Tesla Third Quarter 2017 Update
Surpassed 250,000 vehicles delivered since inception

Record Model S and Model X net orders and deliveries in Q3 2017



About 100,000 Model S and X deliveries projected for 2017Model 3 production steadily increasingCash balance of $3.5B entering Q4 2017

In Q3, we delivered the 250,000th Tesla. This is a significant milestone as the Tesla fleet is now about 100 times larger than it was five
years ago, just before the launch of Model S.
During Q3, we received record net orders for Model S and Model X, setting the stage for what should be an all-time record for deliveries ofthese vehicles in Q4. With the addition of Model 3 as a compelling, high-performance and long-range electric vehicle that is also
affordable, the Tesla fleet should grow even faster in the years ahead.
Shifting road transportation from internal combustion engines to electric powertrains is only half the Tesla story. We are also experiencing
growing demand for our Powerwall and Powerpack energy storage products for residential and commercial applications, and we are
increasing production of these products. Energy generation with Solar Roof will become a bigger portion of our business next year as we
ramp production at Gigafactory 2 in Buffalo. Sustainable energy generation and storage is a critical part of Tesla’s mission and will drive
long-term revenue growth and profits.
ADVANCING SUSTAINABLE TRANSPORT
The initial phase of manufacturing any new vehicle is always challenging, andthe Model 3 production ramp is no exception – particularly given our focus on
highly automated manufacturing processes that will ultimately result in higher
volumes at significantly lower costs. Model 3 has been designed for
manufacturability, so the car itself is not difficult to build. That said, the Model 3
production process will be vastly more automated than the production process ofModel S, Model X or almost any other car on the market today, and bringing thislevel of automation online is simply challenging in the early stages of the ramp.
We continue to make progress resolving early bottlenecks related to theseissues, and there remain no fundamental problems with our supply chain or anyof our production processes.
Several manufacturing lines, such as drive unit, seat assembly, paint shop andstamping, have demonstrated a manufacturing ability in excess of 1,000 units
per week during burst builds of short duration. Other lines, such as battery packassembly, body shop welding and final vehicle assembly, have demonstrated
burst builds of about 500 units per week and are ramping up quickly. Likewise,cell production at Gigafactory 1 continues to ramp, and current cell production
makes it one of the largest battery cell manufacturing facilities in the world.

Model 3 Body Shop Welding(Video Embedded)

To date, our primary production constraint has been in the battery module assembly line at Gigafactory 1, where cells are packaged
into modules. Four modules are packaged into an aluminum case to form a Model 3 battery pack. The combined complexity of module
design and its automated manufacturing process has taken this line longer to ramp than expected. The biggest challenge is that the firsttwo zones of a four zone process, key elements of which were done by manufacturing systems suppliers, had to be taken over andsignificantly redesigned by Tesla. We have redirected our best engineering talent to fine-tune the automated processes and related
robotic programming, and we are confident that throughput will increase substantiallyin upcoming weeks and ultimately be capable of production rates significantly greaterthan the original specification.

Model 3 Final Vehicle Assembly(Video Embedded)

While we continue to make significant progress each week in fixing Model 3bottlenecks, the nature of manufacturing challenges during a ramp such as thismakes it difficult to predict exactly how long it will take for all bottlenecks to becleared or when new ones will appear. Based on what we know now, we currently
expect to achieve a production rate of 5,000 Model 3 vehicles per week by late Q1
2018, recognizing that our production growth rate is like a stepped exponential, so
there can be large forward jumps from one week to the next. We will provide an
update when we announce Q4 production and delivery numbers in the first few daysof January. With respect to the timing for producing 10,000 units per week, it has
always been our intention to implement that capacity addition after we have achieved
a 5,000 per week run rate. That will enable us to make the next generation of
automation even better while making our capex spend significantly more efficient.

