Document:

Prepared by R.R. Donnelley Financial -- EX-10.3

 Exhibit 10.3 

Confidential Treatment Requested by Tesla Motors, Inc. 

Production Pricing Agreement 
 This
Production Pricing Agreement (“Pricing Agreement”) is entered into effective as of the date last signed below (“PA Effective Date”) by and between Tesla Motors, Inc., a Delaware corporation located at 3500 Deer
Creek Road, Palo Alto, California, 94304 (“Tesla”) and Panasonic Corporation, a Japanese corporation located at 1006 Kadoma, Kadoma City, Osaka, 571-8506, Japan (“Seller”). Tesla and Seller are each referred to
herein as a “Party” and collectively as the “Parties.” The Parties enter into this Pricing Agreement in connection with, and subject to, the General Terms and Conditions dated October 1, 2014 (the
“General Terms”). Terms used herein with initial capitalization have the meanings specified where used or in the General Terms. 
  

	 	1.	Production Planning. 

  

	 	a.	This contract is for the supply of cylindrical lithium-ion battery cells made by or on behalf of Seller at the Factory (the “Goods”). The Parties shall meet and confer in good faith to finalize an
agreed, written Specification for each type of Goods. The Parties intend that the initial Good will be a Li-Ion Cylindrical Battery Cell with an agreed watt-hour (Wh) capacity and size to be established based on good faith discussions.

  

	 	b.	As contemplated in Section 1 of the General Terms, Tesla will issue one or more Purchase Orders based on the agreed Production Plan, which will be set in accordance with Tesla’s forecast of its
anticipated requirements and the periodic Production Meeting. Tesla intends to issue a Production Order for an agreed period of time after the Parties finalize the initial Production Plan. The binding quantities of Goods to be supplied by Seller and
the applicable delivery dates will be specified in Tesla’s Purchase Orders accepted by Seller in accordance with Section 1.3 (Acceptance) of the General Terms. The Parties shall also discuss in good faith and agree on the Lead Time for
each Good on an on-going basis at the Production Meeting [***], and any changes to the Lead Time will be reflected in writing. 

  

	 	c.	The Parties intend for Seller to produce Goods at the Factory at an annual run rate that equates to thirty-five gigawatt-hours (35 GWh) of aggregate energy (the “Target Production Volume”) subject to
Section 1.1(b) of the General Terms and Section 2.d below. Subject to the forecast and production planning process described in Section 1.1 (Production Planning) of the General Terms, Seller shall [***]. 

 

	 	d.	For each Good sold to a third party by Seller, [***]. 

  

	 	2.	Capital and Other Investments.  

  

	 	a.	Production Lines. The Parties intend to undertake capital investments to build discrete production lines at the Factory for the manufacture of Goods (each such line is a “Production Line”). The
Parties currently anticipate that Seller will operate [***] Production Lines when Seller’s production rate is at or near the Target Production Volume. 

  

	 	b.	Seller Investments. Subject to Section 1.1(b) of the General Terms and Section 2.d below, Seller shall make all capital investments required for production of Goods for Tesla in accordance with the
Production Plan (the cost for each such investment is “Seller Investment Cost”). Such capital investments shall be “Property,” as that term is defined in Section 9.1 of the General Terms. Seller shall use best
efforts to [***]. Tesla will disclose the relevant market information (including the concept and strategy with respect to corresponding Tesla Products), production ramp plans and investment plans prior to each Seller Investment Cost pursuant to the
NDA, if and to the extent reasonably related to such investment (as determined in Tesla’s sole but reasonable discretion). The Parties recognize that the current estimated Seller Investment Cost to achieve the Target Production Volume is [***].

  

			
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	 	c.	The Seller Investment Costs will include all costs and expenses incurred by Seller for the equipment required to meet Seller’s obligations under the Production Plan, which will include (but is not limited to):

  

	 	i.	[***]; 

  

	 	ii.	[***]; 

  

	 	iii.	[***]; 

  

	 	iv.	[***]; 

  

	 	v.	[***]; 

  

	 	vi.	[***] in accordance with a mutually-agreed matrix set forth in Section 11.1(c) of the General Terms; 

  

	 	vii.	Other utilities as agreed by the Parties; and 

  

	 	viii.	Other equipment and systems as agreed in writing by the Parties. 

  

	 	d.	Tesla Investments. Tesla may be financially responsible for certain capital investments at the Factory for some portions of the equipment required to meet Seller’s obligations under the Production Plan, if
and to the extent agreed in writing by the Parties. Such capital investments shall be “Tesla Property” as that term is defined in Section 9.1 of the General Terms. Each such investment by Tesla is a “Tesla Capital
Investment.” [***]. 

