	Restricted
	
Subsidiary;	
provided
	that	(i)	such	security	interests	and	the	Indebtedness	secured	thereby	are	incurred	prior	to	or	within
	
365	days	after	such	acquisition	or	the	completion	of	such	construction	or	improvement	and	(ii)	such	security	interests	shall
	
not	apply	to	any	other	property	or	assets	of	the	Borrower	or	any	Restricted	Subsidiary	(other	than	the	proceeds	and
	
products	thereof	and	accessions	and	improvements	thereto,	except	that	individual	financings	provided	by	a	Person	or	its
	
Affiliates	may	be	cross	collateralized	to	other	financings	provided	by	such	Person	or	its	Affiliates;	
provided
	that	such	other
	
financings	shall	(i)	have	a	similar	purpose	to	such	individual	financing	and	(ii)	be	part	of	a	series	of	financings	related	to
	
such	individual	financing);
(e)
	
Liens	securing	obligations	of	the	Specified	Tesla	Subsidiaries;
(f)
	
bankers’	Liens,	rights	of	setoff	and	other	similar	Liens	existing	solely	with	respect	to	cash	and	cash
	
equivalents	on	deposit	in	one	or	more	accounts	maintained	by	the	Borrower	or	any	of	its	Subsidiaries,	in	each	case	granted
	
in	the	ordinary	course	of	business	in	favor	of	the	bank	or	banks	or	other	financial	institutions	with	which	such	accounts	are
	
maintained,	securing	amounts	owing	to	such	bank	or	banks	with	respect	to	cash	management	and	operating	account
	
arrangements;


key: chroma:document
string_value:
arrangements;
(g)	Liens	granted	in	the	ordinary	course	of	business	on	insurance	policies,	proceeds	thereof	and	the	unearned
	
portion	of	insurance	premiums	with	respect	thereto	securing	the	financing	of	the	unpaid	cost	of	the	insurance	policies;
(h)	customary	Liens	granted	in	favor	of	a	trustee	pursuant	to	an	indenture	relating	to	Indebtedness	not	prohibited
	
by	this	Agreement	to	the	extent	such	Liens	(i)	secure	only	customary	compensation,	indemnification	and	reimbursement
	
obligations	owing	to	such	trustee	under	such	indenture	and	any	agreements	entered	into	by	such	trustee	(as	trustee	or
	
collateral	agent)	in	connection	therewith	and	(ii)	are	limited	to	the	cash	or	other	collateral	held	by	such	trustee	(excluding
	
cash	held	in	trust	for	the	payment	of	such	Indebtedness);
(i)	customary	Liens	securing	repurchase	obligations	in	the	ordinary	course	of	business;
(j)	Liens	on	Used	Motor	Vehicles	and	related	assets	(such	as	proceeds	and	documents	of	title	in	respect	thereof,
	
that	in	the	reasonable	opinion	of	the	Borrower	are	customary	for	financing	transactions	related	to	such	assets),	in	each
	
case	securing	Indebtedness	permitted	by	
Section	6.08(k)
;
	
(k)	Liens	of	the	purchaser	or	any	of	its	Affiliates	on	Environmental	Attributes	and	their	related	intangible	rights	in
	
connection	with	the	sale	of	such	Environmental	Attributes;
(l)	Liens	securing	Indebtedness	permitted	under	
Section	6.08(l)
;	
provided
	that	such	Lien	extends	only	to	the	real


key: chroma:document
string_value:
that	such	Lien	extends	only	to	the	real
	
property,	and	any	buildings,	structures,	parking	areas,	fixtures	or	other	improvements	thereon	and	other	property	of	the
	
type	customarily	described	in	a	mortgage	or	deed	of	trust,	comprising	the	Manufacturing	Facility	constructed,	improved	or
	
repaired	with	the	proceeds	of	such	Indebtedness	and,	if	applicable,	the	Equity	Interests	in	the	Restricted	Subsidiary	that
	
has	title	to	the	financed	Manufacturing	Facility	and	whose	assets	consist	solely	of	such	related	assets;
76


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string_value:
(m)	Liens	on	Rental	Account	Assets	and	related	assets;
(n)	Liens	on	Used	Motor	Vehicles	and	related	assets	(such	as	proceeds	and	documents	of	title	in	respect	thereof,
	
that	in	the	reasonable	opinion	of	the	Borrower	are	customary	for	financing	transactions	related	to	such	assets);
	
(o)	Liens	on	assets	owned	by	a	Securitization	Subsidiary	which	is	a	Restricted	Subsidiary	granted	in	connection
	
with	a	Securitization	Transaction;	and
(p)	other	Liens	securing	obligations	of	the	Borrower	and	the	Restricted	Subsidiaries	that	do	not	in	the	aggregate
	
at	any	time	exceed	7.5%	of	Consolidated	Net	Tangible	Assets.
SECTION	6.03.		
Fundamental	Changes
.		The	Borrower	will	not,	and	will	not	permit	any	Restricted	Subsidiary	to,
	
merge	into	or	consolidate	with	any	other	Person,	or	permit	any	other	Person	to	merge	into	or	consolidate	with	it,	or	sell,	transfer,
	
license,	lease	or	otherwise	dispose	of	(in	one	transaction	or	in	a	series	of	transactions)	all	or	substantially	all	of	its	assets,	or	all	or
	
substantially	all	of	the	stock	of	any	of	its	Restricted	Subsidiaries	(in	each	case,	whether	now	owned	or	hereafter	acquired),	or
	
liquidate	or	dissolve,	except	that,	if	at	the	time	thereof	and	immediately	after	giving	effect	thereto	no	Default	shall	have	occurred
	
and	be	continuing	(i)	any	Restricted	Subsidiary	may	merge	into	the	Borrower	in	a	transaction	in	which	the	Borrower	is	the


key: chroma:document
string_value:
surviving	corporation,	(ii)	any	Person	(other	than	the	Borrower)	may	merge	into	any	Restricted	Subsidiary	in	a	transaction	in	which
	
the	surviving	entity	is	a	Restricted	Subsidiary,	(iii)	any	Restricted	Subsidiary	may	sell,	transfer,	license,	lease	or	otherwise	dispose
	
of	its	assets	to	the	Borrower	or	to	another	Restricted	Subsidiary,	(iv)	any	Restricted	Subsidiary	may	liquidate	or	dissolve	if	the
	
Borrower	determines	in	good	faith	that	such	liquidation	or	dissolution	is	in	the	best	interests	of	the	Borrower	and	is	not	materially
	
disadvantageous	to	the	Lenders,	(v)	any	Restricted	Subsidiary	may	be	sold	or	otherwise	disposed	of,	and	any	Restricted	Subsidiary
	
may	merge	or	consolidate	with	any	other	Person	or	sell,	lease,	license	or	otherwise	dispose	of,	all	or	substantially	all	of	its	assets	so
	
long	as,	in	each	case,	such	sales,	transfers,	licenses,	leases	or	disposals,	in	the	aggregate,	do	not	constitute	all	or	substantially	all	of
	
the	assets	of	the	Borrower	and	its	Restricted	Subsidiaries,	taken	as	a	whole	and	(vi)	the	Borrower	or	any	Restricted	Subsidiary	may
	
sell,	transfer,	license,	lease	or	otherwise	dispose	of	its	assets	to	a	Securitization	Subsidiary	in	connection	with	a	Securitization
	
Transaction	so	long	as	such	sales,	transfers,	licenses,	leases	or	disposals,	in	the	aggregate,	do	not	constitute	all	or	substantially	all


key: chroma:document
string_value:
of	the	assets	of	the	Borrower	and	its	Restricted	Subsidiaries,	taken	as	a	whole.		Notwithstanding	anything	to	the	contrary	in	this
	
Agreement,	the	Borrower	shall	not	reorganize	under	the	laws	of	any	jurisdiction	other	than	a	state	of	the	United	States	of	America.
77


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string_value:
SECTION	6.04.		
Clauses	Restricting	Subsidiary	Distributions
.		The	Borrower	will	not,	and	will	not	permit	any
	
Restricted	Subsidiary	to,	enter	into	or	suffer	to	exist	or	become	effective	any	consensual	encumbrance	or	restriction	on	the	ability
	
of	any	Restricted	Subsidiary	of	the	Borrower	to	(a)	make	Restricted	Payments	in	respect	of	any	capital	stock	of	such	Restricted
	
Subsidiary	held	by,	or	pay	any	Indebtedness	owed	to,	the	Borrower	or	any	other	Restricted	Subsidiary	of	the	Borrower,	other	than
	
subordination	of	Indebtedness	or	subrogation	rights	in	connection	with	permitted	guaranties,	(b)	make	loans	or	advances	to,	or
	
other	investments	in,	the	Borrower	or	any	other	Restricted	Subsidiary	of	the	Borrower	or	(c)	transfer	any	of	its	assets	to	the
	
Borrower	or	any	other	Restricted	Subsidiary	of	the	Borrower,	except	for	such	encumbrances	or	restrictions	(x)	entered	into	by	the
	
Borrower	or	any	of	its	Restricted	Subsidiaries	in	the	ordinary	course	of	business	which	the	Borrower	has	reasonably	determined	in
	
good	faith	will	not	materially	impair	the	Borrower’s	ability	to	make	payments	under	this	Agreement	when	due	(including	on	the
	
Maturity	Date)	or	(y)	existing	under	or	by	reason	of:
(i)	any	restrictions	with	respect	to	a	Restricted	Subsidiary	or	its	assets	imposed	pursuant	to	an	agreement	that
	
has	been	entered	into	in	connection	with	the	disposition	of	capital	stock	or	assets	of	such	Subsidiary;


key: chroma:document
string_value:
(ii)	any	restrictions,	limitations,	conditions	and	prohibitions	under	or	imposed	by	any	indenture,	agreement,
	
instrument	or	other	contractual	arrangement	in	effect	on	the	Effective	Date	(including	this	Agreement)	and	any	similar
	
indentures,	agreements	or	instruments	to	the	extent	such	restrictions,	limitations,	conditions	and	prohibitions	are
	
customary	or	reasonable	or	otherwise	no	more	restrictive,	taken	as	a	whole,	than	those	set	forth	in	such	existing
	
indentures,	agreements	or	instruments	(including	this	Agreement),	in	each	case	as	reasonably	determined	by	the
	
Borrower;
	
(iii)	any	agreements	governing	any	purchase	money	Liens,	Capital	Lease	Obligations	or	other	Liens	otherwise
	
permitted	hereby	to	the	extent	any	prohibition	or	limitation	restricts	Liens	on	the	assets	subject	to	such	Lien;
(iv)	any	prohibitions	or	conditions	under	applicable	law,	rule	or	regulation	or	contained	in	any	Loan	Document;
(v)	customary	provisions	restricting	assignment	of	any	licensing	agreement	(in	which	the	Borrower	or	any	of	its
	
Restricted	Subsidiaries	is	the	licensee)	or	any	other	contract	entered	into	by	the	Borrower	or	any	of	its	Restricted
	
Subsidiaries	in	the	ordinary	course	of	business;
(vi)	any	agreement	in	effect	at	the	time	a	Person	becomes	a	Restricted	Subsidiary	of	the	Borrower,	so	long	as
	
such	agreement	was	not	entered	into	in	connection	with	or	in	contemplation	of	such	Person	becoming	a	Subsidiary	of	the
	
Borrower;
	
(vii)	any	provisions	restricting	assignment	of	any	agreement	entered	into	by	a	Restricted	Subsidiary	in	the


key: chroma:document
string_value:
ordinary	course	of	business	and	consistent	with	past	practices;
	
(viii)	any	provisions	restricting	subletting	or	assignment	of	any	lease	governing	a	leasehold	interest	of	a
	
Restricted	Subsidiary	entered	into	in	the	ordinary	course	of	business	and	consistent	with	past	practices;
(ix)	customary	provisions	in	partnership	agreements,	limited	liability	company	governance	documents,	joint
	
venture	agreements	and	other	similar	agreements	that	restrict	the	transfer	of	assets	of,	or	ownership	interests	in,	the
	
relevant	partnership,	limited	liability	company,	joint	venture	or	similar	Person;
78


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string_value:
(x)	
provisions	in	agreements	or	instruments	which	prohibit	the	payment	of	dividends	or	the	making	of	other
	
distributions	with	respect	to	any	class	of	Equity	Interests	of	a	Person	other	than	on	a	pro	rata	basis;
(xi)	encumbrances	or	restrictions	on	cash	or	other	deposits	or	net	worth	imposed	by	customers	under	agreements
	
entered	into	in	the	ordinary	course	of	business;
	
	(xii)	
customary	net	worth	or	similar	financial	maintenance	provisions	contained	in	real	property	leases	entered
	
into	by	any	Restricted	Subsidiary;
	
(xiii)	arrangements	with	any	Governmental	Authority	imposed	on	any	Foreign	Subsidiary	in	connection	with
	
governmental	grants,	financial	aid,	tax	holidays	or	similar	benefits;
	
(xiv)	customary	restrictions	created	in	connection	with	any	Securitization	Transaction;	or
(xv)	customary	restrictions,	limitations,	conditions	or	prohibitions	applicable	to	the	Specified	Tesla	Subsidiaries.
SECTION	6.05.		
Lines	of	Business
.	The	Borrower	and	the	Restricted	Subsidiaries,	taken	as	a	whole,	will	not
	
fundamentally	and	substantively	alter	the	character	of	their	business,	taken	as	a	whole,	from	the	business	conducted	by	the
	
Borrower	and	the	Restricted	Subsidiaries,	taken	as	a	whole,	on	the	Effective	Date	and	other	business	activities	which	are
	
extensions	thereof	or	otherwise	incidental,	synergistic,	reasonably	related,	or	ancillary	to	any	of	the	foregoing	(and	non-core
	
incidental	businesses	acquired	in	connection	with	any	acquisition).
SECTION	6.06.		
Transactions	with	Affiliates


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string_value:
SECTION	6.06.		
Transactions	with	Affiliates
.		(a)	The	Borrower	will	not,	and	will	not	permit	any	of	its	Restricted
	
Subsidiaries	to,	sell,	lease	or	otherwise	transfer	any	material	property	or	material	assets	to,	or	purchase,	lease	or	otherwise	acquire
	
any	material	property	or	material	assets	from,	or	otherwise	engage	in	any	other	material	transactions	with,	any	of	its	Affiliates
	
(other	than	the	Borrower	or	any	other	Restricted	Subsidiary	to	the	extent	such	transaction	does	not	otherwise	involve	any	other
	
Affiliate),	unless	such	transaction	is	(x)	upon	fair	and	reasonable	terms	no	less	favorable	in	all	material	respects	to	the	Borrower	or
	
the	relevant	Restricted	Subsidiary,	as	applicable,	than	it	would	obtain	in	a	comparable	arm’s	length	transaction	with	a	Person	that
	
is	not	an	Affiliate	or	(y)	otherwise	expressly	permitted	hereunder	(including	Standard	Securitization	Undertakings);	
provided
	that
	
nothing	in	this	
Section	6.06
	prohibit:	(i)	any	Affiliate	who	is	an	individual	from	serving	as	a	director,	officer	or	employee	of	the
	
Borrower	or	any	of	its	Restricted	Subsidiaries	and	receiving	reasonable	compensation	for	his	or	her	services	in	such	capacity;	(ii)	so
	
long	as	the	Borrower	is	publicly	held,	any	transaction	that	is	approved	in	accordance	with	the	then-applicable	related	party
	
transaction	(or	similar)	policy	of	the	Borrower,	(iii)	the	issuance	of	common	stock	and	the	making	of	any	Restricted	Payment	in	the


key: chroma:document
string_value:
ordinary	course	of	business	or	(iv)	the	payment	of	customary	fees,	indemnities	and	reimbursements	paid	to	officers	and	directors	of
	
the	Borrower	and	its	Restricted	Subsidiaries.
	
(b)	The	Borrower	shall	not,	and	shall	not	permit	any	Restricted	Subsidiary	that	is	not	a	Specified	Tesla	Subsidiary
	
to,	sell,	transfer,	license,	lease	or	otherwise	dispose	of	any	of	its	material	assets	or	material	property	to	a	Specified	Tesla
	
Subsidiary	unless	such	sale,	transfer,	license,	lease	or	other	disposition	is	made	for	bona	fide	business	purposes	related	to
	
the	business	of	the	applicable	Specified	Tesla	Subsidiary.
SECTION	6.07.		
Use	of	Proceeds
.		The	Borrower	will	not,	and	will	not	permit	any	of	its	Subsidiaries	to,	use
	
directly	or	indirectly	the	proceeds	of	any	Loan	or	Letter	of	Credit,	or	lend,	contribute	or	otherwise	make	available	such	proceeds	to
	
any	Subsidiary	or	any	other	Person	(a)	in	furtherance	of	an
	
79


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string_value:
offer,	payment,	promise	to	pay,	or	authorization	of	the	payment	or	giving	of	money,	or	anything	else	of	value,	to	any	Person	in
	
material	violation	of	any	applicable	Anti-Corruption	Laws,	(b)	for	the	purpose	of	funding,	financing	or	facilitating	any	activities,
	
business	or	transaction	of	or	with	any	Sanctioned	Person,	or	in	any	Sanctioned	Country	or	(c)	in	any	other	manner	that	would	result
	
in	a	violation	of	any	Anti-Corruption	Laws,	any	Anti-Money	Laundering	Laws	or	applicable	Sanctions	by	any	party	to	this
	
Agreement.
SECTION	6.08.		
Subsidiary	Indebtedness
.		The	Borrower	will	not	permit	any	of	its	Restricted	Subsidiaries	to
	
directly	or	indirectly,	create,	incur,	assume	or	suffer	to	exist	any	Indebtedness,	except:
(a)	Indebtedness	existing	on	the	date	hereof	and	set	forth	in	
Schedule	6.08
	and	amendments,	extensions,
	
renewals,	refinancings	and	replacements	of	any	such	Indebtedness	that	do	not	increase	the	outstanding	principal	amount
	
thereof	(except	by	the	amount	of	any	accrued	interest	and	premiums	with	respect	to	such	Indebtedness	and	transaction
	
fees,	costs	and	expenses	in	connection	with	such	extension,	renewal	or	replacement	thereof);
(b)	Indebtedness	of	any	Restricted	Subsidiary	to	the	Borrower	or	any	other	Restricted	Subsidiary;
(c)	Guarantees	by	any	Restricted	Subsidiary	of	Indebtedness	of	any	other	Restricted	Subsidiary;
(d)	Capital	Lease	Obligations	and	other	Indebtedness	incurred	to	finance	the	purchase	price	or	improvement	cost


key: chroma:document
string_value:
incurred	or	assumed	in	connection	with	the	acquisition,	construction	or	improvement	of	fixed	capital	or	capital	assets	and
	
any	amendments,	extensions,	renewals,	refinancings	and	replacements	thereof	that	do	not	increase	the	outstanding
	
principal	amount	thereof	(except	by	the	amount	of	any	accrued	interest	and	premiums	with	respect	to	such	Indebtedness
	
and	transaction	fees,	costs	and	expenses	in	connection	with	such	extension,	renewal	or	replacement	thereof);
(e)	Indebtedness	in	respect	of	performance	bonds,	bid	bonds,	appeal	bonds,	surety	bonds	and	completion
	
guarantees,	standby	and	documentary	letters	of	credit	and	similar	obligations,	in	each	case	provided	in	the	ordinary	course
	
of	business;
(f)	Indebtedness	assumed	in	connection	with	an	acquisition	of	the	equity	interests	or	the	assets	of	any	Person;
	
provided
	that	such	Indebtedness	(i)	exists	at	the	time	of	the	acquisition	of	such	equity	interests	or	assets	and	(ii)	is	not
	
created	in	contemplation	of	or	in	connection	with	the	acquisition	of	such	equity	interests	or	assets;
(g)	Indebtedness	consisting	of	the	financing	of	insurance	premiums	in	the	ordinary	course	of	business;
(h)	Indebtedness	owed	in	respect	of	any	overdrafts	and	related	liabilities	arising	from	treasury,	depository	and
	
cash	management	services	or	in	connection	with	any	automated	clearing-house	transfers	of	funds;	provided	that	such
	
Indebtedness	shall	be	repaid	in	full	within	ten	Business	Days	of	the	incurrence	thereof;
80


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(i)	Indebtedness	in	respect	of	non-speculative	Swap	Agreements	relating	to	the	business	or	operations	of	such
	
Subsidiary;
(j)	Indebtedness	of	any	Restricted	Subsidiary	as	an	account	party	in	respect	of	letters	of	credit	or	letters	of
	
guarantee	in	the	ordinary	course	of	business;
(k)	Indebtedness	of	any	Restricted	Subsidiaries	secured	by	a	Lien	on	Used	Motor	Vehicles	and	related	assets;
	
provided
	that	such	Indebtedness	shall	not	be	secured	by	any	assets	other	than	Used	Motor	Vehicles	and	other	related
	
assets,	such	as	proceeds	therefrom	and	documents	of	title	in	respect	thereof,	that	in	the	reasonable	opinion	of	the
	
Borrower	are	customary	for	financing	transactions	related	to	such	assets;	
provided
,	
further
,	that	the	aggregate	principal
	
amount	of	Indebtedness	outstanding	at	any	time	pursuant	to	this	
clause	(l)
	shall	not	exceed	$300,000,000;
(l)	Indebtedness	of	any	Restricted	Subsidiary	incurred	to	provide	all	or	a	portion	of,	or	to	reimburse	any
	
Restricted	Subsidiary	for	expenditures	relating	to,	the	cost	of	construction,	repair	or	improvement	of	any	Manufacturing
	
Facility,	including	a	long-term	financing	of	any	Manufacturing	Facility;
(m)	Indebtedness	of	any	direct	or	indirect	subsidiary	of	TEO	that	is	(i)	a	renewal,	extension,	exchange,
	
replacement	or	refinancing	of	Indebtedness	outstanding	on	the	Effective	Date	(plus	the	sum	of	(1)	accrued	and	unpaid


key: chroma:document
string_value:
interest	thereon,	(2)	any	prepayment	or	exchange	premium	and	(3)	customary	premium,	fees	and	expenses	relating	to	such
	
renewal,	extension,	exchange,	replacement,	refinancing	or	issuance)	or	(ii)	incurred	by	any	special	purpose	subsidiary	of
	
TEO	so	long	as	there	shall	be	no	recourse	to,	or	obligation	of	(whether	direct,	by	guarantee	or	otherwise),	the	Borrower	or
	
any	of	its	Subsidiaries	(other	than	pursuant	to	representations,	warranties,	covenants	and	indemnities	entered	into	in	the
	
ordinary	course	of	business	in	connection	with	such	Indebtedness	that	in	the	reasonable	opinion	of	the	Borrower	are
	
customary	for	such	transactions);
(n)	Indebtedness	of	the	Specified	Tesla	Subsidiaries;	and
(o)	other	Indebtedness	in	an	aggregate	principal	amount	not	to	exceed	at	any	time	outstanding	7.5%	of
	
Consolidated	Net	Tangible	Assets.
Article	VII
Events	of	Default
SECTION	7.01.		
Events	of	Default
.		If	any	of	the	following	events	(“
Events	of	Default
”)	shall	occur:
(a)	
the	Borrower	shall	fail	to	pay	any	principal	of	any	Loan	or	any	reimbursement	obligation	in	respect	of	any
	
LC	Disbursement	when	and	as	the	same	shall	become	due	and	payable,	whether	at	the	due	date	thereof	or	otherwise;
(b)	
the	Borrower	shall	fail	to	pay	any	interest	on	any	Loan	or	any	fee	or	any	other	amount	(other	than	an	amount
	
referred	to	in	
clause	(a)
	of	this	
Section	7.01
)	payable	under	this	Agreement,	when	and	as	the	same	shall	become	due	and


key: chroma:document
string_value:
(c)	
any	representation	or	warranty	made	or	deemed	made	by	or	on	behalf	of	the	Borrower	in	or	in	connection
	
with	this	Agreement	or	any	amendment	or	modification	hereof	or	waiver	hereunder,	or	in	any	report,	certificate,	financial
	
statement	or	other	document	furnished	pursuant	to	or	in	connection	with	this	Agreement	or	any	amendment	or
	
modification	hereof	or	waiver	hereunder,	shall	prove	to	have	been	incorrect	in	any	material	respect	when	made	or	deemed
	
made;
(d)	
the	Borrower	shall	fail	to	observe	or	perform	any	covenant,	condition	or	agreement	contained	in	
Section
	
5.02(a)
,	
Section	5.03
	(with	respect	to	the	Borrower’s	existence)	or	in	
Article	VI
;
(e)	
the	Borrower	shall	fail	to	observe	or	perform	any	covenant,	condition	or	agreement	contained	in	this
	
Agreement	(other	than	those	specified	in	
clauses	(a)
,	
(b)
	or	
(d)
	of	this	
Section	7.01
),	and	such	failure	shall	continue
	
unremedied	for	a	period	of	thirty	(30)	days	after	the	receipt	of	written	notice	thereof	from	the	Administrative	Agent	to	the
	
Borrower	(which	notice	will	be	given	at	the	request	of	any	Lender);
(f)	
the	Borrower	or	any	of	the	Restricted	Subsidiaries	that	are	Significant	Subsidiaries	shall	fail	to	make	any
	
payment	(whether	of	principal	or	interest	and	regardless	of	amount)	in	respect	of	any	Material	Indebtedness,	when	and	as
	
the	same	shall	become	due	and	payable	after	giving	effect	to	any	applicable	grace	period	or	waiver;
(g)


key: chroma:document
string_value:
(g)	
any	event	or	condition	occurs	that	results	in	any	Material	Indebtedness	becoming	due	prior	to	its	scheduled
	
maturity;	
provided
	that	this	
clause	(g)
	shall	not	apply	to	(A)	secured	Indebtedness	that	becomes	due	as	a	result	of	the
	
voluntary	sale	or	transfer	of	the	property	or	assets	securing	such	Indebtedness,	(B)	any	conversion,	repurchase	or
	
redemption	of	any	Material	Indebtedness	scheduled	by	the	terms	thereof	to	occur	on	a	particular	date	and	not	subject	to
	
any	contingent	event	or	condition	related	to	the	creditworthiness,	financial	performance	or	financial	condition	of	the
	
Borrower	or	any	Restricted	Subsidiary	that	is	a	Significant	Subsidiary	or	(C)	any	repurchase	or	redemption	of	any	Material
	
Indebtedness	pursuant	to	any	put	option	exercised	by	the	holder	of	such	Material	Indebtedness;	
provided
	that	such	put
	
option	is	exercisable	at	times	specified	in	the	terms	of	the	Material	Indebtedness	and	not	as	a	result	of	any	contingent
	
event	or	condition	related	to	the	creditworthiness,	financial	performance	or	financial	condition	of	the	Borrower	or	the
	
applicable	Restricted	Subsidiaries	that	are	Significant	Subsidiaries	or	a	Change	in	Control;
(h)	
an	involuntary	proceeding	shall	be	commenced	or	an	involuntary	petition	shall	be	filed	seeking	(i)
	
liquidation,	reorganization	or	other	relief	in	respect	of	the	Borrower	or	any	Restricted	Subsidiary	that	is	a	Significant
	
Subsidiary,	or	its	debts,	or	of	all	or	substantially	all	of	its	assets	(or,	in	the	case	of	the	Borrower,	a	substantial	part	of	its


key: chroma:document
string_value:
assets),	under	any	Federal,	state	or	foreign	bankruptcy,	insolvency,	receivership	or	similar	law	now	or	hereafter	in	effect
	
or	(ii)	the	appointment	of	a	receiver,	trustee,	custodian,	sequestrator,	conservator	or	similar	official	for	the	Borrower	or
	
any	Restricted	Subsidiary	that	is	a	Significant	Subsidiary	or	for	all	or	substantially	all	of	its	assets	(or,	in	the	case	of	the
	
Borrower,	a	substantial	part	of	its	assets),	and,	in	any	such	case,	such	proceeding	or	petition	shall	continue	undismissed
	
for	sixty	(60)	days	or	an	order	or	decree	approving	or	ordering	any	of	the	foregoing	shall	be	entered;
82


key: chroma:document
string_value:
(i)	
the	Borrower	or	any	Restricted	Subsidiary	that	is	a	Significant	Subsidiary	shall	(i)	voluntarily	commence	any
	
proceeding	or	file	any	petition	seeking	liquidation,	reorganization	or	other	relief	under	any	Federal,	state	or	foreign
	
bankruptcy,	insolvency,	receivership	or	similar	law	now	or	hereafter	in	effect,	(ii)	consent	to	the	institution	of,	or	fail	to
	
contest	in	a	timely	and	appropriate	manner,	any	proceeding	or	petition	described	in	
clause	(h)
	of	this	
Section	7.01
,	(iii)
	
apply	for	or	consent	to	the	appointment	of	a	receiver,	trustee,	custodian,	sequestrator,	conservator	or	similar	official	for
	
the	Borrower	or	any	Restricted	Subsidiary	that	is	a	Significant	Subsidiary,	or	for	all	or	substantially	all	of	its	assets	(or,	in
	
the	case	of	the	Borrower,	a	substantial	part	of	its	assets),	(iv)	file	an	answer	admitting	the	material	allegations	of	a	petition
	
filed	against	it	in	any	such	proceeding,	(v)	make	a	general	assignment	for	the	benefit	of	creditors	or	(vi)	take	any	action	for
	
the	purpose	of	directly	effecting	any	of	the	foregoing;
(j)	
the	Borrower	or	any	Restricted	Subsidiary	shall	become	unable,	admit	in	writing	its	inability	or	fail	generally
	
to	pay	its	debts	as	they	become	due;	
provided
	that	this	
clause	(j)
	shall	not	apply	to	Indebtedness	that	in	the	aggregate	does
	
not	constitute	Material	Indebtedness;
(k)


key: chroma:document
string_value:
(k)	
one	or	more	final,	non-appealable	unsatisfied	judgments	for	the	payment	of	money	in	an	aggregate	amount
	
in	excess	of	$350,000,000	(or,	if	denominated	in	another	currency,	the	equivalent	thereof	in	Dollars)	not	covered	by
	
insurance	by	a	financially	solvent	insurance	company	that	has	not	denied	coverage	shall	be	rendered	against	the	Borrower,
	
any	Significant	Subsidiary	or	any	combination	thereof	and	the	same	shall	remain	unpaid	or	undischarged	for	a	period	of
	
sixty	(60)	consecutive	days	during	which	execution	shall	not	be	effectively	stayed,	vacated	or	bonded	pending	appeal	(it
	
being	understood	that,	notwithstanding	the	definition	of	“Default”,	no	“Default”	shall	be	triggered	solely	by	the	rendering
	
of	such	judgment	or	judgments	prior	to	the	commencement	of	enforcement	proceedings	or	the	lapse	of	such	sixty	(60)
	
consecutive	day	period	so	long	as	such	judgments	are	capable	of	satisfaction	by	payment	at	any	time);
(l)	
an	ERISA	Event	shall	have	occurred	that,	when	taken	together	with	all	other	ERISA	Events	that	have
	
occurred,	results	in	a	Material	Adverse	Effect;
	
(m)	
	a	Change	in	Control	shall	occur;	or
(n)	
the	Guarantee	Agreement	(or	the	Guarantees	thereunder),	once	executed,	shall	cease,	for	any	reason,	to	be
	
in	full	force	and	effect	or	any	Loan	Party	shall	so	assert	(excluding	release	of	any	Guarantor	from	its	guarantee	in
	
accordance	with	the	Loan	Documents);
then,	and	in	every	such	event	(other	than	an	event	with	respect	to	the	Borrower	described	in


key: chroma:document
string_value:
clauses	(h)
	or	
(i)
	of	this	
Section	7.01
),
	
and	at	any	time	thereafter	during	the	continuance	of	such	event,	the	Administrative	Agent	may	with	the	consent	of	the	Required
	
Lenders,	and	at	the	request	of	the	Required	Lenders	shall,	by	notice	to	the	Borrower,	take	either	or	both	of	the	following	actions,	at
	
the	same	or	different	times:		(i)	terminate	the	Commitments,	and	thereupon	the	Commitments	shall	terminate	immediately,	(ii)
	
declare	the	Loans	then	outstanding	to	be	due	and	payable	in	whole	(or	in	part,	in	which	case	any	principal	not	so	declared	to	be	due
	
and	payable	may	thereafter	be	declared	to	be	due	and	payable),	and	thereupon	the	principal	of	the	Loans	so	declared	to	be	due	and
	
payable,	together	with	accrued	interest	thereon	and	all	fees	and	other	obligations	of	the	Borrower	accrued	hereunder,	shall	become
	
due	and	payable	immediately,	without	presentment,	demand,	protest	or	other	notice	of	any	kind,	all	of	which	are	hereby	waived	by
	
the	Borrower,	(iii)	require	that	the	Borrower	provide	cash	collateral	as	required	in	
Section	2.06(j)
	and	(iv)	exercise	on	behalf	of
	
itself,	the	Lenders	and	the	Issuing	Banks	all	rights	and	remedies	available	to	it,	the	Lenders	and	the	Issuing	Banks	under	the	Loan
	
Documents	and	applicable	law;	and	in	case	of	any	event	with	respect	to	the	Borrower	described	in	
clauses	(h)
	or	
(i)
	of	this
	
83


key: chroma:document
string_value:
Section	7.01
,	the	Commitments	shall	automatically	terminate	and	the	principal	of	the	Loans	then	outstanding,	together	with
	
accrued	interest	thereon	and	all	fees	and	other	obligations	of	the	Borrower	accrued	hereunder,	shall	automatically	become	due	and
	
payable,	and	the	obligation	of	the	Borrower	to	cash	collateralize	the	LC	Exposure	as	provided	in	
clause	(iii)
	above	shall
	
automatically	become	effective,	in	each	case,	without	presentment,	demand,	protest	or	other	notice	of	any	kind,	all	of	which	are
	
hereby	waived	by	the	Borrower.
	
SECTION	7.02.		
Application	of	Payments
.		Notwithstanding	anything	herein	to	the	contrary,	following	the
	
occurrence	and	during	the	continuance	of	an	Event	of	Default,	and	notice	thereof	to	the	Administrative	Agent	by	the	Borrower	or
	
the	Required	Lenders,	all	payments	received	on	account	of	the	Obligations	shall,	subject	to	
Section	2.20
,	be	applied	by	the
	
Administrative	Agent	as	follows:
(i)	
first
,	to	payment	of	that	portion	of	the	Obligations	constituting	fees,	indemnities,	expenses	and	other
	
amounts	payable	to	the	Administrative	Agent	(including	fees	and	disbursements	and	other	charges	of	counsel	to	the
	
Administrative	Agent	payable	under	
Section	9.03
	and	amounts	pursuant	to	
Section	2.11(c)
	payable	to	the	Administrative
	
Agent	in	its	capacity	as	such);
(ii)	
second
,	to	payment	of	that	portion	of	the	Obligations	constituting	fees,	expenses,	indemnities	and	other


key: chroma:document
string_value:
amounts	(other	than	principal,	reimbursement	obligations	in	respect	of	LC	Disbursements,	interest	and	Letter	of	Credit
	
fees)	payable	to	the	Lenders	and	the	Issuing	Banks	(including	fees	and	disbursements	and	other	charges	of	counsel	to	the
	
Lenders	and	the	Issuing	Banks	payable	under	
Section	9.03
)	arising	under	the	Loan	Documents,	ratably	among	them	in
	
proportion	to	the	respective	amounts	described	in	this	
clause	(ii)
	payable	to	them;
(iii)	
third
,	to	payment	of	that	portion	of	the	Obligations	constituting	accrued	and	unpaid	Letter	of	Credit	fees	and
	
charges	and	interest	on	the	Loans	and	unreimbursed	LC	Disbursements,	ratably	among	the	Lenders	and	the	Issuing	Banks
	
in	proportion	to	the	respective	amounts	described	in	this	
clause	(iii)
	payable	to	them;
(iv)	
fourth
,	(A)	to	payment	of	that	portion	of	the	Obligations	constituting	unpaid	principal	of	the	Loans	and
	
unreimbursed	LC	Disbursements	and	(B)	to	cash	collateralize	that	portion	of	LC	Exposure	comprising	the	undrawn	amount
	
of	Letters	of	Credit	to	the	extent	not	otherwise	cash	collateralized	by	the	Borrower	pursuant	to	
Section	2.04
	or	
Section
	
2.20
,	ratably	among	the	Lenders	and	the	Issuing	Banks	in	proportion	to	the	respective	amounts	described	in	this	
clause
	
(iv)
	payable	to	them;	
provided
	that	(x)	any	such	amounts	applied	pursuant	to	
sub-clause	(B)
	above	shall	be	paid	to	the


key: chroma:document
string_value:
above	shall	be	paid	to	the
	
Administrative	Agent	for	the	ratable	account	of	the	applicable	Issuing	Banks	to	cash	collateralize	Obligations	in	respect	of
	
Letters	of	Credit,	(y)	subject	to	
Section	2.04
	or	
Section	2.20
,	amounts	used	to	cash	collateralize	the	aggregate	amount	of
	
Letters	of	Credit	pursuant	to	this	
clause	(iv)
	shall	be	used	to	satisfy	drawings	under	such	Letters	of	Credit	as	they	occur
	
and	(z)	upon	the	expiration	of	any	Letter	of	Credit	(without	any	pending	drawings),	the	pro	rata	share	of	cash	collateral
	
shall	be	distributed	to	the	other	Obligations,	if	any,	in	the	order	set	forth	in	this	
Section	7.02
;
(v)	
fifth
,	to	the	payment	in	full	of	all	other	Obligations,	in	each	case	ratably	among	the	Administrative	Agent,	the
	
Lenders	and	the	Issuing	Banks	based	upon	the	respective	aggregate	amounts	of	all	such	Obligations	owing	to	them	in
	
accordance	with	the	respective	amounts	thereof	then	due	and	payable;	and
(vi)	
finally
,	the	balance,	if	any,	after	all	Obligations	have	been	paid	in	full,	to	the	Borrower	or	as	otherwise
	
required	by	law.
84


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If	any	amount	remains	on	deposit	as	cash	collateral	after	all	Letters	of	Credit	have	either	been	fully	drawn	or	expired
	
(without	any	pending	drawings),	such	remaining	amount	shall	be	applied	to	the	other	Obligations,	if	any,	in	the	order	set	forth
	
above.
Article	VIII
The	Administrative	Agent
SECTION	8.01.		
Authorization	and	Action
.		Each	of	the	Lenders	and	the	Issuing	Banks	hereby	irrevocably	appoints
	
the	Administrative	Agent	as	its	agent	and	authorizes	the	Administrative	Agent	to	take	such	actions	on	its	behalf	and	to	exercise
	
such	powers	as	are	delegated	to	the	Administrative	Agent	by	the	terms	hereof,	together	with	such	actions	and	powers	as	are
	
reasonably	incidental	thereto.
The	bank	serving	as	the	Administrative	Agent	hereunder	shall	have	the	same	rights	and	powers	in	its	capacity	as	a	Lender	or	as	an
	
Issuing	Bank	as	any	other	Lender	or	Issuing	Bank	and	may	exercise	the	same	as	though	it	were	not	the	Administrative	Agent,	and
	
such	bank	and	its	Affiliates	may	accept	deposits	from,	lend	money	to	and	generally	engage	in	any	kind	of	business	with	the
	
Borrower	or	any	Subsidiary	or	other	Affiliate	thereof	as	if	it	were	not	the	Administrative	Agent	hereunder.
SECTION	8.02.		
Administrative	Agent’s	Reliance;	Limitation	of	Liability,	Etc
.		The	Administrative	Agent	shall	not
	
have	any	duties	or	obligations	except	those	expressly	set	forth	herein.		Without	limiting	the	generality	of	the	foregoing,	(a)	the


key: chroma:document
string_value:
Administrative	Agent	shall	not	be	subject	to	any	fiduciary	or	other	implied	duties,	regardless	of	whether	a	Default	has	occurred	and
	
is	continuing,	(b)	the	Administrative	Agent	shall	not	have	any	duty	to	take	any	discretionary	action	or	exercise	any	discretionary
	
powers,	except	discretionary	rights	and	powers	expressly	contemplated	hereby	that	the	Administrative	Agent	is	required	to
	
exercise	in	writing	as	directed	by	the	Required	Lenders	or	such	other	number	or	percentage	of	the	Lenders	as	shall	be	necessary
	
under	the	circumstances	as	provided	in	
Section	9.02
	and	(c)	except	as	expressly	set	forth	herein,	the	Administrative	Agent	shall	not
	
have	any	duty	to	disclose,	and	shall	not	be	liable	for	the	failure	to	disclose,	any	information	relating	to	the	Borrower	or	any	of	its
	
Subsidiaries	that	is	communicated	to	or	obtained	by	the	bank	serving	as	Administrative	Agent	or	any	of	its	Affiliates	in	any	capacity.
		
The	Administrative	Agent	shall	not	be	liable	for	any	action	taken	or	not	taken	by	it	with	the	consent	or	at	the	request	of	the
	
Required	Lenders	or	such	other	number	or	percentage	of	the	Lenders	as	shall	be	necessary	under	the	circumstances	as	provided	in
	
Section	9.02
,	or	in	the	absence	of	its	own	gross	negligence	or	willful	misconduct.		The	Administrative	Agent	shall	be	deemed	not	to
	
have	knowledge	of	any	Default	unless	and	until	written	notice	thereof	is	given	to	the	Administrative	Agent	by	the	Borrower,	a
	
Lender	or	an	Issuing	Bank,	and	the	Administrative	Agent	shall	not	be	responsible	for	or	have	any	duty	to	ascertain	or	inquire	into	(i)


key: chroma:document
string_value:
any	statement,	warranty	or	representation	made	in	or	in	connection	with	this	Agreement,	(ii)	the	contents	of	any	certificate,	report
	
or	other	document	delivered	hereunder	or	in	connection	herewith,	(iii)	the	performance	or	observance	of	any	of	the	covenants,
	
agreements	or	other	terms	or	conditions	set	forth	herein,	(iv)	the	validity,	enforceability,	effectiveness	or	genuineness	of	this
	
Agreement	or	any	other	agreement,	instrument	or	document	or	(v)	the	satisfaction	of	any	condition	set	forth	in	
Article	IV
	or
	
elsewhere	herein,	other	than	to	confirm	receipt	of	items	expressly	required	to	be	delivered	to	the	Administrative	Agent.
		
The	Administrative	Agent	shall	be	entitled	to	rely	upon,	and	shall	not	incur	any	liability	for	relying	upon,	any
	
notice,	request,	certificate,	consent,	statement,	instrument,	document	or	other	writing	believed	by	it	to	be	genuine	and	to	have
	
been	signed	or	sent	by	the	proper	Person.		The	Administrative	Agent	also	may	rely	upon	any	statement	made	to	it	orally	or	by
	
telephone	and	believed	by	it	to	be	made	by	the	proper	Person,	and	shall	not	incur	any	liability	for	relying	thereon.		The
	
Administrative	Agent	may	consult	with	legal	counsel	(who	may	be	counsel	for	the	Borrower),
	
85


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string_value:
independent	accountants	and	other	experts	selected	by	it,	and	shall	not	be	liable	for	any	action	taken	or	not	taken	by	it	in
	
accordance	with	the	advice	of	any	such	counsel,	accountants	or	experts.
The	Administrative	Agent	may	perform	any	and	all	its	duties	and	exercise	its	rights	and	powers	by	or	through	any
	
one	or	more	sub-agents	appointed	by	the	Administrative	Agent.		The	Administrative	Agent	and	any	such	sub-agent	may	perform	any
	
and	all	its	duties	and	exercise	its	rights	and	powers	through	their	respective	Related	Parties.		The	exculpatory	provisions	of	the
	
preceding	paragraphs	shall	apply	to	any	such	sub-agent	and	to	the	Related	Parties	of	the	Administrative	Agent	and	any	such	sub-
agent,	and	shall	apply	to	their	respective	activities	in	connection	with	the	syndication	of	the	credit	facilities	provided	for	herein	as
	
well	as	activities	as	Administrative	Agent.
SECTION	8.03.		
Successor	Administrative	Agent
.		Subject	to	the	appointment	and	acceptance	of	a	successor
	
Administrative	Agent	as	provided	in	this	
Section	8.03
,	the	Administrative	Agent	may	resign	at	any	time	by	notifying	the	Lenders,
	
the	Issuing	Banks	and	the	Borrower.		Upon	any	such	resignation,	the	Required	Lenders	shall	have	the	right,	in	consultation	with	the
	
Borrower,	to	appoint	from	among	the	Lenders	a	successor	reasonably	acceptable	to	the	Borrower	(except	that	the	Borrower’s
	
consent	shall	not	be	required	if	an	Event	of	Default	has	occurred	and	is	continuing).		If	no	successor	shall	have	been	so	appointed
	
by	the	Required	Lenders	and	shall	have	accepted	such	appointment	within	thirty	(30)	days	after	the	retiring	Administrative	Agent


key: chroma:document
string_value:
gives	notice	of	its	resignation	(the	“
Resignation	Effective	Date
”),	then	the	retiring	Administrative	Agent	may,	on	behalf	of	the
	
Lenders	and	the	Issuing	Banks,	appoint	a	successor	Administrative	Agent	reasonably	acceptable	to	the	Borrower	(except	that	the
	
Borrower’s	consent	shall	not	be	required	if	an	Event	of	Default	has	occurred	and	is	continuing)	which	shall	be	a	bank	with	an	office
	
in	New	York,	New	York,	or	an	Affiliate	of	any	such	bank.		If	the	Person	serving	as	Administrative	Agent	is	a	Defaulting	Lender
	
pursuant	to	
clause	(e)
	of	the	definition	thereof,	the	Required	Lenders	may,	to	the	extent	permitted	by	applicable	law,	by	notice	in
	
writing	to	the	Borrower	and	such	Person,	remove	such	Person	as	Administrative	Agent	and,	in	consultation	with	the	Borrower,
	
appoint	a	successor.		If	no	such	successor	shall	have	been	so	appointed	by	the	Required	Lenders	and	shall	have	accepted	such
	
appointment	within	thirty	(30)	days	(or	such	earlier	day	as	shall	be	agreed	by	the	Required	Lenders)	(the	“
Removal	Effective
	
Date
”),	then	such	removal	shall	nonetheless	become	effective	in	accordance	with	such	notice	on	the	Removal	Effective	Date;
	
provided
	that	in	no	event	shall	any	such	successor	Administrative	Agent	be	a	Defaulting	Lender	or	a	Disqualified	Institution.		Upon
	
the	acceptance	of	its	appointment	as	Administrative	Agent	hereunder	by	a	successor,	such	successor	shall	succeed	to	and	become
	
vested	with	all	the	rights,	powers,	privileges	and	duties	of	the	retiring	or	removed	Administrative	Agent,	and	the	retiring	or


key: chroma:document
string_value:
removed	Administrative	Agent	shall	be	discharged	from	its	duties	and	obligations	hereunder.		With	effect	from	the	Resignation
	
Effective	Date	or	the	Removal	Effective	Date	(as	applicable)	(1)	the	retiring	or	removed	Administrative	Agent	shall	be	discharged
	
from	its	duties	and	obligations	hereunder	and	(2)	except	for	any	indemnity	payments	owed	to	the	retiring	or	removed
	
Administrative	Agent,	all	payments,	communications	and	determinations	provided	to	be	made	by,	to	or	through	the	Administrative
	
Agent	shall	instead	be	made	by	or	to	each	Lender	or	each	Issuing	Bank	directly,	until	such	time,	if	any,	as	the	Required	Lenders
	
appoint	a	successor	Administrative	Agent	as	provided	for	above.		The	fees	payable	by	the	Borrower	to	a	successor	Administrative
	
Agent	shall	be	the	same	as	those	payable	to	its	predecessor	unless	otherwise	agreed	between	the	Borrower	and	such	successor.
		
