Tesla Third Quarter 2016 Update
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GAAP net income of $22 million and positive free cash flow of $176 million
Record vehicle production, deliveries, and revenue
GAAP gross profit per car increased significantly from Q2 to Q3Long-term debt reduced and liquidity increased to support future growthEvery new Tesla produced now comes with hardware for self-driving
Dramatic improvement in Model X reliability
Model 3 on plan for volume deliveries in second half of 2017

The Tesla third quarter results reflect strong company-wide execution in many areas. Furthermore, we expect this to continue into Q4
and project positive GAAP net income (excluding non-cash stock-based compensation) despite ZEV credit sales in Q4 likely being
negligible. We set new records for vehicle production, deliveries and revenue, which led to GAAP profitability and positive free cash
flow (cash flows from operations less capital expenditures). At the same time, GAAP total automotive gross margin and gross profit per
car increased substantially.
New product launches, increased store efficiency and new store openings drove year -on-year order growth in Q3, while self-driving
hardware and other product enhancements position Tesla for additional market share gains. Our energy storage products are gaining
increased market acceptance, firmly establishing Tesla as a leader in energy storage solutions, and surpassing our competitors inthe breadth and scope of our offerings across residential, commercial, and utility-scale storage markets.
At the same time, we continue to lay the foundation for future growth. Gigafactory construction and Model 3 development both remainon plan to support volume Model 3 production and deliveries in the second half of 2017. Meanwhile, our efforts to transform the solar
industry will be demonstrated at our joint product introduction with SolarCity on October 28 th.

Continuous Product Innovation
Last week, we announced that all newly produced Tesla vehicles have the hardware needed for full self-driving capability. This same
capability will also be built into every Model 3. Eight surround cameras provide 360 degree visibility around the car at up to 250 metersof range. Twelve enhanced ultrasonic sensors complement this vision, allowing for detection of both hard and soft objects at nearly
twice the distance of the prior system, and computing power has been increased by 40-fold over our previous generation hardware.
Fleet learning means that all Tesla vehicles with Autopilot will naturally get better over time. Additionally, new safety and conveniencefeatures will be rolled out via over-the-air software updates. Tesla vehicles have already been driven over 3 billion miles, including
more than 1.3 billion miles logged by vehicles with Autopilot hardware.
In August, we announced the Model S P100D with Ludicrous mode
(P100DL), which is the world’s quickest production car with a 0-60
mph time of 2.5 seconds. However, unlike other supercars, P100DL
is a four door sedan, can seat five adults plus two children, hasadditional room for cargo, and has industry-leading crash safety. It
is also the longest range all-electric vehicle on the market, able todrive 315 miles on a single charge. We also unveiled the Model X
P100DL, which can accelerate to 60 mph in 2.9 seconds.
Over the past month, we released Version 8.0 software via an overthe-air update for all Model S and Model X vehicles. This update
adds numerous enhancements to the navigation and audio
applications on every Model S and Model X, and also increases
Autopilot capability with enhanced radar signal processing.

Strong Operational Execution

Every New Tesla Now Equipped with Hardware
for Self-driving Capability

In Q3, combined net orders for new Model S and Model X
vehicles grew 68%, compared with the same period last year. During the quarter, we opened 17 new stores and service centers toincrease our customer support network to 250 locations globally. We believe new product variants such as the P100DL, additional
Model X seating variants, new product capabilities such as Enhanced Autopilot and hardware for Full Self-Driving Capability, Autopilot
8.0 software, and new store and service center openings should continue to drive strong vehicle order growth.

We achieved record production levels in Q3, rising to 25,185 vehicles for
an increase of 37% from Q2 and an increase of 92% from Q3 last year.
More than four years since its introduction, Model S continues to expand
market share, which is a testament to our continuous vehicle innovation.
In the U.S., which is Tesla’s most mature market, Model S deliveries
grew nearly 60% year over year, increasing its lead status with a 32%
share of the top 12 selling large luxury sedans, as Model S unit growthsignificantly outpaced U.S. large luxury sedan category sales growth.
Despite still ramping production, Model X is also gaining market share,already growing to 6% of the U.S. large luxury SUV market in Q3, or #8
in the large luxury SUV category, edging out the Porsche Macan and
Cayenne, the Land Rover R-R Sport and the Infiniti QX80. The large
luxury SUV category is three times the size of the large luxury sedan
category in the U.S., and represents a huge opportunity to further
increase Model X sales.

