Tesla Fourth Quarter & Full Year 2018 UpdateQ4 operating income stable compared to Q3 at $414M, operating margin of 5.7%

Operating cash flow less capex improved from Q3 to $910M in Q4



Cash and cash equivalents of $3.7B at Q4-end, increased by $718M in Q4

Q4 GAAP net income of $139M impacted by $54M non-cash chargeModel 3 GAAP and non-GAAP gross margin remained stable at >20% in Q4

Last year was the most pivotal year in Tesla’s history. During our Model 3
production ramp, we went through significant challenges with the battery
module line at Gigafactory 1 in Nevada, and later with our general
assembly line in Fremont. Thanks to the hard work and ingenuity of ourmanufacturing teams, by mid-2018 we successfully overcame thesechallenges and stabilized Model 3 production at high volumes. Model 3
then went on to become the best-selling passenger car in the US in termsof revenue in both Q3 and Q4. With nearly 140,000 units sold, Model 3
was also the best-selling premium vehicle (including SUVs) in the US for2018 – the first time in decades an American carmaker has been able tosecure the top spot.

Premium vehicle sales in the US (2018)

Operating (EBIT) margin of premium carmakers

Model 3’s success has carried over to our financial performance in Q3
and Q4 of 2018. Operating income in Q4 remained stable at $414 million
despite a sequential decline in revenue from the sale of regulatory
credits, higher import duties on components from China, a price reduction
for Model S and Model X in China, and the introduction of a lower-priced
mid-range version of Model 3. Our operating margin also improved
significantly in the second half of 2018, changing from being negative toon-par with other premium carmakers. Despite margins in the automotive
industry typically being lower in Q4, that was not true for us as ouroperating margin remained strong at 5.7% in Q4. Our GAAP net incomeof $139 million was impacted by a non-cash charge of $54 million
attributable to non-controlling interests. Free cash flow (operating cash
flow less capital expenditures) also improved sequentially in Q4 to $910
million. In the second half of 2018, our cash position improved by $1.45
billion despite the scheduled repayment of a $230 million convertible
bond in Q4. We have sufficient cash on hand to comfortably settle incash our convertible bond that will mature in March 2019.

In 2019, full-year Model 3 volumes will grow substantially over 2018 due to a full year of high production rates at our Fremont facility.
Also, by the end of this year we are expecting to start producing Model 3 vehicles at our Gigafactory Shanghai using a complete vehicle
production line. We expect the capital spend per unit of capacity for this factory to be less than half of that of our Model 3 line in
Fremont. Additionally, this year we will start tooling for Model Y to achieve volume production by the end of 2020, most likely at
Gigafactory 1. All of these activities are setting us up for very significant annual growth in 2019 and beyond.
AUTOMOTIVE PRODUCTS
Model 3’s production rate progressively improved through Q4, with December 2018 being our highest volume month ever. In our
Fremont facility, we are now past the steep portion of the production S-curve, and we expect our production rate to continue togradually improve. Every part of the Model 3 production process has demonstrated over a 24-hour period the ability to produce at an
extrapolated rate of 7,000 vehicles per week. By the end of this year, we expect to be able to produce Model 3 at this rate on asustained basis.
As we improve the production rate of Model 3, the cost per vehicle continues to decline. It is critical that we continue this trend so that
we can keep increasing the affordability of Model 3 while retaining a sustainable level of profitability. The labor hours per Model 3
vehicle declined yet again by roughly 20% compared to Q3 and by about 65% in the second half of 2018 alone. Despite introducing alower-priced mid-range variant and other headwinds, Model 3’s gross margin remained stable in Q4 at over 20%.

Our delivery and logistics systems continued to progress in Q4, but there remains room for more improvement. In order to reduce
vehicle transportation time and improve the timeliness of scheduled deliveries, we have purchased and are continuing to purchase ourown car-hauling truck capacity for vehicle shipments. This gives us far more control while lowering costs and improving customer
satisfaction.
In the past two years, Tesla vehicles have accounted for all of the electricvehicle (EV) volume growth in the US. Even with the radical EV growth in thesecond half of 2018, EVs still account for just 2% of the total US market, andthere remains a substantial opportunity for EVs to continue to gain market
share in the US and globally. Consumer purchases have demonstrated thatEVs are becoming a preferred option, as EVs in Q4 2018 outsold hybrid electricvehicles (HEVs) in the US for the first time in history.

