Tesla First Quarter 2018 UpdateModel 3 production hit 2,270/week in April for the 3rd straight week over 2,000

Q1 Auto GAAP gross margin up sequentially by 80 bp and non-GAAP by 500 bpCash balance of $2.7 billion at the end of Q1

2018 Capex projection reduced from >$3.4 billion to <$3 billion



Expecting positive GAAP net income and positive cash flow in Q3 and Q4 2018

We made significant progress on the Model 3 ramp in the second half of Q1, and the momentum continued into early Q2. Prior to aplanned shutdown in mid-April to further increase production, we produced more than 2,000 Model 3 vehicles for three straight weeks,
and we hit 2,270 in the last of those weeks. Even at this stage of the ramp, Model 3 is already on the cusp of becoming the best-selling
mid-sized premium sedan in the US, and our deliveries continue to increase. Consumers have clearly shown that electric vehicles are
simply more desirable when priced on par with their internal combustion engine competitors while offering better technology,
performance and user experience.
If we execute according to our plans, we will at least achieve positive net income excluding non-cash stock based compensation in Q3
and Q4 and we expect to also achieve full GAAP profitability in each of these quarters. This is primarily based on our ability to reach
Model 3 production volume of 5,000 units per week and to grow Model 3 gross margin from slightly negative in Q1 2018 to close to
breakeven in Q2 and then to highly positive in Q3 and Q4. Ultimately, the growth of Model 3 and the profit associated with it will help us
accelerate the transition to sustainable energy even faster.
ADVANCING SUSTAINABLE TRANSPORT
As with all manufacturing, Model 3 production can only go as fast as theslowest part of the entire supply chain and production process. For
months, the battery module line was our main production bottleneck.
After deploying multiple semi-automated lines and improving our originallines, we have largely overcome this bottleneck. Consequently, we now
expect to reach a module production rate of 5,000 car sets per week even
before we install the new automated line designed and built by Tesla inGermany. Still, once installed, this new automated module line should
significantly lower manufacturing costs. Our automation team in
Germany is currently focusing on further capacity expansion where
needed.
We continue to target Model 3 production of approximately 5,000 per
week in about two months, although our prior experience has
demonstrated the difficulty of accurately forecasting specific production
rates at specific points in time because of the exponential nature of theramp. In order to achieve this production rate, we plan to take additionaldays of downtime during Q2, just like we did in Q1. We have already done this several times during the Model 3 ramp, including oncein the third week of April to fix several small, known constraints, enabling higher levels of output. Just before taking this latest
downtime, we produced 2,270 Model 3 and 2,024 Model S and Model X vehicles in the prior seven days, which was a new record forus. Furthermore, in the just over two weeks between the beginning of April and the planned downtime, we had produced 4,750 Model 3
vehicles, which was already about half the production of the entire prior quarter. After achieving a production rate of 5,000 per week,
we will begin offering new options such as all-wheel-drive and the base model with a standard-sized battery pack.
Once we hit the 5,000 per week milestone, we intend to incorporate our learnings to continue to increase output on our existing
manufacturing lines beyond 5,000 units per week, and then in a capital efficient manner to add incremental capacity to ultimately get to
a 10,000 unit weekly rate.
We’ve spoken at great length about the “machine that builds the machine” and why it is so important to Tesla’s long-term success.
Fundamentally, we believe that thinking about a factory in the same way that people think about the product itself creates the potential
for a step change in manufacturing that will create enormous benefits for quality, cost, efficiency and employee safety. It is humannature to take the best of what the automotive industry currently has to offer and assume that is the best that can be done. But webelieve in first principles thinking. In the end, this is all about having factories that are producing the world’s highest quality cars as
quickly and as cost-effectively as possible, and with as close to zero injuries as we can possibly get. Our automation strategy is key tothis and we are as committed to it as ever.

