PREPARED BY SERGIO PARDO FOR URENCO USA RISK MANAGEMENT COMMETTEE

Tesla Motors, Inc. designs, develops, manufactures, and sells electric vehicles and advanced electric vehicle powertrain components. It offers Tesla Roadster, an electric sports car. The company markets and sells its vehicles directly to consumers through the phone and Internet, as well as through its network of Tesla stores. It operates 18 Tesla stores located in Boulder, Chicago, Los Angeles, Menlo Park, Miami, New York, Newport Beach, San Jose, Seattle, Washington, D.C., Copenhagen, London, Milan, Monaco, Munich, Paris, Tokyo, and Zurich. The company was founded in 2003 and is headquartered in Palo Alto, California.

Our limited operating history makes evaluating our business and future prospects difficult, and may increase the risk of your investment We anticipate that we will experience an increase in losses and may experience a decrease in automotive sales revenues prior to the launch of the Model S Our production model for the non-powertrain portion of the Model S is unproven, still evolving and is very different from the non-powertrain portion of the production model for the Tesla Roadster We may experience significant delays in the design, manufacture, launch and financing of the Model S, including in the build out of our Model S manufacturing facility, which could harm our business and prospects

Our future growth is dependent upon consumers willingness to adopt electric vehicles We are dependent upon our ability to fully draw down on our loan facility from the United States Department of Energy, which may restrict our ability to conduct our business Any changes to the Federal Trade Commissions electric vehicle range testing procedure or the United States Environmental Protection Agencys energy consumption regulations for electric vehicles could result in a reduction to the advertised range of our vehicles which could negatively impact our sales and harm our business

If our vehicles fail to perform as expected, our ability to develop, market and sell our electric vehicles could be harmed We are dependent on our suppliers, a significant number of which are single or limited source suppliers, and the inability of these suppliers to continue to deliver, or their refusal to deliver, necessary components of our vehicles at prices and volumes acceptable to us would have a material adverse effect on our business, prospects and operating results We may be subject to claims arising from an airplane crash in which three of our employees died

Regulators could review our practice of taking reservation payments and, if the practice is deemed to violate applicable law, we could be required to pay penalties or refund the reservation payments that we have received for vehicles that are not immediately available for delivery, to stop accepting additional reservation payments, to restructure certain aspects of our reservation program, and potentially to suspend or revoke our licenses to manufacture and sell our vehicles

If we are unable to attract and retain key employees and hire qualified management, technical and vehicle engineering personnel, our ability to compete could be harmed We are highly dependent on the services of Elon Musk, our Chief Executive Officer Many members of our management team are new to the company or to the automobile industry, and execution of our business plan and development strategy could be seriously harmed if integration of our management team into our company is not successful

We are subject to various environmental laws and regulations that could impose substantial costs upon us and cause delays in building our manufacturing facilities Our vehicles make use of lithium-ion battery cells, which on rare occasions have been observed to catch fire or vent smoke and flame We may need to defend ourselves against patent or trademark infringement claims, which may be time consuming and would cause us to incur substantial costs Our business will be adversely affected if we are unable to protect our intellectual property rights from unauthorized use or infringement by third parties