Tesla : Update Letter

Q2 2022 Update

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Highlights	03
Financial Summary	04
Operational Summary	06
Vehicle Capacity	07
Core Technology	08
Other Highlights	09
Outlook	10
Photos & Charts	11
Key Metrics	21
Financial Statements	23
Additional Information	29

H I G H L I G H T SS U M M A R Y

Cash

Profitability

Operations

Operating cash flow less capex (free cash flow) of $621M in Q2

In total, $0.8B increase in our cash and cash equivalents in Q2 to $18.3B

$2.5B GAAP operating income; 14.6% operating margin in Q2

$2.3B GAAP net income; $2.6B non-GAAP net income (ex-SBC1) in Q2 27.9% GAAP Automotive gross margin in Q2

More than 1,000 vehicles produced in a single week at Gigafactory Berlin Highest solar deployment in over four years

We continued to make significant progress across the business during the second quarter of 2022. Though we faced certain challenges, including limited production and shutdowns in Shanghai for the majority of the quarter, we achieved an operating margin among the highest in the industry of 14.6%, positive free cash flow of $621M and ended the quarter with the highest vehicle production month in our history.

New factories in Berlin-Brandenburg and Austin continued to ramp in Q2. Gigafactory Berlin-Brandenburg reached an important milestone of over 1,000 cars produced in a single week while achieving positive gross margin during the quarter. From our Austin factory, the first vehicles with Tesla-made 4680 cells and structural battery packs were delivered to our U.S. customers. We are continuing to invest in capacity expansion of our factories to maximize production.

The Energy business made meaningful progress in Q2 as well, achieving higher volumes with stronger unit economics. This resulted in an overall record gross profit. Customer interest in our storage products remains strong and well above our production rate.

With each of the Fremont and Shanghai factories achieving their highest-ever production months and new factory growth, we are focused on a record-breaking second half of 2022.

1. SBC = stock-based compensation.

F I N A N C I A L S U M M A R Y (Unaudited)

($ in millions, except percentages and per share data)	Q2-2021	Q3-2021	Q4-2021	Q1-2022	Q2-2022	YoY
Automotive revenues	10,206	12,057	15,967	16,861	14,602	43%
of which regulatory credits	354	279	314	679	344	-3%
Automotive gross profit	2,899	3,673	4,882	5,539	4,081	41%
Automotive gross margin	28.4%	30.5%	30.6%	32.9%	27.9%	-46 bp
Total revenues	11,958	13,757	17,719	18,756	16,934	42%
Total gross profit	2,884	3,660	4,847	5,460	4,234	47%
Total GAAP gross margin	24.1%	26.6%	27.4%	29.1%	25.0%	89 bp
Operating expenses	1,572	1,656	2,234	1,857	1,770	13%
Income from operations	1,312	2,004	2,613	3,603	2,464	88%
Operating margin	11.0%	14.6%	14.7%	19.2%	14.6%	358 bp
Adjusted EBITDA	2,487	3,203	4,090	5,023	3,791	52%
Adjusted EBITDA margin	20.8%	23.3%	23.1%	26.8%	22.4%	159 bp
Net income attributable to common stockholders (GAAP)	1,142	1,618	2,321	3,318	2,259	98%
Net income attributable to common stockholders (non-GAAP)	1,616	2,093	2,879	3,736	2,620	62%
EPS attributable to common stockholders, diluted (GAAP)(1)	1.02	1.44	2.05	2.86	1.95	91%
EPS attributable to common stockholders, diluted (non-GAAP)(1)	1.45	1.86	2.54	3.22	2.27	57%
Net cash provided by operating activities	2,124	3,147	4,585	3,995	2,351	11%
Capital expenditures	(1,505)	(1,819)	(1,810)	(1,767)	(1,730)	15%
Free cash flow	619	1,328	2,775	2,228	621	0%
Cash and cash equivalents	16,229	16,065	17,576	17,505	18,324	13%

(1)EPS = earnings per share.

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F I N A N C I A L S U M M A R Y

Revenue	Total revenue grew 42% YoY in Q2 to $16.9B. YoY, revenue was impacted by the following items:
	+ growth in vehicle deliveries
	+ increased average selling price (ASP)
	+ growth in other parts of the business

Profitability	Our operating income improved YoY to $2.5B in Q2, resulting in a 14.6% operating margin. YoY, operating income
	was primarily impacted by the following items:

• increased ASP
• growth in vehicle deliveries
• profit growth in other parts of the business
• lower stock-based compensation expense

• higher raw material, commodity, logistics and expedite costs
• higher per unit fixed costs in Shanghai due to shutdowns
• negative FX impact
• Bitcoin impairment

Cash	Quarter-end cash, cash equivalents and short-term marketable securities increased sequentially by $902M to
	$18.9B in Q2, driven mainly by free cash flow of $621M, partially offset by debt repayments of $402M. As of the
	end of Q2, we have converted approximately 75% of our Bitcoin purchases into fiat currency. Conversions in Q2
	added $936M of cash to our balance sheet.

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