Demand for Model 3 is not going to be a constraint for quite a long time. The
global net reservations for Model 3 continued to grow significantly in Q3.
In Q3, we delivered 25,915 Model S and Model X vehicles and 222 Model 3
vehicles, for a total of 26,137 deliveries. Combined Model S and Model X
deliveries in Q3 grew 18% globally compared to Q2 and 4.5% versus the samequarter one year ago. Consequently, both Model S and Model X gained further
market share in the US luxury vehicle market. In addition, our used vehicle sales
more than doubled from the prior quarter.
Model S and X combined net orders in Q3 also hit an all-time record in our North
American, European and Asian markets individually, driven primarily byincreased awareness of Tesla from the Model 3 launch and the addition of newstores internationally.
50-Stall Supercharger Station in Shanghai
We continue to update our Autopilot software and recently made significant
improvements to the Autosteer function. The Tesla AI team, which isfundamental to achieving full autonomy, strengthened dramatically this year, with a number of the world’s best AI engineers andresearchers joining our company. We plan to continue building Tesla AI until it is one of the best teams in the world, not just in
automotive, where Tesla is already the leader, but across all industries. This applies to both software and hardware.
Now that the foundation of the Tesla vision neural net is right, which was an exceptionally difficult problem, as it must fit into far lesscomputing power than is typically used, we expect a rapid rollout of additional functionality over the next several months and areprogressing rapidly towards our goal of a coast-to-coast drive with no one touching the controls.
During Q3, we opened 18 new store and service locations for a total of 318 locations globally. The number of service locations increased
by 6% in Q3, while we managed to increase our technician capacity by 10% per service center. Our mobile service fleet has expanded to
160 service units in Q3, and we are expecting this number to almost double by the end of this year. Reaction to both the speed andconvenience of our mobile service has been very positive, with customer satisfaction for this offering at nearly 100% during the quarter.
We added 126 new Supercharger stations in Q3, for a total of more than 1,000 stations and over 7,000 Supercharging connectors
worldwide. Our network of destination chargers is even larger. At the end of the quarter, there were 7,200 destination charger locations
worldwide, which increased the availability of destination charging for our customers by nearly 18% in one quarter. We recently opened a
Supercharger station with 50 connectors in Shanghai, China. Such high-density stations will become more common in other high traffic
areas in the future. We also introduced new Superchargers for parking garages and city centers. Superchargers in city centers are morecompact, easier to install, and have a high charging rate of 72 kW. This is helping us to accelerate and scale Supercharging availability forour customers, in line with the expected growth of our fleet.

ADVANCING SUSTAINABLE ENERGY
Deployment of the 100 MW / 129 MWh energy storage project for South Australia is underway, and we are well on track to meet our 100day deadline. Energy storage enables a more efficient, cost-effective and sustainable way to build and manage utility grid scale
applications, and we expect this project to lay the groundwork for many similar projects, but at an even larger scale, in the years ahead.
In the aftermath of Hurricane Maria, the island of Puerto Rico was left largely without
electricity. In response, we have sent solar panels, Powerpacks and hundreds ofPowerwall energy storage systems to Puerto Rico. We are also actively working withvarious organizations to offer Tesla’s energy generation and storage solutions that are
cost effective and can provide long-term distributed energy to the island.
We are also continuing to expand the presence of solar and storage product placementin our stores and service centers. As a result of these efforts, we are seeing a growing
number of Tesla vehicle customers also purchasing our energy generation and storage
systems, which validates our strategy to cross-sell these products.

South Australia Energy Storage ProjectIn Q3, we deployed 110 MWh of energy storage systems, growing 12% from the priorquarter and increasing 138% year-over-year, driven mainly by increased Powerwall
deliveries. To date, we have also installed more than 80% of the Powerpacks for theSouth Australia project; however, revenue will not be recognized until full deployment of
the project.

We also deployed 109 MW of energy generation systems in Q3. The lower deployments are in large part a result of deliberately
deemphasizing commercial and industrial solar energy projects with low profit and limited cash generation. Approximately 46% of theresidential solar energy systems deployed in Q3 were sold, rather than leased, up from 13% in Q3 2016, a continuing trend that drives
revenue growth and improves cash generation. We are expecting cash sales to surpass 50% of residential solar revenue in Q4. Solar
Roof installations will initially ramp slowly in Q4 as we move the production process from Fremont to Gigafactory 2 in Buffalo. As we finetune and standardize the production and installation process, we expect to ramp Solar Roof production considerably in 2018.

