10-K – 2026-01-29 – tsla-20251231.htm

The weighted-average grant date fair value per share of RSUs granted in the years ended December 31, 2025, 2024 and 2023 was $ 360.99 , $ 223.98 and $ 228.33 , respectively. The aggregate release date fair value of RSUs in the years ended December 31, 2025, 2024 and 2023 was $ 2.42 billion, $ 1.75 billion and $ 2.50 billion, respectively.
The aggregate intrinsic value of options exercised during the years ended December 31, 2025, 2024 and 2023 was $ 1.73 billion, $ 1.77 billion and $ 1.33 billion, respectively.
ESPP
Our employees are eligible to purchase our common stock through payroll deductions of up to 15 % of their eligible compensation, subject to any plan limitations. The purchase price would be 85 % of the lower of the fair market value on the first and last trading days of each six-month offering period. During the years ended December 31, 2025, 2024 and 2023, under the ESPP we issued 1.9 million, 2.2 million and 2.1 million shares, respectively. As of December 31, 2025, there were 93.6 million shares available for issuance under the ESPP.
2025 CEO Interim Award
On August 3, 2025, the Board of Directors granted and issued 96.0 million shares of restricted stock to our CEO (the “2025 CEO Interim Award”), which will vest on the second anniversary of the grant date, assuming his continued employment as either the CEO or as an executive responsible for product development or operations (as approved by disinterested members of the Board of Directors) through the vesting date. Our CEO must pay the Company $ 23.34 per share (the “Purchase Price”) of restricted stock that vests, which is equal to the exercise price per share of the stock-based compensation plan awarded to Elon Musk in 2018 (the “2018 CEO Performance Award”).
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Restricted stock under the 2025 CEO Interim Award will be immediately forfeited and returned (an “Early Forfeiture”) to the Company to preclude a “double dip” or windfall if, prior to vesting, there is a final, non-appealable judgment, order or decision of the Delaware courts with respect to the action captioned Tornetta v. Elon Musk et al., C.A. No. 2018-0408-KSJM (Del. Ch.), or any pending or future appeal, including In re Tesla, Inc. Derivative Litigation, Nos. 10, 2025, 11, 2025 (Del.) (a “Tornetta Decision Event”) (see Note 13, Commitments and Contingencies ), that results in our CEO becoming able to exercise in full the 2018 CEO Performance Award. If a Tornetta Decision Event results in our CEO becoming able to exercise options covered by the 2018 CEO Performance Award, but does not result in Early Forfeiture, then, if the Tornetta Decision Event occurs before the 2025 CEO Interim Award vests, shares covered by the 2025 CEO Interim Award will be reduced to the extent that (a) the sum of the 2025 CEO Interim Award shares and any amount of options exercisable under the 2018 CEO Performance Award exceeds (b) the total number of options subject to the 2018 CEO Performance Award in full (the “Excess Amount”), and if the Tornetta Decision Event occurs after the 2025 CEO Interim Award vests, then our CEO will return or otherwise repay us for shares issued under the 2025 CEO Interim Award (with us returning or repaying the Purchase Price) or forfeit options underlying the 2018 CEO Performance Award equal to the Excess Amount. The “no double dip” provision means that if our CEO gains the ability to exercise the 2018 CEO Performance Award, there will be no material additional benefit to him because the total number of shares awarded under the 2025 CEO Interim Award together with the 2018 CEO Performance Award cannot exceed the number of shares underlying the 2018 CEO Performance Award.
Our CEO must hold shares covered by the 2025 CEO Interim Award for five years from the date of grant, subject to certain exceptions, including to satisfy taxes due in respect of vesting of the 2025 CEO Interim Award and/or to pay the Purchase Price. The 2025 CEO Interim Award will vest on an accelerated basis prior to the second anniversary of the grant date if our CEO is in continued eligible service upon a change in control or his death.
Stock-based compensation expense associated with the 2025 CEO Interim Award is recognized over the requisite service period, based on the grant date fair value determined on August 15, 2025 (the date the issuance of the shares of restricted stock was no longer subject to conditionality or the “accounting grant date”), but only if and when the vesting of the award becomes probable. Additionally, our CEO stock-based compensation expense represents a non-cash expense and is recorded as a selling, general and administrative operating expense in our consolidated statement of operations. The grant date fair value of the 2025 CEO Interim Award is $ 26.06 billion. The grant date fair value is based upon the closing market price of our common stock as of the accounting grant date, less the Purchase Price, adjusted to take into account an illiquidity discount due to the required holding period.
As of December 31, 2025, no stock-based compensation expense has been recorded related to the 2025 CEO Interim Award as vesting was not deemed probable. Following the Delaware Supreme Court’s recent decision reversing the Court of Chancery’s rescission order and reinstating Mr. Musk’s 2018 compensation package, the Special Committee, consistent with its general purpose, continues to consider, evaluate and determine all aspects of the retention and incentivization of Mr. Musk and any methods, approaches or manners for doing so, including the 2018 CEO Performance Award and the 2025 CEO Interim Award. If the 2025 CEO Interim Award is cancelled before vesting is deemed probable, no expense will be recognized relating to the award.
2025 CEO Performance Award
On September 3, 2025 (the “2025 CEO Performance Award Grant Date”), the Board of Directors granted approximately 423.7 million shares of performance-based restricted stock to our CEO (the “2025 CEO Performance Award”), which was approved on November 6, 2025 by our shareholders (the “2025 CEO Performance Award Accounting Grant Date”).
Until such time as there are no shares under the 2025 CEO Performance Award that are not earned (the “Unearned Shares”), our CEO’s Unearned Shares will vote proportionately to the votes of all other shares of our capital stock that are present and entitled to vote at any annual or special meeting (or similar action) of our shareholders (including our CEO). Generally, each of the 12 tranches of the 2025 CEO Performance Award will become “Earned Shares” upon our CEO remaining in Eligible Service (as defined below) and the certification by disinterested directors that the following have been achieved: (i) the market capitalization milestone for such tranche and (ii) any one of the twelve operational milestones (clauses (i) and (ii), together the “Performance Milestones”). Our CEO will be able to direct the vote of such Earned Shares.
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Tranche # Number of Shares Subject to Tranche Market Capitalization Milestones (2) Operational Milestones Achievement Status
1 35,311,992 $ 2.0 trillion
Achievement of any 1 of the 12 Operational Milestones -
2 35,311,992 $ 2.5 trillion
Achievement of any 2 of the 12 Operational Milestones -
3 35,311,992 $ 3.0 trillion
Achievement of any 3 of the 12 Operational Milestones -
4 35,311,992 $ 3.5 trillion
Achievement of any 4 of the 12 Operational Milestones -
5 35,311,992 $ 4.0 trillion
Achievement of any 5 of the 12 Operational Milestones -
6 35,311,992 $ 4.5 trillion
Achievement of any 6 of the 12 Operational Milestones -
7 35,311,992 $ 5.0 trillion
Achievement of any 7 of the 12 Operational Milestones -
8 35,311,992 $ 5.5 trillion
Achievement of any 8 of the 12 Operational Milestones -
9 35,311,992 $ 6.0 trillion
Achievement of any 9 of the 12 Operational Milestones -
10 35,311,992 $ 6.5 trillion
Achievement of any 10 of the 12 Operational Milestones -
11 35,311,992 $ 7.5 trillion
Achievement of any 11 of the 12 Operational Milestones (1) -
12 35,311,992 $ 8.5 trillion
Achievement of any 12 of the 12 Operational Milestones (1) -
Total 423,743,904

