TSLATesla, Inc.

Please quantify material factors to which changes in accounts are attributed. For example, we note your disclosure that the increase in cost of automotive sales revenue was primarily due to higher volume of Model 3 deliveries, partially offset by reductions in Model 3 average costs per unit and lower overall costs for Model S and Model X deliveries from fewer units delivered.

We respectfully advise the Staff that we believe we have provided information regarding any material factors that have impacted our accounts in our disclosures in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations” in the 2018 Form 10-K, in accordance with Item 303 of Regulation S-K.

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We have quantified individual factors where they were material and where we believed it would be helpful to understand their relative impact, whether in their amount relative to a single material factor that was the clear and

3500 Deer Creek Road, Palo Alto, California 94304 predominant reason for a change in an account, or otherwise in their unique significance to the account or our business. Moreover, we have not quantified certain enumerated material factors where their amounts could be derived from the other values provided in the same discussion.

For example, with respect to our cost of automotive sales revenues, we respectfully submit that we delivered 245,506 total vehicles in 2018, a 138% increase over the 103,184 total vehicles we delivered in 2017. The single most significant factor in such increase was the ramp during 2018 of Model 3, which we launched and of which we delivered 1,764 units during the second half of 2017, compared to 146,094 units delivered during 2018 (the difference between which we disclosed in the 2018 Form 10-K in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Revenues” (page 56)). The fact that Model 3 deliveries increased from a negligible number to our highest-selling product accounted for the vast majority of the $6.96 billion increase in cost of automotive sales revenue between fiscal years 2017 and 2018. Accordingly, other than $969.8 million of additional cost of automotive sales revenue arising from a new accounting standard, we determined that it would not be meaningful to separately quantify any individual factors that were comparatively insignificant.

On the other hand, we respectfully submit that where we believed that it would be helpful to quantify material factors that significantly impacted changes in our cost of revenues between periods, or factors that were otherwise material in significance in a given period, we have done so. For example, in comparing the cost of revenues between applicable periods in the 2018 Form 10-K, we specified that: $969.8 million in additional cost of automotive sales revenue was recognized and $624.4 million in cost of automotive leasing revenue was no longer recognized in 2018 due to a new accounting standard (page 58); an increase of $23.4 million in cost of automotive leasing revenue was recognized in 2017 compared to 2016 due to early payoffs and expiration of resale value guarantees (page 59); and an increase of $72.5 million in cost of energy generation and storage revenues was recognized in 2018 compared to 2017 due to a specific commercial battery project (page 60). Likewise, in the 2019 Q2 Form 10-Q, we recently specified reductions in cost of automotive sales of $49.6 million and $458.4 million for the three months and six months ended June 30, 2019, respectively, owing to certain price adjustments we made in the first half of 2019 (pages 43 and 44).

Finally, we further respectfully advise the Staff that we have also quantified and/or compared factors that were material in amount or other significance in our discussion of our financial results other than our cost of revenues, such as in the following excerpts from the 2018 Form 10-K in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations” (emphasis added):

“Automotive sales revenue increased $9.10 billion, or 107%, in the year ended December 31, 2018 as compared to the year ended December 31, 2017, primarily due to an increase of approximately 144,330 Model 3 deliveries from our significant production ramp in the year ended December 31, 2018, delivered at average selling prices that remained relatively consistent year-over-year. Additionally, we recognized $1.40 billion of additional automotive sales revenue due to the adoption of the new revenue standard and an increase of $58.3 million in sales of regulatory credits to $418.6 million in the year ended December 31, 2018. ZEV credits sales were $103.4 million and non-ZEV regulatory credits sales were $315.2 million in the year ended December 31, 2018, compared to $279.7 million ZEV credit sales and $80.6 million in non-ZEV regulatory credit sales in the year ended December 31, 2017. The growth in non-ZEV regulatory credits year-over-year was generally consistent with the delivery volume growth. The above increases in revenue were offset by a decrease of approximately 3,240 Model S and Model X deliveries during the year ended December 31, 2018, excluding the impact of adoption of the new revenue standard, at average selling prices that remained relatively consistent as compared to the year ended December 31, 2017.” (page 56)