Model S P100DL
The World’s Quickest Production Car
We continue to expand the Tesla vehicle charging network.
At the end of Q3, we had 715 Supercharger locations
globally, with 4,461 individual Superchargers. 97% of the
population in the continental U.S. and 86% of western
Europeans are now within 150 miles of a Supercharger.
High population areas in China, Japan and Australia will soon
reach similar coverage levels . The Supercharging network is
supplemented by 3,222 destination chargers with 5,547
connection points globally at the end of Q3. Destination
charging offers convenient charging at hotels, restaurants
and shopping centers.

Growing Destination Charging Coverage

Tesla’s energy storage business also continues to grow.
Tesla is installing a 20 MW/80 MWh Powerpack system at
the Southern California Edison Mira Loma substation to help
reduce rolling blackouts . Upon completion, this system willbe the largest lithium ion battery storage project in the world
and will hold enough energy to power more than 2,500
households for a day or charge 1,000 Tesla vehicles.

Future Growth Initiatives
For Model 3, we have completed production line layouts and will soon begin installation of new body welding and final assembly lines.
We have established a world class team of suppliers for Model 3 production equipment and components and critical long lead timeequipment and components have been sourced. We are now testing vehicle systems such as chassis, the high voltage drive system,
and low voltage subsystems such as vehicle controllers, HVAC, infotainment and lighting. As refinement of the Model 3 continues, we
remain on plan for our timing, volume, vehicle capability, pricing, and margin targets.
The Gigafactory remains on track to begin cell production later this year for use initially in our energy storage products and later tosupport volume production and deliveries of Model 3 in the second half of 2017. In addition, we continue to expand production capacity
at our Fremont facility and are exploring additional production capacity in Asia and Europe.
With the previously announced plan to acquire SolarCity, we look forward to making solar as compelling as electric vehicles. Acquiring
SolarCity would leverage Tesla’s existing investments in the Gigafactory and the next-generation Powerwall and Powerpack to drive
revenue growth. In addition to the revenue growth associated with making solar more compelling, the combined company is expectedto achieve over $150 million of direct cost synergies in the first full year post-close. Over the coming days, there will be a number of
additional events relating to the SolarCity acquisition and our strategic plan for the combined company:
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October 28th: Product demonstration event to unveil an integrated solar roof with next-generation energy storage and EV
charging.
November 1st: Additional information to be released about the combined company.
November 17th: Stockholder meeting to tally the final vote on the acquisition.