Q3 2017 RESULTS
Revenue & Gross Margin

Automotive revenue ($000)
Automotive gross margin – GAAP
Automotive gross margin excluding SBC
and ZEV credit - Non-GAAP

18.7 %

25.0 %

25.0 %-628 bp -628 bp

Automotive revenue grew 10% as compared to Q3 2016 mainly due to a 4.5% increase in Model S and Model X volumes. ZEV credit
sales were less than $1 million in Q3 as compared to $100 million in Q2 and $139 million in Q3 last year.
Approximately 21% of Q3 deliveries were subject to lease accounting, which is roughly consistent with Q2. Initially for Model 3, we will
not be offering a lease financing option, which will result in upfront revenue recognition of the vehicle and improved cash flows from
Model 3 deliveries.
Non-GAAP automotive gross margin temporarily declined to 18.7%, which was in line with our expectations. The gross margin
declined primarily because of a significant increase in Model 3 manufacturing costs to support the limited initial level of production.
Model S and Model X gross margin declined from Q2 primarily due to one-time price adjustments for discontinued trims andunfavorable trim mix. Numerous actions to improve Model S and Model X gross margin are underway. Consequently, we expect
Model S and Model X gross margin to improve in upcoming quarters.

Energy generation and storage revenue ($000)
Energy generation and storage gross marginThree Months Ended
ChangeSeptember 30,
September 30,
June 30,
2017
2017
2016
QoQ
YoY
$
2,362,889 $ 2,286,616 $
2,148,727
3%
10 %18.3 %
27.9 %
29.4 % -964 bp -1,111 bp

Three Months Ended
ChangeSeptember 30,
September 30,
June 30,
2017
2017
2016
QoQ
YoY
$
317,505 $286,780 $
23,334
11 % 1261 %
25.3 %
28.9 %-4.1 % -368 bp 2,932 bp

Energy generation and storage revenue increased 11% in Q3 compared to Q2 2017 as energy storage sales continue to accelerate.
Gross margin was 25.3%, as compared to 28.9% in Q2 2017, due to energy storage products becoming a larger mix of revenue.
Energy generation and storage gross margin should decline in Q4 mainly due to seasonality of generation by solar assets as well as
increasing mix of energy storage sales. As Gigafactory 1 continues to increase production, gross margin of energy storage products
should continue to improve due to better capacity utilization and additional manufacturing cost reductions.

Other Highlights







Service and Other revenue increased predominantly due to strong growth in used car sales. We expect Service and Other revenue toincrease further in Q4.
Service and Other gross loss increased slightly to $63 million, driven largely by an expansion of our service network in preparation fora rapid expansion of our fleet of vehicles. Service and Other losses are expected to reduce substantially in each subsequent coming
quarter as our fleet grows and service centers become more utilized. Gross profit from used car sales was approximately break-evenin Q3.
Our GAAP operating expenses increased sequentially by 8% compared to Q2, primarily due to higher selling expenses in preparation
for large increases in vehicle deliveries, expenses associated with record net orders, and one-time expenses of about $30 million.
Customer deposits grew 14% sequentially in Q3, driven primarily by higher demand for Model S, Model X, and Model 3.
Shares outstanding as of September 30, 2017 were approximately 168 million. Fully diluted share count as of September 30, 2017
was approximately 179 million.

Cash Flow and Liquidity($000)Cash flows (used in) provided by operating activities
Collateralized lease borrowing
Operating cash flows plus collateralized lease borrowing

Three Months Ended
September 30,
September 30,
June 30,
2017
2017
2016
$
(300,562 ) $(200,172 ) $423,649
80,752
149,320
173,144$(219,810 ) $(50,852 ) $596,793

ChangeQoQ
YoY-50 % -171 %
-46 %
-53 %
-332 % -137 %Cash outflow from operating activities during Q3 benefited from the management of working capital. Lower inventory of new and used
vehicles and higher customer deposits improved working capital, with a partial offset due to higher accounts receivables.
In August, we completed the issuance of $1.8 billion of Senior Notes due 2025 at an interest rate of 5.3%. We also used cash toterminate a revolving credit facility by repaying the outstanding balance of $325 million. At the end of Q3, our gross cash balance
increased to $3.5 billion.
Capital expenditures were $1.1 billion in Q3. The majority of capital expenditures were attributable to Model 3 and Gigafactory 1
production capacity increases.