“R&D expenses increased $82.3 million, or 6%, in the year ended December 31, 2018 compared to the year ended December 31, 2017. This increase was primarily due to an $84.2 million increase in employee and labor related expenses from headcount growth to support our business expansion and $45.2 million increase in stock-based compensation expense related to an increase in headcount and number of employee stock awards granted for new hire and refresher employee stock grants. Additionally, there was an increase of $16.0 million in facilities, freight, and depreciation expenses due to business expansion, offset by a $69.7 million decrease in expensed materials as there were higher costs in the year ended December 31, 2017 primarily related to Model 3 development.” (page 60)

“SG&A expenses increased $358.0 million, or 14%, in the year ended December 31, 2018 as compared to the year ended December 31, 2017. The increase was primarily due to a $193.1 million increase in stock-based compensation expense related to the 2018 CEO Performance Award and stock awards granted for new hires and refresher employee stock grants. Additionally, there was a $153.9 million increase in office, information technology and facilities-related expenses and sales and marketing activities to support our business expansion.” (page 61)

In future filings, we will continue to disclose where appropriate quantitative information about material factors to which changes in accounts are attributed.

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We note that your services and other revenue consists of revenue from various sources including "sales by our acquired subsidiaries to third party customers." Please further clarify for us the nature of these sales.

We respectfully advise the Staff that certain companies that we acquired in previous fiscal years continued to provide services to third party customers following their acquisition pursuant to their remaining pre-acquisition contractual obligations, which has generated immaterial amounts of revenues to Tesla from time to time. We have classified such revenues within the “Services and other” line item in our consolidated financial statements.

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If the resulting revenue from acquisitions lead to a material change or represents a meaningful factor in our Services and other revenue, we have disclosed such information in our Annual Reports on Form 10-K. For example, in the 2018 Form 10-K, information regarding the most significant of such acquisitions during the periods reported was discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Results of Operations–Revenues” as follows, and substantially identical disclosure was provided in the same section of our Annual Report on Form 10-K for the year ended December 31, 2017 (page 49):

“Service and other revenue increased $533.2 million, or 114%, in the year ended December 31, 2017 compared to the year ended December 31, 2016. This was primarily due to an increase in used vehicle sales as a result of increased automotive sales as well as from the expansion of our trade-in program. Additionally, there was a $41.1 million increase from the inclusion of engineering service revenue from Grohmann Engineering GmbH (now Tesla Grohmann Automation GmbH), which we acquired on January 3, 2017, and a $68.4 million increase in non-warranty maintenance services revenue as our fleet continued to grow during the year ended December 31, 2017.” (page 56)

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We note your disclosure that the warranty reserve does not include projected warranty costs associated with your vehicles subject to lease accounting and your solar energy systems under lease contracts or PPAs, as the costs to repair these warranty claims are expensed as incurred. Please tell us the basis for recognizing these costs as incurred.

We respectfully advise the Staff that we have followed the guidance set forth by the Financial Accounting Standards Board within Accounting Standards Codification (“ASC”) Section 460-10-20, which defines “Warranty” as “[a] guarantee for which the underlying is related to the performance (regarding function, not price) of nonfinancial assets that are owned by the guaranteed party.” In the case of our vehicles subject to direct lease accounting and solar energy systems under lease contracts or Power Purchase Agreements (“PPAs”), the underlying non-financial assets (i.e., the vehicles and solar

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energy systems) are not owned by the guaranteed parties (i.e., the customers). These vehicles and solar energy systems are recorded as assets within the “Operating lease vehicles, net” and “Solar energy systems leased and to be leased, net” financial statement line items in our consolidated balance sheet. Therefore, the leasing customers obtain the benefit from Tesla’s owned productive assets. The repairs and maintenance on such owned assets are incurred over the term of usage of the assets rather than as an upfront cost. Therefore, there are no warranty obligations to customers, and we expense the costs to repair as incurred.

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We note your disclosure that you capitalize shipping costs and initial direct costs such as the incremental costs of contract administration, referral fees and sales commissions from the origination of automotive lease agreements as an element of operating lease vehicles, net, and subsequently amortize these costs over the term of the related lease agreement.

