What changed in this filing

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Item 1. Business

2026-01-29 compared with 2025-01-30 · 127 added, 175 removed, 168 unchanged (64% of the section changed)

We design, develop, manufacture, sell and lease high-performance fully electric vehicles and energy generation and storage systems, and offer services related to our products.

We generally sell our products directly to customers, and continue to grow our customer-facing infrastructure through a global network of vehicle showrooms and service centers, Mobile Service, body shops, Supercharger stations and Destination Chargers to accelerate the widespread adoption of our products.

We are focused on bringing artificial intelligence (“AI”) into the real world, through products and services like Full Self-Driving (“FSD”) (Supervised) and Robotaxi, as well as working to develop and commercialize AI robots (“Bots”) (including Optimus).

We intend to leverage our current operations, in which we design, develop, manufacture, sell and lease high-performance fully electric vehicles and energy generation and storage systems that increasingly deliver AI-related and enhanced software and services to our customers, to achieve that objective.

We generally sell our products directly to customers, and continue to grow our global retail, service and charging footprint to accelerate the widespread adoption of our products.

We emphasize performance, attractive styling and the safety of our users and workforce in the design and manufacture of our products and are continuing to develop full self-driving technology for improved safety.

We also strive to lower the cost of ownership for our customers through continuous efforts to reduce manufacturing costs and by offering financial and other services tailored to our products.

Our mission is to accelerate the world’s transition to sustainable energy.

We believe that this mission, along with our engineering expertise, vertically integrated business model and focus on user experience differentiate us from other companies.

Our mission is building a world of amazing abundance.

We believe that this mission, along with our engineering expertise, advancements in real-world AI, vertically integrated business model, and focus on user experience differentiate us from other companies.

Segment Information

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The automotive segment includes the design, development, manufacturing, sales and leasing of high-performance fully electric vehicles as well as sales of automotive regulatory credits.

Additionally, the automotive segment also includes services and other, which includes sales of used vehicles, non-warranty maintenance services and collision, part sales, paid Supercharging, insurance services revenue and retail merchandise sales.

The energy generation and storage segment includes the design, manufacture, installation, sales and leasing of solar energy generation and energy storage products and related services and sales of solar energy systems incentives.

Additionally, the automotive segment also includes services and other, which includes sales of used vehicles, non-warranty maintenance services and collision, paid Supercharging sessions, automotive insurance business revenue, part sales and retail merchandise sales.

The energy generation and storage segment includes sales, leasing, and financing of energy generation and storage products, services related to such products and sales of energy generation incentives.

Our Products and Services

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Model S and Model X feature the highest performance characteristics and longest ranges that we offer in a sedan and SUV, respectively.

In November 2023, we entered the consumer pickup truck market with first deliveries of the Cybertruck, a full-size electric pickup truck with a stainless steel exterior that has the utility and strength of a truck while featuring the speed of a sports car.

The Cybertruck is a full-size electric pickup truck with a stainless steel exterior that has the utility and strength of a truck while featuring the speed of a sports car.

In 2022, we also began early production and deliveries of a commercial electric vehicle, the Tesla Semi.

We have planned electric vehicles to address additional vehicle markets, and continue leveraging developments in our proprietary Full Self-Driving (“FSD”) (Supervised) features, including through our purpose-built Robotaxi product - Cybercab, and battery cell and other technologies.

We have planned electric vehicles to address additional vehicle markets, and will continue leveraging developments in our proprietary Full Self-Driving (“FSD”) (Supervised) features, battery cell and other technologies.

For purposes of this filing, use of the term “FSD (Supervised)” includes the equivalent naming convention, “FSD (Capability)” that is used in the European, Middle East and Asia-Pacific regions.

In June 2025, we launched our Robotaxi service, an autonomous ride-hailing platform that harnesses our technology and vehicles.

We expect this service will open access to an expanded customer base as modes of transportation evolve, and, along with products such as FSD (Supervised) subscriptions, unlock the potential to advance a service-driven business model based on AI, software and fleet-based profits.

Our Robotaxi business currently operates with Model Y vehicles but, in time, will include Cybercab, our purpose-built autonomous vehicle.

Energy Generation and Storage

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Powerwall and Megapack are our lithium-ion battery energy storage products.

Powerwall, which we sell directly to customers, as well as through channel partners, is designed to store energy at a home or small commercial facility.

Powerwall, which we sell and lease to customers, as well as through channel partners, is designed to store energy at homes or small commercial facilities.

Megapack is an energy storage solution for commercial, industrial, utility and energy generation customers, multiple of which may be grouped together to form larger installations of gigawatt hours (“GWh”) or greater capacity.

We also continue to develop software capabilities for remotely controlling and dispatching our energy storage systems across a wide range of markets and applications, including through our real-time energy control and optimization platforms.

Solar Energy Offerings

We sell retrofit solar energy systems to customers and channel partners.

We purchase most of the components for our retrofit solar energy systems from multiple sources to ensure competitive pricing and adequate supply.

We also design and manufacture certain components for our solar energy products.

We sell our Solar Roof, which combines premium glass roof tiles with energy generation, to consumers, including through channel customers.

We continue to improve our installation capability and efficiency, including through collaboration with real estate developers and builders on new homes.

As AI infrastructure drives rapid load growth, Megapack helps to, among other things, increase utilization of existing generation and transmission capacity, resulting in a more efficient use of the electric grid.