  

	 	e.	[***] Seller Investment Cost. 

  

	 	i.	Tesla commits that Seller will [***] Seller Investment Cost [***] after [***] through the sale of Goods [***]; provided, however, that a Seller Investment Cost [***] by Tesla in the following circumstances: [***] Seller
Investment Cost [***]. (The [***] is the [***]). 

  

	 	ii.	If and to the extent that Seller does not [***] Seller Investment Cost in the manner set forth in the applicable investment letter agreement [***] (as agreed by the Parties based on a good faith discussion) [***], Tesla
shall either (A) [***], or (B) resolve the matter in another manner as agreed in writing by the Parties, upon the earlier of (i) [***], or (ii) the expiration or termination of the General Terms and unless expressly provided
otherwise in the General Terms. If and to the extent, however, Seller does not [***] Seller Investment Cost in the manner set forth in the applicable investment letter agreement [***] (as agreed by the Parties based on a good faith discussion),
Tesla will have no further obligation to [***] and [***]. 

  

	 	iii.	For [***] production lines only, the Parties shall also evaluate in good faith progress towards [***] at a meeting that takes place [***]. If and to the extent Seller has not yet [***] Seller Investment Cost in the
manner set forth in the applicable investment letter agreement [***] (as agreed by the Parties based on a good faith discussion) within [***], Tesla will promptly either (A) [***] (B) resolve the matter in another manner as agreed in
writing by the Parties. If and to the extent, however, Seller has not yet [***] Seller Investment Cost in the manner set forth in the applicable investment letter agreement within [***] (as agreed by the Parties based on a good faith discussion),
Tesla will have no further obligation to [***] and [***]. For example, if Seller has [***] of a Seller Investment Cost after [***] but the Parties had projected that Seller would [***] of such cost at that point in time: 

 

	 	1.	If [***] is due to [***] or implement another solution agreed by the Parties [***]; or 

  

	 	2.	If and to the extent [***] is due [***], Tesla will have no obligation to [***]. 

  

	 	3.	Pricing. 

  

	 	a.	Unit Prices. 

  

	 	i.	 The Parties agree to set unit pricing for the Goods based on [***] (the price per Good is the “Unit Price”). The [***] Unit Prices
for Goods manufactured on [***] are the “Quotation 

  

			
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Prices” set forth in Exhibit A. The Parties shall negotiate in good faith and use best efforts to [***]. Such discussions shall include the topics listed below. The Unit Price is
subject to adjustment pursuant to Section 3(b) below. The Parties shall amend Exhibit A hereto to reflect agreed changes to the Unit Price. 

—    [***]. 

 

	 	ii.	The Quotation Prices in Exhibit A are based on the following assumptions, and are subject to change if and to the extent that one or more assumptions change: 

—    [***]. 

 

	 	iii.	As a general illustration, the Unit Price consists of the following items and adjustments to the Unit Price will be implemented with reference to the following: 

[***] 
 —    [***]. 
  

	 	b.	Unit Price Adjustments. The Unit Price is a firm, fixed price which is subject to adjustment only as follows: 

  

	 	i.	The Parties shall meet and confer in good faith on an on-going basis, and at least [***], [***]. [***], the corresponding [***]the Unit Price will be adjusted by the corresponding amount. 

 

	 	ii.	[***]. 

  

	 	iii.	[***]. 

  

	 	iv.	[***]. 

  

	 	v.	[***]. 

  

	 	vi.	[***]. 

  

	 	vii.	If the aggregate orders for Goods by Authorized Purchasers in any rolling period of [***] are [***], the Parties shall immediately review and discuss the then-current Unit Prices. 

 

	 	c.	Currency. Invoices and payments shall be reflected in United States dollars ($). 

  

	 	d.	Responsibility for Certain Costs. Tesla shall pay for the costs for [***]. 

  

	 	4.	Miscellaneous. 

  

	 	a.	[***]. 

  

	 	b.	[***]. 

  

	 	c.	Tesla may audit Seller’s compliance with [***], including [***], in accordance with Section 16.2 (Audit and Inspection) of the General Terms. 

 

	 	d.	 Seller and Tesla agree that the supply of the Goods shall be pursuant to the General Terms. This Pricing Agreement, together with such provisions of
the General Terms, constitutes the entire agreement between the Parties with respect to its subject matter and supersedes all prior agreements and understandings, both oral and written, between the Parties with respect thereto. No subsequent terms,
conditions, understandings, or agreements purporting to modify the terms of this Pricing Agreement will be binding unless in writing and signed by the Parties. This Pricing Agreement may be executed in counterparts, each of which when so executed
and delivered will be deemed an original, and all of which taken together will constitute one and 

  

			
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the same instrument. This Pricing Agreement shall expire upon the later of (i) expiration or termination of the General Terms unless otherwise specifically provided in the General Terms, or
(ii) the date that the Parties completes performance of their respective obligations under this Pricing Agreement. 