After	the	Administrative	Agent’s	resignation	or	removal	hereunder,	the	provisions	of	this	
Article	VIII
	and	
Section	9.03
	shall
	
continue	in	effect	for	the	benefit	of	such	retiring	or	removed	Administrative	Agent,	its	sub‑agents	and	their	respective	Related
	
Parties	in	respect	of	any	actions	taken	or	omitted	to	be	taken	by	any	of	them	while	it	was	acting	as	Administrative	Agent.
SECTION	8.04.		
Acknowledgements	of	Lenders	and	Issuing	Banks
.		Each	Lender	and	each	Issuing	Bank
	
acknowledges	that	it	has,	independently	and	without	reliance	upon	the	Administrative	Agent	or	any	other	Lender	or	Issuing	Bank


key: chroma:document
string_value:
and	based	on	such	documents	and	information	as	it	has	deemed	appropriate,	made	its	own	credit	analysis	and	decision	to	enter	into
	
this	Agreement.		Each	Lender	and	each	Issuing	Bank	also	acknowledges	that	it	will,	independently	and	without	reliance	upon	the
	
Administrative	Agent	or	any	other	Lender	or	Issuing	Bank	and	based	on	such	documents	and	information
	
86


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string_value:
as	it	shall	from	time	to	time	deem	appropriate,	continue	to	make	its	own	decisions	in	taking	or	not	taking	action	under	or	based
	
upon	this	Agreement,	any	related	agreement	or	any	document	furnished	hereunder	or	thereunder.
SECTION	8.05.		
Certain	ERISA	Matters
.		Each	Lender	and	each	Issuing	Bank	(x)	represents	and	warrants,	as	of
	
the	date	such	Person	became	a	Lender	or	an	Issuing	Bank	party	hereto,	to	and	(y)	covenants,	from	the	date	such	Person	became	a
	
Lender	or	an	Issuing	Bank	party	hereto	to	the	date	such	Person	ceases	being	a	Lender	or	an	Issuing	Bank	party	hereto,	for	the
	
benefit	of,	the	Administrative	Agent,	and	each	Lead	Arranger	and	their	respective	Affiliates,	and	not,	for	the	avoidance	of	doubt,	to
	
or	for	the	benefit	of	the	Borrower,	that	at	least	one	of	the	following	is	and	will	be	true:
(i)	such	Lender	or	such	Issuing	Bank	is	not	using	“plan	assets”	(within	the	meaning	of	the	Plan	Asset	Regulations)
	
of	one	or	more	Benefit	Plans	in	connection	with	the	Loans,	the	Letters	of	Credit	or	the	Commitments,
(ii)	the	transaction	exemption	set	forth	in	one	or	more	PTEs,	such	as	PTE	84-14	(a	class	exemption	for	certain
	
transactions	determined	by	independent	qualified	professional	asset	managers),	PTE	95-60	(a	class	exemption	for	certain
	
transactions	involving	insurance	company	general	accounts),	PTE	90-1	(a	class	exemption	for	certain	transactions	involving
	
insurance	company	pooled	separate	accounts),	PTE	91-38	(a	class	exemption	for	certain	transactions	involving	bank	collective


key: chroma:document
string_value:
investment	funds)	or	PTE	96-23	(a	class	exemption	for	certain	transactions	determined	by	in-house	asset	managers),	is	applicable
	
with	respect	to	such	Lender’s	or	such	Issuing	Bank’s	entrance	into,	participation	in,	administration	of	and	performance	of	the
	
Loans,	the	Letters	of	Credit,	the	Commitments	and	this	Agreement,
(iii)	(A)	such	Lender	or	such	Issuing	Bank	is	an	investment	fund	managed	by	a	“Qualified	Professional	Asset
	
Manager”	(within	the	meaning	of	Part	VI	of	PTE	84-14),	(B)	such	Qualified	Professional	Asset	Manager	made	the	investment
	
decision	on	behalf	of	such	Lender	or	such	Issuing	Bank	to	enter	into,	participate	in,	administer	and	perform	the	Loans,	the	Letters
	
of	Credit,	the	Commitments	and	this	Agreement,	(C)	the	entrance	into,	participation	in,	administration	of	and	performance	of	the
	
Loans,	the	Letters	of	Credit,	the	Commitments	and	this	Agreement	satisfies	the	requirements	of	sub-sections	(b)	through	(g)	of	Part
	
I	of	PTE	84-14	and	(D)	to	the	best	knowledge	of	such	Lender	or	such	Issuing	Bank,	the	requirements	of	subsection	(a)	of	Part	I	of
	
PTE	84-14	are	satisfied	with	respect	to	such	Lender’s	or	such	Issuing	Bank’s	entrance	into,	participation	in,	administration	of	and
	
performance	of	the	Loans,	the	Letters	of	Credit,	the	Commitments	and	this	Agreement,	or
(iv)	such	other	representation,	warranty	and	covenant	as	may	be	agreed	in	writing	between	the	Administrative
	
Agent,	in	its	sole	discretion,	and	such	Lender	or	such	Issuing	Bank.
In	addition,	unless	
sub-clause	(i)


key: chroma:document
string_value:
In	addition,	unless	
sub-clause	(i)
	in	the	immediately	preceding	paragraph	is	true	with	respect	to	a	Lender	or	an
	
Issuing	Bank	or	such	Lender	or	such	Issuing	Bank	has	provided	another	representation,	warranty	and	covenant	as	provided	in	
sub-
clause	(iv)
	in	the	immediately	preceding	paragraph,	such	Lender	or	such	Issuing	Bank	further	(x)	represents	and	warrants,	as	of	the
	
date	such	Person	became	a	Lender	or	an	Issuing	Bank	party	hereto,	to	and	(y)	covenants,	from	the	date	such	Person	became	a
	
Lender	or	an	Issuing	Bank	party	hereto	to	the	date	such	Person	ceases	being	a	Lender	or	an	Issuing	Bank	party	hereto,	for	the
	
benefit	of,	the	Administrative	Agent,	and	each	Lead	Arranger	and	their	respective	Affiliates,	and	not,	for	the	avoidance	of	doubt,	to
	
or	for	the	benefit	of	the	Borrower,	that	none	of	the	Administrative	Agent,	or	any	Lead	Arranger	or	any	of	their	respective	Affiliates
	
is	a	fiduciary	with	respect	to	the	assets	of	such	Lender	or	such	Issuing	Bank	(including	in	connection	with	the	reservation	or
	
exercise	of	any	rights	by	the	Administrative	Agent	under	this	Agreement	or	any	documents	related	to	hereto	or	thereto).
87


key: chroma:document
string_value:
SECTION	8.06.		
No	Fiduciary	Duty
.		The	Administrative	Agent,	and	each	Lead	Arranger	hereby	informs	the
	
Lenders	and	the	Issuing	Banks	that	each	such	Person	is	not	undertaking	to	provide	impartial	investment	advice,	or	to	give	advice	in
	
a	fiduciary	capacity,	in	connection	with	the	transactions	contemplated	hereby,	and	that	such	Person	has	a	financial	interest	in	the
	
transactions	contemplated	hereby	in	that	such	Person	or	an	Affiliate	thereof	(i)	may	receive	interest	or	other	payments	with	respect
	
to	the	Loans,	the	Commitments	and	this	Agreement,	(ii)	may	recognize	a	gain	if	it	extended	the	Loans	or	the	Commitments	for	an
	
amount	less	than	the	amount	being	paid	for	an	interest	in	the	Loans	or	the	Commitments	by	such	Lender	or	such	Issuing	Bank	or
	
(iii)	may	receive	fees	or	other	payments	in	connection	with	the	transactions	contemplated	hereby	or	otherwise,	including
	
structuring	fees,	commitment	fees,	arrangement	fees,	facility	fees,	upfront	fees,	underwriting	fees,	ticking	fees,	agency	fees,
	
administrative	agent	or	collateral	agent	fees,	utilization	fees,	minimum	usage	fees,	letter	of	credit	fees,	fronting	fees,	deal-away	or
	
alternate	transaction	fees,	amendment	fees,	processing	fees,	term	out	premiums,	banker’s	acceptance	fees,	breakage	or	other	early
	
termination	fees	or	fees	similar	to	the	foregoing.
SECTION	8.07.		
Erroneous	Payments
.
		
(a)	
If	the	Administrative	Agent	(x)	notifies	a	Lender,	Issuing	Bank	or	any	Person	who	has	received	funds	on	behalf	of	a


key: chroma:document
string_value:
Lender	or	Issuing	Bank	(any	such	Lender,	Issuing	Bank	or	other	recipient,	and	each	of	their	respective	successors	and	assigns,	a
	
“
Payment	Recipient
”)	that	the	Administrative	Agent	has	determined	in	its	sole	discretion	(whether	or	not	after	receipt	of	any	notice
	
under	immediately	succeeding	
clause	(b)
)	that	any	funds	(as	set	forth	in	such	notice	from	the	Administrative	Agent)	received	by
	
such	Payment	Recipient	from	the	Administrative	Agent	or	any	of	its	Affiliates	were	erroneously	or	mistakenly	transmitted	to,	or
	
otherwise	erroneously	or	mistakenly	received	by,	such	Payment	Recipient	(whether	or	not	known	to	such	Lender,	Issuing	Bank	or
	
other	Payment	Recipient	on	its	behalf)		(any	such	funds,	whether		transmitted	or	received	as	a	payment,	prepayment	or	repayment
	
of	principal,	interest,	fees,	distribution	or	otherwise,	individually	and	collectively,	an	“
Erroneous	Payment
”)	and	(y)	demands	in
	
writing	the	return	of	such	Erroneous	Payment	(or	a	portion	thereof),	such	Erroneous	Payment	shall	at	all	times	remain	the	property
	
of	the	Administrative	Agent	pending	its	return	or	repayment	as	contemplated	below	in	this	
Section	8.07
	and	held	in	trust	for	the
	
benefit	of	the	Administrative	Agent,	and	such	Lender	or	Issuing	Bank	shall	(or,	with	respect	to	any	Payment	Recipient	who	received
	
such	funds	on	its	behalf,	shall	cause	such	Payment	Recipient	to)	promptly,	but	in	no	event	later	than	two	(2)	Business	Days


key: chroma:document
string_value:
thereafter	(or	such	later	date	as	the	Administrative	Agent	may,	in	its	sole	discretion,	specify	in	writing),	return	to	the	Administrative
	
Agent	the	amount	of	any	such	Erroneous	Payment	(or	portion	thereof)	as	to	which	such	a	demand	was	made,	in	same	day	funds	(in
	
the	currency	so	received),	together	with	interest	thereon	(except	to	the	extent	waived	in	writing	by	the	Administrative	Agent)	in
	
respect	of	each	day	from	and	including	the	date	such	Erroneous	Payment	(or	portion	thereof)	was	received	by	such	Payment
	
Recipient	to	the	date	such	amount	is	repaid	to	the	Administrative	Agent	in	same	day	funds	at	the	greater	of	the	Overnight	Rate	and
	
a	rate	determined	by	the	Administrative	Agent	in	accordance	with	banking	industry	rules	on	interbank	compensation	from	time	to
	
time	in	effect.	A	notice	of	the	Administrative	Agent	to	any	Payment	Recipient	under	this	
clause	(a)
	shall	be	conclusive,	absent
	
manifest	error.
88


key: chroma:document
string_value:
(b)	
Without	limiting	the	immediately	preceding	
clause	(a)
,	each	Payment	Recipient	(and	each	of	their	respective
	
successors	and	assigns)	agrees	that	if	it	receives	a	payment,	prepayment	or	repayment	(whether	received	as	a	payment,
	
prepayment	or	repayment	of	principal,	interest,	fees,	distribution	or	otherwise)	from	the	Administrative	Agent	(or	any	of	its
	
Affiliates)	(x)	that	is	in	a	different	amount	than,	or	on	a	different	date	from,	that	specified	in	this	Agreement	or	in	a	notice	of
	
payment,	prepayment	or	repayment	sent	by	the	Administrative	Agent	(or	any	of	its	Affiliates)	with	respect	to	such	payment,
	
prepayment	or	repayment,	(y)	that	was	not	preceded	or	accompanied	by	a	notice	of	payment,	prepayment	or	repayment	sent	by	the
	
Administrative	Agent	(or	any	of	its	Affiliates)	or	(z)	that	such	Payment	Recipient	otherwise	becomes	aware	was	transmitted,	or
	
received,	in	error	or	by	mistake	(in	whole	or	in	part),	then	in	each	such	case:
(i)	it	acknowledges	and	agrees	that	(A)	in	the	case	of	immediately	preceding	
clauses	(x)
	or	
(y)
,	an	error	and
	
mistake	shall	be	presumed	to	have	been	made	(absent	written	confirmation	from	the	Administrative	Agent	to	the	contrary)
	
or	(B)	an	error	and	mistake	has	been	made	(in	the	case	of	immediately	preceding	
clause	(z)
),	in	each	case,	with	respect	to
	
such	payment,	prepayment	or	repayment;	and
(ii)	such	Lender	or	Issuing	Bank	shall	(and	shall	cause	any	other	recipient	that	receives	funds	on	its	respective


key: chroma:document
string_value:
behalf	to)	promptly	(and,	in	all	events,	within	one	(1)	Business	Day	of	its	knowledge	of	the	occurrence	of	any	of	the
	
circumstances	described	in	immediately	preceding	
clauses	(x)
,	
(y)
	and	
(z)
)	notify	the	Administrative	Agent	of	its	receipt	of
	
such	payment,	prepayment	or	repayment,	the	details	thereof	(in	reasonable	detail)	and	that	it	is	so	notifying	the
	
Administrative	Agent	pursuant	to	this	
Section	8.07(b)
.
For	the	avoidance	of	doubt,	the	failure	to	deliver	a	notice	to	the	Administrative	Agent	pursuant	to	this	
Section	8.07(b)
	shall	not	have
	
any	effect	on	a	Payment	Recipient’s	obligations	pursuant	to	
Section	8.07(a)
	or	on	whether	or	not	an	Erroneous	Payment	has	been
	
made.
(c)	
Each	Lender	or	Issuing	Bank	hereby	authorizes	the	Administrative	Agent	to	set	off,	net	and	apply	any	and	all	amounts
	
at	any	time	owing	to	such	Lender	or	Issuing	Bank	under	any	Loan	Document,	or	otherwise	payable	or	distributable	by	the
	
Administrative	Agent	to	such	Lender	or	Issuing	Bank	under	any	Loan	Document	with	respect	to	any	payment	of	principal,	interest,
	
fees	or	other	amounts,	against	any	amount	that	the	Administrative	Agent	has	demanded	to	be	returned	under	the	immediately
	
preceding	
clause	(a)
.
(d)	
In	the	event	that	an	Erroneous	Payment	(or	portion	thereof)	is	not	recovered	by	the	Administrative	Agent	for	any
	
reason,	after	demand	therefor	in	accordance	with	immediately	preceding	
clause	(a)
,	from	any	Lender	that	has	received	such


key: chroma:document
string_value:
,	from	any	Lender	that	has	received	such
	
Erroneous	Payment	(or	portion	thereof)	(and/or	from	any	Payment	Recipient	who	received	such	Erroneous	Payment	(or	portion
	
thereof)	on	its	respective	behalf)		(such	unrecovered	amount,	an	“
Erroneous	Payment	Return	Deficiency
”),	upon	the	Administrative
	
Agent’s	notice	to	such	Lender	at	any	time,	then	effective	immediately	(with	the	consideration	therefor	being	acknowledged	by	the
	
parties	hereto),	(A)	such	Lender	shall	be	deemed	to	have	assigned	its	Loans	(but	not	its	Commitments)	with	respect	to	which	such
	
Erroneous	Payment	was	made	(the	“
Erroneous	Payment	Impacted	Class
”)	in	an	amount	equal	to	the	Erroneous	Payment	Return
	
Deficiency	(or	such	lesser	amount	as	the	Administrative	Agent	may	specify)	(such	assignment	of	the	Loans	(but	not	Commitments)
	
of	the	Erroneous	Payment	Impacted	Class,	the	“
Erroneous	Payment	Deficiency	Assignment
”)	(on	a	cashless	basis	and	such	amount
	
calculated	at	par	plus	any	accrued	and	unpaid	interest	(with	the	assignment	fee	to	be	waived	by	the	Administrative	Agent	in	such
	
instance)),	and	is	hereby	(together	with	the	Borrower)	deemed	to	execute	and	deliver	an	Assignment	and	Assumption	(or,	to	the
	
extent	applicable,	an	agreement	incorporating	an	Assignment	and	Assumption	by	reference	pursuant	to	an	Approved	Electronic
	
Platform	as	to	which	the	Administrative	Agent	and	such	parties	are	participants)
	
89


key: chroma:document
string_value:
with	respect	to	such	Erroneous	Payment	Deficiency	Assignment,	and	such	Lender		shall	deliver	any	Notes	evidencing	such	Loans	to
	
the	Borrower	or	the	Administrative	Agent	(but	the	failure	of	such	Person	to	deliver	any	such	Notes	shall	not	affect	the	effectiveness
	
of	the	foregoing	assignment),	(B)	the	Administrative	Agent	as	the	assignee	Lender	shall	be	deemed	to	have	acquired	the	Erroneous
	
Payment	Deficiency	Assignment,	(C)	upon	such	deemed	acquisition,	the	Administrative	Agent	as	the	assignee	Lender	shall	become
	
a	Lender,	as	applicable,	hereunder	with	respect	to	such	Erroneous	Payment	Deficiency	Assignment	and	the	assigning	Lender	shall
	
cease	to	be	a	Lender,	as	applicable,	hereunder	with	respect	to	such	Erroneous	Payment	Deficiency	Assignment,	excluding,	for	the
	
avoidance	of	doubt,	its	obligations	under	the	indemnification	provisions	of	this	Agreement	and	its	applicable	Commitments	which
	
shall	survive	as	to	such	assigning	Lender,	(D)	the	Administrative	Agent	and	the	Borrower	shall	each	be	deemed	to	have	waived	any
	
consents	required	under	this	Agreement	to	any	such	Erroneous	Payment	Deficiency	Assignment	and	(E)	the	Administrative	Agent
	
will	reflect	in	the	Register	its	ownership	interest	in	the	Loans	subject	to	the	Erroneous	Payment	Deficiency	Assignment.	For	the
	
avoidance	of	doubt,	no	Erroneous	Payment	Deficiency	Assignment	will	reduce	the	Commitments	of	any	Lender	and	such
	
Commitments	shall	remain	available	in	accordance	with	the	terms	of	this	Agreement.
	
(e)	
Subject	to	
Section	9.04


key: chroma:document
string_value:
(e)	
Subject	to	
Section	9.04
	(but	excluding,	in	all	events,	any	assignment	consent	or	approval	requirements	(whether	from
	
the	Borrower	or	otherwise)),	the	Administrative	Agent	may,	in	its	discretion,	sell	any	Loans	acquired	pursuant	to	an	Erroneous
	
Payment	Deficiency	Assignment	and	upon	receipt	of	the	proceeds	of	such	sale,	the	Erroneous	Payment	Return	Deficiency	owing	by
	
the	applicable	Lender	shall	be	reduced	by	the	net	proceeds	of	the	sale	of	such	Loan	(or	portion	thereof),	and	the	Administrative
	
Agent	shall	retain	all	other	rights,	remedies	and	claims	against	such	Lender	(and/or	against	any	recipient	that	receives	funds	on	its
	
respective	behalf).	In	addition,	an	Erroneous	Payment	Return	Deficiency	owing	by	the	applicable	Lender	(x)	shall	be	reduced	by	the
	
proceeds	of	prepayments	or	repayments	of	principal	and	interest,	or	other	distribution	in	respect	of	principal	and	interest,	received
	
by	the	Administrative	Agent	on	or	with	respect	to	any	such	Loans	acquired	from	such	Lender	pursuant	to	an	Erroneous	Payment
	
Deficiency	Assignment	(to	the	extent	that	any	such	Loans	are	then	owned	by	the	Administrative	Agent)	and	(y)	may,	in	the	sole
	
discretion	of	the	Administrative	Agent,	be	reduced	by	any	amount	specified	by	the	Administrative	Agent	in	writing	to	the	applicable
	
Lender	from	time	to	time.
(f)	
The	parties	hereto	agree	that	(x)	irrespective	of	whether	the	Administrative	Agent	may	be	equitably	subrogated,	in
	
the	event	that	an	Erroneous	Payment	(or	portion	thereof)	is	not	recovered	from	any	Payment	Recipient	that	has	received	such


key: chroma:document
string_value:
Erroneous	Payment	(or	portion	thereof)	for	any	reason,	the	Administrative	Agent	shall	be	subrogated	to	all	the	rights	and	interests
	
of	such	Payment	Recipient	(and,	in	the	case	of	any	Payment	Recipient	who	has	received	funds	on	behalf	of	a	Lender	or	Issuing
	
Bank,	to	the	rights	and	interests	of	such	Lender	or	Issuing	Bank,	as	the	case	may	be)	under	the	Loan	Documents	with	respect	to
	
such	amount	(the	“
Erroneous	Payment	Subrogation	Rights
”)	(
provided
	that	the	Loan	Parties’	Obligations	under	the	Loan
	
Documents	in	respect	of	the	Erroneous	Payment	Subrogation	Rights	shall	not	be	duplicative	of	such	Obligations	in	respect	of	Loans
	
that	have	been	assigned	to	the	Administrative	Agent	under	an	Erroneous	Payment	Deficiency	Assignment)	and	(y)	an	Erroneous
	
Payment	shall	not	pay,	prepay,	repay,	discharge	or	otherwise	satisfy	any	Obligations	owed	by	the	Borrower	or	any	other	Loan	Party;
	
provided
	
that	for	the	immediately	preceding	
clauses	(x)
	and	
(y)
	shall	not	apply	to	the	extent	any	such	Erroneous	Payment	is,	and
	
solely	with	respect	to	the	amount	of	such	Erroneous	Payment	that	is,	comprised	of	funds	received	by	the	Administrative	Agent	from
	
the	Borrower	for	the	purpose	of	making	such	Erroneous	Payment.	Notwithstanding	anything	to	the	contrary	set	forth	herein,	this
	
Section	8.07
	shall	not	be	interpreted	to	increase	(or	accelerate	the	due	date	for),	or	have	the	effect	of	increasing	(or	accelerating


key: chroma:document
string_value:
the	due	date	for),	the	Obligations	of	the	Borrower	relative	to	the	amount	(and/or	timing	for	payment)	of	the	Obligations	that	would
	
have	been	payable	had	such	Erroneous	Payment	not	been	made	by	the	Administrative	Agent.
90


key: chroma:document
string_value:
(g)	
To	the	extent	permitted	by	applicable	law,	no	Payment	Recipient	shall	assert	any	right	or	claim	to		an	Erroneous
	
Payment,	and	hereby	waives,	and	is	deemed	to	waive,	any	claim,	counterclaim,	defense	or	right	of	set-off	or	recoupment	with
	
respect	to	any	demand,	claim	or	counterclaim	by	the	Administrative	Agent	for	the	return	of	any	Erroneous	Payment	received,
	
including,	without	limitation,	any	defense	based	on	“discharge	for	value”	or	any	similar	doctrine.
(h)	
Each	party’s	obligations,	agreements	and	waivers	under	this	
Section	8.07
	shall	survive	the	resignation	or	replacement
	
of	the	Administrative	Agent,	any	transfer	of	rights	or	obligations	by,	or	the	replacement	of,	a	Lender	or	Issuing	Bank,
	
the
	
termination	of	the	Commitments	and/or	the	repayment,	satisfaction	or	discharge	of	all	Obligations	(or	any	portion	thereof)	under
	
any	Loan	Document.
Article	IX
Miscellaneous
SECTION	9.01.		
Notices
.		(a)		Except	in	the	case	of	notices	and	other	communications	expressly	permitted	to	be
	
given	by	telephone	(and	subject	to	
paragraph	(b)
	below),	all	notices	and	other	communications	provided	for	herein	shall	be	in
	
writing	and	shall	be	delivered	by	hand	or	overnight	courier	service,	mailed	by	certified	or	registered	mail	or	sent	by	electronic	mail
	
(or	in	any	other	manner	approved	pursuant	to	
Section	9.01(b)
),	as	follows:
(i)	if	to	the	Borrower,	to	1	Tesla	Road,	Austin,	TX	78725,	Attention:	General	Counsel,	with	a	copy	to	3500	Deer


key: chroma:document
string_value:
Creek	Road,	Palo	Alto,	CA	94304,	Attention:	Legal,	Finance,	with	a	copy	to	the	electronic	mail	address	of	the	Borrower	on
	
file	with	the	Administrative	Agent;
with	a	copy	(which	shall	not	constitute	notice	to	any	Loan	Party)	to	Skadden,	Arps,	Slate	Meagher	&	Flom	LLP,
	
One	Manhattan	West,	New	York,	New	York	10010,	Attention:	Steven	Messina;	Email:
	
steven.messina@skadden.com;	Fax:	917-777-3509;
(ii)	if	to	the	Administrative	Agent,	to	Citibank	Delaware	at	One	Penn’s	Way,	OPS	II,	New	Castle,	DE	19720,	Attn:
	
Agency	Operations,	Phone:	(302)	894-6010,	Fax:	(646)	274-5080,	Borrower	inquiries	only:	AgencyABTFSupport@citi.com,
	
Borrower	notifications:	GlAgentOfficeOps@Citi.com;	and
(iii)	if	to	an	Issuing	Bank,	to	it	at	its	address	(or	facsimile	number)	on	file	with	the	Administrative	Agent;	and
(iv)	if	to	any	other	Lender,	to	it	at	its	address	(or	facsimile	number)	set	forth	in	its	Administrative	Questionnaire.
(b)	
Notices	and	other	communications	to	the	Lenders	and	the	Issuing	Banks	hereunder	may	be	delivered	or
	
(other	than	service	of	process)	furnished	by	electronic	communications	pursuant	to	procedures	approved	by	the	Administrative
	
Agent;	
provided
	that	the	foregoing	shall	not	apply	to	service	of	process	or	to	notices	pursuant	to	
Article	II
	unless	otherwise	agreed
	
by	the	Administrative	Agent	and	the	applicable	Lender.		The	Administrative	Agent	or	the	Borrower	may,	in	its	discretion,	agree	to


key: chroma:document
string_value:
accept	notices	and	other	communications	to	it	hereunder	by	electronic	communications	pursuant	to	procedures	approved	by	it;
	
provided
	that	approval	of	such	procedures	may	be	limited	to	particular	notices	or	communications.		All	notices	concerning
	
Borrowings	in	the	Funding	Office	or	any	matter	arising	in	connection	therewith	will	be	required	to	be	given	at	the	address	set	forth
	
in	
Section	9.01(a)(ii)
	(in	each	case,	subject	to	
Section	9.01(c)
).
91


key: chroma:document
string_value:
(c)	
Any	party	hereto	may	change	its	address	or	facsimile	number	for	notices	and	other	communications
	
hereunder	by	notice	to	the	other	parties	hereto.		All	notices	and	other	communications	given	to	any	party	hereto	in	accordance	with
	
the	provisions	of	this	Agreement	shall	be	deemed	to	have	been	given	on	the	date	of	receipt.
(d)	
Notices	sent	by	hand	or	overnight	courier	service,	or	mailed	by	certified	or	registered	mail,	shall	be	deemed
	
to	have	been	given	when	received;	notices	sent	by	fax	shall	be	deemed	to	have	been	given	when	sent	(except	that,	if	not	given
	
during	normal	business	hours	for	the	recipient,	shall	be	deemed	to	have	been	given	at	the	opening	of	business	on	the	next	business
	
day	for	the	recipient);	and	notices	and	other	communications	sent	to	an	e-mail	address	shall	be	deemed	received	upon	the	sender’s
	
receipt	of	an	acknowledgement	from	the	intended	recipient	(such	as	by	the	“return	receipt	requested”	function,	as	available,	return
	
e-mail	or	other	written	acknowledgement),	and	notices	or	communications	posted	to	an	Internet	or	intranet	website	to	the	extent
	
provided	in	
paragraph	(b)
	above	shall	be	deemed	received	upon	the	deemed	receipt	by	the	intended	recipient,	at	its	e-mail	address
	
as	described	above,	of	notification	that	such	notice	or	communication	is	available	and	identifying	the	website	address	therefor;
	
provided
	that,	in	each	case,	if	such	e-mail	is	not	sent	during	the	normal	business	hours	of	the	recipient,	such	notice	or
	
communication	shall	be	deemed	to	have	been	sent	at	the	opening	of	business	on	the	next	business	day	for	the	recipient.
SECTION	9.02.		
Waivers;	Amendments


key: chroma:document
string_value:
SECTION	9.02.		
Waivers;	Amendments
.		(a)		No	failure	or	delay	by	the	Administrative	Agent,	any	Issuing	Bank	or
	
any	Lender	in	exercising	any	right	or	power	hereunder	shall	operate	as	a	waiver	thereof,	nor	shall	any	single	or	partial	exercise	of
	
any	such	right	or	power,	or	any	abandonment	or	discontinuance	of	steps	to	enforce	such	a	right	or	power,	preclude	any	other	or
	
further	exercise	thereof	or	the	exercise	of	any	other	right	or	power.		The	rights	and	remedies	of	the	Administrative	Agent,	the
	
Issuing	Banks	and	the	Lenders	hereunder	are	cumulative	and	are	not	exclusive	of	any	rights	or	remedies	that	they	would	otherwise
	
have.		No	waiver	of	any	provision	of	this	Agreement	or	consent	to	any	departure	by	the	Borrower	therefrom	shall	in	any	event	be
	
effective	unless	the	same	shall	be	permitted	by	
Section	9.02(b)
,	and	then	such	waiver	or	consent	shall	be	effective	only	in	the
	
specific	instance	and	for	the	purpose	for	which	given.		Without	limiting	the	generality	of	the	foregoing,	the	making	of	a	Loan	or
	
issuance	of	a	Letter	of	Credit	shall	not	be	construed	as	a	waiver	of	any	Default,	regardless	of	whether	the	Administrative	Agent,	any
	
Issuing	Bank	or	any	Lender	may	have	had	notice	or	knowledge	of	such	Default	at	the	time.
(b)	
Neither	this	Agreement	nor	any	provision	hereof	may	be	waived,	amended	or	modified	except	pursuant	to	an
	
agreement	or	agreements	in	writing	entered	into	by	the	Borrower	and	the	Required	Lenders	or	by	the	Borrower	and	the


key: chroma:document
string_value:
Administrative	Agent	with	the	consent	of	the	Required	Lenders	(it	being	understood	that	amendments	or	waivers	of	conditions
	
precedent,	representations,	covenants,	Defaults	or	Events	of	Default	shall	not	constitute	an	increase	in	the	Commitment	of	any
	
Lender)	or	by	an	agreement	in	writing	entered	into	by	the	Borrower	and	the	Administrative	Agent	to	cure	any	ambiguity,	omission,
	
defect,	mistake	or	inconsistency	so	long	as	the	Lenders	shall	have	received	at	least	five	(5)	Business	Days’	prior	written	notice
	
thereof	and	the	Administrative	Agent	shall	not	have	received,	within	five	(5)	Business	Days	of	the	date	of	such	notice	to	the
	
Lenders,	a	written	notice	from	the	Required	Lenders	stating	that	the	Required	Lenders	object	to	such	amendment;	
provided
	that	no
	
such	agreement	shall	(i)	increase	the	Commitment	of	any	Lender	without	the	written	consent	of	such	Lender,	(ii)	reduce	the
	
principal	amount	of	any	Loan	or	LC	Disbursement	or	reduce	the	rate	of	interest	thereon,	or	reduce	any	fees	payable	hereunder,
	
without	the	written	consent	of	each	Lender	adversely	affected	thereby	(it	being	understood	that	any	amendment,	modification	or
	
waiver	to	
Section	2.12(e)
	shall	not	be	subject	to	this	
clause	(ii)
),	(iii)	postpone	the	final	maturity	date	of	any	Loan,	or	postpone	the
	
scheduled	date	of	payment	of	any	principal,	interest	or	fees	payable	hereunder,	or	reduce	the	amount	of,	waive	or	excuse	any	such
	
payment,	or	postpone	the	scheduled	date	of	expiration	of	any	Commitment,	without	the	written	consent	of	each	Lender	adversely


key: chroma:document
string_value:
or	the	definition	of	“Required	Lenders”,	“Applicable	Percentage”	or	any	other	provision	hereof	specifying	the	number	or
	
percentage	of	Lenders	required	to	waive,	amend	or	modify	any	rights	hereunder	or	make	any	determination	or	grant	any	consent
	
hereunder,	without	the	written	consent	of	each	Lender,	(v)	change	the	last	sentence	of	
Section	2.08(c)
	or	change	
Section	2.17
	or
	
Section	7.02
	in	a	manner	that	would	alter	the	pro	rata	sharing	of	payments	required	thereby	among	Lenders,	without	the	written
	
consent	of	each	such	Lender	adversely	affected	thereby,	(vi)	release	all	or	substantially	all	of	the	(a)	Guarantors	from	their
	
obligations	under	the	Guarantee	Agreement	or	(b)	value	of	the	Guarantees	in	respect	of	the	Obligations,	in	each	case,	other	than	in
	
connection	with	a	transaction	or	series	of	transactions	not	prohibited	by	this	Agreement	without	the	written	consent	of	all	Lenders,
	
(viii)	add	any	Foreign	Currencies	to	the	Facility	without	the	written	consent	of	each	Lender	directly	affected	thereby	or	(ix)	consent
	
to	the	release,	assignment	or	transfer	by	any	Loan	Party	of	any	of	its	rights	and	obligations	under	this	Agreement	other	than	in
	
connection	with	a	transaction	or	series	of	transactions	not	prohibited	by	this	Agreement	without	the	written	consent	of	all	Lenders;
	
provided
,	
further
,	that	no	such	agreement	shall	amend,	modify	or	otherwise	affect	the	rights	or	duties	of	the	Administrative	Agent
	
or	the	Issuing	Banks	hereunder	without	the	prior	written	consent	of	the	Administrative	Agent	or	the	applicable	Issuing	Banks,	as


key: chroma:document
string_value:
the	case	may	be;	
provided
,	
further
,	that	no	such	agreement	shall	amend	or	modify	the	provisions	of	
Section	2.04
	or	any	letter	of
	
credit	application	and	any	bilateral	agreement	between	the	Borrower	and	an	Issuing	Bank	regarding	such	Issuing	Bank’s	Letter	of
	
Credit	Commitment	or	the	respective	rights	and	obligations	between	the	Borrower	and	an	Issuing	Bank	in	connection	with	the
	
issuance	of	Letters	of	Credit	without	the	prior	written	consent	of	such	Issuing	Bank.	Notwithstanding	the	foregoing,	no	consent
	
with	respect	to	any	amendment,	waiver	or	other	modification	of	this	Agreement	shall	be	required	of	any	Defaulting	Lender,	except
	
with	respect	to	any	amendment,	waiver	or	other	modification	referred	to	in	
sub-clauses	(i)
,	
(ii)
	or	
(iii)
	of	the	first	proviso	of	this
	
paragraph	(b)
	and	then	only	in	the	event	such	Defaulting	Lender	shall	be	directly	affected	by	such	amendment,	waiver	or	other
	
modification.
SECTION	9.03.		
Expenses;	Indemnity;	Damage	Waiver
.		(a)		The	Borrower	shall	pay,	and	without	duplication,	(i)
	
except	as	otherwise	agreed,	all	reasonable	and	documented	out-of-pocket	expenses	incurred	by	the	Administrative	Agent,	the
	
Syndication	Agent,	the	Lead	Arrangers	and	the	Documentation	Agents,	limited,	in	the	case	of	legal	fees,	to	the	reasonable	fees,
	
charges	and	disbursements	of	a	single	counsel	(and,	if	reasonably	necessary,	a	single	local	counsel	in	each	relevant	material


key: chroma:document
string_value:
jurisdiction	(which	may	be	a	single	local	counsel	acting	in	multiple	material	jurisdictions))	for	the	Administrative	Agent,	but
	
excluding	Taxes,	which	are	covered	by	
Section	2.16
,	in	connection	with	the	administration	of	this	Agreement	or	any	amendments,
	
modifications	or	waivers	of	the	provisions	hereof	(whether	or	not	the	transactions	contemplated	thereby	shall	be	consummated),	(ii)
	
all	reasonable	and	documented	out-of-pocket	expenses	incurred	by	an	Issuing	Bank	in	connection	with	the	issuance,	amendment,
	
renewal	or	extension	of	any	Letter	of	Credit	or	any	demand	for	payment	thereunder	and	(iii)	all	reasonable	and	documented	out-of-
pocket	expenses	incurred	by	the	Administrative	Agent,	the	Issuing	Banks,	the	Syndication	Agent,	the	Documentation	Agents	and
	
the	Lenders	(limited,	in	the	case	of	legal	fees,	to	the	reasonable	and	documented	fees	and	disbursements	and	other	charges	of	one
	
counsel	for	all	such	Persons	taken	as	a	whole	and,	if	reasonably	necessary,	a	single	local	counsel	for	all	such	Persons	taken	as	a
	
whole	in	each	relevant	material	jurisdiction	(which	may	be	a	single	local	counsel	acting	in	multiple	material	jurisdictions)	and,
	
solely	in	the	case	of	an	actual	or	perceived	conflict	of	interest	between	such	Person	where	the	Persons	affected	by	such	conflict
	
inform	the	Borrower	of	such	conflict,	one	additional	counsel	and	one	additional	local	counsel	in	each	relevant	material	jurisdiction
	
to	each	group	of	affected	Persons	similarly	situated	taken	as	a	whole),	but	excluding	Taxes	which	are	covered	by	
Section	2.16
,	in


key: chroma:document
string_value:
Section	2.16
,	in
	
connection	with	the	enforcement	of	this	Agreement	or	any	agreement	or	instrument	contemplated	hereby.
		
(b)	
The	Borrower	shall	indemnify	the	Administrative	Agent,	each	Issuing	Bank,	each	Lender,	each	Lead
	
Arranger,	the	Syndication	Agent,	each	Documentation	Agent	and	each	Related	Party	of	any	of	the	foregoing	Persons	(each	such
	
Person	being	called	an	“
Indemnitee
”)	against,	and	hold	each
	
93


key: chroma:document
string_value:
Indemnitee	harmless	from,	any	and	all	losses,	claims,	damages,	liabilities	and	related	expenses	(limited,	in	the	case	of	legal	fees,	to
	
the	reasonable	and	documented	fees	and	disbursements	and	other	charges	of	one	counsel	for	all	Indemnitees	taken	as	a	whole	and,
	
if	reasonably	necessary,	a	single	local	counsel	for	all	Indemnitees	taken	as	a	whole	in	each	relevant	material	jurisdiction	(which
	
may	be	a	single	local	counsel	acting	in	multiple	material	jurisdictions)	and,	solely	in	the	case	of	an	actual	or	perceived	conflict	of
	
interest	between	Indemnitees	where	the	Indemnitees	affected	by	such	conflict	inform	the	Borrower	of	such	conflict,	one	additional
	
counsel	and	one	additional	local	counsel	in	each	relevant	material	jurisdiction	to	each	group	of	affected	Indemnitees	similarly
	
situated	taken	as	a	whole),	but	excluding	Taxes,	which	are	covered	by	
Section	2.16
,	incurred	by	or	asserted	against	any	Indemnitee
	
arising	out	of	or	as	a	result	of	(i)	the	execution	or	delivery	of	this	Agreement	or	any	agreement	or	instrument	contemplated	hereby,
	
the	performance	by	the	parties	hereto	of	their	respective	obligations	hereunder	or	the	consummation	of	the	Transactions	or	any
	
other	transactions	contemplated	hereby,	(ii)	any	Loan	or	Letter	of	Credit	or	the	use	of	the	proceeds	therefrom	(including	any
	
refusal	by	an	Issuing	Bank	to	honor	a	demand	for	payment	under	a	Letter	of	Credit	if	the	documents	presented	in	connection	with
	
such	demand	do	not	strictly	comply	with	the	terms	of	such	Letter	of	Credit),	(iii)	any	actual	or	alleged	presence	or	release	of


key: chroma:document
string_value:
Hazardous	Materials	on	or	from	any	property	owned	or	operated	by	the	Borrower	or	any	of	its	Subsidiaries,	or	any	Environmental
	
Liability	related	in	any	way	to	the	Borrower	or	any	of	its	Subsidiaries	or	(iv)	any	actual	or	prospective	claim,	litigation,	investigation
	
or	proceeding	relating	to	any	of	the	foregoing,	whether	based	on	contract,	tort	or	any	other	theory	and	regardless	of	whether	any
	
Indemnitee	is	a	party	thereto	and	regardless	of	whether	such	claim,	litigation,	investigation	or	proceeding	is	brought	by	the
	
Borrower	or	any	other	party;	
provided
	that	such	indemnity	shall	not,	as	to	any	Indemnitee,	be	available	to	the	extent	that	such
	
losses,	claims,	damages,	liabilities	or	related	expenses	are	determined	by	a	court	of	competent	jurisdiction	by	final	and	non-
appealable	judgment	to	have	resulted	from	the	gross	negligence,	bad	faith	or	material	breach	by	such	Indemnitee	or	any	of	its
	
Related	Parties	of	such	Person’s	obligations	under	this	Agreement,	or	willful	misconduct	of	such	Indemnitee	or	any	of	its	Related
	
Parties	and	that	no	Lender	shall	be	entitled	to	indemnification	with	respect	to	any	losses,	claims,	damages,	liabilities	or	related
	
expenses	arising	out	of	a	dispute	between	such	Lender	and	its	assignees	or	Participants	or	solely	between	Lenders	(other	than
	
disputes	resulting	from	an	act	or	material	omission	by	the	Borrower	or	any	Subsidiary	in	violation	of	this	Agreement).
(c)


key: chroma:document
string_value:
(c)	
To	the	extent	that	the	Borrower	fails	to	pay	any	amount	required	to	be	paid	by	it	to	the	Administrative	Agent
	
under	
Sections	9.03(a)
	or	
(b)
,	each	Lender	severally	agrees	to	pay	to	the	Administrative	Agent	such	Lender’s	Applicable	Percentage
	
(determined	as	of	the	time	that	the	applicable	unreimbursed	expense	or	indemnity	payment	is	sought)	of	such	unpaid	amount;
	
provided
	that	the	unreimbursed	expense	or	indemnified	loss,	claim,	damage,	liability	or	related	expense,	as	the	case	may	be,	was
	
incurred	by	or	asserted	against	the	Administrative	Agent	in	its	capacity	as	such.
(d)	
To	the	extent	permitted	by	applicable	law	(i)	no	party	hereto	shall	assert,	and	each	such	party	hereto	hereby
	
waives,	any	claim	against	any	other	party	hereto	for	any	damages	arising	from	the	use	by	others	of	information	or	other	materials
	
obtained	through	telecommunications,	electronic	or	other	information	transmission	systems	(including	the	Internet)	and	(ii)	no
	
party	hereto	shall	assert,	and	each	such	party	hereby	waives,	any	claim	against	any	other	party	hereto,	on	any	theory	of	liability,	for
	
special,	indirect,	consequential	or	punitive	damages	(as	opposed	to	direct	or	actual	damages)	arising	out	of,	in	connection	with,	or
	
as	a	result	of,	this	Agreement,	any	other	Loan	Document,	or	any	agreement	or	instrument	contemplated	hereby	or	thereby,	the
	
Transactions,	any	Loan	or	Letter	of	Credit	or	the	use	of	the	proceeds	thereof;	
provided
	that	nothing	in	this	
clause	(d)(ii)
	shall	relieve


key: chroma:document
string_value:
clause	(d)(ii)
	shall	relieve
	
the	Borrower	of	any	obligation	it	may	have	to	indemnify	an	Indemnitee	against	special,	indirect,	consequential	or	punitive	damages
	
asserted	against	such	Indemnitee	by	a	third	party	as	set	forth	in	clause	(a)	above).
94


key: chroma:document
string_value:
(e)	
All	amounts	due	under	this	
Section	9.03
	shall	be	payable	not	later	than	thirty	(30)	days	after	written	demand
	
therefor,	except	where	the	validity	or	amount	thereof	is	being	contested	in	good	faith	in	appropriate	proceedings	by	the	Borrower.
SECTION	9.04.		
Successors	and	Assigns
.		(a)		The	provisions	of	this	Agreement	shall	be	binding	upon	and	inure	to
	
the	benefit	of	the	parties	hereto	and	their	respective	successors	and	assigns	permitted	hereby	(including	any	Affiliate	of	an	Issuing
	
Bank	that	issues	any	Letter	of	Credit),	except	that	(i)	the	Borrower	may	not	assign	or	otherwise	transfer	any	of	its	rights	or
	
obligations	hereunder	without	the	prior	written	consent	of	each	Lender	(and	any	attempted	assignment	or	transfer	by	the	Borrower
	
without	such	consent	shall	be	null	and	void),	(ii)	no	Lender	may	assign	or	otherwise	transfer	its	rights	or	obligations	hereunder
	
except	in	accordance	with	this	
Section	9.04
,	(iii)	no	assignment	shall	be	made	to	any	Defaulting	Lender	or	any	of	its	Affiliates,	or
	
any	person	who,	upon	becoming	a	Lender	hereunder,	would	constitute	any	of	the	foregoing	Persons	described	in	this	
clause	(iii)
	
and	(iv)	no	Lender	may	assign	or	otherwise	transfer	its	rights	or	obligations	hereunder	to	the	Borrower	or	any	of	its	Subsidiaries.
	