Energy Generation Offerings

We sell energy generation systems directly to customers and also through channel partners.

We design and manufacture certain components for our energy generation products, including solar panels and Solar Roof, which combines premium glass roof tiles with energy generation.

We also purchase many components for our energy generation systems from various third-party manufacturers to provide for competitive pricing and adequate supply.

Self-Driving Development and Artificial Intelligence

We use AI to develop real-world applications, such as autonomous driving solutions and robots.

We utilize vision-based technologies, systems and software to train our artificial neural networks, which are accelerated by our own in-house, custom designed inference chips.

We are also applying our artificial intelligence learnings from self-driving technology to Bots, such as Optimus, a general purpose, autonomous humanoid robot in development.

Currently, we offer in our customer vehicles certain advanced driver assistance systems.

Although at present, same as in the past, the driver is responsible for remaining fully engaged in the driving operation, these systems provide safety and convenience functionality that may relieve drivers of many tedious and potentially dangerous aspects of road travel much like the system that airplane pilots use, when conditions permit.

As with other vehicle systems, we improve these functions in our customer vehicles through over-the-air software updates.

Every Tesla vehicle delivered today is designed for autonomy, and we believe our capabilities and advancements in AI differentiate us from our competitors.

Vehicle Control and Infotainment Software

The performance and safety systems of our vehicles and their battery packs utilize sophisticated control software.

Control systems in our vehicles optimize performance, customize vehicle behavior, manage charging and control all infotainment functions.

We develop almost all of this software, including most of the user interfaces, internally and update our vehicles’ software regularly through over-the-air updates, and work to actively improve our software security with every release.

Battery and Powertrain

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In order to enable a greater supply of cells for our products with higher energy density at lower costs, we have developed a new proprietary lithium-ion battery cell and improved manufacturing processes.

Vehicle Control and Infotainment Software

The performance and safety systems of our vehicles and their battery packs utilize sophisticated control software.

Control systems in our vehicles optimize performance, customize vehicle behavior, manage charging and control all infotainment functions.

We develop almost all of this software, including most of the user interfaces, internally and update our vehicles’ software regularly through over-the-air updates.

Self-Driving Development and Artificial Intelligence

We have expertise in developing technologies, systems and software to enable self-driving vehicles using primarily vision-based technologies.

Our FSD Computer runs our neural networks in our vehicles, and we are also developing additional computer hardware to better enable the massive amounts of field data captured by our vehicles to continually train and improve these neural networks for real-world performance.

Currently, we offer in our vehicles certain advanced driver assist systems under our Autopilot and FSD (Supervised) options.

Although at present, same as in the past, the driver is responsible for remaining fully engaged in the driving operation, our systems provide safety and convenience functionality that can relieve drivers of many tedious and potentially dangerous aspects of road travel much like the system that airplane pilots use, when conditions permit.

As with other vehicle systems, we improve these functions in our vehicles over time through over-the-air software updates.

In 2025, we intend to begin launching our Robotaxi business, a ride-hailing network that will eventually operate fully autonomous vehicles.

We expect this business will open access to a new customer base even as modes of transportation evolve.

We believe our capabilities and advancements in AI, including the deployment of Cortex, our training cluster at Gigafactory Texas, differentiates us from our competitors.

We are also applying our artificial intelligence learnings from self-driving technology to the field of robotics, such as through Optimus, a robotic humanoid in development, which is controlled by the same AI system.

Energy Generation and Storage

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We have also developed software to remotely control and dispatch our energy storage systems.

Solar Energy Systems

We have engineered Solar Roof over numerous iterations to combine aesthetic appeal and durability with power generation.

The efficiency of our solar energy products is aided by our own solar inverter, which incorporates our power electronics technologies.

Further leveraging our capabilities in AI, every Tesla energy storage product is capable of being enhanced through firmware updates and optimized by our software platforms, particularly Powerhub (for distributed energy resources, including Powerwall-enabled virtual power plants) and Autobidder (for Megapack batteries).

Energy Generation Systems

We began manufacturing a new residential retrofit solar panel in 2025, and began initial customer deliveries in January 2026.

We continue to manufacture Solar Roof, which has been engineered over numerous iterations to combine aesthetic appeal and durability with power generation.

The efficiency of our energy generation products is aided by our own solar inverter, which incorporates our power electronics technologies.

We designed both products to integrate with Powerwall.

Infrastructure

To support our businesses in clean energy and transport and autonomous robots, we are investing in and developing the necessary supporting infrastructure.

This includes additional compute hardware to better enable the massive amounts of field data captured by our vehicles to continually train and improve these artificial neural networks for real-world performance.

In 2025, we further expanded Cortex, our training cluster at Gigafactory Texas, and announced a new collaboration with Samsung to manufacture advanced semiconductors for AI inference and training in the U.S.

We are currently building Cortex 2 at Gigafactory Texas to further increase our AI training compute capacity.

In 2026, we will be ramping six new production lines across vehicle, Bots, energy storage and battery manufacturing, while further leveraging our existing factory, charging and service center footprints to support future growth.

We are also focused on exploring additional opportunities independently and with strategic partners to develop bespoke and scalable solutions, including through vertical integration, to optimize for cost, functionality, efficiency and safety.

Design and Engineering

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We have also achieved complex engineering feats in stamping, casting and thermal systems, and developed a method to integrate batteries directly with vehicle body structures without separate battery packs to optimize manufacturability, weight, range and cost characteristics.