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Please explain to us the nature of the type of costs considered “contract administration” costs and how your policy for these costs complies with ASC 842-10-30-9 and 30-10. Note 12. Leases, page 25

We respectfully advise the Staff that we only capitalize initial direct costs that are incurred upon lease execution, such as sales commissions and referral fees from the origination of automotive lease agreements. In the 2019 Q2 Form 10-Q, we indicated that initial direct costs include contract administration costs. As a policy, incremental contract administration costs include fees payable upon execution of the leases, such as legal fees resulting from the execution of the lease and lease document preparation costs incurred upon execution of the lease.

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We believe that this is consistent with the guidance provided in ASC 842-10-30-9 and 30-10.

We further respectfully submit that our current lease arrangements have not resulted in external and incremental contract administration costs as of June 30, 2019. Therefore, no contract administration costs have been capitalized in our consolidated financial statements as of June 30, 2019. However, we will continue to monitor our initial direct costs as we may incur these costs in the future with new product offerings, and accordingly we will continue to ensure that only eligible costs under ASC 842 are capitalized in our consolidated financial statements.

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We note your disclosure in Note 12 that certain of your operating leases provide for annual increases to lease payments based on an index or rate. We also note that you disclose you estimate the annual increase in lease payments based on the index or rate at the lease commencement date, for both your historical leases and for new leases commencing after January 1, 2019.

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Please tell us how your accounting complies with the guidance in ASC 842-10-30-5(b). As part of your response, please explain the estimates used in your calculation of lease payments and tell us the nature and terms of any arrangements where the lease payments are not initially measured using the index or rate at the commencement date.

We respectfully advise the Staff that most of our lease arrangements do not provide for increases in lease payments based on an index, and instead provide for either no future increases in lease payments or increases in lease payments in fixed amounts specified in the respective lease agreements. Moreover, we have no lease arrangements where we use estimates to calculate any lease payments.

For each lease arrangement that provides for annual increases in lease payments based on a specific index or rate, we obtain the value of such index or rate at lease commencement and include it in the

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lease payments schedule to calculate the right-of-use asset and corresponding liability. Subsequent to the lease commencement date, when the actual payments in the subsequent period are known based on changes in the specific rate or index, we do not re-measure the lease payments unless there is a re-measurement event. We believe that this is consistent with the guidance provided in ASC 842-10-30-5(b). If, however, the lease arrangement specifies that the increases in lease payments based on a specific rate or index are subject to a cap, we instead apply the capped increase to lease payments over the contracted lease term and we deem such capped increases to be, in substance, fixed increases to our lease payments schedule. Any future changes in lease payments due to the movements of such index or rate are reflected directly in our consolidated income statement as a period cost. Furthermore, any differences resulting from the application of any caps specified in our lease arrangements, as compared to the index or rate specified at lease commencement, are immaterial to our consolidated financial statements.

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We note that you expect the phase-out of the $7,500 federal tax credit available in the U.S. for the purchase of qualified electric vehicles such as yours to begin at some point during 2018. If you believe this phase-out could impact the demand for electric vehicles and thus have a material impact on sales, please discuss this change in trend and uncertainty in MD&A in accordance with Item 303(a)(3)(ii) of

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Regulation S-K.

We respectfully advise the Staff that we have not expected, and currently do not expect, any impact of the scheduled phase-out of the federal tax credit over the course of 2019 on our vehicle demand or sales to be material. Nevertheless, in response to the Staff’s comment, we have included in “Management’s Discussion and Analysis of Financial Condition and Results of Operation—Management Opportunities, Challenges and Risks” in our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2018 (the “Q2 Form 10-Q”) the following discussion of the expected temporary impact on vehicle

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sales:

“In July 2018, we delivered our 200,000th vehicle in the U.S. Under current regulations, the full $7,500 federal tax credit for the purchase of a qualified electric vehicle will continue to be available only for any of our new vehicles delivered by the end of 2018 in the U.S., and then will be reduced to $3,750 for each vehicle delivered by the end of the second quarter of 2019, then to $1,875 for each vehicle delivered by the end of 2019, then to $0 for each vehicle delivered thereafter. In the near term, we believe this phase-out will pull forward customer orders, before normalizing. In the long run, we do not expect a meaningful impact to our sales in the U.S., as we believe that our vehicles offer a compelling proposition at their full price.”

