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1、UNITEDSTATESSECURITIESANDEXCHANGECOMMISSIONWashington,D.C.20549FORM10-K(MarkOne)xANNUALREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934ForthefiscalyearendedDecember31,2023ORoTRANSITIONREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934Forthetransitionperiodfrom_to_Commis

2、sionFileNumber:001-34756Tesla,Inc.(Exactnameofregistrantasspecifiedinitscharter)Delaware91-2197729(Stateorotherjurisdictionofincorporationororganization)(I.R.S.EmployerIdentificationNo.)1TeslaRoadAustin,Texas78725(Addressofprincipalexecutiveoffices)(ZipCode)(512)516-8177(Registrantstelephonenumber,i

3、ncludingareacode)SecuritiesregisteredpursuanttoSection12(b)oftheAct:TitleofeachclassTradingSymbol(s)NameofeachexchangeonwhichregisteredCommonstockTSLATheNasdaqGlobalSelectMarketSecuritiesregisteredpursuanttoSection12(g)oftheAct:NoneIndicatebycheckmarkwhethertheregistrantisawell-knownseasonedissuer,a

4、sdefinedinRule405oftheSecuritiesAct.YesxNooIndicatebycheckmarkiftheregistrantisnotrequiredtofilereportspursuanttoSection13or15(d)oftheAct.YesoNoxIndicatebycheckmarkwhethertheregistrant(1)hasfiledallreportsrequiredtobefiledbySection13or15(d)oftheSecuritiesExchangeActof1934(“ExchangeAct”)duringtheprec

5、eding12months(orforsuchshorterperiodthattheregistrantwasrequiredtofilesuchreports),and(2)hasbeensubjecttosuchfilingrequirementsforthepast90days.YesxNooIndicatebycheckmarkwhethertheregistranthassubmittedelectronicallyeveryInteractiveDataFilerequiredtobesubmittedpursuanttoRule405ofRegulationS-T(232.40

6、5ofthischapter)duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtosubmitsuchfiles).YesxNooIndicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anon-acceleratedfiler,asmallerreportingcompany,oranemerginggrowthcompany.Seethedefinitionsof“largea

7、cceleratedfiler,”“acceleratedfiler,”“smallerreportingcompany”and“emerginggrowthcompany”inRule12b-2oftheExchangeAct:LargeacceleratedfilerxAcceleratedfileroNon-acceleratedfileroSmallerreportingcompanyoEmerginggrowthcompanyoIfanemerginggrowthcompany,indicatebycheckmarkiftheregistranthaselectednottouset

8、heextendedtransitionperiodforcomplyingwithanyneworrevisedfinancialaccountingstandardsprovidedpursuanttoSection13(a)oftheExchangeAct.oIndicatebycheckmarkwhethertheRegistranthasfiledareportonandattestationtoitsmanagementsassessmentoftheeffectivenessofitsinternalcontroloverfinancialreportingunderSectio

9、n404(b)oftheSarbanes-OxleyAct(15U.S.C.7262(b)bytheregisteredpublicaccountingfirmthatpreparedorissueditsauditreport.xIfsecuritiesareregisteredpursuanttoSection12(b)oftheAct,indicatebycheckmarkwhetherthefinancialstatementsoftheregistrantincludedinthefilingreflectthecorrectionofanerrortopreviouslyissue

10、dfinancialstatements.oIndicatebycheckmarkwhetheranyofthoseerrorcorrectionsarerestatementsthatrequiredarecoveryanalysisofincentive-basedcompensationreceivedbyanyoftheregistrantsexecutiveofficersduringtherelevantrecoveryperiodpursuantto240.10D-1(b).oIndicatebycheckmarkwhethertheregistrantisashellcompa

11、ny(asdefinedinRule12b-2oftheExchangeAct).YesoNoxTheaggregatemarketvalueofvotingstockheldbynon-affiliatesoftheregistrant,asofJune30,2023,thelastdayoftheregistrantsmostrecentlycompletedsecondfiscalquarter,was$722.52billion(basedontheclosingpriceforsharesoftheregistrantsCommonStockasreportedbytheNASDAQ

12、GlobalSelectMarketonJune30,2023).SharesofCommonStockheldbyeachexecutiveofficeranddirectorhavebeenexcludedinthatsuchpersonsmaybedeemedtobeaffiliates.Thisdeterminationofaffiliatestatusisnotnecessarilyaconclusivedeterminationforotherpurposes.AsofJanuary22,2024,therewere3,184,790,415sharesoftheregistran

13、tscommonstockoutstanding.DOCUMENTSINCORPORATEDBYREFERENCEPortionsoftheregistrantsProxyStatementforthe2024AnnualMeetingofStockholdersareincorporatedhereinbyreferenceinPartIIIofthisAnnualReportonForm10-Ktotheextentstatedherein.SuchproxystatementwillbefiledwiththeSecuritiesandExchangeCommissionwithin12

14、0daysoftheregistrantsfiscalyearendedDecember31,2023.TESLA,INC.ANNUALREPORTONFORM10-KFORTHEYEARENDEDDECEMBER31,2023INDEXPagePARTI.Item1.Business4Item1A.RiskFactors14Item1B.UnresolvedStaffComments28Item1C.Cybersecurity29Item2.Properties30Item3.LegalProceedings30Item4.MineSafetyDisclosures30PARTII.Item

15、5.MarketforRegistrantsCommonEquity,RelatedStockholderMattersandIssuerPurchasesofEquitySecurities31Item6.Reserved32Item7.ManagementsDiscussionandAnalysisofFinancialConditionandResultsofOperations33Item7A.QuantitativeandQualitativeDisclosuresaboutMarketRisk45Item8.FinancialStatementsandSupplementaryDa

16、ta46Item9.ChangesinandDisagreementswithAccountantsonAccountingandFinancialDisclosure93Item9A.ControlsandProcedures93Item9B.OtherInformation94Item9C.DisclosureRegardingForeignJurisdictionsthatPreventInspections94PARTIII.Item10.Directors,ExecutiveOfficersandCorporateGovernance95Item11.ExecutiveCompens

17、ation95Item12.SecurityOwnershipofCertainBeneficialOwnersandManagementandRelatedStockholderMatters95Item13.CertainRelationshipsandRelatedTransactions,andDirectorIndependence95Item14.PrincipalAccountantFeesandServices95PARTIV.Item15.ExhibitsandFinancialStatementSchedules96Item16.Summary111SignaturesTa

18、bleofContentsForward-LookingStatementsThediscussionsinthisAnnualReportonForm10-Kcontainforward-lookingstatementsreflectingourcurrentexpectationsthatinvolverisksanduncertainties.Theseforward-lookingstatementsinclude,butarenotlimitedto,statementsconcerningsupplychainconstraints,ourstrategy,competition

19、,futureoperationsandproductioncapacity,futurefinancialposition,futurerevenues,projectedcosts,profitability,expectedcostreductions,capitaladequacy,expectationsregardingdemandandacceptanceforourtechnologies,growthopportunitiesandtrendsinthemarketsinwhichweoperate,prospectsandplansandobjectivesofmanage

20、ment.Thewords“anticipates,”“believes,”“could,”“estimates,”“expects,”“intends,”“may,”“plans,”“projects,”“will,”“would”andsimilarexpressionsareintendedtoidentifyforward-lookingstatements,althoughnotallforward-lookingstatementscontaintheseidentifyingwords.Wemaynotactuallyachievetheplans,intentionsorexp

21、ectationsdisclosedinourforward-lookingstatementsandyoushouldnotplaceunduerelianceonourforward-lookingstatements.Actualresultsoreventscoulddiffermateriallyfromtheplans,intentionsandexpectationsdisclosedintheforward-lookingstatementsthatwemake.Theseforward-lookingstatementsinvolverisksanduncertainties

22、thatcouldcauseouractualresultstodiffermateriallyfromthoseintheforward-lookingstatements,including,withoutlimitation,theriskssetforthinPartI,Item1A,“RiskFactors”oftheAnnualReportonForm10-KforthefiscalyearendedDecember31,2023andthatareotherwisedescribedorupdatedfromtimetotimeinourotherfilingswiththeSe

23、curitiesandExchangeCommission(the“SEC”).Thediscussionofsuchrisksisnotanindicationthatanysuchriskshaveoccurredatthetimeofthisfiling.Wedonotassumeanyobligationtoupdateanyforward-lookingstatements.TableofContentsPARTIITEM1.BUSINESSOverviewWedesign,develop,manufacture,sellandleasehigh-performancefullyel

24、ectricvehiclesandenergygenerationandstoragesystems,andofferservicesrelatedtoourproducts.Wegenerallysellourproductsdirectlytocustomers,andcontinuetogrowourcustomer-facinginfrastructurethroughaglobalnetworkofvehicleshowroomsandservicecenters,MobileService,bodyshops,SuperchargerstationsandDestinationCh

25、argerstoacceleratethewidespreadadoptionofourproducts.Weemphasizeperformance,attractivestylingandthesafetyofourusersandworkforceinthedesignandmanufactureofourproductsandarecontinuingtodevelopfullself-drivingtechnologyforimprovedsafety.Wealsostrivetolowerthecostofownershipforourcustomersthroughcontinu

26、ouseffortstoreducemanufacturingcostsandbyofferingfinancialandotherservicestailoredtoourproducts.Ourmissionistoacceleratetheworldstransitiontosustainableenergy.Webelievethatthismission,alongwithourengineeringexpertise,verticallyintegratedbusinessmodelandfocusonuserexperiencedifferentiateusfromotherco

27、mpanies.SegmentInformationWeoperateastworeportablesegments:(i)automotiveand(ii)energygenerationandstorage.Theautomotivesegmentincludesthedesign,development,manufacturing,salesandleasingofhigh-performancefullyelectricvehiclesaswellassalesofautomotiveregulatorycredits.Additionally,theautomotivesegment

28、alsoincludesservicesandother,whichincludessalesofusedvehicles,non-warrantyafter-salesvehicleservices,bodyshopandparts,paidSupercharging,vehicleinsurancerevenueandretailmerchandise.Theenergygenerationandstoragesegmentincludesthedesign,manufacture,installation,salesandleasingofsolarenergygenerationand

29、energystorageproductsandrelatedservicesandsalesofsolarenergysystemsincentives.OurProductsandServicesAutomotiveWecurrentlymanufacturefivedifferentconsumervehiclestheModel3,Y,S,XandCybertruck.Model3isafour-doormid-sizesedanthatwedesignedformanufacturabilitywithabasepriceformass-marketappeal.ModelYisac

30、ompactsportutilityvehicle(“SUV”)builtontheModel3platformwithseatingforuptosevenadults.ModelSisafour-doorfull-sizesedanandModelXisamid-sizeSUVwithseatingforuptosevenadults.ModelSandModelXfeaturethehighestperformancecharacteristicsandlongestrangesthatweofferinasedanandSUV,respectively.InNovember2023,w

31、eenteredtheconsumerpickuptruckmarketwithfirstdeliveriesoftheCybertruck,afull-sizeelectricpickuptruckwithastainlesssteelexteriorthathastheutilityandstrengthofatruckwhilefeaturingthespeedofasportscar.In2022,wealsobeganearlyproductionanddeliveriesofacommercialelectricvehicle,theTeslaSemi.Wehaveplannede

32、lectricvehiclestoaddressadditionalvehiclemarkets,andtocontinueleveragingdevelopmentsinourproprietaryFullSelf-Driving(“FSD”)Capabilityfeatures,batterycellandothertechnologies.EnergyGenerationandStorageEnergyStorageProductsPowerwallandMegapackareourlithium-ionbatteryenergystorageproducts.Powerwall,whi

33、chweselldirectlytocustomers,aswellasthroughchannelpartners,isdesignedtostoreenergyatahomeorsmallcommercialfacility.Megapackisanenergystoragesolutionforcommercial,industrial,utilityandenergygenerationcustomers,multipleofwhichmaybegroupedtogethertoformlargerinstallationsofgigawatthours(“GWh”)orgreater

34、capacity.Wealsocontinuetodevelopsoftwarecapabilitiesforremotelycontrollinganddispatchingourenergystoragesystemsacrossawiderangeofmarketsandapplications,includingthroughourreal-timeenergycontrolandoptimizationplatforms.4TableofContentsSolarEnergyOfferingsWesellretrofitsolarenergysystemstocustomersand

35、channelpartnersandalsomakethemavailablethroughpowerpurchaseagreement(“PPA”)arrangements.Wepurchasemostofthecomponentsforourretrofitsolarenergysystemsfrommultiplesourcestoensurecompetitivepricingandadequatesupply.Wealsodesignandmanufacturecertaincomponentsforoursolarenergyproducts.WesellourSolarRoof,

36、whichcombinespremiumglassrooftileswithenergygeneration,directlytocustomers,aswellasthroughchannelcustomers.Wecontinuetoimproveourinstallationcapabilityandefficiency,includingthroughcollaborationwithrealestatedevelopersandbuildersonnewhomes.TechnologyAutomotiveBatteryandPowertrainOurcorevehicletechno

37、logycompetenciesincludepowertrainengineeringandmanufacturingandourabilitytodesignvehiclesthatutilizetheuniqueadvantagesofanelectricpowertrain.Wehavedesignedourproprietarypowertrainsystemstobeadaptable,efficient,reliableandcost-effectivewhilewithstandingtherigorsofanautomotiveenvironment.Weofferdualm

38、otorpowertrainvehicles,whichusetwoelectricmotorstomaximizetractionandperformanceinanall-wheeldriveconfiguration,aswellasvehiclepowertraintechnologyfeaturingthreeelectricmotorsforfurtherincreasedperformanceincertainversionsofModelSandModelX,CybertruckandtheTeslaSemi.WemaintainextensivetestingandR&Dca

39、pabilitiesforbatterycells,packsandsystems,andhavebuiltanexpansivebodyofknowledgeonlithium-ioncellchemistrytypesandperformancecharacteristics.Inordertoenableagreatersupplyofcellsforourproductswithhigherenergydensityatlowercosts,wehavedevelopedanewproprietarylithium-ionbatterycellandimprovedmanufactur

40、ingprocesses.VehicleControlandInfotainmentSoftwareTheperformanceandsafetysystemsofourvehiclesandtheirbatterypacksutilizesophisticatedcontrolsoftware.Controlsystemsinourvehiclesoptimizeperformance,customizevehiclebehavior,managechargingandcontrolallinfotainmentfunctions.Wedevelopalmostallofthissoftwa

41、re,includingmostoftheuserinterfaces,internallyandupdateourvehiclessoftwareregularlythroughover-the-airupdates.Self-DrivingDevelopmentandArtificialIntelligenceWehaveexpertiseindevelopingtechnologies,systemsandsoftwaretoenableself-drivingvehiclesusingprimarilyvision-basedtechnologies.OurFSDComputerrun