EV sales in the US
The appeal of Model 3 continues to go far beyond the mid-sized premium
sedan market. Our trade-in data suggests that consumers are significantly
changing their purchasing habits in order to buy a Model 3. Of all trade-ins
we’ve ever received from customers buying a Model 3, only 17% are othermid-sized premium sedans. Perhaps more surprisingly, almost 60% of these
trade-ins are non-premium vehicles. We are also seeing that a significant
number of Model 3 buyers are trading down in size from a larger car or a
SUV to a Model 3. Designed from the ground up to be electric, Model 3 hasmore interior space than its gas-powered equivalents. Interestingly, Model S
accounted for only a small portion (4%) of total Model 3 trade-ins.

Model 3 trade-ins by vehicle type
In Q4, we delivered 63,359 Model 3 vehicles to customers in North America.
In January 2019, we started to produce Model 3 vehicles for Europe andChina, and the car is now fully certified for sale in these markets. The market
opportunity for Model 3 in Europe and China exceeds North America basedon the most recent sales of mid-sized premium sedans. Model 3 wasdesigned from the outset for a global market, and shares more than 98% of
its parts in common across its regional variants.

Model 3 vs other premium sedans in 2018
In January 2019, we started construction of Gigafactory Shanghai. Local manufacturing is an essential component of our ability toprovide to customers in the region a truly affordable version of Model 3. Most other mid-sized premium sedans in China are locally
produced, which allows them to have a lower average selling price. In the initial phase of Gigafactory Shanghai, we expect to havestamping, paint shop, body joining, and general assembly shops in operation by the end of 2019. This accelerated timeframe should bepossible due to the radical simplification of our manufacturing layout and processes compared to our first-generation production line in
Fremont. Higher-spec models such as our long-range all-wheel drive (AWD) and Performance versions will continue to be shipped toChina from the US.
In Q4, we delivered 27,607 Model S and Model X vehicles to customers. For the full year, we delivered 99,475 Model S and Model X
vehicles, which was in line with our guidance. We recently stopped taking orders for the 75 kWh versions of Model S and Model X andwill focus on the longer-range versions of these flagship products instead, with the recent introduction of a 310 mile range base Model S
and 270 mile range base Model X. Over the years, we have been gradually simplifying options for Model S and Model X bystandardizing options such as the air suspension, AWD, premium package, and glass roof. This is yet another step towards increased
standardization, which results in significantly lower manufacturing cost. Additionally, we believe this will provide more differentiation
between Model S and Model 3. As a result of this change and improving efficiencies in our production lines, we have reduced Model S
and Model X production hours accordingly. Last year alone, Model S and X production efficiencies improved 15%. Our objective is tocontinue to achieve further efficiencies, which will reduce the manufacturing cost while providing us the flexibility to increase output asnecessary.
Our Autopilot team recently publicly launched “Navigate on Autopilot”, a feature that allows, on most controlled-access roads such as
highways, any Tesla vehicle with Enhanced Autopilot to change lanes, transition from one highway to another, and ultimately exit the
highway when approaching the final destination. We expect to increase the functionality of Autopilot to navigate increasingly complex
environments and situations.
During Q4, we opened 27 new store and service locations, resulting in 378 locations worldwide at the end of the quarter. Our largely
electrified Mobile Service fleet continued to grow further to 411 service vehicles on the road at the end of Q4. In 2018, the total Tesla
vehicle fleet grew by 85%, mainly due to the steep Model 3 production ramp. We see upgrading our service capacity and improving
customer service as a top priority at the moment. Where needed, our service centers are moving to two-shift operations in order todouble service capacity quickly, and we are simplifying processes in order to increase service throughput. We are also increasing thefunctionality of the Tesla App for scheduling service in order to improve responsiveness and convenience for our customers.
Furthermore, we are changing our parts distribution approach to ensure that spare parts are available in a timely manner at all ourservice centers globally.
In Q4, we opened 69 new Supercharger locations for a total of 1,421 Supercharger stations globally. In 2018, we opened 293
Supercharger locations, many of which have 20 to 50 stalls per location. To date, we have approximately 12,000 dedicatedSupercharging connectors and over 21,000 Destination Charging connectors globally. In addition to our continued investment in global
charging infrastructure, our engineering team is finalizing plans for the rollout of our V3 Supercharger technology early this year, which
will enable significantly faster charge times. We anticipate V3 to not only provide a better customer experience for Tesla vehicle
owners, but to also significantly lower Tesla’s operational and capital expenditures.
ENERGY PRODUCTS
While 2018 was predominantly the year of Model 3, our Energy business also reached a significant milestone. In 2018, we deployed
1.04 GWh of energy storage, nearly tripling our energy storage deployments compared to 358 MWh deployed in 2017. In Q4, energy
storage deployments reached 225 MWh, a decrease of 6% sequentially, and up 57% compared to Q4 2017. A new manufacturing line
made by Tesla Grohmann is further increasing production of Powerwall and Powerpack modules at Gigafactory 1. With a better supplyof cells and new manufacturing equipment, we are aiming to more than double energy storage deployments to over 2 GWh in 2019.
Through various operational efficiencies, our average sale-to-installation time also decreased by about 50% in 2018.
We see growth opportunities for Powerwall not only in North America, but alsoin Australia and Europe where electricity rates are high and solar panels
combined with Powerwall units will help reduce electricity bills. South
Australia has recently initiated a Virtual Power Plant program where the plan is
to install 50,000 interconnected Powerwall units that will provide increased
grid reliability and lower cost for all customers. The profitability of our energy
products continued to improve partially due to the increased efficiency ofPowerwall installations. Each Powerwall is an internet connected device,
enabling us to continue to introduce new functionality and improvements overtime, just like we do with our vehicles.