Q3 Results
Starting this quarter, our financial releases no longer include the non-GAAP revenue disclosures that we historically provided. To
simplify our financial reporting, we add back non-cash stock-based compensation (SBC) to calculate non-GAAP results. Consistent
with previous quarters, non-GAAP automotive gross margin will also exclude ZEV credit sales.
Total Q3 GAAP revenue was $2.30 billion, up 145% from Q3 2015, while total Q3 gross margin was 27.7%, compared to 21.6% in Q2.
Total automotive revenue was $2.15 billion on a GAAP basis , up 152% from Q3 2015. Our final Q3 delivery count was 24,821, over
300 more than the estimated delivery count we shared on October 2 nd. Deliveries increased 114% from the third quarter of 2015, andwas comprised of 16,047 Model S and 8,774 Model X vehicles. In addition, 5,065 vehicles were in transit to customers at the end of
the quarter. These vehicles will be delivered in Q4.
In Q3, deliveries where we retain residual risk, and thus were subject to lease accounting, were 32% of total deliveries, down from 36%
in Q2. The elimination of resale value guarantees in the U.S. in Q3 had no impact on demand, signaling strong consumer confidence inthe long-term value of our vehicles. During Q3, we were asked to repurchase fewer than 2% of vehicles eligible for buy back under our
resale value guarantee program.
Q3 GAAP Total automotive gross margin was 29.4%, while non-GAAP Automotive gross margin was 25.0% excluding SBC and $139
million of ZEV credit revenue. Non-GAAP automotive gross margin excluding ZEV credits increased 140 basis points sequentiallybecause of improved manufacturing efficiency and higher production volume. Reliability of our vehicles continues to improve and ourwarranty accrual rates on new and used vehicles declined from Q2 to Q3. The amount of issues that we have addressed with Model X
have fallen by 92% in the last 12 months, a reflection of the improvements we have made in Model X due to our ability and com mitment
to react quickly to issues.
Model S average prices decreased 6.5% sequentially, primarily due to the introduction of the 60 kWh models and production of the 100
kWh variants only starting late in Q3, which would otherwise have balanced that out. 2% of the decline was due to price adjustmentsthat were made for inventory cars that already had mileage on them, showroom cars with wear, and cars that were built before producttransitions, such as those with the original fascia. Model X average prices declined 1.2% sequentially as we increased production
beyond just the highest-priced Q2 Signature builds.
Q3 Services and other revenue was $150 million, up 78% from Q3 2015 and up 70% sequentially from Q2. The increase was primarily
due to higher sales of used vehicles and stationary storage products. Q3 Services and other gross margin was 3.4%, up from 2.5% in
Q2, and generally in line with our expectations .
Total Q3 GAAP operating expenses were $551 million, including $81 million of SBC. After excluding SBC, non-GAAP operating
expenses were $471 million, up 4% from Q2. GAAP research and development expenses were $214 million, including $40 million of
SBC. Excluding SBC, non-GAAP research and development expenses increased 10% sequentially to $174 million, as vehicle
development programs accelerate. GAAP sales, general and administrative expenses were $337 million, including $41 million of SBC.
After excluding SBC, non-GAAP sales, general and administrative expenses of $296 million were up 1% sequentially, demonstrating
our efforts to increase operating leverage.
Our Q3 GAAP net income was $22 million, or $0.14 per share on 157 million diluted shares, while our non-GAAP net income was $111
million, or $0.71 per share on a diluted basis, after adding back $90 million of SBC. Both figures include an $0.08 per share loss ofother expense, net, primarily related to foreign currency transactions and the conversion of most of our 2018 convertible notes.
Our cash flow from operations during the quarter was $424 million due to increased sales, coupled with careful expense management.
Free cash flow was $176 million as we invested $248 million in capital expenditures to increase production capacity, accelerate
Gigafactory construction, and expand customer support infrastructure. Capital expenditures remain on plan to help us reach our goal of
producing 500,000 vehicles in 2018. In addition, we collected $173 million of cash inflows from vehicle sales to our bank leasing
partners, which are not included in cash flow from operations.
With our strong cash flows this quarter, we were able to reduce the balances on our borrowing facilities by $178 million and settle $422
million of conversions on our 2018 convertible notes, strengthening our balance sheet. After this $600 million in debt repayment, cash
and cash equivalents were $3.1 billion at quarter end, compared with $3.2 billion at the end of Q2.
Our sources of liquidity expanded in the quarter as we were able to increase our borrowing capacity with the addition of a $3 00 million
retail lease financing facility. We were also able to expand our indirect leasing capacity for our customers as our largest partner in the
U.S. increased our capacity with them by over 80%. We are also adding a new leasing partner in the fourth quarter of 2016. These
increases will allow us to continue to provide attractive and convenient financing sources for our customers.

Outlook
We maintain our guidance of 50,000 new vehicle deliveries for the second half of 2016, with a Q4 plan of just over 25,000 deliveries,
despite the challenges of winter weather and the holiday season. We expect about 30% to 35% of these deliveries to be accounted for
as leases for revenue recognition purposes.
As previously provided in our second quarter update, we guided a 2 to 3 percentage points improvement in automotive gross mar gin on
a GAAP and non-GAAP basis by the end of 2016. Automotive gross margin on a non-GAAP basis excludes ZEV credits and SBC. We
are on track to meet this guidance.
We also guided in our second quarter update that full year 2016 operating expenses, both on a GAAP and non -GAAP basis, wouldgrow approximately 30% from 2015. We are also on track to meet this guidance.
We now expect our capital expenditures in 2016 will be approximately $1.8 billion as we continue to focus on capital efficiency. Capital
expenditures for the past three quarters totaled $759 million.
We plan to continue demonstrating strong execution against established goals while also creating new opportunities for future growth.