Nothing	in	this	Agreement,	expressed	or	implied,	shall	be	construed	to	confer	upon	any	Person	(other	than	the	parties	hereto,	their


key: chroma:document
string_value:
respective	successors	and	assigns	permitted	hereby	(including	any	Affiliate	of	an	Issuing	Bank	that	issues	any	Letter	of	Credit),
	
Participants	(to	the	extent	provided	in	
Section	9.04(c)
)	and,	to	the	extent	expressly	contemplated	hereby,	the	Related	Parties	of
	
each	of	the	Administrative	Agent,	the	Lead	Arrangers,	the	Syndication	Agent,	the	Documentation	Agents,	the	Issuing	Banks	and	the
	
Lenders)	any	legal	or	equitable	right,	remedy	or	claim	under	or	by	reason	of	this	Agreement.
(b)	
Subject	to	the	conditions	set	forth	in	
paragraph	(b)(ii)
	below,	any	Lender	may	assign	to	one	or	more
	
assignees	(other	than	(x)	a	natural	person	or	a	holding	company,	investment	vehicle	or	trust	for,	or	owned	and	operated	for	the
	
primary	benefit	of,	a	natural	person,	(y)	the	Borrower	or	its	Subsidiaries	or	(z)	any	Defaulting	Lender	or	any	of	its	Affiliates)	all	or	a
	
portion	of	its	rights	and	obligations	under	this	Agreement	(including	all	or	a	portion	of	its	Commitment,	participation	in	Letters	of
	
Credit	and	the	Loans	at	the	time	owing	to	it)	with	the	prior	written	consent	(such	consent	not	to	be	unreasonably	withheld	or
	
delayed)	of:
(A)	
the	Borrower;	
provided
	that	(i)	no	consent	of	the	Borrower	shall	be	required	for	an	assignment	to	a
	
Lender,	an	Affiliate	of	a	Lender,	an	Approved	Fund	or,	if	an	Event	of	Default	has	occurred	and	is	continuing	under	
clauses
	
(a)
,	
(b)
,	
(h)
	or	
(i)
	of	
Section	7.01


key: chroma:document
string_value:
or	
(i)
	of	
Section	7.01
,	any	other	assignee	and	(ii)	where	the	consent	of	the	Borrower	is	required,	the	Borrower
	
shall	be	deemed	to	have	consented	to	any	such	assignment	to	which	it	has	not	objected	in	writing	within	ten	(10)	Business
	
Days	after	receipt	of	notice	thereof;
	
(B)	
the	Administrative	Agent;	
provided
	that	no	consent	of	the	Administrative	Agent	shall	be	required
	
for	an	assignment	to	a	Lender	or	an	Affiliate	of	a	Lender;	and
(C)	
Each	Issuing	Bank.
(ii)	Assignments	shall	be	subject	to	the	following	additional	conditions:
	
95


key: chroma:document
string_value:
(A)	
except	in	the	case	of	an	assignment	to	a	Lender,	an	Affiliate	of	a	Lender	or	an	Approved	Fund	or	an
	
assignment	of	the	entire	remaining	amount	of	the	assigning	Lender’s	Commitment	or	Loans,	the	amount	of	the
	
Commitment	or	Loans	of	the	assigning	Lender	subject	to	each	such	assignment	(determined	as	of	the	date	the	Assignment
	
and	Assumption	with	respect	to	such	assignment	is	delivered	to	the	Administrative	Agent)	shall	not	be	less	than
	
$10,000,000	unless	each	of	the	Borrower	and	the	Administrative	Agent	otherwise	consent;	
provided
	that	no	such	consent
	
of	the	Borrower	shall	be	required	if	an	Event	of	Default	specified	in	
clauses	(a)
,	
(b)
,	
(h)
	or	
(i)
	of	
Section	7.01
	has	occurred
	
and	is	continuing;
(B)	
each	partial	assignment	shall	be	made	as	an	assignment	of	a	proportionate	part	of	all	the	assigning
	
Lender’s	rights	and	obligations	under	this	Agreement;
	
(C)	
the	parties	to	each	assignment	shall	execute	and	deliver	to	the	Administrative	Agent	an
	
Assignment	and	Assumption,	together	with	a	processing	and	recordation	fee	of	$3,500,	which	fees	shall	not	be	payable	by
	
the	Borrower,	except	in	connection	with	the	replacement	of	a	Lender	pursuant	to	
Section	2.19
;	and
(D)	
the	assignee,	if	it	shall	not	be	a	Lender,	shall	deliver	to	the	Administrative	Agent	an	Administrative
	
Questionnaire.
For	the	purposes	of	this	
Section	9.04(b)
,	the	term	“
Approved	Fund
”	has	the	following	meaning:
“
Approved	Fund


key: chroma:document
string_value:
“
Approved	Fund
”	means	any	Person	(other	than	a	natural	person)	that	is	engaged	in	making,	purchasing,	holding
	
or	investing	in	bank	loans	and	similar	extensions	of	credit	in	the	ordinary	course	of	its	business	and	that	is	administered	or
	
managed	by	(a)	a	Lender,	(b)	an	Affiliate	of	a	Lender	or	(c)	an	entity	or	an	Affiliate	of	an	entity	that	administers	or	manages	a
	
Lender.
(iii)	Subject	to	acceptance	and	recording	thereof	pursuant	to	
Section	9.04(b)(iv)
,	from	and	after	the	effective
	
date	specified	in	each	Assignment	and	Assumption	the	assignee	thereunder	shall	be	a	party	hereto	and,	to	the	extent	of	the
	
interest	assigned	by	such	Assignment	and	Assumption,	have	the	rights	and	obligations	of	a	Lender	under	this	Agreement,
	
and	the	assigning	Lender	thereunder	shall,	to	the	extent	of	the	interest	assigned	by	such	Assignment	and	Assumption,	be
	
released	from	its	obligations	under	this	Agreement	(and,	in	the	case	of	an	Assignment	and	Assumption	covering	all	of	the
	
assigning	Lender’s	rights	and	obligations	under	this	Agreement,	such	Lender	shall	cease	to	be	a	party	hereto	but	shall
	
continue	to	be	subject	to	its	obligations	under	Section	9.12	for	a	period	of	one	year	following	the	effective	date	specified	in
	
such	Assignment	and	Assumption	and	shall	continue	to	be	entitled	to	the	benefits	of	
Sections	2.14
,
	2.15
,	
2.16
,	
2.20
	and
	
9.03
).		Any	assignment	or	transfer	by	a	Lender	of	rights	or	obligations	under	this	Agreement	that	does	not	comply	with	this
	
Section	9.04


key: chroma:document
string_value:
Section	9.04
	shall	be	treated	for	purposes	of	this	Agreement	as	a	sale	by	such	Lender	of	a	participation	in	such	rights	and
	
obligations	in	accordance	with	
Section	9.04(c)
.
(iv)	The	Administrative	Agent,	acting	for	this	purpose	as	an	agent	of	the	Borrower,	shall	maintain	at	one	of	its
	
offices	a	copy	of	each	Assignment	and	Assumption	delivered	to	it	and	a	register	for	the	recordation	of	the	names	and
	
addresses	of	the	Lenders,	and	the	Commitment	of,	and	principal	amount	(and	stated	interest)	of	the	Loans	and	LC
	
Disbursements	owing	to,	each	Lender	pursuant	to	the	terms	hereof	from	time	to	time	(the	“
Register
”).		The	entries	in	the
	
Register	shall	be	conclusive,	absent	manifest	error,	and	the	Borrower,	the	Administrative	Agent,	the	Issuing	Banks	and	the
	
Lenders	shall	treat	each	Person	whose	name	is	recorded	in	the	Register	pursuant	to	the	terms	hereof	as	a	Lender
	
hereunder	for	all	purposes	of	this	Agreement,
	
96


key: chroma:document
string_value:
notwithstanding	notice	to	the	contrary.		The	Register	shall	be	available	for	inspection	by	the	Borrower	,	any	Issuing	Bank
	
and	any	Lender,	at	any	reasonable	time	and	from	time	to	time	upon	reasonable	prior	notice.
(v)	Upon	its	receipt	of	a	duly	completed	Assignment	and	Assumption	executed	by	an	assigning	Lender	and	an
	
assignee,	the	assignee’s	completed	Administrative	Questionnaire	(unless	the	assignee	shall	already	be	a	Lender
	
hereunder),	the	processing	and	recordation	fee	referred	to	in	
Section	9.04(b)
	and	any	written	consent	to	such	assignment
	
required	by	
Section	9.04(b)
,	the	Administrative	Agent	shall	accept	such	Assignment	and	Assumption	and	record	the
	
information	contained	therein	in	the	Register.		No	assignment	shall	be	effective	for	purposes	of	this	Agreement	unless	it
	
has	been	recorded	in	the	Register	as	provided	in	this	
paragraph	(b)
.
(c)	
Any	Lender	may,	without	the	consent	of	the	Borrower,	the	Administrative	Agent	or	the	Issuing	Banks,	sell
	
participations	to	one	or	more	banks	or	other	entities	(other	than	(x)	a	natural	person	or	a	holding	company,	investment	vehicle	or
	
trust	for,	or	owned	and	operated	for	the	primary	benefit	of,	a	natural	person,	(y)	the	Borrower	or	its	Subsidiaries	or	(z)	any
	
Defaulting	Lender	or	Disqualified	Institution	or	any	of	their	respective	Affiliates)	(a	“
Participant
”)	in	all	or	a	portion	of	such
	
Lender’s	rights	and	obligations	under	this	Agreement	(including	all	or	a	portion	of	its	Commitment	and	the	Loans	owing	to	it);
	
provided


key: chroma:document
string_value:
provided
	that	(A)	such	Lender’s	obligations	under	this	Agreement	shall	remain	unchanged,	(B)	such	Lender	shall	remain	solely
	
responsible	to	the	other	parties	hereto	for	the	performance	of	such	obligations	and	(C)	the	Borrower,	the	Administrative	Agent,	the
	
Issuing	Banks	and	the	other	Lenders	shall	continue	to	deal	solely	and	directly	with	such	Lender	in	connection	with	such	Lender’s
	
rights	and	obligations	under	this	Agreement.		Any	agreement	or	instrument	pursuant	to	which	a	Lender	sells	such	a	participation
	
shall	provide	that	such	Lender	shall	retain	the	sole	right	to	enforce	this	Agreement	and	to	approve	any	amendment,	modification	or
	
waiver	of	any	provision	of	this	Agreement;	
provided
	that	such	agreement	or	instrument	may	provide	that	such	Lender	will	not,
	
without	the	consent	of	the	Participant,	agree	to	any	amendment,	modification	or	waiver	described	in	the	first	proviso	to	
Section
	
9.02(b)
	that	affects	such	Participant.		Subject	to	
Section	9.04(c)(ii)
,	the	Borrower	agrees	that	each	Participant	shall	be	entitled	to
	
the	benefits	of	
Sections	2.14
,	
2.15
,	
2.16
	and	
9.03
	subject	to	the	requirements	and	limitations	therein,	including	the	requirements
	
under	
Section	2.16(f)
	(it	being	understood	that	the	documentation	required	under	
Section	2.16(f)
	shall	be	delivered	to	the
	
participating	Lender)	to	the	same	extent	as	if	it	were	a	Lender	and	had	acquired	its	interest	by	assignment	pursuant	to	
Section
	
9.04(b)


key: chroma:document
string_value:
Section
	
9.04(b)
.		Each	Lender	that	sells	a	participation	agrees,	at	the	Borrower's	request	and	expense,	to	use	reasonable	efforts	to
	
cooperate	with	the	Borrower	to	effectuate	the	provisions	of	
Section	2.19
	with	respect	to	any	Participant.		To	the	extent	permitted	by
	
law,	each	Participant	also	shall	be	entitled	to	the	benefits	of	
Section	9.08
	as	though	it	were	a	Lender;	
provided
	such	Participant
	
agrees	to	be	subject	to	
Section	2.17(c)
	as	though	it	were	a	Lender.	Each	Lender	that	sells	a	participation	shall,	acting	solely	for	this
	
purpose	as	a	non-fiduciary	agent	of	the	Borrower,	maintain	a	register	on	which	it	enters	the	name	and	address	of	each	Participant
	
and	the	principal	amounts	(and	stated	interest)	of	each	Participant’s	interest	in	the	Loans	or	other	obligations	under	this	Agreement
	
(the	“
Participant	Register
”);	
provided
	that	no	Lender	shall	have	any	obligation	to	disclose	all	or	any	portion	of	the	Participant
	
Register	to	any	Person	(including	the	identity	of	any	Participant	or	any	information	relating	to	a	Participant’s	interest	in	any
	
Commitments,	Loans,	Letters	of	Credit	or	its	other	obligations	under	this	Agreement)	except	to	the	extent	that	such	disclosure	is
	
necessary	to	establish	that	such	Commitment,	Loan,	Letter	of	Credit	or	other	obligation	is	in	registered	form	under	Section	5f.103-
1(c)	of	the	United	States	Treasury	Regulations.	The	entries	in	the	Participant	Register	shall	be	conclusive	absent	manifest	error,
	
and	such	Lender	shall	treat	each	person	whose	name	is	recorded	in	the	Participant	Register	as	the	owner	of	such	participation	for


key: chroma:document
string_value:
all	purposes	of	this	Agreement,	notwithstanding	any	notice	to	the	contrary.		For	the	avoidance	of	doubt,	the	Administrative	Agent
	
(in	its	capacity	as	Administrative	Agent)	shall	have	no	responsibility	for	maintaining	a	Participant	Register.
97


key: chroma:document
string_value:
(i)	A	Participant	shall	not	be	entitled	to	receive	any	greater	payment	under	
Sections	2.14
,	
2.15
,	
2.16
	or	
9.03
	than
	
the	applicable	Lender	would	have	been	entitled	to	receive	with	respect	to	the	participation	sold	to	such	Participant,	unless
	
the	sale	of	the	participation	to	such	Participant	is	made	with	the	Borrower’s	prior	written	consent,	except	to	the	extent
	
such	entitlement	to	receive	a	greater	payment	results	from	an	adoption	of	or	any	change	in	any	requirement	of	law	or	in
	
the	interpretation	or	application	thereof	or	compliance	by	any	Lender	with	any	request	or	directive	(whether	or	not	having
	
the	force	of	law)	from	any	central	bank	or	other	Governmental	Authority	made	subsequent	to	the	date	hereof	that	occurs
	
after	the	Participant	acquired	the	applicable	participation.		A	Participant	shall	not	be	entitled	to	the	benefits	of	
Section
	
2.16
	unless	the	Borrower	is	notified	of	the	participation	sold	to	such	Participant	and	such	Participant	agrees,	for	the
	
benefit	of	the	Borrower,	to	comply	with	
Section	2.16(f)
	as	though	it	were	a	Lender	(it	being	understood	that	the
	
documentation	required	under	
Section	2.16(f)
	shall	be	delivered	to	the	participating	Lender).
		
(d)	
Any	Lender	may	at	any	time	pledge	or	assign	a	security	interest	in	all	or	any	portion	of	its	rights	under	this
	
Agreement	and	its	respective	promissory	note	to	secure	obligations	of	such	Lender	to	a	Federal	Reserve	Bank	or	other	central
	
bank,	and	this	
Section	9.04
	shall	not	apply	to	any	such	pledge	or	assignment	of	a	security	interest;	
provided


key: chroma:document
string_value:
provided
	that	no	such	pledge	or
	
assignment	of	a	security	interest	shall	release	a	Lender	from	any	of	its	obligations	hereunder	or	substitute	any	such	pledgee	or
	
assignee	for	such	Lender	as	a	party	hereto.
(e)	
(i)	No	assignment	or	participation	shall	be	made	to	any	Person	that	was	a	Disqualified	Institution	as	of	the
	
date	(the	“
Trade	Date
”)	on	which	the	assigning	Lender	entered	into	a	binding	agreement	to	sell	and	assign	all	or	a	portion	of	its
	
rights	and	obligations	under	this	Agreement	to	such	Person	(unless	the	Borrower	has	consented	to	such	assignment	or	participation
	
in	writing	in	its	sole	and	absolute	discretion,	in	which	case	such	Person	will	not	be	considered	a	Disqualified	Institution	for	the
	
purpose	of	such	assignment,	or	participation).		For	the	avoidance	of	doubt,	with	respect	to	any	assignee		that	becomes	a
	
Disqualified	Institution	after	the	applicable	Trade	Date,	(x)	such	assignee	shall	not	retroactively	be	disqualified	from	becoming	a
	
Lender	and	(y)	the	execution	by	the	Borrower	of	an	Assignment	and	Assumption	with	respect	to	such	assignee	will	not	by	itself
	
result	in	such	assignee	no	longer	being	considered	a	Disqualified	Institution.	Any	assignment	or	participation	in	violation	of	this
	
clause	(e)(i)
	shall	not	be	void,	but	the	other	provisions	of	this	
clause	(e)
	shall	apply.
	
(ii)	If	any	assignment	or	participation	is	made	to	any	Disqualified	Institution	without	the	Borrower’s	prior	written
	
consent	in	violation	of	
clause	(i)
	above,	or	if	any	Person	becomes	a	Disqualified	Institution	after	the	applicable	Trade	Date,


key: chroma:document
string_value:
the	Borrower	may,	at	its	sole	expense	and	effort,	upon	notice	to	the	applicable	Disqualified	Institution	and	the
	
Administrative	Agent,	(A)	terminate	any	Commitment	of	such	Disqualified	Institution	and	repay	all	obligations	of	the
	
Borrower	owing	to	such	Disqualified	Institution	in	connection	with	such	Commitment	or	(B)	require	such	Disqualified
	
Institution	to	assign,	without	recourse	(in	accordance	with	and	subject	to	the	restrictions	contained	in	this	Section),	all	of
	
its	interest,	rights	and	obligations	under	this	Agreement	to	one	or	more	Eligible	Assignees	at	the	lesser	of	(x)	the	principal
	
amount	thereof	and	(y)	the	amount	that	such	Disqualified	Institution	paid	to	acquire	such	interests,	rights	and	obligations,
	
in	each	case	plus	accrued	interest,	accrued	fees	and	all	other	amounts	(other	than	principal	amounts)	payable	to	it
	
hereunder.
		
	
(iii)	Notwithstanding	anything	to	the	contrary	contained	in	this	Agreement,	Disqualified	Institutions	(A)	will	not
	
(x)	have	the	right	to	receive	information,	reports	or	other	materials	provided	to	Lenders	or	Issuing	Banks	by	the	Borrower,
	
the	Administrative	Agent	or	any	other	Lender	or	Issuing	Bank,	(y)	attend	or	participate	in	meetings	attended	by	the
	
Lenders,	Issuing	Banks	and	the	Administrative	Agent,	or	(z)	access	any	electronic	site	established	for	the	Lenders
	
98


key: chroma:document
string_value:
or	the	Issuing	Banks	or	confidential	communications	from	counsel	to	or	financial	advisors	of	the	Administrative	Agent,	the
	
Lenders	or	the	Issuing	Banks	and	(B)	for	purposes	of	any	consent	to	any	amendment,	waiver	or	modification	of,	or	any
	
action	under,	and	for	the	purpose	of	any	direction	to	the	Administrative	Agent,	any	Lender	or	any	Issuing	Bank	to
	
undertake	any	action	(or	refrain	from	taking	any	action)	under	this	Agreement	or	any	other	Loan	Document,	each
	
Disqualified	Institution	will	be	deemed	to	have	consented	in	the	same	proportion	as	the	Lenders	or	Issuing	Banks	that	are
	
not	Disqualified	Institutions	consented	to	such	matter.
	
(iv)	The	Administrative	Agent	shall	not	be	responsible	or	have	any	liability	for,	or	have	any	duty	to	ascertain,
	
inquire	into,	monitor	or	enforce,	compliance	with	the	provisions	hereof	relating	to	Disqualified	Institutions.		Without
	
limiting	the	generality	of	the	foregoing,	the	Administrative	Agent	shall	not	​(i)	be	obligated	to	ascertain,	monitor	or	inquire
	
as	to	whether	any	Lender	or	Participant	or	prospective	Lender	or	Participant	is	a	Disqualified	​Institution	or	(ii)	have	any
	
liability	with	respect	to	or	arising	out	of	any	assignment	or	participation	of	Loans,	or	disclosure	of	confidential	information,
	
to	any	​Disqualified	Institution.	The	Administrative	Agent	shall	have	the	right,	and	the	Borrower	hereby	expressly
	
authorizes	the	Administrative	Agent,	to	(A)	post	the	list	of	Disqualified	Institutions	provided	by	the	Borrower	and	any
	
updates	thereto	from	time	to	time	(collectively,	the	“
DQ	List


key: chroma:document
string_value:
DQ	List
”)	on	an	Approved	Electronic	Platform	or	(B)	provide	the	DQ
	
List	to	each	Lender	requesting	the	same.
	
SECTION	9.05.		
Survival
.		All	covenants,	agreements,	representations	and	warranties	made	by	the	Borrower
	
herein	and	in	the	certificates	or	other	instruments	delivered	in	connection	with	or	pursuant	to	this	Agreement	shall	be	considered
	
to	have	been	relied	upon	by	the	other	parties	hereto	and	shall	survive	the	execution	and	delivery	of	this	Agreement	and	the	making
	
of	any	Loans	and	issuance	of	any	Letters	of	Credit,	regardless	of	any	investigation	made	by	any	such	other	party	or	on	its	behalf	and
	
notwithstanding	that	the	Administrative	Agent,	any	Issuing	Bank	or	any	Lender	may	have	had	notice	or	knowledge	of	any	Default	or
	
incorrect	representation	or	warranty	at	the	time	any	credit	is	extended	hereunder,	and	shall	continue	in	full	force	and	effect	as	long
	
as	the	principal	of	or	any	accrued	interest	on	any	Loan	or	any	fee	or	any	other	amount	payable	under	this	Agreement	is	outstanding
	
and	unpaid	or	any	Letter	of	Credit	is	outstanding	and	so	long	as	the	Commitments	have	not	expired	or	terminated.		The	provisions
	
of	
Sections	2.14
,	
2.15
,	
2.16
	and	
9.03
	and	
Article	VIII
	shall	survive	and	remain	in	full	force	and	effect	regardless	of	the	resignation
	
or	replacement	of	the	Administrative	Agent	or	a	Lender,	the	repayment	of	the	Loans,	the	expiration	or	termination	of	the	Letters	of
	
Credit	and	the	Commitments	or	the	termination	of	this	Agreement	or	any	provision	hereof.
SECTION	9.06.


key: chroma:document
string_value:
SECTION	9.06.		
Counterparts;	Integration;	Effectiveness
.		This	Agreement	may	be	executed	in	counterparts	(and
	
by	different	parties	hereto	on	different	counterparts),	each	of	which	shall	constitute	an	original,	but	all	of	which	when	taken
	
together	shall	constitute	a	single	contract.		This	Agreement	and	any	separate	letter	agreements	with	respect	to	(i)	fees	payable	to
	
the	Administrative	Agent	and	(ii)	the	reductions	of	the	Letter	of	Credit	Commitment	of	any	Issuing	Banks	constitute	the	entire
	
contract	among	the	parties	relating	to	the	subject	matter	hereof	and	supersede	any	and	all	previous	agreements	and
	
understandings,	oral	or	written,	relating	to	the	subject	matter	hereof.		Except	as	provided	in	
Section	4.01
,	this	Agreement	shall
	
become	effective	when	it	shall	have	been	executed	by	the	Administrative	Agent	and	when	the	Administrative	Agent	shall	have
	
received	counterparts	hereof	which,	when	taken	together,	bear	the	signatures	of	each	of	the	other	parties	hereto,	and	thereafter
	
shall	be	binding	upon	and	inure	to	the	benefit	of	the	parties	hereto	and	their	respective	successors	and	assigns.		Delivery	of	an
	
executed	counterpart	of	a	signature	page	of	this	Agreement	by	facsimile	(or	in	any	other	manner	approved	pursuant	to	
Section
	
9.01(b)
)	shall	be	effective	as	delivery	of	a	manually	executed	counterpart	of	this	Agreement.	The	words	“execution”,	“signed”,
	
“signature”,	and	words	of	like	import	in	this	Agreement	including	any	Assignment	and	Assumption	shall	be	deemed	to	include


key: chroma:document
string_value:
electronic	signatures	or	electronic	records,	each	of	which	shall	be	of	the	same	legal	effect,	validity	or	enforceability	as	a	manually
	
99


key: chroma:document
string_value:
executed	signature	or	the	use	of	a	paper-based	recordkeeping	system,	as	the	case	may	be,	to	the	extent	and	as	provided	for	in	any
	
applicable	law,	including	the	Federal	Electronic	Signatures	in	Global	and	National	Commerce	Act,	the	New	York	State	Electronic
	
Signatures	and	Records	Act,	or	any	other	similar	state	laws	based	on	the	Uniform	Electronic	Transactions	Act.
SECTION	9.07.		
Severability
.		Any	provision	of	this	Agreement	held	to	be	invalid,	illegal	or	unenforceable	in	any
	
jurisdiction	shall,	as	to	such	jurisdiction,	be	ineffective	to	the	extent	of	such	invalidity,	illegality	or	unenforceability	without
	
affecting	the	validity,	legality	and	enforceability	of	the	remaining	provisions	hereof;	and	the	invalidity	of	a	particular	provision	in	a
	
particular	jurisdiction	shall	not	invalidate	such	provision	in	any	other	jurisdiction.
SECTION	9.08.		
Right	of	Setoff
.		If	an	Event	of	Default	shall	have	occurred	and	be	continuing	and	the
	
Commitments	have	been	terminated	and	the	Loans	then	outstanding	have	been	declared	due	and	payable	as	a	result	thereof,	each
	
Lender,	each	Issuing	Bank	and	each	of	their	respective	Affiliates	is	hereby	authorized	at	any	time	and	from	time	to	time,	to	the
	
fullest	extent	permitted	by	law,	to	set	off	and	apply	any	and	all	deposits	(general	or	special,	time	or	demand,	provisional	or	final)	at
	
any	time	held	and	other	obligations	at	any	time	owing	by	such	Lender,	such	Issuing	Bank	or	any	such	Affiliate	to	or	for	the	credit	or


key: chroma:document
string_value:
the	account	of	the	Borrower	against	any	of	and	all	the	obligations	of	the	Borrower	now	or	hereafter	existing	under	this	Agreement
	
held	by	such	Lender	or	such	Issuing	Bank	or	their	respective	Affiliates,	irrespective	of	whether	or	not	such	Lender,	such	Issuing
	
Bank	or	such	Affiliate	shall	have	made	any	demand	under	this	Agreement	and	although	such	obligations	may	be	unmatured;
	
provided
	that	if	any	Defaulting	Lender	shall	exercise	any	such	right	of	setoff,	(x)	all	amounts	so	set	off	shall	be	paid	over
	
immediately	to	the	Administrative	Agent	for	further	application	in	accordance	with	the	provisions	of	
Section	2.20
	and,	pending	such
	
payment,	shall	be	segregated	by	such	Defaulting	Lender	from	its	other	funds	and	deemed	held	in	trust	for	the	benefit	of	the
	
Administrative	Agent,	the	Issuing	Banks	and	the	Lenders	and	(y)	the	Defaulting	Lender	shall	provide	promptly	to	the	Administrative
	
Agent	and	the	Borrower	a	statement	describing	in	reasonable	detail	the	obligations	owing	to	such	Defaulting	Lender	as	to	which	it
	
exercised	such	right	of	setoff.		The	rights	of	each	Lender,	each	Issuing	Bank	and	their	respect	Affiliates	under	this	
Section	9.08
	are
	
in	addition	to	other	rights	and	remedies	(including	other	rights	of	setoff)	which	such	Lender,	such	Issuing	Bank	or	their	respective
	
Affiliates	may	have.		For	the	avoidance	of	doubt,	it	is	understood	and	agreed	that	the	rights	of	each	Lender,	each	Issuing	Bank,	and
	
each	of	their	respective	Affiliates	under	this	
Section	9.08


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Section	9.08
	shall	not	apply	to	amounts	held	by	the	Borrower	in	trust	for	the	benefit	of
	
others	or	in	its	capacity	as	a	servicer	in	connection	with	a	Securitization	Transaction.
SECTION	9.09.		
Governing	Law;	Jurisdiction;	Consent	to	Service	of	Process
.		(a)		This	Agreement	shall	be
	
construed	in	accordance	with	and	governed	by	the	law	of	the	State	of	New	York	(whether	in	tort,	contract	or	otherwise	and	whether
	
at	law	or	in	equity).
(b)	
Each	of	the	parties	hereto	hereby	irrevocably	and	unconditionally	submits,	for	itself	and	its	property,	to	the
	
exclusive	jurisdiction	of	the	United	States	District	Court	of	the	Southern	District	of	New	York	sitting	in	the	Borough	of	Manhattan
	
(or	if	such	court	lacks	subject	matter	jurisdiction,	the	Supreme	Court	of	the	State	of	New	York	sitting	in	the	Borough	of	Manhattan),
	
and	any	appellate	court	from	any	thereof,	in	any	action	or	proceeding	arising	out	of	or	relating	to	this	Agreement,	or	for	recognition
	
or	enforcement	of	any	judgment,	and	each	of	the	parties	hereto	hereby	irrevocably	and	unconditionally	agrees	that	all	claims	in
	
respect	of	any	such	action	or	proceeding	may	be	heard	and	determined	in	such	Federal	(to	the	extent	permitted	by	law)	or	New
	
York	State	court.		Each	of	the	parties	hereto	agrees	that	a	final	judgment	in	any	such	action	or	proceeding	shall	be	conclusive	and
	
may	be	enforced	in	other	jurisdictions	by	suit	on	the	judgment	or	in	any	other	manner	provided	by	law.		Nothing	in	this	Agreement


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shall	affect	any	right	that	the	Administrative	Agent,	any	Issuing	Bank	or	any	Lender	may	otherwise	have	to	enforce	a	judgment
	
against	the	Borrower	or	its	properties	in	the	courts	of	any	jurisdiction.
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(c)	
Each	of	the	parties	hereto	hereby	irrevocably	and	unconditionally	waives,	to	the	fullest	extent	it	may	legally
	
and	effectively	do	so,	any	objection	which	it	may	now	or	hereafter	have	to	the	laying	of	venue	of	any	suit,	action	or	proceeding
	
arising	out	of	or	relating	to	this	Agreement	in	any	court	referred	to	in	the	first	sentence	of	
Section	9.09(b)
.		Each	of	the	parties
	
hereto	hereby	irrevocably	waives,	to	the	fullest	extent	permitted	by	law,	the	defense	of	an	inconvenient	forum	to	the	maintenance
	
of	such	action	or	proceeding	in	any	such	court.
(d)	
Each	party	to	this	Agreement	irrevocably	consents	to	service	of	process	in	the	manner	provided	for	notices	in
	
writing	under	
Section	9.01
,	but	not	electronically.		Nothing	in	this	Agreement	will	affect	the	right	of	any	party	to	this	Agreement	to
	
serve	process	in	any	other	manner	permitted	by	law.
SECTION	9.10.		
WAIVER	OF	JURY	TRIAL
.		EACH	PARTY	HERETO	HEREBY	WAIVES,	TO	THE	FULLEST
	
EXTENT	PERMITTED	BY	APPLICABLE	LAW,	ANY	RIGHT	IT	MAY	HAVE	TO	A	TRIAL	BY	JURY	IN	ANY	LEGAL
	
PROCEEDING	DIRECTLY	OR	INDIRECTLY	ARISING	OUT	OF	OR	RELATING	TO	THIS	AGREEMENT	OR	THE
	
TRANSACTIONS	CONTEMPLATED	HEREBY	(WHETHER	BASED	ON	CONTRACT,	TORT	OR	ANY	OTHER	THEORY).
		
EACH	PARTY	HERETO	(A)	CERTIFIES	THAT	NO	REPRESENTATIVE,	AGENT	OR	ATTORNEY	OF	ANY	OTHER	PARTY


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HAS	REPRESENTED,	EXPRESSLY	OR	OTHERWISE,	THAT	SUCH	OTHER	PARTY	WOULD	NOT,	IN	THE	EVENT	OF
	
LITIGATION,	SEEK	TO	ENFORCE	THE	FOREGOING	WAIVER	AND	(B)	ACKNOWLEDGES	THAT	IT	AND	THE	OTHER
	
PARTIES	HERETO	HAVE	BEEN	INDUCED	TO	ENTER	INTO	THIS	AGREEMENT	BY,	AMONG	OTHER	THINGS,	THE
	
MUTUAL	WAIVERS	AND	CERTIFICATIONS	IN	THIS	
SECTION	9.10
.
SECTION	9.11.		
Headings
.		Article	and	Section	headings	and	the	Table	of	Contents	used	herein	are	for
	
convenience	of	reference	only,	are	not	part	of	this	Agreement	and	shall	not	affect	the	construction	of,	or	be	taken	into	consideration
	
in	interpreting,	this	Agreement.
SECTION	9.12.		
Confidentiality
.		Each	of	the	Administrative	Agent,	the	Issuing	Banks	and	the	Lenders	agrees	to
	
maintain	the	confidentiality	of	the	Information	(as	defined	below),	except	that	Information	may	be	disclosed	(a)	to	its	and	its
	
Affiliates’	directors,	officers,	employees	and	agents,	including	accountants,	legal	counsel	and	other	advisors	(it	being	understood
	
that	the	Persons	to	whom	such	disclosure	is	made	will	be	informed	of	the	confidential	nature	of	such	Information	and	instructed	to
	
keep	such	Information	confidential),	(b)	to	the	extent	requested	by	any	regulatory	authority	or	Governmental	Authority	having
	
jurisdiction	over	such	Administrative	Agent,	Issuing	Bank,	Lender	or	its	respective	Affiliates;	
provided
,	
however
,	that	with	respect
	
to	disclosures	pursuant	to	this	
clause	(b)


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to	disclosures	pursuant	to	this	
clause	(b)
	(other	than	with	respect	to	any	audit	or	examination	conducted	by	any	governmental	bank
	
regulatory	authority	exercising	examination	or	regulatory	authority	unless	such	audit	or	examination	specifically	targets	the
	
Borrower	or	its	Subsidiaries,	the	Transactions	or	the	Information)	or	the	following	
clause	(c)
	of	this	
Section	9.12
,	unless	prohibited
	
by	law	or	applicable	court	order,	each	disclosing	Person	shall	attempt	to	notify	the	Borrower	of	any	request	by	any	governmental
	
agency	or	representative	thereof	or	other	Person	for	disclosure	of	Information	after	receipt	of	such	request,	and	if	reasonably
	
practicable	and	permissible,	before	disclosure	of	such	Information,	(c)	to	the	extent	required	by	applicable	laws	or	regulations	or	by
	
any	subpoena	or	similar	legal	process,	(d)	to	any	other	party	to	this	Agreement,	(e)	subject	to	an	agreement	containing	provisions
	
substantially	the	same	as	those	of	this	
Section	9.12
,	to	any	credit	insurance	provider	or	service	provider	relating	to	the	Borrower
	
and	its	obligations,	(f)	in	connection	with	the	exercise	of	any	remedies	hereunder	or	any	suit,	action	or	proceeding	relating	to	this
	
Agreement	or	the	enforcement	of	rights	hereunder,	(g)	subject	to	an	agreement	containing	provisions	substantially	the	same	as
	
those	of	this	
Section	9.12
	to	(i)	any	assignee	of	or	Participant	in,	or	any	prospective	assignee	of	or	Participant	in,	or	any	sub-
Participant	in,	any	of	its	rights	or	obligations	under	this	Agreement	or	(ii)	any
	
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actual	or	prospective	counterparty	(or	its	advisors)	to	any	swap,	derivative	transaction	or	other	transaction	under	which	payments
	
are	to	be	made	relating	to	the	Borrower	and	its	obligations,	this	Agreement	or	payments	hereunder,	other	than,	in	each	case,	to	any
	
Disqualified	Institution,	(h)	on	a	confidential	basis	to,	with	the	consent	of	the	Borrower,	(1)	any	rating	agency	in	connection	with
	
rating	the	Borrower	or	its	Subsidiaries	or	the	credit	facilities	provided	herein	or	(2)	the	CUSIP	Service	Bureau	or	any	similar
	
agency	in	connection	with	the	issuance	and	monitoring	of	identification	numbers	with	respect	to	the	credit	facilities	provided
	
herein,	(i)	with	the	consent	of	the	Borrower,	(j)	to	the	extent	such	Information	(1)	becomes	publicly	available	other	than	as	a	result
	
of	a	breach	of	this	
Section	9.12
	by	the	disclosing	party	or	any	of	its	directors,	officers,	employees	and	agents,	including
	
accountants,	legal	counsel	and	other	advisors,	(2)	becomes	available	to	the	Administrative	Agent,	any	Issuing	Bank	or	any	Lender
	
on	a	non-confidential	basis	from	a	source	other	than	the	Borrower	or	any	of	its	subsidiaries	(other	than	by	any	source	known	by
	
such	disclosing	party	to	have	an	obligation	of	confidentiality	with	respect	to	the	disclosed	Information)	or	(3)	to	the	extent
	
pertaining	to	the	existence	or	terms	of	this	Agreement,	market	data	collectors,	similar	service	providers	to	the	lending	industry	and
	
service	providers	to	the	extent	such	information	is	customarily	provided	to	such	Persons	in	connection	with	the	administration	of


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this	Agreement	and	the	Commitments	hereunder,	(k)	to	the	extent	applicable	and	reasonably	necessary	or	advisable,	for	purposes
	
of	establishing	a	“due	diligence”	defense	in	connection	with	any	legal,	judicial,	administrative	proceeding	or	other	process	or	(l)	to
	
the	extent	that	such	information	is	independently	developed	by	such	Administrative	Agent,	Issuing	Bank	or	Lender	so	long	as	not
	
based	on	information	obtained	in	a	manner	that	would	otherwise	violate	this	
Section	9.12
.		For	the	purposes	of	this	
Section	9.12
,
	
“
Information
”	means	all	information	received	from	the	Borrower	or	any	of	its	subsidiaries	relating	to	the	Borrower	or	its
	
Subsidiaries	or	their	business,	other	than	any	such	information	that	is	available	to	the	Administrative	Agent,	any	Issuing	Bank	or
	
any	Lender	on	a	non-confidential	basis	prior	to	disclosure	by	the	Borrower	or	any	of	its	Subsidiaries.		Any	Person	required	to
	
maintain	the	confidentiality	of	Information	as	provided	in	this	
Section	9.12
	shall	be	considered	to	have	complied	with	its	obligation
	
to	do	so	if	such	Person	has	exercised	the	same	degree	of	care	to	maintain	the	confidentiality	of	such	Information	as	such	Person
	
would	accord	to	its	own	confidential	information.	Each	of	the	Administrative	Agent,	the	Syndication	Agent,	the	Lead	Arrangers,	the
	
Documentation	Agents,	the	Issuing	Banks	and	the	Lenders	acknowledge	and	agree	that	(i)	the	Information	may	include	material
	
non-public	information	concerning	the	Borrower	or	a	Subsidiary	thereof,	as	the	case	may	be,	(ii)	it	has	developed	compliance


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procedures	regarding	the	use	of	material	non-public	information	(iii)	it	will	handle	such	material	non-public	information	in
	
accordance	with	such	compliance	procedures	and	applicable	law,	including	U.S.	federal	and	state	securities	laws	and	(iv)	it	will
	
exercise	the	same	degree	of	care	to	maintain	the	confidentiality	of	such	Information	as	such	Person	would	accord	to	its	own
	
confidential	information.
SECTION	9.13.		
USA	PATRIOT	Act;	Beneficial	Ownership	Regulation
.		Each	Lender	hereby	notifies	the	Borrower
	
that	pursuant	to	the	requirements	of	the	USA	Patriot	Act	(Title	III	of	Pub.	L.	107-56	(signed	into	law	October	26,	2001))	(the	“
Act
”)
	
and	the	Beneficial	Ownership	Regulation,	it	is	required	to	obtain,	verify	and	record	information	that	identifies	the	Borrower,	which
	
information	includes	the	name	and	address	of	the	Borrower	and	other	information	that	will	allow	such	Lender	to	identify	the
	
Borrower	in	accordance	with	the	Act	and	the	Beneficial	Ownership	Regulation.
SECTION	9.14.		
Agreements	Respecting	Unrestricted	Subsidiaries
.		If	any	Unrestricted	Subsidiary,	in	connection
	
with	any	Indebtedness,	Guarantee	or	other	obligations	incurred	by	such	Unrestricted	Subsidiary,	incurs	obligations	that	do	not
	
satisfy	the	requirements	for	designation	as	an	Unrestricted	Subsidiary	or	otherwise	fails	to	satisfy	the	requirements	for	designation
	
as	an	Unrestricted	Subsidiary,	the	relevant	Unrestricted	Subsidiary	automatically	(without	any	further	action	by	the	Borrower)	shall


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be	re-designated	as	a	Restricted	Subsidiary	and	each	provision	of	this	Agreement	applicable	to	Restricted	Subsidiaries	shall	apply
	
to	such	Subsidiary.
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SECTION	9.15.		
No	Fiduciary	Duty
.		The	Administrative	Agent,	each	Lender,	each	Issuing	Bank	and	their	Affiliates
	
(collectively,	solely	for	purposes	of	this	
Section	9.15
,	the	“
Lenders
”),	may	have	economic	interests	that	conflict	with	those	of
	
Borrower.	Borrower	agrees	that	nothing	in	this	Agreement	or	any	related	documentation	or	otherwise	will	be	deemed	to	create	an
	
advisory,	fiduciary	or	agency	relationship	or	fiduciary	or	other	implied	duty	between	the	Lenders	and	Borrower,	its	stockholders	or
	
its	affiliates.	The	Borrower	acknowledges	and	agrees	that	(i)	the	transactions	contemplated	by	this	Agreement	and	any	related
	
documentation	are	arm’s	length	commercial	transactions	between	the	Lenders,	on	the	one	hand,	and	Borrower,	on	the	other,	(ii)	in
	
connection	therewith	and	with	the	process	leading	to	such	transaction	each	of	the	Lenders	is	acting	solely	as	a	principal	and	not	the
	
agent	or	fiduciary	of	Borrower,	its	management,	stockholders,	creditors	or	any	other	person,	(iii)	no	Lender	has	assumed	an
	
advisory	or	fiduciary	responsibility	in	favor	of	Borrower	with	respect	to	the	transactions	contemplated	hereby	or	the	process
	
leading	thereto	(irrespective	of	whether	any	Lender	or	any	of	its	affiliates	has	advised	or	is	currently	advising	Borrower	on	other
	
matters)	or	any	other	obligation	to	Borrower	except	the	obligations	expressly	set	forth	in	this	Agreement	and	any	related
	
documentation	and	(iv)	Borrower	has	consulted	its	own	legal	and	financial	advisors	to	the	extent	it	deemed	appropriate.	Borrower


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further	acknowledges	and	agrees	that	it	is	responsible	for	making	its	own	independent	judgment	with	respect	to	such	transactions
	
and	the	process	leading	thereto.	Borrower	agrees	that	it	will	not	claim	that	any	Lender	has	rendered	advisory	services	of	any
	
nature	or	respect,	or	owes	a	fiduciary	or	similar	duty	to	Borrower,	in	connection	with	such	transaction	or	the	process	leading
	
thereto.
SECTION	9.16.		
Conversion	of	Currencies
.
(a)	
If,	for	the	purpose	of	obtaining	judgment	in	any	court,	it	is	necessary	to	convert	a	sum	owing	hereunder	in
	
one	currency	into	another	currency,	each	party	hereto	agrees,	to	the	fullest	extent	that	it	may	effectively	do	so,	that	the	rate	of
	
exchange	used	shall	be	that	at	which,	in	accordance	with	normal	banking	procedures	in	the	relevant	jurisdiction,	the	first	currency
	
could	be	purchased	with	such	other	currency	on	the	Business	Day	immediately	preceding	the	day	on	which	final	judgment	is	given.
(b)	
The	obligations	of	the	Borrower	in	respect	of	any	sum	due	to	any	party	hereto	or	any	holder	of	the
	
obligations	owing	hereunder	(the	“
Applicable	Creditor
”)	shall,	notwithstanding	any	judgment	in	a	currency	(the	“
Judgment
	
Currency
”)	other	than	the	currency	in	which	such	sum	is	stated	to	be	due	hereunder	(the	“
Agreement	Currency
”),	be	discharged
	
only	to	the	extent	that,	on	the	Business	Day	following	receipt	by	the	Applicable	Creditor	of	any	sum	adjudged	to	be	so	due	in	the
	
Judgment	Currency,	the	Applicable	Creditor	may	in	accordance	with	normal	banking	procedures	in	the	relevant	jurisdiction


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purchase	the	Agreement	Currency	with	the	Judgment	Currency;	if	the	amount	of	the	Agreement	Currency	so	purchased	is	less	than
	
the	sum	originally	due	to	the	Applicable	Creditor	in	the	Agreement	Currency,	the	Borrower	agrees,	as	a	separate	obligation	and
	
notwithstanding	any	such	judgment,	to	indemnify	the	Applicable	Creditor	against	such	loss.		The	obligations	of	the	Borrower
	
contained	in	this	
Section	9.16
	shall	survive	the	termination	of	this	Agreement	and	the	payment	of	all	other	amounts	owing
	
hereunder.
SECTION	9.17.		
Acknowledgement	and	Consent	to	Bail-In	of	Affected	Financial	Institutions,	Etc.
.
		
Notwithstanding	anything	to	the	contrary	in	this	Agreement	or	in	any	other	agreement,	arrangement	or	understanding	among	any
	
such	parties,	each	party	hereto	acknowledges	that	any	liability	of	any	Affected	Financial	Institution	arising	under	any	Loan
	
Document	may	be	subject	to	the	Write-Down	and	Conversion	Powers	of	the	applicable	Resolution	Authority	and	agrees	and
	
consents	to,	and	acknowledges	and	agrees	to	be	bound	by:
(a)	
the	application	of	any	Write-Down	and	Conversion	Powers	by	an	applicable	Resolution	Authority	to	any	such
	
liabilities	arising	hereunder	which	may	be	payable	to	it	by	any	party	hereto	that	is	an	Affected	Financial	Institution;	and
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(b)	
the	effects	of	any	Bail-In	Action	on	any	such	liability,	including,	if	applicable:
(i)	a	reduction	in	full	or	in	part	or	cancellation	of	any	such	liability;
(ii)	a	conversion	of	all,	or	a	portion	of,	such	liability	into	shares	or	other	instruments	of	ownership	in	such
	
Affected	Financial	Institution,	its	parent	entity,	or	a	bridge	institution	that	may	be	issued	to	it	or	otherwise	conferred	on	it,
	
and	that	such	shares	or	other	instruments	of	ownership	will	be	accepted	by	it	in	lieu	of	any	rights	with	respect	to	any	such
	
liability	under	this	Agreement	or	any	other	Loan	Document;	or
(iii)	the	variation	of	the	terms	of	such	liability	in	connection	with	the	exercise	of	the	Write-Down	and	Conversion
	
Powers	of	the	applicable	Resolution	Authority.
SECTION	9.18.		
Acknowledgement	Regarding	Any	Supported	QFCs
.		To	the	extent	that	this	Agreement	provides
	
support,	through	a	guarantee	or	otherwise,	for	hedging	agreements	or	any	other	agreement	or	instrument	that	is	a	QFC	(such
	
support,	“
QFC	Credit	Support
”,	and	each	such	QFC	a	“
Supported	QFC
”),	the	parties	acknowledge	and	agree	as	follows	with	respect
	
to	the	resolution	power	of	the	Federal	Deposit	Insurance	Corporation	under	the	Federal	Deposit	Insurance	Act	and	Title	II	of	the
	
Dodd-Frank	Wall	Street	Reform	and	Consumer	Protection	Act	(together	with	the	regulations	promulgated	thereunder,	the	“
U.S.
	