42、sourneuralnetworksinourvehicles,andwearealsodevelopingadditionalcomputerhardwaretobetterenablethemassiveamountsoffielddatacapturedbyourvehiclestocontinuallytrainandimprovetheseneuralnetworksforreal-worldperformance.Currently,weofferinourvehiclescertainadvanceddriverassistsystemsunderourAutopilotandF

43、SDCapabilityoptions.Althoughatpresentthedriverisultimatelyresponsibleforcontrollingthevehicle,oursystemsprovidesafetyandconveniencefunctionalitythatrelievesdriversofthemosttediousandpotentiallydangerousaspectsofroadtravelmuchlikethesystemthatairplanepilotsuse,whenconditionspermit.Aswithothervehicles

44、ystems,weimprovethesefunctionsinourvehiclesovertimethroughover-the-airupdates.WeintendtoestablishinthefutureanautonomousTeslaride-hailingnetwork,whichweexpectwouldalsoallowustoaccessanewcustomerbaseevenasmodesoftransportationevolve.Wearealsoapplyingourartificialintelligencelearningsfromself-drivingt

45、echnologytothefieldofrobotics,suchasthroughOptimus,arobotichumanoidindevelopment,whichiscontrolledbythesameAIsystem.5TableofContentsEnergyGenerationandStorageEnergyStorageProductsWeleveragemanyofthecomponent-leveltechnologiesfromourvehiclesinourenergystorageproducts.Bytakingamodularapproachtothedesi

46、gnofbatterysystems,wecanoptimizemanufacturingcapacityofourenergystorageproducts.Additionally,ourexpertiseinpowerelectronicsenablesourbatterysystemstointerconnectwithelectricitygridswhileprovidingfast-actingsystemsforpowerinjectionandabsorption.Wehavealsodevelopedsoftwaretoremotelycontrolanddispatcho

47、urenergystoragesystems.SolarEnergySystemsWehaveengineeredSolarRoofovernumerousiterationstocombineaestheticappealanddurabilitywithpowergeneration.Theefficiencyofoursolarenergyproductsisaidedbyourownsolarinverter,whichincorporatesourpowerelectronicstechnologies.WedesignedbothproductstointegratewithPow

48、erwall.DesignandEngineeringAutomotiveWehaveestablishedsignificantin-housecapabilitiesinthedesignandtestengineeringofelectricvehiclesandtheircomponentsandsystems.Ourteamhassignificantexperienceincomputer-aideddesignaswellasdurability,strengthandcrashtestsimulations,whichreducestheproductdevelopmentti

49、meofnewmodels.Wehavealsoachievedcomplexengineeringfeatsinstamping,castingandthermalsystems,anddevelopedamethodtointegratebatteriesdirectlywithvehiclebodystructureswithoutseparatebatterypackstooptimizemanufacturability,weight,rangeandcostcharacteristics.Wearealsoexpandingourmanufacturingoperationsglo

50、ballywhiletakingactiontolocalizeourvehicledesignsandproductionforparticularmarkets,includingcountry-specificmarketdemandsandfactoryoptimizationsforlocalworkforces.Asweincreaseourcapabilities,particularlyintheareasofautomation,die-makingandline-building,wearealsomakingstridesinthesimulationsmodelingt

51、hesecapabilitiespriortoconstruction.EnergyGenerationandStorageOurexpertiseinelectrical,mechanical,civilandsoftwareengineeringallowsustodesign,engineer,manufactureandinstallenergygeneratingandstorageproductsandcomponents,includingattheresidentialthroughutilityscale.Forexample,themodulardesignofourMeg

52、apackutility-scalebatterylineisintendedtosignificantlyreducetheamountofassemblyrequiredinthefield.Wealsocustomizesolutionsincludingourenergystorageproducts,solarenergysystemsand/orSolarRoofforcustomerstomeettheirspecificneeds.SalesandMarketingHistorically,wehavebeenabletoachievesaleswithouttradition

53、aladvertisingandatrelativelylowmarketingcosts.Wecontinuetomonitorourpublicnarrativeandbrand,andtailorourmarketingeffortsaccordingly,includingthroughinvestmentsincustomereducationandadvertisingasnecessary.AutomotiveDirectSalesOurvehiclesaleschannelscurrentlyincludeourwebsiteandaninternationalnetworko

54、fcompany-ownedstores.Insomejurisdictions,wealsohavegalleriestoeducateandinformcustomersaboutourproducts,butsuchlocationsdonottransactinthesaleofvehicles.Webelievethisinfrastructureenablesustobettercontrolcostsofinventory,managewarrantyserviceandpricing,educateconsumersaboutelectricvehicles,makeourve

55、hiclesmoreaffordable,maintainandstrengthentheTeslabrandandobtainrapidcustomerfeedback.Wereevaluateoursalesstrategybothgloballyandatalocation-by-locationlevelfromtimetotimetooptimizeoursaleschannels.However,salesofvehiclesintheautomobileindustrytendtobecyclicalinmanymarkets,whichmayexposeustovolatili

56、tyfromtimetotime.6TableofContentsUsedVehicleSalesOurusedvehiclebusinesssupportsnewvehiclesalesbyintegratingthetrade-inofacustomersexistingTeslaornon-TeslavehiclewiththesaleofaneworusedTeslavehicle.TheTeslaandnon-Teslavehiclesweacquireastrade-insaresubsequentlyremarketed,eitherdirectlybyusorthroughth

57、irdparties.WealsoremarketusedTeslavehiclesacquiredfromothersourcesincludingleasereturns.PublicChargingWehaveagrowingglobalnetworkofTeslaSuperchargers,whichareourindustrial-grade,high-speedvehiclechargers.Wherepossible,weco-locateSuperchargerswithoursolarandenergystoragesystemstoreducecostsandpromote

58、renewablepower.Superchargerstationsaretypicallyplacedalongwell-traveledroutesandinandarounddensecitycenterstoallowvehicleownerstheabilitytoenjoyquick,reliablechargingalonganextensivenetworkwithconvenientstops.UseoftheSuperchargernetworkeitherrequirespaymentofafeeorisfreeundercertainsalesprograms.InN

59、ovember2021,webegantoofferSuperchargeraccesstonon-Teslavehiclesincertainlocationsinsupportofourmissiontoacceleratetheworldstransitiontosustainableenergy,andinNovember2022,weopenedupourpreviouslyproprietarychargingconnectorastheNorthAmericanChargingStandard(NACS).Thisenablesallelectricvehiclesandchar

60、gingstationstointeroperatewhichmakeschargingeasierandmoreefficientforeveryoneandadvancesourmissiontoacceleratetheworldstransitiontosustainableenergy.Followingthis,anumberofmajorautomotivecompaniesannouncedtheiradoptionofNACS,withtheiraccesstotheSuperchargernetworkbeginninginphasesin2024andtheirprodu

61、ctionofNACSvehiclesbeginningnolaterthan2025.WealsoengagedSAEInternationaltogovernNACSasanindustrystandard,nownamedJ3400.WecontinuetomonitorandincreaseournetworkofTeslaSuperchargersinanticipationoffuturedemand.Wealsoworkwithawidevarietyofhospitality,retailandpublicdestinations,aswellasbusinesseswithc

62、ommutingemployees,toofferadditionalchargingoptionsforourcustomers,aswellassingle-familyhomeownersandmulti-familyresidentialentities,todeployhomechargingsolutions.In-AppUpgradesAsourvehiclesarecapableofbeingupdatedremotelyover-the-air,ourcustomersmaypurchaseadditionalpaidoptionsandfeaturesthroughtheT

63、eslaapporthroughthein-vehicleuserinterface.Weexpectthatthisfunctionalitywillalsoallowustooffercertainoptionsandfeaturesonasubscriptionbasisinthefuture.EnergyGenerationandStorageWemarketandselloursolarandenergystorageproductstoresidential,commercialandindustrialcustomersandutilitiesthroughavarietyofc

64、hannels,includingthroughourwebsite,storesandgalleries,aswellasthroughournetworkofchannelpartners,andinthecaseofsomecommercialcustomers,throughPPAtransactions.Weemphasizesimplicity,standardizationandaccessibilitytomakeiteasyandcost-effectiveforcustomerstoadoptcleanenergy,whilereducingourcustomeracqui

65、sitioncosts.ServiceandWarrantyAutomotiveServiceWeprovideserviceforourelectricvehiclesatourcompany-ownedservicelocationsandthroughTeslaMobileServicetechnicianswhoperformworkremotelyatcustomershomesorotherlocations.Servicingthevehiclesourselvesallowsustoidentifyproblemsandimplementsolutionsandimprovem

66、entsfasterthantraditionalautomobilemanufacturersandtheirdealernetworks.Theconnectivityofourvehiclesalsoallowsustodiagnoseandremedymanyproblemsremotelyandproactively.VehicleLimitedWarrantiesandExtendedServicePlansWeprovideamanufacturerslimitedwarrantyonallnewandusedTeslavehiclesweselldirectlytoconsum

67、ers,whichmayincludelimitedwarrantiesoncertaincomponents,specifictypesofdamageorbatterycapacityretention.Wealsocurrentlyofferoptionalextendedserviceplansthatprovidecoveragebeyondthenewvehiclelimitedwarrantiesforcertainmodelsinspecifiedregions.7TableofContentsEnergyGenerationandStorageWeprovideservice

68、andrepairstoourenergyproductcustomers,includingunderwarrantywhereapplicable.Wegenerallyprovidemanufacturerslimitedwarrantieswithourenergystorageproductsandoffercertainextendedlimitedwarrantiesthatareavailableatthetimeofpurchaseofthesystem.Ifweinstallasystem,wealsoprovidecertainlimitedwarrantiesonour

69、installationworkmanship.Forretrofitsolarenergysystems,weprovideseparatelimitedwarrantiesforworkmanshipandagainstroofleaks,andforSolarRoof,wealsoprovidelimitedwarrantiesfordefectsandweatherization.Forcomponentsnotmanufacturedbyus,wegenerallypass-throughtheapplicablemanufacturerswarranties.Aspartofour

70、solarenergysystemandenergystoragecontracts,wemayprovidethecustomerwithperformanceguaranteesthatcommitthattheunderlyingsystemwillmeetorexceedtheminimumenergygenerationorperformancerequirementsspecifiedinthecontract.FinancialServicesAutomotivePurchaseFinancingandLeasesWeofferleasingand/orloanfinancing

71、arrangementsforourvehiclesincertainjurisdictionsinNorthAmerica,EuropeandAsiaourselvesandthroughvariousfinancialinstitutions.Undercertainofsuchprograms,wehaveprovidedresalevalueguaranteesorbuybackguaranteesthatmayobligateustocoveraresalelossuptoacertainlimitorrepurchasethesubjectvehiclesatpre-determi

72、nedvalues.InsuranceIn2021,welaunchedourinsuranceproductusingreal-timedrivingbehaviorinselectstates,whichoffersratesthatareoftenbetterthanotheralternativesandpromotessaferdriving.Ourinsuranceproductsarecurrentlyavailablein12statesandweplantoexpandthemarketsinwhichweofferinsuranceproducts,aspartofouro

73、ngoingefforttodecreasethetotalcostofownershipforourcustomers.EnergyGenerationandStorageWeoffercertainfinancingoptionstooursolarcustomers,whichenablethecustomertopurchaseandownasolarenergysystem,SolarRooforintegratedsolarandPowerwallsystem.OursolarPPAs,offeredprimarilytocommercialcustomers,chargeafee

74、perkilowatt-hourbasedontheamountofelectricityproducedbyoursolarenergysystems.ManufacturingWecurrentlyhavemanufacturingfacilitiesintheU.S.inNorthernCalifornia,inBuffalo,NewYork,GigafactoryNewYork;inAustin,Texas,GigafactoryTexasandnearReno,Nevada,GigafactoryNevada.Atthesefacilities,wemanufactureandass

75、emble,amongotherthings,vehicles,certainvehiclepartsandcomponents,suchasourbatterypacksandbatterycells,energystoragecomponentsandsolarproductsandcomponents.Internationally,wealsohavemanufacturingfacilitiesinChina(GigafactoryShanghai)andGermany(GigafactoryBerlin-Brandenburg),whichallowsustoincreasethe

76、affordabilityofourvehiclesforcustomersinlocalmarketsbyreducingtransportationandmanufacturingcostsandeliminatingtheimpactofunfavorabletariffs.InMarch2023,weannouncedthelocationofournextGigafactoryinMonterrey,Mexico.Generally,wecontinuetoexpandproductioncapacityatourexistingfacilities.Wealsointendtofu

77、rtherincreasecost-competitivenessinoursignificantmarketsbystrategicallyaddinglocalmanufacturing.SupplyChainOurproductsusethousandsofpartsthataresourcedfromhundredsofsuppliersacrosstheworld.Wehavedevelopedcloserelationshipswithvendorsofkeypartssuchasbatterycells,electronicsandcomplexvehicleassemblies

78、.Certaincomponentspurchasedfromthesesuppliersaresharedoraresimilaracrossmanyproductlines,allowingustotakeadvantageofpricingefficienciesfromeconomiesofscale.8TableofContentsAsisthecaseforsomeautomotivecompanies,someofourprocuredcomponentsandsystemsaresourcedfromsinglesuppliers.Wheremultiplesourcesare

79、availableforcertainkeycomponents,weworktoqualifymultiplesuppliersforthemwhereitissensibletodosoinordertominimizepotentialproductionrisksduetodisruptionsintheirsupply.Wealsomitigateriskbymaintainingsafetystockforkeypartsandassembliesanddiebanksforcomponentswithlengthyprocurementleadtimes.Ourproductsu

80、sevariousrawmaterialsincludingaluminum,steel,cobalt,lithium,nickelandcopper.Pricingforthesematerialsisgovernedbymarketconditionsandmayfluctuateduetovariousfactorsoutsideofourcontrol,suchassupplyanddemandandmarketspeculation.Westrivetoexecutelong-termsupplycontractsforsuchmaterialsatcompetitivepricin

81、gwhenfeasible,andwecurrentlybelievethatwehaveadequateaccesstorawmaterialssuppliestomeettheneedsofouroperations.GovernmentalPrograms,IncentivesandRegulationsGlobally,theownershipofourproductsbyourcustomersisimpactedbyvariousgovernmentcredits,incentives,andpolicies.Ourbusinessandproductsarealsosubject

82、tonumerousgovernmentalregulationsthatvaryamongjurisdictions.Theoperationofourbusinessisalsoimpactedbyvariousgovernmentprograms,incentives,andotherarrangements.SeeNote2,SummaryofSignificantAccountingPolicies,totheconsolidatedfinancialstatementsincludedelsewhereinthisAnnualReportonForm10-Kforfurtherde

83、tails.ProgramsandIncentivesInflationReductionActOnAugust16,2022,theInflationReductionActof2022(“IRA”)wasenactedintolawandiseffectivefortaxableyearsbeginningafterDecember31,2022,andremainssubjecttofutureguidancereleases.TheIRAincludesmultipleincentivestopromotecleanenergy,electricvehicles,batteryande