GWh of energy storage deployed
While the Hornsdale battery that we built in South Australia is still the largest battery in the world, we have recently received multiple
requests to build significantly larger battery projects. The Hornsdale project has generated substantial savings and is likely to pay foritself within a few years. This has generated interest from governments and municipalities to invest in large battery storage projects
rather than in conventional peak energy generation. In addition to providing backup generation and cost savings to businesses,
Powerpack units are now used in over 100 microgrid projects across 32 countries.
We deployed 73 MW of retrofit solar systems in Q4, a 21% decrease sequentially. We are still in the process of transitioning our sales
channel from former partners to our Tesla stores and training our sales team to sell solar systems in addition to vehicles. Cash andloan sales made up 75% of residential deployments in Q4, up from 51% in Q4 2017. Likewise, while total deployments decreased by
38% to 326 MW in 2018, cash and loan residential deployments increased from 39% in 2017 to 71% in 2018. This was an important
contributor to improving the cash generation and profitability of the solar business.
We plan to ramp up the production of Solar Roof with significantly improved manufacturing capabilities during 2019, based on thedesign iterations and testing underway. In the meantime, we are continuing to install Solar Roofs at a slow pace to gather further
learnings from our design changes, as well as about the viability of our installation processes by implementing them in areas around the
U.S. that are experiencing inclement weather.

Q4 2018 RESULTS
Revenue & Gross Margin

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



24.7 %

25.5 %

13.8 %

Change
QoQ

YoY
4%
134 %
-149 bp 540 bp-85 bp 1,086 bp

Automotive revenue in Q4 increased by 4% sequentially over Q3 and by 134% compared to Q4 2017, primarily due to a sharp
increase in Model 3 deliveries. In Q4, we recognized less than $1 million in ZEV credit sales compared to $52 million in Q3.
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, only 4% of vehicles delivered in Q4 were subject to leaseaccounting.
GAAP Automotive gross margin slightly decreased to 24.3% in Q4 from 25.8% in Q3 primarily due to lower regulatory credit salesin Q4. Non-GAAP Automotive gross margin decreased to 24.7% in Q4 from 25.5% in the prior quarter due to a $43 million decline
in non-ZEV credit revenue and negative impact from Chinese import duties.
Model 3 gross margin stayed flat compared to Q3, remaining above 20% despite the headwinds described above. The mix of the
Performance versions of Model 3 remained only slightly above the percentage mix of Performance versions of Model S and X.
Gross margin of Model S and Model X declined very slightly compared to Q3, which was in line with our guidance. Further cost
reductions partially offset lowered prices in China as well as other negative factors. For full year 2018, Model S and Model X nonGAAP gross margin improved by over 500 bp and GAAP gross margin improved by over 300 bp compared to 2017, mainly due tosignificant cost reductions.