OUTLOOK
Based on the recent acceleration in order growth, we now expect that Model S and Model X are on pace for about 100,000 deliveries in
2017, an increase of 30% compared to 2016. Notwithstanding these increased deliveries, we plan to produce about 10% fewer Model S
and Model X in Q4 compared to Q3 because of the reallocation of some of the manufacturing workforce towards Model 3 production. As aresult, inventory level of finished Model S and X vehicles should continue to decline.
We expect Model 3 non-GAAP gross margin to reach breakeven by end of Q4, because of increased capacity utilization, and it should
improve rapidly in 2018 to our target of 25%. Our recent production challenges may affect short-term costs, but they have no impact onour 25% gross margin target, since there has been no change to our projections for material, labor and overhead costs per vehicle.
Due to a higher mix of temporarily lower margin Model 3 deliveries in Q4 compared to Q3, we expect non-GAAP automotive gross margin
to temporarily decline slightly in Q4 to about 15% and then recover starting in Q1. Gross profit is expected to grow more than operating
costs in Q4 compared to Q3, while operating costs are expected to be flat to up slightly in Q4. Between cash on hand, future cash flows
and available lines of credit, we believe that we are well capitalized to accommodate the revised ramp of Model 3 production to 5,000 per
week. Upon achieving this production level, we expect to generate significant cash flows from operating activities.
Capital expenditures are expected to be approximately $1 billion in Q4, driven largely by milestone payments on Model 3 production
equipment, as well as Gigafactory 1, and further expansion of stores, service centers, delivery hubs and the Supercharger network.
Model 3 represents a significant milestone in the coming of age of electric vehicles. We aspire to transform other segments of theautomotive market in the future. At the unveiling of the Tesla Semi on November 16, 2017, we will demonstrate just how compellingelectric drive will be for the global trucking industry. We look forward to showing you something truly incredible.

Elon Musk, Chairman & CEO

Deepak Ahuja, Chief Financial Officer

WEBCAST INFORMATION
Tesla will provide a live webcast of its third quarter 2017 financial results conference call beginning at 2:30 p.m. PT on November 1,
2017, 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)
attributable to common stockholders, non-GAAP net income (loss) attributable to common stockholders on a per share basis, andoperating cash flows plus change in collateralized lease borrowing. Management believes that it is useful to supplement its GAAP
financial statements with this non-GAAP information because management uses such information internally for its operating, budgetingand 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 presentationof the non-GAAP financial measures provides useful information to our investors regarding our financial condition and results ofoperations because it allows investors greater transparency to the information used by Tesla management in its financial andoperational decision-making so that investors can see through the eyes of Tesla management regarding important financial metrics that
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 withfinancial information reported under U.S. GAAP when understanding Tesla’s operating performance. A reconciliation between GAAPand 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 and software development, such as Model 3, Solar Roof and Autopilot; statements regarding growth in
the number of Tesla store, service center, delivery hub, Supercharger and destination charger locations and in other service and repair
capabilities; statements relating to the production, production rate and delivery timing of products such as Model 3 and Solar Roof andcompletion of energy generation and storage projects; statements regarding growth of our energy business and means to achieve suchgrowth; growth in demand and orders for Tesla products and the catalysts for that growth; the ability to achieve product demand,
volume, production, delivery, inventory, deployment, revenue, cash generation, cash flow, leasing, gross margin, spending, capital
expenditure and profitability targets; productivity improvements and capacity expansion plans, such as for Gigafactory 1; andstatements regarding Gigafactory 1 and Gigafactory 2 timing, plans and output expectations, including those related to battery andphotovoltaic cell and other production, are “forward-looking statements” that are subject to risks and uncertainties. These forwardlooking 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 from those in the forward-looking statements: the risk of delays in the manufacture, production, delivery and/or completion of
our vehicles and energy products, particularly Model 3; the ability to design and achieve and grow simultaneous and separate market
acceptance of Model S, Model X and their variants, as well as new vehicle models, specifically Model 3; the ability of suppliers to meet
quality and part delivery expectations at increasing volumes, especially with respect to Model 3 parts; adverse foreign exchange
movements; any failures by Tesla products to perform as expected or if product recalls occur; Tesla’s ability to continue to reduce orcontrol manufacturing and other costs; consumers’ willingness to adopt electric vehicles; competition in the automotive and energy
product markets generally and the alternative fuel vehicle market and the premium sedan, premium SUV and small to medium-sized
sedan markets in particular; Tesla’s ability to establish, maintain and strengthen the Tesla brand; Tesla’s ability to manage future
growth effectively as we rapidly grow, especially internationally; the unavailability, reduction or elimination of government and economic
incentives for electric vehicles and energy products; 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 under definitive agreements for
Gigafactory 1 and Gigafactory 2, maintaining Gigafactory 1 and Gigafactory 2 implementation schedules, output and cost estimates;
and Tesla’s ability to execute on its strategy for new store, delivery hub, service center, Supercharger and other locations andcapabilities. More information on potential factors that could affect our financial results is included from time 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 4, 2017. Tesla disclaims any obligation to update information contained in theseforward-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:
Dave Arnold
Communications
press@tesla.com