84、nergystoragemanufactureorpurchase,includingthroughprovidingtaxcreditstoconsumers.Forexample,qualifyingTeslacustomersmayreceiveupto$7,500infederaltaxcreditsforthepurchaseofqualifiedelectricvehiclesintheU.S.through2032.AutomotiveRegulatoryCreditsWeearntradablecreditsintheoperationofourbusinessundervar

85、iousregulationsrelatedtozero-emissionvehicles(“ZEVs”),greenhousegas,fueleconomyandcleanfuel.Wesellthesecreditstootherregulatedentitieswhocanusethecreditstocomplywithemissionstandardsandotherregulatoryrequirements.Salesofthesecreditsarerecognizedwithinautomotiveregulatorycreditsrevenueinourconsolidat

86、edstatementsofoperationsincludedelsewhereinthisAnnualReportonForm10-K.EnergyStorageSystemIncentivesandPoliciesWhiletheregulatoryregimeforenergystorageprojectsisstillunderdevelopment,therearevariouspolicies,incentivesandfinancialmechanismsatthefederal,stateandlocallevelsthatsupporttheadoptionofenergy

87、storage.Forexample,energystoragesystemsthatarechargedusingsolarenergymaybeeligibleforthesolarenergy-relatedU.S.federaltaxcreditsdescribedbelow.TheFederalEnergyRegulatoryCommission(“FERC”)hasalsotakenstepstoenabletheparticipationofenergystorageinwholesaleenergymarkets.Inaddition,Californiaandanumbero

88、fotherstateshaveadoptedprocurementtargetsforenergystorage,andbehind-the-meterenergystoragesystemsqualifyforfundingundertheCaliforniaSelfGenerationIncentiveProgram.Ourcustomersprimarilybenefitdirectlyundertheseprograms.Incertaininstancesourcustomersmaytransfersuchcreditstousascontractconsideration.In

89、suchtransactions,theyareincludedasacomponentofenergygenerationandstoragerevenuesinourconsolidatedstatementsofoperationsincludedelsewhereinthisAnnualReportonForm10-K.PursuanttotheIRA,underSections48,48Eand25DoftheInternalRevenueCode(”IRC”),standaloneenergystoragetechnologyiseligibleforataxcreditbetwe

90、en6%and50%ofqualifiedexpenditures,regardlessofthesourceofenergy,whichmaybeclaimedbyourcustomersforstoragesystemstheypurchaseorbyusforarrangementswhereweownthesystems.Thesetaxcreditsareprimarilyforthebenefitofourcustomersandarecurrentlyscheduledtophase-outstartingin2032orlater.9TableofContentsSolarEn

91、ergySystemIncentivesandPoliciesU.S.federal,stateandlocalgovernmentshaveestablishedvariouspolicies,incentivesandfinancialmechanismstoreducethecostofsolarenergyandtoacceleratetheadoptionofsolarenergy.Theseincentivesincludetaxcredits,cashgrants,taxabatementsandrebates.Inparticular,pursuanttotheIRA,Sect

92、ions48,48Eand25DoftheIRCprovidesataxcreditbetween6%and70%ofqualifiedcommercialorresidentialexpendituresforsolarenergysystems,whichmaybeclaimedbyourcustomersforsystemstheypurchase,orbyusforarrangementswhereweownthesystemsforpropertiesthatmeetstatutoryrequirements.Thesetaxcreditsareprimarilyforthedire

93、ctbenefitofourcustomersandarecurrentlyscheduledtophase-outstartingin2032orlater.RegulationsVehicleSafetyandTestingIntheU.S.,ourvehiclesaresubjecttoregulationbytheNationalHighwayTrafficSafetyAdministration(“NHTSA”),includingallapplicableFederalMotorVehicleSafetyStandards(“FMVSS”)andtheNHTSAbumperstan

94、dard.NumerousFMVSSapplytoourvehicles,suchascrash-worthinessandoccupantprotectionrequirements.OurcurrentvehiclesfullycomplyandweexpectthatourvehiclesinthefuturewillfullycomplywithallapplicableFMVSSwithlimitedornoexemptions,however,FMVSSaresubjecttochangefromtimetotime.Asamanufacturer,wemustself-certi

95、fythatourvehiclesmeetallapplicableFMVSSandtheNHTSAbumperstandard,orotherwiseareexempt,beforethevehiclesmaybeimportedorsoldintheU.S.WearealsorequiredtocomplywithotherfederallawsadministeredbyNHTSA,includingtheCorporateAverageFuelEconomystandards,TheftPreventionActrequirements,labelingrequirementsando

96、therinformationprovidedtocustomersinwriting,EarlyWarningReportingrequirementsregardingwarrantyclaims,fieldreports,deathandinjuryreportsandforeignrecalls,aStandingGeneralOrderrequiringreportsregardingcrashesinvolvingvehiclesequippedwithadvanceddriverassistancesystems,andadditionalrequirementsforcoope

97、ratingwithcomplianceandsafetyinvestigationsandrecallreporting.TheU.S.AutomobileInformationandDisclosureActalsorequiresmanufacturersofmotorvehiclestodisclosecertaininformationregardingthemanufacturerssuggestedretailprice,optionalequipmentandpricing.Inaddition,federallawrequiresinclusionoffueleconomyr

98、atings,asdeterminedbytheU.S.DepartmentofTransportationandtheEnvironmentalProtectionAgency(the“EPA”),andNewCarAssessmentProgramratingsasdeterminedbyNHTSA,ifavailable.OurvehiclessoldoutsideoftheU.S.aresubjecttosimilarforeigncompliance,safety,environmentalandotherregulations.Manyofthoseregulationsaredi

99、fferentfromthoseapplicableintheU.S.andmayrequireredesignand/orretesting.Someofthoseregulationsimpactorpreventtherolloutofnewvehiclefeatures.Self-DrivingVehiclesGenerally,lawspertainingtoself-drivingvehiclesareevolvingglobally,andinsomecasesmaycreaterestrictionsonfeaturesorvehicledesignsthatwedevelop

100、.WhiletherearecurrentlynofederalU.S.regulationspertainingspecificallytoself-drivingvehiclesorself-drivingequipment,NHTSAhaspublishedrecommendedguidelinesonself-drivingvehicles,apartfromtheFMVSSandmanufacturerreportingobligations,andretainstheauthoritytoinvestigateand/ortakeactiononthesafetyorcomplia

101、nceofanyvehicle,equipmentorfeaturesoperatingonpublicroads.CertainU.S.statesalsohavelegalrestrictionsontheoperation,registrationorlicensureofself-drivingvehicles,andmanyotherstatesareconsideringthem.Thisregulatorypatchworkincreasesthelegalcomplexitywithrespecttoself-drivingvehiclesintheU.S.Inmarketst

102、hatfollowtheregulationsoftheUnitedNationsEconomicCommissionforEurope(“ECEmarkets”),somerequirementsrestrictthedesignofadvanceddriver-assistanceorself-drivingfeatures,whichcancompromiseorpreventtheiruseentirely.Otherapplicablelaws,bothcurrentandproposed,mayhinderthepathandtimelinetointroducingself-dr

103、ivingvehiclesforsaleanduseinthemarketswheretheyapply.Otherkeymarkets,includingChina,continuetoconsiderself-drivingregulation.AnyimplementedregulationsmaydiffermateriallyfromtheU.S.andECEmarkets,whichmayfurtherincreasethelegalcomplexityofself-drivingvehiclesandlimitorpreventcertainfeatures.10TableofC

104、ontentsAutomobileManufacturerandDealerRegulationIntheU.S.,statelawsregulatethemanufacture,distribution,saleandserviceofautomobiles,andgenerallyrequiremotorvehiclemanufacturersanddealerstobelicensedinordertosellvehiclesdirectlytoresidents.Certainstateshaveassertedthatthelawsinsuchstatesdonotpermitaut

105、omobilemanufacturerstobelicensedasdealersortoactinthecapacityofadealer,orthattheyotherwiserestrictamanufacturersabilitytodeliverorperformwarrantyrepairsonvehicles.Tosellvehiclestoresidentsofstateswherewearenotlicensedasadealer,wegenerallyconductthesaleoutofthestate.Incertainsuchstates,wehaveopened“g

106、alleries”thatserveaneducationalpurposeandwheresalesmaynotoccur.Someautomobiledealertradeassociationshavebothchallengedthelegalityofouroperationsincourtandusedadministrativeandlegislativeprocessestoattempttoprohibitorlimitourabilitytooperateexistingstoresorexpandtonewlocations.Certaindealerassociatio

107、nshavealsoactivelylobbiedstatelicensingagenciesandlegislatorstointerpretexistinglawsorenactnewlawsinwaysnotfavorabletoourownershipandoperationofourownretailandservicelocations.Weexpectsuchchallengestocontinue,andweintendtoactivelyfightanysuchefforts.BatterySafetyandTestingOurbatterypacksaresubjectto

108、variousU.S.andinternationalregulationsthatgoverntransportof“dangerousgoods,”definedtoincludelithium-ionbatteries,whichmaypresentariskintransportation.Weconducttestingtodemonstrateourcompliancewithsuchregulations.Weuselithium-ioncellsinourhighvoltagebatterypacksinourvehiclesandenergystorageproducts.T

109、heuse,storageanddisposalofourbatterypacksareregulatedunderexistinglawsandarethesubjectofongoingregulatorychangesthatmayaddadditionalrequirementsinthefuture.Wehaveagreementswiththirdpartybatteryrecyclingcompaniestorecycleourbatterypacks,andwearealsopilotingourownrecyclingtechnology.SolarEnergyGeneral

110、Wearesubjecttocertainstateandfederalregulationsapplicabletosolarandbatterystorageprovidersandsellersofelectricity.Tooperateoursystems,weenterintostandardinterconnectionagreementswithapplicableutilities.Salesofelectricityandnon-saleequipmentleasesbythirdparties,suchasourleasesandPPAs,havefacedregulat

111、orychallengesinsomestatesandjurisdictions.SolarEnergyNetMeteringMoststatesintheU.S.makenetenergymetering,ornetmetering,availabletosolarcustomers.Netmeteringtypicallyallowssolarcustomerstointerconnecttheirsolarenergysystemstotheutilitygridandoffsettheirutilityelectricitypurchasesbyreceivingabillcredi

112、tforexcessenergygeneratedbytheirsolarenergysystemthatisexportedtothegrid.Incertainjurisdictions,regulatorsorutilitieshavereducedoreliminatedthebenefitavailableundernetmeteringorhaveproposedtodoso.CompetitionAutomotiveTheworldwideautomotivemarketishighlycompetitiveandweexpectitwillbecomeevenmorecompe

113、titiveinthefutureasasignificantandgrowingnumberofestablishedandnewautomobilemanufacturers,aswellasothercompanies,haveentered,orarereportedtohaveplanstoentertheelectricvehiclemarket.Webelievethatourvehiclescompeteinthemarketbasedonboththeirtraditionalsegmentclassificationaswellastheirpropulsiontechno

114、logy.Forexample,Cybertruckcompeteswithotherpickuptrucks,ModelSandModelXcompeteprimarilywithpremiumsedansandpremiumSUVsandModel3andModelYcompetewithsmalltomedium-sizedsedansandcompactSUVs,whichareextremelycompetitivemarkets.Competingproductstypicallyincludeinternalcombustionvehiclesfrommoreestablishe

115、dautomobilemanufacturers;however,manyestablishedandnewautomobilemanufacturershaveenteredorhaveannouncedplanstoenterthemarketforelectricandotheralternativefuelvehicles.Overall,webelievetheseannouncementsandvehicleintroductions,includingtheintroductionofelectricvehiclesintorentalcarcompanyfleets,promo

116、tethedevelopmentoftheelectricvehiclemarketbyhighlightingtheattractivenessofelectricvehiclesrelativetotheinternalcombustionvehicle.ManymajorautomobilemanufacturershaveelectricvehiclesavailabletodayinmajormarketsincludingtheU.S.,ChinaandEurope,andothercurrentandprospectiveautomobilemanufacturersareals

117、odevelopingelectricvehicles.Inaddition,severalmanufacturersofferhybridvehicles,includingplug-inversions.11TableofContentsWebelievethatthereisalsoincreasingcompetitionforourvehicleofferingsasaplatformfordeliveringself-drivingtechnologies,chargingsolutionsandotherfeaturesandservices,andweexpecttocompe

118、teinthisdevelopingmarketthroughcontinuedprogressonourAutopilot,FSDandneuralnetworkcapabilities,Superchargernetworkandourinfotainmentofferings.EnergyGenerationandStorageEnergyStorageSystemsThemarketforenergystorageproductsisalsohighlycompetitive,andbothestablishedandemergingcompanieshaveintroducedpro

119、ductsthataresimilartoourproductportfolioorthatarealternativestotheelementsofoursystems.Wecompetewiththesecompaniesbasedonprice,energydensityandefficiency.Webelievethatthespecificationsandfeaturesofourproducts,ourstrongbrandandthemodular,scalablenatureofourenergystorageproductsgiveusacompetitiveadvan

120、tageinourmarkets.SolarEnergySystemsTheprimarycompetitorstooursolarenergybusinessarethetraditionallocalutilitycompaniesthatsupplyenergytoourpotentialcustomers.Wecompetewiththesetraditionalutilitycompaniesprimarilybasedonpriceandtheeasebywhichcustomerscanswitchtoelectricitygeneratedbyoursolarenergysys

121、tems.Wealsocompetewithsolarenergycompaniesthatprovideproductsandservicessimilartoours.Manysolarenergycompaniesonlyinstallsolarenergysystems,whileothersonlyprovidefinancingfortheseinstallations.Webelievewehaveasignificantexpansionopportunitywithourofferingsandthattheregulatoryenvironmentisincreasingl

122、yconducivetotheadoptionofrenewableenergysystems.IntellectualPropertyWeplaceastrongemphasisonourinnovativeapproachandproprietarydesignswhichbringintrinsicvalueanduniquenesstoourproductportfolio.Aspartofourbusiness,weseektoprotecttheunderlyingintellectualpropertyrightsoftheseinnovationsanddesignssucha

123、swithrespecttopatents,trademarks,copyrights,tradesecrets,confidentialinformationandothermeasures,includingthroughemployeeandthird-partynondisclosureagreementsandothercontractualarrangements.Forexample,weplaceahighpriorityonobtainingpatentstoprovidethebroadestandstrongestpossibleprotectiontoenableour

124、freedomtooperateourinnovationsanddesignsacrossallofourproductsandtechnologiesaswellastoprotectanddefendourproductportfolio.Wehavealsoadoptedapatentpolicyinwhichweirrevocablypledgedthatwewillnotinitiatealawsuitagainstanypartyforinfringingourpatentsthroughactivityrelatingtoelectricvehiclesorrelatedequ