(1) The 11th and 12th tranches are earned upon the later of (i) the date on which the last Performance Milestone applicable to such tranche is completed and (ii) the date on which the CEO succession framework developed by our CEO is approved by the Board of Directors.
(2) Market capitalization milestones are measured on a trailing average basis over both a six-month period and a 30-day period. Achievement may also be measured over a one-year period in connection with the deemed achievement of certain product goals.
The operational milestones generally required for any shares to become Earned Shares are defined as follows:

Milestone # Operational Milestones (3)
1 20 million Tesla vehicles delivered

2 10 million active FSD subscriptions

3 1 million bots delivered

4 1 million Robotaxis in commercial operation

5 $ 50 billion of Adjusted EBITDA

6 $ 80 billion of Adjusted EBITDA

7 $ 130 billion of Adjusted EBITDA

8 $ 210 billion of Adjusted EBITDA

9 $ 300 billion of Adjusted EBITDA

10 $ 400 billion of Adjusted EBITDA (4)

11 $ 400 billion of Adjusted EBITDA (4)

12 $ 400 billion of Adjusted EBITDA (4)

(3) Adjusted EBITDA is defined as net income (loss) attributable to common stockholders before interest expense, provision (benefit) for income taxes, depreciation, amortization and impairment, stock-based compensation and digital assets gains and losses for the four consecutive quarters that immediately precede such determination date.
(4) Meeting the last three Adjusted EBITDA operational milestones requires achieving Adjusted EBITDA of $ 400  billion in three non-overlapping periods, each made up of four consecutive quarters.
The vesting date for each tranche of shares depends on when such shares become Earned Shares, which is based on the achievement of Performance Milestones. Generally, shares earned prior to the 5th anniversary of the 2025 CEO Performance Award Grant Date vest on the 7.5th anniversary, and shares that are earned after the 5th anniversary of the 2025 CEO Performance Award Grant Date vest on the 10th anniversary (each such 7.5 and 10-year period, a “Post-Milestone Service Period”), in each case our CEO must maintain continued employment either as our CEO or as an executive officer responsible for product development or operations through the applicable Post-Milestone Service Period (“Eligible Service”). Upon vesting, the vested shares will be reduced by an offset amount of $ 334.09 per share, unless our CEO elects to pay such amounts in cash.

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Unearned Shares will be forfeited and returned upon the 10-year anniversary of the 2025 CEO Performance Award Grant Date. Unvested shares (including any Earned Shares that have not vested) will be forfeited upon cessation of Eligible Service. Any stock-based compensation expense related to forfeited shares will be reversed during the period in which such a forfeiture occurs.
Our CEO must hold shares for five years after they become Earned Shares (regardless of whether such Earned Shares vest), subject to exceptions on or after vesting for (i) a change in control, (ii) satisfying taxes due in respect of vesting or (iii) transfers for estate planning purposes that involve a mere change of form or as may be permitted by our disinterested directors in their discretion consistent with our internal policies.
Stock-based compensation expense recognition commences when an operational milestone is considered probable of achievement regardless of the progress made towards achieving the next market capitalization milestone. The probability of meeting an operational milestone is based on a subjective assessment of the product roadmap, regulatory environment, industry and adoption trends, competitive environment, macroeconomic conditions and risks, and our future financial projections, among other estimates and assumptions. These inputs, which are subjective and generally require significant judgment, are based on historical experience, as appropriate, and on various other assumptions that we believe to be reasonable under the circumstances. Changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ significantly from the estimates made by our management. As of December 31, 2025, we determined that the operational milestone involving the delivery of 20  million Tesla vehicles, is probable over the term of the award based on our current assumptions.
Once an operational milestone is considered probable of achievement, stock-based compensation expense associated with the tranche will be recognized over the relevant Post-Milestone Service Period, which is based on the expected achievement date of the operational milestone. By design of this award, the recognition period will be approximately 7.5 or 10 years from the 2025 CEO Performance Award Accounting Grant Date. Stock-based compensation expense associated with this award is recorded as Selling, general and administrative expense on our consolidated statement of operations.
As of December 31, 2025, based on our current estimate of the achievement date, we had unrecognized stock-based compensation expense of $ 10.23 billion for the operational milestone that was considered probable of achievement over the term of the award, which we expect to be recognized over 9.7 years. As of December 31, 2025, we had unrecognized stock-based compensation expense of $ 105.82 billion to $ 120.37 billion for the operational milestones that were considered not probable of achievement. From the 2025 CEO Performance Award Accounting Grant Date to December 31, 2025, we recorded stock-based compensation expense of $ 162  million related to the 2025 CEO Performance Award.
Fair Value Assumptions
We use the fair value method in recognizing stock-based compensation expense. Under the fair value method, we estimate the fair value of each stock option award with service or service and performance conditions and the ESPP on the grant date generally using the Black-Scholes option pricing model. The weighted-average assumptions used in the Black-Scholes model for stock options are as follows:

Year Ended December 31,
2025 2024 2023
Risk-free interest rate 3.95   % 3.92   % 3.90   %
Expected term (in years) 4.7 4.3 4.5
Expected volatility 60   % 59   % 63   %
Dividend yield —   % —   % —   %
Grant date fair value per share $ 178.36   $ 114.29   $ 121.62  

The risk-free interest rate is based on the U.S. Treasury yield for zero-coupon U.S. Treasury notes with maturities approximating each grant’s expected life. We use our historical data in estimating the expected award term of our employee grants. The expected share price volatility is based on the average of the implied volatility of publicly traded options for our common stock and the historical volatility of our common stock.

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The fair value of restricted stock-based awards that have market, service and performance conditions is estimated on the grant date using a Monte Carlo simulation model. The weighted-average assumptions used in the Monte Carlo simulation model for the purpose of determining the grant date fair value of the 2025 CEO Performance Award is as follows:

Expected award term (in years) (1) 9.8
Expected share price volatility 60   %
Dividend yield —   %
Risk-free rate of return 4.06   %
Dilution adjustment 15   %
Illiquidity discount (2) 0 % - 14 %

Grant date fair value per share (3) $ 284.24 - $ 337.74

(1) The expected award term is the period from the shareholder approval date to the end of the performance period.
(2) The illiquidity discount was determined using a valuation model that uses the same expected share price volatility applied in the Monte Carlo simulation model and tax rates utilized are equal to the federal tax rate, plus our best estimate of personal tax rates based on available payroll information.
(3) The stock-based compensation expense recognized will depend on the date a given tranche vests if at all. The range in grant date fair value per share reflects differences in any applicable holding period that may be in effect post-vesting for each tranche.
The fair value of RSAs and RSUs with service or service and performance conditions is measured on the grant date based on the closing fair market value of our common stock less any purchase price or offset amount, adjusted to take into account any illiquidity discounts due to applicable required holding periods that are in effect post-vesting.
Other Performance-Based Grants
From time to time, the Compensation Committee of our Board of Directors grants certain employees performance-based RSUs and stock options. For the year ended December 31, 2025, we granted 8.4 million shares of other performance awards with grant date fair value, net of forfeitures, of $ 1.70 billion. For the years ended December 31, 2024 and 2023, the shares granted were not material.
As of December 31, 2025, we had unrecognized stock-based compensation expense of $ 1.79 billion under these grants to purchase or receive an aggregate 13.0 million shares of our common stock. For awards probable of achievement, we estimate the unrecognized stock-based compensation expense of $ 831 million will be recognized over a weighted-average period of 3.3 years.
For the year ended December 31, 2025, we recorded $ 323 million of stock-based compensation expense related to these grants, net of forfeitures. For the years ended December 31, 2024 and 2023, stock-based compensation expense related to these grants, net of forfeitures, were immaterial .
Summary Stock-Based Compensation Information
The following table summarizes our stock-based compensation expense by line item in the consolidated statements of operations (in millions):

Year Ended December 31,
2025 2024 2023
Cost of revenues $ 870   $ 776   $ 741  
Research and development 1,332   832   689  
Selling, general and administrative 623   389   382  
Restructuring and other —   2   —  
Total $ 2,825   $ 1,999   $ 1,812  

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Income tax benefits recognized from stock-based compensation expense during the years ended December 31, 2025, 2024 and 2023 were $ 517  million, $ 371  million and $ 326  million, respectively. During the years ended December 31, 2025, 2024 and 2023, stock-based compensation expense capitalized to our consolidated balance sheets was $ 238 million, $ 198 million and $ 199 million, respectively. As of December 31, 2025, we had $ 5.82 billion of total unrecognized stock-based compensation expense related to non-performance awards, which will be recognized over a weighted-average period of 2.6 years.