 IN WITNESS
WHEREOF, the Parties have executed this Pricing Agreement by persons duly authorized below: 
  

									
	Panasonic Corporation	 		  	Tesla Motors, Inc.
					
	Signed:	 	 /s/ Yoshio Ito
	 		  	Signed:	 	 /s/ JB Straubel

	Print Name:	 	Yoshio Ito	 		  	Print Name:	 	JB Straubel
	Print Title:	 	Senior Managing Director, Member of the Board President, Automotive & Industrial Systems Company Panasonic Corporation	 		  	 Print Title:       Chief Technology Officer

 
 Date: October 1, 2014

				
	Date: September 30, 2014	 		  		 	

  

			
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 Exhibit A 

Pricing 
  

	1.	Quotation Prices. The attached file titled “[***],” which is incorporated herein by reference, sets forth the current [***] price for Goods based on Seller’s quotation. 

[***] 

  

			
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 [***] 
 *
Quotation Price is based on the [***] set forth in Exhibit B. 
 * Quotation Price shown are [***]. 

[***]. 

  

			
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 Exhibit B 

[***] 
 [***] 

  

			
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 Exhibit C 

[***] 
 [***] 

  

			
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portions.Prepared by R.R. Donnelley Financial -- EX-10.4

 Exhibit 10.4 
  

			
	

	 	Confidential Treatment Requested by Tesla Motors, Inc.

  

October 1, 2014 
  

	To:	Mr. JB Straubel 

	  	Chief Technology Officer 

	  	Tesla Motors, Inc. 

	  	3500 Deer Creek Road 

	  	Palo Alto, CA 94304 

  

	RE:	Investment letter agreement for Panasonic’s [***] Production Line [***] at Giga-Factory 

 Dear
JB-san, 
 This letter agreement (“[***] Investment Letter Agreement”) is entered into by and between Tesla Motors, Inc., a Delaware
corporation (“Tesla”), and Panasonic Corporation, a Japanese corporation (“Panasonic”), effective as of the date last signed below with respect to Panasonic’s investment in the [***] Production Line [***]
(defined below), as contemplated in the General Terms and Conditions dated October 1, 2014, including Section 1.1(b) thereof (the “General Terms”), and the Production Pricing Agreement dated October 1, 2014
(“Pricing Agreement”) by and between the Parties. Tesla and Panasonic are each referred to herein as a “Party” and collectively as the “Parties.” This [***] Investment Letter Agreement is entered
into in connection with, and subject to, the General Terms and the Pricing Agreement. Capitalized terms used in this [***] Investment Letter Agreement have the meanings given herein, in the General Terms and/or in the Pricing Agreement. 

In consideration of the mutual premises and mutual covenants set forth below and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Tesla and Panasonic hereby agree as follows. 
  

	1.	 Investment Commitment. Panasonic shall, at its cost and expense, supply all components (including but not limited to [***], but excluding [***]
Tesla-Supplied Items), all engineering, manufacturing and other processes, all designs, and all research and development necessary to complete design, development, manufacture, assembly, installation of the Seller’s Property required for [***]
for the manufacture of Goods which meet the requirements of the applicable Specifications (collectively, the “[***] Production Line [***]”) subject to (i) the Parties’ entering into the Factory Lease as contemplated in
Section 11.1(a) of the General Terms by the Lease Target Date and (ii) that the General Terms remain effective at the time of such investment by Panasonic. The [***] Production Line [***] is described in more detail in Exhibit A
hereto. Panasonic will make its investments in 

  
  

			
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	 	Confidential Treatment Requested by Tesla Motors, Inc.

  

 

 
the [***] Production Line [***] over [***], with installation at the Factory beginning on an agreed date after [***]; provided, however, that the schedule for such installation is subject to
timely completion of the Tesla Responsibilities described in Sections 2.4(a), 11.1(a) and 11.1(b) of the General Terms. It is currently anticipated by the Parties that the [***] Production Line [***] shall be capable of achieving a monthly
production capacity of [***] Goods (i.e., approximately [***]). Panasonic shall take title to all equipment, tooling, components and similar tangible items included in the [***] Production Line [***] at the Factory. 