We are also expanding our manufacturing operations globally while taking action to localize our vehicle designs and production for particular markets, including country-specific market demands and factory optimizations for local workforces.

We are focused on maximum capacity utilization at our factories, while taking action to localize our vehicle designs and production for particular markets, including country-specific market demands and factory optimizations for local workforces.

As we increase our capabilities, particularly in the areas of automation, die-making and line-building, we are also making strides in the simulations modeling these capabilities prior to construction.

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Our expertise in electrical, mechanical, civil and software engineering allows us to design, engineer, manufacture and install energy generating and storage products and components, including at the residential through utility scale.

For example, the modular design of our Megapack utility-scale battery line is intended to significantly reduce the amount of assembly required in the field.

We also customize solutions including our energy storage products, solar energy systems and/or Solar Roof for customers to meet their specific needs.

For example, the integrated design of our Megapack products are intended to significantly reduce the amount of assembly required in the field.

We also customize solutions including our energy storage products, energy generation systems and/or Solar Roof for customers to meet their specific needs.

Sales and Marketing

Historically, we have been able to achieve sales without traditional advertising and at relatively low marketing costs.

Historically, we have been able to achieve sales without relying on traditional advertising and at relatively low marketing costs.

We continue to monitor our public narrative and brand, and tailor our marketing efforts accordingly, including through investments in customer education and advertising as necessary.

Our vehicle sales channels currently include our website and an international network of company-owned stores.

Our vehicle sales channels currently include our website and a global network of company-owned stores.

In some jurisdictions, we also have galleries to educate and inform customers about our products, but such locations do not transact in the sale of vehicles.

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Use of the Supercharger network either requires payment of a fee or is free under certain sales programs.

In November 2021, we began to offer Supercharger access to non-Tesla vehicles in certain locations in support of our mission to accelerate the world’s transition to sustainable energy, and in November 2022, we opened up our previously proprietary charging connector as the North American Charging Standard (NACS).

This enables electric vehicles and charging stations to interoperate — which makes charging easier and more efficient for everyone and advances our mission to accelerate the world’s transition to sustainable energy.

Following this, all major automotive companies announced their adoption of NACS in certain markets, with their access to the Supercharger network beginning in phases in 2024 and their production of NACS vehicles beginning no later than 2025.

We also engaged SAE International to govern NACS as an industry standard, now named J3400.

We continue to monitor and increase our network of Tesla Superchargers in anticipation of future demand.

We offer Supercharger access to non-Tesla vehicles in support of our mission, with all major automakers announcing their adoption of the North American Charging Standard (NACS) in certain markets.

We continue to monitor and increase our network of Tesla Superchargers in anticipation of future demand, including with respect to our Robotaxi services.

We also work with a wide variety of hospitality, retail and public destinations, as well as businesses with commuting employees, to offer additional charging options for our customers, as well as single-family homeowners and multi-family residential entities, to deploy home charging solutions.

To accelerate dependable charging ubiquity, Superchargers are also available through our Supercharger for Business program, where third parties can purchase and install Superchargers and set the charging price, while Tesla remains responsible for software updates, network operations, maintenance and driver support.

In 2025, we opened the first Tesla Diner in California, which offers Supercharging as well as Tesla themed food and merchandise.

In-App Upgrades

As our vehicles are capable of being updated remotely over-the-air, our customers may purchase additional paid options and features through the Tesla app or through the in-vehicle user interface.

We expect that this functionality will also allow us to offer certain options and features on a subscription basis in the future.

As our vehicles are capable of being updated remotely over-the-air, our customers may purchase additional paid options and features through the Tesla app or through the in-vehicle user interface, which also allows us to offer certain options and features on a subscription basis.

Energy Generation and Storage

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We provide a manufacturer’s limited warranty on all new and used Tesla vehicles we sell directly to consumers, which may include limited warranties on certain components, specific types of damage or battery capacity retention.

We also currently offer optional extended service plans that provide coverage beyond the new vehicle limited warranties for certain models in specified regions.

We also currently offer optional extended service plans that provide coverage after the new vehicle limited warranties end for certain models in specified regions.

Energy Generation and Storage

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If we install a system, we also provide certain limited warranties on our installation workmanship.

For retrofit solar energy systems, we provide separate limited warranties for workmanship and against roof leaks, and for Solar Roof, we also provide limited warranties for defects and weatherization.

For retrofit energy generation systems, we provide separate limited warranties for workmanship and against roof leaks, and for Solar Roof, we also provide limited warranties for defects and weatherization.

For components not manufactured by us, we generally pass-through the applicable manufacturers’ warranties.

As part of our historical solar energy system and energy storage contracts, we may provide the customer with performance guarantees that commit that the underlying system will meet or exceed the minimum energy generation or performance requirements specified in the contract.

As part of our energy generation system and energy storage contracts, we may provide the customer with either certain availability or performance guarantees that commit that the underlying system will meet or exceed certain availability or minimum energy generation or performance requirements specified in the contract.

Financial Services

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Energy Generation and Storage

We offer certain financing options to our residential customers, which enable the customer to purchase and own energy systems comprised of solar, Solar Roof and/or Powerwall batteries.

Our solar PPAs, offered primarily to commercial customers, charge a fee per kilowatt-hour based on the amount of electricity produced by our solar energy systems.

We offer certain financing options to our residential customers, including a new lease product that was launched in the fourth quarter of 2025, which enable choices to our customers to purchase and own or lease energy systems comprised of solar and/or Powerwall batteries.