Special	Resolution	Regimes
”)	in	respect	of	such	Supported	QFC	and	QFC	Credit	Support	(with	the	provisions	below	applicable


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notwithstanding	that	this	Agreement	and	any	Supported	QFC	may	in	fact	be	stated	to	be	governed	by	the	laws	of	the	State	of	New
	
York	and/or	of	the	United	States	or	any	other	state	of	the	United	States):
In	the	event	a	Covered	Entity	that	is	party	to	a	Supported	QFC	(each,	a	“
Covered	Party
”)	becomes	subject	to	a
	
proceeding	under	a	U.S.	Special	Resolution	Regime,	the	transfer	of	such	Supported	QFC	and	the	benefit	of	such	QFC	Credit
	
Support	(and	any	interest	and	obligation	in	or	under	such	Supported	QFC	and	such	QFC	Credit	Support,	and	any	rights	in	property
	
securing	such	Supported	QFC	or	such	QFC	Credit	Support)	from	such	Covered	Party	will	be	effective	to	the	same	extent	as	the
	
transfer	would	be	effective	under	the	U.S.	Special	Resolution	Regime	if	the	Supported	QFC	and	such	QFC	Credit	Support	(and	any
	
such	interest,	obligation	and	rights	in	property)	were	governed	by	the	laws	of	the	United	States	or	a	state	of	the	United	States.	In
	
the	event	a	Covered	Party	or	a	BHC	Act	Affiliate	of	a	Covered	Party	becomes	subject	to	a	proceeding	under	a	U.S.	Special
	
Resolution	Regime,	Default	Rights	under	this	that	might	otherwise	apply	to	such	Supported	QFC	or	any	QFC	Credit	Support	that
	
may	be	exercised	against	such	Covered	Party	are	permitted	to	be	exercised	to	no	greater	extent	than	such	Default	Rights	could	be
	
exercised	under	the	U.S.	Special	Resolution	Regime	if	the	Supported	QFC	and	this	Agreement	were	governed	by	the	laws	of	the


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United	States	or	a	state	of	the	United	States.	Without	limitation	of	the	foregoing,	it	is	understood	and	agreed	that	rights	and
	
remedies	of	the	parties	with	respect	to	a	Defaulting	Lender	shall	in	no	event	affect	the	rights	of	any	Covered	Party	with	respect	to	a
	
Supported	QFC	or	any	QFC	Credit	Support.
	
SECTION	9.19.		
Release	of	Guarantees
.	A	Guarantor	(other	than	the	Borrower)	shall	automatically	be	released
	
from	its	obligations	under	the	Loan	Documents	and	the	Guarantee	of	such	Guarantor	shall	automatically	be	terminated,	in	each
	
case,	upon	(i)	the	consummation	of	any	transaction	permitted	by	this	Agreement	as	a	result	of	which	such	Guarantor	ceases	to	be	a
	
Restricted	Subsidiary;	
provided
	that,	if	so	required	by	
Section	9.02
,	the	Required	Lenders	shall	have	consented	to	such	transaction
	
or	(ii)	such	Guarantor	becoming	an	Excluded	Subsidiary;	
provided
	that	the	Borrower	has	elected	for	such	Excluded	Subsidiary	to	be
	
released	from	its	Guarantee.	Notwithstanding	anything	to	the	contrary	contained	herein	or	in	any	other	Loan	Document,	the
	
Administrative	Agent	is	hereby	irrevocably	authorized	by	each	Lender	(without	requirement	of	notice	to	or	consent	of	any	Lender
	
except	as	expressly	required	by	
Section	9.02
)	to	take	any	action	requested	by	Borrower	having	the	effect	of	releasing	any
	
104


key: chroma:document
string_value:
guarantee	obligations	to	the	extent	not	prohibited	by	any	Loan	Document	or	consented	to	in	accordance	with	
Section	9.02
.
	
Notwithstanding	anything	to	the	contrary	herein,	any	Guarantor	that	is	a	guarantor	with	respect	to	any	Specified	Borrower
	
Indebtedness	shall	not	be	released	from	its	obligations	under	the	Loan	Documents	and	the	Guarantee	of	such	Guarantor	shall	not
	
be	terminated	pursuant	to	any	Loan	Document,	in	each	case,	so	long	as	it	remains	a	guarantor	of	such	Specified	Borrower
	
Indebtedness.	In	connection	with	any	termination	or	release	pursuant	to	this	
Section	9.19
,	the	Administrative	Agent	shall	execute
	
and	deliver	to	any	Loan	Party,	at	such	Loan	Party’s	expense,	all	documents	that	such	Loan	Party	shall	reasonably	request	to
	
evidence	such	termination	or	release	so	long	as	the	Borrower	or	applicable	Loan	Party	shall	have	provided	the	Administrative	Agent
	
such	certifications	or	documents	as	the	Administrative	Agent	shall	reasonably	request	in	order	to	demonstrate	compliance	with	this
	
Agreement.
SECTION	9.20.		
Interest	Rate	Limitation
.		Notwithstanding	anything	herein	to	the	contrary,	if	at	any	time	the
	
interest	rate	applicable	to	any	Loan	or	other	Obligation	owing	under	this	Agreement,	together	with	all	fees,	charges	and	other
	
amounts	that	are	treated	as	interest	on	such	Loan	or	other	Obligation	under	applicable	law	(collectively,	“
Charges
”),	shall	exceed
	
the	maximum	lawful	rate	(the	“
Maximum	Rate
”)	that	may	be	contracted	for,	charged,	taken,	received	or	reserved	by	the	Lender	or


key: chroma:document
string_value:
other	Person	holding	such	Loan	or	other	Obligation	in	accordance	with	applicable	law,	the	rate	of	interest	payable	in	respect	of
	
such	Loan	or	other	Obligation	hereunder,	together	with	all	Charges	payable	in	respect	thereof,	shall	be	limited	to	the	Maximum
	
Rate.		To	the	extent	lawful,	the	interest	and	Charges	that	would	have	been	paid	in	respect	of	such	Loan	or	other	Obligation	but
	
were	not	paid	as	a	result	of	the	operation	of	this	
Section	9.20
	shall	be	cumulated	and	the	interest	and	Charges	payable	to	such
	
Lender	or	other	Person	in	respect	of	other	Loans	or	Obligations	or	periods	shall	be	increased	(but	not	above	the	amount	collectible
	
at	the	Maximum	Rate	therefor)	until	such	cumulated	amount,	together	with	interest	thereon	at	the	Federal	Funds	Effective	Rate	for
	
each	day	to	the	date	of	repayment,	shall	have	been	received	by	such	Lender	or	other	Person.		Any	amount	collected	by	such	Lender
	
or	other	Person	that	exceeds	the	maximum	amount	collectible	at	the	Maximum	Rate	shall	be	applied	to	the	reduction	of	the
	
principal	balance	of	such	Loan	or	other	Obligation	or	refunded	to	the	Borrower	so	that	at	no	time	shall	the	interest	and	Charges
	
paid	or	payable	in	respect	of	such	Loan	or	other	Obligation	exceed	the	maximum	amount	collectible	at	the	Maximum	Rate.
[
Remainder	of	page	intentionally	left	blank.		Signature	pages	follow.
]
105


key: chroma:document
string_value:
IN	WITNESS	WHEREOF,	the	parties	hereto	have	caused	this	Agreement	to	be	duly	executed	by	their	respective
	
authorized	representatives	as	of	the	day	and	year	first	above	written.
	
	
TESLA,	INC.,	as	the	Borrower
	
	
	
	
By:
/s/	Zachary	Kirkhorn
	
Name:	Zachary	Kirkhorn
	
Title:	Chief	Financial	Officer
	
	
By:
/s/	Jeffrey	Munson
	
Name:	Jeffrey	Munson
	
Title:	Director,	Treasury	&	Capital	Markets
	
[Signature	Page	to	Credit	Agreement]


key: chroma:document
string_value:
CITIBANK,	N.A.,	as	the	Administrative	Agent,	and	as	a	Lender	and
	
Issuing	Bank
	
	
	
	
By:
/s/	Susan	Olsen
	
Name:	Susan	Olsen
	
Title:	Vice	President
	
[Signature	Page	to	Credit	Agreement]


key: chroma:document
string_value:
DEUTSCHE	BANK	AG	NEW	YORK	BRANCH,	as	a	Lender	and	Issuing
	
Bank
	
	
	
	
	
	
By:
/s/	Ming	K.	Chu
	
	
Name:	Ming	K.	Chu
	
	
Title:	Director
	
	
	
	
	
	
	
By:
/s/	Marko	Lukin
	
	
Name:	Marko	Lukin
	
	
Title:	Vice	President
	
	
[Signature	Page	to	Credit	Agreement]


key: chroma:document
string_value:
CREDIT	AGRICOLE	CORPORATE	AND	INVESTMENT	BANK,	as	a
	
Lender	and	Issuing	Bank
	
	
	
	
By:
/s/	Jill	Wong
	
Name:	Jill	Wong
	
Title:	Director
	
	
	
	
By:
/s/	Gordon	Yip
	
Name:	Gordon	Yip
	
Title:	Director
	
[Signature	Page	to	Credit	Agreement]


key: chroma:document
string_value:
GOLDMAN	SACHS	BANK	USA,	as	a	Lender	and	Issuing	Bank
	
	
	
	
By:
/s/	Rebecca	Kratz
	
Name:	Rebecca	Kratz
	
Title:	Authorized	Signatory
	
[Signature	Page	to	Credit	Agreement]


key: chroma:document
string_value:
HSBC	Bank	USA,	National	Association,	as	a	Lender	and	Issuing	Bank
	
	
	
	
By:
/s/	Andrew	Everett
	
Name:	Andrew	Everett
	
Title:	Senior	Vice	President
	
[Signature	Page	to	Credit	Agreement]


key: chroma:document
string_value:
MORGAN	STANLEY	BANK,	N.A.,	as	a	Lender	and	Issuing	Bank
	
	
	
	
By:
/s/	Michael	King
	
Name:	Michael	King
	
Title:	Authorized	Signatory
	
[Signature	Page	to	Credit	Agreement]


key: chroma:document
string_value:
SOCIETE	GENERALE,	as	a	Lender	and	Issuing	Bank
	
	
	
	
By:
/s/	Kimberly	Metzger
	
Name:	Kimberly	Metzger
	
Title:	Director
	
[Signature	Page	to	Credit	Agreement]


key: chroma:document
string_value:
The	Toronto-Dominion	Bank,	New	York	Branch,	as	a	Lender	and	Issuing
	
Bank
	
	
	
	
By:
/s/	David	Perlman
	
Name:	David	Perlman
	
Title:	Authorized	Signatory
	
[Signature	Page	to	Credit	Agreement]


key: chroma:document
string_value:
Wells	Fargo	Bank,	National	Association,	as	a	Lender	and	Issuing	Bank
	
	
	
	
By:
/s/	Jonathan	D.	Beck
	
Name:	Jonathan	D.	Beck
	
Title:	Director
	
[Signature	Page	to	Credit	Agreement]


key: chroma:document
string_value:
BANCO	SANTANDER,	S.A.,	NEW	YORK	BRANCH,	as	a	Lender
	
	
	
	
By:
/s/	Andres	Barbosa
	
Name:	Andres	Barbosa
	
Title:	Managing	Director
	
	
	
	
By:
/s/	Rita	Walz-Cuccioli
	
Name:	Rita	Walz-Cuccioli
	
Title:	Executive	Director
	
[Signature	Page	to	Credit	Agreement]


key: chroma:document
string_value:
LLOYDS	BANK	CORPORATE	MARKETS	PLC,	as	a	Lender
	
	
	
	
By:
/s/	Kamala	Basdeo
	
Name:	Kamala	Basdeo
	
Title:	Assistant	Vice	President
	
	
	
	
By:
/s/	Tina	Wong
	
Name:	Tina	Wong
	
Title:	Assistant	Vice	President
	
[Signature	Page	to	Credit	Agreement]


key: chroma:document
string_value:
Bank	of	China	Limited,	New	York	Branch,	as	a	Lender
	
	
	
	
By:
/s/	Raymond	Qiao
	
Name:	Raymond	Qiao
	
Title:	Executive	Vice	President
	
[Signature	Page	to	Credit	Agreement]


key: chroma:document
string_value:
Canadian	Imperial	Bank	of	Commerce,	New	York	Branch,	as	a	Lender
	
	
	
	
By:
/s/	Farhad	Merali
	
Name:	Farhad	Merali
	
Title:	Managing	Director	&	Authorized	Signatory
	
[Signature	Page	to	Credit	Agreement]


key: chroma:document
string_value:
CREDIT	SUISSE	AG,	New	York	Branch,	as	a	Lender
	
	
	
	
By:
/s/	Doreen	Barr
	
Name:	Doreen	Barr
	
Title:	Auhorized	Signatory
	
	
	
	
By:
/s/	Michael	Dieffenbacher
	
Name:	Michael	Dieffenbacher
	
Title:	Auhorized	Signatory
	
[Signature	Page	to	Credit	Agreement]


key: chroma:document
string_value:
STANDARD	CHARTERED	BANK,	as	a	Lender
	
	
	
	
By:
/s/	Kristopher	Tracy
	
Name:	Kristopher	Tracy
	
Title:	Director,	Financing	Solutions
	
[Signature	Page	to	Credit	Agreement]


key: chroma:document
string_value:
THE	BANK	OF	NOVA	SCOTIA,	as	a	Lender
	
	
	
	
By:
/s/	Rolf	Schmitz
	
Name:	Rolf	Schmitz
	
Title:	Managing	Director
	
[Signature	Page	to	Credit	Agreement]


key: chroma:document
string_value:
U.S.	BANK	NATIONAL	ASSOCIATION,	as	a	Lender
	
	
	
	
By:
/s/	Brett	M.	Justman
	
Name:	Brett	M.	Justman
	
Title:	Vice	President
	
[Signature	Page	to	Credit	Agreement]


key: chroma:document
string_value:
UNICREDIT	BANK	AG	–	NEW	YORK	BRANCH,	as	a	Lender
	
	
	
	
By:
/s/	Edward	D.	Herko
	
Name:	Edward	D.	Herko
	
Title:	Director
	
	
	
	
By:
/s/	Thomas	Petz
	
Name:	Thomas	Petz
	
Title:	Managing	Director
	
[Signature	Page	to	Credit	Agreement]


key: chroma:document
string_value:
BANK	OF	THE	WEST,	as	a	Lender
	
	
	
	
By:
/s/	Charlene	A	Davidson
	
Name:	Charlene	A	Davidson
	
Title:	Managing	Director
	
[Signature	Page	to	Credit	Agreement]


key: chroma:document
string_value:
THE	BANK	OF	NEW	YORK	MELLON,	as	a	Lender
	
	
	
	
By:
/s/	Tak	Cheng
	
Name:	Tak	Cheng
	
Title:	Vice	President
	
[Signature	Page	to	Credit	Agreement]


key: chroma:document
string_value:
BARCLAYS	BANK	PLC,	as	a	Lender
	
	
	
	
By:
/s/	Sean	Duggan
	
Name:	Sean	Duggan
	
Title:	Director
	
[Signature	Page	to	Credit	Agreement]


key: chroma:document
string_value:
Exhibit	21.1
	
SUBSIDIARIES	OF	TESLA,	INC.
	
Name	of	Subsidiary
	
Jurisdiction	of
	
Incorporation	or	Organization
Alabama	Service	LLC
	
Delaware
Allegheny	Solar	1,	LLC
	
Delaware
Allegheny	Solar	Manager	1,	LLC
	
Delaware
Alset	Transport	GmbH
	
Germany
Alset	Warehouse	GmbH
	
Germany
Ancon	Holdings	II,	LLC
	
Delaware
Ancon	Holdings	III,	LLC
	
Delaware
Ancon	Holdings,	LLC
	
Delaware
Ancon	Solar	Corporation
	
Delaware
Ancon	Solar	I,	LLC
	
Delaware
Ancon	Solar	II	Lessee	Manager,	LLC
	
Delaware
Ancon	Solar	II	Lessee,	LLC
	
Delaware
Ancon	Solar	II	Lessor,	LLC
	
Delaware
Ancon	Solar	III	Lessee	Manager,	LLC
	
Delaware
Ancon	Solar	III	Lessee,	LLC
	
Delaware
Ancon	Solar	III	Lessor,	LLC
	
Delaware
Ancon	Solar	Managing	Member	I,	LLC
	
Delaware
Arpad	Solar	Borrower,	LLC
	
Delaware
Arpad	Solar	I,	LLC
	
Delaware
Arpad	Solar	Manager	I,	LLC
	
Delaware
AU	Solar	1,	LLC
	
Delaware
AU	Solar	2,	LLC
	
Delaware
Banyan	SolarCity	Manager	2010,	LLC
	
Delaware
Banyan	SolarCity	Owner	2010,	LLC
	
Delaware
Basking	Solar	I,	LLC
	
Delaware
Basking	Solar	II,	LLC
	
Delaware
Basking	Solar	Manager	II,	LLC
	
Delaware
Beatrix	Solar	I,	LLC
	
Delaware
Bernese	Solar	Manager	I,	LLC
	
Delaware


key: chroma:document
string_value:
Bernese	Solar	Manager	I,	LLC
	
Delaware
Blue	Skies	Solar	I,	LLC
	
Delaware
Blue	Skies	Solar	II,	LLC
	
Delaware
BT	Connolly	Storage,	LLC
	
Texas
Caballero	Solar	Managing	Member	I,	LLC
	
Delaware
Caballero	Solar	Managing	Member	II,	LLC
	
Delaware
Caballero	Solar	Managing	Member	III,	LLC
	
Delaware
Cardinal	Blue	Solar,	LLC
	
Delaware
Castello	Solar	I,	LLC
	
Delaware
Castello	Solar	II,	LLC
	
Delaware
Castello	Solar	III,	LLC
	
Delaware
Chaparral	SREC	Borrower,	LLC
	
Delaware
Chaparral	SREC	Holdings,	LLC
	
Delaware
Chompie	Solar	I,	LLC
	
Delaware
Chompie	Solar	II,	LLC
	
Delaware
Chompie	Solar	Manager	I,	LLC
	
Delaware
Chompie	Solar	Manager	II,	LLC
	
Delaware
Clydesdale	SC	Solar	I,	LLC
	
Delaware
Colorado	River	Project,	LLC
	
Delaware
Community	Solar	Partners,	LLC
	
Delaware
Connecticut	Auto	Repair	and	Service	LLC
	
Delaware
Compass	Automation	Incorporated
	
Illinois
Dom	Solar	General	Partner	I,	LLC
	
Delaware
Dom	Solar	Lessor	I,	LP
	
Cayman	Islands
Domino	Solar	Ltd.
	
Cayman	Islands
Dom	Solar	Limited	Partner	I,	LLC
	
Delaware
Falconer	Solar	Manager	I,	LLC
	
Delaware


key: chroma:document
string_value:
Firehorn	Solar	I,	LLC
	
Cayman	Islands
Firehorn	Solar	Manager	I,	LLC
	
Delaware
FocalPoint	Solar	Borrower,	LLC
	
Delaware
FocalPoint	Solar	I,	LLC
	
Delaware
FocalPoint	Solar	Manager	I,	LLC
	
Delaware
Fontane	Solar	I,	LLC
	
Delaware
Fotovoltaica	GI	4,	S.	de	R.L.	de	C.V.
	
Mexico
Fotovoltaica	GI	5,	S.	de	R.L.	de	C.V.
	
Mexico
FP	System	Owner,	LLC
	
Delaware
Giga	Insurance	Texas,	Inc.
	
Texas
Giga	Texas	Energy,	LLC
	
Delaware
Grohmann	Engineering	Trading	(Shanghai)	Co.	Ltd.
	
China
Grohmann	USA,	Inc.
	
	
Delaware
Guilder	Solar,	LLC
	
Delaware
Hamilton	Solar,	LLC
	
Delaware
Hangzhou	Silevo	Electric	Power	Co.,	Ltd.
	
	
China
Harpoon	Solar	I,	LLC
	
Delaware
Harpoon	Solar	Manager	I,	LLC
	
Delaware
Haymarket	Holdings,	LLC
	
Delaware
Haymarket	Manager	1,	LLC
	
Delaware
Haymarket	Solar	1,	LLC
	
Delaware
Hibar	Systems	Europe	GmbH
	
Germany
Hive	Battery	Inc.
	
Delaware
Ikehu	Manager	I,	LLC
	
Delaware
IL	Buono	Solar	I,	LLC
	
Delaware
Iliosson,	S.A.	de	C.V.
	
Mexico
Industrial	Maintenance	Technologies,	Inc.
	
California
Kansas	Repair	LLC
	
Delaware
Klamath	Falls	Solar	1,	LLC
	
Delaware
Knight	Solar	Managing	Member	I,	LLC
	
Delaware
Knight	Solar	Managing	Member	II,	LLC
	
Delaware


key: chroma:document
string_value:
Delaware
Knight	Solar	Managing	Member	III,	LLC
	
Delaware
Landlord	2008-A,	LLC
	
Delaware
Louis	Solar	II,	LLC
	
Delaware
Louis	Solar	III,	LLC
	
Delaware
Louis	Solar	Manager	II,	LLC
	
	
Delaware
Louis	Solar	Manager	III,	LLC
	
Delaware
Louis	Solar	Master	Tenant	I,	LLC
	
Delaware
Louis	Solar	MT	Manager	I,	LLC
	
Delaware
Louis	Solar	Owner	I,	LLC
	
Delaware
Louis	Solar	Owner	Manager	I,	LLC
	
Delaware
Master	Tenant	2008-A,	LLC
	
Delaware
Matterhorn	Solar	I,	LLC
	
Delaware
Maxwell	Holding	GmbH
	
Germany
Maxwell	Technologies	GmbH
	
Germany
Maxwell	Technologies,	Inc.
	
Delaware
Megalodon	Solar,	LLC
	
Delaware
MML	Acquisition	Corp.
	
Delaware
Monte	Rosa	Solar	I,	LLC
	
Delaware
Mound	Solar	Manager	V,	LLC
	
Delaware
Mound	Solar	Manager	VI,	LLC
	
Delaware
Mound	Solar	Manager	X,	LLC
	
Delaware
Mound	Solar	Manager	XI,	LLC
	
Delaware
Mound	Solar	Manager	XII,	LLC
	
Delaware
Mound	Solar	Master	Tenant	IX,	LLC
	
Delaware
Mound	Solar	Master	Tenant	V,	LLC
	
California
Mound	Solar	Master	Tenant	VI,	LLC
	
Delaware
Mound	Solar	Master	Tenant	VII,	LLC
	
Delaware
Mound	Solar	Master	Tenant	VIII,	LLC
	
Delaware
Mound	Solar	MT	Manager	IX,	LLC
	
Delaware
Mound	Solar	MT	Manager	VII,	LLC
	
Delaware


key: chroma:document
string_value:
Mound	Solar	MT	Manager	VIII,	LLC
	
Delaware
Mound	Solar	Owner	IX,	LLC
	
Delaware
Mound	Solar	Owner	Manager	IX,	LLC
	
Delaware
Mound	Solar	Owner	Manager	VII,	LLC
	
Delaware
Mound	Solar	Owner	Manager	VIII,	LLC
	
Delaware
Mound	Solar	Owner	V,	LLC
	
California
Mound	Solar	Owner	VI,	LLC
	
Delaware
Mound	Solar	Owner	VII,	LLC
	
Delaware
Mound	Solar	Owner	VIII,	LLC
	
Delaware
Mound	Solar	Partnership	X,	LLC
	
Delaware
Mound	Solar	Partnership	XI,	LLC
	
Delaware
Mound	Solar	Partnership	XII,	LLC
	
Delaware
MS	SolarCity	2008,	LLC
	
Delaware
MS	SolarCity	Commercial	2008,	LLC
	
Delaware
MS	SolarCity	Residential	2008,	LLC
	
Delaware
New	Mexico	Sales	and	Vehicle	Service	LLC
	
Delaware
NBA	SolarCity	AFB,	LLC
	
California
NBA	SolarCity	Commercial	I,	LLC
	
California
NBA	SolarCity	Solar	Phoenix,	LLC
	
California
Northern	Nevada	Research	Co.,	LLC
	
Nevada
Orange	Vehicle	Sales	LLC
	
Delaware
Oranje	Solar	I,	LLC
	
Delaware
Oranje	Solar	Manager	I,	LLC
	
Delaware
Paramount	Energy	Fund	I	Lessee,	LLC
	
Delaware
Paramount	Energy	Fund	I	Lessor,	LLC
	
Delaware
PEF	I	MM,	LLC
	
Delaware
Perbix	Machine	Company,	Inc.
	
Minnesota
Presidio	Solar	I,	LLC
	
Delaware
Presidio	Solar	II,	LLC
	
Delaware
Presidio	Solar	III,	LLC
	
Delaware


key: chroma:document
string_value:
Presidio	Solar	III,	LLC
	
Delaware
Pukana	La	Solar	I,	LLC
	
Delaware
R9	Solar	1,	LLC
	
Delaware
Roadster	Automobile	Sales	and	Service	(Beijing)	Co.,	Ltd.
	
China
Roadster	Finland	Oy
	
Finland
SA	VPP	Holding	Trust
	
Australia
SA	VPP	Project	Trust
	
Australia
Sequoia	Pacific	Holdings,	LLC
	
Delaware
Sequoia	Pacific	Manager	I,	LLC
	
Delaware
Sequoia	Pacific	Solar	I,	LLC
	
Delaware
Sequoia	SolarCity	Owner	I,	LLC
	
Delaware
Sierra	Solar	Power	(Hong	Kong)	Limited
	
Hong	Kong
SiiLion,	Inc.
	
Delaware
Silevo,	LLC
	
Delaware
Shoreline	Vehicle	Sales	LLC
	
Delaware
Solar	Aquarium	Holdings,	LLC
	
Delaware
Solar	Energy	of	America	1,	LLC
	
Delaware
Solar	Energy	of	America	Manager	1,	LLC
	
Delaware
Solar	Explorer,	LLC
	
Delaware
Solar	Gezellig	Holdings,	LLC
	
Delaware
Solar	House	I,	LLC
	
Delaware
Solar	House	II,	LLC
	
Delaware
Solar	House	III,	LLC
	
Delaware
Solar	House	IV,	LLC
	
Delaware
Solar	Integrated	Fund	I,	LLC
	
Delaware
Solar	Integrated	Fund	II,	LLC
	
Delaware
Solar	Integrated	Fund	III,	LLC
	
Delaware
Solar	Integrated	Fund	IV-A,	LLC
	
Delaware
Solar	Integrated	Fund	V,	LLC
	
Delaware
Solar	Integrated	Fund	VI,	LLC
	
Delaware
Solar	Integrated	Manager	I,	LLC
	
Delaware
Solar	Integrated	Manager	II,	LLC
	
Delaware


key: chroma:document
string_value:
Solar	Integrated	Manager	III,	LLC
	
Delaware
Solar	Integrated	Manager	IV-A,	LLC
	
Delaware
Solar	Integrated	Manager	V,	LLC
	
Delaware
Solar	Integrated	Manager	VI,	LLC
	
Delaware
Solar	Services	Company,	LLC
	
Delaware
Solar	Ulysses	Manager	I,	LLC
	
Delaware
Solar	Ulysses	Manager	II,	LLC
	
Delaware
Solar	Voyager,	LLC
	
Delaware
Solar	Warehouse	Manager	I,	LLC
	
Delaware
Solar	Warehouse	Manager	II,	LLC
	
Delaware
Solar	Warehouse	Manager	III,	LLC
	
Delaware
Solar	Warehouse	Manager	IV,	LLC
	
Delaware
SolarCity	Alpine	Holdings,	LLC
	
Delaware
SolarCity	Amphitheatre	Holdings,	LLC
	
Delaware
SolarCity	Arbor	Holdings,	LLC
	
Delaware
SolarCity	Arches	Holdings,	LLC
	
Delaware
SolarCity	AU	Holdings,	LLC
	
Delaware
SolarCity	Cruyff	Holdings,	LLC
	
Delaware
SolarCity	Electrical,	LLC
	
Delaware
SolarCity	Electrical	New	York	Corporation
	
Delaware
SolarCity	Finance	Company,	LLC
	
Delaware
SolarCity	Finance	Holdings,	LLC
	
Delaware
SolarCity	Foxborough	Holdings,	LLC
	
Delaware
SolarCity	FTE	Series	1,	LLC
	
Delaware
SolarCity	FTE	Series	2,	LLC
	
Delaware
SolarCity	Fund	Holdings,	LLC
	
Delaware
SolarCity	Grand	Canyon	Holdings,	LLC
	
Delaware
SolarCity	Holdings	2008,	LLC
	
Delaware
SolarCity	International,	Inc.
	
Delaware
SolarCity	Leviathan	Holdings,	LLC
	
Delaware
SolarCity	LMC	Series	I,	LLC
	
Delaware


key: chroma:document
string_value:
Delaware
SolarCity	LMC	Series	II,	LLC
	
Delaware
SolarCity	LMC	Series	III,	LLC
	
Delaware
SolarCity	LMC	Series	IV,	LLC
	
Delaware
SolarCity	LMC	Series	V,	LLC
	
Delaware
SolarCity	Mid-Atlantic	Holdings,	LLC
	
Delaware
SolarCity	Nitro	Holdings,	LLC
	
Delaware
SolarCity	Orange	Holdings,	LLC
	
Delaware
SolarCity	Series	Holdings	I,	LLC
	
Delaware
SolarCity	Series	Holdings	II,	LLC
	
Delaware
SolarCity	Series	Holdings	IV,	LLC
	
Delaware
SolarCity	Steep	Holdings,	LLC
	
Delaware
SolarCity	Ulu	Holdings,	LLC
	
Delaware
SolarCity	Village	Holdings,	LLC
	
Delaware
SolarRock,	LLC
	
Delaware
SolarStrong,	LLC
	
Delaware
Sparrowhawk	Solar	I,	LLC
	
Delaware
SREC	Holdings,	LLC
	
Delaware
TALT	Holdings,	LLC
	
Delaware
TALT	TBM	Holdings,	LLC
	
Delaware
TBM	Partnership	II,	LLC
	
Delaware
TEO	Engineering,	Inc.
	
California
TES	2017-1,	LLC
	
Delaware
TES	2017-2,	LLC
	
Delaware
TES	Holdings	2017-1,	LLC
	
Delaware
Tesla	2014	Warehouse	SPV	LLC
	
Delaware
Tesla	Auto	Lease	Trust	2019-A
	
Delaware
Tesla	Auto	Lease	Trust	2020-A
	
Delaware
Tesla	Auto	Lease	Trust	2021-A
	
Delaware
Tesla	Auto	Lease	Trust	2021-B
	
Delaware
Tesla	Auto	Lease	Trust	2022-A
	
Delaware


key: chroma:document
string_value:
Tesla	Automation	GmbH
	
Germany
Tesla	Automobile	Information	Service	(Dalian)	Co.,	Ltd.
	
China
Tesla	Automobile	Management	and	Service	(Haikou)	Co.,	Ltd.
	
	
China
Tesla	Automobile	Sales	and	Service	(Beijing)	Co.,	Ltd.
	
China
Tesla	Automobile	Sales	and	Service	(Changchun)	Co.,	Ltd.
	
China
Tesla	Automobile	Sales	and	Service	(Changsha)	Co.,	Ltd.
	
	
China
Tesla	Automobile	Sales	and	Service	(Chengdu)	Co.,	Ltd.
	
China
Tesla	Automobile	Sales	and	Service	(Chongqing)	Co.,	Ltd.
	
China
Tesla	Automobile	Sales	and	Service	(Dalian)	Co.,	Ltd.
	
China
Tesla	Automobile	Sales	and	Service	(Fuzhou)	Co.,	Ltd.
	
China
Tesla	Automobile	Sales	and	Service	(Guangzhou)	Co.,	Ltd.
	
China
Tesla	Automobile	Sales	and	Service	(Guiyang)	Co.,	Ltd.
	
	
China
Tesla	Automobile	Sales	and	Service	(Haerbin)	Co.,	Ltd.
	
	
China
Tesla	Automobile	Sales	and	Service	(Hangzhou)	Co.,	Ltd.
	
China
Tesla	Automobile	Sales	and	Service	(Hefei)	Co.,	Ltd.
	
	
China
Tesla	Automobile	Sales	and	Service	(Hohhot)	Co.,	Ltd.
	
China
Tesla	Automobile	Sales	and	Service	(Jinan)	Co.,	Ltd.
	
	
China
Tesla	Automobile	Sales	and	Service	(Kunming)	Co.,	Ltd.
	
	
China
Tesla	Automobile	Sales	and	Service	(Lanzhou)	Co.,	Ltd.
	
China
Tesla	Automobile	Sales	and	Service	(Nanchang)	Co.,	Ltd.
	
	
China
Tesla	Automobile	Sales	and	Service	(Nanjing)	Co.,	Ltd.
	
China


key: chroma:document
string_value:
China
Tesla	Automobile	Sales	and	Service	(Nanning)	Co.,	Ltd.
	
China
Tesla	Automobile	Sales	and	Service	(Ningbo)	Co.,	Ltd.
	
China
Tesla	Automobile	Sales	and	Service	(Qingdao)	Co.,	Ltd.
	
China
Tesla	Automobile	Sales	and	Service	(Shanghai)	Co.,	Ltd.
	
China
Tesla	Automobile	Sales	and	Service	(Shenyang)	Co.,	Ltd.
	
	
China
Tesla	Automobile	Sales	and	Service	(Shijiazhuang)	Co.,	Ltd.
	
	
China
Tesla	Automobile	Sales	and	Service	(Suzhou)	Co.	Ltd.
	
China
Tesla	Automobile	Sales	and	Service	(Taiyuan)	Co.,	Ltd.
	
	
China
Tesla	Automobile	Sales	and	Service	(Tianjin)	Co.	Ltd.
	
China
Tesla	Automobile	Sales	and	Service	(Urumqi)	Co.	Ltd.
	
China
Tesla	Automobile	Sales	and	Service	(Wenzhou)	Co.,	Ltd.
	
	
China
Tesla	Automobile	Sales	and	Service	(Wuhan)	Co.,	Ltd.
	
China
Tesla	Automobile	Sales	and	Service	(Xi'an)	Co.,	Ltd.
	
China
Tesla	Automobile	Sales	and	Service	(Xiamen)	Co.,	Ltd.
	
	
China
Tesla	Automobile	Sales	and	Service	(Yinchuan)	Co.,	Ltd.
	
China
Tesla	Automobile	Sales	and	Service	(Zhengzhou)	Co.	Ltd.
	
	
China
Tesla	Automobiles	Sales	and	Service	Mexico,	S.	de	R.L.	de	C.V.
	
Mexico
Tesla	(Beijing)	New	Energy	R&D	Co.,	Ltd.
	
China
Tesla	Belgium	BV
	
Belgium
Tesla	Canada	Finance	ULC
	
Canada
Tesla	Canada	GP	Inc.
	
Canada
Tesla	Canada	LP
	
Canada
Tesla	Charging,	LLC


key: chroma:document
string_value:
Canada
Tesla	Charging,	LLC
	
Delaware
Tesla	Construction	(Shanghai)	Co.,	Ltd.
	
	
China
Tesla	Czech	Republic	s.r.o.
	
	
Czech	Republic
Tesla	Energia	Macau	Limitada
	
Macau
Tesla	Energy	d.o.o.
	
Slovenia
Tesla	Energy	Management	LLC
	
	
Tesla	Energy	Operations,	Inc.
	
Delaware
Tesla	Finance	LLC
	
Delaware
Tesla	Financial	Leasing	(China)	Co.,	Ltd.
	
China
Tesla	Financial	Services	GmbH
	
Germany
Tesla	Financial	Services	Holdings	B.V.
	
Netherlands
Tesla	Financial	Services	Limited
	
United	Kingdom
Tesla	France	S.à	r.l.
	
France
Tesla	Germany	GmbH
	
Germany
Tesla	General	Insurance,	Inc.
	
Arizona
Tesla	Greece	Single	Member	P.C.
	
Greece
Tesla	Hrvatska	d.o.o.
	
Croatia
Tesla	Hungary	Kft.
	
Hungary


key: chroma:document
string_value:
Tesla	India	Motors	and	Energy	Private	Limited
	
India
Tesla	Insurance	Brokers	Co.,	Ltd.
	
China
Tesla	Insurance	Holdings,	LLC
	
Delaware
Tesla	Insurance,	Inc.
	
Delaware
Tesla	Insurance	Ltd.
	
Malta
Tesla	Insurance	Company
	
California
Tesla	Insurance	Services,	Inc.
	
California
Tesla	Insurance	Services	of	Texas,	Inc.
	
Texas
Tesla	International	B.V.
	
Netherlands
Tesla	Investments	LLC
	
Delaware
Tesla	Italy	S.r.l.
	
Italy
Tesla	Jordan	Car	Trading	LLC
	
Jordan
Tesla	Korea	Limited
	
Republic	of	Korea
Tesla	Lease	Trust
	
Delaware
Tesla	LLC
	
	
Delaware
Tesla	Manufacturing	Brandenburg	SE
	
Germany
Tesla	Michigan,	Inc.
	
Michigan
Tesla	Mississippi	LLC
	
Delaware
Tesla	Motors	Australia,	Pty	Ltd
	
Australia
Tesla	Motors	Austria	GmbH
	
Austria
Tesla	Motors	(Beijing)	Co.,	Ltd.
	
China
Tesla	Motors	Canada	ULC
	
Canada
Tesla	Motors	Coöperatief	U.A.
	
Netherlands
Tesla	Motors	Denmark	ApS
	
Denmark
Tesla	Motors	FL,	Inc.
	
Florida
Tesla	Motors	HK	Limited
	
Hong	Kong
Tesla	Motors	Iceland	ehf.
	
Iceland
Tesla	Motors	Ireland	Limited
	
Ireland
Tesla	Motors	Israel	Ltd.
	
Israel
Tesla	Motors	Japan	GK
	
Japan
Tesla	Motors	Limited
	
United	Kingdom
Tesla	Motors	Luxembourg	S.à	r.l.
	
Luxembourg
Tesla	Motors	MA,	Inc.
	
Massachusetts
Tesla	Motors	Netherlands	B.V.
	
Netherlands
Tesla	Motors	New	York	LLC
	
New	York


key: chroma:document
string_value:
New	York
Tesla	Motors	NL	LLC
	
Delaware
Tesla	Motors	NV,	Inc.
	
Nevada
Tesla	Motors	PA,	Inc.
	
Pennsylvania
Tesla	Motors	Romania	S.R.L.
	
Romania
Tesla	Motors	Sales	and	Service	LLC
	
Turkey
Tesla	Motors	Singapore	Holdings	Pte.	Ltd.
	
Singapore
Tesla	Motors	Singapore	Private	Limited
	
Singapore
Tesla	Motors	Stichting
	
Netherlands
Tesla	Motors	Taiwan	Limited
	
Taiwan
Tesla	Motors	TN,	Inc.
	
Tennessee
Tesla	Motors	TX,	Inc.
	
Texas
Tesla	Motors	UT,	Inc.
	
Utah
Tesla	Nambe	LLC
	
Delaware
Tesla	New	Zealand	ULC
	
New	Zealand
Tesla	Norway	AS
	
Norway
Tesla	Poland	sp.	z	o.o.
	
Poland
Tesla	Property	&Casualty,	Inc.
	
California
Tesla	Portugal,	Sociedade	Unipessoal	LDA
	
Portugal
Tesla	Puerto	Rico	LLC
	
Puerto	Rico
Tesla	Pumps	(Ningbo)	Co.,LTD	(fka:	Hibar	China	Co.	Ltd.)
	
China
Tesla	Pumps	Seoul	Ltd.
	
Republic	of	Korea
Tesla	Sales,	Inc.
	
Delaware
Tesla	Sdn.	Bhd.
	
Malaysia
Tesla	Shanghai	Co.,	Ltd
	
China
Tesla	Spain,	S.L.	Unipersonal
	
Spain
Tesla	Switzerland	GmbH
	
Switzerland


key: chroma:document
string_value:
Tesla	(Thailand)	Ltd.
	
Thailand
Tesla	TH1	LLC
	
Delaware
Tesla	TH2	LLC
	
Delaware
Telsa	Toronto	Automation	ULC
	
Canada
Tesla	Toronto	International	Holdings	ULC
	
Canada
Tesla		Transport	B.V.
	
Netherlands
The	Big	Green	Solar	I,	LLC
	
Delaware
The	Big	Green	Solar	Manager	I,	LLC
	
Delaware
Three	Rivers	Solar	1,	LLC
	
Delaware
Three	Rivers	Solar	2,	LLC
	
Delaware
Three	Rivers	Solar	3,	LLC
	
Delaware
Three	Rivers	Solar	Manager	1,	LLC
	
Delaware
Three	Rivers	Solar	Manager	2,	LLC
	
Delaware
Three	Rivers	Solar	Manager	3,	LLC
	
Delaware
TM	International	C.V.
	
Netherlands
TM	Sweden	AB
	
Sweden
USB	SolarCity	Manager	IV,	LLC
	
Delaware
USB	SolarCity	Master	Tenant	IV,	LLC
	
California
USB	SolarCity	Owner	IV,	LLC
	
California
Visigoth	Solar	1,	LLC
	
Delaware
Visigoth	Solar	Holdings,	LLC
	
Delaware
Visigoth	Solar	Managing	Member	1,	LLC
	
Delaware
VPP	Project	1	(SA)	Pty	Ltd.
	
Australia
Weisshorn	Solar	I,	LLC
	
Delaware
Weisshorn	Solar	Manager	I,	LLC
	
Delaware
Zep	Solar	LLC
	
California


key: chroma:document
string_value:
Exhibit	23.1
CONSENT	OF	INDEPENDENT	REGISTERED	PUBLIC	ACCOUNTING	FIRM
We	hereby	consent	to	the	incorporation	by	reference	in	the	Registration	Statements	on	Form	S-8	(Nos.	333-232079,	333-223169,	333-216376,	333-
209696,	333-198002,	333-187113,	333-183033,	and	333-167874)	of	Tesla,	Inc.	of	our	report	dated	January	30,	2023	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
January	30,	2023
	
	
1


key: chroma:document
string_value:
Exhibit	31.1
	
CERTIFICATIONS
	
I,	Elon	Musk,	certify	that:
	
1.	I	have	reviewed	this	Annual	Report	on	Form	10-K	of	Tesla,	Inc.;
	
2.	Based	on	my	knowledge,	this	report	does	not	contain	any	untrue	statement	of	a	material	fact	or	omit	to	state	a	material	fact	necessary	to	make	the
	
statements	made,	in	light	of	the	circumstances	under	which	such	statements	were	made,	not	misleading	with	respect	to	the	period	covered	by
	
this	report;
	
3.	Based	on	my	knowledge,	the	financial	statements,	and	other	financial	information	included	in	this	report,	fairly	present	in	all	material	respects	the
	
financial	condition,	results	of	operations	and	cash	flows	of	the	registrant	as	of,	and	for,	the	periods	presented	in	this	report;
	
4.	The	registrant’s	other	certifying	officer	and	I	are	responsible	for	establishing	and	maintaining	disclosure	controls	and	procedures	(as	defined	in
	
Exchange	Act	Rules	13a-15(e)	and	15d-15(e))	and	internal	control	over	financial	reporting	(as	defined	in	Exchange	Act	Rules	13a-15(f)	and	15d-
15(f))	for	the	registrant	and	have:
	
(a)	Designed	such	disclosure	controls	and	procedures,	or	caused	such	disclosure	controls	and	procedures	to	be	designed	under	our	supervision,
	
to	ensure	that	material	information	relating	to	the	registrant,	including	its	consolidated	subsidiaries,	is	made	known	to	us	by	others	within
	
those	entities,	particularly	during	the	period	in	which	this	report	is	being	prepared;
	
(b)	Designed	such	internal	control	over	financial	reporting,	or	caused	such	internal	control	over	financial	reporting	to	be	designed	under	our


key: chroma:document
string_value:
supervision,	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;
	
(c)	Evaluated	the	effectiveness	of	the	registrant’s	disclosure	controls	and	procedures	and	presented	in	this	report	our	conclusions	about	the
	
effectiveness	of	the	disclosure	controls	and	procedures,	as	of	the	end	of	the	period	covered	by	this	report	based	on	such	evaluation;	and
	
(d)	Disclosed	in	this	report	any	change	in	the	registrant’s	internal	control	over	financial	reporting	that	occurred	during	the	registrant’s	most
	
recent	fiscal	quarter	(the	registrant’s	fourth	fiscal	quarter	in	the	case	of	an	annual	report)	that	has	materially	affected,	or	is	reasonably
	
likely	to	materially	affect,	the	registrant’s	internal	control	over	financial	reporting;	and
	
5.	The	registrant’s	other	certifying	officer	and	I	have	disclosed,	based	on	our	most	recent	evaluation	of	internal	control	over	financial	reporting,	to	the
	
registrant’s	auditors	and	the	audit	committee	of	the	registrant’s	Board	of	Directors	(or	persons	performing	the	equivalent	functions):
	
(a)	All	significant	deficiencies	and	material	weaknesses	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
	
(b)	Any	fraud,	whether	or	not	material,	that	involves	management	or	other	employees	who	have	a	significant	role	in	the	registrant’s	internal
	
control	over	financial	reporting.
	