125、ipmentforsolongassuchpartyisactingingoodfaith.Wemadethispledgeinordertoencouragetheadvancementofacommon,rapidly-evolvingplatformforelectricvehicles,therebybenefitingourselves,othercompaniesmakingelectricvehiclesandtheworld.Environmental,SocialandGovernance(ESG)andHumanCapitalResourcesESGTheverypurpo

126、seofTeslasexistenceistoacceleratetheworldstransitiontosustainableenergy.Webelievetheworldcannotreducecarbonemissionswithoutaddressingbothenergygenerationandconsumption,andwearedesigningandmanufacturingacompleteenergyandtransportationecosystemtoachievethisgoal.Asweexpand,wearebuildingeachnewfactoryto

127、bemoreefficientandsustainablydesignedthanthepreviousone,includingwithrespecttoper-unitwastereductionandresourceconsumption,includingwaterandenergyusage.Wearefocusedonfurtherenhancingsustainabilityofoperationsoutsideofourdirectcontrol,includingreducingthecarbonfootprintofoursupplychain.Wearecommitted

128、tosourcingonlyresponsiblyproducedmaterials,andoursuppliersarerequiredtoprovideevidenceofmanagementsystemsthatensuresocial,environmentalandsustainabilitybestpracticesintheirownoperations,aswellastodemonstrateacommitmenttoresponsiblesourcingintotheirsupplychains.Wehaveazero-tolerancepolicywhenitcomest

129、ochildorforcedlaborandhumantraffickingbyoursuppliersandwelooktotheOrganizationforEconomicCo-operationandDevelopmentDueDiligenceGuidelinestoinformourprocessandusefeedbackfromourinternalandexternalstakeholderstofindwaystocontinuallyimprove.Wearealsodrivingsafetyinourownfactoriesbyfocusingonworkerengag

130、ement.Ourincidentspervehiclecontinuetodropevenasourproductionvolumesincrease.Wealsostrivetobeanemployerofchoicebyofferingcompelling,impactfuljobswithbestin-industrybenefits.12TableofContentsWebelievethatsoundcorporategovernanceiscriticaltohelpingusachieveourgoals,includingwithrespecttoESG.Wecontinue

131、toevolveagovernanceframeworkthatexercisesappropriateoversightofresponsibilitiesatalllevelsthroughoutthecompanyandmanagesitsaffairsconsistentwithhighprinciplesofbusinessethics.OurESGSustainabilityCouncilismadeupofleadersfromacrossourcompany,andregularlypresentstoourBoardofDirectors,whichoverseesourES

132、Gimpacts,initiativesandpriorities.HumanCapitalResourcesAcompetitiveedgeforTeslaisitsabilitytoattractandretainhighqualityemployees.Duringthepastyear,Teslamadesubstantialinvestmentsinitsworkforce,furtherstrengtheningitsstandingasoneofthemostdesirableandinnovativecompaniestoworkfor.AsofDecember31,2023,

133、ouremployeeheadcountworldwidewas140,473.Wehavecreatedanenvironmentthatfostersgrowthopportunities,andasofthisreport,nearlytwo-thirds(65%)ofourmanagerswerepromotedfromaninternal,non-managerposition,and43%ofourmanagementemployeeshavebeenwithTeslaformorethanfiveyears.Teslasgrowthof35%overthepasttwoyears

134、hasofferedinternalcareerdevelopmenttoouremployeesaswellastheabilitytomakeameaningfulcontributiontoasustainablefuture.Weareabletoretainouremployees,inpart,notonlybecauseemployeescanenjoyownershipinTeslathroughstock(ofwhich89%havebeengiventheopportunityto),butbecausewealsoprovidethemwithexcellenthealt

135、hbenefitssuchasfreecounseling,paidparentalleave,paidtimeoffandzero-premiummedicalplanoptionsthataremadeavailableonthefirstdayofemployment.Werecognizethepositiveimpactthatleaderscanhaveontheirteamsandofferfundamentalskillstrainingandcontinuousdevelopmenttoallleadersthroughvariousprogramsglobally.Wedo

136、ntstopthere.Teslahasseveralotherprogramsstrategicallydesignedtoincreasepathsforgreatercareeropportunitysuchas:TechnicianTrainee(Service)TheTeslaTechnicianTraineeProgramprovideson-the-jobautomotivemaintenancetrainingatTesla,resultinginanindustrycertification.Targetedatindividualswithlimitedexperience

137、,whetherinindustryorvocationalschools,theprogrampreparestraineesforemploymentastechnicians.In2023,wehiredover1,900TechnicianTraineesacrosstheU.S.,GermanyandChina.START(ManufacturingandService)TeslaSTARTisanintensivetrainingprogramthatcomplementstheTechnicianTraineeprogramandequipsindividualswiththes

138、killsneededforasuccessfultechnicianroleatTesla.WehavepartneredwithcollegesandtechnicalacademiestolaunchTeslaSTARTintheU.S.,UnitedKingdomandGermany.In2023,wehiredover350traineesformanufacturingandservicerolesthroughthisprogram,providinganopportunitytotransitionintofull-timeemployment.InternshipsAnnua

139、lly,Teslahiresover6,000universityandcollegestudentsfromaroundtheworld.Werecruitfromdiversestudentorganizationsandcampuses,seekingtoptalentpassionateaboutourmission.Ourinternsengageinmeaningfulworkfromdayone,andweoftenofferthemfull-timepositionspost-internship.MilitaryFellowshipandTransitionProgramsT

140、heMilitaryFellowshipandTransitionProgramsaredesignedtoofferexitingmilitaryservicemembersintheU.S.andEuropewithcareerguidanceontransitioningintothecivilworkforce.WepartnerwiththecareertransitionservicesofEuropeanDefenceMinistriesacrossfivecountries,aswellastheU.S.ChamberofCommercesHireourHeroes.These

141、programsaimtoconverthigh-performingindividualstofull-timerolesandcreateaveterantalentpipeline.ApprenticeshipsTeslaApprenticeshipsareofferedglobally,providingacademicandon-the-jobtrainingtopreparespecialistsinskilledtrades.Apprenticeswillcompletebetweenonetofouryearsofon-the-jobtraining.Apprenticepro

142、gramshaveseenskilledtradehiresacrosstheU.S.,Australia,HongKong,KoreaandGermany.ManufacturingDevelopmentProgramTeslasmanufacturingpathwayprogramisdesignedtoprovidegraduatinghighschoolseniorswiththefinancialresources,courseworkandexperiencetheyneedtostartasuccessfulmanufacturingcareeratTesla.Wehired37

143、3graduatesthroughthisprogramin2023,andourgoalin2024isgrowthisprogramtoover600studentsannuallyacrossourFremontFactory,GigafactoryNevada,GigafactoryTexasandGigafactoryNewYork.13TableofContentsEngineeringDevelopmentProgramLaunchedinJanuary2024,thisprogramtargetsrecentcollegeanduniversitygraduatesforspe

144、cializedengineeringfields.IncollaborationwithAustinCommunityCollege,theprogrameducatesearly-careerengineersincontrolsengineering,enhancingtheirknowledgeofhigh-demandtechnologiesforU.S.manufacturing.WewillcontinuetoexpandtheopportunitiesforouremployeestoaddskillsanddevelopprofessionallywithanewEmploy

145、eeEducationalAssistanceProgramlaunchingintheU.S.inthespringof2024tohelpemployeespursueselectcertificatesordegrees.Withvirtual,self-pacededucationoptionsavailable,employeescanpursueanewpathorexpandtheirknowledgewhilecontinuingtogrowtheircareer.AtTesla,ouremployeesshowuppassionateaboutmakingadifferenc

146、eintheworldandforeachother.Weremainunwaveringinourdemandthatourfactories,offices,storesandservicecentersareplaceswhereouremployeesfeelrespectedandappreciated.Ourpoliciesaredesignedtopromotefairnessandrespectforeveryone.Wehire,evaluateandpromoteemployeesbasedontheirskillsandperformance.Everyoneisexpe

147、ctedtobetrustworthy,demonstrateexcellenceintheirperformanceandcollaboratewithothers.Withthisinmind,wewillnottoleratecertainbehaviors.Theseincludeharassment,retaliation,violence,intimidationanddiscriminationofanykindonthebasisofrace,color,religion,nationalorigin,gender,sexualorientation,genderidentit

148、y,genderexpression,age,disabilityorveteranstatus.Anti-harassmenttrainingisconductedondayoneofnewhireorientationforallemployeesandreoccurringforleaders.Inaddition,werunvariousleadershipdevelopmentprogramsthroughouttheyearaimedatenhancingleadersskills,andinparticular,helpingthemtounderstandhowtoapprop

149、riatelyrespondtoandaddressemployeeconcerns.Employeesareencouragedtospeakupbothinregardtomisconductandsafetyconcernsandcandosobycontactingtheintegrityline,submittingconcernsthroughourTakeChargeprocess,ornotifyingtheirHumanResourcePartneroranymemberofmanagement.Concernsarereviewedinaccordancewithestab

150、lishedprotocolsbyinvestigatorswithexpertise,whoalsoreviewfortrendsandoutcomesforremediationandappropriatecontrols.RespondingtoquestionstimelyiskeysoHumanResourcePartnersforeachfunctionalareaarevisiblethroughoutfacilitiesandareactivelyinvolvedindrivingcultureandengagementalongsidebusinessleaders.Avai

151、lableInformationWefileorfurnishperiodicreportsandamendmentsthereto,includingourAnnualReportsonForm10-K,ourQuarterlyReportsonForm10-QandCurrentReportsonForm8-K,proxystatementsandotherinformationwiththeSEC.Inaddition,theSECmaintainsawebsite(www.sec.gov)thatcontainsreports,proxyandinformationstatements

152、,andotherinformationregardingissuersthatfileelectronically.O,andourreports,amendmentsthereto,proxystatementsandotherinformationarealsomadeavailable,freeofcharge,assoonasreasonablypracticableafterweelectronicallyfileorfurnishsuchinformationwiththeSEC.Theinformationpostedonourwebsiteisnotincorporatedb

153、yreferenceintothisAnnualReportonForm10-K.ITEM1A.RISKFACTORSYoushouldcarefullyconsidertherisksdescribedbelowtogetherwiththeotherinformationsetforthinthisreport,whichcouldmateriallyaffectourbusiness,financialconditionandfutureresults.Therisksdescribedbelowarenottheonlyrisksfacingourcompany.Risksandunc

154、ertaintiesnotcurrentlyknowntousorthatwecurrentlydeemtobeimmaterialalsomaymateriallyadverselyaffectourbusiness,financialconditionandoperatingresults.RisksRelatedtoOurAbilitytoGrowOurBusinessWemayexperiencedelaysinlaunchingandrampingtheproductionofourproductsandfeatures,orwemaybeunabletocontrolourmanu

155、facturingcosts.Wehavepreviouslyexperiencedandmayinthefutureexperiencelaunchandproductionrampdelaysfornewproductsandfeatures.Forexample,weencounteredunanticipatedsupplierissuesthatledtodelaysduringtheinitialrampofourfirstModelXandexperiencedchallengeswithasupplierandwithrampingfullautomationforcertai

156、nofourinitialModel3manufacturingprocesses.Inaddition,wemayintroduceinthefutureneworuniquemanufacturingprocessesanddesignfeaturesforourproducts.Asweexpandourvehicleofferingsandglobalfootprint,thereisnoguaranteethatwewillbeabletosuccessfullyandtimelyintroduceandscalesuchprocessesorfeatures.14TableofCo

157、ntentsInparticular,ourfuturebusinessdependsinlargepartonincreasingtheproductionofmass-marketvehicles.Inordertobesuccessful,wewillneedtoimplement,maintainandrampefficientandcost-effectivemanufacturingcapabilities,processesandsupplychainsandachievethedesigntolerances,highqualityandoutputrateswehavepla

158、nnedatourmanufacturingfacilitiesinCalifornia,Nevada,Texas,China,GermanyandanyfuturesitessuchasMexico.Wewillalsoneedtohire,trainandcompensateskilledemployeestooperatethesefacilities.Bottlenecksandotherunexpectedchallengessuchasthoseweexperiencedinthepastmayariseduringourproductionramps,andwemustaddre

159、ssthempromptlywhilecontinuingtoimprovemanufacturingprocessesandreducingcosts.Ifwearenotsuccessfulinachievingthesegoals,wecouldfacedelaysinestablishingand/orsustainingourproductrampsorbeunabletomeetourrelatedcostandprofitabilitytargets.Wehaveexperienced,andmayalsoexperiencesimilarfuturedelaysinlaunch

160、ingand/orrampingproductionofourenergystorageproductsandSolarRoof;newproductversionsorvariants;newvehicles;andfuturefeaturesandservicesbasedonartificialintelligence.Likewise,wemayencounterdelayswiththedesign,constructionandregulatoryorotherapprovalsnecessarytobuildandbringonlinefuturemanufacturingfac

161、ilitiesandproducts.Anydelayorothercomplicationinrampingtheproductionofourcurrentproductsorthedevelopment,manufacture,launchandproductionrampofourfutureproducts,featuresandservices,orindoingsocost-effectivelyandwithhighquality,mayharmourbrand,business,prospects,financialconditionandoperatingresults.O

162、ursuppliersmayfailtodelivercomponentsaccordingtoschedules,prices,qualityandvolumesthatareacceptabletous,orwemaybeunabletomanagethesecomponentseffectively.Ourproductscontainthousandsofpartspurchasedgloballyfromhundredsofsuppliers,includingsingle-sourcedirectsuppliers,whichexposesustomultiplepotential

163、sourcesofcomponentshortages.Unexpectedchangesinbusinessconditions,materialspricing,includinginflationofrawmaterialcosts,laborissues,wars,tradepolicies,naturaldisasters,healthepidemicssuchastheglobalCOVID-19pandemic,tradeandshippingdisruptions,portcongestions,cyberattacksandotherfactorsbeyondourorour

164、supplierscontrolcouldalsoaffectthesesuppliersabilitytodelivercomponentstousortoremainsolventandoperational.Forexample,aglobalshortageofsemiconductorsbeginninginearly2021hascausedchallengesinthemanufacturingindustryandimpactedoursupplychainandproduction.Additionally,ifoursuppliersdonotaccuratelyforec

165、astandeffectivelyallocateproductionoriftheyarenotwillingtoallocatesufficientproductiontous,orfaceotherchallengessuchasinsolvency,itmayreduceouraccesstocomponentsandrequireustosearchfornewsuppliers.Theunavailabilityofanycomponentorsuppliercouldresultinproductiondelays,idlemanufacturingfacilities,prod

166、uctdesignchangesandlossofaccesstoimportanttechnologyandtoolsforproducingandsupportingourproducts,aswellasimpactourcapacityexpansionandourabilitytofulfillourobligationsundercustomercontracts.Moreover,significantincreasesinourproductionorproductdesignchangesbyushaverequiredandmayinthefuturerequireusto