Our solar PPAs, offered primarily to commercial customers, charge a fee per kilowatt-hour based on the amount of electricity produced by our energy generation systems.

Manufacturing

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At these facilities, we manufacture and assemble, among other things, vehicles, certain vehicle parts and components, such as our battery packs and battery cells, energy storage components and systems and solar products and components.

Internationally, we also have manufacturing facilities in China and Germany, which allows us to increase the affordability of our vehicles for customers in local markets by reducing transportation and manufacturing costs and eliminating the impact of unfavorable tariffs.

In March 2023, we announced the location of our next Gigafactory in Monterrey, Mexico.

Generally, we continue to expand production capacity at our existing facilities.

We also intend to further increase cost-competitiveness in our significant markets by strategically adding local manufacturing.

Our products use thousands of parts that are sourced from hundreds of suppliers across the world.

We have developed close relationships with vendors of key parts such as battery cells, electronics and complex vehicle assemblies.

Certain components purchased from these suppliers are shared or are similar across many product lines, allowing us to take advantage of pricing efficiencies from economies of scale.

As is the case for some automotive companies, some of our procured components and systems are sourced from single suppliers.

Generally, we continue to expand production capacity at our existing facilities, and strive to increase cost-competitiveness in our significant markets by strategically adding local manufacturing, including through partnerships with suppliers.

Our products use parts sourced from thousands of suppliers globally.

We have developed close relationships with key partners that supply battery cells, electronics and complex vehicle assemblies.

Certain components purchased from these suppliers are shared or are similar across many product lines, allowing us to take advantage of pricing efficiencies through economies of scale.

As is the case for some OEM companies, some of our procured components and systems are sourced from single suppliers.

Where multiple sources are available for certain key components, we work to qualify multiple suppliers for them where it is sensible to do so in order to minimize potential production risks due to disruptions in their supply.

We also mitigate risk by maintaining safety stock for key parts and assemblies and die banks for components with lengthy procurement lead times.

Our products use various raw materials including aluminum, steel, cobalt, lithium, nickel and copper.

Our products use various raw materials including aluminum, steel, lithium, nickel and copper.

Pricing for these materials is governed by market conditions and may fluctuate due to various factors outside of our control, such as supply and demand and market speculation.

We strive to execute long-term supply contracts for such materials at competitive pricing when feasible, and we currently believe that we have adequate access to raw materials supplies to meet the needs of our operations.

We strive to execute long-term supply contracts for such materials at competitive pricing when feasible, and actively manage supply of raw materials to meet the needs of our operations.

We continue to localize and de-risk our supply chains across regions, including through vertical integration where possible, such as our in-house lithium refinery in Texas, which began operations in January 2026.

Governmental Programs, Incentives and Regulations

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Programs and Incentives

Inflation Reduction Act

On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was enacted into law and is effective for taxable years beginning after December 31, 2022, and remains subject to future guidance releases.

The IRA includes multiple incentives to promote clean energy, electric vehicles, battery and energy storage manufacture or purchase, including through providing tax credits to consumers.

For example, under current legislation, qualifying Tesla customers may receive up to $7,500 in federal tax credits for the purchase of qualified electric vehicles in the U.S.

through 2032.

Inflation Reduction Act Modified by the OBBBA

On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was enacted into law and is effective for taxable years beginning after December 31, 2022.

The IRA included multiple incentives to promote clean energy, electric vehicles, battery and energy storage manufacture or purchase, including through providing tax credits to consumers.

These IRA incentives were subsequently substantially curtailed by the One Big Beautiful Bill Act (the “OBBBA”) enacted on July 4, 2025, which repeals individual consumer tax credits for electric vehicles and residential energy property, and imposes more stringent eligibility requirements, accelerated phase-outs, and termination of certain provisions, although some of the IRA incentives remain available under the revised requirements.

Automotive Regulatory Credits

We earn tradable credits in the operation of our business under various regulations related to zero-emission vehicles (“ZEVs”), greenhouse gas, fuel economy and clean fuel.

We sell these credits to other regulated entities who can use the credits to comply with emission standards and other regulatory requirements.

We earn tradable credits in the operation of our automotive business under various regulations.

We sell these credits globally to other regulated entities who can use the credits to comply with emission standards and other regulatory requirements.

Sales of these credits are recognized within automotive regulatory credits revenue in our consolidated statements of operations included elsewhere in this Annual Report on Form 10-K.

Governmental and regulatory actions, such as the OBBBA, have restricted certain regulatory credit programs tied to our products.

Energy Storage System Incentives and Policies

While the regulatory regime for energy storage projects is still under development, there are various policies, incentives and financial mechanisms at the federal, state and local levels that support the adoption of energy storage.

For example, energy storage systems that are charged using solar energy may be eligible for the solar energy-related U.S.

For example, energy storage systems may be eligible for the U.S.

federal tax credits described below.

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In such transactions, they are included as a component of energy generation and storage revenues in our consolidated statements of operations included elsewhere in this Annual Report on Form 10-K.

Pursuant to the IRA, under Sections 48, 48E and 25D of the Internal Revenue Code (”IRC”), standalone energy storage technology is eligible for a tax credit between 6% and 50% of qualified expenditures, regardless of the source of energy, which may be claimed by our customers for storage systems they purchase or by us for arrangements where we own the systems.

These tax credits are primarily for the benefit of our customers and are currently scheduled to phase-out starting in 2032 or later.