		
Date:	January	30,	2023
		
		
/s/	Elon	Musk


key: chroma:document
string_value:
/s/	Elon	Musk
		
		
		
Elon	Musk
		
		
		
Chief	Executive	Officer
		
		
		
(Principal	Executive	Officer)


key: chroma:document
string_value:
Exhibit	31.2
CERTIFICATIONS
	
I,	Zachary	J.	Kirkhorn,	certify	that:
	
1.	I	have	reviewed	this	Annual	Report	on	Form	10-K	of	Tesla,	Inc.;
	
2.	Based	on	my	knowledge,	this	report	does	not	contain	any	untrue	statement	of	a	material	fact	or	omit	to	state	a	material	fact	necessary	to	make	the
	
statements	made,	in	light	of	the	circumstances	under	which	such	statements	were	made,	not	misleading	with	respect	to	the	period	covered	by
	
this	report;
	
3.	Based	on	my	knowledge,	the	financial	statements,	and	other	financial	information	included	in	this	report,	fairly	present	in	all	material	respects	the
	
financial	condition,	results	of	operations	and	cash	flows	of	the	registrant	as	of,	and	for,	the	periods	presented	in	this	report;
	
4.	The	registrant’s	other	certifying	officer	and	I	are	responsible	for	establishing	and	maintaining	disclosure	controls	and	procedures	(as	defined	in
	
Exchange	Act	Rules	13a-15(e)	and	15d-15(e))	and	internal	control	over	financial	reporting	(as	defined	in	Exchange	Act	Rules	13a-15(f)	and	15d-
15(f))	for	the	registrant	and	have:
	
(a)	Designed	such	disclosure	controls	and	procedures,	or	caused	such	disclosure	controls	and	procedures	to	be	designed	under	our	supervision,
	
to	ensure	that	material	information	relating	to	the	registrant,	including	its	consolidated	subsidiaries,	is	made	known	to	us	by	others	within
	
those	entities,	particularly	during	the	period	in	which	this	report	is	being	prepared;
	
(b)	Designed	such	internal	control	over	financial	reporting,	or	caused	such	internal	control	over	financial	reporting	to	be	designed	under	our


key: chroma:document
string_value:
supervision,	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;
	
(c)	Evaluated	the	effectiveness	of	the	registrant’s	disclosure	controls	and	procedures	and	presented	in	this	report	our	conclusions	about	the
	
effectiveness	of	the	disclosure	controls	and	procedures,	as	of	the	end	of	the	period	covered	by	this	report	based	on	such	evaluation;	and
	
(d)	Disclosed	in	this	report	any	change	in	the	registrant’s	internal	control	over	financial	reporting	that	occurred	during	the	registrant’s	most
	
recent	fiscal	quarter	(the	registrant’s	fourth	fiscal	quarter	in	the	case	of	an	annual	report)	that	has	materially	affected,	or	is	reasonably
	
likely	to	materially	affect,	the	registrant’s	internal	control	over	financial	reporting;	and
	
5.	The	registrant’s	other	certifying	officer	and	I	have	disclosed,	based	on	our	most	recent	evaluation	of	internal	control	over	financial	reporting,	to	the
	
registrant’s	auditors	and	the	audit	committee	of	the	registrant’s	Board	of	Directors	(or	persons	performing	the	equivalent	functions):
	
(a)	All	significant	deficiencies	and	material	weaknesses	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
	
(b)	Any	fraud,	whether	or	not	material,	that	involves	management	or	other	employees	who	have	a	significant	role	in	the	registrant’s	internal
	
control	over	financial	reporting.
	
		
Date:	January	30,	2023
		
	
	
/s/	Zachary	J.	Kirkhorn


key: chroma:document
string_value:
/s/	Zachary	J.	Kirkhorn
		
		
	
	
Zachary	J.	Kirkhorn
		
		
	
	
Chief	Financial	Officer
		
		
	
	
(Principal	Financial	Officer)


key: chroma:document
string_value:
Exhibit	32.1
	
	
SECTION	1350	CERTIFICATIONS
	
I,	Elon	Musk,	certify,	pursuant	to	18	U.S.C.	Section	1350,	that,	to	my	knowledge,	the	Annual	Report	of	Tesla,	Inc.	on	Form	10-K	for	the	annual	period
	
ended	December	31,	2022,	(i)	fully	complies	with	the	requirements	of	Section	13(a)	or	15(d)	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,	Inc.
	
	
Date:	January	30,	2023
		
		
/s/	Elon	Musk
	
		
		
		
Elon	Musk
		
		
		
Chief	Executive	Officer
		
		
		
(Principal	Executive	Officer)
	
I,	Zachary	J.	Kirkhorn,	certify,	pursuant	to	18	U.S.C.	Section	1350,	that,	to	my	knowledge,	the	Annual	Report	of	Tesla,	Inc.	on	Form	10-K	for	the	annual
	
period	ended	December	31,	2022,	(i)	fully	complies	with	the	requirements	of	Section	13(a)	or	15(d)	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,	Inc.
	
	
Date:	January	30,	2023
		
		
/s/	Zachary	J.	Kirkhorn
		
		
		
Zachary	J.	Kirkhorn
		
		
		
Chief	Financial	Officer
		
		
		
(Principal	Financial	Officer)


key: chroma:document
string_value:
UNITED	STATES
SECURITIES	AND	EXCHANGE	COMMISSION
Washington,	D.C.	20549
	
FORM	
10-K
	
(Mark	One)
☒
ANNUAL	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF	THE	SECURITIES	EXCHANGE	ACT	OF	1934
For	the	fiscal	year	ended	
December	31,	2019
	
OR
☐
TRANSITION	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF	THE	SECURITIES	EXCHANGE	ACT	OF	1934
For	the	transition	period	from	
																				
	to	
																					
Commission	File	Number:	
001-34756
	
Tesla,	Inc.
(Exact	name	of	registrant	as	specified	in	its	charter)
	
	
Delaware
	
91-2197729
(State	or	other	jurisdiction	of
incorporation	or	organization)
	
(I.R.S.	Employer
Identification	No.)
	
	
	
3500	Deer	Creek	Road
Palo	Alto
,	
California
	
94304
(Address	of	principal	executive	offices)
	
(Zip	Code)
(
650
)	
681-5000
(Registrant’s	telephone	number,	including	area	code)
Securities	registered	pursuant	to	Section	12(b)	of	the	Act:
	
Title	of	each	class
Trading	Symbol(s)
Name	of	each	exchange	on	which	registered
Common	stock
TSLA
The	Nasdaq	Global	Select	Market
	
Securities	registered	pursuant	to	Section	12(g)	of	the	Act:
None
	
Indicate	by	check	mark	whether	the	registrant	is	a	well-known	seasoned	issuer,	as	defined	in	Rule	405	of	the	Securities	Act.				
Yes
		
☒
				No		
☐


key: chroma:document
string_value:
Yes
		
☒
				No		
☐
Indicate	by	check	mark	if	the	registrant	is	not	required	to	file	reports	pursuant	to	Section	13	or	15(d)	of	the	Act.				Yes		
☐
				
No
		
☒
Indicate	by	check	mark	whether	the	registrant	(1)	has	filed	all	reports	required	to	be	filed	by	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934	(“Exchange	Act”)	during	the	preceding
12	months	(or	for	such	shorter	period	that	the	registrant	was	required	to	file	such	reports),	and	(2)	has	been	subject	to	such	filing	requirements	for	the	past	90	days.				
Yes
		
☒
				No		
☐
Indicate	by	check	mark	whether	the	registrant	has	submitted	electronically	every	Interactive	Data	File	required	to	be	submitted	pursuant	to	Rule	405	of	Regulation	S-T	(§	232.405	of	this
chapter)
	
during	the	preceding	12	months	(or	for	such	shorter	period	that	the	registrant	was	required	to	submit	such	files).				
Yes
		
☒
				No		
☐
Indicate	by	check	mark	whether	the	registrant	is	a	large	accelerated	filer,	an	accelerated	filer,	a	non-accelerated	filer,	a	smaller	reporting	company	or	an	emerging	growth	company.	See	the
definitions	of	“large	accelerated	filer,”	“accelerated	filer,”	“smaller	reporting	company”	and	“emerging	growth	company”	in	Rule	12b-2	of	the	Exchange	Act:
	
Large	accelerated	filer
	
☒
		
Accelerated	filer
	
☐
	
	
	
	
Non-accelerated	filer
	
☐
		
		
Smaller	reporting	company
	
☐


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Emerging	growth	company
	
☐
	
	
	
	
If	an	emerging	growth	company,	indicate	by	check	mark	if	the	registrant	has	elected	not	to	use	the	extended	transition	period	for	complying	with	any	new	or	revised	financial	accounting
standards	provided	pursuant	to	Section	13(a)	of	the	Exchange	Act.				
☐
Indicate	by	check	mark	whether	the	registrant	is	a	shell	company	(as	defined	in	Rule	12b-2	of	the	Exchange	Act).				Yes		
☐
				No		
☒
The	aggregate	market	value	of	voting	stock	held	by	non-affiliates	of	the	registrant,	as	of	June	30,	2019,	the	last	day	of	the	registrant’s	most	recently	completed	second	fiscal	quarter,	was
$
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,	2019).	Shares	of	Common	Stock	held	by	each
executive	officer,	director,	and	holder	of	5%	or	more	of	the	outstanding	Common	Stock	have	been	excluded	in	that	such	persons	may	be	deemed	to	be	affiliates.	This	determination	of	affiliate	status
is	not	necessarily	a	conclusive	determination	for	other	purposes.
As	of	February	7,	2020,	there	were	
181,341,586
	shares	of	the	registrant’s	Common	Stock	outstanding.
DOCUMENTS	INCORPORATED	BY	REFERENCE
Portions	of	the	registrant’s	Proxy	Statement	for	the	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


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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,	2019.


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TESLA,	INC.
ANNUAL	REPORT	ON	FORM	10-K	FOR	THE	YEAR	ENDED	DECEMBER	31,	2019
INDEX
	
	
	
	
	
Page
PART	I.
	
	
	
	
	
	
	
Item	1.
	
Business
		
1
Item	1A.
	
Risk	Factors
	
15
Item	1B.
	
Unresolved	Staff	Comments
	
34
Item	2.
	
Properties
	
35
Item	3.
	
Legal	Proceedings
	
35
Item	4.
	
Mine	Safety	Disclosures
	
35
	
	
	
PART	II.
	
	
	
	
	
	
Item	5.
	
Market	for	Registrant’s	Common	Equity,	Related	Stockholder	Matters	and	Issuer	Purchases	of	Equity	Securities
	
36
Item	6.
	
Selected	Consolidated	Financial	Data
	
38
Item	7.
	
Management’s	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations
	
39
Item	7A.
	
Quantitative	and	Qualitative	Disclosures	About	Market	Risk
	
60
Item	8.
	
Financial	Statements	and	Supplementary	Data
	
61
Item	9.
	
Changes	in	and	Disagreements	with	Accountants	on	Accounting	and	Financial	Disclosure
	
127
Item	9A.
	
Controls	and	Procedures
	
127
Item	9B.
	
Other	Information
	
128
	
	
	
PART	III.
	
	
	
	
	
	
Item	10.
	
Directors,	Executive	Officers	and	Corporate	Governance
	
129
Item	11.
	
Executive	Compensation
	
129
Item	12.
	
Security	Ownership	of	Certain	Beneficial	Owners	and	Management	and	Related	Stockholder	Matters
	
129
Item	13.


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129
Item	13.
	
Certain	Relationships	and	Related	Transactions,	and	Director	Independence
	
129
Item	14.
	
Principal	Accountant	Fees	and	Services
	
129
	
	
	
	
PART	IV.
	
	
	
	
	
	
Item	15.
	
Exhibits	and	Financial	Statement	Schedules
	
129
Item	16.
	
Summary
	
155
	
	
	
Signatures
	
156
	
	
	
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Forward-Looking	Statements
The	discussions	in	this	Annual	Report	on	Form	10-K	contain	forward-looking	statements	reflecting	our	current	expectations	that
involve	risks	and	uncertainties.	These	forward-looking	statements	include,	but	are	not	limited	to,	statements	concerning	our	strategy,
future	operations,	future	financial	position,	future	revenues,	projected	costs,	profitability,	expected	cost	reductions,	capital	adequacy,
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	“anticipates,”	“believes,”	“could,”	“estimates,”	“expects,”	“intends,”
“may,”	“plans,”	“projects,”	“will,”	“would”	and	similar	expressions	are	intended	to	identify	forward-looking	statements,	although	not	all
forward-looking	statements	contain	these	identifying	words.	We	may	not	actually	achieve	the	plans,	intentions	or	expectations	disclosed
in	our	forward-looking	statements	and	you	should	not	place	undue	reliance	on	our	forward-looking	statements.	Actual	results	or	events
could	differ	materially	from	the	plans,	intentions	and	expectations	disclosed	in	the	forward-looking	statements	that	we	make.	These
forward-looking	statements	involve	risks	and	uncertainties	that	could	cause	our	actual	results	to	differ	materially	from	those	in	the
forward-looking	statements,	including,	without	limitation,	the	risks	set	forth	in	Part	I,	Item	1A,	“Risk	Factors”	in	this	Annual	Report	on
Form	10-K	and	in	our	other	filings	with	the	Securities	and	Exchange	Commission.	We	do	not	assume	any	obligation	to	update	any
forward-looking	statements.


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PART	I
ITEM	1.
BUSINESS
	
Overview
We	design,	develop,	manufacture,	sell	and	lease	high-performance	fully	electric	vehicles	and	energy	generation	and	storage	systems,	and	offer
services	related	to	our	products.	We	are	the	world’s	first	vertically	integrated	sustainable	energy	company,	offering	end-to-end	clean	energy	products,
including	generation,	storage	and	consumption.	We	generally	sell	our	products	directly	to	customers,	including	through	our	website	and	retail	locations.
We	also	continue	to	grow	our	customer-facing	infrastructure	through	a	global	network	of	vehicle	service	centers,	Mobile	Service	technicians,	body
shops,	Supercharger	stations	and	Destination	Chargers	to	accelerate	the	widespread	adoption	of	our	products.	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.	Our	sustainable	energy	products,	engineering	expertise,	intense	focus	to	accelerate	the
world’s	transition	to	sustainable	energy	and	achieve	the	benefits	of	autonomous	driving,	and	business	model	differentiate	us	from	other	companies.	
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.	In	order	to	meet	customers’	range,	functionality	and


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performance	expectations,	we	have	employed	our	considerable	design	and	vehicle	engineering	capabilities	to	overcome	the	design,	styling	and
performance	issues	that	have	historically	limited	broad	adoption	of	electric	vehicles.	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.
Finally,	we	have	leveraged	our	technological	expertise	in	batteries,	energy	management,	power	electronics,	and	integrated	systems	from	our
vehicle	powertrain	systems	to	develop	and	manufacture	energy	storage	products,	including	Powerwall,	Powerpack	and	Megapack.	These	scalable


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systems	may	be	used	in	homes,	commercial	facilities	and	on	the	utility	grid,	and	are	capable	of	numerous	applications	including	backup	or	off-grid
power,	peak	demand	reduction,	demand	response,	reducing	intermittency	of	renewable	energy	generation,	facilitation	of	the	use	of	renewable	energy
generation	over	fossil	fuel	generation,	and	other	grid	services	and	wholesale	electric	market	services.	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.
Segment	Information
We	operate	as	two	reportable	segments:	(i)	automotive	and	(ii)	energy	generation	and	storage.
The	automotive	segment	includes	the	design,	development,	manufacturing,	sales,	and	leasing	of	electric	vehicles	as	well	as	sales	of	automotive
regulatory	credits.	Additionally,	the	automotive	segment	is	also	comprised	of	services	and	other,	which	includes	non-warranty	after-sales	vehicle
services,	sales	of	used	vehicles,	retail	merchandise,	sales	by	our	acquired	subsidiaries	to	third	party	customers,	and	vehicle	insurance	revenue.	The
energy	generation	and	storage	segment	includes	the	design,	manufacture,	installation,	sales,	and	leasing	of	solar	energy	generation	and	energy	storage
products,	services	related	to	such	products,	and	sales	of	solar	energy	system	incentives.
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Our	Products	and	Services
Automotive
Model	3
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
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	and	Model	X
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.


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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.
Future	Consumer	and	Commercial	Electric	Vehicles
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.
Energy	Generation	and	Storage
Energy	Storage	Products
We	began	deliveries	of	the	current	generations	of	our	Powerwall	and	Powerpack	products	in	late	2016	and	2017,	respectively,	and	of	our
Megapack	product	in	late	2019.	Powerwall	is	a	13.5	kilowatt	hour	(“kWh”)	rechargeable	lithium-ion	battery	with	integrated	inverter,	designed	to	store
energy	at	a	home	or	small	commercial	facility.	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


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together	to	form	larger	installations,	capable	of	reaching	gigawatt	hours	(“GWh”)	or	greater.	Powerpack	and	Megapack	can	also	be	combined	with
renewable	energy	generation	sources	to	create	microgrids	that	provide	communities	with	clean,	resilient	and	affordable	power.
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	applications,	which	can	be	sent	to	our	systems	through	over-the-air	updates.
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Solar	Energy	Offerings
The	major	components	of	our	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.	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.
In	2019,	we	commenced	direct	customer	and	channel	partner	sales	of	the	third	generation	of	our	Solar	Roof,	which	features	aesthetically
pleasing	and	durable	glass	roofing	tiles	designed	to	complement	the	architecture	of	homes	and	commercial	buildings	while	turning	sunlight	into
electricity.	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.
Technology
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.	Our	core	intellectual	property	includes	our	electric	powertrain	and	our	work	on


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developing	self-driving	technologies.	Our	powertrain	consists	of	our	battery	pack,	power	electronics,	motor,	gearbox,	and	control	software.	We	offer
several	powertrain	variants	for	our	vehicles	that	incorporate	years	of	research	and	development.	In	addition,	we	have	designed	our	vehicles	to
incorporate	the	latest	advances	in	consumer	technologies,	such	as	mobile	computing,	sensing,	displays,	and	connectivity.
Battery	and	Powertrain
We	optimize	the	design	of	the	lithium-ion	cells	we	use	and	of	our	battery	packs	to	achieve	high	energy	density	at	decreasing	costs	while	also
maintaining	safety,	reliability	and	long	life	in	the	rigors	of	an	automotive	environment.	Our	proprietary	technology	includes	systems	for	high	density
energy	storage,	cooling,	safety,	charge	balancing,	structural	durability,	and	electronics	management.	We	have	also	pioneered	advanced	manufacturing
techniques	to	manufacture	large	volumes	of	battery	packs	with	high	quality	at	low	cost.	Moreover,	we	maintain	extensive	testing	and	R&D	capabilities
for	battery	cells,	packs	and	systems,	and	have	built	an	expansive	body	of	knowledge	on	lithium-ion	cell	vendors,	chemistry	types	and	performance
characteristics.	We	believe	that	the	flexibility	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	power	electronics	in	our	electric	powertrain	govern	the	flow	of	electrical	current	throughout	our	vehicles	as	needed,	convert	direct	current


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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.	The	primary	technological	advantages	to	our	proprietary	power	electronics	designs	include	the
ability	to	drive	large	amounts	of	electrical	current	in	a	small	physical	package	with	high	efficiency	and	low	cost,	and	to	recharge	on	a	wide	variety	of
electricity	sources	at	home,	at	the	office	or	on	the	road,	including	at	our	Superchargers.
We	offer	dual	motor	powertrain	vehicles,	which	use	two	electric	motors	to	maximize	traction	and	performance	in	an	all-wheel	drive
configuration.	Tesla’s	dual	motor	powertrain	digitally	and	independently	controls	torque	to	the	front	and	rear	wheels.	The	near-instantaneous	response
of	the	motors,	combined	with	low	centers	of	gravity,	provides	drivers	with	controlled	performance	and	increased	traction	control.	We	are	also
developing	vehicle	powertrain	technology	featuring	three	electric	motors	for	further	increased	performance.
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Vehicle	Control	and	Infotainment	Software
The	performance	and	safety	systems	of	our	vehicles	and	their	battery	packs	require	sophisticated	control	software.	There	are	numerous
processors	in	our	vehicles	to	control	these	functions,	and	we	write	custom	firmware	for	many	of	these	processors.	Software	algorithms	control	traction,
vehicle	stability,	the	acceleration	and	regenerative	braking	of	the	vehicle,	climate	control	and	thermal	management,	and	are	also	used	extensively	to
monitor	the	charge	state	of	the	battery	pack	and	to	manage	all	of	its	safety	systems.	Drivers	use	the	information	and	control	systems	in	our	vehicles	to
optimize	performance,	customize	vehicle	behavior,	manage	charging	modes	and	times	and	control	all	infotainment	functions.	We	develop	almost	all	of
this	software,	including	most	of	the	user	interfaces,	internally.
Self-Driving	Development
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.	This
hardware	suite	enables	field	data	from	the	on-board	camera,	radar,	ultrasonics,	and	GPS	to	continually	train	and	improve	our	neural	network	for	real-
world	performance.
Currently,	we	offer	in	our	vehicles	certain	advanced	driver	assist	systems	under	our	Autopilot	and	FSD	options,	including	auto-steering,	traffic
aware	cruise	control,	automated	lane	changing,	automated	parking,	driver	warning	systems,	and	a	Smart	Summon	feature	that	enables	vehicles	to	be
remotely	summoned	over	short	distances	in	parking	lots	and	driveways.	These	systems	relieve	our	drivers	of	the	most	tedious	and	potentially	dangerous


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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.	Although	at	present	the	driver	is	ultimately	responsible	for	controlling	the	vehicle,	our	systems	provide	safety	and	convenience
functionality	that	allows	our	customers	to	rely	on	them	much	like	the	system	that	airplane	pilots	use	when	conditions	permit.
Energy	Generation	and	Storage
Energy	Storage	Products
We	are	leveraging	many	of	the	component-level	technologies	from	our	vehicles	to	advance	our	energy	storage	products,	including	high	density
energy	storage,	cooling,	safety,	charge	balancing,	structural	durability,	and	electronics	management.	By	taking	a	modular	approach	to	the	design	of
battery	systems,	we	are	able	to	maximize	manufacturing	capacity	to	produce	our	Powerwall,	Powerpack	and	Megapack	products.	Additionally,	we	are
making	significant	strides	in	the	area	of	bi-directional,	grid-tied	power	electronics	that	enable	us	to	interconnect	our	battery	systems	seamlessly	with
global	electricity	grids	while	providing	fast-acting	systems	for	power	injection	and	absorption.
Solar	Energy	Systems
We	are	continually	innovating	and	developing	new	technologies	to	facilitate	the	growth	of	our	solar	energy	business.	For	example,	we	have
developed	proprietary	software	to	reduce	solar	energy	system	design	and	installation	timelines	and	costs,	and	the	Solar	Roof	is	designed	to	work
seamlessly	with	Powerwall.
Design	and	Engineering
Automotive
We	have	created	significant	in-house	capabilities	in	the	design	and	test	engineering	of	electric	vehicles	and	their	components	and	systems.	We


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design,	engineer	and	test	bodies,	chassis,	exteriors,	interiors,	heating	and	cooling	and	low	voltage	electrical	systems	in-house,	and	to	a	lesser	extent,	in
conjunction	with	our	suppliers.	Our	team	has	core	competencies	in	computer	aided	design	and	crash	test	simulations,	which	reduces	the	product
development	time	of	new	models.	We	continue	to	grow	our	capabilities,	including	for	on-site	crash	testing,	durability	testing	and	component	validation.
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Additionally,	our	team	has	expertise	in	selecting	and	working	with	various	materials.	For	example,	given	the	impact	of	mass	on	range,	which	is
very	important	for	passenger	vehicles,	Model	S	and	Model	X	are	built	with	lightweight	aluminum	bodies	and	chassis	which	incorporate	a	variety	of
materials	and	production	methods	that	help	optimize	vehicle	weight,	and	Model	3	and	Model	Y	are	built	with	a	mix	of	materials	to	be	lightweight	and
safe	while	also	increasing	cost-effectiveness	for	these	mass-market	vehicles.	On	the	other	hand,	to	accommodate	the	durability	required	of	work
vehicles,	we	plan	to	use	a	thick	cold-rolled	stainless	steel	alloy	and	ultra-strong	glass	for	Cybertruck	while	employing	our	expertise	in	battery
engineering	to	maintain	excellent	range.
Energy	Generation	and	Storage
Energy	Storage	Products
We	have	an	in-house	engineering	team	that	both	designs	our	energy	storage	products	themselves,	and	works	with	our	residential,	commercial
and	utility	customers	to	design	bespoke	systems	incorporating	our	products.	Our	team’s	expertise	in	electrical,	mechanical,	civil	and	software
engineering	enables	us	to	create	integrated	energy	storage	solutions	that	meet	the	various	and	particular	needs	of	our	customers.
Solar	Energy	Systems
We	also	have	an	in-house	team	that	designs	a	customized	solar	energy	system	or	Solar	Roof	for	each	of	our	customers,	including	an	integrated
energy	storage	system	when	requested	by	the	customer.	We	have	developed	software	that	simplifies	and	expedites	the	design	process	and	optimizes	the
design	to	maximize	the	energy	production	of	each	system.	This	team	completes	a	structural	analysis	of	each	building	and	produces	a	full	set	of


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structural	design	and	electrical	blueprints	that	contain	the	specifications	for	all	system	components.	Additionally,	this	team	specifies	complementary
mounting	and	grounding	hardware	where	required.
Sales	and	Marketing
Historically,	we	have	been	able	to	generate	significant	media	coverage	of	our	company	and	our	products,	and	we	believe	we	will	continue	to	do
so.	Such	media	coverage	and	word	of	mouth	are	the	current	primary	drivers	of	our	sales	leads	and	have	helped	us	achieve	sales	without	traditional
advertising	and	at	relatively	low	marketing	costs.
Automotive
Direct	Sales
We	market	and	sell	our	vehicles	directly	to	customers	using	means	that	we	believe	will	maximize	our	reach,	improve	the	overall	customer
experience	and	maximize	capital	efficiency.	Currently,	our	sales	channels	include	our	website	and	an	international	network	of	company-owned	stores.	
In
some	states,	we	have	also	opened	galleries	to	educate	and	inform	customers	about	our	products,	but	such	locations	do	not	actually	transact	in	the	sale
of	vehicles.	
We	believe	this	infrastructure	enables	us	to	better	control	costs	of	inventory,	manage	warranty	service	and	pricing,	educate	consumers
about	electric	vehicles	and	charging,	maintain	and	strengthen	the	Tesla	brand,	and	obtain	rapid	customer	feedback.
We	reevaluate	our	sales	strategy	both	globally	and	at	a	location-by-location	level	from	time	to	time	to	optimize	our	current	sales	channels.	
Sales
of	vehicles	in	the	automobile	industry	also	tend	to	be	cyclical	in	many	markets,	which	may	expose	us	to	volatility	from	time	to	time.
Used	Vehicle	Sales
Our	used	vehicle	business	supports	new	vehicle	sales	by	integrating	the	sale	of	a	new	Tesla	vehicle	with	a	customer’s	trade-in	needs	for	their


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existing	Tesla	and	non-Tesla	vehicles.	The	Tesla	and	non-Tesla	vehicles	we	acquire	through	trade-ins	are	subsequently	remarketed,	either	directly	by	us
or	through	third-parties.	We	also	receive	used	Tesla	vehicles	to	resell	through	lease	returns	and	other	sources.
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Public	Charging
We	continue	to	build	out	our	global	Supercharger	network	for	our	customers’	convenience,	including	to	enable	long-distance	travel	and	urban
ownership,	which	is	a	part	of	our	strategy	to	remove	a	barrier	to	the	broader	adoption	of	electric	vehicles	caused	by	the	perception	of	limited	range.
Each	Tesla	Supercharger	is	an	industrial	grade,	high-speed	charger	designed	to	recharge	a	Tesla	vehicle	significantly	more	quickly	than	other	charging
options,	and	we	continue	to	evolve	our	technology	to	allow	for	even	faster	charging	times	at	lower	cost	to	us.	Where	possible,	we	are	co-locating
Superchargers	with	our	solar	and	energy	storage	systems	to	further	reduce	costs	and	promote	renewable	power.	Supercharger	stations	typically	are
strategically	placed	along	well-traveled	routes	and	in	dense	city	centers	to	allow	Tesla	vehicle	owners	the	ability	to	enjoy	quick,	reliable	and	ubiquitous
charging	with	convenient,	minimal	stops.	Use	of	the	Supercharger	network	is	either	free	under	certain	sales	programs	or	requires	a	competitive	fee.
We	also	work	with	a	wide	variety	of	hospitality,	retail,	and	public	destinations,	as	well	as	businesses	with	commuting	employees,	to	offer
additional	charging	options	for	our	customers.	These	Destination	Charging	and	workplace	locations	deploy	Tesla	Wall	Connectors	to	provide	charging	to
Tesla	vehicle	owners	who	patronize	or	are	employed	at	their	businesses.	We	also	work	with	single-family	homeowners	and	multi-family	residential
entities	to	deploy	home	charging	solutions	in	our	communities.
Energy	Generation	and	Storage
We	market	and	sell	our	solar	and	energy	storage	products	to	individuals,	commercial	and	industrial	customers	and	utilities	through	a	variety	of
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channels.
In	the	U.S.,	we	offer	residential	solar	and	energy	storage	products	directly	through	our	website,	stores	and	galleries,	as	well	as	through	our
network	of	channel	partners.	Outside	of	the	U.S.,	we	use	our	international	sales	organization	and	a	network	of	channel	partners	to	market	and	sell	these
products	for	the	residential	market.	We	also	sell	Powerwall	directly	to	utilities.	In	the	case	of	products	sold	to	such	utilities	or	channel	partners,	such
partners	typically	sell	and	install	the	product	in	customer	homes.
We	sell	Powerpack	and	Megapack	systems	to	commercial	and	utility	customers	through	our	international	sales	organization,	which	consists	of
experienced	energy	industry	professionals	in	all	of	our	target	markets,	as	well	as	through	our	channel	partner	network.	In	certain	jurisdictions,	we	also
sell	installed	solar	energy	systems	(with	or	without	energy	storage)	to	commercial	customers	through	cash,	lease	and	PPA	transactions.
Service	and	Warranty
Automotive
Service
We	provide	service	for	our	electric	vehicles	at	our	company-owned	service	locations	and	through	an	expanding	fleet	of	Tesla	Mobile	Service
technicians	who	provide	services	that	do	not	require	a	vehicle	lift	remotely	at	customers’	homes	or	other	locations.	Performing	vehicle	service	ourselves
provides	us	with	the	capability	to	identify	problems,	find	solutions,	and	incorporate	improvements	faster,	and	optimize	logistics	and	inventory	for
service	parts	better,	than	traditional	automobile	manufacturers.	Our	vehicles	are	also	designed	with	the	capability	to	wirelessly	upload	data	to	us	via	an
on-board	system	with	cellular	connectivity,	allowing	us	to	diagnose	and	remedy	many	problems	before	ever	looking	at	the	vehicle.
Vehicle	Limited	Warranty	and	Extended	Service	Plans


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Vehicle	Limited	Warranty	and	Extended	Service	Plans
We	provide	a	manufacturer’s	warranty	on	all	new	and	used	Tesla	vehicles.	Each	new	vehicle	has	a	four	year	or	50,000	mile	New	Vehicle	Limited
Warranty,	subject	to	separate	limited	warranties	for	the	supplemental	restraint	system,	battery	and	drive	unit,	and	body	rust	perforation.	For	the
battery	and	drive	unit	on	our	current	new	Model	S	and	Model	X	vehicles,	we	offer	an	eight	year,	150,000	mile	limited	warranty,	with	minimum	70%
retention	of	battery	capacity	over	the	warranty	period.	For	the	battery	and	drive	unit	on	our	current	new	Model	3	and	Model	Y	vehicles,	we	offer	an
eight	year	or	100,000	mile	limited	warranty	for	our	Standard	or	Standard	Range	Plus	battery	and	an	eight	year	or	120,000	mile	limited	warranty	for	our
Long	Range	or	Performance	battery,	with	minimum	70%	retention	of	battery	capacity	over	the	warranty	period.
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In	addition	to	the	New	Vehicle	Limited	Warranty,	we	currently	offer	for	Model	S	and	Model	X	Extended	Service	plans	for	new	vehicle
s	in
specified	regions
.	The	Extended	Service	plans	cover	the	repair	or	replacement	of	vehicle	parts	for	up	to	an	additional	four	years	or	up	to	an	additional
50,000	miles	after	the	expiration	of	the	New	Vehicle	Limited	Warranty.
Energy	Generation	and	Storage
Energy	Storage	Systems
We	generally	provide	a	10-year	“no	defect”	and	“energy	retention”	warranty	with	every	current	Powerwall	and	a	15-year	“no	defect”	and
“energy	retention”	warranty	with	every	current	Powerpack	or	Megapack	system.	Pursuant	to	these	energy	retention	warranties,	we	guarantee	that	the
energy	capacity	of	the	applicable	product	will	be	at	least	a	specified	percentage	(within	a	range	up	to	80%)	of	its	nameplate	capacity	during	specified
time	periods,	depending	on	the	product,	battery	pack	size	and/or	region	of	installation,	and	subject	to	specified	use	restrictions	or	kWh	throughputs
caps.	In	addition,	we	offer	certain	extended	warranties,	which	customers	are	able	to	purchase	from	us	at	the	time	they	purchase	an	energy	storage
system,	including	a	20	year	extended	protection	plan	for	Powerwall	and	a	selection	of	10	or	20	year	performance	guarantees	for	Powerpack	and
Megapack.	In	circumstances	where	we	install	a	Powerwall	or	Powerpack	system,	we	also	provide	certain	warranties	on	our	installation	workmanship.
All	of	the	warranties	for	our	energy	storage	systems	are	subject	to	customary	limitations	and	exclusions.
Solar	Energy	Systems
For	retrofit	solar	energy	systems,	we	provide	a	workmanship	warranty	for	up	to	20	years	from	installation	and	a	separate	warranty	against	roof


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leaks.	We	also	pass-through	the	inverter	and	module	manufacturer	warranties	(typically	10	years	and	25	years	respectively).	When	we	lease	a	retrofit
solar	energy	system,	we	compensate	the	customer	if	their	system	produces	less	energy	than	guaranteed	over	a	specified	period.	For	the	Solar	Roof,	we
provide	a	warranty	against	defects	for	25	years,	a	25	year	weatherization	warranty	and	a	power	output	warranty.	For	all	systems	(retrofit	and	Solar
Roof)	we	also	provide	service	and	repair	(either	under	warranty	or	for	a	fee)	during	the	entire	term	of	the	customer	relationship.
Financial	Services
Automotive
Purchase	Financing	and	Leases
We	offer	leasing	and/or	loan	financing	arrangements	for	our	vehicles	in	certain	jurisdictions	in	North	America,	Europe	and	Asia	through	various
financial	institutions.	
In	certain	international	markets,	we	offer	resale	value	guarantees	to	customers	who	purchase	and	finance	their	vehicles	through
one	of	our	specified	commercial	banking	partners,
	under	which	those	customers	have	the	option	of	selling	their	vehicles	back	to	us	at	preset	future
dates,	generally	at	the	end	of	the	terms	of	the	applicable	loans	or	financing	programs,	for	pre-determined	resale	values.
	
In	certain	markets,	we	also
offer	vehicle	buyback	guarantees	to	financial	institutions,	which	may	obligate	us	to	repurchase	the	vehicles	for	pre-determined	prices.
We	also	currently	offer	
leasing	directly	through	our	local	subsidiaries	for	Model	S,	Model	X	and	Model	3	in	the	U.S.	and	for	Model	S	and	Model
X	in	Canada.
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X	in	Canada.
Insurance
In	August	2019,	we	launched	an	insurance	product	designed	for	our	customers,	which	offers	rates	that	are	often	better	than	other	alternatives.
This	product	is	currently	available	in	California,	and	we	plan	to	expand	both	the	markets	in	which	we	offer	insurance	products	and	our	ability	to	offer
such	products,	as	part	of	our	ongoing	effort	to	decrease	the	total	cost	of	ownership	for	our	customers.
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Energy	Generation	and	Storage
Energy	Storage	Systems
We	currently	offer	a	loan	product	to	residential	customers	who	purchase	Powerwall	together	with	a	new	solar	energy	system,	and	lease	and	PPA
options	to	commercial	customers	who	purchase	a	Powerpack	system	together	with	a	new	solar	energy	system.	We	intend	to	introduce	financial	services
offerings	for	customers	who	purchase	standalone	energy	storage	products	in	the	future.
Solar	Energy	Systems
We	are	an	industry	leader	in	offering	innovative	financing	alternatives	that	allow	our	customers	to	take	direct	advantage	of	available	tax	credits
and	incentives	to	reduce	the	cost	of	owning	a	solar	energy	system	through	a	solar	loan,	or	to	make	the	switch	to	solar	energy	with	little	to	no	upfront
costs	under	a	lease	or	PPA.	Our	solar	loan	offers	third-party	financing	directly	to	a	qualified	customer	to	enable	the	customer	to	purchase	and	own	a
solar	energy	system.	We	are	not	a	party	to	the	loan	agreement	between	the	customer	and	the	third-party	lender,	and	the	third-party	lender	has	no
recourse	against	us	with	respect	to	the	loan.	Our	solar	lease	offers	customers	a	fixed	monthly	fee,	at	rates	that	typically	translate	into	lower	monthly
utility	bills,	and	an	electricity	production	guarantee.	Our	solar	PPA	charges	customers	a	fee	per	kWh	based	on	the	amount	of	electricity	produced	by	our
solar	energy	systems.	We	monetize	the	customer	payments	we	receive	from	our	leases	and	PPAs	through	funds	we	have	formed	with	investors.	We	also
intend	to	introduce	financial	services	offerings	for	our	Solar	Roof	customers	in	the	future.
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Manufacturing
We	manufacture	our	products	and	related	components	primarily	at	the	Fremont	Factory	and	at	nearby	facilities	in	the	Bay	Area,	California;
Gigafactory	Nevada	near	Reno,	Nevada;	Gigafactory	New	York	in	Buffalo,	New	York;	and	Gigafactory	Shanghai	in	China.	We	have	also	selected	a	site
near	Berlin,	Germany	to	build	a	factory	for	the	European	market,	which	we	refer	to	as	Gigafactory	Berlin.
Manufacturing	Facilities	in	the	Bay	Area,	California
We	manufacture	our	vehicles,	and	certain	parts	and	components	that	are	critical	to	our	intellectual	property	and	quality	standards,	at	our
manufacturing	facilities	in	the	Bay	Area	in	California,	including	the	Fremont	Factory,	and	other	local	manufacturing	facilities.	Our	Bay	Area	facilities
contain	several	manufacturing	operations,	including	stamping,	machining,	casting,	plastics,	body	assembly,	paint	operations,	seat	assembly,	final
vehicle	assembly	and	end-of-line	testing	for	our	vehicles,	as	well	as	production	of	battery	packs	and	drive	units	for	Model	S	and	Model	X.	Some	major
vehicle	component	systems	are	purchased	from	suppliers;	however,	we	have	a	high	level	of	vertical	integration	in	our	manufacturing	processes	at	our
Bay	Area	facilities.
Gigafactory	Nevada
Gigafactory	Nevada	is	a	facility	where	we	work	together	with	our	suppliers	to	integrate	battery	material,	cell,	module	and	battery	pack
production	in	one	location.	We	use	the	battery	packs	manufactured	at	Gigafactory	Nevada	for	Model	3,	Model	Y	and	our	energy	storage	products.	We


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also	manufacture	Model	3	and	Model	Y	drive	units	at	Gigafactory	Nevada.	Finally,	the	assembly	of	Megapack	systems	takes	place	at	Gigafactory
Nevada,	allowing	us	to	ship	deployment-ready	systems	directly	to	customers.
We	have	designed	Gigafactory	Nevada	to	allow	us	access	to	high	volumes	of	lithium-ion	battery	cells	while	achieving	a	significant	reduction	in
the	cost	of	our	battery	packs,	and	we	have	an	agreement	with	Panasonic	to	partner	with	us	on	Gigafactory	Nevada	with	investments	in	production
equipment	that	it	is	using	to	manufacture	and	supply	us	with	battery	cells.	
Given	its	importance	to	the	production	of	our	vehicle	and	energy	storage
products,	in	particular	Model	3,	Model	Y	and	Megapack,	we	continue	to	invest	in	Gigafactory	Nevada	to	achieve	additional	production	output	there.
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Gigafactory	New	York
We	have	primarily	used	our	manufacturing	facility	in	Buffalo,	New	York,	which	we	refer	to	as	Gigafactory	New	York,	for	the	development	and
production	of	our	Solar	Roof	and	other	solar	products	and	components,	energy	storage	components,	and	Supercharger	components,	and	for	other
lessor-approved	functions.	In	particular,	our	manufacturing	operations	at	Gigafactory	New	York	are	increasing	significantly	as	we	ramp	the	production
of	the	third	generation	of	our	Solar	Roof	there.
Gigafactory	Shanghai
In	December	2019,	we	commenced	production	of	Model	3	vehicles	at	Gigafactory	Shanghai,	which	we	have	established	in	order	to	increase	the
affordability	of	our	vehicles	for	customers	in	local	markets	by	reducing	transportation	and	manufacturing	costs	and	eliminating	certain	tariffs	on
vehicles	imported	into	China	from	the	U.S.	
At	Gigafactory	Shanghai,	we	have	installed	annual	production	capacity	for	150,000	Model	3	vehicles	
that	we
believe	we	will	eventually	be	able	to	push	to	actual	rates	of	production	in	excess	of	such	number
,	subject	to	local	production	of	battery	packs,	which	we
began	ramping	there	later	than	other	processes.	We	have	also	commenced	construction	of	the	next	phase	of	Gigafactory	Shanghai	to	add	Model	Y
manufacturing	capacity	at	least	equivalent	to	that	for	Model	3.	
Much	of	the	investment	in	Gigafactory	Shanghai	has	been	and	is	expected	to	continue	to
be	provided	through	local	debt	financing,	including	a	RMB	9.0	billion	(or	the	equivalent	amount	in	U.S.	dollars)	fixed	asset	term	facility	and	a	RMB	2.25


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billion	(or	the	equivalent	amount	in	U.S.	dollars)	working	capital	revolving	facility	that	our	subsidiary	entered	into	in	December	2019.	We	are
supplementing	such	financing	with	limited	direct	capital	expenditures	by	us,	at	a	lower	cost	per	unit	of	production	capacity	than	that	of	Model	3
production	at	the	Fremont	Factory.
Other	Manufacturing
Generally,	we	continue	to	expand	production	capacity	at	our	existing	facilities.	We	also	intend	to	further	increase	cost-competitiveness	in	our
significant	markets	by	strategically	adding	local	manufacturing,	including	at	our	planned	Gigafactory	Berlin.
Supply	Chain
Our	products	use	thousands	of	purchased	parts	that	are	sourced	from	hundreds	of	suppliers	across	the	world.	We	have	developed	close
relationships	with	vendors	of	key	parts	such	as	battery	cells,	electronics	and	complex	vehicle	assemblies.	Certain	components	purchased	from	these
suppliers	are	shared	or	are	similar	across	many	product	lines,	allowing	us	to	take	advantage	of	pricing	efficiencies	from	economies	of	scale.			
As	is	the	case	for	most	automotive	companies,	most	of	our	procured	components	and	systems	are	sourced	from	single	suppliers.	Certain	key
components	we	use	have	multiple	available	sources,	and	we	work	to	qualify	multiple	suppliers	for	each	such	component	where	it	is	sensible	to	do	so,	in
order	to	minimize	production	risks	owing	to	disruptions	in	their	supply.	We	also	mitigate	risk	by	maintaining	safety	stock	for	key	parts	and	assemblies
and	die	banks	for	components	with	lengthy	procurement	lead	times.		
Our	products	use	various	raw	materials	including	aluminum,	steel,	cobalt,	lithium,	nickel	and	copper.	Pricing	for	these	materials	is	governed	by


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market	conditions	and	may	fluctuate	due	to	various	factors	outside	of	our	control,	such	as	supply	and	demand	and	market	speculation.	We	currently
believe	that	we	have	adequate	access	to	raw	materials	supplies	in	order	to	meet	the	needs	of	our	operations.
Governmental	Programs,	Incentives	and	Regulations
Globally,	both	the	operation	of	our	business	by	us	and	the	ownership	of	our	products	by	our	customers	are	impacted	by	a	number	of	government
programs,	incentives	and	other	arrangements.	Our	business	and	products	are	also	subject	to	a	number	of	governmental	regulations	that	vary	among
jurisdictions.
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Programs	and	Incentives
California	Alternative	Energy	and	Advanced	Transportation	Financing	Authority	Tax	Incentives
We	have	entered	into	multiple	agreements	over	the	past	few	years	with	the	California	Alternative	Energy	and	Advanced	Transportation
Financing	Authority	(“CAEATFA”)	that	provide	multi-year	sales	tax	exclusions	on	purchases	of	manufacturing	equipment	that	will	be	used	for	specific
purposes,	including	the	expansion	and	ongoing	development	of	Model	S,	Model	X,	Model	3,	Model	Y	and	future	electric	vehicles	and	the	expansion	of
electric	vehicle	powertrain	production	in	California.
Gigafactory	Nevada—Nevada	Tax	Incentives
In	connection	with	the	construction	of	Gigafactory	Nevada,	we	have	entered	into	agreements	with	the	State	of	Nevada	and	Storey	County	in
Nevada	that	provide	abatements	for	sales,	use,	real	property,	personal	property	and	employer	excise	taxes,	discounts	to	the	base	tariff	energy	rates	and
transferable	tax	credits.	These	incentives	are	available	for	the	applicable	periods	beginning	on	October	17,	2014	and	ending	on	either	June	30,	2024	or
June	30,	2034	(depending	on	the	incentive).	Under	these	agreements,	we	were	eligible	for	a	maximum	of	$195.0	million	of	transferable	tax	credits,
subject	to	capital	investments	by	us	and	our	partners	for	Gigafactory	Nevada	of	at	least	$3.50	billion,	which	we	exceeded	during	2017,	and	specified
hiring	targets	for	Gigafactory	Nevada,	which	we	exceeded	during	2018.	As	a	result,	as	of	December	31,	2018,	we	had	earned	the	maximum	amount	of
credits.
Gigafactory	New	York—New	York	State	Investment	and	Lease


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We	have	a	lease	through	the	Research	Foundation	for	the	State	University	of	New	York	(the	“SUNY	Foundation”)	for	Gigafactory	New	York,
which	was	constructed	on	behalf	of	the	SUNY	Foundation.	Under	the	lease	and	a	related	research	and	development	agreement,	there	continues	to	be,
on	behalf	of	the	SUNY	Foundation,	installation	of	certain	utilities	and	other	improvements	and	acquisition	of	certain	manufacturing	equipment
designated	by	us	to	be	used	at	Gigafactory	New	York.	The	terms	of	such	agreement	require	us	to	comply	with	a	number	of	covenants,	including
required	hiring	and	cumulative	investment	targets,	which	we	have	met	to	date	as	of	the	applicable	measurement	dates.
Gigafactory	Shanghai—Lease	and	Land	Use	Rights
We	have	a	lease	arrangement	with	the	local	government	of	Shanghai	for	land	use	rights	at	Gigafactory	Shanghai.	Under	the	terms	of	the
arrangement,	we	are	required	to	meet	a	cumulative	capital	expenditure	target	and	an	annual	tax	revenue	target	starting	at	the	end	of	2023,	which	we
believe	will	be	attainable	even	if	our	actual	vehicle	production	at	Gigafactory	Shanghai	were	far	lower	than	the	volumes	we	are	forecasting.
Tesla	Regulatory	Credits
In	connection	with	the	production,	delivery,	placement	into	service	and	ongoing	operation	of	our	zero	emission	vehicles,	charging	infrastructure
and	solar	systems	in	global	markets,	we	have	earned	and	will	continue	to	earn	various	tradable	regulatory	credits.	We	have	sold	these	credits,	and	will
continue	to	sell	future	credits,	to	automotive	companies	and	other	regulated	entities	who	can	use	the	credits	to	comply	with	emission	standards	and