Energy generation and storage revenue ($000)
Energy generation and storage gross margin

Three Months Ended
December 31,
September 30,
December 31,
2018
2018
2017
$
6,323,219 $6,098,766$
2,702,19524.3 %
25.8 %
18.9 %

Three Months Ended
December 31,
September 30, December 31,
2018
2018
2017
$
371,497 $399,317 $298,037
11.5 %
17.2 %
5.5 %Change
QoQ
YoY
-7 %
25 %
-570 bp 604 bp

Energy generation and storage revenue in Q4 decreased by 7% over Q3 and increased by 25% compared to Q4 2017. This yearover-year increase was mainly driven by a substantial growth in energy storage deployments.
GAAP gross margin of the Energy business in Q4 dropped significantly to 11.5% compared to Q3 mainly due to the typicalseasonal decline in solar energy production and correspondingly lower lease revenue in the winter months, Solar Roof ramp cost,and a higher mix of lower margin energy storage business.

Other Highlights







Service and Other revenue in Q4 increased by 63% compared to Q3. This was mainly due to increased used car sales and higher
revenue from service and merchandise sales.
Service and Other gross margin in Q4 improved sequentially to negative 26%. Total gross loss of Service and Other increased
compared to Q3.
Our total GAAP operating expenses decreased to $1.03 billion in Q4, which was 7% less than in Q3. Excluding one-time
restructuring and other costs, operating expenses decreased by 5% sequentially.
Income attributable to non-controlling interests impacted our income statement negatively by $71 million in Q4. The asset backed
securitization (ABS) of auto leases completed in Q4 resulted in a change of ownership structure of those leased vehicles. Thisrequired a non-cash charge of $54 million attributable to non-controlling interests.
Interest and Other expenses, net were $182 million in Q4 compared to $145 million in Q3. Non-cash items accounted for $87
million of total interest expense in Q4.
There were approximately 172 million basic shares outstanding at the end of Q4.

Cash Flow and Liquidity

Our cash position increased by $718 million in Q4, despite the scheduled repayment of our $230 million convertible bonds.
Cash flow from operating activities in Q4 was $1.23 billion. Operating cash flow remained strong although our days payable
outstanding decreased significantly, partially limiting the positive impact of working capital.
Customer deposits decreased sequentially by $113 million in Q4 to $793 million as we continue to work through our Model 3
backlog.
Our capital expenditures were $325 million in Q4. Because our acquisition of land in China is a 50-year lease from the Chinese
government, our payment of $141 million for it is excluded from capex and reflected in operating cash flow. Capital expenditures,
including our China land acquisition payment, were at $2.24 billion in 2018.