167、procureadditionalcomponentsinashortamountoftime.Wehavefacedinthepast,andmayfacesupplierswhoareunwillingorunabletosustainablymeetourtimelinesorourcost,qualityandvolumeneeds,whichmayincreaseourcostsorrequireustoreplacethemwithothersources.Finally,asweconstructnewmanufacturingfacilitiesandaddproduction

168、linestoexistingfacilities,wemayexperienceissuesincorrespondinglyincreasingtheleveloflocalizedprocurementatthosefacilities.Whilewebelievethatwewillbeabletosecureadditionaloralternatesourcesordevelopourownreplacementsformostofourcomponents,thereisnoassurancethatwewillbeabletodosoquicklyoratall.Additio

169、nally,wemaybeunsuccessfulinourcontinuouseffortstonegotiatewithexistingsupplierstoobtaincostreductionsandavoidunfavorablechangestoterms,sourcelessexpensivesuppliersforcertainpartsandredesigncertainpartstomakethemlessexpensivetoproduce,especiallyinthecaseofincreasesinmaterialspricing.Anyoftheseoccurre

170、ncesmayharmourbusiness,prospects,financialconditionandoperatingresults.Asthescaleofourvehicleproductionincreases,wewillalsoneedtoaccuratelyforecast,purchase,warehouseandtransportcomponentsathighvolumestoourmanufacturingfacilitiesandservicinglocationsinternationally.Ifweareunabletoaccuratelymatchthet

171、imingandquantitiesofcomponentpurchasestoouractualneedsorsuccessfullyimplementautomation,inventorymanagementandothersystemstoaccommodatetheincreasedcomplexityinoursupplychainandpartsmanagement,wemayincurunexpectedproductiondisruption,storage,transportationandwrite-offcosts,whichmayharmourbusinessando

172、peratingresults.Wemaybeunabletomeetourprojectedconstructiontimelines,costsandproductionrampsatnewfactories,orwemayexperiencedifficultiesingeneratingandmaintainingdemandforproductsmanufacturedthere.Ourabilitytoincreaseproductionofourvehiclesonasustainedbasis,makethemaffordablegloballybyaccessinglocal

173、supplychainsandworkforcesandstreamlinedeliverylogisticsisdependentontheconstructionandrampofourcurrentandfuturefactories.Theconstructionofandcommencementandrampofproductionatthesefactoriesaresubject15TableofContentstoanumberofuncertaintiesinherentinallnewmanufacturingoperations,includingongoingcompl

174、iancewithregulatoryrequirements,procurementandmaintenanceofconstruction,environmentalandoperationallicensesandapprovalsforadditionalexpansion,supplychainconstraints,hiring,trainingandretentionofqualifiedemployeesandthepaceofbringingproductionequipmentandprocessesonlinewiththecapabilitytomanufactureh

175、igh-qualityunitsatscale.Moreover,wewillhavetoestablishandrampproductionofourproprietarybatterycellsandpacksatournewfactories,andweadditionallyintendtoincorporatesequentialdesignandmanufacturingchangesintovehiclesmanufacturedateachnewfactory.Ifweexperienceanyissuesordelaysinmeetingourprojectedtimelin

176、es,costs,capitalefficiencyandproductioncapacityforournewfactories,expandingandmanagingteamstoimplementiterativedesignandproductionchangesthere,maintainingandcomplyingwiththetermsofanydebtfinancingthatweobtaintofundthemorgeneratingandmaintainingdemandforthevehicleswemanufacturethere,ourbusiness,prosp

177、ects,operatingresultsandfinancialconditionmaybeharmed.Wemaybeunabletogrowourglobalproductsales,deliveryandinstallationcapabilitiesandourservicingandvehiclechargingnetworks,orwemaybeunabletoaccuratelyprojectandeffectivelymanageourgrowth.Oursuccesswilldependonourabilitytocontinuetoexpandoursalescapabi

178、lities.Wearetargetingaglobalmassdemographicwithabroadrangeofpotentialcustomers,inwhichwehaverelativelylimitedexperienceprojectingdemandandpricingourproducts.Wecurrentlyproducenumerousinternationalvariantsatalimitednumberoffactories,andifourspecificdemandexpectationsforthesevariantsproveinaccurate,we

179、maynotbeabletotimelygeneratedeliveriesmatchedtothevehiclesthatweproduceinthesametimeframeorthatarecommensuratewiththesizeofouroperationsinagivenregion.Likewise,aswedevelopandgrowourenergyproductsandservicesworldwide,oursuccesswilldependonourabilitytocorrectlyforecastdemandinvariousmarkets.Becausewed

180、onothaveindependentdealernetworks,weareresponsiblefordeliveringallofourvehiclestoourcustomers.Asourproductionvolumescontinuetogrow,wehavefacedinthepast,andmayfacechallengeswithdeliveriesatincreasingvolumes,particularlyininternationalmarketsrequiringsignificanttransittimes.Wehavealsodeployedanumberof

181、deliverymodels,suchasdeliveriestocustomershomesandworkplacesandtouchlessdeliveries,butthereisnoguaranteethatsuchmodelswillbescalableorbeacceptedglobally.Likewise,aswerampourenergyproducts,weareworkingtosubstantiallyincreaseourproductionandinstallationcapabilities.Ifweexperienceproductiondelaysorinac

182、curatelyforecastdemand,ourbusiness,financialconditionandoperatingresultsmaybeharmed.Moreover,becauseofouruniqueexpertisewithourvehicles,werecommendthatourvehiclesbeservicedbyusorbycertainauthorizedprofessionals.Ifweexperiencedelaysinaddingservicingcapacityorservicingourvehiclesefficiently,orexperien

183、ceunforeseenissueswiththereliabilityofourvehicles,particularlyhigher-volumeadditionstoourfleetsuchasModel3andModelY,itcouldoverburdenourservicingcapabilitiesandpartsinventory.Similarly,theincreasingnumberofTeslavehiclesalsorequiresustocontinuetorapidlyincreasethenumberofourSuperchargerstationsandcon

184、nectorsthroughouttheworld.Thereisnoassurancethatwewillbeabletorampourbusinesstomeetoursales,delivery,installation,servicingandvehiclechargingtargetsglobally,thatourprojectionsonwhichsuchtargetsarebasedwillproveaccurateorthatthepaceofgrowthorcoverageofourcustomerinfrastructurenetworkwillmeetcustomere

185、xpectations.Theseplansrequiresignificantcashinvestmentsandmanagementresourcesandthereisnoguaranteethattheywillgenerateadditionalsalesorinstallationsofourproducts,orthatwewillbeabletoavoidcostoverrunsorbeabletohireadditionalpersonneltosupportthem.Asweexpand,wewillalsoneedtoensureourcompliancewithregu

186、latoryrequirementsinvariousjurisdictionsapplicabletothesale,installationandservicingofourproducts,thesaleordispatchofelectricityrelatedtoourenergyproductsandtheoperationofSuperchargers.Ifwefailtomanageourgrowtheffectively,itmayharmourbrand,business,prospects,financialconditionandoperatingresults.Wew

187、illneedtomaintainandsignificantlygrowouraccesstobatterycells,includingthroughthedevelopmentandmanufactureofourowncells,andcontrolourrelatedcosts.Wearedependentonthecontinuedsupplyoflithium-ionbatterycellsforourvehiclesandenergystorageproducts,andwewillrequiresubstantiallymorecellstogrowourbusinessac

188、cordingtoourplans.Currently,werelyonsupplierssuchasPanasonicandContemporaryAmperexTechnologyCo.Limited(CATL)forthesecells.Wehavetodatefullyqualifiedonlyaverylimitednumberofsuchsuppliersandhavelimitedflexibilityinchangingsuppliers.Anydisruptioninthesupplyofbatterycellsfromoursupplierscouldlimitproduc

189、tionofourvehiclesandenergystorageproducts.Inthelongterm,weintendtosupplementcellsfromoursupplierswithcellsmanufacturedbyus,whichwebelievewillbemoreefficient,manufacturableatgreatervolumesandmorecost-effectivethancurrentlyavailablecells.However,oureffortstodevelopandmanufacturesuchbatterycellshavereq

190、uired,andmaycontinuetorequire,significantinvestments,andtherecanbenoassurancethatwewillbeabletoachievethesetargetsinthetimeframesthatwehaveplannedoratall.Ifweare16TableofContentsunabletodoso,wemayhavetocurtailourplannedvehicleandenergystorageproductproductionorprocureadditionalcellsfromsuppliersatpo

191、tentiallygreatercosts,eitherofwhichmayharmourbusinessandoperatingresults.Inaddition,thecostandmassproductionofbatterycells,whethermanufacturedbyoursuppliersorbyus,dependsinpartuponthepricesandavailabilityofrawmaterialssuchaslithium,nickel,cobaltand/orothermetals.Thepricesforthesematerialsfluctuatean

192、dtheiravailablesupplymaybeunstable,dependingonmarketconditionsandglobaldemandforthesematerials.Forexample,asaresultofincreasedglobalproductionofelectricvehiclesandenergystorageproducts,suppliersoftheserawmaterialsmaybeunabletomeetourvolumeneeds.Additionally,oursuppliersmaynotbewillingorabletoreliabl

193、ymeetourtimelinesorourcostandqualityneeds,whichmayrequireustoreplacethemwithothersources.Anyreducedavailabilityofthesematerialsmayimpactouraccesstocellsandourgrowth,andanyincreasesintheirpricesmayreduceourprofitabilityifwecannotrecoupsuchcoststhroughincreasedprices.Moreover,ourinabilitytomeetdemanda

194、ndanyproductpriceincreasesmayharmourbrand,growth,prospectsandoperatingresults.Ourfuturegrowthandsuccessaredependentuponconsumersdemandforelectricvehiclesandspecificallyourvehiclesinanautomotiveindustrythatisgenerallycompetitive,cyclicalandvolatile.Thoughwecontinuetoseeincreasedinterestandadoptionofe

195、lectricvehicles,ifthemarketforelectricvehiclesingeneralandTeslavehiclesinparticulardoesnotdevelopasweexpect,developsmoreslowlythanweexpect,orifdemandforourvehiclesdecreasesinourmarketsorourvehiclescompetewitheachother,ourbusiness,prospects,financialconditionandoperatingresultsmaybeharmed.Inaddition,

196、electricvehiclesstillconstituteasmallpercentageofoverallvehiclesales.Asaresult,themarketforourvehiclescouldbenegativelyaffectedbynumerousfactors,suchas:perceptionsaboutelectricvehiclefeatures,quality,safety,performanceandcost;perceptionsaboutthelimitedrangeoverwhichelectricvehiclesmaybedrivenonasing

197、lebatterycharge,andaccesstochargingfacilities;competition,includingfromothertypesofalternativefuelvehicles,plug-inhybridelectricvehiclesandhighfuel-economyinternalcombustionenginevehicles;volatilityinthecostofoil,gasolineandenergy;governmentregulationsandeconomicincentivesandconditions;andconcernsab

198、outourfutureviability.Thetargetdemographicsforourvehiclesarehighlycompetitive.Salesofvehiclesintheautomotiveindustrytendtobecyclicalinmanymarkets,whichmayexposeustofurthervolatility.Wealsocannotpredictthedurationordirectionofcurrentglobaltrendsortheirsustainedimpactonconsumerdemand.Ultimately,wecont

199、inuetomonitormacroeconomicconditionstoremainflexibleandtooptimizeandevolveourbusinessasappropriate,andattempttoaccuratelyprojectdemandandinfrastructurerequirementsgloballyanddeployourproduction,workforceandotherresourcesaccordingly.Risinginterestratesmayleadtoconsumerstoincreasinglypullbackspending,

200、includingonourproducts,whichmayharmourdemand,businessandoperatingresults.Ifweexperienceunfavorableglobalmarketconditions,orifwecannotordonotmaintainoperationsatascopethatiscommensuratewithsuchconditionsorarelaterrequiredtoorchoosetosuspendsuchoperationsagain,ourbusiness,prospects,financialconditiona

201、ndoperatingresultsmaybeharmed.Wefacestrongcompetitionforourproductsandservicesfromagrowinglistofestablishedandnewcompetitors.Theworldwideautomotivemarketishighlycompetitivetodayandweexpectitwillbecomeevenmoresointhefuture.Asignificantandgrowingnumberofestablishedandnewautomobilemanufacturers,aswella

202、sothercompanies,haveentered,orarereportedtohaveplanstoenter,themarketforelectricandotheralternativefuelvehicles,includinghybrid,plug-inhybridandfullyelectricvehicles,aswellasthemarketforself-drivingtechnologyandothervehicleapplicationsandsoftwareplatforms.Insomecases,ourcompetitorsofferorwillofferel

203、ectricvehiclesinimportantmarketssuchasChinaandEurope,and/orhaveannouncedanintentiontoproduceelectricvehiclesexclusivelyatsomepointinthefuture.Inaddition,certaingovernmentandeconomicincentiveswhichprovidebenefitstomanufacturerswhoassembledomesticallyorhavelocalsuppliers,mayprovideagreaterbenefittoour

204、competitors,whichcouldnegativelyimpactourprofitability.Manyofourcompetitorshavesignificantlymoreorbetter-establishedresourcesthanwedotodevotetothedesign,development,manufacturing,distribution,promotion,saleandsupportoftheirproducts.Increasedcompetitioncouldresultinourlowervehicleunitsales,pricereduc

205、tions,revenueshortfalls,lossofcustomersandlossofmarketshare,whichmayharmourbusiness,financialconditionandoperatingresults.17TableofContentsWealsofacecompetitioninourenergygenerationandstoragebusinessfromothermanufacturers,developers,installersandserviceprovidersofcompetingenergytechnologies,aswellas

206、fromlargeutilities.Decreasesintheretailorwholesalepricesofelectricityfromutilitiesorotherrenewableenergysourcescouldmakeourproductslessattractivetocustomersandleadtoanincreasedrateofcustomerdefaults.RisksRelatedtoOurOperationsWemayexperienceissueswithlithium-ioncellsorothercomponentsmanufacturedatou

207、rGigafactories,whichmayharmtheproductionandprofitabilityofourvehicleandenergystorageproducts.Ourplantogrowthevolumeandprofitabilityofourvehiclesandenergystorageproductsdependsonsignificantlithium-ionbatterycellproduction,includingbyourpartnerPanasonicatGigafactoryNevada.Wealsoproduceseveralvehicleco

208、mponentsatourGigafactories,suchasbatterymodulesandpacksanddriveunits,andmanufactureenergystorageproducts.Ifweareunabletoorotherwisedonotmaintainandgrowourrespectiveoperations,orifweareunabletodosocost-effectivelyorhireandretainhighly-skilledpersonnelthere,ourabilitytomanufactureourproductsprofitably