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other	regulatory	requirements.	For	example,	under	California’s	Zero	Emission	Vehicle	Regulation	and	those	of	states	that	have	adopted	California’s
standard,	vehicle	manufacturers	are	required	to	earn	or	purchase	credits,	referred	to	as	ZEV	credits,	for	compliance	with	their	annual	regulatory
requirements.	These	laws	provide	that	automakers	may	bank	or	sell	to	other	regulated	parties	their	excess	credits	if	they	earn	more	credits	than	the
minimum	quantity	required	by	those	laws.	Tesla	also	earns	other	types	of	saleable	regulatory	credits	in	the	United	States	and	abroad,	including
greenhouse	gas,	fuel	economy,	renewable	energy,	and	clean	fuels	credits.	Likewise,	several	U.S.	states	have	adopted	procurement	requirements	for
renewable	energy	production.	These	requirements	enable	companies	deploying	solar	energy	to	earn	tradable	credits	known	as	Solar	Renewable	Energy
Certificates	(“SRECs”).
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Energy	Storage	Systems—Incentives
The	regulatory	regime	for	energy	storage	projects	is	still	under	development.	Nevertheless,	there	are	various	policies,	incentives	and	financial
mechanisms	at	the	federal,	state	and	local	levels	that	support	the	adoption	of	energy	storage.	For	example,	energy	storage	systems	that	are	charged
using	solar	energy	are	eligible	for	the	26%	tax	credit	in	2020	with	a	ramp	down	in	2021	and	beyond	under	Section	48(a)(3)	of	the	Internal	Revenue
Code,	or	the	IRC,	as	described	below.	In	addition,	California	and	a	number	of	other	states	have	adopted	procurement	targets	for	energy	storage,	and
behind	the	meter	energy	storage	systems	qualify	for	funding	under	the	California	Self	Generation	Incentive	Program.
The	Federal	Energy	Regulatory	Commission	(“FERC”)	has	also	taken	steps	to	enable	the	participation	of	energy	storage	in	wholesale	energy
markets.	For	example,	in	late	2016,	FERC	issued	a	final	rule,	Order	No.	821,	to	further	break	down	barriers	preventing	energy	storage	from	fully
participating	in	wholesale	energy	markets.	Order	821	is	currently	under	review	before	the	U.S.	Court	of	Appeals	for	the	D.C.	Circuit.
Solar	Energy	Systems—Government	and	Utility	Programs	and	Incentives
U.S.	federal,	state	and	local	governments	have	established	various	policies,	incentives	and	financial	mechanisms	to	reduce	the	cost	of	solar
energy	and	to	accelerate	the	adoption	of	solar	energy.	These	incentives	include	tax	credits,	cash	grants,	tax	abatements	and	rebates.
The	federal	government	currently	provides	an	uncapped	investment	tax	credit	(“ITC”)	under	two	sections	of	the	IRC:	Section	48	and	Section


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25D.	Section	48(a)(3)	of	the	IRC	allows	a	taxpayer	to	claim	a	credit	of	26%	of	qualified	expenditures	for	a	commercial	solar	energy	system	that
commences	construction	by	December	31,	2020.	The	credit	then	declines	to	22%	in	2021	and	a	permanent	10%	thereafter.	We	claim	the	Section	48
commercial	credit	when	available	for	both	our	residential	and	commercial	projects,	based	on	ownership	of	the	solar	energy	system.	The	federal
government	also	provides	accelerated	depreciation	for	eligible	commercial	solar	energy	systems.	Section	25D	of	the	IRC	allows	a	homeowner-taxpayer
to	claim	a	credit	of	26%	of	qualified	expenditures	for	a	residential	solar	energy	system	owned	by	the	homeowner	that	is	placed	in	service	by	December
31,	2020.	The	credit	then	declines	to	22%	in	2021	and	is	scheduled	to	expire	thereafter.	Customers	who	purchase	their	solar	energy	systems	for	cash	or
through	our	solar	loan	offering	are	eligible	to	claim	the	Section	25D	investment	tax	credit.
In	addition	to	the	federal	ITC,	many	U.S.	states	offer	personal	and	corporate	tax	credits	and	incentives	for	solar	energy	systems.
Regulations
Vehicle	Safety	and	Testing
Our	vehicles	are	subject	to,	and	comply	with	or	are	otherwise	exempt	from,	numerous	regulatory	requirements	established	by	the	National
Highway	Traffic	Safety	Administration	(“NHTSA”),	including	all	applicable	United	States	Federal	Motor	Vehicle	Safety	Standards	(“FMVSS”).	Our
vehicles	fully	comply	with	all	applicable	FMVSSs	without	the	need	for	any	exemptions,	and	we	expect	future	Tesla	vehicles	to	either	fully	comply	or


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comply	with	limited	exemptions	related	to	new	technologies.	Additionally,	there	are	regulatory	changes	being	considered	for	several	FMVSS,	and	while
we	anticipate	compliance,	there	is	no	assurance	until	final	regulation	changes	are	enacted.
As	a	manufacturer,	we	must	self-certify	that	our	vehicles	meet	all	applicable	FMVSS,	as	well	as	the	NHTSA	bumper	standard,	or	otherwise	are
exempt,	before	the	vehicles	can	be	imported	or	sold	in	the	U.S.	Numerous	FMVSS	apply	to	our	vehicles,	such	as	crash-worthiness	requirements,	crash
avoidance	requirements,	and	electric	vehicle	requirements.	We	are	also	required	to	comply	with	other	federal	laws	administered	by	NHTSA,	including
the	CAFE	standards,	Theft	Prevention	Act	requirements,	consumer	information	labeling	requirements,	Early	Warning	Reporting	requirements	regarding
warranty	claims,	field	reports,	death	and	injury	reports	and	foreign	recalls,	and	owner’s	manual	requirements.
The	Automobile	Information	and	Disclosure	Act	requires	manufacturers	of	motor	vehicles	to	disclose	certain	information	regarding	the
manufacturer’s	suggested	retail	price,	optional	equipment	and	pricing.	In	addition,	this	law	allows	inclusion	of	city	and	highway	fuel	economy	ratings,
as	determined	by	EPA,	as	well	as	crash	test	ratings	as	determined	by	NHTSA	if	such	tests	are	conducted.
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Our	vehicles	sold	outside	of	the	U.S.	are	subject	to	similar	foreign	safety,	environmental	and	other	regulations.	Many	of	those	regulations	are
different	from	those	applicable	in	the	U.S.	and	may	require	redesign	and/or	retesting.	The	European	Union	has	established	new	rules	regarding
additional	compliance	oversight	that	are	scheduled	to	commence	in	2020,	and	there	is	also	regulatory	uncertainty	related	to	the	United	Kingdom’s
withdrawal	from	the	European	Union.		These	changes	could	impact	the	rollout	of	new	vehicle	features	in	Europe.
Self-Driving
There	are	no	federal	U.S.	regulations	pertaining	to	the	safety	of	self-driving	vehicles;	however,	NHTSA	has	established	recommended
guidelines.	Certain	U.S.	states	have	legal	restrictions	on	self-driving	vehicles,	and	many	other	states	are	considering	them.	This	patchwork	increases	the
legal	complexity	for	our	vehicles.	In	Europe,	certain	vehicle	safety	regulations	apply	to	self-driving	braking	and	steering	systems,	and	certain	treaties
also	restrict	the	legality	of	certain	higher	levels	of	self-driving	vehicles.	Self-driving	laws	and	regulations	are	expected	to	continue	to	evolve	in	numerous
jurisdictions	in	the	U.S.	and	foreign	countries,	and	may	create	restrictions	on	self-driving	features	that	we	develop.
Automobile	Manufacturer	and	Dealer	Regulation
State	laws	regulate	the	manufacture,	distribution,	sale	and	service	of	automobiles,	and	generally	require	motor	vehicle	manufacturers	and
dealers	to	be	licensed	in	order	to	sell	vehicles	directly	to	consumers	in	the	state.	As	we	open	additional	Tesla	stores	and	service	centers,	we	secure
dealer	licenses	(or	their	equivalent)	and	engage	in	sales	activities	to	sell	our	vehicles	directly	to	consumers.	Certain	states	do	not	permit	automobile


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manufacturers	to	be	licensed	as	dealers	or	to	act	in	the	capacity	of	a	dealer,	or	otherwise	restrict	a	manufacturer’s	ability	to	deliver	or	service	vehicles.
To	sell	vehicles	to	residents	of	states	where	we	are	not	licensed	as	a	dealer,	we	generally	conduct	the	transfer	of	title	out	of	the	state.	In	such	states,	we
have	opened	“galleries”	that	serve	an	educational	purpose	and	where	the	title	transfer	may	not	occur.
As	we	expand	our	retail	footprint	in	the	U.S.,	some	automobile	dealer	trade	associations	have	both	challenged	the	legality	of	our	operations	in
court	and	used	administrative	and	legislative	processes	to	attempt	to	prohibit	or	limit	our	ability	to	operate	existing	stores	or	expand	to	new	locations.
We	expect	that	the	dealer	associations	will	continue	to	mount	challenges	to	our	business	model.	In	addition,	we	expect	the	dealer	associations	to
actively	lobby	state	licensing	agencies	and	legislators	to	interpret	existing	laws	or	enact	new	laws	in	ways	not	favorable	to	Tesla’s	ownership	and
operation	of	its	own	retail	and	service	locations,	and	we	intend	to	actively	fight	any	such	efforts	to	limit	our	ability	to	sell	and	service	our	own	vehicles.
Battery	Safety	and	Testing
Our	battery	pack	conforms	to	mandatory	regulations	that	govern	transport	of	“dangerous	goods,”	defined	to	include	lithium-ion	batteries,	which
may	present	a	risk	in	transportation.	The	regulations	vary	by	mode	of	shipping	transportation,	such	as	by	ocean	vessel,	rail,	truck,	or	air.	We	have
completed	the	applicable	transportation	tests	for	our	battery	packs,	demonstrating	our	compliance	with	applicable	regulations.


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We	use	lithium-ion	cells	in	our	high	voltage	battery	packs	in	our	vehicles	and	energy	storage	products.	The	use,	storage,	and	disposal	of	our
battery	packs	is	regulated	under	federal	law.	We	have	agreements	with	third	party	battery	recycling	companies	to	recycle	our	battery	packs	and	we	are
also	developing	our	own	recycling	technology.	
Solar	Energy—General
We	are	not	a	“regulated	utility”	in	the	U.S.,	although	we	are	subject	to	certain	state	and	federal	regulations	applicable	to	solar	and	battery
storage	providers.	To	operate	our	systems,	we	obtain	interconnection	agreements	from	the	utilities.	In	most	cases,	interconnection	agreements	are
standard	form	agreements	that	have	been	pre-approved	by	the	public	utility	commission	or	other	regulatory	body.	
Sales	of	electricity	and	non-sale	equipment	leases	by	third	parties,	such	as	our	leases,	PPAs	and	subscription	agreements,	face	regulatory
challenges	in	some	states	and	jurisdictions.
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Solar	Energy—Net	Metering
Most	states	in	the	U.S.	have	a	regulatory	policy	known	as	net	energy	metering,	or	net	metering,	available	to	solar	customers.	Net	metering
typically	allows	solar	customers	to	interconnect	their	on-site	solar	energy	systems	to	the	utility	grid	and	offset	their	utility	electricity	purchases	by
receiving	a	bill	credit	for	excess	energy	generated	by	their	solar	energy	system	that	is	exported	to	the	grid.	In	certain	jurisdictions,	regulators	or
utilities	have	reduced	or	eliminated	the	benefit	available	under	net	metering,	or	have	proposed	to	do	so.
Solar	Energy—Mandated	Renewable	Capacity
Many	states	also	have	adopted	procurement	requirements	for	renewable	energy	production,	such	as	an	enforceable	renewable	portfolio
standard,	or	RPS,	or	other	policies	that	require	covered	entities	to	procure	a	specified	percentage	of	total	electricity	delivered	to	customers	in	the	state
from	eligible	renewable	energy	sources,	such	as	solar	energy	systems.	In	SREC	state	markets,	the	RPS	requires	electricity	suppliers	to	secure	a	portion
of	their	electricity	from	solar	generators.	The	SREC	program	provides	a	means	for	the	generation	of	SRECs,	which	can	then	be	sold	separately	from	the
energy	produced	to	covered	entities	who	surrender	the	SRECs	to	the	state	to	prove	compliance	with	the	state’s	renewable	energy	mandate.
Competition
Automotive
The	worldwide	automotive	market	is	highly	competitive	and	we	expect	it	will	become	even	more	competitive	in	the	future	as	we	introduce
additional	vehicles	in	a	broader	cross-section	of	the	passenger	and	commercial	vehicle	market	and	expand	our	vehicles’	capabilities.


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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	and	Model	X	compete	primarily	with	premium	sedans	and	premium	SUVs	and	Model	3	and	Model	Y	compete	with
small	to	medium-sized	sedans	and	compact	SUVs,	which	are	extremely	competitive	markets.	Competing	products	typically	include	internal	combustion
vehicles	from	more	established	automobile	manufacturers;	however,	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.	Many	major	automobile	manufacturers	have	electric	vehicles	available	today	in	major	markets	including	the
U.S.,	China	and	Europe,	and	other	current	and	prospective	automobile	manufacturers	are	also	developing	electric	vehicles.	In	addition,	several
manufacturers	offer	hybrid	vehicles,	including	plug-in	versions.	
Our	vehicles	also	compete	in	the	market	based	on	the	compelling	user	experience	that	they	offer.	We	believe	that	a	key	factor	in	our	success
will	be	our	Autopilot	and	FSD	technologies	that	currently	enable	the	driver-assistance	features	in	our	vehicles,	and	in	which	we	are	making	significant
strides	through	our	proprietary	and	powerful	FSD	computer	and	remotely	updateable	artificial	intelligence	software.	Ultimately,	while	we	are	subject	to


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regulatory	constraints	over	which	we	have	no	control,	our	goal	is	a	fully	autonomously-driven	future	that	improves	safety	and	provides	our	customers
with	convenience	and	additional	income	through	participation	in	an	autonomous	Tesla	ride-hailing	network.	This	network,	which	will	also	include	our
own	fleet	of	vehicles,	will	also	allow	us	to	access	a	new	customer	base	even	as	modes	of	transportation	evolve.	Finally,	our	vehicles	offer	unparalleled
in-vehicle	entertainment	features,	currently	including	Internet	search,	music	services,	passenger	karaoke,	and	parked	video	streaming	and	gaming.
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Energy	Generation	and	Storage
Energy	Storage	Systems
The	market	for	energy	storage	products	is	also	highly	competitive.	Established	companies,	such	as	AES	Energy	Storage,	Siemens,	LG	Chem	and
Samsung,	as	well	as	various	emerging	companies,	have	introduced	products	that	are	similar	to	our	product	portfolio.	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.	We	compete	with	these	companies	based	on	price,	energy	density	and	efficiency.	We	believe	that	the	specifications	of	our	products,
our	strong	brand,	and	the	modular,	scalable	nature	of	our	Powerpack	and	Megapack	products	give	us	a	competitive	advantage	when	marketing	our
products.
Solar	Energy	Systems
The	primary	competitors	to	our	solar	energy	business	are	the	traditional	local	utility	companies	that	supply	energy	to	our	potential	customers.
We	compete	with	these	traditional	utility	companies	primarily	based	on	price,	predictability	of	price	and	the	ease	by	which	customers	can	switch	to
electricity	generated	by	our	solar	energy	systems.	We	also	compete	with	solar	energy	companies	that	provide	products	and	services	similar	to	ours.
Many	solar	energy	companies	only	install	solar	energy	systems,	while	others	only	provide	financing	for	these	installations.	In	the	residential	solar
energy	system	installation	market,	our	primary	competitors	include	Vivint	Solar	Inc.,	Sunrun	Inc.,	Trinity	Solar,	SunPower	Corporation,	and	many
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smaller	local	solar	companies.
The	electricity	produced	by	solar	installations	still	represents	a	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
business	as	we	make	our	retrofit	installations	more	accessible	and	ramp	our	innovative	Solar	Roof.	We	also	believe	that	residential	solar	energy
generation	is	gaining	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.
Intellectual	Property
We	place	a	strong	emphasis	on	our	innovative	approach	and	proprietary	designs	which	bring	intrinsic	value	and	uniqueness	to	our	product
portfolio.		As	part	of	our	business,	we	seek	to	protect	the	underlying	intellectual	property	rights	of	these	innovations	and	designs	such	as	with	respect	to
patents,	trademarks,	copyrights,	trade	secrets	and	other	measures,	including	through	employee	and	third	party	nondisclosure	agreements	and	other
contractual	arrangements.	For	example,	we	place	a	high	priority	on	obtaining	patents	to	provide	the	broadest	and	strongest	possible	protection	to
enable	our	freedom	to	operate	our	innovations	and	designs	within	our	products	and	technologies	in	the	electric	vehicle	market	as	well	as	to	protect	and
defend	our	product	portfolio.	We	have	also	adopted	a	patent	policy	in	which	we	irrevocably	pledged	that	we	will	not	initiate	a	lawsuit	against	any	party


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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.		
Employees
As	of	December	31,	2019,	Tesla,	Inc.	had	48,016	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”).	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	website	is	located	at	
www.tesla.com
,	and	our	reports,	amendments	thereto,	proxy	statements	and	other	information	are	also	made
available,	free	of	charge,	on	our	investor	relations	website	at	
ir.tesla.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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ITEM	1A.
RISK	FACTORS
You	should	carefully	consider	the	risks	described	below	together	with	the	other	information	set	forth	in	this	report,	which	could	materially
affect	our	business,	financial	condition	and	future	results.	The	risks	described	below	are	not	the	only	risks	facing	our	company.	Risks	and	uncertainties
not	currently	known	to	us	or	that	we	currently	deem	to	be	immaterial	also	may	materially	adversely	affect	our	business,	financial	condition	and
operating	results.
Risks	Related	to	Our	Business	and	Industry
We	have	experienced	in	the	past,	and	may	experience	in	the	future,	delays	or	other	complications	in	the	design,	manufacture,
launch,	and	production	ramp	of	our	vehicles,	energy	products,	and	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	launch	and	production	ramp	delays	or	other	complications	in	connection	with	new	vehicle	models	such	as
Model	S,	Model	X	and	Model	3,	and	new	vehicle	features	such	as	the	all-wheel	drive	dual	motor	drivetrain	on	Model	S	and	the	second	version	of	our
Autopilot	hardware.	For	example,	we	encountered	unanticipated	supply	chain	constraints	that	led	to	initial	delays	in	producing	Model	X	and	an	isolated
supplier	limitation	in	the	manufacture	of	Model	3.	Similarly,	during	our	initial	Model	3	production	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,	which	we	addressed	by	reducing


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the	levels	of	automation	and	introducing	semi-automated	or	manual	processes.	In	addition,	we	have	used	a	number	of	new	manufacturing	technologies,
techniques	and	processes	for	our	vehicles,	such	as	aluminum	spot	welding	systems	and	high-speed	blow	forming	of	certain	difficult	to	stamp	vehicle
parts,	and	we	may	introduce	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,	hardware	for	our	Autopilot	and	FSD	features	and	falcon-wing	doors.	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


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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.	
Finally,	because	our	vehicle	models,	in	particular	Model	3	and	Model	Y,	may	share	certain	parts,	suppliers	or	production	facilities	with
each	other,	the	volume	or	efficiency	of	production	with	respect	to	one	model	may	impact	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	launching	and/or	ramping	production	of	new	vehicles,	such	as	Tesla
Semi,	Cybertruck	and	the	new	Tesla	Roadster,	our	energy	storage	products	and	the	Solar	Roof,	as	well	as	future	features	and	services	such	as	new
Autopilot	or	FSD	features	and	the	autonomous	Tesla	ride-hailing	network.	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.
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Any	significant	delay	or	other	complication	in	the	production	ramp	of	our	current	products	or	the	development,	manufacture,	launch	and
production	ramp	of	our	future	products,	features	and	services,	including	complications	associated	with	expanding	our	production	capacity	and	supply
chain	or	obtaining	or	maintaining	related	regulatory	approvals,	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	product	sales,	delivery	and	installation	plans	and	vehicle	servicing	and	charging	network
needs,	or	accurately	project	and	manage	this	growth	internationally,	any	of	which	could	harm	our	business	and	prospects.
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.	As	we
expand	globally,	
we	will	also	need	to	ensure	we	are	in	compliance	with	any	regulatory	requirements	applicable	to	the	sale,	installation	and	service	of	our
products,	the	sale	of	electricity	generated	through	our	solar	energy	systems	and	operation	of	Superchargers	in	various	jurisdictions,	which	could	take
considerable	time	and	expense.	These	plans	require	significant	cash	investments	and	management	resources	and	there	is	no	guarantee	that	they	will
ultimately	generate	additional	sales	or	installations	of	our	products.
We	continuously	evaluate,	and	as	appropriate	evolve,	our	retail	operations	and	product	offerings	in	order	to	maximize	our	reach	and	optimize


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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.	In	particular,	we	are	targeting	with	Model	3	and
Model	Y	a	global	mass	demographic	with	a	broad	range	of	potential	customers,	in	which	we	have	limited	experience	projecting	demand	and	pricing	our
products.	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.
Moreover,	because	we	do	not	have	independent	dealer	networks,	we	are	responsible	for	delivering	all	of	our	vehicles	to	our	customers	and
meeting	their	vehicle	servicing	needs.	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


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markets	as	we	expand.	For	example,	significant	transit	time	may	be	required	to	transport	vehicles	in	volume	into	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	time	in	the	first	quarter	of	2019.
To	accommodate	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	geographies	and	may	not	ultimately	be	successful.	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	our	vehicles,	particular	higher-volume	and	newer	additions	to	our	fleet	such	as	Model	3	and	Model	Y,	it	could	overburden	our
servicing	capabilities	and	parts	inventory.	Finally,	the	increasing	number	of	Tesla	vehicles	also	requires	us	to	continue	to	rapidly	increase	the	number	of
our	Supercharger	stations	and	connectors	throughout	the	world.
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.
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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.	
Moreover,	we	may	not	be	successful
	in	undertaking	this	global	expansion	
if	we	are	unable	to	avoid	cost	overruns	and
other	unexpected	operating	costs,
	
adapt
	our	products	and	conduct	our	operations	to	meet	local	requirements
	and	regulations
,	
implement
	required	local
infrastructure,	systems	and	processes,	and
	
find
	and	
hire
	a	significant	number	of	additional	
sales,	
service,	electrical	installation,	construction	
and
administrative	personnel.
	
If	we	fail	to	manage	our	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	vehicles.
We	operate	in	the	automotive	industry,	which	is	generally	susceptible	to	cyclicality	and	volatility.
Our	growth	is	highly	dependent	upon	the	worldwide	adoption	by	consumers	of	alternative	fuel	vehicles	in	general	and	electric	vehicles	in
particular.	Although	we	have	successfully	grown	demand	for	our	vehicles	thus	far,	there	is	no	guarantee	of	such	future	demand,	or	that	our	vehicles	will
not	compete	with	one	another	in	the	market.	Moreover,	the	target	demographics	for	our	vehicles,	in	particular	the	mass	market	demographic	for	Model


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3	and	Model	Y,	are	highly	competitive.	If	the	market	for	electric	vehicles	in	general	and	Tesla	vehicles	in	particular	does	not	develop	as	we	expect,
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	relatively	recently	achieved	high-volume	production	of	vehicles,	and	are	still	at	an	earlier	stage	and	have	limited	resources
relative	to	our	competitors.	Moreover,	the	market	for	alternative	fuel	vehicles	is	rapidly	evolving.	As	a	result,	the	market	for	our	vehicles	could	be
affected	by	numerous	factors,	such	as:
	
•
perceptions	about	electric	vehicle	features,	quality,	safety,	performance	and	cost;
	
•
perceptions	about	the	limited	range	over	which	electric	vehicles	may	be	driven	on	a	single	battery	charge;
	
•
competition,	including	from	other	types	of	alternative	fuel	vehicles,	plug-in	hybrid	electric	vehicles	and	high	fuel-economy	internal
combustion	engine	vehicles;
	
•
volatility	in	the	cost	of	oil	and	gasoline;
	
•
government	regulations	and	economic	incentives;
	
•
access	to	charging	facilities;	and
	
•
concerns	about	our	future	viability.
In	addition,	sales	of	vehicles	in	the	automotive	industry	tend	to	be	cyclical	in	many	markets,	which	may	expose	us	to	increased	volatility,
especially	as	we	expand	and	adjust	our	operations	and	retail	strategies.	Specifically,	it	is	uncertain	as	to	how	such	macroeconomic	factors	will	impact	us


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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.
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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	results.
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.	However,	our	limited,	and	in	most	cases	single-source,	supply	chain	exposes	us	to	multiple
potential	sources	of	delivery	failure	or	component	shortages	for	our	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,	tariffs,	natural	disasters	such	as	the	March	2011	earthquakes	in	Japan,	health	epidemics,	and	other	factors	beyond	our


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and	our	suppliers’	control	could	also	affect	these	suppliers’	ability	to	deliver	components	to	us	on	a	timely	basis.	The	loss	of	any	supplier,	particularly	a
single-	or	limited-source	supplier,	or	the	disruption	in	the	supply	of	components	from	our	suppliers,	could	lead	to	product	design	changes,	production
delays	of	key	revenue-generating	products,	idle	manufacturing	facilities,	and	potential	loss	of	access	to	important	technology	and	parts	for	producing,
servicing	and	supporting	our	products,	any	of	which	could	result	in	negative	publicity,	damage	to	our	brand	and	a	material	and	adverse	effect	on	our
business,	prospects,	financial	condition	and	operating	results.
We	may	also	be	impacted	by	changes	in	our	supply	chain	or	production	needs.	We	have	experienced	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	changes.
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.	Our	suppliers	may	not	ultimately	be	able	to	sustainably	and	timely	meet	our
cost,	quality	and	volume	needs,	requiring	us	to	replace	them	with	other	sources.	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


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replacements	for	certain	highly	customized	components.	Additionally,	we	continuously	negotiate	with	existing	suppliers	to	obtain	cost	reductions	and
avoid	unfavorable	changes	to	terms,	seek	new	and	less	expensive	suppliers	for	certain	parts,	and	attempt	to	redesign	certain	parts	to	make	them	less
expensive	to	produce.	If	we	are	unsuccessful	in	our	efforts	to	control	and	reduce	supplier	costs,	our	operating	results	will	suffer.
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.	Furthermore,	as	the	scale	of	our	vehicle	production	increases,	we
will	need	to	accurately	forecast,	purchase,	warehouse	and	transport	components	to	our	manufacturing	facilities	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	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.
Any	problems	or	delays	in	expanding	Gigafactory	Nevada	or	ramping	and	maintaining	operations	there	could	negatively	affect	the
production	and	profitability	of	our	products,	such	as	Model	3,	Model	Y	and	our	energy	storage	products.	In	addition,	the	battery
cells	produced	there	store	large	amounts	of	energy.


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To	lower	the	cost	of	cell	production	and	produce	cells	in	high	volume,	we	have	vertically	integrated	the	production	of	lithium-ion	cells	at
Gigafactory	Nevada,	where	we	also	manufacture	battery	packs	and	drive	units	for	certain	vehicles	and	energy	storage	products	and	assemble	our
Megapack	product.	Production	of	lithium-ion	cells	at	Gigafactory	Nevada	began	in	2017,	and	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
our	products	and	expanding	production	output	at	Gigafactory	Nevada.
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In	order	to	achieve	our	volume	and	gross	margin	targets	for	our	vehicles	and	energy	storage	products,	we	must	continue	to	sustain	and	ramp
significant	cell	production	at	Gigafactory	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	relatively	limited	experience	with	cell	production	at	Gigafactory	Nevada.	In	addition,	we	produce	several	components	for	Model	3	and
Model	Y,	such	as	battery	modules	incorporating	the	lithium-
ion	cells	produced	by	Panasonic
	and	drive	units	(including	to	support	Gigafactory	Shanghai
production),	at	Gigafactory	Nevada.	Some	of	the	manufacturing	lines	for	such	components	took	longer	than	anticipated	to	ramp	to	their	full	capacity.
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	rate	and	introduce	new	lines.	If	we	are	unable	to	maintain	Gigafactory	Nevada	production,	ramp
output	additionally	over	time	as	needed,	and	do	so	cost-effectively,	or	if	we
	or	Panasonic	are	unable	to	
hire	and	retain	a	substantial	number	of	highly
skilled	personnel,	our	ability	to	supply	battery	packs	or	other	components	for	Model	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.


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In	addition,	the	high	volumes	of	lithium-ion	cells	and	battery	modules	and	packs	manufactured	at	Gigafactory	Nevada	are	stored	and	recycled	at
our	various	facilities.	Any	mishandling	of	battery	cells	may	cause	disruption	to	the	operation	of	such	facilities.	While	we	have	implemented	safety
procedures	related	to	the	handling	of	the	cells,	there	can	be	no	assurance	that	a	safety	issue	or	fire	related	to	the	cells	would	not	disrupt	our	operations.
Such	disruptions	or	issues	could	negatively	affect	our	brand	and	harm	our	business,	prospects,	financial	condition	and	operating	results.
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


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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.
In	particular,	local	manufacturing	is	critical	to	our	expansion	and	sales	in	China,	which	is	the	largest	market	for	electric	vehicles	in	the	world.
Our	vehicle	sales	in	China	have	been	negatively	impacted	in	the	past	by	certain	tariffs	on	automobiles	manufactured	in	the	U.S.,	such	as	our	vehicles,
and	our	costs	for	producing	our	vehicles	in	the	U.S.	have	also	been	affected	by	import	duties	on	certain	components	sourced	from	China.	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.
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We	face	risks	associated	with	our	international	operations,	including	unfavorable	and	uncertain	regulatory,	political,	economic,
tax	and	labor	conditions,	and	with	establishing	ourselves	in	new	markets,	all	of	which	could	harm	our	business.
We	have	a	global	footprint	with	domestic	and	international	operations	and	subsidiaries.	Accordingly,	we	are	subject	to	a	variety	of	legal,
political	and	regulatory	requirements	and	social,	environmental	and	economic	conditions	over	which	we	have	little	control.	For	example,	we	may	be
impacted	by	trade	policies,	environmental	conditions,	political	uncertainty	and	economic	cycles	involving	geographic	regions	where	we	have	significant
operations,	which	are	inherently	unpredictable.	We	are	subject	to	a	number	of	risks	associated	in	particular	with	international	business	activities	that
may	increase	our	costs,	impact	our	ability	to	sell	our	products	and	require	significant	management	attention.	These	risks	include	conforming	our
products	to	various	international	regulatory	and	safety	requirements	as	well	as	charging	and	other	electric	infrastructures,	organizing	local	operating
entities,	difficulty	in	establishing,	staffing	and	managing	foreign	operations,	challenges	in	attracting	customers,	foreign	government	taxes,	regulations
and	permit	requirements,	our	ability	to	enforce	our	contractual	rights,	trade	restrictions,	customs	regulations,	tariffs	and	price	or	exchange	controls,
and	preferences	of	foreign	nations	for	domestically	manufactured	products.
Increases	in	costs,	disruption	of	supply	or	shortage	of	materials,	in	particular	for	lithium-ion	cells,	could	harm	our	business.
We	may	experience	increases	in	the	cost	of	or	a	sustained	interruption	in	the	supply	or	shortage	of	materials.	Any	such	increase,	supply


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interruption	or	shortage	could	materially	and	negatively	impact	our	business,	prospects,	financial	condition	and	operating	results.	We	use	various
materials	in	our	business	including	aluminum,	steel,	lithium,	nickel,	copper	and	cobalt,	as	well	as	lithium-ion	cells	from	suppliers.	The	prices	for	these
materials	fluctuate,	and	their	available	supply	may	be	unstable,	depending	on	market	conditions	and	global	demand	for	these	materials,	including	as	a
result	of	increased	production	of	electric	vehicles	and	energy	storage	products	by	our	competitors,	and	could	adversely	affect	our	business	and
operating	results.	For	instance,	we	are	exposed	to	multiple	risks	relating	to	lithium-ion	cells.	These	risks	include:
	
•
an	increase	in	the	cost,	or	decrease	in	the	available	supply,	of	materials	used	in	the	cells;
	
•
disruption	in	the	supply	of	cells	due	to	quality	issues	or	recalls	by	battery	cell	manufacturers	or	any	issues	that	may	arise	with	respect
to	cells	manufactured	at	our	own	facilities;	and
	
•
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.	
Our	business	is	dependent	on	the	continued	supply	of	battery	cells	for	the	battery	packs	used	in	our	vehicles	and	energy	storage	products.
While	we	believe	several	sources	of	the	battery	cells	are	available	for	such	battery	packs,	and	expect	to	eventually	rely	substantially	on	battery	cells
manufactured	at	our	own	facilities,	we	have	to	date	fully	qualified	only	a	very	limited	number	of	suppliers	for	the	cells	used	in	such	battery	packs	and


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have	very	limited	flexibility	in	changing	cell	suppliers.	Any	disruption	in	the	supply	of	battery	cells	from	such	suppliers	could	disrupt	production	of	our
vehicles	and	of	the	battery	packs	we	produce	for	energy	products	until	such	time	as	a	different	supplier	is	fully	qualified.	Furthermore,	fluctuations	or
shortages	in	petroleum	and	other	economic	conditions	may	cause	us	to	experience	significant	increases	in	freight	charges	and	material	costs.
Substantial	increases	in	the	prices	for	our	materials	or	prices	charged	to	us,	such	as	those	charged	by	battery	cell	suppliers,	would	increase	our
operating	costs,	and	could	reduce	our	margins	if	we	cannot	recoup	the	increased	costs	through	increased	vehicle	prices.	Any	attempts	to	increase
product	prices	in	response	to	increased	material	costs	could	result	in	cancellations	of	orders	and	reservations	and	therefore	materially	and	adversely
affect	our	brand,	image,	business,	prospects	and	operating	results.
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If	our	vehicles	or	other	products	that	we	sell	or	install	fail	to	perform	as	expected,	our	ability	to	develop,	market	and	sell	our
products	and	services	could	be	harmed.
If	our	vehicles	or	our	energy	products	contain	defects	in	design	and	manufacture	that	cause	them	not	to	perform	as	expected	or	that	require
repair,	or	certain	features	of	our	vehicles	such	as	new	Autopilot	or	FSD	features	take	longer	than	expected	to	become	enabled,	are	legally	restricted	or
become	subject	to	onerous	regulation,	our	ability	to	develop,	market	and	sell	our	products	and	services	could	be	harmed.	For	example,	the	operation	of
our	vehicles	is	highly	dependent	on	software,	which	is	inherently	complex	and	may	contain	latent	defects	and	errors	or	be	subject	to	external	attacks.
Issues	experienced	by	vehicle	customers	have	included	those	related	to	the	software	for	the	17	inch	display	screen,	as	well	as	the	panoramic	roof	and
the	12-volt	battery	in	the	Model	S	and	the	seats	and	doors	in	the	Model	X.	Although	we	attempt	to	remedy	any	issues	we	observe	in	our	products	as
effectively	and	rapidly	as	possible,	such	efforts	may	not	be	timely,	may	hamper	production	or	may	not	be	to	the	satisfaction	of	our	customers.	While	we
have	performed	extensive	internal	testing	on	the	products	we	manufacture,	we	currently	have	a	limited	frame	of	reference	by	which	to	evaluate	detailed
long-term	quality,	reliability,	durability	and	performance	characteristics	of	our	battery	packs,	powertrains,	vehicles	and	energy	storage	products.	There
can	be	no	assurance	that	we	will	be	able	to	detect	and	fix	any	defects	in	our	products	prior	to	their	sale	to	or	installation	for	customers.


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Any	product	defects,	delays	or	legal	restrictions	on	product	features,	or	other	failure	of	our	products	to	perform	as	expected,	could	harm	our
reputation	and	result	in	delivery	delays,	product	recalls,	product	liability	claims,	breach	of	warranty	claims,	and	significant	warranty	and	other
expenses,	and	could	have	a	material	adverse	impact	on	our	business,	financial	condition,	operating	results	and	prospects.
We	may	become	subject	to	product	liability	claims,	which	could	harm	our	financial	condition	and	liquidity	if	we	are	not	able	to
successfully	defend	or	insure	against	such	claims.
Although	we	design	our	vehicles	to	be	the	safest	vehicles	on	the	road,	product	liability	claims,	even	those	without	merit,	could	harm	our
business,	prospects,	operating	results	and	financial	condition.	The	automobile	industry	in	particular	experiences	significant	product	liability	claims	and
we	face	inherent	risk	of	exposure	to	claims	in	the	event	our	vehicles	do	not	perform	or	are	claimed	to	not	have	performed	as	expected.	As	is	true	for
other	automakers,	our	vehicles	have	been	involved	and	we	expect	in	the	future	will	be	involved	in	crashes	resulting	in	death	or	personal	injury,	and	such
crashes	where	Autopilot	or	FSD	features	are	engaged	are	the	subject	of	significant	public	attention.	We	have	experienced	and	we	expect	to	continue	to
face	claims	arising	from	or	related	to	misuse	or	claimed	failures	of	new	technologies	that	we	are	pioneering,	including	Autopilot	and	FSD	features	in	our
vehicles.	In	addition,	the	battery	packs	that	we	produce	make	use	of	lithium-ion	cells.	On	rare	occasions,	lithium-ion	cells	can	rapidly	release	the	energy


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they	contain	by	venting	smoke	and	flames	in	a	manner	that	can	ignite	nearby	materials	as	well	as	other	lithium-ion	cells.	While	we	have	designed	the
battery	pack	to	passively	contain	any	single	cell’s	release	of	energy	without	spreading	to	neighboring	cells,	there	can	be	no	assurance	that	a	field	or
testing	failure	of	our	vehicles	or	other	battery	packs	that	we	produce	will	not	occur,	in	particular	due	to	a	high-speed	crash,	which	could	subject	us	to
lawsuits,	product	recalls	or	redesign	efforts,	all	of	which	would	be	time	consuming	and	expensive.
Moreover,	as	our	solar	energy	systems	and	energy	storage	products	generate	and	store	electricity,	they	have	the	potential	to	cause	injury	to
people	or	property.	A	successful	product	liability	claim	against	us	could	require	us	to	pay	a	substantial	monetary	award.	Our	risks	in	this	area	are
particularly	pronounced	given	the	relatively	limited	number	of	vehicles	and	energy	storage	products	delivered	to	date	and	limited	field	experience	of
our	products.	Moreover,	a	product	liability	claim	could	generate	substantial	negative	publicity	about	our	products	and	business	and	could	have	a
material	adverse	effect	on	our	brand,	business,	prospects	and	operating	results.	In	most	jurisdictions,	we	generally	self-insure	against	the	risk	of
product	liability	claims	for	vehicle	exposure,	meaning	that	any	product	liability	claims	will	likely	have	to	be	paid	from	company	funds,	not	by	insurance.
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The	markets	in	which	we	operate	are	highly	competitive,	and	we	may	not	be	successful	in	competing	in	these	industries.	We
currently	face	competition	from	new	and	established	domestic	and	international	competitors	and	expect	to	face	competition	from
others	in	the	future,	including	competition	from	companies	with	new	technology.
The	worldwide	automotive	market,	particularly	for	alternative	fuel	vehicles,	is	highly	competitive	today	and	we	expect	it	will	become	even	more
so	in	the	future.	There	is	no	assurance	that	our	vehicles	will	be	successful	in	the	respective	markets	in	which	they	compete.	A	significant	and	growing
number	of	established	and	new	automobile	manufacturers,	as	well	as	other	companies,	have	entered	or	are	reported	to	have	plans	to	enter	the
alternative	fuel	vehicle	market,	including	hybrid,	plug-in	hybrid	and	fully	electric	vehicles,	as	well	as	the	market	for	self-driving	technology	and
applications.	In	some	cases,	such	competitors	have	announced	an	intention	to	produce	electric	vehicles	exclusively	at	some	point	in	the	future.	Most	of
our	current	and	potential	competitors	have	significantly	greater	financial,	technical,	manufacturing,	marketing,	vehicle	sales	resources	and	networks
than	we	do	and	may	be	able	to	devote	greater	resources	to	the	design,	development,	manufacturing,	distribution,	promotion,	sale	and	support	of	their
products.		In	particular,	some	competitors	have	also	announced	plans	to	compete	with	us	in	important	and	large	markets	for	electric	vehicles,	such	as
China	and	in	Europe.	Increased	competition	could	result	in	lower	vehicle	unit	sales,	price	reductions,	revenue	shortfalls,	loss	of	customers	and	loss	of


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market	share,	which	could	harm	our	business,	prospects,	financial	condition	and	operating	results.	In	addition,	Model	3	and	Model	Y	face	competition
from	existing	and	future	automobile	manufacturers	in	the	extremely	competitive	entry-level	premium	sedan	and	compact	SUV	market,	including	BMW,
Ford,	Lexus,	Mercedes	and	Volkswagen	Group.
The	solar	and	energy	storage	industries	are	highly	competitive.	We	face	competition	from	other	manufacturers,	developers	and	installers	of
solar	and	energy	storage	systems,	as	well	as	from	large	utilities.	Decreases	in	the	retail	prices	of	electricity	from	utilities	or	other	renewable	energy
sources	could	make	our	products	less	attractive	to	customers	and	lead	to	an	increased	rate	of	customer	defaults	under	our	existing	long-term	leases	and
PPAs.	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.
If	we	are	unable	to	establish	and	maintain	confidence	in	our	long-term	business	prospects	among	consumers,	analysts	and	within
our	industries,	or	are	subject	to	negative	publicity,	then	our	financial	condition,	operating	results,	business	prospects	and	access
to	capital	may	suffer	materially.
Consumers	may	be	less	likely	to	purchase	our	products	if	they	are	not	convinced	that	our	business	will	succeed	or	that	our	service	and	support
and	other	operations	will	continue	in	the	long	term.	Similarly,	suppliers	and	other	third	parties	will	be	less	likely	to	invest	time	and	resources	in


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developing	business	relationships	with	us	if	they	are	not	convinced	that	our	business	will	succeed.	Accordingly,	in	order	to	build	and	maintain	our
business,	we	must	maintain	confidence	among	customers,	suppliers,	analysts,	ratings	agencies	and	other	parties	in	our	long-term	financial	viability	and
business	prospects.	Maintaining	such	confidence	may	be	particularly	complicated	by	certain	factors	including	those	that	are	largely	outside	of	our
control,	such	as	our	limited	operating	history,	customer	unfamiliarity	with	our	products,	any	delays	in	scaling	manufacturing,	delivery	and	service
operations	to	meet	demand,	competition	and	uncertainty	regarding	the	future	of	electric	vehicles	or	our	other	products	and	services,	and	our	quarterly
production	and	sales	performance	compared	with	market	expectations.
In	particular,	Tesla’s	products,	business,	results	of	operations,	statements	and	actions	are	well-publicized	by	a	range	of	third	parties.	Such
attention	includes	frequent	criticism,	which	is	often	exaggerated	or	unfounded,	such	as	speculation	regarding	the	sufficiency	or	stability	of	our
management	team.	Any	such	negative	perceptions,	whether	caused	by	us	or	not,	could	harm	our	business	and	make	it	more	difficult	to	raise	additional
funds	if	needed.
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If	we	fail	to	effectively	grow	and	manage	the	residual,	financing	and	credit	risks	related	to	our	vehicle	financing	programs,	our
business	may	suffer.
We	offer	financing	arrangements	for	our	vehicles	in	North	America,	Europe	and	Asia	primarily	through	various	financial	institutions.	We	also
currently	offer	leasing	directly	through	our	local	subsidiaries	for	Model	S,	Model	X	and	Model	3	in	the	U.S.	and	for	Model	S	and	Model	X	in	Canada.
Under	a	lease	held	directly	by	us,	we	typically	receive	only	a	very	small	portion	of	the	total	vehicle	purchase	price	at	the	time	of	lease,	followed	by	a
stream	of	payments	over	the	term	of	the	lease.	The	profitability	of	any	vehicles	returned	to	us	at	the	end	of	their	leases	depends	on	our	ability	to
accurately	project	our	vehicles’	residual	values	at	the	outset	of	the	leases,	and	such	values	may	fluctuate	prior	to	the	end	of	their	terms	depending	on
various	factors	such	as	supply	and	demand	of	our	used	vehicles,	economic	cycles	and	the	pricing	of	new	vehicles.	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.	The	leasing	program	also	relies	on	our	ability	to	secure	adequate	financing	and/or	business	partners	to	fund	and	grow
this	program,	and	screen	for	and	manage	customer	credit	risk.	We	expect	the	availability	of	leasing	and	other	financing	options	will	be	important	for	our


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vehicle	customers.	If	we	are	unable	to	adequately	fund	our	leasing	program	with	internal	funds,	or	partners	or	other	external	financing	sources,	and
compelling	alternative	financing	programs	are	not	available	for	our	customers,	we	may	be	unable	to	grow	our	deliveries.	Furthermore,	if	our	leasing
business	grows	substantially,	our	business	may	suffer	if	we	cannot	effectively	manage	the	greater	levels	of	residual	and	credit	risks	resulting	from
growth.	Finally,	if	we	do	not	successfully	monitor	and	comply	with	applicable	national,	state	and/or	local	financial	regulations	and	consumer	protection
laws	governing	lease	transactions,	we	may	become	subject	to	enforcement	actions	or	penalties,	either	of	which	may	harm	our	business.
Moreover,	we	have	provided	resale	value	guarantees	to	customers	and	partners	for	certain	financing	programs,	under	which	such
counterparties	may	sell	their	vehicles	back	to	us	at	certain	points	in	time	at	pre-determined	amounts.	However,	actual	resale	values,	as	with	residual
values	for	leased	vehicles,	are	subject	to	similar	fluctuations	over	the	term	of	the	financing	arrangements,	such	as	from	the	vehicle	pricing	changes
discussed	above.	If	the	actual	resale	values	of	any	vehicles	resold	or	returned	to	us	pursuant	to	these	programs	are	materially	lower	than	the	pre-
determined	amounts	we	have	offered,	our	operating	results,	profitability	and/or	liquidity	could	be	negatively	impacted.
The	unavailability,	reduction	or	elimination	of,	or	unfavorable	determinations	with	respect	to,	government	and	economic
incentives	in	the	U.S.	and	abroad	supporting	the	development	and	adoption	of	electric	vehicles,	energy	storage	products	or	solar
energy	could	have	some	impact	on	demand	for	our	products	and	services.