Elon Musk, Chairman & CEO

Jason Wheeler, Chief Financial OfficerWebcast Information
Tesla will provide a live webcast of its third quarter 2016 financial results conference call beginning at 2:30 p.m. PT on October 26,
2016, at ir.tesla.com. This webcast will also be available for replay for approximately one year thereafter.
Non-GAAP Financial Information
Consolidated financial information has been presented in accordance with GAAP as well as on a non-GAAP basis to supplement ourconsolidated financial results. Our non-GAAP financial measures include non-GAAP gross margin, non-GAAP net income (loss), nonGAAP net income (loss) on a per share basis, free cash flow, and operating cash flows plus change in collateralized lease bor rowing.
Management believes that it is useful to supplement its GAAP financial state ments with this non-GAAP information because
management uses such information internally for its operating, budgeting and financial planning purposes . These non-GAAP financial
measures also facilitate management’s internal comparisons to Tesla’s historical performance as well as comparisons to the operating
results of other companies. Management also believes that presentation of the non-GAAP financial measures provides useful
information to our investors regarding our financial condition and results of o perations because it allows investors greater transparency
to the information used by Tesla management in its financial and operational decision -making so that investors can see through theeyes of Tesla management regarding important financial metrics tha t Tesla management uses to run the business as well as allows
investors to better understand Tesla’s performance. Non-GAAP information is not prepared under a comprehensive set of accounting
rules and therefore, should only be read in conjunction with fin ancial information reported under U.S. GAAP when understanding
Tesla's operating performance. A reconciliation between GAAP and non-GAAP financial information is provided below.

Forward-Looking Statements
Certain statements in this shareholder letter, including statements in the “Outlook” section; statements relating to the progress Tesla ismaking with respect to product development; statements regarding growth in the number of Tesla store, service center andSupercharger locations; statements relating to the production and delivery timing of future products such as Model 3; growth in demandand orders for Tesla products and the catalysts for that growth; the ability to achieve product demand, volume, production, d elivery,
revenue, cash flow, leasing, gross margin, spending, capital expenditure and profitability targets; productivity improvements andcapacity expansion plans; statements regarding future sources of liquidity; Tesla Gigafactory timing, plans and output expectations,
including those related to cell and other production; and opportunities for product innovation and integration with SolarCity, as well as
expected cost synergies , are “forward-looking statements” that are subject to risks and uncertainties . These forward-looking
statements are based on management’s current expectations, and as a result of certain risks and uncertainties, actual results may differ
materially from those projected. The following important factors, without limitation, could cause actual results to differ materially fromthose in the forward-looking statements: the risk of delays in the manufacture, production and delivery of Model S and Model X vehicles
and energy products, and production and delivery of Model 3 vehicles; the ability to design and achieve market acc eptance of Model S
and its variants, as well as new vehicle models, specifically Model X and Model 3; the ability of suppliers to meet quality a nd partdelivery expectations at increasing volumes; adverse foreign exchange movements; any failures by Tesla p roducts to perform as
expected or if product recalls occur; Tesla’s ability to continue to reduce or control manufacturing and other costs; consume rs’
willingness to adopt electric vehicles; competition in the automotive market generally and the alternative fuel vehicle market inparticular; Tesla’s ability to establish, maintain and strengthen the Tesla brand; Tesla’s ability to manage future growth ef fectively as we
rapidly grow, especially internationally; the unavailability, reduction or elimination of government and economic incentives for electricvehicles; Tesla’s ability to establish, maintain and strengthen its relationships with strategic partners such as Panasonic; potential
difficulties in finalizing, performing and realizing potential benefits u nder definitive agreements for the Tesla Gigafactory site, obtaining
permits and incentives, negotiating terms with technology, materials and other partners for Gigafactory, and maintaining Giga factory
implementation schedules, output and costs estimates; and Tesla’s ability to execute on its retail strategy and for new store, service
center and Tesla Supercharger openings. More information on potential factors that could affect our financial results is included fromtime to time in our Securities and Exchange Commission filings and reports, including the risks identified under the section captioned“Risk Factors” in our quarterly report on Form 10-Q filed with the SEC on August 5, 2016. Tesla disclaims any obligation to update
information contained in these forward-looking statements whether as a result of new information, future events, or otherwise.