Note 12 – Income Taxes
Our income before provision for (benefit from) income taxes for the years ended December 31, 2025, 2024 and 2023 was as follows (in millions):

Year Ended December 31,
2025 2024 2023
Domestic $ 4,766   $ 2,292   $ 3,196  
Noncontrolling interest and redeemable noncontrolling interest 61   62   ( 23 )
Foreign 451   6,636   6,800  
Income before income taxes $ 5,278   $ 8,990   $ 9,973  

A provision for (benefit from) income taxes of $ 1.42  billion, $ 1.84 billion and $( 5.00 ) billion has been recognized for the years ended December 31, 2025, 2024 and 2023, respectively. The components of the provision for (benefit from) income taxes for the years ended December 31, 2025, 2024 and 2023 consisted of the following (in millions):

Year Ended December 31,
2025 2024 2023
Current:
Federal $ —   $ —   $ 48  
State 5   45   57  
Foreign 1,295   1,315   1,243  
Total current 1,300   1,360   1,348  
Deferred:
Federal 434   831   ( 5,246 )
State 21   ( 49 ) ( 653 )
Foreign ( 332 ) ( 305 ) ( 450 )
Total deferred 123   477   ( 6,349 )
Total provision for (benefit from) income taxes $ 1,423   $ 1,837   $ ( 5,001 )

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Upon adoption of ASU 2023-09, Improvements to Income Tax Disclosures, as described in Note 2, Summary of Significant Accounting Policies , the reconciliation of taxes at the federal statutory rate to our provision for (benefit from) income taxes for the year ended December 31, 2025 was as follows (in millions, except for percentages):

Amount Percent
U.S. federal statutory tax rate $ 1,108   21.0   %
Foreign tax effects
China
Statutory tax rate difference between China and United States 60   1.1  
Withholding tax 361   6.8  
Other ( 37 ) ( 0.7 )
Other foreign jurisdictions 331   6.3  
Tax credits
Research and development tax credits ( 352 ) ( 6.7 )
Foreign tax credits ( 327 ) ( 6.2 )
Changes in valuation allowances 389   7.5  
Nontaxable or nondeductible items
Nontaxable manufacturing credits ( 354 ) ( 6.7 )
Stock-based compensation ( 172 ) ( 3.3 )
Other 83   1.6  
Changes in unrecognized tax benefits 194   3.7  
Other adjustments 139   2.6  
Effective tax rate $ 1,423   27.0   %

The reconciliation of taxes at the federal statutory rate to our provision for (benefit from) income taxes for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the adoption of ASU 2023-09 was as follows (in millions):

Year Ended December 31,
2024 2023
Tax at statutory federal rate $ 1,887   $ 2,094  
State tax, net of federal benefit 8   ( 372 )
Excess tax benefits related to stock-based compensation ( 267 ) ( 288 )
Nontaxable manufacturing credit ( 291 ) ( 101 )
Foreign income rate differential ( 545 ) ( 816 )
U.S. tax credits ( 317 ) ( 593 )
GILTI and Subpart F inclusion 882   670  
Unrecognized tax benefits 144   183  
Change in valuation allowance 163   ( 5,962 )
Other 173   184  
Provision for (benefit from) income taxes $ 1,837   $ ( 5,001 )

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Upon adoption of ASU 2023-09, Improvements to Income Tax Disclosures, as described in Note 2, Summary of Significant Accounting Policies , cash paid for income taxes, net of refunds, during the year ended December 31, 2025 was as follows (in millions):

Federal $ 28  
State
California 86  
Other states 65  
Foreign
China 751  
Other countries 302  
Total cash paid for income taxes, net of refunds $ 1,232  

Cash paid for income taxes, net of refunds, during the years ended December 31, 2024 and 2023 was $ 1.33 billion and $ 1.12 billion, respectively.
Deferred tax assets (liabilities) as of December 31, 2025 and 2024 consisted of the following (in millions):

December 31,
2025 December 31,
2024
Deferred tax assets:
Net operating loss carry-forwards $ 1,083   $ 1,295  
Research and development credits 2,030   1,735  
Other tax credits and attributes 2,090   1,325  
Deferred revenue 999   1,101  
Inventory and warranty reserves 2,269   1,769  

Operating lease right-of-use liabilities 1,376   1,186  
Capitalized research and development costs 2,365   2,448  
Deferred GILTI tax assets 709   691  
Other 570   412  
Total deferred tax assets 13,491   11,962  
Valuation allowance ( 1,765 ) ( 1,224 )
Deferred tax assets, net of valuation allowance 11,726   10,738  
Deferred tax liabilities:
Depreciation and amortization ( 3,146 ) ( 2,658 )

Operating lease right-of-use assets ( 1,267 ) ( 1,097 )

Other ( 514 ) ( 561 )
Total deferred tax liabilities ( 4,927 ) ( 4,316 )
Deferred tax assets (liabilities), net of valuation allowance $ 6,799   $ 6,422  

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As of December 31, 2025, we maintained valuation allowances of $ 1.77  billion for deferred tax assets that are not more likely than not to be realized, which primarily included our California deferred tax assets, U.S. foreign tax credits and certain capitalized foreign expenses. The valuation allowance on our net deferred tax assets increased by $ 541 million and $ 332 million during the years ended December 31, 2025 and 2024, respectively, and decreased by $ 6.46 billion during the year ended December 31, 2023. The changes in valuation allowances during the years ended December 31, 2025 and 2024 were primarily due to the changes of our California deferred tax assets, U.S. foreign tax credits and certain capitalized foreign expenses. The change in valuation allowance during the year ended December 31, 2023 was primarily due to the release of our valuation allowance with respect to our U.S. federal and certain state deferred tax assets. In the fourth quarter of 2023, based on the relevant weight of positive and negative evidence, including the amount of our taxable income in recent years which was objective and verifiable, and consideration of our expected future taxable earnings, we concluded that it is more likely than not that most of our U.S. federal and certain state deferred tax assets are realizable and released the valuation allowance on these deferred tax assets. Our deferred tax assets without a valuation allowance are more likely than not to be realized given the expectation of future earnings in the respective jurisdictions.
As of December 31, 2025, we had $ 3.56 billion of federal and $ 8.22 billion of state net operating loss carry-forwards available to offset future taxable income, an immaterial amount of which, if not utilized, will begin to expire in 2026. Federal and state laws can impose substantial restrictions on the utilization of net operating loss and tax credit carry-forwards in the event of an “ownership change,” as defined in Section 382 of the Internal Revenue Code. We have determined that no significant limitation would be placed on the utilization of our net operating loss and tax credit carry-forwards due to prior ownership changes or expirations.
As of December 31, 2025, we had federal research and development tax credits of $ 1.83 billion, federal renewable energy tax credits of $ 1.38 billion, and state research and development tax credits of $ 1.21 billion. Most of our state research and development tax credits were in the state of California. If not utilized, some of the federal tax credits may expire in various amounts beginning in 2036. However, California research and development tax credits can be carried forward indefinitely.
As of December 31, 2025, we intend to indefinitely reinvest our foreign earnings and cash unless such repatriation results in no or minimal tax costs. We have recorded the taxes associated with the foreign earnings we intend to repatriate in the future. For the earnings we intend to indefinitely reinvest, no deferred tax liabilities for foreign withholding or other taxes have been recorded. The estimated amount of such unrecognized withholding tax liability associated with the indefinitely reinvested earnings is approximately $ 371  million.
Uncertain Tax Positions
The changes to our gross unrecognized tax benefits were as follows (in millions):