OUTLOOK
Model 3 production volumes in Fremont should gradually continue to grow throughout 2019 and reach a sustained rate of 7,000 units
per week by the end of the year. We are planning to continue to produce Model 3 vehicles at maximum production rates throughout
2019. Inclusive of Gigafactory Shanghai, where we are initially aiming for 3,000 Model 3 vehicles per week, our goal is to be able toproduce 10,000 vehicles per week on a sustained basis. Barring unexpected challenges with Gigafactory Shanghai, we are targeting
annualized Model 3 output in excess of 500,000 units sometime between Q4 of 2019 and Q2 of 2020.
While the number of Model 3 vehicles produced should increase sequentially in Q1, deliveries in North America during Q1 will be lower
than the prior quarter as we start delivering cars in Europe and China for the first time. As a result of the start of Model 3 expansion into
Europe and China, deliveries will be lower than production by about 10,000 units due to vehicle transit times to these markets.
Because of the first scheduled reduction of the federal EV tax credit on January 1, 2019, we likely saw a pull-forward of demand in the
US for Model S and Model X into 2018. Both Model S and Model X reached all-time high market shares in the US in the second half of2018. Model S, for example, accounted for 38% of its segment in the US. Because this high level of demand presumably represented
a pull-forward, we are expecting our Model S and Model X deliveries in Q1 2019 to be slightly below Q1 2018.
We continue to target a 25% Model 3 non-GAAP gross margin at some point in 2019. While there are many moving parts that will
ultimately determine gross margin, we believe that significant cost reductions combined with better fixed-cost absorption and carefulmanagement of mix should enable us to get to this profit level. We expect that gross margin for Model S and Model X should remain
relatively stable compared to 2018.
Energy generation and storage revenue should increase significantly in 2019, mainly due to the storage business. We expect that the
deployment of retrofit solar systems in Q1 will be slightly lower than in Q4 due to seasonality. The gross margin of our Energy businessshould grow as the energy storage margin continues to improve from its current level.
We expect our Services and Other business to continue to grow, mainly due to projected used car sales volumes in 2019. We should
continue to see further sequential improvements in gross margin throughout this year.
Our operating expenses will grow by less than 10% in 2019, thus creating massive leverage given the top line growth in 2019. This
year, we will continue to implement more automation projects, and our ongoing cost reduction efforts will also make an impact. Since
about 70% of Model 3 customers made a purchase without a test drive in the second half of 2018, we believe we can leverage our retail
network further.
We expect that the restructuring actions taken in Q1 will reduce our costs by about $400 million annually. Our Q1 financials will reflect a
one-time restructuring cost. The gap between production and deliveries in Q1 will create a temporary but predictable dip in ourrevenues and earnings. As a result, our optimistic target is to achieve a very small GAAP net income in Q1, but that will require us tosuccessfully execute on many fronts including handling logistics and delivery challenges in Europe and China. The higher in-transit
inventory will also negatively impact operating cash flows in Q1.
In total, we are expecting to deliver 360,000 to 400,000 vehicles in 2019, representing a growth of approximately 45% to 65%
compared to 2018. In this range, we are expecting to have positive GAAP net income and to generate positive free cash flow
(operating cash flow less capex) in every quarter beyond Q1 2019. We believe these results will be substantially driven by our
restructuring action and the ongoing financial discipline with which we are managing the business.
Our 2019 capex, the vast majority of which will be to grow our capacity and develop new vehicles, is expected to be about $2.5 billion.
We believe this amount should be sufficient to continue to develop our main projects, such as Gigafactory Shanghai, Model Y and
Tesla Semi, as well as for the further expansion of our Supercharger, service and retail networks. We expect to arrange financing
through local banks in China to fund most of the capex for Gigafactory Shanghai.
Since Model Y will be built on the Model 3 platform and is designed to share about 75% of its components with Model 3, the cost of theModel Y production line should be substantially lower than the Model 3 line in Fremont, and the production ramp should also be faster.
This year should be a truly exciting one for Tesla. Model 3 will become a global product, the profitability of our business should becomesustainably positive, our new Gigafactory Shanghai should start producing cars, and we will start tooling for Model Y production. Our
growth opportunities are massive. Our accomplishments have been possible thanks to the exceptional effort of our employees and the
support of our customers, suppliers and investors. We hope you’re as excited as we are about 2019.

Elon Musk

Deepak Ahuja

WEBCAST INFORMATION
Tesla will provide a live webcast of its fourth quarter and full year 2018 financial results conference call beginning at 2:30 p.m. PT on
January 30, 2019, 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
presentation of the non-GAAP financial measures provides useful information to our investors regarding our financial condition andresults of operations 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 letter, including statements in the “Outlook” section; statements relating to the development, production,
production rates, ramp and timing of existing and future Tesla products and technologies such as Model 3, Autopilot, Solar Roof, Model
Y, Tesla Semi and Supercharger; statements regarding growth in the number of Tesla store, service center, Supercharger and
Destination Charger locations and in other service and repair capabilities; statements regarding growth of our energy business and themeans to achieve such growth; statements regarding growing market opportunities for Tesla products and the catalysts for that growth;statements regarding the ability to achieve our targets with respect to product demand, volume, production, delivery, leasing, market
share, inventory and deployment; statements regarding revenue, cash availability and generation, cash flow, gross margin, productpricing, spending, capital expenditure and profitability targets; statements regarding productivity improvements, cost reductions andcapacity expansion plans, such as for customer deliveries, logistics and vehicle servicing; statements regarding our Fremont factory,
Gigafactory 1 and Gigafactory Shanghai, including cost, project financing and timing, plans and output expectations, including thoserelated to vehicle, battery and other production; and statements regarding our investment in and the impact of changes to our customer
delivery infrastructure, 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 materiallyfrom those projected. The following important factors, without limitation, could cause actual results to differ materially from those in theforward-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 of Tesla to design and grow simultaneous and separate market acceptance of and demand forModel S, Model X, Model 3 and their variants, as well as new vehicle models such as Model Y; 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 productmarkets 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 growtheffectively 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 performing and realizing potential benefits under definitive agreements for our
existing and future manufacturing facilities; Tesla’s ability to maintain schedules, output and cost estimates for our manufacturing
facilities; and Tesla’s ability to execute on our strategy for new store, service center, 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 quarterly report on Form
10-Q filed with the SEC on November 2, 2018. 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:
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)
Year Ended
Three Months Ended
December 31, September 30, December 31, December 31, December 31,
2018
2018
2017
2018
2017
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
Restructuring and otherTotal operating expenses
Income (loss) from operations
Interest income
Interest expense
Other (expense) income, net
Income (loss) before income taxes
Provision (benefit) for income taxes
Net income (loss)
Net income (loss) attributable to noncontrollinginterests and redeemable noncontrollinginterests
Net income (loss) attributable to common
stockholders
Net income (loss) per share of common stock
attributable to common stockholders –basic and diluted
Basic
DilutedWeighted average shares used in computing
net income (loss) per share ofcommon stock – basic and diluted
Basic
Diluted