We are already seeing many benefits from heavily increasing
automation as part of the Model 3 production process. Through thevast majority of Model 3 production, including in body welding, general
assembly, inverter and drive unit production, our automation effort has
been very successful. Based on every measurable metric, Model 3 isalready the highest quality vehicle we have ever produced, and this isunquestionably due in large part to automation. Additionally, we’vebeen able to create significant safety benefits in the factory. For
example, many steps in the assembly process, including “marriage” ofthe battery pack and drive unit with the body, and installation of the
instrument panel, seats, and wheels, are ergonomically challenging forour employees, but by automating these processes, we have beenable to solve this and significantly improve safety for our team.
That said, a step change in manufacturing doesn’t come without its
challenges, particularly early in the process, and we made a mistakeby adding too much automation too quickly. In those select areas
where we have had challenges ramping fully automated processes,
such as portions of the battery module line, part of the material flow
system, and two steps of general assembly, we have temporarily dialed back automation and introduced certain semi-automated or
manual processes while we work to eventually have full automation take back over. This flexibility has enabled us to continue to ramp
Model 3 to new levels.
Automation is only half the story. Higher levels of automation have been enabled by a dramatic simplification of product design. Our
Model 3 general assembly line consists of fewer than 50 steps, which is about 70% less than conventional assembly lines. All Model 3
vehicles use only one standard body frame, down from more than 80 for Model S, a wiring harness that has 50% less mass than
average vehicles, and a fraction of the number of controllers, connectors and CPUs. All these elements are rooted in design andcritical not only to our ability to reach higher levels of output in a smaller amount of factory space but also to achieve lower levels ofcost.
The Model 3 battery has sophisticated power electronics, cooling systems and structure that enables high level of safety, sports-car likeacceleration, Supercharging, a 120,000 mile warranty and low cost. Cells used in Model 3 are the highest energy density cells used inany electric vehicle. We have achieved this by significantly reducing cobalt content per battery pack while increasing nickel content andstill maintaining superior thermal stability. The cobalt content of our Nickel-Cobalt-Aluminum cathode chemistry is already lower thannext-generation cathodes that will be made by other cell producers with a Nickel-Manganese-Cobalt ratio of 8:1:1. As a result, evenwith its battery, the gross weight of Model 3 is on par with its gasoline-powered counterparts.
Demand for our flagship Model S and Model X vehicles remains very strong. After all-time record orders in Q3 and Q4 2017, we had
our highest ever Q1 for orders. With demand exceeding supply, we are making considerable progress with margin improvement. In
Q1, we produced 24,728 Model S and X and 9,766 Model 3 vehicles, and delivered 21,815 Model S and Model X vehicles and 8,182
Model 3 vehicles, totaling 29,997 deliveries. Short-term operational and logistical issues led to an increase in the number of Model S
and Model X vehicles in transit to customers at the end of Q1. Model 3 net reservations, including configured orders that had not yet
been delivered, continued to exceed 450,000 at the end of Q1 even though fewer than 20 stores worldwide had Model 3 on display.
We are planning to deploy significantly more Model 3 vehicles in our stores in Q2 thisyear.
On March 15, we released a significant Autopilot update, which has been wellreceived by our customers. Also, our mapping architecture has been upgradedand establishes a key platform to enable safer driving and the transition
towards full autonomy. The latest mapping software in our cars is dramaticallysimpler and faster, providing a better user experience and superior
performance.
During Q1, we opened nine new store and service locations, resulting in 339
locations worldwide at the end of the quarter. We continue to expand ourservice capacity mainly through growth of our electrified Mobile Service fleet.
Such service capacity is quicker to deploy, incurs lower upfront and operating
costs and has continued to generate significantly higher customer satisfaction
rate at an average of 98%. There are about 300 mobile service vehicles inoperation today, which is an equivalent of approximately 60 service locations.
At the end of Q1, 25% of all service carried out in North America was done
without customers having to visit a physical service center.
Last quarter, we opened 77 new Supercharger locations for a total of 1,205 Supercharger stations and more than 9,300 stalls
worldwide. Most of the growth is currently focused on North America to support the initial Model 3 rollout. Nevertheless, in Europe, we
already operate about 400 Supercharger stations. We continue to build Supercharger stations in locations with the highest demand
and the most reservation holders. As a result, we are able to open new stations in specific locations even before fleet expansion takes
place.