Solar Energy System Incentives and Policies

Pursuant to the IRA, as modified by the OBBBA, under Sections 48, 48E and 25D of the Internal Revenue Code (”IRC”), standalone energy storage technology is eligible for a tax credit between 6% and 50% of qualified expenditures, regardless of the source of energy, which may be claimed by our customers for storage systems they purchase or by us for arrangements where we own the systems.

Residential credits expired on December 31, 2025, and commercial credits are currently scheduled to phase out in 2034 or later.

Energy Generation System Incentives and Policies

federal, state and local governments have established various policies, incentives and financial mechanisms to reduce the cost of solar energy and to accelerate the adoption of solar energy.

These incentives include tax credits, cash grants, tax abatements and rebates.

In particular, pursuant to the IRA, Sections 48, 48E and 25D of the IRC provides a tax credit between 6% and 70% of qualified commercial or residential expenditures for solar energy systems, which may be claimed by our customers for systems they purchase, or by us for arrangements where we own the systems for properties that meet statutory requirements.

These tax credits are primarily for the direct benefit of our customers and are currently scheduled to phase-out starting in 2032 or later.

In particular, pursuant to the IRA, as modified by the OBBBA, Sections 48, 48E and 25D of the IRC provides a tax credit between 6% and 70% of qualified commercial or residential expenditures for solar energy generation systems, which may be claimed by our customers for systems they purchase, or by us for arrangements where we own the systems for properties that meet statutory requirements.

Residential credits expired on December 31, 2025.

Commercial credits are currently scheduled to expire for solar facilities placed in service after December 31, 2027, subject to the exceptions of projects beginning construction on or before July 4, 2026.

Vehicle Safety and Testing

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As a manufacturer, we must self-certify that our vehicles meet all applicable FMVSS and the NHTSA bumper standard, or otherwise are exempt, before the vehicles may be imported or sold in the U.S.

We are also required to comply with other federal laws administered by NHTSA, including the Corporate Average Fuel Economy standards, Theft Prevention Act requirements, labeling requirements and other information provided to customers in writing, Early Warning Reporting requirements regarding warranty claims, field reports, death and injury reports and foreign recalls, a Standing General Order requiring reports regarding certain crashes involving vehicles equipped with advanced driver assistance systems, and additional requirements for cooperating with compliance and safety investigations and recall reporting.

Automobile Information and Disclosure Act also requires manufacturers of motor vehicles to disclose certain information regarding the manufacturer’s suggested retail price, optional equipment and pricing.

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Some of those regulations impact or prevent the rollout of new vehicle features.

Self-Driving Vehicles

Generally, laws pertaining to self-driving vehicles are evolving globally, and in some cases may create restrictions on features or vehicle designs that we develop.

While there are currently no federal U.S.

regulations pertaining specifically to self-driving vehicles or self-driving equipment, NHTSA has published recommended guidelines on self-driving vehicles, apart from the FMVSS and manufacturer reporting obligations, and retains the authority to investigate and/or take action on the safety or compliance of any vehicle, equipment or features operating on public roads.

states also have legal restrictions on the operation, registration or licensure of self-driving vehicles, and many other states are considering them.

This regulatory patchwork increases the legal complexity with respect to self-driving vehicles in the U.S.

In markets that follow the regulations of the United Nations Economic Commission for Europe (“ ECE markets ”), some requirements restrict the design of advanced driver-assistance or self-driving features, which can compromise or prevent their use entirely.

Other applicable laws, both current and proposed, may hinder or complicate the path and timeline to introducing self-driving vehicles for sale and use in the markets where they apply.

Other key markets, including China, continue to consider self-driving regulation.

Any implemented regulations may differ materially from the U.S.

and ECE markets, which may further increase the legal complexity of self-driving vehicles and limit or prevent certain features.

Regulation of Autonomous Vehicles and Autonomous Vehicle Ride-Hailing

Generally, laws pertaining to autonomous vehicles are evolving globally, and in some cases may impose restrictions on our features or vehicle designs.

In the U.S., while NHTSA has updated certain FMVSS to account for autonomous vehicle design, other FMVSS and regulations do not currently account for autonomous vehicle design and additional rulemaking by NHTSA may occur.

These requirements are in addition to manufacturer reporting obligations, and NHTSA retains the authority to investigate and/or take action on the safety or compliance of any vehicle, equipment or features operating on public roads.

Additionally, certain U.S.

states and cities have legal restrictions on, or are considering additional regulation of, the testing, commercial operation, marketing, registration and licensure of autonomous vehicles, including commercial ride-hailing with a fleet of autonomous vehicles, and many other states and cities are considering them.

This regulatory patchwork increases the legal complexity with respect to autonomous vehicles and an autonomous vehicle ride-hailing business in the U.S.

In Europe and other countries that follow the regulations of the United Nations Economic Commission for Europe (“ECE countries”), some requirements restrict the design of both advanced driver-assistance and autonomous systems, which can compromise or prevent their use entirely.

On a European Union level, additional layers of regulatory frameworks may impose further obligations in areas such as risk management, data-governance, trainings, technical documentation.

Meanwhile, on a national level, the enforcement of certain applicable regulations may vary.

Proposed national laws may further hinder or complicate the path of both advanced driver-assistance and autonomous vehicle systems, including the timeline for introducing autonomous vehicles for sale and use in ECE countries.