Investor Relations Contact:
Jeff Evanson
Investor Relations
ir@tesla.com

Press Contact:
Sarah O’Brien
Communications
press@tesla.com

Tesla Motors, Inc.
Condensed Consolidated Statem ents of Operations(Unaudited)(In thousands, except per share data)

Sept 30,
2016
Revenues
Automotive
Automotive leasing
Total automotive revenue$

1,917,442
231,285
2,148,727$

1,030,224
151,628
1,181,852$

149,7092,298,436$

88,165
1,270,017

Cost of revenues
Automotive
Automotive leasing
Total automotive cost of revenues$

1,355,102
161,959
1,517,061

Services and otherTotal cost of revenues (1)$Gross profit

Services and otherTotal revenues

Operating expenses
Research and development (1)Selling, general and administrative (1)Total operating expenses
Income (loss) from operations
Interest income
Interest expense (2)Other expense, net
Income (loss) before income taxes
Provision for income taxes
Net income (loss)
Net income (loss) per common share:
Basic
Diluted$Three Months Ended
June 30,
Sept 30,
2016
2015

$

769,015
83,540852,555$

3,849,558
507,085
4,356,643$

84,234
936,789$

358,858
4,715,501$

827,230
82,052909,282$

582,545
46,184
628,729$

2,895,483
310,176
3,205,659

144,640
1,661,701$

85,959995,241$

76,564705,293$

345,8633,551,522$

199,846
2,126,706$

636,735$

274,776$

231,496$

1,163,979$

704,939$$

191,664
321,152
512,816(238,040)
2,242(46,368)(7,373)(289,539)
3,649(293,188)$

588,448
976,173
1,564,621(400,642)
6,351(133,706)(9,952)(537,949)
15,628(553,577)$$

178,791
236,367
415,158(183,662)
327(29,308)(15,431)(228,074)
1,784(229,858)$$

214,302336,811551,11385,622
2,858(46,713)(11,756)
30,011
8,133
21,878$527,657
633,578
1,161,235(456,296)
758(80,234)(24,503)(560,275)
7,991(568,266)

$

0.15

$

(2.09) $(1.78)$(3.94) $(4.47)$

0.14$(2.09) $(1.78)$(3.94) $(4.47)$$

Shares used in per share calculation:
Basic
Diluted

$

$

$
$

$

Nine Months Ended
Sept 30,
Sept 30,
2016
2015

$

$

$

$

$
$

$
$

2,417,247
206,718
2,623,965$

207,680
2,831,645

1,808,576
118,284
1,926,860$$

148,991

139,983

129,006

140,581

127,225

156,935

139,983

129,006

140,581

127,225

Notes:(1) Includes stock-based compensation expense of the follow ing for the periods presented:
Cost of revenues
Research and development
Selling, general and administrative
Total stock-based compensation expense

$

$

8,939
40,22040,38489,543$$

6,495
33,50627,311
67,312$$

3,828
24,15328,05256,033$$

21,837
113,328
111,347
246,512$$

13,24963,85765,288142,394(2) Interest expense includes non-cash interest expense related to convertible notes and other borrow ing. For the three months ended September
30, 2016, June 30, 2016, and September 30, 2015, non-cash interest expense related to convertible notes and other borrow ing w ere $33.1
million, $31.8 million, and $21.8 million, respectively. For the nine months ended September 30, 2016 and 2015, non-cash interest expense
related to convertible notes and other borrow ings w ere $93.9 million and $59.5 million.