ADVANCING SUSTAINABLE ENERGY
While Model 3 is clearly in the spotlight both externally and internally, 2018 should be a very important year for our energy storage
business. We continue to aim for a three-fold increase in MWh deployed for our energy storage products this year.
In Q1, energy storage deployments grew 161% from Q4 2017 to 373 MWh, which includes the 129 MWh South Australia project thatwas installed last year with final commercial transfer occurring in Q1. Electric utilities and power producers around the globe are
increasingly appreciating the value proposition of our Powerpack storage systems based not only on economic benefits but also on theoperational benefits of faster response time and greater reliability of the electric grid. In addition, we deployed a record number ofresidential Powerwall systems in Q1. In spite of the significant growth of Powerwall deliveries, our backlog in Q1 continued to grow.
We also deployed 76 MW of solar energy generation systems in Q1. Cashand loan system sales made up 66% of residential deployments in thequarter, up from 31% in Q1 2017 and 9% in Q1 2016. Due to higher upfront
cash sales, lower emphasis on less profitable commercial projects andconsolidation of our sales channels, our solar business had slightly positive
cash flow throughout 2017. We are expecting cash flow from our solar
business to remain at this level in the first half of 2018 and then improvesignificantly thereafter.
Solar deployments have declined over the last few quarters due in largepart to our strategic decision to shutter certain sales channels and market
segments. These decisions had a negative impact on our deployments but
created a positive impact on our cash generation. Furthermore, asignificant part of our customer base is waiting for a Powerwall before
getting their solar panels installed. We continue to prioritize Powerwall
deliveries when they are sold together with our retrofit solar panels, and thisshould have a positive impact on our solar deployments in upcoming quarters.
Our Solar Roof facility in Buffalo continued to ramp in Q1. We are working to enhance the product design and manufacturing process
in order to improve the customer experience while reducing manufacturing cost and achieving high levels of quality. Production ofSolar Roofs should accelerate significantly in the second half of this year.
Over the past couple of quarters, we have increased efforts to sell energy generation and storage systems in Tesla stores. We areseeing clear signs of a pickup in order rates for retrofit solar installations through Tesla stores. These are now being offered in over 90
Tesla stores in the US, and we continue to expand the offering to the rest of our stores across the US.

Q1 2018 RESULTS
Revenue & Gross Margin

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

Three Months Ended
March 31,
December 31,
March 31,
2018
2017
2017
$ 2,735,317 $ 2,702,195 $ 2,289,600
19.7 %
18.9 %
27.4 %
18.8 %

13.8 %

27.8 %

Change
QoQ
YoY
1%
19 %
81 bp -766 bp
498 bp -904 bp

Automotive revenue in Q1 2018 increased by 19% over Q1 2017, mainly due to Model 3 deliveries and adoption of the new
accounting standard described below. ZEV credit sales in Q1 2018 were $50 million as compared to zero in Q1 2017.
With the adoption of the new revenue recognition standard starting January 1, 2018, lease accounting generally applies only tovehicles directly leased by us without using bank partners. As a result of this change, only 8% of our deliveries in Q1 were subject
to lease accounting. We are not expecting to offer a leasing option on Model 3 this year as we continue to focus on cash sales.
Non-GAAP Automotive gross margin improved significantly to 18.8% in Q1 as compared to the prior quarter. Gross margins ofModel S and Model X have increased to slightly above 25% due to better cost reductions, mix management, FX gains and pricing
actions compared to Q4. GAAP Automotive gross margin improved to 19.7%.
Model 3 gross margin remained negative in Q1 due to temporary underutilization of our manufacturing capacity, which was in linewith our expectations.
The recent voluntary recall of 125,000 Model S vehicles related to steering bolt corrosion was not material to our warranty reserves
and is expected to be covered by the indemnification obligations of the supplier.

Energy generation and storage revenue ($000)
Energy generation and storage gross marginThree Months Ended
March 31,
December 31,
March 31,
2018
2017
2017
$
410,022 $298,037 $
213,944
8.5 %5.5 %29.1 %

Change
QoQ
YoY
38 %
92 %
298 bp -2,061 bp

Energy generation and storage revenue in Q1 2018 increased by 92% over Q1 2017 and by 38% compared to Q4 2017. This was
mainly driven by substantial growth of our energy storage deployments and recognition of our large project in South Australia.
GAAP energy generation and storage gross margin in Q1 2018 improved compared to Q4 2017 mainly due to an improvement ofenergy storage margin and fewer one-time items. We expect this improvement trend to continue in subsequent quarters.