Tesla, Inc.
Condensed Consolidated Statements of Operations(Unaudited)(In thousands, except per share data)
Nine Months Ended
Three Months Ended
September 30, June 30 September 30, September 30, September 30,
2017
2017
2016
2017
2016
Revenues
Automotive sales
Automotive leasing
Total automotive revenue
Energy generation and storage
Services and otherTotal revenues
Cost of revenues
Automotive sales
Automotive leasing
Total automotive cost of revenues
Energy generation and storage
Services and otherTotal cost of revenues (1)Gross profit
Operating expenses
Research and development (1)Selling, general and administrative (1)Total operating expenses(Loss) income from operations
Interest income
Interest expense (2)(3)
Other (expense) income, net(Loss) income before income taxes
Provision for income taxes
Net (loss) income
Net loss attributable to noncontrolling interests
and redeemable noncontrolling interests
Net (loss) income attributable to common
Stockholders
Net (loss) income per share of common stock
attributable to common stockholders
Basic
DilutedWeighted average shares used in computing net
income (loss) per share of common stock
Basic
DilutedNotes:(1) Includes stock-based compensation expenseof the following for the periods presented:
Cost of revenue
Research and development
Selling, general and administrative
Total stock-based compensation expense(2) Interest expense includes non-cash interest
expense related to convertible notes andother borrowing for the periods presented:(3) Interest expense includes the following asa result of the assumed debt from SolarCity:
Interest expense (excluding amortization of debt
discount and fees) - recourse debt
Interest expense (excluding amortization of debt
discount and fees) - non-recourse debt

$

$

$
$

2,076,731 $ 2,013,852 $
286,158
272,764
2,362,889 2,286,616
317,505
286,780
304,281
216,1612,984,675 2,789,557

1,917,442 $
231,285
2,148,727
23,334
126,375
2,298,436

6,125,643 $
813,4626,939,105
818,229
713,168
8,470,502

3,849,558
507,085
4,356,643
50,009308,849
4,715,501

1,755,622
175,224
1,930,846
237,288
367,401
2,535,535
449,140

1,472,578
175,433
1,648,011
203,762
271,169
2,122,942
666,615

1,355,102
161,959
1,517,061
24,281
120,359
1,661,701
636,735

4,724,849
516,683
5,241,532
592,823
852,446
6,686,801
1,783,701

2,895,483
310,176
3,205,659
50,553295,310
3,551,522
1,163,979

331,622652,998
984,620(535,480 )
5,531(117,109 )(24,390 )(671,448 )(285 )(671,163 )

369,774
537,757
907,531(240,916 )
4,785(108,441 )(41,208 )(385,780 )
15,647(401,427 )

214,302336,811551,11385,622
2,858(46,713 )(11,756 )
30,011
8,133
21,8781,023,436
1,794,210
2,817,646(1,033,945 )
13,406(324,896 )(83,696 )(1,429,131 )
40,640(1,469,771 )

588,448
976,173
1,564,621(400,642 )
6,351(133,706 )(9,952 )(537,949 )
15,628(553,577 )(51,787 )(65,030 )—(183,721 )—

21,878 $(1,286,050 ) $(553,577 )0.15 $
0.14 $(7.80 ) $(7.80 ) $(3.94 )
(3.94 )

(619,376 ) $ (336,397 ) $(3.70 ) $(3.70 ) $167,294
167,294(2.04 ) $(2.04 ) $148,991
156,935