Tesla Motors, Inc.
Condensed Consolidated Balance Sheets(Unaudited)(In thousands)
Sept 30,
2016
AssetsCash and cash equivalents
Restricted cash and marketable securities - current
Accounts receivable
Inventory
Prepaid expenses and other current assets
Operating lease vehicles, net (1)Property and equipment, net
Restricted cash - noncurrent
Other assets
Total assets
Liabilities and Stockholders' Equity
Accounts payable and accrued liabilities
Deferred revenue (2)Customer deposits
Long-term debt and capital leases
Other long-term liabilities (3)Total liabilities
Mezzanine equity (4)Stockholders' equity
Total liabilities and stockholders' equity

$

$

$

$

Dec 31,
2015

3,084,257
23,711
326,895
1,604,571
132,978
2,949,297
4,309,048
90,99470,646
12,592,397$

2,301,302
1,411,155
690,364
2,704,191
2,793,627
9,900,639
11,2702,680,488
12,592,397

$

$

$

1,196,908
22,628
168,965
1,277,838
115,667
1,791,403
3,403,334
31,522
59,674
8,067,939

1,338,946
1,006,897
283,3702,649,020
1,658,717
6,936,950
47,285
1,083,704
8,067,939

Notes:(1) Includes the follow ing increase in operating lease vehicles related to deliveries and subject to lease accounting, net of
depreciation recognized in automotive cost of sales, for the follow ing periods:
Resale value guarantee program (and other vehicles with similar buy-back terms)
Beginning balance$First quarter
Second quarter
Third quarter
Fourth quarter

1,556,528
352,782
217,270
224,598$

689,689
103,022
170,025
215,337
378,455

Ending balance$

2,351,178$

1,556,528$

234,619
99,97672,252
190,975$$

597,822$

81,63635,68739,58725,16252,547
234,619

Model S and Model X leasing program
Beginning balanceFirst quarter
Second quarter
Third quarter
Fourth quarter
Ending balance(2) Includes the follow ing increase in deferred revenue related to deliveries w ith the resale value guarantee and similar
programs and subject to lease accounting, net of revenue amortized to automotive sales, for the follow ing periods:

Beginning balanceFirst quarter
Second quarter
Third quarter
Fourth quarter$

679,131
121,836
50,71757,724$376,471
45,33460,76767,522129,037

Ending balance$

909,408$

679,131(3) Includes the follow ing increase in other liabilities related to deliveries w ith the resale value guarantee and similar
programs and subject to lease accounting for the follow ing periods:
Beginning balanceFirst quarter
Second quarter
Third quarter
Fourth quarter$

1,430,573
344,926
231,848
252,776$

487,879
118,341
186,957
245,133
392,263

Ending balance$

2,260,123$

1,430,573(4) Our common stock price exceeded the conversion threshold price of our convertible senior notes due 2018 (2018
Notes) issued in May 2013; therefore, the 2018 Notes are convertible at the holder’s option during the third quarter of
2016. As such, the carrying value of the 2018 Notes w as classified as a current liability as of September 30, 2016 andthe difference betw een the principal amount and the carrying value of the 2018 Notes w as reflected as convertible
debt in mezzanine equity on our condensed consolidated balance sheet as of September 30, 2016.

Tesla Motors, Inc.
Supplem ental Consolidated Financial Inform ation(Unaudited)(In thousands)

Sept 30,
2016
Selected Cash Flow Inform ation
Cash flow s provided by (used in) operating activities
Cash flow s used in investing activities
Cash flow s provided by (used in) financing activities
Other Selected Financial Inform ation
Cash flow s provided by (used in) operating activities
Change in collateralized lease borrow ing
Operating cash flow s plus change in collateralized lease borrow ing
Capital expenditures
Depreciation and amortization
Free Cash Flow
Cash flow s provided by (used in) operating activities
Capital expenditures
Free cash flow

Three Months Ended
June 30,
Sept 30,2016
2015

Nine Months Ended
Sept 30,
Sept 30,
2016
2015

$

423,650 $(268,006)(320,870)