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We	and	our	customers	currently	benefit	from	certain	government	and	economic	incentives	supporting	the	development	and	adoption	of	electric
vehicles.	In	the	U.S.	and	abroad,	such	incentives	include	tax	credits	or	rebates	that	encourage	the	purchase	of	electric	vehicles.	Specific	policies	in
place	around	the	world	include	exempting	the	purchase	of	electric	vehicles	from	import	taxes,	value	added	taxes,	or	carbon	dioxide	and	weight-based
purchase	taxes.	Such	programs	could	be	reduced,	eliminated	or	exhausted.	For	example,	under	current	regulations,	a	$7,500	federal	tax	credit	that	was
available	in	the	U.S.	for	the	purchase	of	our	vehicles	was	reduced	in	phases	during	2019	and	ended	on	December	31,	2019.	We	believe	that	this
sequential	phase-out	likely	pulled	forward	some	vehicle	demand	into	the	periods	preceding	each	reduction.	Moreover,	in	July	2018,	a	previously
available	incentive	for	purchases	of	Model	3	in	Ontario,	Canada	was	cancelled	and	Tesla	buyers	in	Germany	lost	access	to	electric	vehicle	incentives	for
a	short	period	of	time	beginning	late	2017.	In	April	2017	and	January	2016,	respectively,	previously	available	incentives	in	Hong	Kong	and	Denmark
that	favored	the	purchase	of	electric	vehicles	expired,	negatively	impacting	sales.	Effective	March	2016,	California	implemented	regulations	phasing	out
a	$2,500	cash	rebate	on	qualified	electric	vehicles	for	high-income	consumers.	Such	developments	could	have	some	negative	impact	on	demand	for	our
vehicles,	and	we	and	our	customers	may	have	to	adjust	to	them.
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In	addition,	certain	governmental	rebates,	tax	credits	and	other	financial	incentives	that	are	currently	available	with	respect	to	our	solar	and
energy	storage	product	businesses	allow	us	to	lower	our	costs	and	encourage	customers	to	buy	our	products	and	investors	to	invest	in	our	solar
financing	funds.	However,	these	incentives	may	expire	on	a	particular	date	when	the	allocated	funding	is	exhausted,	reduced	or	terminated	as
renewable	energy	adoption	rates	increase,	sometimes	without	warning.	For	example,	the	U.S.	federal	government	currently	offers	an	investment	tax
credit	(ITC)	for	the	installation	of	solar	power	facilities	and	energy	storage	systems	that	are	charged	from	a	co-sited	solar	power	facility;	however,	the
ITC	is	currently	schedul
ed	to	decline	in	phases,	from	26
%	for	qualifying	solar	systems	for	which	constru
ction	began	by	December	31,	2020
,	to	10%	for
commercial	and	utility	systems	and	to	0%	for	customer-owned	residential	systems	for	which	construction	begins	after	December	31,	2021.	Likewise,	in
jurisdictions	where	net	energy	metering	is	currently	available,	our	customers	receive	bill	credits	from	utilities	for	energy	that	their	solar	energy	systems
generate	and	export	to	the	grid	in	excess	of	the	electric	load	they	use.	Several	jurisdictions	have	reduced,	altered	or	eliminated	the	benefit	available
under	net	energy	metering,	or	have	proposed	to	do	so.	Such	reductions	in	or	termination	of	governmental	incentives	could	adversely	impact	our	results
by	making	our	products	less	competitive	for	potential	customers,	increasing	our	cost	of	capital	and	adversely	impacting	our	ability	to	attract	investment


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partners	and	to	form	new	financing	funds	for	our	solar	and	energy	storage	assets.
Moreover,	we	and	our	fund	investors	claim	the	ITC	and	certain	state	incentives	in	amounts	based	on	the	fair	market	value	of	our	solar	and
energy	storage	systems.	Although	we	obtain	independent	appraisals	to	support	the	claimed	fair	market	values,	the	relevant	governmental	authorities
have	audited	such	values	and	in	certain	cases	have	determined	that	they	should	be	lower,	and	they	may	do	so	again	in	the	future.	Such	determinations
may	result	in	adverse	tax	consequences	and/or	our	obligation	to	make	indemnification	or	other	payments	to	our	funds	or	fund	investors.
Any	failure	by	us	to	comply	with	the	terms	of	our	agreement	with	the	Research	Foundation	for	the	State	University	of	New	York
relating	to	our	Gigafactory	New	York,	could	result	in	negative	consequences	for	our	business.
We	are	party	to	an	operating	lease	and	a	research	and	development	agreement	through	the	SUNY	Foundation.	These	agreements	provide	for
the	construction	and	use	of	our	Gigafactory	in	Buffalo,	New	York,	which	we	have	primarily	used	for	the	development	and	production	of	our	Solar	Roof
and	other	solar	products	and	components,	energy	storage	components,	and	Supercharger	components,	and	for	other	lessor-approved	functions.	Under
this	agreement,	we	are	obligated	to,	among	other	things,	directly	employ	specified	minimum	numbers	of	personnel	in	the	State	of	New	York	and	spend
or	incur	$5.0	billion	in	combined	capital,	operational	expenses,	costs	of	goods	sold	and	other	costs	in	the	State	of	New	York	during	the	10-year	period


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beginning	April	30,	2018.	While	we	expect	significant	operations	at	Gigafactory	New	York	and	the	surrounding	Buffalo	area	to	continue,	including	with
our	ramp	and	manufacture	of	the	Solar	Roof,	if	we	fail	in	any	year	over	the	course	of	the	term	of	the	agreement	to	meet	these	obligations,	we	would	be
obligated	to	pay	a	“program	payment”	of	$41.2	million	to	the	SUNY	Foundation	for	such	year.	Any	inability	on	our	part	to	comply	with	the	requirements
of	this	agreement	may	result	in	the	payment	of	significant	amounts	to	the	SUNY	Foundation,	the	termination	of	our	lease	at	Gigafactory	New	York,
and/or	the	need	to	adjust	certain	of	our	operations,	in	particular	our	production	ramp	of	the	Solar	Roof	or	Supercharger	components.	Any	of	the
foregoing	events	could	have	a	material	adverse	effect	on	our	business,	prospects,	financial	condition	and	operating	results.
If	we	are	unable	to	attract	and/or	retain	key	employees	and	hire	qualified	personnel,	our	ability	to	compete	could	be	harmed.
The	loss	of	the	services	of	any	of	our	key	employees	could	disrupt	our	operations,	delay	the	development	and	introduction	of	our	vehicles	and
services,	and	negatively	impact	our	business,	prospects	and	operating	results.	In	particular,	we	are	highly	dependent	on	the	services	of	Elon	Musk,	our
Chief	Executive	Officer.
None	of	our	key	employees	is	bound	by	an	employment	agreement	for	any	specific	term	and	we	may	not	be	able	to	successfully	attract	and
retain	senior	leadership	necessary	to	grow	our	business.	Our	future	success	depends	upon	our	ability	to	attract	and	retain	executive	officers	and	other


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key	technology,	sales,	marketing,	engineering,	manufacturing	and	support	personnel,	especially	to	support	our	high-volume	manufacture	of	vehicles,
expansion	plans	and	technological	innovation,	and	any	failure	or	delay	in	doing	so	could	adversely	impact	our	business,	prospects,	financial	condition
and	operating	results.
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Key	talent	may	leave	Tesla	due	to	various	factors,	such	as	a	very	competitive	labor	market	for	talented	individuals	with	automotive	or
technology	experience,	or	any	negative	publicity	related	to	us.	In	California,	Nevada	and	other	regions	where	we	have	operations,	including	outside	of
the	U.S.,	there	is	increasing	competition	for	individuals	with	skillsets	needed	for	our	business,	including	specialized	knowledge	of	electric	vehicles,
software	engineering,	manufacturing	engineering,	and	other	skills	such	as	electrical	and	building	construction	expertise.	This	competition	affects	our
ability	to	retain	and	hire	key	employees.	Moreover,	we	have	in	the	past	conducted	reductions	in	force	in	order	to	optimize	our	organizational	structure
and	reduce	costs,	and	certain	senior	personnel	have	also	departed	for	various	reasons.	Our	continued	success	depends	upon	our	continued	ability	to
hire	new	employees	in	a	timely	manner,	especially	to	support	our	expansion	plans,	and	to	retain	current	employees	or	replace	departed	senior
employees	with	qualified	and	experienced	individuals,	which	is	typically	a	time-consuming	process.	Additionally,	we	compete	with	both	mature	and
prosperous	companies	that	have	far	greater	financial	resources	than	we	do	and	start-ups	and	emerging	companies	that	promise	short-term	growth
opportunities.	Difficulties	in	retaining	or	recruiting	employees	could	have	an	adverse	effect	on	our	performance	and	results.
Finally,	our	compensation	philosophy	for	all	of	our	personnel	reflects	our	startup	origins,	with	an	emphasis	on	equity-based	awards	and	benefits
in	order	to	closely	align	their	incentives	with	the	long-term	interests	of	our	stockholders.	We	have	to	periodically	seek	and	obtain	approval	from	our


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stockholders	for	future	increases	to	the	number	of	awards	that	may	be	granted	and	shares	that	may	be	purchased	under	our	equity	incentive	and
employee	stock	purchase	plans.	If	we	are	unable	to	obtain	the	requisite	stockholder	approvals	to	obtain	future	increases	to	the	number	of	awards	that
may	be	granted	and	shares	that	may	be	purchased	under	such	plans,	and	compensate	our	personnel	in	accordance	with	our	compensation	philosophy,
our	ability	to	retain	and	hire	qualified	personnel	would	be	negatively	impacted.
We	are	highly	dependent	on	the	services	of	Elon	Musk,	our	Chief	Executive	Officer.
We	are	highly	dependent	on	the	services	of	Elon	Musk,	our	Chief	Executive	Officer	and	largest	stockholder.	Although	Mr.	Musk	spends
significant	time	with	Tesla	and	is	highly	active	in	our	management,	he	does	not	devote	his	full	time	and	attention	to	Tesla.	Mr.	Musk	also	currently
serves	as	Chief	Executive	Officer	and	Chief	Technical	Officer	of	Space	Exploration	Technologies	Corp.,	a	developer	and	manufacturer	of	space	launch
vehicles,	and	is	involved	in	other	emerging	technology	ventures.
We	are	continuously	expanding	and	improving	our	information	technology	systems	and	use	security	measures	designed	to	protect
our	systems	against	breaches	and	cyber-attacks.	If	these	efforts	are	not	successful,	our	business	and	operations	could	be
disrupted	or	our	intellectual	property	could	be	compromised,	as	a	result	of	which	our	operating	results	and	reputation	could	be
harmed.
We	are	continuously	expanding	and	improving	our	information	technology	systems,	including	implementing	new	internally	developed	systems


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and	deploying	such	systems	globally,	to	assist	us	in	the	management	of	our	business.	In	particular,	our	volume	production	of	multiple	vehicles
necessitates	continued	development,	maintenance	and	improvement	of	our	information	technology	systems	in	the	U.S.	and	abroad,	including	at
Gigafactory	Shanghai,	such	as	systems	for	product	data	management,	procurement,	inventory	management,	production	planning	and	execution,	sales,
service	and	logistics,	dealer	management,	financial,	tax	and	regulatory	compliance	systems.	We	also	maintain	information	technology	measures
designed	to	protect	us	against	intellectual	property	theft,	data	breaches	and	other	cyber-attacks.	The	implementation,	maintenance,	segregation	and
improvement	of	these	systems	require	significant	management	time,	support	and	cost.	Moreover,	there	are	inherent	risks	associated	with	developing,
improving	and	expanding	our	core	systems	as	well	as	implementing	new	systems	and	updating	current	systems,	including	the	disruption	of	our	data
management,	procurement,	manufacturing	execution,	finance,	supply	chain	and	sales	and	service	processes.	These	risks	may	affect	our	ability	to
manage	our	data	and	inventory,	procure	parts	or	supplies	or	manufacture,	sell,	deliver	and	service	vehicles,	adequately	protect	our	intellectual	property
or	achieve	and	maintain	compliance	with,	or	realize	available	benefits	under,	tax	laws	and	other	applicable	regulations.
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We	cannot	be	sure	that	these	systems	or	their	required	functionality	will	be	effectively	implemented,	maintained	or	expanded	as	planned.	If	we
do	not	successfully	implement,	maintain	or	expand	these	systems	as	planned,	our	operations	may	be	disrupted,	our	ability	to	accurately	and/or	timely
report	our	financial	results	could	be	impaired,	and	deficiencies	may	arise	in	our	internal	control	over	financial	reporting,	which	may	impact	our	ability
to	certify	our	financial	results.	
Moreover,	our	proprietary	information	
or	intellectual	property	
could	be	compromised	or	misappropriated	and	our
reputation	may	be	adversely	affected.	
If	these	systems	or	their	functionality	do	not	operate	as	we	expect	them	to,	we	may	be	required	to	expend
significant	resources	to	make	corrections	or	find	alternative	sources	for	performing	these	functions.
Any	unauthorized	control	or	manipulation	of	our	products’	systems	could	result	in	loss	of	confidence	in	us	and	our	products	and
harm	our	business.
Our	products	contain	complex	information	technology	systems.	For	example,	our	vehicles	and	energy	storage	products	are	designed	with	built-
in	data	connectivity	to	accept	and	install	periodic	remote	updates	from	us	to	improve	or	update	their	functionality.	We	have	designed,	implemented	and
tested	security	measures	intended	to	prevent	unauthorized	access	to	our	information	technology	networks,	our	products	and	their	systems.	However,
hackers	have	reportedly	attempted,	and	may	attempt	in	the	future,	to	gain	unauthorized	access	to	modify,	alter	and	use	such	networks,	products	and
systems	to	gain	control	of,	or	to	change,	our	products’	functionality,	user	interface	and	performance	characteristics,	or	to	gain	access	to	data	stored	in


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or	generated	by	our	products.	We	encourage	reporting	of	potential	vulnerabilities	in	the	security	of	our	products	via	our	security	vulnerability	reporting
policy,	and	we	aim	to	remedy	any	reported	and	verified	vulnerability.	Accordingly,	we	have	received	reports	of	potential	vulnerabilities	in	the	past	and
have	attempted	to	remedy	them.	However,	there	can	be	no	assurance	that	vulnerabilities	will	not	be	exploited	in	the	future	before	they	can	be
identified,	or	that	our	remediation	efforts	are	or	will	be	successful.
Any	unauthorized	access	to	or	control	of	our	products	or	their	systems	or	any	loss	of	data	could	result	in	legal	claims	or	proceedings.	In
addition,	regardless	of	their	veracity,	reports	of	unauthorized	access	to	our	products,	their	systems	or	data,	as	well	as	other	factors	that	may	result	in
the	perception	that	our	products,	their	systems	or	data	are	capable	of	being	“hacked,”	could	negatively	affect	our	brand	and	harm	our	business,
prospects,	financial	condition	and	operating	results.	We	have	been	the	subject	of	such	reports	in	the	past.
We	are	subject	to	substantial	laws	and	regulations	that	could	impose	substantial	costs,	legal	prohibitions	or	unfavorable	changes
upon	our	operations	or	products,	and	any	failure	to	comply	with	these	laws	and	regulations,	including	as	they	evolve,	could
negatively	impact	our	ability	to	operate	our	manufacturing	facilities	and	substantially	harm	our	business	and	operating	results.
As	a	manufacturing	company,	including	with	respect	to	our	current	facilities	such	as	the	Fremont	Factory,	Gigafactory	Nevada,	Gigafactory


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New	York	and	Gigafactory	Shanghai	and	our	future	facility	at	Gigafactory	Berlin,	we	are	or	will	be	subject	to	complex	environmental,	manufacturing,
health	and	safety	laws	and	regulations	at	numerous	jurisdictional	levels	in	the	U.S.,	China,	Germany	and	other	locations	abroad,	including	laws	relating
to	the	use,	handling,	storage,	recycling,	disposal	and	human	exposure	to	hazardous	materials	and	with	respect	to	constructing,	expanding	and
maintaining	our	facilities.	The	costs	of	compliance,	including	remediating	contamination	if	any	is	found	on	our	properties	and	any	changes	to	our
operations	mandated	by	new	or	amended	laws,	may	be	significant.	We	may	also	face	unexpected	delays	in	obtaining	permits	and	approvals	required	by
such	laws	in	connection	with	our	manufacturing	facilities,	which	would	hinder	our	operation	of	these	facilities.	Such	costs	and	delays	may	adversely
impact	our	business	prospects	and	operating	results.	Furthermore,	any	violations	of	these	laws	may	result	in	substantial	fines	and	penalties,
remediation	costs,	third	party	damages,	or	a	suspension	or	cessation	of	our	operations.
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In	addition,	motor	vehicles	are	subject	to	substantial	regulation	under	international,	federal,	state	and	local	laws.	We	incur	significant	costs	in
complying	with	these	regulations	and	may	be	required	to	incur	additional	costs	to	comply	with	any	changes	to	such	regulations,	and	any	failures	to
comply	could	result	in	significant	expenses,	delays	or	fines.	We	are	subject	to	laws	and	regulations	applicable	to	the	supply,	manufacture,	import,	sale
and	service	of	automobiles	internationally.	For	example,	in	countries	outside	of	the	U.S.,	we	are	required	to	meet	standards	relating	to	vehicle	safety,
fuel	economy	and	emissions,	among	other	things,	that	are	often	materially	different	from	requirements	in	the	U.S.,	thus	resulting	in	additional
investment	into	the	vehicles	and	systems	to	ensure	regulatory	compliance	in	those	countries.	This	process	may	include	official	review	and	certification
of	our	vehicles	by	foreign	regulatory	agencies	prior	to	market	entry,	as	well	as	compliance	with	foreign	reporting	and	recall	management	systems
requirements.
In	particular,	we	offer	in	our	vehicles	Autopilot	and	FSD	features	that	today	assist	drivers	with	certain	tedious	and	potentially	dangerous
aspects	of	road	travel,	but	which	currently	require	drivers	to	remain	engaged.	We	are	continuing	to	develop	our	FSD	technology	with	the	goal	of
achieving	full	self-driving	capability	in	the	future.	There	is	a	variety	of	international,	federal	and	state	regulations	that	may	apply	to	self-driving	vehicles,
which	include	many	existing	vehicle	standards	that	were	not	originally	intended	to	apply	to	vehicles	that	may	not	have	a	driver.	Such	regulations
continue	to	rapidly	change,	which	increases	the	likelihood	of	a	patchwork	of	complex	or	conflicting	regulations,	or	may	delay	products	or	restrict	self-


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driving	features	and	availability,	any	of	which	could	adversely	affect	our	business.
Finally,	as	a	manufacturer	and	installer	of	solar	generation	and	energy	storage	systems	and	a	supplier	of	electricity	generated	and	stored	by	the
solar	energy	and	energy	storage	systems	we	install	for	customers,	we	are	impacted	by	federal,	state	and	local	regulations	and	policies	concerning
electricity	pricing,	the	interconnection	of	electricity	generation	and	storage	equipment	with	the	electric	grid,	and	the	sale	of	electricity	generated	by
third-party	owned	systems.	For	example,	existing	or	proposed	regulations	and	policies	would	permit	utilities	to	limit	the	amount	of	electricity	generated
by	our	customers	with	their	solar	energy	systems,	charge	fees	and	penalties	to	our	customers	relating	to	the	purchase	of	energy	other	than	from	the
grid,	adjust	electricity	rate	designs	such	that	the	price	of	our	solar	products	may	not	be	competitive	with	that	of	electricity	from	the	grid,	restrict	us	and
our	customers	from	transacting	under	our	PPAs	or	qualifying	for	government	incentives	and	benefits	that	apply	to	solar	power,	and	limit	or	eliminate
net	energy	metering.	If	such	regulations	and	policies	are	adopted,	or	if	other	regulations	and	policies	that	adversely	impact	the	interconnection	or	use
of	our	solar	and	energy	storage	systems	are	introduced,	they	could	deter	potential	customers	from	purchasing	our	solar	and	energy	storage	products,
threaten	the	economics	of	our	existing	contracts	and	cause	us	to	cease	solar	and	energy	storage	system	sales	and	operations	in	the	relevant
jurisdictions,	which	could	harm	our	business,	prospects,	financial	condition	and	results	of	operations.


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Failure	to	comply	with	a	variety	of	U.S.	and	international	privacy	and	consumer	protection	laws	to	which	we	are	subject	could
harm	the	Company.
Our	privacy	policy	is	posted	on	our	website,	and	any	failure	by	us	or	our	vendor	or	other	business	partners	to	comply	with	it	or	with	federal,
state	or	international	privacy,	data	protection	or	security	laws	or	regulations	relating	to	the	collection,	use,	retention,	security	and	transfer	of	personally
identifiable	information	could	result	in	regulatory	or	litigation-related	actions	against	us,	legal	liability,	fines,	damages,	ongoing	audit	requirements	and
other	significant	costs.	Substantial	expenses	and	operational	changes	may	be	required	in	connection	with	maintaining	compliance	with	such	laws,	and
in	particular	certain	emerging	privacy	laws	are	still	subject	to	a	high	degree	of	uncertainty	as	to	their	interpretation	and	application.	For	example,	in
May	2018,	the	General	Data	Protection	Regulation	began	to	fully	apply	to	the	processing	of	personal	information	collected	from	individuals	located	in
the	European	Union,	and	has	created	new	compliance	obligations	and	has	significantly	increased	fines	for	noncompliance.	Similarly,	beginning	in
January	2020,	the	California	Consumer	Privacy	Act	imposes	certain	legal	obligations	on	our	use	and	processing	of	personal	information	related	to
California	residents.	Although	we	take	steps	to	protect	the	security	and	integrity	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	have


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negative	consequences	for	our	business	and	future	prospects,	including	possible	fines,	penalties	and	damages,	reduced	customer	demand	for	our
vehicles	and	harm	to	our	reputation	and	brand.
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Our	business	may	be	adversely	affected	by	any	disruptions	caused	by	union	activities.
It	is	not	uncommon	for	employees	of	certain	trades	at	companies	such	as	us	to	belong	to	a	union,	which	can	result	in	higher	employee	costs	and
increased	risk	of	work	stoppages.	Moreover,	regulations	in	some	jurisdictions	outside	of	the	U.S.	mandate	employee	participation	in	industrial	collective
bargaining	agreements	and	work	councils	with	certain	consultation	rights	with	respect	to	the	relevant	companies’	operations.	Although	we	work
diligently	to	provide	the	best	possible	work	environment	for	our	employees,	they	may	still	decide	to	join	or	seek	recognition	to	form	a	labor	union,	or	we
may	be	required	to	become	a	union	signatory.	From	time	to	time,	labor	unions	have	engaged	in	campaigns	to	organize	certain	of	our	operations,	as	part
of	which	such	unions	have	filed	unfair	labor	practice	charges	against	us	with	the	National	Labor	Relations	Board,	and	they	may	do	so	in	the	future.	In
September	2019,	an	administrative	law	judge	issued	a	recommended	decision	for	Tesla	on	certain	issues	and	against	us	on	certain	others.	The	National
Labor	Relations	Board	has	not	yet	adopted	the	recommendation	and	we	have	appealed	certain	aspects	of	the	recommended	decision.	Any	unfavorable
ultimate	outcome	for	Tesla	may	have	a	negative	impact	on	the	perception	of	Tesla’s	treatment	of	our	employees.	Furthermore,	we	are	directly	or
indirectly	dependent	upon	companies	with	unionized	work	forces,	such	as	parts	suppliers	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


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occurs,	it	could	delay	the	manufacture	and	sale	of	our	products	and	have	a	material	adverse	effect	on	our	business,	prospects,	operating	results	or
financial	condition.
We	may	choose	to	or	be	compelled	to	undertake	product	recalls	or	take	other	similar	actions,	which	could	adversely	affect	our
brand	image	and	financial	performance.
Any	product	recall	with	respect	to	our	products	may	result	in	adverse	publicity,	damage	our	brand	and	adversely	affect	our	business,	prospects,
operating	results	and	financial	condition.	For	example,	certain	vehicle	recalls	that	we	initiated	have	resulted	from	various	causes,	including	a
component	that	could	prevent	the	parking	brake	from	releasing	once	engaged,	a	concern	with	the	firmware	in	the	restraints	control	module	in	certain
right-hand-drive	vehicles,	industry-wide	issues	with	airbags	from	a	particular	supplier,	Model	X	seat	components	that	could	cause	unintended	seat
movement	during	a	collision,	and	concerns	of	corrosion	in	Model	S	and	Model	X	power	steering	assist	motor	bolts.	Furthermore,	testing	of	our	products
by	government	regulators	or	industry	groups	may	require	us	to	initiate	product	recalls	or	may	result	in	negative	public	perceptions	about	the	safety	of
our	products.	In	the	future,	we	may	at	various	times,	voluntarily	or	involuntarily,	initiate	a	recall	if	any	of	our	products	or	our	electric	vehicle	powertrain
components	that	we	have	provided	to	other	vehicle	OEMs,	including	any	systems	or	parts	sourced	from	our	suppliers,	prove	to	be	defective	or
noncompliant	with	applicable	laws	and	regulations,	such	as	federal	motor	vehicle	safety	standards.	Such	recalls,	whether	voluntary	or	involuntary	or


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caused	by	systems	or	components	engineered	or	manufactured	by	us	or	our	suppliers,	could	involve	significant	expense	and	could	adversely	affect	our
brand	image	in	our	target	markets,	as	well	as	our	business,	prospects,	financial	condition	and	results	of	operations.
Our	current	and	future	warranty	reserves	may	be	insufficient	to	cover	future	warranty	claims	which	could	adversely	affect	our
financial	performance.
We	provide	a	manufacturer’s	warranty	on	all	new	and	used	Tesla	vehicles	and	production	powertrain	components	and	systems	we	sell.		In
addition,	we	also	provide	a	warranty	on	the	installation	and	components	of	the	energy	generation	and	storage	systems	we	sell,	and	we	pass	through	to
our	customers	the	inverter	and	panel	manufacturers’	warranties.	Finally,	we	offer	a	performance	guarantee	with	our	leased	solar	energy	systems	that
compensates	a	customer	on	an	annual	basis	if	their	system	does	not	meet	the	electricity	production	guarantees	set	forth	in	their	PPA	or	lease.		Under
these	performance	guarantees,	we	bear	the	risk	of	electricity	production	shortfalls	resulting	from	an	inverter	or	panel	failure.		These	risks	are
exacerbated	in	the	event	the	panel	or	inverter	manufacturers	cease	operations	or	fail	to	honor	their	warranties.
If	our	warranty	reserves	are	inadequate	to	cover	future	warranty	claims	on	our	products,	our	business,	prospects,	financial	condition	and
operating	results	could	be	materially	and	adversely	affected.	Warranty	reserves	include	our	management’s	best	estimate	of	the	projected	costs	to	repair
or	to	replace	items	under	warranty.	These	estimates	are	based	on	actual	claims	incurred	to	date	and	an	estimate	of	the	nature,	frequency	and	costs	of


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future	claims.	Such	estimates	are	inherently	uncertain	and	changes	to	our	historical	or	projected	experience,	especially	with	respect	to	products	such	as
Model	3,	Model	Y	and	the	Solar	Roof	that	we	have	recently	introduced	and/or	that	we	expect	to	produce	at	significantly	greater	volumes	than	our	past
products,	may	cause	material	changes	to	our	warranty	reserves	in	the	future.
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Our	insurance	coverage	strategy	may	not	be	adequate	to	protect	us	from	all	business	risks.
We	may	be	subject,	in	the	ordinary	course	of	business,	to	losses	resulting	from	products	liability,	accidents,	acts	of	God	and	other	claims	against
us,	for	which	we	may	have	no	insurance	coverage.	As	a	general	matter,	we	do	not	maintain	as	much	insurance	coverage	as	many	other	companies	do,
and	in	some	cases,	we	do	not	maintain	any	at	all.	Additionally,	the	policies	that	we	do	have	may	include	significant	deductibles	or	self-insured
retentions,	and	we	cannot	be	certain	that	our	insurance	coverage	will	be	sufficient	to	cover	all	future	losses	or	claims	against	us.	A	loss	that	is
uninsured	or	which	exceeds	policy	limits	may	require	us	to	pay	substantial	amounts,	which	could	adversely	affect	our	financial	condition	and	operating
results.
Our	financial	results	may	vary	significantly	from	period	to	period	due	to	fluctuations	in	our	operating	costs	and	other	factors.
We	expect	our	period-to-period	financial	results	to	vary	based	on	our	operating	costs,	which	we	anticipate	will	fluctuate	as	the	pace	at	which	we
continue	to	design,	develop	and	manufacture	new	products	and	increase	production	capacity	by	expanding	our	current	manufacturing	facilities	and
adding	future	facilities,	may	not	be	consistent	or	linear	between	periods.	Additionally,	our	revenues	from	period	to	period	may	fluctuate	as	we	introduce
existing	products	to	new	markets	for	the	first	time	and	as	we	develop	and	introduce	new	products.		As	a	result	of	these	factors,	we	believe	that	quarter-


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to-quarter	comparisons	of	our	financial	results,	especially	in	the	short	term,	are	not	necessarily	meaningful	and	that	these	comparisons	cannot	be	relied
upon	as	indicators	of	future	performance.	Moreover,	our	financial	results	may	not	meet	expectations	of	equity	research	analysts,	ratings	agencies	or
investors,	who	may	be	focused	only	on	quarterly	financial	results.	If	any	of	this	occurs,	the	trading	price	of	our	stock	could	fall	substantially,	either
suddenly	or	over	time.
Servicing	our	indebtedness	requires	a	significant	amount	of	cash,	and	there	is	no	guarantee	that	we	will	have	sufficient	cash	flow
from	our	business	to	pay	our	substantial	indebtedness.
As	of	December	31,	2019,	we	and	our	subsidiaries	had	outstanding	$12.49	billion	in	aggregate	principal	amount	of	indebtedness	(see	Note	12,
Debt
,	to	the	consolidated	financial	statements	included	elsewhere	in	this	Annual	Report	on	Form	10-K).	Our	substantial	consolidated	indebtedness	may
increase	our	vulnerability	to	any	generally	adverse	economic	and	industry	conditions.	We	and	our	subsidiaries	may,	subject	to	the	limitations	in	the
terms	of	our	existing	and	future	indebtedness,	incur	additional	debt,	secure	existing	or	future	debt	or	recapitalize	our	debt.
Pursuant	to	their	terms,	holders	of	our	1.25%	Convertible	Senior	Notes	due	2021,	2.375%	Convertible	Senior	Notes	due	2022	and	2.00%
Convertible	Senior	Notes	due	2024	(together,	the	“Tesla	Convertible	Notes”)	may	convert	their	respective	Tesla	Convertible	Notes	at	their	option	prior


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to	the	scheduled	maturities	of	the	respective	Tesla	Convertible	Notes	under	certain	circumstances.	Upon	conversion	of	the	applicable	Tesla	Convertible
Notes,	we	will	be	obligated	to	deliver	cash	and/or	shares	in	respect	of	the	principal	amounts	thereof	and	the	conversion	value	in	excess	of	such	principal
amounts	on	such	Tesla	Convertible	Notes.	Moreover,	our	subsidiary’s	Zero-Coupon	Convertible	Senior	Notes	due	2020	(the	“Subsidiary	Convertible
Notes”)	are	convertible	into	shares	of	our	common	stock	at	a	conversion	price	of	$300.00	per	share.	Finally,	holders	of	the	Tesla	Convertible	Notes	and
the	Subsidiary	Convertible	Notes	will	have	the	right	to	require	us	to	repurchase	their	notes	upon	the	occurrence	of	a	fundamental	change	at	a	purchase
price	equal	to	100%	of	the	principal	amount	of	the	notes,	plus	accrued	and	unpaid	interest,	if	any,	to,	but	not	including,	the	fundamental	change
purchase	date.
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Our	ability	to	make	scheduled	payments	of	
the	
principal	
and
	interest	
on
	our	indebtedness	
when	due	or	to	make	payments	
upon	conversion	
or
repurchase	demands	with	respect	to	our	convertible	notes,	or	to	refinance	our	indebtedness	as	we	may	need	or	desire
,	depends	on	our	future
performance,	which	is	subject	to	economic,	financial,	competitive	and	other	factors	beyond	our	control.	Our	business	may	not	continue	to	generate	cash
flow	from	operations	in	the	future	sufficient	to	satisfy	
our	
obligations	under
	our	existing	indebtedness,	and
	any	future	indebtedness	we	may	incur,	and
to	make	necessary	capital	expenditures.	If	we	are	unable	to	generate	such	cash	flow,	we	may	be	required	to	adopt	one	or	more	alternatives,	such	as
reducing	or	delaying	investments	or	capital	expenditures,	selling	assets,	refinancing	or	obtaining	additional	equity	capital	on	terms	that	may	be	onerous
or	highly	dilutive.	Our	ability	to	refinance	existing	or	future	indebtedness	will	depend	on	the	capital	markets	and	our	financial	condition	at	such	time.	
In
addition,	our	ability	to	make	payments	may	be	limited	by	law,	by	regulatory	authority	or	by	agreements	governing	our	future	indebtedness.	
We	may	not
be	able	to	engage	in	any	of	these	activities	or	engage	in	these	activities	on	desirable	terms	or	at	all,	which	could	result	in	a	default	on	
our	existing
	or
future	indebtedness	and	have	a	material	adverse	effect	on	our	business,	results	of	operations	and	financial	condition.
Our	debt	agreements	contain	covenant	restrictions	that	may	limit	our	ability	to	operate	our	business.


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The	terms	of	certain	of	our	credit	facilities,	including	the	Credit	Agreement,	contain,	and	any	of	our	other	future	debt	agreements	may	contain,
covenant	restrictions	that	limit	our	ability	to	operate	our	business,	including	restrictions	on	our	ability	to,	among	other	things,	incur	additional	debt	or
issue	guarantees,	create	liens,	repurchase	stock	or	make	other	restricted	payments,	and	make	certain	voluntary	prepayments	of	specified	debt.	In
addition,	under	certain	circumstances	we	are	required	to	comply	with	a	fixed	charge	coverage	ratio.	As	a	result	of	these	covenants,	our	ability	to
respond	to	changes	in	business	and	economic	conditions	and	engage	in	beneficial	transactions,	including	to	obtain	additional	financing	as	needed,	may
be	restricted.	Furthermore,	our	failure	to	comply	with	our	debt	covenants	could	result	in	a	default	under	our	debt	agreements,	which	could	permit	the
holders	to	accelerate	our	obligation	to	repay	the	debt.	If	any	of	our	debt	is	accelerated,	we	may	not	have	sufficient	funds	available	to	repay	it.
We	may	need	or	want	to	raise	additional	funds	and	these	funds	may	not	be	available	to	us	when	we	need	them.	If	we	cannot	raise
additional	funds	when	we	need	or	want	them,	our	operations	and	prospects	could	be	negatively	affected.
The	design,	manufacture,	sale,	installation	and/or	servicing	of	automobiles,	energy	storage	products	and	solar	products	is	a	capital-intensive
business,	and	the	specific	timing	of	cash	inflows	and	outflows	may	fluctuate	substantially	from	period	to	period.	Until	we	are	consistently	generating


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positive	free	cash	flows,	we	may	need	or	want	to	raise	additional	funds	through	the	issuance	of	equity,	equity-related	or	debt	securities	or	through
obtaining	credit	from	financial	institutions	to	fund,	together	with	our	principal	sources	of	liquidity,	the	costs	of	developing	and	manufacturing	our
current	or	future	vehicles,	energy	storage	products	and/or	solar	products,	to	pay	any	significant	unplanned	or	accelerated	expenses	or	for	new
significant	strategic	investments,	or	to	refinance	our	significant	consolidated	indebtedness,	even	if	not	required	to	do	so	by	the	terms	of	such
indebtedness.	We	need	sufficient	capital	to	fund	ongoing	operations,	research	and	development	projects	for	new	products,	establishment	and/or
increases	of	Model	3	and	Model	Y	production	capacity	at	the	Fremont	Factory	and	at	Gigafactory	Shanghai,	the	continued	expansion	of	Gigafactory
Nevada,	the	construction	of	Gigafactory	Berlin,	the	manufacturing	ramp	of	the	Solar	Roof	at	Gigafactory	New	York,	and	the	continued	expansion	of	our
retail	and	service	locations,	body	shops,	Mobile	Service	fleet	and	Supercharger	network.	We	cannot	be	certain	that	additional	funds	will	be	available	to
us	on	favorable	terms	when	required,	or	at	all.	If	we	cannot	raise	additional	funds	when	we	need	them,	our	financial	condition,	results	of	operations,
business	and	prospects	could	be	materially	and	adversely	affected.
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We	could	be	subject	to	liability,	penalties	and	other	restrictive	sanctions	and	adverse	consequences	arising	out	of	certain
governmental	investigations	and	proceedings.
We	are	cooperating	with	certain	government	investigations	as	discussed	in	Note	16,	
Commitments	and	Contingencies
,	to	the	consolidated
financial	statements	included	elsewhere	in	this	Annual	Report	on	Form	10-K.	To	our	knowledge,	no	government	agency	in	any	such	ongoing
investigation	has	concluded	that	any	wrongdoing	occurred.	However,	we	cannot	predict	the	outcome	or	impact	of	any	such	ongoing	matters,	and	there
exists	the	possibility	that	we	could	be	subject	to	liability,	penalties	and	other	restrictive	sanctions	and	adverse	consequences	if	the	SEC,	the	DOJ,	or	any
other	government	agency	were	to	pursue	legal	action	in	the	future.	Moreover,	we	expect	to	incur	costs	in	responding	to	related	requests	for	information
and	subpoenas,	and	if	instituted,	in	defending	against	any	governmental	proceedings.
For	example,	on	October	16,	2018,	the	U.S.	District	Court	for	the	Southern	District	of	New	York	entered	a	final	judgment	approving	the	terms	of
a	settlement	filed	with	the	Court	on	September	29,	2018,	in	connection	with	the	actions	taken	by	the	SEC	relating	to	Mr.	Musk’s	statement	on	August	7,
2018	that	he	was	considering	taking	Tesla	private.	Pursuant	to	the	settlement,	we,	among	other	things,	paid	a	civil	penalty	of	$20	million,	appointed	an
independent	director	as	the	Chair	of	the	Board,	appointed	two	additional	independent	directors	to	our	board	of	directors,	and	made	further


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enhancements	to	our	disclosure	controls	and	other	corporate	governance-related	matters.	On	April	26,	2019,	this	settlement	was	amended	to	clarify
certain	of	the	previously-agreed	disclosure	procedures,	which	was	subsequently	approved	by	the	Court.	All	other	terms	of	the	prior	settlement	were
reaffirmed	without	modification.	Although	we	intend	to	continue	to	comply	with	the	terms	and	requirements	of	the	settlement,	if	there	is	a	lack	of
compliance	or	an	alleged	lack	of	compliance,	additional	enforcement	actions	or	other	legal	proceedings	may	be	instituted	against	us.
If	we	update	or	discontinue	the	use	of	our	manufacturing	equipment	more	quickly	than	expected,	we	may	have	to	shorten	the
useful	lives	of	any	equipment	to	be	retired	as	a	result	of	any	such	update,	and	the	resulting	acceleration	in	our	depreciation	could
negatively	affect	our	financial	results.
We	have	invested	and	expect	to	continue	to	invest	significantly	in	what	we	believe	is	state	of	the	art	tooling,	machinery	and	other	manufacturing
equipment	for	our	various	product	lines,	and	we	depreciate	the	cost	of	such	equipment	over	their	expected	useful	lives.	However,	manufacturing
technology	may	evolve	rapidly,	and	we	may	decide	to	update	our	manufacturing	process	with	cutting-edge	equipment	more	quickly	than	expected.
Moreover,	we	are	continually	implementing	learnings	as	our	engineering	and	manufacturing	expertise	and	efficiency	increase,	which	may	result	in	our
ability	to	manufacture	our	products	using	less	of	our	currently	installed	equipment.	Alternatively,	as	we	ramp	and	mature	the	production	of	our
products	to	higher	levels,	our	learnings	may	cause	us	to	discontinue	the	use	of	already	installed	equipment	in	favor	of	different	or	additional	equipment.


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The	useful	life	of	any	equipment	that	would	be	retired	early	as	a	result	would	be	shortened,	causing	the	depreciation	on	such	equipment	to	be
accelerated,	and	our	results	of	operations	could	be	negatively	impacted.
We	are	exposed	to	fluctuations	in	currency	exchange	rates,	which	could	negatively	affect	our	financial	results.
We	transact	business	globally	in	multiple	currencies	and	have	foreign	currency	risks	related	to	our	revenue,	costs	of	revenue	and	operating
expenses	denominated	in	currencies	other	than	the	U.S.	dollar,	primarily	the	euro,	Japanese	yen,	Canadian	dollar,	Chinese	yuan	and	Norwegian	krone.
To	the	extent	we	have	significant	revenues	denominated	in	such	foreign	currencies,	any	strengthening	of	the	U.S.	dollar	would	tend	to	reduce	our
revenues	as	measured	in	U.S.	dollars,	as	we	have	historically	experienced.	In	addition,	a	portion	of	our	costs	and	expenses	have	been,	and	we	anticipate
will	continue	to	be,	denominated	in	foreign	currencies,	including	the	Japanese	yen.	If	we	do	not	have	fully	offsetting	revenues	in	these	currencies	and	if
the	value	of	the	U.S.	dollar	depreciates	significantly	against	these	currencies,	our	costs	as	measured	in	U.S.	dollars	as	a	percent	of	our	revenues	will
correspondingly	increase	and	our	margins	will	suffer.	Moreover,	while	we	undertake	limited	hedging	activities	intended	to	offset	the	impact	of	currency
translation	exposure,	it	is	impossible	to	predict	or	eliminate	such	impact.	As	a	result,	our	operating	results	could	be	adversely	affected.
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We	may	face	regulatory	limitations	on	our	ability	to	sell	vehicles	directly	which	could	materially	and	adversely	affect	our	ability	to
sell	our	electric	vehicles.
We	sell	our	vehicles	directly	to	consumers	using	means	that	we	believe	will	maximize	our	reach,	currently	including	through	our	website	and
our	own	stores.	While	we	intend	to	continue	to	leverage	our	most	effective	sales	strategies,	we	may	not	be	able	to	sell	our	vehicles	through	our	own
stores	in	each	state	in	the	U.S.,	as	some	states	have	laws	that	may	be	interpreted	to	impose	limitations	on	this	direct-to-consumer	sales	model.	In	some
states,	we	have	also	opened	galleries	to	educate	and	inform	customers	about	our	products,	but	such	locations	do	not	actually	transact	in	the	sale	of
vehicles.	The	application	of	these	state	laws	to	our	operations	continues	to	be	difficult	to	predict.	Laws	in	some	states	have	limited	our	ability	to	obtain
dealer	licenses	from	state	motor	vehicle	regulators	and	may	continue	to	do	so.
In	addition,	decisions	by	regulators	permitting	us	to	sell	vehicles	may	be	challenged	by	dealer	associations	and	others	as	to	whether	such
decisions	comply	with	applicable	state	motor	vehicle	industry	laws.	We	have	prevailed	in	many	of	these	lawsuits	and	such	results	have	reinforced	our
continuing	belief	that	state	laws	were	not	designed	to	prevent	our	distribution	model.	In	some	states,	there	have	also	been	regulatory	and	legislative
efforts	by	dealer	associations	to	propose	laws	that,	if	enacted,	would	prevent	us	from	obtaining	dealer	licenses	in	their	states	given	our	current	sales


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model.	A	few	states	have	passed	legislation	that	clarifies	our	ability	to	operate,	but	at	the	same	time	limits	the	number	of	dealer	licenses	we	can	obtain
or	stores	that	we	can	operate.
Internationally,	there	may	be	laws	in	jurisdictions	we	have	not	yet	entered	or	laws	we	are	unaware	of	in	jurisdictions	we	have	entered	that	may
restrict	our	sales	or	other	business	practices.	Even	for	those	jurisdictions	we	have	analyzed,	the	laws	in	this	area	can	be	complex,	difficult	to	interpret
and	may	change	over	time.	Continued	regulatory	limitations	and	other	obstacles	interfering	with	our	ability	to	sell	vehicles	directly	to	consumers	could
have	a	negative	and	material	impact	our	business,	prospects,	financial	condition	and	results	of	operations.
We	may	need	to	defend	ourselves	against	intellectual	property	infringement	claims,	which	may	be	time-consuming	and	could
cause	us	to	incur	substantial	costs.
Others,	including	our	competitors,	may	hold	or	obtain	patents,	copyrights,	trademarks	or	other	proprietary	rights	that	could	prevent,	limit	or
interfere	with	our	ability	to	make,	use,	develop,	sell	or	market	our	products	and	services,	which	could	make	it	more	difficult	for	us	to	operate	our
business.	From	time	to	time,	the	holders	of	such	intellectual	property	rights	may	assert	their	rights	and	urge	us	to	take	licenses,	and/or	may	bring	suits
alleging	infringement	or	misappropriation	of	such	rights.	While	we	endeavor	to	obtain	and	protect	the	intellectual	property	rights	that	we	expect	will
allow	us	to	retain	or	advance	our	strategic	initiatives,	there	can	be	no	assurance	that	we	will	be	able	to	adequately	identify	and	protect	the	portions	of


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intellectual	property	that	are	strategic	to	our	business,	or	mitigate	the	risk	of	potential	suits	or	other	legal	demands	by	our	competitors.	Accordingly,	we
may	consider	the	entering	into	licensing	agreements	with	respect	to	such	rights,	although	no	assurance	can	be	given	that	such	licenses	can	be	obtained
on	acceptable	terms	or	that	litigation	will	not	occur,	and	such	licenses	and	associated	litigation	could	significantly	increase	our	operating	expenses.	In
addition,	if	we	are	determined	to	have	or	believe	there	is	a	high	likelihood	that	we	have	infringed	upon	a	third	party’s	intellectual	property	rights,	we
may	be	required	to	cease	making,	selling	or	incorporating	certain	components	or	intellectual	property	into	the	goods	and	services	we	offer,	to	pay
substantial	damages	and/or	license	royalties,	to	redesign	our	products	and	services,	and/or	to	establish	and	maintain	alternative	branding	for	our
products	and	services.	In	the	event	that	we	were	required	to	take	one	or	more	such	actions,	our	business,	prospects,	operating	results	and	financial
condition	could	be	materially	adversely	affected.	In	addition,	any	litigation	or	claims,	whether	or	not	valid,	could	result	in	substantial	costs,	negative
publicity	and	diversion	of	resources	and	management	attention.
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Our	facilities	or	operations	could	be	adversely	affected	by	events	outside	of	our	control,	such	as	natural	disasters
,	wars
	or	health
epidemics.
We	may	be	impacted	by	natural	disasters,	wars,	health	epidemics	or	other	events	outside	of	our	control.	For	example,	our	corporate
headquarters,	the	Fremont	Factory	and	Gigafactory	Nevada	are	located	in	seismically	active	regions	in	Northern	California	and	Nevada,	and	our
Gigafactory	Shanghai	is	located	in	a	flood-prone	area.	If	major	disasters	such	as	earthquakes,	floods	or	other	events	occur,	or	our	information	system	or
communications	network	breaks	down	or	operates	improperly,	our	headquarters	and	production	facilities	may	be	seriously	damaged,	or	we	may	have	to
stop	or	delay	production	and	shipment	of	our	products.	In	addition,	beginning	in	late	2019,	the	media	has	reported	a	public	health	epidemic	originating
in	China,	prompting	precautionary	government-imposed	closures	of	certain	travel	and	business.	Gigafactory	Shanghai	was	closed	for	a	brief	time	as	a
result,	before	it	reopened	in	February	2020	and	rejoined	our	U.S.	factories,	which	had	continued	to	operate.		It	is	unknown	whether	and	how	global
supply	chains,	particularly	for	automotive	parts,	may	be	affected	if	such	an	epidemic	persists	for	an	extended	period	of	time.	We	may	incur	expenses	or
delays	relating	to	such	events	outside	of	our	control,	which	could	have	a	material	adverse	impact	on	our	business,	operating	results	and	financial
condition.
Risks	Related	to	the	Ownership	of	Our	Common	Stock
The	trading	price	of	our	common	stock	is	likely	to	continue	to	be	volatile.