December 31, 2022 $ 870  
Increases in balances related to prior year tax positions 59  
Decreases in balances related to settlement with tax authorities ( 6 )
Increases in balances related to current year tax positions 255  
Decreases in balances related to expiration of the statute of limitations ( 4 )
December 31, 2023 1,174  
Increases in balances related to prior year tax positions 51  
Decreases in balances related to prior year tax positions ( 27 )
Increases in balances related to current year tax positions 227  
Decreases in balances related to settlement with tax authorities ( 4 )
Decreases in balances related to expiration of the statute of limitations ( 4 )
December 31, 2024 1,417  
Increases in balances related to prior year tax positions 64  
Decreases in balances related to prior year tax positions ( 24 )
Increases in balances related to current year tax positions 305  
Decreases in balances related to settlement with tax authorities ( 3 )
Decreases in balances related to expiration of the statute of limitations ( 13 )
December 31, 2025 $ 1,746  

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We include interest and penalties related to unrecognized tax benefits in income tax expense. We recognized net interest and penalties related to unrecognized tax benefits in provision for (benefit from) income taxes line of our consolidated statements of operations of $ 10  million, $ 23 million and $ 17 million for the years ended December 31, 2025, 2024 and 2023, respectively. As of December 31, 2025, and 2024, we have accrued $ 79 million and $ 69 million, respectively, related to interest and penalties on our unrecognized tax benefits. Unrecognized tax benefits of $ 1.41 billion, if recognized, would affect our effective tax rate.
We file income tax returns in the U.S. and various state and foreign jurisdictions. We are currently under examination by the Internal Revenue Service (“IRS”) for the years 2015 to 2018. Additional tax years within the periods 2004 to 2014 and 2019 to 2024 remain subject to examination for federal income tax purposes. All net operating losses and tax credits generated to date are subject to adjustment for U.S. federal and state income tax purposes. Our returns for 2004 and subsequent tax years remain subject to examination in U.S. state and foreign jurisdictions.