3500 Deer Creek Road, Palo Alto, California 94304

Moreover, in future filings, if we believe that the phase-out of the federal tax credit could negatively impact the demand for our electric vehicles and have a material impact on our sales in a manner that is different than such discussion, we will provide appropriate additional disclosure at that time.

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We note that you plan to ramp up production of the Model 3 to produce 5,000 units per week. Please disclose an estimate of the amount of capital necessary to accomplish this goal. See Item 303(a)(1) of Regulation S-K.

We respectfully advise the Staff that we have disclosed under “Management’s Discussion and Analysis of Financial Condition and Results of Operation—Liquidity and Capital Resources” in the Form 10-K as well as in our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2018 (the “Q1 Form 10-Q”) and the Q2 Form 10-Q our expectations for total capital expenditures in 2018, taking into account the capital costs incurred and to be incurred to produce Model 3 at a rate of 5,000 vehicles per week, which we achieved in the last week of June 2018.

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Moreover, as of the end of each period covered by these reports, we had already incurred most of the capital costs to achieve such rate of production, and such capital costs were included in the capital expenditures for the applicable periods included in our consolidated financial statements and notes thereto.

Additionally, we have also disclosed in the same section of the Q2 Form 10-Q that we expect that a planned further expansion of Model 3 manufacturing capacity to rates of 6,000 vehicles per week by late August 2018, and eventually to 10,000 vehicles per week by sometime in 2019, will require limited additional capital expenditures. In future filings, to the best of our ability, we will continue to disclose information about the future capital needs of our business.

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Please include a discussion of material planned capital expenditures, as well as the timing of such expenditures, associated with the expansion of Gigafactory 1, ramping production at Gigafactory 2, and tooling and manufacturing capital required to introduce new vehicles, energy storage products, and solar products. See Item 303(a)(2) of Regulation S-K and SEC Release No. 33-6835.

We respectfully advise the Staff that as disclosed under “Management’s Discussion and Analysis of Financial Condition and Results of Operation—Liquidity and Capital Resources” in the Form 10-K, Q1 Form 10-Q and Q2 Form 10-Q, our expectations of our capital expenditures for 2018 at the times of filing such reports were: (i) slightly higher than 2017 (which, as disclosed in the Consolidated Statement of Cash Flows in the Form 10-K, was approximately $3.41 billion), (ii) slightly below $3 billion, and (iii) slightly below $2.5 billion, respectively.

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Such disclosures reflect the best of our ability to project future material capital expenditures, which is generally limited to the near term at this still-early stage in our life cycle when we have just begun high-volume manufacturing. It is challenging to predict the magnitude and timing of capital expenditures beyond the current fiscal year, or at best, the next four fiscal quarters, because we are still focused on significantly ramping the production rate of our Model 3 vehicle, and the extent of our current operations is still such that the timing and capital-efficiency of our future initiatives will largely depend on the progress of our ongoing Model 3 vehicle production ramp. Furthermore, as such future initiatives are expected to grow the scale of our business by multiples and at a rate that we have not previously experienced, predictions are even more difficult to make at this time.

However, in response to the Staff’s comment, we have included the following disclosure in the Q2 Form 10-Q under “Management’s Discussion and Analysis of Financial Condition and Results of Operation—Liquidity and Capital Resources” to discuss our expectations for capital expenditures beyond 2018 to the best of our current ability:

“For the twelve-month period ending June 30, 2019, we expect total capital expenditures to be approximately $2.5 billion. As we continue to expand our existing manufacturing capacity, introduce new products, expand our retail stores, services centers, mobile repair services and Supercharging network, we are utilizing our increasing experience and learnings from past and current product ramps to do so at a level of capital efficiency per dollar of spend that we expect to be significantly greater than historical levels. Moreover, we expect that cash generated from our core operations will generally be sufficient for such future capital expenditures, although we may choose to seek alternative financing sources with respect to certain projects outside of the ordinary course of business. For example, we expect that much of our investment in our Gigafactory 3 to be constructed in Shanghai, China will be funded through indebtedness arranged through local financial institutions.”