$6,073,471 $
249,748
6,323,219
371,497
531,157
7,225,873

5,878,305 $
220,461
6,098,766
399,317326,330
6,824,413

2,409,109 $ 17,631,522 $ 8,534,752
293,086
883,461
1,106,548
2,702,195
18,514,983
9,641,300
298,037
1,555,244
1,116,266
288,017
1,391,041
1,001,185
3,288,249
21,461,268
11,758,751

4,658,517
127,731
4,786,248
328,706
668,019
5,782,973
1,442,900

4,405,919
119,283
4,525,202
330,554444,992
5,300,748
1,523,665

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

13,685,572
488,425
14,173,997
1,364,896
1,880,354
17,419,247
4,042,021

6,724,480
708,224
7,432,704
874,538
1,229,022
9,536,264
2,222,487

356,297
667,452
5,615
1,029,364
413,536
7,348(174,723 )(14,205 )
231,956
21,878210,078

350,848
729,876
26,184
1,106,908
416,757
6,907(175,220 )
22,876271,320
16,647
254,673354,637
682,290—
1,036,927(598,141 )
6,280(146,363 )(41,677 )(779,901 )(9,094 )(770,807 )

1,460,370
2,834,491
135,233
4,430,094(388,073 )
24,533(663,071 )
21,866(1,004,745 )
57,837(1,062,582 )

1,378,073
2,476,500—
3,854,573(1,632,086 )
19,686(471,259 )(125,373 )(2,209,032 )
31,546(2,240,578 )

70,595(56,843 )(95,457 )(86,491 )(279,178 )$

139,483 $

311,516 $(675,350 ) $(976,091 ) $(1,961,400 )$$0.81 $
0.78 $

1.82 $
1.75 $(4.01 ) $(4.01 ) $(5.72 ) $(5.72 ) $(11.83 )(11.83 )172,026
179,026

170,893
178,196

168,314168,314

170,525
170,525

165,758
165,758

Tesla, Inc.
Condensed Consolidated Balance Sheets(Unaudited)(In thousands)
December 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)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,
2017

3,685,618 $
192,551
949,022
3,113,446
365,671
8,306,308
2,089,758
6,271,396
11,330,077
350,651
421,548398,219571,657
29,739,614 $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

3,404,451 $
2,094,253
630,292
502,840
792,601
2,567,699
9,992,136
9,403,672
990,873
328,926
2,710,403
23,426,010
555,964—
4,923,243
834,397
29,739,614 $-

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-

7,080,584 $
3,551,891 $

6,755,376
2,873,458

Tesla, Inc.
Condensed Consolidated Statement of Cash Flows(Unaudited)(In thousands)
Year Ended
Three Months Ended
December 31, September 30, December 31, December 31, December 31,
2018
2018
2017
2018
2017
Cash Flows from Operating Activities
Net income (loss)$
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation, amortization and impairment
Stock-based compensation
Losses related to the SolarCity
acquisition
Other
Changes in operating assets and liabilities,
net of effect of business combinations
Net cash provided by (used in)operating 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 (used in) provided byfinancing activities
Effect of exchange rate changes oncash and cash equivalents andrestricted cash
Net increase (decrease) 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$