Note 13 – Commitments and Contingencies
Legal Proceedings
Litigation Relating to 2018 CEO Performance Award
On June 4, 2018, a purported Tesla stockholder filed a putative class and derivative action in the Delaware Court of Chancery against Elon Musk and the members of Tesla’s board of directors as then constituted, alleging corporate waste, unjust enrichment and that such board members breached their fiduciary duties by approving the 2018 CEO Performance Award. Trial was held November 14-18, 2022. On January 30, 2024, the Court issued an opinion finding that the 2018 CEO Performance Award should be rescinded. Plaintiff’s counsel filed a brief seeking a fee award of 29,402,900 Tesla shares, plus expenses of $ 1,120,115.50 . Tesla opposed the fee request, and at Tesla’s 2024 Annual Meeting of Stockholders, 72 % of the disinterested voting shares of Tesla, excluding shares owned by Mr. Musk and Kimbal Musk, voted to ratify the 2018 CEO Performance Award. Because Tesla’s disinterested stockholders voted to ratify the 2018 CEO Performance Award, Mr. Musk and the other director defendants, joined by Tesla, filed a brief seeking to revise the Court’s January 30, 2024 opinion. On December 2, 2024, the Court issued an opinion denying the motion to revise the Court’s January 30, 2024 opinion and awarded Plaintiff’s counsel fees in the amount of $ 345  million. A final judgment was entered by the Court, and the director defendants and Tesla appealed the decisions to the Delaware Supreme Court. Tesla and the Director Defendants filed their response briefs on March 11, 2025. Plaintiffs filed their opening brief on April 25, 2025, and reply briefs were filed on May 16, 2025. Oral argument occurred on October 15, 2025. On December 19, 2025, the Delaware Supreme Court reversed the Court of Chancery’s rescission order, reinstating Mr. Musk’s 2018 compensation package, and awarded $ 1 in nominal damages. The Court also significantly reduced the attorney fee award.
Litigation Related to Directors’ Compensation
On June 17, 2020, a purported Tesla stockholder filed a derivative action in the Delaware Court of Chancery, purportedly on behalf of Tesla, against certain of Tesla’s current and former directors regarding compensation awards granted to Tesla’s directors, other than Elon Musk, between 2017 and 2020. The suit asserts claims for breach of fiduciary duty and unjust enrichment and seeks declaratory and injunctive relief, unspecified damages and other relief. Defendants filed their answer on September 17, 2020.
On July 14, 2023, the parties filed a Stipulation and Agreement of Compromise and Settlement, which does not involve an admission of any wrongdoing by any party. Pursuant to the terms of the agreement, Tesla provided notice of the proposed settlement to stockholders of record as of July 14, 2023. The Court held a hearing regarding the settlement on October 13, 2023, after which it took the settlement and Plaintiff’s counsel fees request under advisement. On January 8, 2025, the Court approved the settlement and awarded Plaintiff’s counsel fees in the amount of approximately $ 176  million. A final judgment was entered by the Court on January 13, 2025.
The Company disagrees with the amount of attorneys’ fees awarded by the court. On February 10, 2025, Tesla appealed the attorneys’ fee award amount to the Delaware Supreme Court. Tesla did not appeal the Delaware Court of Chancery’s approval of the underlying settlement. Also on February 10, 2025, a single shareholder appealed the approval of the settlement. This shareholder’s appeal does not seek to alter any material terms (e.g., financial contributions or the defendants’ obligations under the Settlement Agreement). The Delaware Court of Chancery had previously rejected this shareholder’s objections when approving the Settlement Agreement. Tesla’s appeal of the attorneys’ fee award and the single shareholder’s appeal have been fully briefed. Oral argument occurred on October 29, 2025, and the parties are awaiting a decision.
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Because neither Tesla’s appeal nor the shareholder’s appeal seeks to vacate the Settlement Agreement or materially modify its terms, the Company implemented the provisions of the Settlement Agreement in May 2025 by cancelling the options requiring cancellation under its terms.
In connection with the settlement, Tesla received $ 277  million from certain directors and paid Plaintiff’s counsel fees of $ 176  million (which, as noted above, the Company is appealing) in the three months ended March 31, 2025. We recorded a $ 31  million reversal of previously recognized stock-based compensation expense in association with the returned awards and increased our provision for income taxes in relation to the return of directors’ compensation. As the settlement was an equity transaction, the net impact to additional paid-in-capital was $ 110  million in the three months ended March 31, 2025.
Litigation Relating to Potential Going Private Transaction
Between October 17, 2018 and March 8, 2021, seven derivative lawsuits were filed in the Delaware Court of Chancery, purportedly on behalf of Tesla, against Mr. Musk and the members of Tesla’s board of directors, as constituted at relevant times, in relation to statements made and actions connected to a potential going private transaction, with certain of the lawsuits challenging additional Twitter posts by Mr. Musk, among other things. Several of those actions were consolidated. All the non-consolidated cases have been dismissed with prejudice through a stipulation and order. A stipulation for dismissal with prejudice of the consolidated case was filed on December 24, 2025, and the parties are waiting for the court to approve it. In addition to these cases, two derivative lawsuits were filed on October 25, 2018 and February 11, 2019 in the U.S. District Court for the District of Delaware, purportedly on behalf of Tesla, against Mr. Musk and the members of the Tesla board of directors as then constituted. Those cases were also consolidated, and on April 25, 2025, were dismissed with prejudice through a stipulation and order.
On October 21, 2022, a lawsuit was filed in the Delaware Court of Chancery by a purported shareholder of Tesla alleging, among other things, that board members breached their fiduciary duties in connection with their oversight of the Company’s 2018 settlement with the SEC, as amended. Among other things, the plaintiff seeks reforms to the Company’s corporate governance and internal procedures, unspecified damages, and attorneys’ fees. The lawsuit has been stayed.
Certain Derivative Lawsuits in Delaware
Before converting from a Delaware to Texas corporation on June 13, 2024, three separate derivative actions brought by purported Tesla stockholders were filed in the Delaware Court of Chancery on May 24, June 10 and June 13, 2024, purportedly on behalf of Tesla, against current and former directors regarding topics involving Elon Musk and others, X Corp. (formerly Twitter) and xAI. These suits assert various claims, including breach of fiduciary duty and breach of contract, and seek unspecified damages and other relief. On August 6, 2024, the plaintiffs in these three actions moved to consolidate the matters into a single case. The Court consolidated two of the three cases. Tesla and the directors filed motions to dismiss, and oral argument on those motions occurred on October 22, 2025.
Litigation and Investigations Relating to Alleged Discrimination and Harassment
On February 9, 2022, the California Civil Rights Department (“CRD,” formerly “DFEH”) filed a civil complaint against Tesla in Alameda County, California Superior Court, alleging systemic race discrimination, hostile work environment and pay equity claims, among others. CRD’s amended complaint seeks monetary damages and injunctive relief. The trial is currently set for July 20, 2026.
Additionally, on June 1, 2022 the Equal Employment Opportunity Commission (“EEOC”) issued a cause finding against Tesla that closely parallels the CRD’s allegations. On September 28, 2023, the EEOC filed a civil complaint against Tesla in the United States District Court for the Northern District of California asserting claims for race harassment and retaliation and seeking, among other things, monetary and injunctive relief. The case is in discovery with no trial date set.
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Other Litigation Related to Our Products and Services
We are also subject to various lawsuits that seek monetary and other injunctive relief. These lawsuits include proposed class actions and other consumer claims that allege, among other things, purported defects and misrepresentations related to our products and services. For example, on September 14, 2022, a proposed class action was filed against Tesla, Inc. and related entities in the U.S. District Court for the Northern District of California, alleging various claims about the Company’s driver assistance technology systems under state and federal law. This case was later consolidated with several other proposed class actions, and a Consolidated Amended Complaint was filed on October 28, 2022, which seeks damages and other relief on behalf of all persons who purchased or leased from Tesla between January 1, 2016, to the present. On March 22, 2023, the plaintiffs filed a motion for a preliminary injunction to order Tesla to (1) cease using the term “Full Self-Driving Capability” (FSD Capability), (2) cease the sale and activation of FSD Capability and deactivate FSD Capability on Tesla vehicles, and (3) provide certain notices to consumers about proposed court-findings about the accuracy of the use of the terms Autopilot and FSD Capability. Tesla opposed the motion. On September 30, 2023, the Court denied the request for a preliminary injunction, compelled four of five plaintiffs to arbitration, and dismissed the claims of the fifth plaintiff with leave to amend the complaint. On October 31, 2023, the remaining plaintiff filed an amended complaint, which Tesla moved to dismiss, and on May 15, 2024, the Court granted in part and denied in part Tesla’s motion. On May 6, 2025, the plaintiff filed a motion for class certification, which Tesla opposed, and on August 18, 2025, the Court certified a limited class comprised of California consumers who are not subject to an arbitration agreement. On September 1, 2025, Tesla filed a petition in the United States Court of Appeals for the Ninth Circuit for permission to appeal the class certification order, and on December 18, 2025, the Ninth Circuit granted Tesla’s petition. On January 5, 2026, the district court stayed the case pending resolution of the proceedings before the Ninth Circuit. Tesla’s opening brief in the Ninth Circuit is due on March 12, 2026. On October 2, 2023, a similar proposed class action was filed in San Diego County Superior Court in California. Tesla subsequently removed the San Diego County case to federal court and on January 8, 2024, the federal court granted Tesla’s motion to transfer the case to the U.S. District Court for the Northern District of California. Tesla moved to compel arbitration, which the plaintiff did not oppose, and on June 27, 2024, the Court stayed the case pending arbitration.
On February 27, 2023, a proposed class action was filed in the U.S. District Court for the Northern District of California against Tesla, Inc., Elon Musk and certain current and former Company executives. The complaint alleges that the defendants made material misrepresentations and omissions about the Company’s Autopilot and FSD Capability technologies and seeks money damages and other relief on behalf of persons who purchased Tesla stock between February 19, 2019, and February 17, 2023. An amended complaint was filed on September 5, 2023, naming only Tesla, Inc. and Elon Musk as defendants. On November 6, 2023, Tesla moved to dismiss the amended complaint. On September 30, 2024, the Court granted Tesla’s motion to dismiss without prejudice. On November 26, 2024, the court issued a final judgment in Tesla’s favor, and on December 23, 2024, the plaintiffs filed a notice of appeal to the United States Court of Appeals for the Ninth Circuit. Oral argument occurred on November 20, 2025, and on December 2, 2025, the Ninth Circuit issued a memorandum decision affirming the district court’s dismissal of the amended complaint. On December 29, 2025, the Court’s clerk issued a mandate closing the case.
On August 4, 2025, a proposed class action was filed in the U.S. District Court Western District of Texas against Tesla, Inc., Elon Musk, and certain current and former Company executives. The complaint alleges that the defendants violated federal securities laws through alleged material misrepresentations in public filings regarding the effectiveness of Autopilot, Full-Self Driving (Supervised), and Robotaxi. The complaint seeks monetary damages and other relief on behalf of persons who purchased Tesla stock between April 19, 2023, and June 22, 2025.
The Company intends to vigorously defend itself in these matters; however, we cannot predict the outcome or impact. We are unable to reasonably estimate the possible loss or range of loss, if any, associated with these claims, unless noted.
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Benavides v. Tesla, Inc.
On August 1, 2025, a jury in the U.S. District Court for the Southern District of Florida reached a verdict in a product liability trial relating to certain allegations regarding the use of our Autopilot technology in a 2019 accident that resulted in a fatality and injuries. The jury awarded $ 129  million in total compensatory damages, finding the driver 67 % at fault and the Company 33 % at fault. The jury also awarded $ 200  million in punitive damages. On September 15, 2025, the Company filed a post-trial motion for judgment as a matter of law or, in the alternative, a new trial on all issues or an amended judgment to lesser compensatory and punitive damages. Although we believe that the facts and law do not justify the damages awarded, the Company has recorded an immaterial accrual.
We have experienced, and we expect to continue to face, claims and regulatory scrutiny arising from or related to misuse or claimed failures or alleged misrepresentations of new technologies that we are pioneering. We are unable to reasonably estimate the possible loss or range of loss, if any, associated with these claims, unless noted. An unfavorable outcome in some or all of these proceedings could have a material adverse impact on results of operations or cash flows for a particular period. Our view of these matters is subject to inherent uncertainties and may change in the future.
Certain Investigations and Other Matters
We regularly receive requests for information, including subpoenas, from regulators and governmental authorities such as the National Highway Traffic Safety Administration, the National Transportation Safety Board, the SEC, the Department of Justice (“DOJ”), and various local, state, federal, and international agencies. The ongoing requests for information include topics such as operations, technology (e.g., vehicle functionality, vehicle incidents, Autopilot and FSD Capability and Robotaxi), compliance, finance, data privacy, and other matters related to Tesla’s business, its personnel, and related parties. We routinely cooperate with such formal and informal requests for information, investigations, and other inquiries. To our knowledge no government agency in any ongoing investigation has concluded that any wrongdoing occurred. We cannot predict the outcome or impact of any ongoing matters. Should the government decide to pursue an enforcement action, there exists the possibility of a material adverse impact on our business, results of operations, prospects, cash flows, financial position or brand.
We are also subject to various other legal proceedings, risks and claims that arise from the normal course of business activities. For example, on August 5, 2023, a putative class action was filed in the United States District Court for the Northern District of California, purportedly on behalf of all U.S. individuals impacted by a data misappropriation incident earlier that year. Several additional lawsuits followed, each asserting claims under various state laws and seeking monetary damages and other relief. If an unfavorable ruling or development were to occur in these or other possible legal proceedings, risks and claims, there exists the possibility of a material adverse impact on our business, results of operations, prospects, cash flows, financial position or brand.
Letters of Credit
As of December 31, 2025, we had $ 556 million of unused letters of credit outstanding.