164,897
164,897

140,581
140,581$

10,166 $7,466 $
51,066
57,794
51,42150,782
112,653 $ 116,042 $

8,939 $
40,22040,38489,543 $27,663 $158,052
146,697
332,412 $

21,837
113,328
111,347
246,512$62,731 $

65,682 $33,100 $179,609 $93,900$8,943 $

12,093 $— $33,219 $—$24,50833,451 $23,69435,787 $—— $72,286
105,505 $——$165,212165,212

Tesla, Inc.
Condensed Consolidated Balance Sheets(Unaudited)(In thousands)
September 30,
2017
AssetsCurrent assets
Cash and cash equivalents
Restricted cash
Accounts receivable, net
Inventory
Prepaid expenses and other current assets
Total current assets
Operating lease vehicles, net
Solar energy systems, leased and to be leased, net
Property, plant and equipment, net
Goodwill and intangible assets, net
MyPower customer notes receivable, net of current portion
Restricted cash, net of current portion
Other assets
Total assets
Liabilities and Equity
Current liabilities
Accounts payable
Accrued liabilities and other
Deferred revenue
Resale value guarantees
Customer deposits
Current portion of long-term debt and capital leases (1)Total current liabilities
Long-term debt and capital leases, net of current portion (1)Deferred revenue, net of current portion
Resale value guarantees, net of current portion
Other long-term liabilities
Total liabilities
Redeemable noncontrolling interests in subsidiaries
Convertible senior notes (1)(2)
Total stockholders' equity
Noncontrolling interests in subsidiaries
Total liabilities and equity(1) Breakdown of our debt is as follows:
Recourse debt
Non-recourse debt$

December 31,
2016

3,530,030 $
138,181
607,734
2,471,382
321,406
7,068,733
3,834,234
6,287,965
9,394,397
417,474
463,878
408,544
231,849
28,107,074 $3,393,216
105,519
499,1422,067,454
194,4656,259,796
3,134,080
5,919,880
5,982,957
376,145506,302
268,165
216,751
22,664,076$

2,385,778 $
1,477,784
951,734
543,336
686,084424,224
6,468,940
9,584,197
1,082,870
2,410,220
2,382,830
21,929,057
402,943357
4,711,480
1,063,237
28,107,074 $

1,860,341
1,210,028
763,126
179,504
663,859
1,150,147
5,827,005
5,969,500
851,790
2,210,423
1,891,449
16,750,167
367,039
8,784
4,752,911
785,175
22,664,076$$

6,886,184 $2,539,051 $

4,630,886
2,375,782$$(2) 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 second quarter of 2017. As such, the carrying
value of the 2018 Notes was classified as a current liability as of June 30, 2017 and the difference between the principal amountand the carrying value of the 2018 Notes was reflected as convertible debt in mezzanine equity on our condensed consolidatedbalance sheet as of June 30, 2017.

Tesla, Inc.
Condensed Consolidated Statement of Cash Flows(Unaudited)(In thousands)
Nine Months Ended
Three Months Ended
September 30,
September 30, September 30, September 30,
June 30,
2017
2017
2016
2017
2016
Cash Flows From Operating Activities
Net (loss) income
Adjustments to reconcile net (loss) income to net
cash (used in) provided by operating activities:
Depreciation and amortization
Stock-based compensation
Losses related to the SolarCity acquisition
Other
Changes in operating assets and liabilities,
net of effect of business combinations
Net cash (used in) provided byoperating activities
Cash Flows From Investing Activities
Capital expenditures
Payments for the cost of solar energy systems,leased and to be leased
Business combinations, net of cash acquired
Maturities of short-term marketable securities
Change in restricted cash and otherNet cash used in investing activities
Cash Flows From Financing Activities
Net cash flows from debt activities
Collateralized borrowing
Net cash flows from noncontrolling interests
Proceeds from issuance of common stockin public offerings, net of underwriting fees
Other
Net cash provided by (used in)financing activities
Effect of exchange rate changes oncash and cash equivalents
Net increase (decrease) in cash andcash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period$$(671,163 ) $(401,427 ) $21,878 $(1,469,771 ) $(553,577 )

400,624
112,653
18,22588,867389,171
116,042
177,135

280,468
89,54367,481

1,166,397
332,41229,796364,262

620,160
246,512
158,551(249,768 )(481,093 )(35,721 )(993,641 )(147,266 )(300,562 )(200,172 )423,649(570,545 )