210,078 $

254,673 $(770,807 ) $(1,062,582 ) $(2,240,578 )

496,737
205,313502,825
204,728

469,606
134,348

1,901,050
749,024

1,636,003
466,760—
123,385—
77,737

27,950151,756—452,359

57,746
516,018

199,048351,318

497,038

57,951(496,603 )

1,234,561

1,391,281

509,891

2,097,802(60,654 )(324,978 )(510,271 )(786,688 )(2,100,724 )(3,414,814 )(28,923 )(11,108 )(365,009 )(49,494 )(1,200 )(560,965 )(119,455 )(5,376 )(911,519 )(218,792 )(17,912 )(2,337,428 )(666,540 )(114,523 )(4,195,877 )(184,099 )(216,081 )(195,760 )(142,568 )

28,056
94,89437,202(559,167 )2,414,896
511,321

193,086
37,575(18,567 )

114,942
17,22427,070116,820
31,763(5,479 )596,125
111,753
92,120283,811
43,417
484,070—
75,777—
94,874—
19,788—295,722400,175
277,174(112,309 )(84,218 )

285,842573,755

4,414,864(3,821 )(6,370 )3,990(22,700 )39,726753,422739,728(111,796 )

311,429

198,059

3,522,966

2,783,238

4,076,755

3,964,959

3,766,900

4,276,388 $3,522,966 $

3,964,959 $

4,276,388 $

3,964,959

Tesla, Inc.
Reconciliation of GAAP to Non-GAAP Financial Information(Unaudited)(In thousands, except per share data)
Three Months Ended
December 31, September 30, December 31,
2018
2018
2017
$ 1,536,971 $
1,573,564 $
511,023

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-GAAP$
Automotive gross margin – GAAP
Stock-based compensation expense
ZEV credit revenue recognized
Automotive gross margin excluding SBC
and ZEV credit – non-GAAP
Net income (loss) attributable to common
stockholders – GAAP
Stock-based compensation expense
Losses related to the SolarCity
acquisition
Net income (loss) attributable to common
stockholders – non-GAAP$

22,566(768 )
1,558,769

20,955(52,269 )$Net income (loss) per share attributable tocommon stockholders, basic – GAAP$
Stock-based compensation expense
Losses related to the SolarCity
acquisition
Net income (loss) per share attributable tocommon stockholders, basic – non-GAAP $Shares used in per share calculation,
basic – GAAP and non-GAAP
Net income (loss) per share attributable tocommon stockholders, diluted - GAAP$
Stock-based compensation expense
Losses related to the SolarCity
acquisition
Net income (loss) per share attributable tocommon stockholders, diluted - non-GAAP $Shares used in per share calculation,
diluted - GAAP and non-GAAP

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

71,797(103,351 )$

4,309,432

43,845(279,717 )$

1,972,724

24.3 %
0.4 %0.0 %25.8 %
0.3 %-0.6 %

18.9 %
0.6 %-5.7 %

23.4 %
0.4 %-0.4 %

22.9 %
0.5 %-2.3 %

24.7 %

25.5 %

13.8 %

23.4 %

21.1 %(675,350 ) $134,348(976,091 ) $749,024(1,961,400 )
466,760

27,950—57,746

139,483
205,313$—$

1,542,250

Year Ended
December 31, December 31,
2018
2017
$ 4,340,986 $ 2,208,596

311,516
204,728$—

344,796$516,244$(513,052 ) $(227,067 ) $(1,436,894 )

0.81
1.19

$

1.82
1.20

$

(4.01 ) $0.80

(5.72 ) $4.39

(11.83 )
2.82

—

0.35

(1.33 ) $(8.66 )—
2.00$

172,0260.78
1.15

179,026

3.02$

170,893

$

—
1.93

0.17

—

1.75
1.15

168,314$2.90
178,196(4.01 ) $
0.80
0.17

—
$

(3.04 ) $$(3.04 ) $168,314

170,525

165,758(5.72 ) $4.39

(11.83 )
2.82

—

0.35

(1.33 ) $(8.66 )

170,525

165,758