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The	trading	price	of	our	common	stock	has	been	highly	volatile	and	could	continue	to	be	subject	to	wide	fluctuations	in	response	to	various
factors,	some	of	which	are	beyond	our	control.	Our	common	stock	has	experienced	an	intra-day	trading	high	of	$968.99	per	share	and	a	low	of	$176.99
per	share	over	the	last	52	weeks.	The	stock	market	in	general,	and	the	market	for	technology	companies	in	particular,	has	experienced	extreme	price
and	volume	fluctuations	that	have	often	been	unrelated	or	disproportionate	to	the	operating	performance	of	those	companies.	In	particular,	a	large
proportion	of	our	common	stock	has	been	and	may	continue	to	be	traded	by	short	sellers	which	may	put	pressure	on	the	supply	and	demand	for	our
common	stock,	further	influencing	volatility	in	its	market	price.	Public	perception	and	other	factors	outside	of	our	control	may	additionally	impact	the
stock	price	of	companies	like	us	that	garner	a	disproportionate	degree	of	public	attention,	regardless	of	actual	operating	performance.	In	addition,	in
the	past,	following	periods	of	volatility	in	the	overall	market	and	the	market	price	of	a	particular	company’s	securities,	securities	class	action	litigation
has	often	been	instituted	against	these	companies.	Moreover,	stockholder	litigation	like	this	has	been	filed	against	us	in	the	past.	While	we	defend	such
actions	vigorously,	any	judgment	against	us	or	any	future	stockholder	litigation	could	result	in	substantial	costs	and	a	diversion	of	our	management’s
attention	and	resources.
We	may	fail	to	meet	our	publicly	announced	guidance	or	other	expectations	about	our	business,	which	could	cause	our	stock	price
to	decline.


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to	decline.
We	may	provide	from	time	to	time	guidance	regarding	our	expected	financial	and	business	performance,	which	may	include	projections
regarding	sales	and	production,	as	well	as	anticipated	future	revenues,	gross	margins,	profitability	and	cash	flows.	Correctly	identifying	key	factors
affecting	business	conditions	and	predicting	future	events	is	inherently	an	uncertain	process,	and	our	guidance	may	not	ultimately	be	accurate	and	has
in	the	past	been	inaccurate	in	certain	respects,	such	as	the	timing	of	new	product	manufacturing	ramps.	Our	guidance	is	based	on	certain	assumptions
such	as	those	relating	to	anticipated	production	and	sales	volumes	(which	generally	are	not	linear	throughout	a	given	period),	average	sales	prices,
supplier	and	commodity	costs,	and	planned	cost	reductions.	If	our	guidance	is	not	accurate	or	varies	from	actual	results	due	to	our	inability	to	meet	our
assumptions	or	the	impact	on	our	financial	performance	that	could	occur	as	a	result	of	various	risks	and	uncertainties,	the	market	value	of	our	common
stock	could	decline	significantly.
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Transactions	relating	to	our	convertible	notes	may	dilute	the	ownership	interest	of	existing	stockholders,	or	may	otherwise
depress	the	price	of	our	common	stock.
The	conversion	of	some	or	all	of	the	Tesla	Convertible	Notes	or	the	Subsidiary	Convertible	Notes	would	dilute	the	ownership	interests	of
existing	stockholders	to	the	extent	we	deliver	shares	upon	conversion	of	any	of	such	notes.	Our	Subsidiary	Convertible	Notes	have	been	historically,	and
the	other	Tesla	Convertible	Notes	may	become	in	the	future,	convertible	at	the	option	of	their	holders	prior	to	their	scheduled	terms	under	certain
circumstances.	If	holders	elect	to	convert	their	convertible	notes,	we	could	be	required	to	deliver	to	them	a	significant	number	of	shares	of	our	common
stock.	Any	sales	in	the	public	market	of	the	common	stock	issuable	upon	such	conversion	could	adversely	affect	prevailing	market	prices	of	our	common
stock.	In	addition,	the	existence	of	the	convertible	notes	may	encourage	short	selling	by	market	participants	because	the	conversion	of	such	notes	could
be	used	to	satisfy	short	positions,	or	anticipated	conversion	of	such	notes	into	shares	of	our	common	stock	could	depress	the	price	of	our	common	stock.
Moreover,	in	connection	with	each	issuance	of	the	Tesla	Convertible	Notes,	we	entered	into	convertible	note	hedge	transactions,	which	are
expected	to	reduce	the	potential	dilution	and/or	offset	potential	cash	payments	we	are	required	to	make	in	excess	of	the	principal	amount	upon
conversion	of	the	applicable	Tesla	Convertible	Notes.	We	also	entered	into	warrant	transactions	with	the	hedge	counterparties,	which	could	separately


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have	a	dilutive	effect	on	our	common	stock	to	the	extent	that	the	market	price	per	share	of	our	common	stock	exceeds	the	applicable	strike	price	of	the
warrants	on	the	applicable	expiration	dates.	In	addition,	the	hedge	counterparties	or	their	affiliates	may	enter	into	various	transactions	with	respect	to
their	hedge	positions,	which	could	also	cause	or	prevent	an	increase	or	a	decrease	in	the	market	price	of	our	common	stock	or	the	convertible	notes.
Elon	Musk	has	pledged	shares	of	our	common	stock	to	secure	certain	bank	borrowings.	If	Mr.	Musk	were	forced	to	sell	these
shares	in	order	to	satisfy	his	loan	obligations,	such	sales	could	cause	our	stock	price	to	decline.
Certain	banking	institutions	have	made	extensions	of	credit	to	Elon	Musk,	our	Chief	Executive	Officer,	a	portion	of	which	was	used	to	purchase
shares	of	common	stock	in	certain	of	our	public	offerings	and	private	placements	at	the	same	prices	offered	to	third	party	participants	in	such	offerings
and	placements.	We	are	not	a	party	to	these	loans,	which	are	partially	secured	by	pledges	of	a	portion	of	the	Tesla	common	stock	currently	owned	by
Mr.	Musk.	If	the	price	of	our	common	stock	were	to	decline	substantially,	Mr.	Musk	may	be	forced	by	one	or	more	of	the	banking	institutions	to	sell
shares	of	Tesla	common	stock	to	satisfy	his	loan	obligations	if	he	could	not	do	so	through	other	means.	Any	such	sales	could	cause	the	price	of	our
common	stock	to	decline	further.
Anti-takeover	provisions	contained	in	our	governing	documents,	applicable	laws	and	our	convertible	notes	could	impair	a	takeover
attempt.


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attempt.
Our	certificate	of	incorporation	and	bylaws	afford	certain	rights	and	powers	to	our	board	of	directors	that	could	contribute	to	the	delay	or
prevention	of	an	acquisition	that	it	deems	undesirable.	We	are	also	subject	to	Section	203	of	the	Delaware	General	Corporation	Law	and	other
provisions	of	Delaware	law	that	limit	the	ability	of	stockholders	in	certain	situations	to	effect	certain	business	combinations.	In	addition,	the	terms	of
our	convertible	notes	require	us	to	repurchase	such	notes	in	the	event	of	a	fundamental	change,	including	a	takeover	of	our	company.	Any	of	the
foregoing	provisions	and	terms	that	has	the	effect	of	delaying	or	deterring	a	change	in	control	could	limit	the	opportunity	for	our	stockholders	to	receive
a	premium	for	their	shares	of	our	common	stock,	and	could	also	affect	the	price	that	some	investors	are	willing	to	pay	for	our	common	stock.
	
ITEM	1B.
UNRESOLVED	STAFF	COMMENTS
None.
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ITEM	2.
PROPERTIES
We	are	headquartered	in	Palo	Alto,	California.	Our	principal	facilities	include	a	large	number	of	properties	in	North	America,	Europe	and	Asia
utilized	for	manufacturing	and	assembly,	warehousing,	engineering,	retail	and	service	locations,	Supercharger	sites,	and	administrative	and	sales
offices.	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.	The	following	table	sets	forth	the	location	of	our	primary	owned	and	leased
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.
ITEM	3.
LEGAL	PROCEEDINGS
For	a	description	of	our	material	pending	legal	proceedings,	please	see	Note	16,	
Commitments	and	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.


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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.
	
I
TEM	4.
MINE	SAFETY	DISCLOSURES
Not	applicable.
	
	
	
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PART	II
I
TEM	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.
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The	following	graph	shows	a	comparison,	from	January	1,	201
5
	through	December	31,	201
9
,	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,	201
5
	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.
	
	
37


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I
TEM	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,
	
	
	
2019	(3)
	
	
2018	(2)
	
	
2017
	
	
2016	(1)
	
	
2015
	
Consolidated	Statements	of	Operations	Data:
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
Total	revenues
	
$
24,578
	
	
$
21,461
	
	
$
11,759
	
	
$
7,000
	
	
$
4,046
	
Gross	profit
	
$
4,069
	
	
$
4,042
	
	
$
2,223
	
	
$
1,599
	
	
$
924
	
Loss	from	operations
	
$
(69
)
	
$
(388
)
	
$
(1,632
)
	
$
(667
)
	
$
(717
)
Net	loss	attributable	to	common	stockholders
	
$
(862
)
	
$
(976
)
	
$
(1,962
)
	
$
(675
)
	
$
(889
)
Net	loss	per	share	of	common	stock


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)
Net	loss	per	share	of	common	stock
			attributable	to	common	stockholders,	basic
			and	diluted
	
$
(4.92
)
	
$
(5.72
)
	
$
(11.83
)
	
$
(4.68
)
	
$
(6.93
)
Weighted	average	shares	used	in	computing
			net	loss	per	share	of	common	stock,	basic
			and	diluted
	
	
177
	
	
	
171
	
	
	
166
	
	
	
144
	
	
	
128
	
	
	
As	of	December	31,
	
	
	
2019	(3)
	
	
2018	(2)
	
	
2017
	
	
2016	(1)
	
	
2015
	
Consolidated	Balance	Sheet	Data:
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
Working	(deficit)	capital
	
$
1,436
	
	
$
(1,686
)
	
$
(1,104
)
	
$
433
	
	
$
(29
)
Total	assets
	
	
34,309
	
	
	
29,740
	
	
	
28,655
	
	
	
22,664
	
	
	
8,068
	
Total	long-term	obligations
	
	
15,532
	
	
	
13,434
	
	
	
15,348
	
	
	
10,923
	
	
	
4,126
	
(1)
We	acquired	SolarCity	Corporation	(“SolarCity”)	on	November	21,	2016.	SolarCity’s	financial	results	have	been	included	in	our	financial	results


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from	the	acquisition	date	as	previously	reported	in	our	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2016.
(2)
We	adopted	ASC	606	in	2018.	Prior	periods	have	not	been	revised.	See	Note	2,	
Summary	of	Significant	Accounting	Policies
,	of	the	notes	to	the
consolidated	financial	statements	included	elsewhere	in	this	Annual	Report	on	Form	10-K	for	further	details.
(3)
Includes	the	impact	of	the	adoption	of	the	new	lease	accounting	standard	in	2019.	Prior	periods	have	not	been	revised.	See	Note	2,	
Summary	of
Significant	Accounting	Policies
,	of	the	notes	to	the	consolidated	financial	statements	included	elsewhere	in	this	Annual	Report	on	Form	10-K	for
further	details.
	
	
	
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I
TEM	7.
MANAGEMENT’S	DISCUSSION	AND	ANALYSIS	OF	FINANCIAL	CONDITION	AND	RESULTS	OF	OPERATIONS
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.
	
For	discussion	related	to	changes	in	financial	condition	and	the	results	of	operations	for	fiscal	year	2017-
related	items,	refer	to	Part	II,	Item	7.	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations	in	our	Annual	Report	on
Form	10-K	for	fiscal	year	2018,	which	was	filed	with	the	Securities	and	Exchange	Commission	on	February	19,	2019.
Overview	and	2019	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
During	2019,	we	achieved	annual	vehicle	delivery	and	production	records	of	367,656	and	365,232	total	vehicles,	respectively.	We	also	laid	the
groundwork	for	our	next	phase	of	growth	with	the	commencement	of	Model	3	production	at	Gigafactory	Shanghai;	preparations	at	the	Fremont	Factory
for	Model	Y	production,	which	commenced	in	the	first	quarter	of	2020;	the	selection	of	Berlin,	Germany	as	the	site	for	our	next	factory	for	the	European
market;	and	the	unveiling	of	Cybertruck.	We	also	continued	to	enhance	our	user	experience	through	improved	Autopilot	and	FSD	features,	including	the


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introduction	of	a	new	powerful	on-board	FSD	computer	and	a	new	Smart	Summon	feature,	and	the	expansion	of	a	unique	set	of	in-car	entertainment
options.
Energy	Generation	and	Storage
We	revamped	key	aspects	of	our	solar	operations	in	2019	by	streamlining	traditionally	complex	ordering,	permitting,	installation	and	back-end
service	processes	to	enhance	the	customer	experience,	especially	for	retrofit	solar	installations.	Our	solar	deployments	grew	approximately	48%	and
26%,	quarter-over-quarter,	in	the	second	half	of	the	year.	We	also	deployed	1.65	GWh	of	energy	storage	in	2019,	more	than	the	aggregate	of	all	prior
years.	Finally,	we	further	evolved	our	product	offerings	by	launching	the	third	generation	of	the	Solar	Roof,	for	which	we	are	expanding	both	our
manufacturing	and	installation	capabilities,	and	Megapack,	our	largest	utility-scale	energy	storage	product	to	date.
Management	Opportunities,	Challenges	and	Risks	and	2020	Outlook
Automotive—Production
A	key	focus	in	2020	will	be	our	efforts	towards	establishing	and	expanding	capacity	for	vehicle	production	at	volume	across	three	continents.	At
the	Fremont	Factory,	we	commenced	Model	Y	production	earlier	than	anticipated,	and	combined	with	Model	3,	we	have	installed	annual	production
capacity	for	400,000	vehicles.	We	expect	to	further	increase	this	capacity	to	500,000	vehicles	through	the	installation	of	additional	equipment.
At	Gigafactory	Shanghai,	we	have	installed	annual	production	capacity	for	150,000	Model	3	vehicles	
that	we	believe	we	will	eventually	be	able
to	push	to	actual	rates	of	production	in	excess	of	such	number


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,	subject	to	local	production	of	battery	packs,	which	we	began	ramping	there	later	than
other	processes.	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.	To	finance	our	construction	and	expansion,	in	December	2019	our	local	subsidiary	entered	into	a
	RMB	9.0	billion	(or	the	equivalent
amount	in	U.S.	dollars)	fixed	asset	term	facility	and	a	RMB	2.25	billion	(or	the	equivalent	amount	in	U.S.	dollars)	working	capital	revolving	facility,	part
of	which	was	used	to	repay	
a	RMB	3.5	billion	bridge	loan	entered	into	in	March	2019
.	We	are	supplementing	such	financing	with	limited	direct	capital
expenditures.
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Finally,	
we	have	selected
	Germany
	as	the	site	of	our	next	factory
	for	
manufacturing	vehicles	for	
the	European	marke
t,	due	to	its	strong
manufacturing	and	engineering	presence
.	However,	the	construction	of	and	ramp	at
	Gigafactory	Berlin,	as	well	as	at
	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	e
xpansion
,	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
.	Ultimately,	achieving
increased	total	vehicle	production	cost-effectively	across	all	of	our	manufacturing	operations	will	require	that	we	timely	address	any	bottlenecks	that
may	arise	as	we	ramp,	establish	and	maintain	sustained	supplier	capacity,	and	successfully	utilize	manufacturing	processes	at	the	maximum	output
rates	that	we	have	planned	for	them.
Automotive—Demand	and	Sales
As	the	automotive	industry	continues	to	validate	and	grow	the	market	for	electric	vehicles,	we	are	generating	demand	and	new	customers	even
without	traditional	marketing	and	with	relatively	low	marketing	costs,	and	in	2019	our	orders	shifted	to	originating	mostly	from	new	customers	without
prior	reservations.	Production	at	Gigafactory	Shanghai	allows	us	to	offer	Model	3	in	China	at	competitive	local	pricing	and	more	quickly,	which	should
drive	further	demand	and	opportunity	in	the	world’s	largest	market	for	mid-sized	premium	sedans,	and	we	expect	a	similar	impact	in	China	for	Model	Y


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when	we	commence	production	there	of	this	offering	in	the	popular	compact	SUV	segment.
Moreover,	the	significant	interest	generated	by	our	unveiling	of	Cybertruck	demonstrated	our	brand	visibility,	innovation	and	viability	across	an
increasing	range	of	vehicle	segments.	Meanwhile,	we	are	making	our	existing	vehicles	incrementally	more	compelling,	including	through	a	planned
software	update	for	FSD-enabled	vehicles	to	react	to	traffic	lights	and	stop	signs	and	navigate	city	intersections,	and	additional	functionality	of	both	in-
vehicle	software	and	the	Tesla	mobile	app.
	
On	the	other	hand,	we	may	be	impacted	by	trade	and	environmental	policies,	political	uncertainty	and	economic	cycles	involving	geographic
regions	where	we	have	significant	operations,	which	are	inherently	unpredictable.	Sales	of	vehicles	in	the	automotive	industry	also	tend	to	be	cyclical	in
many	markets,	which	may	expose	us	to	increased	volatility.	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.
Finally,	we	make	certain	adjustments	to	our	prices	from	time	to	time	in	the	ordinary	course	of	business,	including	as	we	introduce	new	vehicles	and
variants	and	optimize	the	pricing	among	them.	Such	pricing	changes	may	impact	our	vehicles’	resale	values,	and	in	turn	our	operating	results.	For
example,	if	price	reductions	result	in	an	increase	to	our	estimates	of	the	volume	of	vehicles	that	may	potentially	be	returned	to	us	under	pre-existing
resale	value	guarantees	provided	to	customers	and	partners	for	certain	financing	programs,	our	gross	profits	may	be	reduced.


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Automotive—Deliveries	and	Customer	Infrastructure
	
We	continue	to	optimize	our	manufacturing	and	global	delivery	patterns	to	address	higher	volumes	of	our	predominantly	single-factory
production	at	the	Fremont	Factory.	We	expect	to	alleviate	any	related	issues	through	local	production	at	Gigafactory	Shanghai	and	eventually	at
Gigafactory	Berlin.
We	also	continue	to	expand	and	invest	in	our	servicing	and	charging	locations	and	capabilities	to	keep	pace	with	our	customer	vehicle	fleet	and
ensure	a	convenient	and	efficient	customer	experience.	However,	if	our	customer	vehicles,	particularly	in	the	rapidly	growing	Model	3	fleet,	experience
unexpected	reliability	issues,	it	could	outpace	and	overburden	our	servicing	capabilities	and	parts	inventory.
Energy	Generation	and	Storage	Demand,	Production	and	Deployment
	
We	expect	to	continue	to	grow	our	retrofit	solar	system	deployments	as	we	execute	our	new	strategy,	including	through	compelling	financing
options	such	as	a	subscription-based	offering,	which	is	currently	available	in	California.
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We
	are	focused	on	training	our	personnel	and	third	party
	partners	to	ramp	i
nstallations	of	our	
Solar	Roof
,	and	are	also	hiring	rapidly	for	its
ongoing	
manufacturing	ramp	at	Gigafactory	New	York.	We	expect	such	ramp	will	support	our	significant	operations	and	our	compliance	with	minimum
hiring	and	cumulative	investment	targets	under	our	agreement	with	the	SUNY	Foundation	related	to	the	construction	and	use	of	Gigafactory	New	York.
However,	if	our	expectations	as	to	the	costs	and	timelines	of	our	investment	and	operations	at	Buffalo	or	our	production	ramp	of	
the	
Solar	Roof
	prove
incorrect,	we	may	incur	additional	expenses	or	substantial	payments	to	the	SUNY	Foundation.
Finally,	with	the	introduction	of	our	3	MWh	Megapack,	we	now	offer	an	even	greater	variety	of	scalable	energy	storage	products	with	a	wide
range	of	markets	and	applications,	and	expect	this	product	to	drive	additional	interest	from	global	project	developers	and	utilities.				
Trends	in	Cash	Flow,	Capital	Expenditures	and	Operating	Expenses
Our	capital	expenditures	are	difficult	to	project	beyond	the	short	term,	given	the	number	and	breadth	of	our	core	projects	at	any	given	time.	For
example,	the	curve	of	any	new	product	ramp,	such	as	for	Model	Y	and	the	Solar	Roof,	is	inherently	subject	to	uncertainty	of	timing,	and	if	we	are	able	to
meet	various	milestones	along	such	ramp	more	quickly	than	expected,	our	capital	expenditures	may	be	accelerated.	We	also	continuously	evaluate,	and
as	appropriate	adjust,	our	capital	expenditures	based	on,	among	other	things:	our	manufacturing	plans	for	our	various	products,	which	we	may


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rebalance	from	time	to	time	based	on	the	mix	of	demand	among	them	and	other	contingent	factors;	the	pace	and	prioritization	of	current	projects	under
development;	and	the	addition	of	any	new	projects.	Moreover,	we	are	generally	increasing	the	capital	efficiency	of	our	projects	with	experience
,	and	we
may	find	that	our	actual	capital	expenditures	on	new	projects	are	different	than	previously	expected.
Subject	to	the	above,	considering	the	expected	pace	of	the	manufacturing	ramps	for	our	products,	construction	and	expansion	of	our	factories,
and	pipeline	of	announced	projects	under	development,	and	consistent	with	our	current	strategy	of	using	partners	to	manufacture	battery	cells,	as	well
as	considering	all	other	infrastructure	growth,	we	currently	expect	our	average	annual	capital	expenditures	in	2020	and	the	two	succeeding	fiscal	years
to	be	$2.5	billion	to	$3.5	billion.
We	expect	operating	expenses	as	a	percentage	of	revenue	to	continue	to	decrease	in	the	future	as	we	focus	on	increasing	operational	efficiency
and	process	automation,	as	well	as	from	increases	in	expected	overall	revenues	from	our	expanding	sales.	In	particular,	our	efforts	to	scale	down	and
optimize	our	cost	structure	relative	to	the	size	of	our	business	have	already	manifested	in	total	operating	expenses	decreasing	from	$4.4	billion	to	$4.1
billion	from	fiscal	year	2018	to	fiscal	year	2019,	including	restructuring	and	other	charges.	Meanwhile,	our	total	revenues	increased	from	$21.5	billion
to	$24.6	billion	in	the	same	period.
In	March	2018,	our	stockholders	approved	the	2018	CEO	Performance	Award,	with	vesting	contingent	on	achieving	market	capitalization	and


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operational	milestones.	We	will	incur	significant	non-cash	stock-based	compensation	expense	for	each	tranche	under	this	award	after	the	related
operational	milestone	initially	becomes	probable	of	being	met,	and	if	later	than	the	grant	date,	we	will	also	have	to	record	a	cumulative	catch-up
expense	at	such	time.	Such	catch-up	expense	may	be	material	depending	on	the	length	of	time	elapsed	from	the	grant	date.	For	example,	in	the	fourth
quarter	of	2019,	as	the	result	of	an	additional	operational	milestone	becoming	probable	of	achievement,	we	recorded	a	cumulative	catch-up	expense	of
$72	million	for	service	provided	from	the	grant	date.	Moreover,	as	the	expense	for	a	tranche	is	recorded	over	the	longer	of	(i)	the	expected	achievement
period	of	the	relevant	operational	milestone	and	(ii)	only	if	the	related	market	capitalization	milestone	has	not	been	achieved,	its	expected	achievement
period,	the	achievement	of	a	market	capitalization	milestone	earlier	than	expected	may	accelerate	the	rate	at	which	such	expense	is	recognized.	Upon
vesting	of	a	tranche,	all	remaining	associated	expense	will	be	recognized	immediately.	See	Note	14,	
Equity	Incentive	Plans—2018	CEO	Performance
Award
,	to	the	consolidated	financial	statements	included	elsewhere	in	this	Annual	Report	on	Form	10-K	for	further	details	regarding	the	stock-based
compensation	relating	to	the	2018	CEO	Performance	Award.
	
	
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Critical	Accounting	Policies	and	Estimates
The	consolidated	financial	statements	are	prepared	in	accordance	with	accounting	principles	generally	accepted	in	the	U.S.	(“GAAP”).	The
preparation	of	the	consolidated	financial	statements	requires	us	to	make	estimates	and	assumptions	that	affect	the	reported	amounts	of	assets,
liabilities,	revenues,	costs	and	expenses	and	related	disclosures.	We	base	our	estimates	on	historical	experience,	as	appropriate,	and	on	various	other
assumptions	that	we	believe	to	be	reasonable	under	the	circumstances.	Changes	in	the	accounting	estimates	are	reasonably	likely	to	occur	from	period
to	period.	Accordingly,	actual	results	could	differ	significantly	from	the	estimates	made	by	our	management.	We	evaluate	our	estimates	and
assumptions	on	an	ongoing	basis.	To	the	extent	that	there	are	material	differences	between	these	estimates	and	actual	results,	our	future	financial
statement	presentation,	financial	condition,	results	of	operations	and	cash	flows	will	be	affected.	We	believe	that	the	following	critical	accounting
policies	involve	a	greater	degree	of	judgment	and	complexity	than	our	other	accounting	policies.	Accordingly,	these	are	the	policies	we	believe	are	the
most	critical	to	understanding	and	evaluating	the	consolidated	financial	condition	and	results	of	operations.
Revenue	Recognition
Adoption	of	new	revenue	standard
On	January	1,	2018,	we	adopted	ASC	606,	
Revenue	from	Contracts	with	Customers
,	(“new	revenue	standard”)	using	the	modified	retrospective
method.	The	new	revenue	standard	had	a	material	impact	in	our	consolidated	financial	statements.	For	further	discussion,	refer	to	Note	2,	
Summary	of
Significant	Accounting	Policies


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Summary	of
Significant	Accounting	Policies
,	to	the	consolidated	financial	statements	included	elsewhere	in	this	Annual	Report	on	Form	10-K.
Automotive	Segment
Automotive	Sales	Revenue
Automotive	Sales	without	Resale	Value	Guarantee
Automotive	sales	revenue	
includes	revenues	related	to	deliveries	of	new	vehicles	and	pay-per-use	charges,	and	specific	other	features	and
services	that	meet	the	definition	of	a	performance	obligation	under	the	new	revenue	standard,	including	access	to	our	Supercharger	network,	internet
connectivity,	Autopilot,	
FSD	features	
and	over-the-air	software	updates.	We	recognize	revenue	on	automotive	sales	upon	delivery	to	the	customer,
which	is	when	the	control	of	a	vehicle	transfers.	Payments	are	typically	received	at	the	point	control	transfers	or	in	accordance	with	payment	terms
customary	to	the	business.	Other	features	and	services	such	as	access	to	our	Supercharger	network,	internet	connectivity	and	over-the-air	software
updates	are	provisioned	upon	control	transfer	of	a	vehicle	and	recognized	over	time	on	a	straight-line	basis	as	we	have	a	stand-ready	obligation	to
deliver	such	services	to	the	customer.	We	recognize	revenue	related	to	these	other	features	and	services	over	the	performance	period,	which	is
generally	the	expected	ownership	life	of	the	vehicle	or	the	eight-year	life	of	the	vehicle.	Revenue	related	to	Autopilot	and	FSD	features	is	recognized
when	functionality	is	delivered	to	the	customer.	For	our	obligations	related	to	automotive	sales,	we	estimate	standalone	selling	price	by	considering
costs	used	to	develop	and	deliver	the	service,	third-party	pricing	of	similar	options	and	other	information	that	may	be	available.
At


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At	
the	time	of	revenue	recognition,	we	reduce	the	transaction	price	and	record	a	sales	return	reserve	against	revenue	for	estimated	variable
consideration	related	to	future	product	returns	based	on	historical	experience.	In	addition,	any	fees	that	are	paid	or	payable	by	us	to	a	customer’s
lender	when	we	arrange	the	financing	are	recognized	as	an	offset	against	automotive	sales	revenue.
Costs	to	obtain	a	contract	mainly	relate	to	commissions	paid	to	our	sales	personnel	for	the	sale	of	vehicles.	Commissions	are	not	paid	on	other
obligations	such	as
	
access	to	our	Supercharger	network,	internet	connectivity,	Autopilot,	FSD	features	and	over-the-air	software	updates.	As	our
contract	costs	related	to	automotive	sales	are	typically	fulfilled	within	one	year,	the	costs	to	obtain	a	contract	are	expensed	as	incurred.	
Amounts	billed
to	customers	related	to	shipping	and	handling	are	classified	as	automotive	revenue,	and	
we	have	elected	to	recognize	the	cost	for	freight	and	shipping
when	control	over	vehicles,	parts,	or	accessories	have	transferred	to	the	customer	as	an	expense	in	cost	of	revenues.	Our	policy	is	to	exclude	taxes
collected	from	a	customer	from	the	transaction	price	of	automotive	contracts.
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Automotive	Sales	with	Resale	Value	Guarantee
	or	a	Buyback	Option
We	offer	resale	value	guarantees	or	similar	buy-back	terms	to	certain	international	customers	who	purchase	vehicles	and	who	finance	their
vehicles	through	one	of	our	specified	commercial	banking	partners.	We	also	offer	resale	value	guarantees	in	connection	with	automotive	sales	to	certain
leasing	partners.	Under	these	programs,	we	receive	full	payment	for	the	vehicle	sales	price	at	the	time	of	delivery	and	our	counterparty	has	the	option
of	selling	their	vehicle	back	to	us	during	the	guarantee	period,	which	currently	is	generally	at	the	end	of	the	term	of	the	applicable	loan	or	financing
program,	for	a	pre-determined	resale	value.
With	the	exception	of	two	programs	which	are	discussed	within	the	
Automotive	Leasing
	section,	we	recognize	revenue	when	control	transfers
upon	delivery	to	customers	in	accordance	with	the	new	revenue	standard	as	a	sale	with	a	right	of	return	as	we	do	not	believe	the	customer	has	a
significant	economic	incentive	to	exercise	the	resale	value	guarantee	provided	to	them.	The	process	to	determine	whether	there	is	a	significant
economic	incentive	includes	a	comparison	of	a	vehicle’s	estimated	market	value	at	the	time	the	option	is	exercisable	with	the	guaranteed	resale	value	to
determine	the	customer’s	economic	incentive	to	exercise.	The	performance	obligations	and	the	pattern	of	recognizing	automotive	sales	with	resale
value	guarantees	are	consistent	with	automotive	sales	without	resale	value	guarantees	with	the	exception	of	our	estimate	for	sales	return	reserve.	Sales
return	reserves	for	automotive	sales	with	resale	value	guarantees	are	estimated	based	on	historical	experience	plus	consideration	for	expected	future


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market	values.	On	a	quarterly	basis,	we	assess	the	estimated	market	values	of	vehicles	under	our	buyback	options	program	to	determine	whether	there
have	been	changes	to	the	likelihood	of	future	product	returns.	As	we	accumulate	more	data	related	to	the	buyback	values	of	our	vehicles	or	as	market
conditions	change,	there	may	be	material	changes	to	their	estimated	values.	The	two	programs	that	are	still	being	recorded	as	operating	leases	are
discussed	in	further	detail	below	in	
Vehicle	Sales	to	Leasing	Partners	with	a	Resale	Value	Guarantee	and	a	Buyback	Option
	and	
Vehicle	Sales	to
Customers	with	a	Resale	Value	Guarantee	where	Exercise	is	Probable.
Prior	to	the	adoption	of	the	new	revenue	standard,	all	transactions	with	resale	value	guarantees	were	recorded	as	operating	leases.	The	amount
of	sale	proceeds	equal	to	the	resale	value	guarantee	was	deferred	until	the	guarantee	expired	or	was	exercised.	For	certain	transactions	that	were
considered	interest	bearing	collateralized	borrowings	as	required	under	ASC	840,	
Leases
	prior	to	January	1,	2019,	we	also	accrued	interest	expense
based	on	our	borrowing	rate.	The	remaining	sale	proceeds	were	deferred	and	recognized	on	a	straight-line	basis	over	the	stated	guarantee	period	to
automotive	leasing	revenue.	The	guarantee	period	expired	at	the	earlier	of	the	end	of	the	guarantee	period	or	the	pay-off	of	the	initial	loan.	We
capitalized	the	cost	of	these	vehicles	on	the	consolidated	balance	sheet	as	operating	lease	vehicles,	net,	and	depreciated	their	value,	less	estimated
residual	value,	to	cost	of	automotive	leasing	revenue	over	the	same	period.


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In	cases	where	our	counterparty	retained	ownership	of	the	vehicle	at	the	end	of	the	guarantee	period,	the	resale	value	guarantee	liability	and
any	remaining	deferred	revenue	balances	related	to	the	vehicle	were	settled	to	automotive	leasing	revenue,	and	the	net	book	value	of	the	leased	vehicle
was	expensed	to	cost	of	automotive	leasing	revenue.	If	our	counterparty	returned	the	vehicle	to	us	during	the	guarantee	period,	we	purchased	the
vehicle	from	our	counterparty	in	an	amount	equal	to	the	resale	value	guarantee	and	settled	any	remaining	deferred	balances	to	automotive	leasing
revenue,	and	we	reclassified	the	net	book	value	of	the	vehicle	on	the	consolidated	balance	sheet	to	used	vehicle	inventory.
Automotive	Regulatory	Credits
In	connection	with	the	production	and	delivery	of	our	zero	emission	vehicles	in	global	markets,	we	have	earned	and	will	continue	to	earn	various
tradable	automotive	regulatory	credits.	We	have	sold	these	credits,	and	will	continue	to	sell	future	credits,	to	automotive	companies	and	other	regulated
entities	who	can	use	the	credits	to	comply	with	emission	standards	and	other	regulatory	requirements.	For	example,	under	California’s	Zero	Emission
Vehicle	Regulation	and	those	of	states	that	have	adopted	California’s	standard,	vehicle	manufacturers	are	required	to	earn	or	purchase	credits,	referred
to	as	ZEV	credits,	for	compliance	with	their	annual	regulatory	requirements.	These	laws	provide	that	automakers	may	bank	or	sell	to	other	regulated
parties	their	excess	credits	if	they	earn	more	credits	than	the	minimum	quantity	required	by	those	laws.	We	also	earn	other	types	of	saleable	regulatory
credits	in	the	United	States	and	abroad,	including	greenhouse	gas,	fuel	economy	and	clean	fuels	credits


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.	Payments	for	regulatory	credits	are	typically
received	at	the	point	control	transfers	to	the	customer,	or	in	accordance	with	payment	terms	customary	to	the	business.	
We	recognize	revenue	on	the	sale
of	automotive	regulatory	credits	at	the	time	control	of	the	regulatory	credits	is	transferred	to	the	purchasing	party	as	automotive	revenue	in	the
consolidated	statement	of	operations.
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Automotive	Leasing	Revenue
Automotive	leasing	revenue	includes	revenue	recognized	under	lease	accounting	guidance	for	our	direct	leasing	programs	as	well	as	the	two
programs	with	resale	value	guarantees	which	continue	to	qualify	for	operating	lease	treatment.	Prior	to	the	adoption	of	the	new	revenue	standard,	all
programs	with	resale	value	guarantees	were	accounted	for	as	operating	leases.
Direct	Vehicle	Leasing	Program
We	have	outstanding	leases	under	our	direct	vehicle	leasing	programs	in	the	U.S.,	Canada	and	in	certain	countries	in	Europe.	As	of	December
31,	2019,	the	direct	vehicle	leasing	program	is	offered	for	all	new	Model	S,	Model	X	and	Model	3	vehicles	in	the	U.S.	and	new	Model	S	and	Model	X
vehicles	in	Canada.	Qualifying	customers	are	permitted	to	lease	a	vehicle	directly	from	Tesla	for	up	to	48	months.	At	the	end	of	the	lease	term,
customers	are	required	to	return	the	vehicles	to	us	or	for	Model	S	and	Model	X	leases,	may	opt	to	purchase	the	vehicles	for	a	pre-determined	residual
value.	We	account	for	these	leasing	transactions	as	operating	leases.	We	record	leasing	revenues	to	automotive	leasing	revenue	on	a	straight-line	basis
over	the	contractual	term,	and	we	record	the	depreciation	of	these	vehicles	to	cost	of	automotive	leasing	revenue.
We	capitalize	shipping	costs	and	initial	direct	costs	such	as	the	incremental	cost	of	referral	fees	and	sales	commissions	from	the	origination	of
automotive	lease	agreements	as	an	element	of	operating	lease	vehicles,	net,	and	subsequently	amortize	these	costs	over	the	term	of	the	related	lease
agreement.	Our	policy	is	to	exclude	taxes	collected	from	a	customer	from	the	transaction	price	of	automotive	contracts.


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Vehicle	Sales	to	Leasing	Partners	with	a	Resale	Value	Guarantee	and	a	Buyback	Option
We	offer	buyback	options	in	connection	with	automotive	sales	with	resale	value	guarantees	with	certain	leasing	partner	sales	in	the	United
States.	These	transactions	entail	a	transfer	of	leases,	which	we	have	originated	with	an	end-customer,	to	our	leasing	partner.	As	control	of	the	vehicles
has	not	been	transferred	in	accordance	with	the	new	revenue	standard,	these	transactions	were	accounted	for	as	interest	bearing	collateralized
borrowings	in	accordance	with	ASC	840,	
Leases
,	
prior	to	January	1,	2019
.	Under	this	program,	cash	is	received	for	the	full	price	of	the	vehicle	and	the
collateralized	borrowing	value	is	generally	recorded	within	resale	value	guarantees	and	the	customer	upfront	down	payment	is	recorded	within
deferred	revenue.	We	amortize	the	deferred	revenue	amount	to	automotive	leasing	revenue	on	a	straight-line	basis	over	the	option	period	and	accrue
interest	expense	based	on	our	borrowing	rate.	We	capitalize	vehicles	under	this	program	to	operating	lease	vehicles,	net,	on	the	consolidated	balance
sheets,	and	we	record	depreciation	from	these	vehicles	to	cost	of	automotive	leasing	revenue	during	the	period	the	vehicle	is	under	a	lease
arrangement.	Cash	received	for	these	vehicles,	net	of	revenue	recognized	during	the	period,	is	classified	as	collateralized	lease	(repayments)
borrowings	within	cash	flows	from	financing	activities	in	the	consolidated	statements	of	cash	flows.	
With	the	adoption	of	ASC	842	on	January	1,	2019,
all	new	agreements	under	this	program	are	accounted	for	as	operating	leases	under	ASC	842	and	there	was	no	material	change	in	the	timing	and


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amount	of	revenue	recognized	over	the	term.	Consequently,	any	cash	flows	for	new	agreements	are	classified	as	operating	cash	activities	on	the
consolidated	statements	of	cash	flows.
At	the	end	of	the	lease	term,	we	settle	our	liability	in	cash	by	either	purchasing	the	vehicle	from	the	leasing	partner	for	the	buyback	option
amount	or	paying	a	shortfall	to	the	option	amount	the	leasing	partner	may	realize	on	the	sale	of	the	vehicle.	Any	remaining	balances	within	deferred
revenue	and	resale	value	guarantee	will	be	settled	to	automotive	leasing	revenue.	
The	end	customers	can	extend	the	lease	for	a	period	of	up	to	6
months.	
In	cases	where	the	leasing	partner	retains	ownership	of	the	vehicle	after	the	end	of	our	option	period,	we	expense	the	net	value	of	the	leased
vehicle	to	cost	of	automotive	leasing	revenue.
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Vehicle	Sales	to	Customers	with	a	Resale	Value	Guarantee	where	Exercise	is	Probable
For	certain	international	programs	where	we	have	offered	resale	value	guarantees	to	certain	customers	who	purchased	vehicles	and	where	we
expect	the	customer	has	a	significant	economic	incentive	to	exercise	the	resale	value	guarantee	provided	to	them,	we	continue	to	recognize	these
transactions	as	operating	leases.	The	process	to	determine	whether	there	is	a	significant	economic	incentive	includes	a	comparison	of	a	vehicle’s
estimated	market	value	at	the	time	the	option	is	exercisable	with	the	guaranteed	resale	value	to	determine	the	customer’s	economic	incentive	to
exercise.	We	have	not	sold	any	vehicles	under	this	program	since	the	first	half	of	2017	and	all	current	period	activity	relates	to	the	exercise	or
cancellation	of	active	transactions.	The	amount	of	sale	proceeds	equal	to	the	resale	value	guarantee	is	deferred	until	the	guarantee	expires	or	is
exercised.	The	remaining	sale	proceeds	are	deferred	and	recognized	on	a	straight-line	basis	over	the	stated	guarantee	period	to	automotive	leasing
revenue.	The	guarantee	period	expires	at	the	earlier	of	the	end	of	the	guarantee	period	or	the	pay-off	of	the	initial	loan.	We	capitalize	the	cost	of	these
vehicles	on	the	consolidated	balance	sheet	as	operating	lease	vehicles,	net,	and	depreciate	their	value,	less	salvage	value,	to	cost	of	automotive	leasing
revenue	over	the	same	period.
In	cases	where	a	customer	retains	ownership	of	a	vehicle	at	the	end	of	the	guarantee	period,	the	resale	value	guarantee	liability	and	any
remaining	deferred	revenue	balances	related	to	the	vehicle	are	settled	to	automotive	leasing	revenue,	and	the	net	book	value	of	the	leased	vehicle	is


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expensed	to	cost	of	automotive	leasing	revenue.	If	a	customer	returns	the	vehicle	to	us	during	the	guarantee	period,	we	purchase	the	vehicle	from	the
customer	in	an	amount	equal	to	the	resale	value	guarantee	and	settle	any	remaining	deferred	balances	to	automotive	leasing	revenue,	and	we	reclassify
the	net	book	value	of	the	vehicle	on	the	consolidated	balance	sheets	to	used	vehicle	inventory.
Energy	Generation	and	Storage	Segment
Energy	Generation	and	Storage	Sales
Energy	generation	and	storage	sales	revenue	consists	of	the	sale	of	solar	energy	systems	and	energy	storage	systems	to	residential,	small
commercial,	and	large	commercial	and	utility	grade	customers,	including	solar	subscription-based	arrangements.	
Upon	adoption	of	ASC	842,	energy
generation	and	storage	sales	revenue	includes	agreements	for	solar	energy	systems	and	PPAs	that	commence	after	January	1,	2019,	as	these	are	now
accounted	for	under	the	new	revenue	standard.	
Sales	of	solar	energy	systems	to	residential	and	small	scale	commercial	customers	consist	of	the
engineering,	design,	and	installation	of	the	system.	Post-installation,	residential	and	small	scale	commercial	customers	receive	a	proprietary	monitoring
system	that	captures	and	displays	historical	energy	generation	data.	Residential	and	small	scale	commercial	customers	pay	the	full	purchase	price	of
the	solar	energy	system	upfront.	Revenue	for	the	design	and	installation	obligation	is	recognized	when	control	transfers,	which	is	when	we	install	a
solar	energy	system	and	the	system	passes	inspection	by	the	utility	or	the	authority	having	jurisdiction.	Revenue	for	the	monitoring	service	is
recognized	ratably	as	a	stand-ready	obligation	over	the	warranty	period	of	the	solar	energy	system.	Sales	of	energy	storage	systems	to	residential	and


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small	scale	commercial	customers	consist	of	the	installation	of	the	energy	storage	system	and	revenue	is	recognized	when	control	transfers,	which	is
when	the	product	has	been	delivered	or,	if	we	are	performing	installation,	when	installed	and	commissioned.	Payment	for	such	storage	systems	is	made
upon	invoice	or	in	accordance	with	payment	terms	customary	to	the	business.
For	large	commercial	and	utility	grade	solar	energy	system	and	energy	storage	system	sales	which	consist	of	the	engineering,	design,	and
installation	of	the	system,	customers	make	milestone	payments	that	are	consistent	with	contract-specific	phases	of	a	project.	Revenue	from	such
contracts	is	recognized	over	time	using	the	percentage	of	completion	method	based	on	cost	incurred	as	a	percentage	of	total	estimated	contract	costs
for	energy	storage	system	sales	and	as	a	percentage	of	total	estimated	labor	hours	for	solar	energy	system	sales.	Certain	large-scale	commercial	and
utility	grade	solar	energy	system	and	energy	storage	system	sales	also	include	operations	and	maintenance	service	which	are	negotiated	with	the
design	and	installation	contracts	and	are	thus	considered	to	be	a	combined	contract	with	the	design	and	installation	service.	For	certain	large
commercial	and	utility	grade	solar	energy	systems	and	energy	storage	systems	where	the	percentage	of	completion	method	does	not	apply,	revenue	is
recognized	when	control	transfers,	which	is	when	the	product	has	been	delivered	to	the	customer	and	commissioned	for	energy	storage	systems	and
when	the	project	has	received	permission	to	operate	from	the	utility	for	solar	energy	systems.	Operations	and	maintenance	service	revenue	is
recognized	ratably	over	the	respective	contract	term	for	solar	energy	system	sales	and	upon	delivery	of	the	service	for	energy	storage	system	sales.
Customer	payments	for	such	services	are	usually	paid	annually	or	quarterly	in	advance.
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In	instances	where	there	are	multiple	performance	obligations	in	a	single	contract,	we	allocate	the	consideration	to	the	various	obligations	in
the	contract	based	on	the	relative	standalone	selling	price	method.	Standalone	selling	prices	are	estimated	based	on	estimated	costs	plus	margin	or
using	market	data	for	comparable	products.	Costs	incurred	on	the	sale	of	residential	installations	before	the	solar	energy	systems	are	completed	are
included	as	work	in	process	within	inventory	in	the	consolidated	balance	sheets.	However,	any	fees	that	are	paid	or	payable	by	us	to	a	solar	loan	lender
would	be	recognized	as	an	offset	against	revenue.	Costs	to	obtain	a	contract	relate	mainly	to	commissions	paid	to	our	sales	personnel	related	to	the	sale
of	solar	energy	systems	and	energy	storage	systems.	As	our	contract	costs	related	to	solar	energy	system	and	energy	storage	system	sales	are	typically
fulfilled	within	one	year,	the	costs	to	obtain	a	contract	are	expensed	as	incurred.
As	part	of	our	solar	energy	system	and	energy	storage	system	contracts,	we	may	provide	the	customer	with	performance	guarantees	that
warrant	that	the	underlying	system	will	meet	or	exceed	the	minimum	energy	generation	or	retention	requirements	specified	in	the	contract.	In	certain
instances,	we	may	receive	a	bonus	payment	if	the	system	performs	above	a	specified	level.	Conversely,	if	a	solar	energy	system	or	energy	storage
system	does	not	meet	the	performance	guarantee	requirements,	we	may	be	required	to	pay	liquidated	damages.	Other	forms	of	variable	consideration
related	to	our	large	commercial	and	utility	grade	solar	energy	system	and	energy	storage	system	contracts	include	variable	customer	payments	that	will