Note 14 – Variable Interest Entity Arrangements
We have entered into various arrangements with investors to facilitate the funding and monetization of our energy generation systems and vehicles. In particular, our wholly owned subsidiaries and fund investors have formed and contributed cash and assets into various financing funds and entered into related agreements. We have determined that the funds are VIEs and we are the primary beneficiary of these VIEs by reference to the power and benefits criterion under ASC 810, Consolidation . We have considered the provisions within the agreements, which grant us the power to manage and make decisions that affect the operation of these VIEs, including determining the energy generation systems and the associated customer contracts to be sold or contributed to these VIEs, redeploying energy generation systems and managing customer receivables. We consider that the rights granted to the fund investors under the agreements are more protective in nature rather than participating.
As the primary beneficiary of these VIEs, we consolidate in the financial statements the financial position, results of operations and cash flows of these VIEs, and all intercompany balances and transactions between us and these VIEs are eliminated in the consolidated financial statements. Cash distributions of income and other receipts by a fund, net of agreed upon expenses, estimated expenses, tax benefits and detriments of income and loss and tax credits, are allocated to the fund investor and our subsidiary as specified in the agreements.
Generally, our subsidiary has the option to acquire the fund investor’s interest in the fund for an amount based on the market value of the fund or the formula specified in the agreements.
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Upon the sale or liquidation of a fund, distributions would occur in the order and priority specified in the agreements.
Pursuant to management services, maintenance and warranty arrangements, we have been contracted to provide services to the funds, such as operations and maintenance support, accounting, lease servicing and performance reporting. In some instances, we have guaranteed payments to the fund investors as specified in the agreements. A fund’s creditors have no recourse to our general credit or to that of other funds. Certain assets of the funds have been pledged as collateral for their obligations.
The aggregate carrying values of the VIEs’ assets and liabilities, after elimination of any intercompany transactions and balances, in the consolidated balance sheets were as follows (in millions):

December 31,
2025 December 31,
2024
Assets    
Current assets    
Cash and cash equivalents $ 109   $ 49  
Accounts receivable, net 11   18  
Prepaid expenses and other current assets 198   276  
Total current assets 318   343  
Operating lease vehicles, net 456   392  
Energy generation and storage systems, net 2,177   2,310  
Other non-current assets 183   183  
Total assets $ 3,134   $ 3,228  
Liabilities    
Current liabilities    
Accrued liabilities and other $ 49   $ 32  
Deferred revenue 6   6  
Current portion of debt and finance leases 1,364   2,114  
Total current liabilities 1,419   2,152  
Deferred revenue, net of current portion 60   71  
Debt and finance leases, net of current portion 1,679   1,834  
Total liabilities $ 3,158   $ 4,057  

Note 15 – Related Party Transactions
Tesla periodically does business with certain entities with which its CEO and directors are affiliated, such as xAI, SpaceX, The Boring Company and Redwood Materials, in accordance with our Related Person Transactions Policy. During the year ended December 31, 2025, we recognized $ 430 million of revenues and $ 285 million of cost of revenues from xAI for its purchase of our Megapack products in the ordinary course of business. Other transactions with xAI and other related parties during the year ended December 31, 2025 were immaterial . During the years ended December 31, 2024 and 2023, transactions with related parties were immaterial .
In January 2026, the Company entered into an agreement with xAI to invest approximately $ 2 billion to acquire shares of Series E Preferred Stock of xAI. As the investment is not in-substance common stock and the fair value is not readily determinable, we will account for the equity investment using the measurement alternative in accordance with ASC 321, Investments – Equity Securities . The equity investment will be initially recorded at cost on our consolidated balance sheet as a long-term investment subsequently adjusted only for observable price changes for identical or similar securities, net of any potential impairment, which will be evaluated quarterly. We will recognize any changes in the basis of the equity investment in Other (expense) income, net in the consolidated statements of operations.
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Note 16 – Segment Reporting and Information about Geographic Areas
Our Chief Executive Officer, as the CODM, organizes our company, manages resource allocations and measures performance among two operating and reportable segments: (i) automotive and (ii) energy generation and storage. The automotive segment includes the design, development, manufacturing, sales and leasing of 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, paid Supercharging sessions, automotive insurance business revenue, part sales and retail merchandise sales. The energy generation and storage segment includes the design, manufacture, installation, sales and leasing of energy generation and storage products and related services and sales of energy generation incentives.
Our CODM does not evaluate operating segments using asset or liability information. The CODM uses gross profit to allocate operating and capital resources and assesses performance of each segment by comparing actual gross profit results to historical results and previously forecasted financial information. The following table presents revenues, cost of revenues and gross profit by reportable segment (in millions):

Year Ended December 31,
2025 2024 2023
Automotive segment    
Revenues $ 82,056   $ 87,604   $ 90,738  
Cost of revenues (1) $ 68,764   $ 72,794   $ 74,219  
Gross profit $ 13,292   $ 14,810   $ 16,519  
Energy generation and storage segment    
Revenues $ 12,771   $ 10,086   $ 6,035  
Cost of revenues (2) $ 8,969   $ 7,446   $ 4,894  
Gross profit $ 3,802   $ 2,640   $ 1,141  

(1) Depreciation and amortization included in Cost of revenues for the automotive segment for the years ended December 31, 2025, 2024 and 2023 was $ 3.78 billion, $ 3.68 billion and $ 3.45 billion, respectively.
(2) Depreciation and amortization included in Cost of revenues for the energy generation and storage segment for the years ended December 31, 2025, 2024 and 2023 was $ 355 million, $ 377 million and $ 343 million, respectively.
The following table presents revenues by geographic area based on the sales location of our products (in millions):

Year Ended December 31,
2025 2024 2023
United States $ 47,627   $ 47,725   $ 45,235  
China 20,962   20,944   21,745  
Other international 26,238   29,021   29,793  
Total $ 94,827   $ 97,690   $ 96,773  

The following table presents long-lived assets by geographic area (in millions):

December 31,
2025 December 31,
2024
United States $ 35,847   $ 32,461  
Germany 4,775   4,175  

Other international 4,625   4,124  
Total $ 45,247   $ 40,760  

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The following table presents inventory by reportable segment (in millions):

December 31,
2025 December 31,
2024
Automotive $ 9,678   $ 9,988  
Energy generation and storage 2,714   2,029  
Total $ 12,392   $ 12,017  

Note 17 – Restructuring and Other
In 2025, we initiated certain actions in order to reduce costs and improve efficiency through convergence of AI chip design efforts. As a result, we recognized $ 390 million of expenses, within our automotive segment, related to charges for supercomputer assets, contract terminations and employee terminations.
In the second quarter of 2024, we initiated and substantially completed certain restructuring actions to reduce costs and improve efficiency. As a result, we recognized $ 583 million of employee termination expenses in Restructuring and other in our consolidated income statement.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.

ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act. In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that our management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of December 31, 2025, our disclosure controls and procedures were designed at a reasonable assurance level and were effective to provide reasonable assurance that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Our management concluded that our internal control over financial reporting was effective as of December 31, 2025.
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Our independent registered public accounting firm, PricewaterhouseCoopers LLP, has audited the effectiveness of our internal control over financial reporting as of December 31, 2025, as stated in their report which is included herein.
Limitations on the Effectiveness of Controls
Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements and projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the quarter ended December 31, 2025, which has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION
Rule 10b5-1 Trading Arrangements
None of the Company’s directors or officers adopted , modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company’s fiscal quarter ended December 31, 2025, as such terms are defined under Item 408(a) of Regulation S-K, except as follows:
On November 17, 2025 , Vaibhav Taneja , Chief Financial Officer , adopted a Rule 10b5-1 trading arrangement for the potential sale of up to 84,000 shares of our common stock, subject to certain conditions. The arrangement's expiration date is January 31, 2027 .
On November 26, 2025 , Kathleen Wilson-Thompson , one of our directors , adopted a Rule 10b5-1 trading arrangement for the potential sale of up to 120,948 shares of our common stock, subject to certain conditions. The arrangement's expiration date is May 8, 2026 .
Investment in xAI
On January 16, 2026, following review in a manner consistent with the Board’s fiduciary duties and the Company’s related party transactions policy (the “RPT Policy”), Tesla entered into an agreement to invest approximately $2 billion to acquire shares of Series E Preferred Stock of xAI as part of xAI’s recent publicly-disclosed financing round. Tesla’s investment was made on market terms consistent with those already received by other investors in the financing, including with respect to price, customary information rights and registration rights. Completion of the investment is subject to customary limited closing conditions, including applicable regulatory approvals.
As previously disclosed, Tesla and xAI have certain ongoing commercial relationships that are described in the Company’s proxy statement for its 2025 Annual Meeting of Shareholders (the “2025 Proxy Statement”). In connection with the investment, Tesla and xAI also entered into certain framework agreement that, among other things, builds upon the existing relationship between Tesla and xAI by providing a framework for evaluating potential collaborations, with any specific projects to be implemented through separate negotiations, all of which will be subject to applicable approval processes (including the RPT Policy) and in a manner consistent with the Board’s fiduciary duties.
As previously disclosed, Tesla shareholders had made a shareholder proposal regarding a potential investment in xAI for Tesla’s 2025 Annual Meeting of Shareholders (the “xAI Proposal”). The Board did not recommend for or against the xAI Proposal. As also previously disclosed, at that shareholders’ meeting, more votes were cast in favor of the xAI Proposal than against, but there were also a significant number of shares held by shareholders who abstained. Because the vote was advisory and no specific transaction was proposed at that time, the Board determined and disclosed in the 2025 Proxy Statement that it would examine next steps in light of the voting results (including the number of abstentions) and retain responsibility for any decisions regarding a potential investment in xAI, which would be evaluated under the RPT Policy. The 2025 Proxy Statement also disclosed that the Board would ultimately determine and implement strategies related to artificial intelligence (including any potential investment in xAI) in a manner consistent with its fiduciary duties and the RPT Policy, all of which it did in approving the xAI investment.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by this Item 10 of Form 10-K will be included in our proxy statement to be filed with the SEC in connection with the solicitation of proxies for our 2026 Annual Meeting of Shareholders (the “2026 Proxy Statement”) and is incorporated herein by reference. The 2026 Proxy Statement will be filed with the SEC within 120 days after the end of the fiscal year to which this report relates.

ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item 11 of Form 10-K will be included in our 2026 Proxy Statement and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by this Item 12 of Form 10-K will be included in our 2026 Proxy Statement and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
The information required by this Item 13 of Form 10-K will be included in our 2026 Proxy Statement and is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this Item 14 of Form 10-K will be included in our 2026 Proxy Statement and is incorporated herein by reference.
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PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
1. Financial statements (see Index to Consolidated Financial Statements in Part II, Item 8 of this report)
2. All financial statement schedules have been omitted since the required information was not applicable or was not present in amounts sufficient to require submission of the schedules, or because the information required is included in the consolidated financial statements or the accompanying notes
3. The exhibits listed in the following Index to Exhibits are filed or incorporated by reference as part of this report

INDEX TO EXHIBITS (1)

Exhibit
Number
Incorporated by Reference Filed
Herewith

Exhibit Description Form File No. Exhibit Filing Date

3.1 Certificate of Formation of the Registrant
10-Q 001-34756 3.1 July 24, 2024

3.2 Amended and Restated Bylaws of the Registrant.
8-K 001-34756 3.1 May 16, 2025

4.1 Specimen common stock certificate of the Registrant.
10-K 001-34756 4.1 January 30, 2025

4.2 Fifth Amended and Restated Investors’ Rights Agreement, dated as of August 31, 2009, between Registrant and certain holders of the Registrant’s capital stock named therein.
S-1 333-164593 4.2 January 29, 2010

4.3 Amendment to Fifth Amended and Restated Investors’ Rights Agreement, dated as of May 20, 2010, between Registrant and certain holders of the Registrant’s capital stock named therein.
S-1/A 333-164593 4.2A May 27, 2010

4.4 Amendment to Fifth Amended and Restated Investors’ Rights Agreement between Registrant, Toyota Motor Corporation and certain holders of the Registrant’s capital stock named therein.
S-1/A 333-164593 4.2B May 27, 2010

4.5 Amendment to Fifth Amended and Restated Investor’s Rights Agreement, dated as of June 14, 2010, between Registrant and certain holders of the Registrant’s capital stock named therein.
S-1/A 333-164593 4.2C June 15, 2010

4.6 Amendment to Fifth Amended and Restated Investor’s Rights Agreement, dated as of November 2, 2010, between Registrant and certain holders of the Registrant’s capital stock named therein.
8-K 001-34756 4.1 November 4, 2010

97

Exhibit
Number
Incorporated by Reference Filed
Herewith

Exhibit Description Form File No. Exhibit Filing Date
4.7 Waiver to Fifth Amended and Restated Investor’s Rights Agreement, dated as of May 22, 2011, between Registrant and certain holders of the Registrant’s capital stock named therein.
S-1/A 333-174466 4.2E June 2, 2011

4.8 Amendment to Fifth Amended and Restated Investor’s Rights Agreement, dated as of May 30, 2011, between Registrant and certain holders of the Registrant’s capital stock named therein.
8-K 001-34756 4.1 June 1, 2011