Other Highlights







Service and Other revenue in Q1 2018 increased by 37% compared to Q1 2017 primarily due to higher used car sales, but
decreased by 9% sequentially as used car sales were lower in Q1 2018 compared to Q4 2017 due to a lower inventory of usedcars available for sale during the quarter.
Service and Other gross loss in Q1 2018 increased to $118 million as a result of the continued growth and maturation in ourservice infrastructure. Our used car sales had slightly positive gross margin.
We expect Service and Other losses to reduce substantially in the coming quarters as our service infrastructure becomessignificantly more utilized with the ramp of our Model 3 fleet size. There are also substantial revenue generating opportunities as
we open our own body shops in 2018 to improve costs of out-of-warranty repairs and as we increase our offering of accessories
and merchandise.
Operating expenses in Q1 2018 increased by 14% compared to Q1 2017, and by less than 2% compared to Q4 2017 to a total of$1.05 billion in spite of significant revenue growth. Excluding stock based compensation, our operating expenses reached $930
million in Q1.
Basic shares outstanding at the end of Q1 2018 were approximately 170 million.

Cash Flow and LiquidityCash outflow from operating activities in Q1 2018 was $398 million primarily due to an increase in inventory and accounts
receivable balances as a result of the timing of deliveries. Higher number of Model S and Model X vehicles in transit at the end of
Q1 2018 compared to Q4 2017 had a negative impact of about $120 million on our working capital. Additionally, due to a
substantial increase in our deliveries in the last few days of the quarter, our accounts receivables negatively impacted ouroperating cash flow by $169 million in Q1. Both of these factors provided cash inflows during April.
We received $112 million in net funding from our vehicle lease warehouse lines, automotive asset-backed notes, auto tax equity
fund and collateralized lease borrowings. When combined with free cash flow, this is a better indicator of the cash consumed in
the quarter.
More than half of our capex in Q1 was related to completion of work for Model 3 production capacity at Fremont and Gigafactory 1
plus payments to suppliers for tooling.

OUTLOOK
During Q2, we expect to shut down production for about 10 days, which includes the shutdown we took in April, to address bottlenecks
across the lines and increase production to new levels. Our goal is to produce approximately 5,000 Model 3 vehicles per week in about
two months.
We are in the process of changing the quarterly production pattern of Model S and X vehicles for the various worldwide regions toensure a more linear flow of deliveries through the quarter. We believe this will provide a better customer experience and reduce thestress on our delivery system. Consequently, Model S and X deliveries in Q2 will likely be similar to Q1 but should pick up considerably
in Q3 to achieve our goal of 100,000 deliveries for the full year.
Our long-term gross margin target of 25% for Model 3 has not changed. In the medium term, we expect to achieve slightly lower
margin due to higher labor content in certain areas of manufacturing where we have temporarily dialed back automation, as well as
higher material costs from recently imposed tariffs, commodity price increases and a weaker US dollar. On the other hand, our average
selling price is significantly higher than prior projections, so we expect to achieve higher gross profit per vehicle than we previously
estimated.
With increasing capacity for Powerwall and Powerpack products at Gigafactory 1, energy generation and storage revenues should
continue to grow significantly throughout the year. Energy storage gross margins should therefore become positive in the second halfof 2018. Our solar business is likely to experience mild growth for another quarter or two before our revised sales strategy starts toshow its full impact in final deployments.

Quarterly non-GAAP operating expenses should grow sequentially at approximately the same rate as in the past four quarters, with ourgross profit expected to grow much faster than our operating expenses. Thus, provided that we hit the 5,000 unit milestone in our
projected timeframe and execute to the rest of our plan, we will at least be profitable in Q3 and Q4 excluding non-cash stock based
compensation and we expect to achieve full GAAP profitability in each of those quarters as well. Also, considering our capex targets,
we expect to generate positive cash in Q3 and Q4, including the inflow of cash that we receive in the normal course of our businessfrom financing activities on leased vehicle and solar products.
We have significantly cut back our capex projections by focusing on the critical near-term needs that benefit us primarily in the next
couple of years. At this stage, we are expecting total 2018 capex to be slightly below $3 billion, which is below the total 2017 level of$3.4 billion. Ultimately, our capex guidance will develop in line with Model 3 production and profitability. We will be able to adjust ourcapital expenditures significantly depending on our operating cash generation.
Interest expenses in Q2 should amount to roughly $160 million and losses attributable to non-controlling interest should remain in linewith the last quarter.
We have good visibility of our path to fully ramp and stabilize Model 3 production this year. Model 3 is already the best-selling electricvehicle and, more importantly, on the cusp of becoming the best-selling premium sedan in the US. The path to an electrified revolution
is not easy, but what we’re trying to achieve is worth fighting for. Thanks for your continued support.