150,337 $(319,854)
1,976,584(203,340)(404,090)
893,978$$

150,337
142,762
293,099$(203,340)
163,416(39,924)$$

423,650
173,144596,794$

324,380
557,669
882,049$$(247,611) $280,468 $(294,720) $183,232 $(392,403)
110,366$$(759,190) $ (1,223,628)
620,159 $278,867$

423,650 $(247,611)
176,039 $

150,337 $(294,720)(144,383) $(203,340)(392,403)(595,743)$

324,380 $(494,650)(759,190)(1,223,628)(434,811) $ (1,718,278)

$

$
$

$

$

324,380 $(494,650)(821,679)(1,259,271)
2,371,149
1,298,485$$(494,650)
359,951(134,699)

Supplem ental Model S and Model X Leasing Program Inform ation(in thousands, except for vehicle deliveries)

Vehicles delivered
Average per unit price of vehicles delivered
Aggregate value of vehicles delivered (1)Three Months Ended
Sept 30,
June 30,
Sept 30,
2016
2016
2015
2,934
1,132
494
$
99 $
103 $
91
$
291,324 $
116,899 $
44,804

Nine Months Ended
Sept 30,
Sept 30,
2016
2015
5,471
1,718
$
105 $
100
$
557,153 $
171,290

Leasing revenue recognized$$

31,387$23,883$(1) Aggregate value is the product of multiplying vehicles delivered by the average per unit price of vehicles delivered

11,514

71,963$

27,211

Tesla Motors, Inc.
Reconciliation of GAAP to Non-GAAP Financial Inform ation(Unaudited)(In thousands, except per share data)

Sept 30,
2016
Autom otive gross profit - GAAP
Stock-based compensation expense
ZEV credit revenue recognized
Autom otive gross profit excluding ZEV credit - Non-GAAP$$

Autom otive gross m argin excluding ZEV credit - Non-GAAP
Research and developm ent expenses - GAAP
Stock-based compensation expense
Research and developm ent expenses - Non-GAAP$

Selling, general and adm inistrative expenses - GAAP
Stock-based compensation expense
Selling, general and adm inistrative expenses - Non-GAAP$Net Incom e (loss) - GAAP
Stock-based compensation expense
Net incom e (loss) - Non-GAAP$

Net incom e (loss) per share, basic - GAAP
Stock-based compensation expense
Net incom e (loss) per share, basic - Non-GAAP

$

$

$

$

$

Shares used in per share calculation, basic - GAAP and Non-GAAP
Net incom e (loss) per share, diluted - GAAP
Stock-based compensation expense
Net incom e (loss) per share, diluted - Non-GAAP
Shares used in per share calculation, diluted - GAAP and Non-GAAP

Three Months Ended
June 30,
Sept 30,
2016
2015

631,666 $
8,939(138,541)
502,064 $272,570 $
6,495
(64)
279,001 $223,826
3,828(38,594)
189,060

25.0%

23.6%

23.2%

214,302 $(40,220)
174,082 $191,664 $(33,506)
158,158 $

178,791(24,153)
154,638$

336,811 $(40,384)
296,427 $321,152 $(27,311)
293,841 $

236,367(28,052)
208,315$

21,87889,543
111,421$(293,188) $67,312(225,876) $(229,858)
56,033(173,825)

$

0.15
0.60
0.75

$

(2.09) $0.48(1.61) $(1.78)
0.43(1.35)$$$

148,991$$

Nine Months Ended
Sept 30,
Sept 30,
2016
2015

0.14
0.57
0.71
156,935

139,983$$(2.09) $0.48(1.61) $139,983

$

$

$

$

$

$

129,006(1.78)
0.43(1.35)
129,006

1,150,984 $
21,837(195,592)
977,229 $
23.5%

24.1%

588,448 $(113,328)
475,120 $527,657(63,857)
463,800

976,173 $(111,347)
864,826 $

633,578(65,288)568,290(553,577) $246,512(307,065) $(568,266)
142,393(425,873)(3.94) $1.76(2.18) $(4.47)
1.12(3.35)

140,581$$

697,105
13,249(103,880)
606,474(3.94) $1.76(2.18) $140,581

127,225(4.47)
1.12(3.35)
127,225