Additionally, certain national and city laws within each ECE country may impose legal restrictions on the marketing of advanced driver-assistance and autonomous vehicle systems, and may vary significantly on commercial ride-hailing with a fleet of autonomous vehicles, in areas such as licenses, permits, competition prohibitions, tariffs and other transport services obligations.

When coupled together, the layers of regulation as well as the fragmentation across each ECE country may hinder or complicate the path and timeline to introducing autonomous vehicles and an autonomous vehicle ride-hailing business in them.

Other key markets, including China, continue to develop and establish driver-assistance and autonomous vehicle regulations.

Any implemented regulations may differ materially from U.S.

and ECE countries.

These differences may further increase the legal complexity of introducing, or availability to introduce, driver-assistance and autonomous vehicles for sale and use, including an autonomous vehicle ride-hailing business, and could result in additional delays, compliance costs, or restrictions on the deployment of certain capabilities in specific jurisdictions.

Automobile Manufacturer and Dealer Regulation

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To sell vehicles to residents of states where we are not licensed as a dealer, we generally conduct the sale out of the state.

In certain such states, we have opened “galleries” that serve an educational purpose and where sales may not occur.

In certain of these states, we have opened “galleries” that serve an educational purpose and where sales may not occur.

Some automobile dealer trade associations have both challenged the legality of our operations in court and used administrative and legislative processes to attempt to prohibit or limit our ability to operate existing stores or expand to new locations.

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We are subject to certain state and federal regulations applicable to solar and battery storage providers and sellers of electricity.

To operate our systems, we enter into standard interconnection agreements with applicable utilities.

To operate our systems, we enter into or facilitate for our customers standard interconnection agreements with applicable utilities.

Sales of electricity and non-sale equipment leases by third parties, such as our leases and PPAs, have faced regulatory challenges in some states and jurisdictions.

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make net energy metering, or net metering, available to solar customers.

Net metering typically allows solar customers to interconnect their solar energy systems to the utility grid and offset their utility electricity purchases by receiving a bill credit for excess energy generated by their solar energy system that is exported to the grid.

Net metering typically allows solar customers to interconnect their energy generation systems to the utility grid and offset their utility electricity purchases by receiving a bill credit for excess energy generated by their energy generation system that is exported to the grid.

In certain jurisdictions, regulators or utilities have reduced or eliminated the benefit available under net metering or have proposed to do so.

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In addition, several manufacturers offer hybrid vehicles, including plug-in versions.

We believe that there is also increasing competition for our vehicle offerings as a platform for delivering self-driving technologies, charging solutions and other features and services, and we expect to compete in this developing market through continued progress on our Autopilot, FSD (Supervised) and neural network capabilities, Supercharger network and our infotainment offerings.

As we seek to become a top provider of autonomous solutions, we also face competition in the fields of AI and robotics.

We expect our Robotaxi service to compete in this developing market, along with traditional ride-hailing and taxi services, through continued progress on our FSD (Supervised) and neural network capabilities, Supercharger network and infotainment offerings.

Energy Generation and Storage

Energy Storage Systems

The market for energy storage products is also highly competitive, and both established and emerging companies have introduced products that are similar to our product portfolio or that are alternatives to the elements of our systems.

We compete with these companies based on price, energy density and efficiency.

The market for energy storage products and services is also highly competitive, and both established and emerging companies have introduced products and services that are similar to our product portfolio or that are alternatives to the elements of our systems or software service offerings.

We compete with these companies based on price, energy density, efficiency, optimization and performance.

We believe that the specifications and features of our products, our strong brand and the modular, scalable nature of our energy storage products give us a competitive advantage in our markets.

Solar Energy Systems

The primary competitors to our solar energy business are the traditional local utility companies that supply energy to our potential customers.

We compete with these traditional utility companies primarily based on price and the ease by which customers can switch to electricity generated by our solar energy systems.

Energy Generation Systems

The primary competitors to our energy generation business are the traditional local utility companies that supply energy to our potential customers.

We compete with these traditional utility companies primarily based on price and the ease by which customers can switch to electricity generated by our energy generation systems.

We also compete with solar energy companies that provide products and services similar to ours.

Many solar energy companies only install solar energy systems, while others only provide financing for these installations.

We believe we have a significant expansion opportunity with our offerings and that the regulatory environment is increasingly conducive to the adoption of renewable energy systems.

We believe we have a significant expansion opportunity with our offerings, including in terms of the aesthetics, superior performance and ease of installation and integration with Powerwall of our solar panels, and that the environment is increasingly conducive to the adoption of renewable energy systems.

Intellectual Property

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We made this pledge in order to encourage the advancement of a common, rapidly-evolving platform for electric vehicles, thereby benefiting ourselves, other companies making electric vehicles and the world.

Environmental, Social and Governance (ESG) and Human Capital Resources

The very purpose of Tesla's existence is to accelerate the world's transition to sustainable energy.

We believe the world cannot reduce carbon emissions without addressing both energy generation and consumption, and we are designing and manufacturing a complete energy and transportation ecosystem to achieve this goal.

As we expand, we are building each new factory to be more efficient and sustainably designed than the previous one, including with respect to per-unit waste reduction and resource consumption, including water and energy usage.

We are focused on further enhancing sustainability of operations outside of our direct control, including reducing the carbon footprint of our supply chain.

We are committed to sourcing only responsibly produced materials, and our suppliers are required to provide evidence of management systems that ensure social, environmental and sustainability best practices in their own operations, as well as to demonstrate a commitment to responsible sourcing into their supply chains.