 

	2.	Investment Cost. The total amount of the Seller Investment Cost required for the [***] Production Line [***] is referred to as the “[***] Production [***]”. Panasonic represents that its [***] of
the [***] Production [***] as of the date of this [***] Investment Letter Agreement, including all costs to connect the [***] Production Line [***] to the Utilities at the Factory (the “Utility Infrastructure Costs”), is [***].
Panasonic will use its [***] of the [***] Production [***]. Panasonic will notify Tesla promptly in writing of any and all changes to the [***] Production [***]. If the [***] Production [***] exceeds the foregoing [***] by more than [***], but only
to the extent such increase is not due to a reasonable increase in the Utility Infrastructure Costs, Tesla shall have no liability for such [***] unless Tesla has given prior written consent to be liable for such [***] (which Tesla shall not
unreasonably withhold, condition or delay following a good faith discussion with Panasonic). 

  

	3.	[***]. For purposes of and subject to Section 2(e) ([***] Seller Investment Cost) of the Pricing Agreement, (a) Seller will be deemed to [***] Production [***] through the sale of an agreed quantity of Goods,
which will be reasonably agreed based on a good faith discussion by the Parties, over a period of [***] beginning on the [***] (as defined in the Pricing Agreement), and (b) Seller will be deemed to [***] of the [***] Production [***] through
the sale of an agreed quantity of Goods, which will be reasonably agreed based on a good faith discussion by the Parties, over the [***] of the [***] period. Further, the [***] Production [***] shall [***], and Panasonic will be deemed to [***], by
an amount equal to [***]. It is currently anticipated that [***] for the [***] Production Line [***] will begin on or around [***], and the actual [***] therefor will be separately agreed in writing between the Parties in accordance with
Section 2(e)(i) of the Pricing Agreement. 

  

	4.	Goods Pricing. The Unit Price of Goods shall be established in accordance with Pricing Agreement. The Parties agree that the supply of the Goods shall be pursuant to the General Terms. 

 

	5.	 Target Purchase Quantity. The quarterly target quantity of Goods to be purchased by Tesla from Panasonic’s operating entity at the Factory
(the “Target Purchase Quantity”) sets forth in Exhibit B, and the Parties will reference such quantities at the Production Meeting. If the first date that 

  
  

			
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	 	Confidential Treatment Requested by Tesla Motors, Inc.

  

 

 
Panasonic’s operating entity at the Factory delivers to Tesla Goods with use of the [***] Production Line [***] is delayed from the schedule set forth in Exhibit B for any reason, [***].
Tesla will use Commercially Reasonable Efforts to purchase Goods in accordance with the Target Purchase Quantities, subject to Section 1.6 of the General Terms and Section 3(b)(vii) of the Pricing Agreement. 

 

	6.	Miscellaneous. To the extent applicable to the subject matter of this [***] Investment Letter Agreement, the General Terms and Pricing Agreement are each incorporated herein and form an integral part hereof. This
[***] Investment Letter Agreement, together with such provisions of the General Terms and Pricing Agreement, constitutes the entire agreement between the Parties with respect to its subject matter and supersedes all prior agreements and
understandings, both oral and written, between the Parties with respect thereto. If a conflict between the provisions of this [***] Investment Letter Agreement and those of the General Terms and/or Pricing Agreement, the conflict shall be resolved
pursuant to Section 16.8 (Conflicts) of the General Terms. No subsequent terms, conditions, understandings, or agreements purporting to modify the terms of this [***] Investment Letter Agreement will be binding unless in writing and signed by
both Parties. This [***] Investment Letter Agreement may be executed in counterparts, each of which when so executed and delivered will be deemed an original, and all of which taken together will constitute one and the same instrument. This [***]
Investment Letter Agreement shall expire upon [***] in accordance with the Pricing Agreement and the terms hereof. 

 Sincerely yours, 

/s/ Shinji Sakamoto 
 Shinji Sakamoto 

Executive Officer 
 Senior Vice President 

Automotive & Industrial Systems Company 
 Panasonic
Corporation 

  
  

			
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	 	Confidential Treatment Requested by Tesla Motors, Inc.

  

 

 Agreed to by Tesla Motors, Inc. 

By: /s/ JB Straubel 
 Name: JB Straubel 

Title: Chief Technology Officer, Tesla Motors, Inc. 

  
  

			
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	 	Confidential Treatment Requested by Tesla Motors, Inc.

  

 

 Exhibit A – [***] Production Line [***] 

[***] 

  
  

			
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		 	Confidential Treatment Requested by Tesla Motors, Inc.

  

 Exhibit B – Target Purchase Quantity 

Unit: Million Cells 
 [***] 

  
  

			
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