209、wouldbelimited,whichmayharmourbusinessandoperatingresults.Finally,thehighvolumesoflithium-ioncellsandbatterymodulesandpacksmanufacturedbyusandbyoursuppliersarestoredandrecycledatourvariousfacilities.Anymishandlingoftheseproductsmaycausedisruptiontotheoperationofsuchfacilities.Whilewehaveimplementeds

210、afetyproceduresrelatedtothehandlingofthecells,therecanbenoassurancethatasafetyissueorfirerelatedtothecellswouldnotdisruptouroperations.Anysuchdisruptionsorissuesmayharmourbrandandbusiness.Wefacerisksassociatedwithmaintainingandexpandingourinternationaloperations,includingunfavorableanduncertainregul

211、atory,political,economic,taxandlaborconditions.Wearesubjecttolegalandregulatoryrequirements,politicaluncertaintyandsocial,environmentalandeconomicconditionsinnumerousjurisdictions,includingmarketsinwhichwegeneratesignificantsales,overwhichwehavelittlecontrolandwhichareinherentlyunpredictable.Ouroper

212、ationsinsuchjurisdictions,particularlyasacompanybasedintheU.S.,createrisksrelatingtoconformingourproductstoregulatoryandsafetyrequirementsandchargingandotherelectricinfrastructures;organizinglocaloperatingentities;establishing,staffingandmanagingforeignbusinesslocations;attractinglocalcustomers;navi

213、gatingforeigngovernmenttaxes,regulationsandpermitrequirements;enforceabilityofourcontractualrights;traderestrictions,customsregulations,tariffsandpriceorexchangecontrols;andpreferencesinforeignnationsfordomesticallymanufacturedproducts.Forexample,wemonitortaxlegislationchangesonaglobalbasis,includin

214、gchangesarisingasaresultoftheOrganizationforEconomicCooperationandDevelopmentsmulti-jurisdictionalplanofactiontoaddressbaseerosionandprofitshifting.Suchconditionsmayincreaseourcosts,impactourabilitytosellourproductsandrequiresignificantmanagementattention,andmayharmourbusinessifweareunabletomanageth

215、emeffectively.Ourbusinessmaysufferifourproductsorfeaturescontaindefects,failtoperformasexpectedortakelongerthanexpectedtobecomefullyfunctional.Ifourproductscontaindesignormanufacturingdefects,whetherrelatingtooursoftwareorhardware,thatcausethemnottoperformasdesignedorintendedorthatrequirerepair,orce

216、rtainfeaturesofourvehiclessuchasnewAutopilotorFSDCapabilityfeaturestakelongerthanexpectedtobecomeenabled,arelegallyrestrictedorbecomesubjecttoonerousregulation,ourabilitytodevelop,marketandsellourproductsandservicesmaybeharmed,andwemayexperiencedeliverydelays,productrecalls,allegationsofproductliabi

217、lity,breachofwarrantyandrelatedconsumerprotectionclaimsandsignificantwarrantyandotherexpenses.Whilewearecontinuouslyworkingtodevelopandimproveourproductscapabilityandperformance,thereisnoguaranteethatanyincrementalchangesinthespecificsoftwareorequipmentwedeployinourvehiclesovertimewillnotresultinini

218、tialfunctionaldisparitiesfromprioriterationsorwillperformasforecastinthetimeframeweanticipate,oratall.Althoughweattempttoremedyanyissuesweobserveinourproductsaseffectivelyandrapidlyaspossible,sucheffortsmaynotbetimely,mayhamperproductionormaynotcompletelysatisfyourcustomers.Wehaveperformed,andcontin

219、uetoperform,extensiveinternaltestingonourproductsandfeatures,though,liketherestoftheindustry,wecurrentlyhavealimitedframeofreferencebywhichtoevaluatecertainaspectsoftheirlong-termquality,reliability,durabilityandperformancecharacteristics,includingexposuretoorconsequenceofexternalattacks.Whileweatte

220、mpttoidentifyandaddressorremedydefectsweidentifypre-productionandsale,theremaybelatentdefectsthatwemaybeunabletodetectorcontrolforinourproducts,andtherebyaddress,priortotheirsaletoorinstallationforcustomers.18TableofContentsWemayberequiredtodefendorinsureagainstproductliabilityclaims.Theautomobilein

221、dustrygenerallyexperiencessignificantproductliabilityclaims,andassuchwefacetheriskofsuchclaimsintheeventourvehiclesdonotperformorareclaimedtonothaveperformedasexpected.Asistrueforotherautomakers,ourvehicleshavebeeninvolvedandweexpectinthefuturewillbeinvolvedinaccidentsresultingindeathorpersonalinjur

222、y,andsuchaccidentswhereAutopilot,EnhancedAutopilotorFSDCapabilityfeaturesareengagedarethesubjectofsignificantpublicattention,especiallyinlightofNHTSAsStandingGeneralOrderrequiringreportsregardingcrashesinvolvingvehicleswithadvanceddriverassistancesystems.Wehaveexperienced,andweexpecttocontinuetoface

223、,claimsandregulatoryscrutinyarisingfromorrelatedtomisuseorclaimedfailuresorallegedmisrepresentationsofsuchnewtechnologiesthatwearepioneering.Inaddition,thebatterypacksthatweproducemakeuseoflithium-ioncells.Onrareoccasions,lithium-ioncellscanrapidlyreleasetheenergytheycontainbyventingsmokeandflamesin

224、amannerthatcanignitenearbymaterialsaswellasotherlithium-ioncells.Whilewehavedesignedourbatterypackstopassivelycontainanysinglecellsreleaseofenergywithoutspreadingtoneighboringcells,therecanbenoassurancethatafieldortestingfailureofourvehiclesorotherbatterypacksthatweproducewillnotoccur,inparticulardu

225、etoahigh-speedcrash.Likewise,asoursolarenergysystemsandenergystorageproductsgenerateandstoreelectricity,theyhavethepotentialtofailorcauseinjurytopeopleorproperty.Anyproductliabilityclaimmaysubjectustolawsuitsandsubstantialmonetarydamages,productrecallsorredesignefforts,andevenameritlessclaimmayrequi

226、reustodefendit,allofwhichmaygeneratenegativepublicityandbeexpensiveandtime-consuming.Inmostjurisdictions,wegenerallyself-insureagainsttheriskofproductliabilityclaimsforvehicleexposure,meaningthatanyproductliabilityclaimswilllikelyhavetobepaidfromcompanyfundsandnotbyinsurance.Wewillneedtomaintainpubl

227、iccredibilityandconfidenceinourlong-termbusinessprospectsinordertosucceed.Inordertomaintainandgrowourbusiness,wemustmaintaincredibilityandconfidenceamongcustomers,suppliers,analysts,investors,ratingsagenciesandotherpartiesinourlong-termfinancialviabilityandbusinessprospects.Maintainingsuchconfidence

228、maybechallengingduetoourlimitedoperatinghistoryrelativetoestablishedcompetitors;customerunfamiliaritywithourproducts;anydelayswemayexperienceinscalingmanufacturing,deliveryandserviceoperationstomeetdemand;competitionanduncertaintyregardingthefutureofelectricvehiclesorourotherproductsandservices;ourq

229、uarterlyproductionandsalesperformancecomparedwithmarketexpectations;andotherfactorsincludingthoseoverwhichwehavenocontrol.Inparticular,Teslasproducts,business,resultsofoperations,andstatementsandactionsofTeslaanditsmanagementaresubjecttosignificantamountsofcommentarybyarangeofthirdparties.Suchattent

230、ioncanincludecriticism,whichmaybeexaggeratedorunfounded,suchasspeculationregardingthesufficiencyorstabilityofourmanagementteam.Anysuchnegativeperceptions,whethercausedbyusornot,mayharmourbusinessandmakeitmoredifficulttoraiseadditionalfundsifneeded.Wemaybeunabletoeffectivelygrow,ormanagethecompliance

231、,residualvalue,financingandcreditrisksrelatedto,ourvariousfinancingprograms.WeofferfinancingarrangementsforourvehiclesinNorthAmerica,EuropeandAsiaprimarilyourselvesandthroughvariousfinancialinstitutions.Wealsocurrentlyoffervehiclefinancingarrangementsdirectlythroughourlocalsubsidiariesincertainmarke

232、ts.Dependingonthecountry,sucharrangementsareavailableforspecifiedmodelsandmayincludeoperatingleasesdirectlywithusunderwhichwetypicallyreceiveonlyaverysmallportionofthetotalvehiclepurchasepriceatthetimeoflease,followedbyastreamofpaymentsoverthetermofthelease.Wehavealsoofferedvariousarrangementsforcus

233、tomersofoursolarenergysystemswherebytheypayusafixedpaymenttoleaseorfinancethepurchaseofsuchsystemsorpurchaseelectricitygeneratedbythem.Ifwedonotsuccessfullymonitorandcomplywithapplicablenational,stateand/orlocalfinancialregulationsandconsumerprotectionlawsgoverningthesetransactions,wemaybecomesubjec

234、ttoenforcementactionsorpenalties.Theprofitabilityofanydirectly-leasedvehiclesreturnedtousattheendoftheirleasesdependsonourabilitytoaccuratelyprojectourvehiclesresidualvaluesattheoutsetoftheleases,andsuchvaluesmayfluctuatepriortotheendoftheirtermsdependingonvariousfactorssuchassupplyanddemandofouruse

235、dvehicles,economiccyclesandthepricingofnewvehicles.Wehavemadeinthepastandmaymakeinthefuturecertainadjustmentstoourpricesfromtimetotimeintheordinarycourseofbusiness,whichmayimpacttheresidualvaluesofourvehiclesandreducetheprofitabilityofourvehicleleasingprogram.Thefundingandgrowthofthisprogramalsorely

236、onourabilitytosecureadequatefinancingand/orbusinesspartners.Ifweareunabletoadequatelyfundourleasingprogramthroughinternalfunds,partnersorotherfinancingsources,andcompellingalternativefinancingprogramsarenotavailableforourcustomerswhomayexpectorneedsuchoptions,wemaybeunabletogrowourvehicledeliveries.

237、Furthermore,ifourvehicleleasingbusinessgrowssubstantially,ourbusinessmaysufferifwecannoteffectivelymanagetheresultinggreaterlevelsofresidualrisk.19TableofContentsSimilarly,wehaveprovidedresalevalueguaranteestovehiclecustomersandpartnersforcertainfinancingprograms,underwhichsuchcounterpartiesmaysellt

238、heirvehiclesbacktousatcertainpointsintimeatpre-determinedamounts.However,actualresalevaluesaresubjecttofluctuationsoverthetermofthefinancingarrangements,suchasfromthevehiclepricingchangesdiscussedabove.Iftheactualresalevaluesofanyvehiclesresoldorreturnedtouspursuanttotheseprogramsaremateriallylowert

239、hanthepre-determinedamountswehaveoffered,ourfinancialconditionandoperatingresultsmaybeharmed.Finally,ourvehicleandsolarenergysystemfinancingprogramsandourenergystoragesalesprogramsalsoexposeustocustomercreditrisk.Intheeventofawidespreadeconomicdownturnorothercatastrophicevent,ourcustomersmaybeunable

240、orunwillingtosatisfytheirpaymentobligationstousonatimelybasisoratall.Ifasignificantnumberofourcustomersdefault,wemayincursubstantialcreditlossesand/orimpairmentchargeswithrespecttotheunderlyingassets.WemustmanageongoingobligationsunderouragreementwiththeResearchFoundationfortheStateUniversityofNewYo

241、rkrelatingtoourGigafactoryNewYork.WearepartytoanoperatingleaseandaresearchanddevelopmentagreementthroughtheStateUniversityofNewYork(the“SUNYFoundation”).TheseagreementsprovidefortheconstructionanduseofourGigafactoryNewYork,whichwehaveprimarilyusedforthedevelopmentandproductionofourSolarRoofandothers

242、olarproductsandcomponents,energystoragecomponentsandSuperchargercomponents,andforotherlessor-approvedfunctions.Underthisagreement,weareobligatedto,amongotherthings,meetemploymenttargetsaswellasspecifiedminimumnumbersofpersonnelintheStateofNewYorkandinBuffalo,NewYorkandspendorincur$5.00billionincombi

243、nedcapital,operationalexpenses,costsofgoodssoldandothercostsintheStateofNewYorkduringaperiodthatwasinitially10yearsbeginningApril30,2018.AsofDecember31,2023,wearecurrentlyinexcessofsuchtargetsrelatingtoinvestmentsandpersonnelintheStateofNewYorkandBuffalo.Whileweexpecttohaveandgrowsignificantoperatio

244、nsatGigafactoryNewYorkandthesurroundingBuffaloarea,anyfailurebyusinanyyearoverthecourseofthetermoftheagreementtomeetallapplicablefutureobligationsmayresultinourobligationtopaya“programpayment”of$41milliontotheSUNYFoundationforsuchyear,theterminationofourleaseatGigafactoryNewYorkwhichmayrequireustopa

245、yadditionalpenalties,and/ortheneedtoadjustcertainofouroperations.Anyoftheforegoingeventsmayharmourbusiness,financialconditionandoperatingresults.Ifweareunabletoattract,hireandretainkeyemployeesandqualifiedpersonnel,ourabilitytocompetemaybeharmed.Thelossoftheservicesofanyofourkeyemployeesoranysignifi

246、cantportionofourworkforcecoulddisruptouroperationsordelaythedevelopment,introductionandrampofourproductsandservices.Inparticular,wearehighlydependentontheservicesofElonMusk,TechnokingofTeslaandourChiefExecutiveOfficer.Noneofourkeyemployeesisboundbyanemploymentagreementforanyspecifictermandwemaynotbe

247、abletosuccessfullyattractandretainseniorleadershipnecessarytogrowourbusiness.Ourfuturesuccessalsodependsuponourabilitytoattract,hireandretainalargenumberofengineering,manufacturing,marketing,salesanddelivery,service,installation,technologyandsupportpersonnel,especiallytosupportourplannedhigh-volumep

248、roductsales,marketandgeographicalexpansionandtechnologicalinnovations.Ifwearenotsuccessfulinmanagingtheserisks,ourbusiness,financialconditionandoperatingresultsmaybeharmed.EmployeesmayleaveTeslaorchooseotheremployersoverTesladuetovariousfactors,suchasaverycompetitivelabormarketfortalentedindividuals

249、withautomotiveortechnologyexperience,oranynegativepublicityrelatedtous.Inregionswherewehaveorwillhaveoperations,particularlysignificantengineeringandmanufacturingcenters,thereisstrongcompetitionforindividualswithskillsetsneededforourbusiness,includingspecializedknowledgeofelectricvehicles,engineerin

250、gandelectricalandbuildingconstructionexpertise.Wealsocompetewithbothmatureandprosperouscompaniesthathavefargreaterfinancialresourcesthanwedoandstart-upsandemergingcompaniesthatpromiseshort-termgrowthopportunities.Finally,ourcompensationphilosophyforallofourpersonnelreflectsourstartuporigins,withanem