We have a zero-tolerance policy when it comes to child or forced labor and human trafficking by our suppliers and we look to the Organization for Economic Co-operation and Development Due Diligence Guidelines to inform our process and use feedback from our internal and external stakeholders to find ways to continually improve.

We are also driving safety in our own factories by focusing on worker engagement.

Our incidents per vehicle continue to drop even as our production volumes increase.

We also strive to be an employer of choice by offering compelling, impactful jobs with best in-industry benefits.

We believe that sound corporate governance is critical to helping us achieve our goals, including with respect to ESG.

We continue to evolve a governance framework that exercises appropriate oversight of responsibilities at all levels throughout the company and manages its affairs consistent with high principles of business ethics.

Our Sustainability and Impact team, in conjunction with leaders from across our Company, regularly presents to our Board of Directors, which oversees our ESG impacts, initiatives and priorities.

Human Capital Resources

Tesla’s ability to attract, develop and retain a talented workforce is a competitive advantage.

During the past year, Tesla provided its workforce with opportunities to contribute to its mission and grow professionally, earning Tesla among the Top 100 Employers of Choice in the 2024 American Opportunity Index.

As of December 31, 2025, our employee headcount worldwide was 134,785.

Employees can participate in Tesla stock ownership programs (of which 92% have been given the opportunity to as part of their total rewards package), while accessing industry-leading benefits, such as free counseling, paid parental leave, paid time off, company sponsored 401(k) plans, no cost fertility and adoption programs and zero-premium medical plan options that are made available on the first day of employment.

We hire, evaluate and promote employees based on their skills and performance.

In 2024, over 13,000 of our employees worldwide, 80% of whom represent Tesla’s frontline workforce, took advantage of opportunities to advance their career within the Company.

As of this report, more than two-thirds (68%) of our managers have been promoted from internal, non-managerial positions, and 45% of our management team has been with Tesla for over five years.

Tesla cultivates an environment that recognizes employee wins and impacts.

We enhance everyday recognition by spotlighting employees and empowering them to recognize each other’s successes.

We inform and engage employees to help foster a connected Tesla experience that supports the business.

To enable employee performance, we provide opportunities for them to learn and grow, including:

Internships & Fellowships

• Professional Internships – Every year, Tesla hires approximately 4,000 university and community college students globally for internships across all business groups.

We partner with campuses and student organizations to build a high-quality pipeline of talent, particularly individuals passionate about sustainable energy and autonomy.

From day one, our interns contribute to meaningful projects, often times leading to full-time positions upon completion of their internships.

• Military Fellowship Program – Tesla's Fellowship program, in partnership with the U.S.

Chamber of Commerce Foundation’s Hire Our Heroes, offers exiting military service members corporate industry experience during their transition in service.

The program aims to convert high-performing individuals to full-time roles and create a veteran talent pipeline for opportunities across Tesla North America.

Development Programs

• Manufacturing Development Program – Tesla's global manufacturing pathway programs are designed to provide graduating high school seniors and early career individuals with the financial resources, coursework and experience they need to start a successful manufacturing career at Tesla.

Through 2024, Tesla expanded the program to new campuses and hired over 800 graduates with a goal for continued growth.

In 2025, Tesla plans to hire over 1,000 participants across our factories.

• Supervisor Professional Program – The Supervisor program is designed for industrial foremen that provides employees the opportunity to develop expertise in their field.

Across a 16-month period, employees take comprehensive coursework in the fields of technology, law, organization and personnel management.

In 2024, our employees became people leaders in the fields of metal production and electrical technology.

• Engineering Development Program – Launched 2024, the program focuses on developing recent college and university graduates for specialized engineering fields.

In partnership with local education partners, the program educates early-career engineers in controls engineering, enhancing their knowledge of high-demand technologies for manufacturing.

Educational Programs

• Education Assistance Program - Tesla's Education Assistance Program offers employees access to tuition-free and partially funded learning opportunities, including degrees for in-demand careers, short-form certificates and programs for high-school completion or English-language learning.

Launched in February 2024, the program has provided funding to 5,436 actively enrolled learners and 1,338 graduates acquiring valuable skills in manufacturing, engineering, artificial intelligence, supply chain management and leadership.

The program partners with top-ranked online institutions and local colleges offering both flexible self-paced learning options and in-person applied training.

• FlexLearn and Dual Study Program – The FlexLearn and Dual Study Program provides employees opportunities to pursue their educational goals across Europe.

FlexLearn allows our employees to further develop with tailored training that aligns with the needs of our factories.

The Dual Study Program combines theoretical knowledge with practical experience.

Graduates of the program receive industry related degrees.

Technical Programs

• Apprenticeships – The Tesla Apprenticeships are multi-year global programs combining academic and on-the-job training, that prepares specialists in skilled trades.

Apprentices complete 2,000 - 8,000 hours of on-the-job training alongside courses at local education partners throughout our manufacturing and service locations.

The program ensures that graduates are well-qualified technicians, ready to support our teams.

• Technician Trainee (Service and Collision) – The Tesla Technician Trainee Program provides on-the-job automotive maintenance and collision training at Tesla’s Service Centers.

The program is targeted at individuals currently enrolled in a school automotive or collision program and recent graduates with limited industry experience.

In 2024, Tesla hired trainees across North America, EMEA and APAC.

• Future Talent Traineeship – The Flagship entry-level rotational program was piloted in the United Kingdom and Ireland.