In future filings, to the best of our ability, we will continue to disclose information about future material planned capital expenditures as well as the timing of such expenditures.

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We note that some of the $2.04 billion of unused committed amounts as of December 31, 2017 and the $1.96 billion of unused committed amounts as of March 31, 2018 under your credit facilities and financing funds are subject to satisfying specific conditions prior to draw-down. Please describe the specific conditions that must be satisfied before the funds can be used.

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In addition, disclose any restrictions on the use of available funds. See Item 303(a)(1) of Regulation S-K.

We respectfully advise the Staff that with respect to our disclosure obligations pursuant to Item 303(a)(1) of Regulation S-K, there have not been, as of the filing of the Form 10-K, the Q1 Form 10-Q or the Q2 Form 10-Q, any known demands, commitments, events or uncertainties with respect to these facilities or funds that were or are likely to result in our liquidity thereunder increasing or decreasing in a material way.

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However, in response to the Staff’s comment, we have included the following disclosure in the Q2 Form 10-Q under “Management’s Discussion and Analysis of Financial Condition and Results of Operation—Liquidity and Capital Resources”:

“In addition, we had $1.31 billion of unused committed amounts under our credit facilities and financing funds, some of which are subject to satisfying specified conditions prior to draw-down (such as pledging to our lenders sufficient amounts of qualified receivables, inventories, leased vehicles and our interests in those leases, solar energy systems and the associated customer contracts, our interests in financing funds or various other assets; and contributing or selling qualified solar energy systems and the associated customer contracts or qualified leased vehicles and our interests in those leases into the financing funds). Upon the draw-down of any unused committed amounts, there are no restrictions on the use of such funds for general corporate purposes.”

As appropriate, we will make similar disclosures regarding any material conditions that must be satisfied before any committed funds under our credit facilities or financing funds may be used, or any material restrictions on their use, in future filings.

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We note that you will need significant capital to continue research and development projects, establish sales, delivery and service centers, and continue to significantly increase the number of Supercharger stations and connectors. Please provide an estimate of the amount of capital necessary to accomplish these goals as well as the timing of such costs. See Item 303(a)(2) of Regulation S-K.

We respectfully refer the Staff to our response to the Staff’s comment number 3 above, including the additional disclosure we included under “Management’s Discussion and Analysis of Financial Condition and Results of Operation—Liquidity and Capital Resources” in the Q2 Form 10-Q. Our future capital spend on research and development projects, sales, delivery and service centers, Supercharger stations and connectors will also depend in large part on the progress of our ongoing Model 3 ramp, and therefore making predictions as to timing and magnitude in any particular period other than the near

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term is difficult at this time.

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We note that the amounts reported in the table of contractual obligations for long-term debt and capital lease obligations due in 2018 do not agree to the corresponding amounts reported on the balance sheet as current portion of long-term debt and capital leases.

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Please reconcile the difference and to the extent deemed necessary, provide footnotes to the table to describe any pertinent data necessary for an understanding of the timing and amount of the specified contractual obligations. See Item 303(a)(5) of Regulation S-K.

to the Staff’s comment, the Company will append a footnote to all future reports that include a table of contractual obligations to describe the reconciling items noted above. Read in the reply ↗

We note in your response to the staff dated May 24, 2017 that future interest payments pertaining to long-term debt are included in the amounts disclosed in your contractual obligations table and that you would modify the the line caption as "Long-term debt, including scheduled interest" to clarify this point in future filings; however, we are unable to locate this revised presentation. Please revise.

We respectfully advise the Staff that this line caption was an unintentional omission, but the scheduled interest was in fact included in the long-term debt amounts. In future filings that include a table of contractual obligations, we will modify the line caption in accordance with your comment. Read in the reply ↗

We note reference to the report of other auditors with respect to the December 31, 2016 balance sheet. Please provide the separate audit report being referenced in accordance with Article 2-05 of Regulation S-X.

We respectfully advise the Staff that the separate audit report with respect to the December 31, 2016 balance sheet was filed as Exhibit 99.1, titled “Certain Excerpts from Annual Report on Form 10-K of SolarCity,” to the Form 10-K, incorporated by reference to Exhibit 99.1 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2016. Read in the reply ↗

We note in your response to the staff dated May 24, 2017 that expanded disclosure would be provided on recalls if related costs are material to your financial statements. We note recalls occurred during 2017 and reports of an additional recall in 2018. Please tell us your consideration of including an accounting policy for recall costs.