Elon Musk, Chairman & CEO

Deepak Ahuja, Chief Financial Officer

WEBCAST INFORMATION
Tesla will provide a live webcast of its first quarter 2018 financial results conference call beginning at 2:30 p.m. PT on May 2, 2018, 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 and its variants, Solar Roof and Autopilot; statements
regarding growth in the number of Tesla stores, Supercharger stations and in our service and repair capabilities; statements relating to
the production process, including our automated production capabilities, production rate and delivery timing of products such as
Model 3, Solar Roof and our other energy generation and storage products; statements regarding growth of our energy business andmeans to achieve such growth; growth in demand and orders for Tesla products and the catalysts for that growth; the ability to achieve
product demand, volume, market share, production, delivery, inventory, deployment, revenue, cash generation, cash flow, leasing,gross margin, expense, capital expenditure and profitability targets; productivity improvements and capacity expansion plans, such as
for the Tesla Factory and Gigafactory 1; and statements regarding Gigafactory 1 and Gigafactory 2 timing, plans and output
expectations, including those related to battery cells and modules, Solar Roof tiles and other production, 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 from those in the forward-looking statements: the riskof delays in the manufacture, production, delivery and/or completion of our vehicles and energy products, particularly Model 3; theability 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 or control manufacturing and other costs; consumers’
willingness to adopt electric vehicles; competition in the automotive and energy product markets generally and the alternative fuelvehicle market and the premium sedan, premium SUV and small to medium-sized sedan markets in particular; Tesla’s ability toestablish, maintain and strengthen the Tesla brand; Tesla’s ability to manage future growth effectively as we rapidly grow, especiallyinternationally; the unavailability, reduction or elimination of government and economic incentives for electric vehicles and energy
products or the increase or imposition of import tariffs or duties on such products; Tesla’s ability to establish, maintain and strengthen
its relationships with strategic partners such as Panasonic; 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 centers, mobile service andbody shops, Supercharger and other locations and capabilities. 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 annual report on Form 10-K filed with the SEC on February 23, 2018. Tesla disclaims any
obligation to update information contained in these forward-looking statements whether as a result of new information, future events, orotherwise.

Investor Relations Contact:
Martin Viecha
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)
March 31,2018
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
Gross profit
Operating expenses
Research and development
Selling, general and administrative
Total operating expenses
Loss from operations
Interest income
Interest expense
Other (expense) income, net
Loss before income taxes(Benefit) provision for income taxes
Net loss
Net loss attributable to noncontrolling interests
and redeemable noncontrolling interests
Net loss attributable to common
stockholders
Net loss per share of common stock
attributable to common stockholders –basic and diluted
Weighted average shares used in computing
net loss per share of common stock –basic and diluted$

Three Months Ended
December 31,
2017

2,561,881
173,436
2,735,317
410,022
263,4123,408,751$

2,409,109
293,086
2,702,195
298,037
288,017
3,288,249$

March 31,2017
2,035,060
254,540
2,289,600
213,944
192,726
2,696,270

2,091,397
104,496
2,195,893
375,363
380,969
2,952,225
456,526

1,999,631
191,541
2,191,172
281,715
376,576
2,849,463
438,786

1,496,649
166,026
1,662,675
151,773
213,876
2,028,324
667,946

367,096
686,404
1,053,500(596,974 )
5,214(149,546 )(37,716 )(779,022 )5,605(784,627 )

354,637
682,290
1,036,927(598,141 )
6,280(146,363 )(41,677 )(779,901 )(9,094 )(770,807 )

322,040
603,455
925,495(257,549 )
3,090(99,346 )(18,098 )(371,903 )
25,278(397,181 )(75,076 )(95,457 )(66,904 )$(709,551 ) $(675,350 ) $(330,277 )$(4.19 ) $(4.01 ) $(2.04 )

169,146

168,314

162,129

Tesla, Inc.
Condensed Consolidated Balance Sheets(Unaudited)(In thousands)
March 31,
2018
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,
20172,665,673 $
120,194652,848
2,565,826
379,379
6,383,920
2,315,124
6,346,374
10,519,226
407,712449,754433,841
415,478
27,271,429 $

3,367,914
155,323
515,3812,263,537
268,365
6,570,520
4,116,604
6,347,490
10,027,522
421,739456,652
441,722
273,123
28,655,372$