251、phasisonequity-basedawardsandbenefitsinordertocloselyaligntheirincentiveswiththelong-terminterestsofourstockholders.Weperiodicallyseekandobtainapprovalfromourstockholdersforfutureincreasestothenumberofawardsavailableunderourequityincentiveandemployeestockpurchaseplans.Ifweareunabletoobtaintherequisi

252、testockholderapprovalsforsuchfutureincreases,wemayhavetoexpendadditionalcashtocompensateouremployeesandourabilitytoretainandhirequalifiedpersonnelmaybeharmed.20TableofContentsWearehighlydependentontheservicesofElonMusk,TechnokingofTeslaandourChiefExecutiveOfficer.WearehighlydependentontheservicesofE

253、lonMusk,TechnokingofTeslaandourChiefExecutiveOfficer.AlthoughMr.MuskspendssignificanttimewithTeslaandishighlyactiveinourmanagement,hedoesnotdevotehisfulltimeandattentiontoTesla.Mr.MuskalsocurrentlyservesasChiefExecutiveOfficerandChiefTechnicalOfficerofSpaceExplorationTechnologiesCorp.,adeveloperandm

254、anufacturerofspacelaunchvehicles,ChairmanandChiefTechnicalOfficerofXCorp.,asocialmediacompany,andisinvolvedinotheremergingtechnologyventures.Ourinformationtechnologysystemsordata,orthoseofourserviceprovidersorcustomersoruserscouldbesubjecttocyber-attacksorothersecurityincidents,whichcouldresultindat

255、abreaches,intellectualpropertytheft,claims,litigation,regulatoryinvestigations,significantliability,reputationaldamageandotheradverseconsequences.Wecontinuetoexpandourinformationtechnologysystemsasouroperationsgrow,suchasproductdatamanagement,procurement,inventorymanagement,productionplanningandexec

256、ution,sales,serviceandlogistics,dealermanagement,financial,taxandregulatorycompliancesystems.ThisincludestheimplementationofnewinternallydevelopedsystemsandthedeploymentofsuchsystemsintheU.S.andabroad.While,wemaintaininformationtechnologymeasuresdesignedtoprotectusagainstintellectualpropertytheft,da

257、tabreaches,sabotageandotherexternalorinternalcyber-attacksormisappropriation,oursystemsandthoseofourserviceprovidersarepotentiallyvulnerabletomalware,ransomware,viruses,denial-of-serviceattacks,phishingattacks,socialengineering,computerhacking,unauthorizedaccess,exploitationofbugs,defectsandvulnerab

258、ilities,breakdowns,damage,interruptions,systemmalfunctions,poweroutages,terrorism,actsofvandalism,securitybreaches,securityincidents,inadvertentorintentionalactionsbyemployeesorotherthirdparties,andothercyber-attacks.Totheextentanysecurityincidentresultsinunauthorizedaccessordamagetooracquisition,us

259、e,corruption,loss,destruction,alterationordisseminationofourdata,includingintellectualpropertyandpersonalinformation,orourproductsorvehicles,orforittobebelievedorreportedthatanyoftheseoccurred,itcoulddisruptourbusiness,harmourreputation,compelustocomplywithapplicabledatabreachnotificationlaws,subjec

260、tustotimeconsuming,distractingandexpensivelitigation,regulatoryinvestigationandoversight,mandatorycorrectiveaction,requireustoverifythecorrectnessofdatabasecontents,orotherwisesubjectustoliabilityunderlaws,regulationsandcontractualobligations,includingthosethatprotecttheprivacyandsecurityofpersonali

261、nformation.Thiscouldresultinincreasedcoststousandresultinsignificantlegalandfinancialexposureand/orreputationalharm.Wealsorelyonserviceproviders,andsimilarincidentsrelatingtotheirinformationtechnologysystemscouldalsohaveamaterialadverseeffectonourbusiness.Therehavebeenandmaycontinuetobesignificantsu

262、pplychainattacks.Ourserviceproviders,includingourworkforcemanagementsoftwareprovider,havebeensubjecttoransomwareandothersecurityincidents,andwecannotguaranteethatourorourserviceproviderssystemshavenotbeenbreachedorthattheydonotcontainexploitabledefects,bugs,orvulnerabilitiesthatcouldresultinasecurit

263、yincident,orotherdisruptionto,ourorourserviceproviderssystems.Ourabilitytomonitorourserviceproviderssecuritymeasuresislimited,and,inanyevent,maliciousthirdpartiesmaybeabletocircumventthosesecuritymeasures.Further,theimplementation,maintenance,segregationandimprovementofthesesystemsrequiresignificant

264、managementtime,supportandcost,andthereareinherentrisksassociatedwithdeveloping,improvingandexpandingourcoresystemsaswellasimplementingnewsystemsandupdatingcurrentsystems,includingdisruptionstotherelatedareasofbusinessoperation.Theserisksmayaffectourabilitytomanageourdataandinventory,procurepartsorsu

265、ppliesormanufacture,sell,deliverandserviceproducts,adequatelyprotectourintellectualpropertyorachieveandmaintaincompliancewith,orrealizeavailablebenefitsunder,taxlawsandotherapplicableregulations.Moreover,ifwedonotsuccessfullyimplement,maintainorexpandthesesystemsasplanned,ouroperationsmaybedisrupted

266、,ourabilitytoaccuratelyand/ortimelyreportourfinancialresultscouldbeimpairedanddeficienciesmayariseinourinternalcontroloverfinancialreporting,whichmayimpactourabilitytocertifyourfinancialresults.Moreover,ourproprietaryinformation,includingintellectualpropertyandpersonalinformation,couldbecompromisedo

267、rmisappropriatedandourreputationmaybeadverselyaffected.Ifthesesystemsortheirfunctionalitydonotoperateasweexpectthemto,wemayberequiredtoexpendsignificantresourcestomakecorrectionsorfindalternativesourcesforperformingthesefunctions.21TableofContentsAnyunauthorizedcontrolormanipulationofourproductssyst

268、emscouldresultinlossofconfidenceinusandourproducts.Ourproductscontaincomplexinformationtechnologysystems.Forexample,ourvehiclesandenergystorageproductsaredesignedwithbuilt-indataconnectivitytoacceptandinstallperiodicremoteupdatesfromustoimproveorupdatetheirfunctionality.Whilewehaveimplementedsecurit

269、ymeasuresintendedtopreventunauthorizedaccesstoourinformationtechnologynetworks,ourproductsandtheirsystems,maliciousentitieshavereportedlyattempted,andmayattemptinthefuture,togainunauthorizedaccesstomodify,alterandusesuchnetworks,productsandsystemstogaincontrolof,ortochange,ourproductsfunctionality,u

270、serinterfaceandperformancecharacteristicsortogainaccesstodatastoredinorgeneratedbyourproducts.Weencouragereportingofpotentialvulnerabilitiesinthesecurityofourproductsthroughoursecurityvulnerabilityreportingpolicy,andweaimtoremedyanyreportedandverifiedvulnerability.However,therecanbenoassurancethatan

271、yvulnerabilitieswillnotbeexploitedbeforetheycanbeidentified,orthatourremediationeffortsareorwillbesuccessful.Anyunauthorizedaccesstoorcontrolofourproductsortheirsystemsoranylossofdatacouldresultinlegalclaimsorgovernmentinvestigations.Inaddition,regardlessoftheirveracity,reportsofunauthorizedaccessto

272、ourproducts,theirsystemsordata,aswellasotherfactorsthatmayresultintheperceptionthatourproducts,theirsystemsordataarecapableofbeinghacked,mayharmourbrand,prospectsandoperatingresults.Wehavebeenthesubjectofsuchreportsinthepast.Ourbusinessmaybeadverselyaffectedbyanydisruptionscausedbyunionactivities.It

273、isnotuncommonforemployeesofcertaintradesatcompaniessuchasourstobelongtoaunion,whichcanresultinhigheremployeecostsandincreasedriskofworkstoppages.Moreover,regulationsinsomejurisdictionsoutsideoftheU.S.mandateemployeeparticipationinindustrialcollectivebargainingagreementsandworkcouncilswithcertaincons

274、ultationrightswithrespecttotherelevantcompaniesoperations.Althoughweworkdiligentlytoprovidethebestpossibleworkenvironmentforouremployees,theymaystilldecidetojoinorseekrecognitiontoformalaborunion,orwemayberequiredtobecomeaunionsignatory.Fromtimetotime,laborunionshaveengagedincampaignstoorganizecerta

275、inofouroperations,aspartofwhichsuchunionshavefiledunfairlaborpracticechargesagainstuswiththeNationalLaborRelationsBoard(the“NLRB”),andtheymaydosointhefuture.AnyunfavorableultimateoutcomeforTeslamayhaveanegativeimpactontheperceptionofTeslastreatmentofouremployees.Furthermore,wearedirectlyorindirectly

276、dependentuponcompanieswithunionizedworkforces,suchassuppliersandtruckingandfreightcompanies.Anyworkstoppagesorstrikesorganizedbysuchunionscoulddelaythemanufactureandsaleofourproductsandmayharmourbusinessandoperatingresults.Wemaychoosetoorbecompelledtoundertakeproductrecallsortakeothersimilaractions.

277、Asamanufacturingcompany,wemustmanagetheriskofproductrecallswithrespecttoourproducts.Recallsforourvehicleshaveresultedfromvarioushardwareandsoftware-relatedsafetyconcernsornon-compliancedeterminations.Inadditiontorecallsinitiatedbyusforvariouscauses,testingoforinvestigationsintoourproductsbygovernmen

278、tregulatorsorindustrygroupsmaycompelustoinitiateproductrecallsormayresultinnegativepublicperceptionsaboutthesafetyofourproducts,evenifwedisagreewiththedefectdeterminationorhavedatathatcontradictsit.Inthefuture,wemayvoluntarilyorinvoluntarilyinitiaterecallsifanyofourproductsaredeterminedbyusoraregula

279、tortocontainasafetydefectorbenoncompliantwithapplicablelawsandregulations,suchasU.S.FederalMotorVehicleSafetyStandards.Suchrecalls,whethervoluntaryorinvoluntaryorcausedbysystemsorcomponentsengineeredormanufacturedbyusoroursuppliers,couldresultinsignificantexpense,supplychaincomplicationsandservicebu

280、rdens,andmayharmourbrand,business,prospects,financialconditionandoperatingresults.Ourcurrentandfuturewarrantyreservesmaybeinsufficienttocoverfuturewarrantyclaims.WeprovideamanufacturerswarrantyonallnewandusedTeslavehiclesweselldirectlytocustomers.Wealsoprovidecertainwarrantieswithrespecttotheenergyg

281、enerationandstoragesystemswesell,includingontheirinstallationandmaintenance.Forcomponentsnotmanufacturedbyus,wegenerallypassthroughtoourcustomerstheapplicablemanufacturerswarranties,butmayretainsomewarrantyresponsibilitiesforsomeorallofthelifeofsuchcomponents.Aspartofourenergygenerationandstoragesys

282、temcontracts,wemayprovidethecustomerwithperformanceguaranteesthatguaranteethattheunderlyingsystemwillmeetorexceedtheminimumenergygenerationorotherenergyperformancerequirementsspecifiedinthecontract.Undertheseperformanceguarantees,wegenerallybeartheriskofelectricityproductionorotherperformanceshortfa

283、lls,includinginsomecasesshortfallscausedbyfailuresincomponentsfromthirdpartymanufacturers.Theserisksareexacerbatedintheeventsuchmanufacturersceaseoperationsorfailtohonortheirwarranties.22TableofContentsIfourwarrantyreservesareinadequatetocoverfuturewarrantyclaimsonourproducts,ourfinancialconditionan

284、doperatingresultsmaybeharmed.Warrantyreservesincludeourmanagementsbestestimatesoftheprojectedcoststorepairortoreplaceitemsunderwarranty,whicharebasedonactualclaimsincurredtodateandanestimateofthenature,frequencyandcostsoffutureclaims.Suchestimatesareinherentlyuncertainandchangestoourhistoricalorproj

285、ectedexperience,especiallywithrespecttoproductsthatwehaveintroducedrelativelyrecentlyand/orthatweexpecttoproduceatsignificantlygreatervolumesthanourpastproducts,maycausematerialchangestoourwarrantyreservesinthefuture.Ourinsurancecoveragestrategymaynotbeadequatetoprotectusfromallbusinessrisks.Wemaybe

286、subject,intheordinarycourseofbusiness,tolossesresultingfromproductsliability,accidents,actsofGodandotherclaimsagainstus,forwhichwemayhavenoinsurancecoverage.Asageneralmatter,wedonotmaintainasmuchinsurancecoverageasmanyothercompaniesdo,andinsomecases,wedonotmaintainanyatall.Additionally,thepoliciesth

287、atwedohavemayincludesignificantdeductiblesorself-insuredretentions,policylimitationsandexclusions,andwecannotbecertainthatourinsurancecoveragewillbesufficienttocoverallfuturelossesorclaimsagainstus.Alossthatisuninsuredorwhichexceedspolicylimitsmayrequireustopaysubstantialamounts,whichmayharmourfinan

288、cialconditionandoperatingresults.Ourdebtagreementscontaincovenantrestrictionsthatmaylimitourabilitytooperateourbusiness.Thetermsofcertainofourdebtfacilitiescontain,andanyofourotherfuturedebtagreementsmaycontain,covenantrestrictionsthatmaylimitourabilitytooperateourbusiness,includingrestrictionsonour

289、and/oroursubsidiariesabilityto,amongotherthings,incuradditionaldebtorcreateliens.Inaddition,undercertaincircumstanceswearerequiredtomaintainacertainamountofliquidity.Asaresultofthesecovenants,ourabilitytorespondtochangesinbusinessandeconomicconditionsandengageinbeneficialtransactions,includingtoobta

290、inadditionalfinancingasneeded,mayberestricted.Furthermore,ourfailuretocomplywithourdebtcovenantscouldresultinadefaultunderourdebtagreements,whichcouldpermittheholderstoaccelerateourobligationtorepaythedebt.Ifanyofourdebtisaccelerated,wemaynothavesufficientfundsavailabletorepayit.Additionalfundsmayno

291、tbeavailabletouswhenweneedorwantthem.Ourbusinessandourfutureplansforexpansionarecapital-intensive,andthespecifictimingofcashinflowsandoutflowsmayfluctuatesubstantiallyfromperiodtoperiod.Wemayneedorwanttoraiseadditionalfundsthroughtheissuanceofequity,equity-relatedordebtsecuritiesorthroughobtainingcr

292、editfromfinancialinstitutionstofund,togetherwithourprincipalsourcesofliquidity,thecostsofdevelopingandmanufacturingourcurrentorfutureproducts,topayanysignificantunplannedoracceleratedexpensesorfornewsignificantstrategicinvestments,ortorefinanceoursignificantconsolidatedindebtedness,evenifnotrequired