324,380(1,116,434 )(959,068 )(247,611 )(2,628,126 )(759,190 )(128,293 )(198,844 )-(547,085 )-(70,205 )(1,314,932 )(57,304 )(1,215,216 )(20,395 )(268,006 )(109,147 )(172,733 )(3,457,091 )

16,667(79,156 )(821,679 )

1,898,696
80,752
41,643(203,412 )
149,320
381,253(571,032 )
173,144-2,553,831
416,427
501,203(41,715 )557,669----

400,175

1,701,734

80,415

101,606

77,018257,386

153,461

2,101,506

428,767(320,870 )

4,129,022

2,371,149

8,094

15,952

3,183

35,42813,499494,106(970,669 )(162,044 )

136,8141,887,349

3,035,924
3,530,030 $4,006,593
3,035,924 $

3,246,301
3,084,257 $

3,393,216
3,530,030 $

1,196,908
3,084,257

Supplemental Consolidated Financial Information

Free Cash Flow ($000)
Cash flows (used in) provided byoperating activities
Capital expenditures
Free cash flow

Three Months Ended
Nine Months Ended
September 30,
September 30, September 30, September 30,
June 30,
2017
2017
2016
2017
2016
$
$

(300,562 ) $ (200,172 ) $(1,116,434 )(959,068 )(1,416,996 ) $ (1,159,240 ) $423,649 $(247,611 )
176,038 $(570,545 ) $(2,628,126 )(3,198,671 ) $324,380(759,190 )(434,810 )Tesla, Inc.
Reconciliation of GAAP to Non-GAAP Financial Information(Unaudited)(In thousands, except per share data)

Automotive gross profit - GAAP
Stock-based compensation expense
ZEV credit revenue recognized
Automotive gross profit excluding SBC and
ZEV credit - Non-GAAP

Nine Months Ended
Three Months Ended
September 30, June 30, September 30, September 30, September 30,
2017
2017
2016
2017
2016
$
432,043 $ 638,605 $
631,666 $1,697,573 $
1,150,984
10,166
7,466
8,939
27,663
21,837(575 ) (100,000 )(138,541 )(100,575 )(195,592 )$Automotive gross margin - GAAP
Stock-based compensation expense
ZEV credit revenue recognized
Automotive gross margin excluding SBC
and ZEV credit - Non-GAAP
Net (loss) income attributable to common
stockholders - GAAP
Stock-based compensation expense
Losses related to the SolarCity acquisition
Net (loss) income attributable to common
stockholders - Non-GAAP
Net (loss) income per share attributable tocommon stockholders, basic - GAAP
Stock-based compensation expense
Losses related to the SolarCity acquisition
Net (loss) income per share attributable tocommon stockholders, basic - Non-GAAP
Shares used in per share calculation,
basic - GAAP and Non-GAAP
Net (loss) income per share attributable tocommon stockholders, diluted - GAAP
Stock-based compensation expense
Losses related to the SolarCity acquisition
Net (loss) income per share attributable tocommon stockholders, diluted - Non-GAAP
Shares used in per share calculation,
diluted - GAAP and Non-GAAP$$

441,634$ 546,071$

502,064$

1,624,661$

977,22918.3 %
0.4 %0.0 %27.9 %
0.3 %-3.3 %

29.4 %
0.4 %-4.8 %

24.5 %
0.4 %-1.1 %

26.4 %
0.5 %-3.4 %

18.7 %

25.0 %

25.0 %

23.8 %

23.5 %(619,376 ) $ (336,397 ) $21,878112,653
18,22589,543—116,042—(488,498 ) $ (220,355 ) $$(1,286,050 ) $(553,577 )

332,41229,796

246,512—

111,421$(923,842 ) $(307,065 )$(3.70 ) $
0.67
0.11

(2.04 ) $
0.71
—

0.15
0.60
—

$

(7.80 ) $
2.02
0.18

(3.94 )
1.76—$

(2.92 ) $(1.33 ) $0.75$

(5.60 ) $(2.18 )

167,294

165,212

148,991

164,897

140,581$(3.70 ) $
0.67
0.11

(2.04 ) $
0.71
—

0.14
0.57
—

$

(7.80 ) $
2.02
0.18

(3.94 )
1.76—$

(2.92 ) $(1.33 ) $0.71$

(5.60 ) $(2.18 )

167,294

165,212

156,935

164,897

140,581