4.9 Sixth Amendment to Fifth Amended and Restated Investors’ Rights Agreement, dated as of May 15, 2013 among the Registrant, the Elon Musk Revocable Trust dated July 22, 2003 and certain other holders of the capital stock of the Registrant named therein.
8-K 001-34756 4.1 May 20, 2013

4.10 Waiver to Fifth Amended and Restated Investor’s Rights Agreement, dated as of May 14, 2013, between the Registrant and certain holders of the capital stock of the Registrant named therein.
8-K 001-34756 4.2 May 20, 2013

4.11 Waiver to Fifth Amended and Restated Investor’s Rights Agreement, dated as of August 13, 2015, between the Registrant and certain holders of the capital stock of the Registrant named therein.
8-K 001-34756 4.1 August 19, 2015

4.12 Waiver to Fifth Amended and Restated Investors’ Rights Agreement, dated as of May 18, 2016, between the Registrant and certain holders of the capital stock of the Registrant named therein.
8-K 001-34756 4.1 May 24, 2016

4.13 Waiver to Fifth Amended and Restated Investors’ Rights Agreement, dated as of March 15, 2017, between the Registrant and certain holders of the capital stock of the Registrant named therein.
8-K 001-34756 4.1 March 17, 2017

4.14 Waiver to Fifth Amended and Restated Investors’ Rights Agreement, dated as of May 1, 2019, between the Registrant and certain holders of the capital stock of the Registrant named therein.
8-K 001-34756 4.1 May 3, 2019

4.15 Voting Agreement, dated as of September 3, 2025
8-K 001-34756 10.3 November 7, 2025

4.16 Indenture, dated as of May 22, 2013, by and between the Registrant and U.S. Bank National Association.
8-K 001-34756 4.1 May 22, 2013

4.17 Description of Registrant’s Securities
— — — — X

98

Exhibit
Number
Incorporated by Reference Filed
Herewith

Exhibit Description Form File No. Exhibit Filing Date

10.1** Form of Indemnification Agreement between the Registrant and its directors and officers.
8-K 3000-34756 10.1 September 5, 2025

10.2** 2003 Equity Incentive Plan.
S-1/A 333-164593 10.2 May 27, 2010

10.3** Form of Stock Option Agreement under 2003 Equity Incentive Plan.
S-1 333-164593 10.3 January 29, 2010

10.4** Amended and Restated 2010 Equity Incentive Plan.
10-K 001-34756 10.4 February 23, 2018

10.5** Form of Stock Option Agreement under 2010 Equity Incentive Plan.
10-K 001-34756 10.6 March 1, 2017

10.6** Form of Restricted Stock Unit Award Agreement under 2010 Equity Incentive Plan.
10-K 001-34756 10.7 March 1, 2017

10.7** Amended and Restated 2010 Employee Stock Purchase Plan, effective as of February 1, 2017.
10-K 001-34756 10.8 March 1, 2017

10.8** T esla, Inc. Amended and Restated 2019 Equity Incentive Plan
8-K 001-34756 10.1 November 7, 2025

10.9** Form of Stock Option Agreement under Amended and Restated 2019 Equity Incentive Plan.
X

10.10** Form of Restricted Stock Unit Award Agreement under Amended and Restated 2019 Equity Incentive Plan.
X

10.11** Employee Stock Purchase Plan, effective as of June 12, 2019.
S-8 333-232079 4.5 June 12, 2019

10.12** 2012 SolarCity Equity Incentive Plan and form of agreements used thereunder.
S-1(1) 333-184317 10.3 October 5, 2012

10.13** Offer Letter between the Registrant and Elon Musk dated October 13, 2008.
S-1 333-164593 10.9 January 29, 2010

10.14** Performance Stock Option Agreement between the Registrant and Elon Musk dated January 21, 2018.
DEF 14A 001-34756 Appendix A February 8, 2018

10.15 Indemnification Agreement, effective as of June 23, 2020, between Registrant and Elon R. Musk.
10-Q 001-34756 10.4 July 28, 2020

99

Exhibit
Number
Incorporated by Reference Filed
Herewith

Exhibit Description Form File No. Exhibit Filing Date

10.16** 2025 CEO Interim Restricted Stock Agreement, dated August 3, 2025
8-K 001-34756 10.1 August 4, 2025

10.17** Tesla, Inc. 2025 CEO Performance Award Agreement, dated as of September 3, 2025
S-8 333-291402 4.4 November 10, 2025

10.18† Agreement for Tax Abatement and Incentives, dated as of May 7, 2015, by and between Tesla Motors, Inc. and the State of Nevada, acting by and through the Nevada Governor’s Office of Economic Development.
10-Q 001-34756 10.1 August 7, 2015

10.19†† Grant Contract for State-Owned Construction Land Use Right, dated as of October 17, 2018, by and between Shanghai Planning and Land Resource Administration Bureau, as grantor, and Tesla (Shanghai) Co., Ltd., as grantee (English translation).
10-Q 001-34756 10.2 July 29, 2019

10.20 Credit Agreement, dated as of January 20, 2023, among Tesla, Inc., the Lenders and Issuing Banks from time to time party thereto, Citibank, N.A., as Administrative Agent and Deutsche Bank Securities, Inc., as Syndication Agent
10-K 001-34756 10.59 January 31, 2023

19 Insider Trading Policy
10-K 001-34756 19 January 30, 2025

21.1 List of Subsidiaries of the Registrant
— — — — X

23.1 Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm
— — — — X

31.1 Rule 13a-14(a) / 15(d)-14(a) Certification of Principal Executive Officer
— — — — X

31.2 Rule 13a-14(a) / 15(d)-14(a) Certification of Principal Financial Officer
— — — — X

32.1* Section 1350 Certifications
— — — — X

97 Tesla, Inc. Clawback Policy
10-K 001-34756 97 January 29, 2024

101.INS Inline XBRL Instance Document — — — — X

100

Exhibit
Number
Incorporated by Reference Filed
Herewith

Exhibit Description Form File No. Exhibit Filing Date
101.SCH Inline XBRL Taxonomy Extension Schema Document — — — — X

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. — — — — X

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document — — — — X

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document — — — — X

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document — — — — X

104 Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)

* Furnished herewith
** Indicates a management contract or compensatory plan or arrangement
† Confidential treatment has been requested for portions of this exhibit
†† Portions of this exhibit have been redacted in compliance with Regulation S-K Item 601(b)(10).
(1) The Registrant has excluded from the exhibits long-term debt that does not exceed 10 percent of the Company’s total assets and agrees to furnish a copy of the instrument to the Commission upon request.

ITEM 16. FORM 10-K SUMMARY
None.
101

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Tesla, Inc.
Date: January 28, 2026
 
/s/ Elon Musk
Elon Musk
Chief Executive Officer
(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature Title Date
     
/s/ Elon Musk Chief Executive Officer and Director (Principal Executive Officer) January 28, 2026

Elon Musk

/s/ Vaibhav Taneja Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) January 28, 2026

Vaibhav Taneja    

/s/ Robyn Denholm Director January 28, 2026

Robyn Denholm  

/s/ Ira Ehrenpreis Director January 28, 2026

Ira Ehrenpreis  

/s/ Joseph Gebbia Director January 28, 2026

Joseph Gebbia  

/s/ Jack Hartung Director January 28, 2026

Jack Hartung

/s/ James Murdoch Director January 28, 2026

James Murdoch

/s/ Kimbal Musk Director January 28, 2026

Kimbal Musk

/s/ JB Straubel Director January 28, 2026

JB Straubel  
   
/s/ Kathleen Wilson-Thompson Director January 28, 2026

Kathleen Wilson-Thompson    

102