2,603,498 $
1,898,431
536,465
629,112984,823
1,998,030
8,650,359
8,763,726
818,250
756,800
2,561,886
21,551,021
405,83524,450,695
863,876
27,271,429 $2,390,250
1,731,366
1,015,253
787,333
853,919896,549
7,674,670
9,418,319
1,177,799
2,309,222
2,442,970
23,022,980
397,73470
4,237,242
997,346
28,655,372$$

6,947,764 $
3,027,447 $

6,755,376
2,873,458$$(2) As of March 31, 2018, our common stock price exceeded the conversion threshold price of our convertible senior notes due in2018 (2018 Notes) issued in May 2013; therefore, the 2018 Notes were convertible at the holder’s option. As such, the carrying
value of the 2018 Notes was classified as a current liability and the difference between the principal amount and the carrying valueof the 2018 Notes was reflected as convertible debt in mezzanine equity, on our condensed consolidated balance sheet as ofMarch 31, 2018.

Tesla, Inc.
Condensed Consolidated Statement of Cash Flows(Unaudited)(In thousands)

Supplemental Consolidated Financial Information
March 31,2018
Cash Flows from Operating Activities
Net loss
Adjustments to reconcile net loss to net
cash provided by (used in) 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
Net cash used in investing activities
Cash Flows from Financing Activities
Net cash flows from debt activities
Collateralized lease (repayments) borrowings
Net borrowings under Warehouse
Agreements and automotive asset-backed notes
Net cash flows from noncontrolling interests - Auto
Net cash flows from noncontrolling interests - Solar
Proceeds from issuances of common stockin public offerings
Other
Net cash provided byfinancing activities
Effect of exchange rate changes oncash and cash equivalents andrestricted cash
Net (decrease) increase in cash andcash equivalents and restricted cash
Cash and cash equivalents and restricted cash
at beginning of period
Cash and cash equivalents and restricted cash
at end of period$$

Three Months Ended
December 31,
2017

March 31,2017

(784,627 ) $(770,807 ) $(397,181 )

416,233
141,639

469,606
134,348376,602103,717—
153,805

27,950151,756

11,571
98,260(325,426 )

497,038(262,780 )(398,376 )

509,891(69,811 )(655,662 )(786,688 )(552,624 )(72,975 )—(728,637 )(119,455 )(5,376 )(911,519 )(219,948 )(109,147 )(881,719 )

172,865(87,092 )28,056
94,894803,838
186,355

174,028
24,599(6,758 )116,820
31,763(5,479 )54,709—78,307—
94,018—19,788400,175
75,365

371,660

285,842

1,598,749

10,102

3,990

11,643(745,251 )(111,796 )

658,8623,964,959

4,076,755

3,766,900

3,219,708$

3,964,959$

4,425,762

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

Automotive gross profit – GAAP
Stock-based compensation expensein automotive cost of revenue
ZEV credit revenue recognized
Automotive gross profit excluding SBC and
ZEV credit – non-GAAPMarch 31,2018$
539,424
15,078(50,314 )$Automotive gross margin – GAAP
Stock-based compensation expense
ZEV credit revenue recognized
Automotive gross margin excluding SBC
and ZEV credit – non-GAAP
Net loss attributable to common
stockholders – GAAP
Stock-based compensation expense
Losses related to the SolarCity
acquisition
Net loss attributable to common
stockholders – non-GAAP
Net loss per share attributable tocommon stockholders, basic anddiluted – GAAP
Stock-based compensation expense
Losses related to the SolarCity
acquisition
Net loss income per share attributable tocommon stockholders, basic anddiluted – non-GAAP
Shares used in per share calculation,
basic and diluted – GAAP and non-GAAP

Three Months Ended
December 31,
March 31,
2017
2017
$
511,023$
626,925$

504,188

16,182(179,142 )$348,063

10,031—$

636,956

19.7 %
0.6 %-1.5 %

18.9 %
0.6 %-5.7 %

27.4 %
0.4 %0.0 %18.8 %

13.8 %

27.8 %(709,551 )
141,639$—(675,350 )
134,348$

27,950(330,277 )
103,717
11,571$(567,912 )$(513,052 )$(214,989 )$(4.19 )
0.84$

(4.01 )
0.80$

(2.04 )
0.64—$

(3.35 )
169,146

0.17$(3.04 )
168,3140.07$(1.33 )
162,129