Trainees have the unique opportunity to experience all key aspects of service, sales and delivery within a single 12-month program, before making an informed decision on which career path they'd like to specialize in full-time upon completion.

The program is ideal for exploring careers within Tesla’s service team.

• START (Manufacturing and Service) – Tesla START is an intensive training program that equips individuals with the skills needed for a successful technician role at Tesla.

We partner with colleges to integrate Tesla START into automotive and manufacturing classroom locations.

In 2024, Tesla START expanded to 14 campuses and hired over 400 technicians.

We emphasize stock ownership opportunities, with 92% of employees included in total rewards packages, alongside industry-leading benefits like free counseling, paid parental leave, and comprehensive healthcare options available from day one.

Hiring, evaluation, and promotion decisions are based on skills and performance, with over 29,000 employees globally advancing their careers in 2025, and 69% of managers promoted internally.

Tesla fosters a culture of recognition and growth, enabling employees to contribute meaningfully from day one.

Programs such as internships, military fellowships, and development pathways—like the Manufacturing Development Program and Engineering Development Program—provide skill-building and career progression.

These initiatives, including Apprenticeships and START training, combine academic and hands-on learning to prepare technicians and leaders, while educational assistance programs support approximately 7,000 learners in fields like engineering and AI.

Across Tesla Shanghai and APAC region, robust programming, including internships, trainee and apprenticeship programs created pathways for employees to develop.

In partnership with educational partners, interns, apprentices and trainees are able to obtain skills necessary to grow their careers at Tesla.

In Berlin and EMEA, educational programs, such as FlexLearn and Dual Study program provided employees the opportunity to pursue education goals.

FlexLearn allows employees to further develop with tailored training that aligns with our factories.

The Dual Study program combines theoretical knowledge with practical experience with graduates receiving industry related degrees.

Overall, Tesla programs supported employees to develop practical training, provided mentorship, and structured transitions to fill roles in manufacturing, service, R&D, and energy sectors across the region.

Tesla is committed to providing a workplace where employees feel respected, satisfied and appreciated.

Our policies are designed to promote fairness and respect for everyone.

Policies prohibit harassment, violence, and discrimination, with mandatory anti-harassment training for all employees and ongoing development for leaders.

We actively support the hiring, retention and advancement of exceptional talent, including but not limited to veterans, disabled veterans and individuals with disabilities.

As of December 31, 2024, in the US, 2.3% of our employees are veterans or active-duty military personnel, 3.3% of our employees are identify as individuals with disabilities and 1.2% of our employees identify as veterans or active-duty military personnel with disabilities.

As of December 31, 2025, in the U.S., 2.2% of our employees are veterans or active-duty military personnel, 3.5% of our employees identified as individuals with disabilities and 1.1% of our employees identified as veterans or active-duty military personnel with disabilities.

Our military partnerships and development programs noted above help to directly and indirectly support these employees.

At Tesla, our employees’ passion is what powers our mission.

Everyone is expected to be trustworthy, demonstrate excellence in their performance and collaborate with others.

Our factories, offices, stores and service centers are places where our employees have opportunities to enhance their skills and gain experience, which is essential for Tesla’s growth.

With this in mind, we will not tolerate certain behaviors.

These include harassment, retaliation, violence, intimidation and discrimination of any kind based on any protected category or action.

Anti-harassment training is provided to all new hires on their first day of orientation, ensuring that all employees are equipped with the knowledge and tools to maintain a respectful environment.

For leaders, anti-harassment training is reinforced on an ongoing basis to promote consistent leadership standards and reinforce organizational values.

In addition to anti-harassment training, we offer a range of leadership development programs throughout the year to further enhance leaders' skills.

These programs are designed to help leaders manage teams, communicate effectively, drive a culture of accountability and resolve disputes.

At Tesla, we listen to our employees.

Our engagement strategy is to listen, act and report back to employees on progress.

Pulse, Tesla's semiannual employee survey, aims to capture the employee experience and generated 86% global participation.

The crucial feedback garnered from these efforts helps shape Tesla’s future goals, plans and projects.

The safety and health of our employees is a core value.

Everyone across Tesla works to ensure a healthy and safe workplace.

Employees are encouraged to speak up regarding misconduct or safety concerns and can do so by contacting the integrity line, submitting concerns through our Take Charge process, or notifying their Human Resource Partner or any member of management.

Concerns are reviewed in accordance with established protocols by investigators with expertise, who also review for trends and outcomes for remediation and appropriate controls.

Responding to questions timely is key so Human Resource Partners for each functional area are visible throughout facilities and engaging employees.

Engagement efforts, such as Tesla’s Pulse survey with 86% global participation, ensure employee feedback shapes company strategies.

Safety and health remain core values, with accessible channels for reporting concerns and dedicated HR partners to address issues promptly.

Our Compensation Committee generally oversees our human capital management strategy, and regularly receives updates and reviews certain management practices related to Tesla’s talent, including how Tesla recruits, develops and retains excellent talent.

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The Committee also monitors developments in human capital management practices and recommends revisions to Company policies and practices as appropriate.

Tesla aspires to do the right thing, and we are constantly looking for ways to do better.

The Company continually seeks to improve its workplace.

By integrating employee insights and maintaining robust training, Tesla aims to sustain a respectful, innovative environment where talent thrives, directly contributing to its mission of building a world of amazing abundance.

Available Information

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business