293、todosobythetermsofsuchindebtedness.Wecannotbecertainthatadditionalfundswillbeavailabletousonfavorabletermswhenrequired,oratall.Ifwecannotraiseadditionalfundswhenweneedthem,ourfinancialcondition,resultsofoperations,businessandprospectscouldbemateriallyandadverselyaffected.Wemaybenegativelyimpactedbya

294、nyearlyobsolescenceofourmanufacturingequipment.Wedepreciatethecostofourmanufacturingequipmentovertheirexpectedusefullives.However,productcyclesormanufacturingtechnologymaychangeperiodically,andwemaydecidetoupdateourproductsormanufacturingprocessesmorequicklythanexpected.Moreover,improvementsinengine

295、eringandmanufacturingexpertiseandefficiencymayresultinourabilitytomanufactureourproductsusinglessofourcurrentlyinstalledequipment.Alternatively,aswerampandmaturetheproductionofourproductstohigherlevels,wemaydiscontinuetheuseofalreadyinstalledequipmentinfavorofdifferentoradditionalequipment.Theuseful

296、lifeofanyequipmentthatwouldberetiredearlyasaresultwouldbeshortened,causingthedepreciationonsuchequipmenttobeaccelerated,andourresultsofoperationsmaybeharmed.Thereisnoguaranteethatwewillhavesufficientcashflowfromourbusinesstopayourindebtednessorthatwewillnotincuradditionalindebtedness.AsofDecember31,

297、2023,weandoursubsidiarieshadoutstanding$4.68billioninaggregateprincipalamountofindebtedness(seeNote11,Debt,totheconsolidatedfinancialstatementsincludedelsewhereinthisAnnualReportonForm10-K).Ourconsolidatedindebtednessmayincreaseourvulnerabilitytoanygenerallyadverseeconomicandindustryconditions.Weand

298、oursubsidiariesmay,subjecttothelimitationsinthetermsofourexistingandfutureindebtedness,incuradditionaldebt,secureexistingorfuturedebtorrecapitalizeourdebt.23TableofContentsOurabilitytomakescheduledpaymentsoftheprincipalandinterestonourindebtednesswhendue,tomakepaymentsuponconversionorrepurchasedeman

299、dswithrespecttoourconvertibleseniornotesortorefinanceourindebtednessaswemayneedordesire,dependsonourfutureperformance,whichissubjecttoeconomic,financial,competitiveandotherfactorsbeyondourcontrol.Ourbusinessmaynotcontinuetogeneratecashflowfromoperationsinthefuturesufficienttosatisfyourobligationsund

300、erourexistingindebtednessandanyfutureindebtednesswemayincur,andtomakenecessarycapitalexpenditures.Ifweareunabletogeneratesuchcashflow,wemayberequiredtoadoptoneormorealternatives,suchasreducingordelayinginvestmentsorcapitalexpenditures,sellingassets,refinancingorobtainingadditionalequitycapitalonterm

301、sthatmaybeonerousorhighlydilutive.Ourabilitytorefinanceexistingorfutureindebtednesswilldependonthecapitalmarketsandourfinancialconditionatsuchtime.Inaddition,ourabilitytomakepaymentsmaybelimitedbylaw,byregulatoryauthorityorbyagreementsgoverningourfutureindebtedness.Wemaynotbeabletoengageintheseactiv

302、itiesondesirabletermsoratall,whichmayresultinadefaultonourexistingorfutureindebtednessandharmourfinancialconditionandoperatingresults.Weareexposedtofluctuationsincurrencyexchangerates.Wetransactbusinessgloballyinmultiplecurrenciesandhaveforeigncurrencyrisksrelatedtoourrevenue,costsofrevenue,operatin

303、gexpensesandlocalizedsubsidiarydebtdenominatedincurrenciesotherthantheU.S.dollar.Totheextentwehavesignificantrevenuesdenominatedinsuchforeigncurrencies,anystrengtheningoftheU.S.dollarwouldtendtoreduceourrevenuesasmeasuredinU.S.dollars,aswehavehistoricallyexperienced,andarecurrentlyexperiencing.Inadd

304、ition,aportionofourcostsandexpenseshavebeen,andweanticipatewillcontinuetobe,denominatedinforeigncurrencies.IfwedonothavefullyoffsettingrevenuesinthesecurrenciesandifthevalueoftheU.S.dollardepreciatessignificantlyagainstthesecurrencies,ourcostsasmeasuredinU.S.dollarsasapercentofourrevenueswillcorresp

305、ondinglyincreaseandourmarginswillsuffer.Asaresult,ouroperatingresultsmaybeharmed.Wemaynotbeabletoadequatelyprotectordefendourselvesagainstintellectualpropertyinfringementclaims,whichmaybetime-consumingandexpensive,oraffectthefreedomtooperateourbusiness.Ourcompetitorsorotherthirdpartiesmayholdorobtai

306、npatents,copyrights,trademarksorotherproprietaryrightsthatcouldprevent,limitorinterferewithourabilitytomake,use,develop,sellormarketourproductsandservices,whichcouldmakeitmoredifficultforustooperateourbusiness.Fromtimetotime,theholdersofsuchintellectualpropertyrightsmayasserttheirrightsandurgeustota

307、kelicensesand/ormaybringsuitsalleginginfringementormisappropriationofsuchrights,whichcouldresultinsubstantialcosts,negativepublicityandmanagementattention,regardlessofmerit.Inaddition,theeffectiveprotectionforourbrands,technologies,andproprietaryinformationmaybelimitedorunavailableincertaincountries

308、,makingitdifficulttoprotectourintellectualpropertyfrommisappropriationorinfringement.Althoughwemakereasonableeffortstomaintaintheconfidentialityofourproprietaryinformation,wecannotguaranteethattheseactionswilldeterorpreventmisappropriationofourintellectualproperty.Thetheftorunauthorizeduseorpublicat

309、ionofourtradesecretsandconfidentialinformationcouldaffectourcompetitiveposition.Whileweendeavortoobtainandprotecttheintellectualpropertyrightsthatweexpectwillallowustoretainoradvanceourstrategicinitiativesinthesecircumstances,therecanbenoassurancethatwewillbeabletoadequatelyidentifyandprotecttheport

310、ionsofintellectualpropertythatarestrategictoourbusiness,ormitigatetheriskofpotentialsuitsorotherlegaldemandsbythirdparties.Accordingly,wemayconsidertheenteringintolicensingagreementswithrespecttosuchrights,althoughnoassurancecanbegiventhatsuchlicensescanbeobtainedonacceptabletermsorthatlitigationwil

311、lnotoccur,andsuchlicensesandassociatedlitigationcouldsignificantlyincreaseouroperatingexpenses.Further,ifwearedeterminedtohaveorbelievethereisahighlikelihoodthatwehaveinfringeduponathirdpartysintellectualpropertyrights,wemayberequiredtoceasemaking,sellingorincorporatingcertaincomponentsorintellectua

312、lpropertyintothegoodsandservicesweoffer,topaysubstantialdamagesand/orlicenseroyalties,toredesignourproductsandservicesand/ortoestablishandmaintainalternativebrandingforourproductsandservices.Intheeventthatwearerequiredtotakeoneormoresuchactions,ourbrand,business,financialconditionandoperatingresults

313、maybeharmed.IncreasedscrutinyandchangingexpectationsfromstakeholderswithrespecttotheCompanysESGpracticesmayresultinadditionalcostsorrisks.Companiesacrossmanyindustriesarefacingincreasingscrutinyrelatedtotheirenvironmental,socialandgovernance(ESG)practices.Investoradvocacygroups,certaininstitutionali

314、nvestors,investmentfundsandotherinfluentialinvestorsarealsoincreasinglyfocusedonESGpracticesandinrecentyearshaveplacedincreasingimportanceonthenon-financialimpactsoftheirinvestments.Whileourmissionistoacceleratetheworldstransitiontosustainableenergy,ifourESGpracticesdonotmeetinvestororotherindustrys

315、takeholderexpectations,whichcontinuetoevolve,wemayincuradditionalcostsandourbrand,abilitytoattractandretainqualifiedemployeesandbusinessmaybeharmed.24TableofContentsOuroperationscouldbeadverselyaffectedbyeventsoutsideofourcontrol,suchasnaturaldisasters,warsorhealthepidemics.Wemaybeimpactedbynaturald

316、isasters,wars,healthepidemics,weatherconditions,thelong-termeffectsofclimatechange,poweroutagesorothereventsoutsideofourcontrol.Forexample,ourFremontFactoryandGigafactoryNevadaarelocatedinseismicallyactiveregionsinNorthernCaliforniaandNevada,andourGigafactoryShanghaiislocatedinaflood-pronearea.Moreo

317、ver,theareainwhichourGigafactoryTexasislocatedexperiencedseverewinterstormsinthefirstquarterof2021thathadawidespreadimpactonutilitiesandtransportation.Ifmajordisasterssuchasearthquakes,floodsorotherclimate-relatedeventsoccur,orourinformationsystemorcommunicationbreaksdownoroperatesimproperly,ourhead

318、quartersandproductionfacilitiesmaybeseriouslydamaged,orwemayhavetostopordelayproductionandshipmentofourproducts.Inaddition,theglobalCOVID-19pandemichasimpactedeconomicmarkets,manufacturingoperations,supplychains,employmentandconsumerbehaviorinnearlyeverygeographicregionandindustryacrosstheworld,andw

319、ehavebeen,andmayinthefuturebe,adverselyaffectedasaresult.Also,thebroaderconsequencesinthecurrentconflictbetweenRussiaandUkraine,whichmayincludefurtherembargoes,regionalinstabilityandgeopoliticalshifts;airspacebansrelatingtocertainroutes,orstrategicdecisionstoaltercertainroutes;andpotentialretaliator

320、yactionbytheRussiangovernmentagainstcompanies,andtheextentoftheconflictonourbusinessandoperatingresultscannotbepredicted.Wemayincurexpensesordelaysrelatingtosucheventsoutsideofourcontrol,whichcouldhaveamaterialadverseimpactonourbusiness,operatingresultsandfinancialcondition.RisksRelatedtoGovernmentL

321、awsandRegulationsDemandforourproductsandservicesmaybeimpactedbythestatusofgovernmentandeconomicincentivessupportingthedevelopmentandadoptionofsuchproducts.GovernmentandeconomicincentivesthatsupportthedevelopmentandadoptionofelectricvehiclesintheU.S.andabroad,includingcertaintaxexemptions,taxcreditsa

322、ndrebates,maybereduced,eliminated,amendedorexhaustedfromtimetotime.Forexample,previouslyavailableincentivesfavoringelectricvehiclesincertainareashaveexpiredorwerecancelledortemporarilyunavailable,andinsomecaseswerenoteventuallyreplacedorreinstituted,whichmayhavenegativelyimpactedsales.Inaddition,cer

323、taingovernmentandeconomicincentivesmayalsobeimplementedoramendedtoprovidebenefitstomanufacturerswhoassembledomestically,havelocalsuppliersorhaveothercharacteristicsthatmaynotapplytoTesla.Suchdevelopmentscouldnegativelyimpactdemandforourvehicles,andweandourcustomersmayhavetoadjusttothem,includingthro

324、ughpricingmodifications.Inaddition,certaingovernmentalrebates,taxcreditsandotherfinancialincentivesthatarecurrentlyavailablewithrespecttooursolarandenergystorageproductbusinessesallowustolowerourcostsandencouragecustomerstobuyourproductsandinvestorstoinvestinoursolarfinancingfunds.However,theseincen

325、tivesmayexpirewhentheallocatedfundingisexhausted,reducedorterminatedasrenewableenergyadoptionratesincrease,sometimeswithoutwarning.Likewise,injurisdictionswherenetmeteringiscurrentlyavailable,ourcustomersreceivebillcreditsfromutilitiesforenergythattheirsolarenergysystemsgenerateandexporttothegridine

326、xcessoftheelectricloadtheyuse.Thebenefitavailableundernetmeteringhasbeenorhasbeenproposedtobereduced,alteredoreliminatedinseveraljurisdictions,andhasalsobeencontestedandmaycontinuetobecontestedbeforetheFederalEnergyRegulatoryCommission.Anyreductionsorterminationsofsuchincentivesmayharmourbusiness,pr

327、ospects,financialconditionandoperatingresultsbymakingourproductslesscompetitiveforcustomers,increasingourcostofcapitalandadverselyimpactingourabilitytoattractinvestmentpartnersandtoformnewfinancingfundsforoursolarandenergystorageassets.Finally,weandourfundinvestorsclaimtheseU.S.federaltaxcreditsandc

328、ertainstateincentivesinamountsbasedonindependentlyappraisedfairmarketvaluesofoursolarandenergystoragesystems.Somegovernmentalauthoritieshaveauditedsuchvaluesandincertaincaseshavedeterminedthatthesevaluesshouldbelower,andtheymaydosoagaininthefuture.Suchdeterminationsmayresultinadversetaxconsequencesa

329、nd/orourobligationtomakeindemnificationorotherpaymentstoourfundsorfundinvestors.Wearesubjecttoevolvinglawsandregulationsthatcouldimposesubstantialcosts,legalprohibitionsorunfavorablechangesuponouroperationsorproducts.Aswegrowourmanufacturingoperationsinadditionalregions,weareorwillbesubjecttocomplex

330、environmental,manufacturing,healthandsafetylawsandregulationsatnumerousjurisdictionallevelsintheU.S.,China,Germanyandotherlocationsabroad,includinglawsrelatingtotheuse,handling,storage,recycling,disposaland/orhumanexposuretohazardousmaterials,productmaterialinputsandpost-consumerproductsandwithrespe

331、cttoconstructing,expandingandmaintainingourfacilities.New,orchangesin,environmentalandclimatechangelaws,regulationsorrulescouldalsoleadtoincreasedcostsofcompliance,includingremediationsofanydiscoveredissues,andchangestoouroperations,whichmaybesignificant,andanyfailurestocomplycouldresultinsignifican

332、texpenses,delaysorfines.Inaddition,aswehave25TableofContentsincreasedouremployeeheadcountandoperations,weareandmaycontinuetobesubjecttoincreasedscrutiny,includinglitigationandgovernmentinvestigations,thatwewillneedtodefendagainst.Ifweareunabletosuccessfullydefendourselvesinsuchlitigationorgovernment

333、investigations,itmayharmourbrand,abilitytoattractandretainqualifiedemployees,businessandfinancialcondition.Wearealsosubjecttolawsandregulationsapplicabletothesupply,manufacture,import,sale,serviceandperformanceofourproductsbothdomesticallyandabroad.Forexample,incountriesoutsideoftheU.S.,wearerequiredtomeetstandardsrelatingtovehiclesafety,fueleconomyandemissionsthatareoftenmateriallydifferentfromeq