We respectfully advise the Staff that all vehicle recalls to date have only resulted in immaterial costs to us. In response to the Staff’s comment, we have clarified that accrued warranty costs include estimated costs of recalls in our disclosure of our warranty accounting policy under the heading “Summary of Significant Accounting Policies—Warranties” in Note 2 to our consolidated financial statements included in the Q2 Form 10-Q. Read in the reply ↗

We note your response to prior comment 2 that further expansion of Model 3 manufacturing capacity to rates of 6,000 vehicles per week by late August 2018, and eventually to 10,000 vehicles per week by sometime in 2019, will require limited additional capital expenditures.

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However, we also note the risk factor disclosure on page 51 that Model 3 has "required significant investment and will require additional resources in connection with its ongoing ramp". If the risk factor disclosure is true, please provide a discussion of the related additional future expenditures in accordance with Item 303(a)(1) and (2) of Regulation S-K. Please advise or revise accordingly.

We respectfully advise the Staff that the referenced language and other similar language in our risk factors (e.g., “our Model 3 production plan has generally required significant investments of cash and management resources, and we expect to deploy additional resources as we further progress our ramp [emphasis added]” on page 47 of the Q2 Form 10-Q) refers to significant past investments, but does not

3500 Deer Creek Road, Palo Alto, California 94304 on its face, nor is it intended to, project the magnitude of our future expenditures.

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Rather, we have included this language in our risk factors precisely because we are still in the middle of a key product ramp that will require some amount of additional spend to complete, but since it will be impossible to know the precise amount until we have completed the ramp, there is a potential risk that it could be greater than our expectations.

On the other hand, we have continued to discuss such expectations for future spend in other items of our periodic reports on a quarterly basis. We disclosed the following in “Management’s Discussion and Analysis of Financial Condition and Results of Operation—Management Opportunities, Challenges and Risks” in our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2018 (the “Q3 Form 10-Q”):

“We are continuing to work to increase Model 3 production to approximately 10,000 units per week in the most optimal manner from both a timing and capital expenditures perspective. At the Fremont Factory, we expect to continue to increase our Model 3 production rate to approximately 7,000 units per week with only limited additional capital expenditures, and we believe we can increase that rate to beyond 7,000 units per week with incremental capital expenditures. In China, which is the largest market for electric vehicles in the world, our Model S and Model X sales have been, and will likely continue to be, negatively impacted by recently-increased tariffs imposed by the Chinese government on U.S.-manufactured vehicles. We are seeking to alleviate the impact of such tariffs for Model 3 by developing plans to start producing approximately 3,000 Model 3 vehicles per week in Shanghai, China in the initial phase of our Gigafactory 3, which will have progressively increased levels of localization through local sourcing and manufacturing. However, the timeframe for that is subject to a number of uncertainties, including regulatory approval, supply chain constraints, and the pace of bringing the factory online.”

Moreover, in consideration of our updated manufacturing plans, including with respect to China, we updated our disclosure in the Q3 Form 10-Q to disclose our estimated capital expenditures for the current and next two fiscal years in “Management’s Discussion and Analysis of Financial Condition and Results of Operation—Liquidity and Capital Resources,” as follows:

“We currently expect total 2018 capital expenditures to be slightly below $2.5 billion, including the acquisition of land use rights in Shanghai, China to build Gigafactory 3 and for its initial design and construction expenses.”

“Considering the pipeline of new products planned at this point, and consistent with our current strategy of using a partner to manufacture cells, as well as considering all other infrastructure growth and expansion of Gigafactories 1, 2 and 3, we currently estimate that capital expenditures will be between $2.5 to $3.0 billion annually for the next two fiscal years.”

In future filings, to the best of our ability and in accordance with our then-current expectations, we will continue to update our disclosures about the future capital needs of our business.

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We note your response to prior comment 4 that some of the unused committed funds are subject to certain satisfying conditions such as pledging to the lenders sufficient amounts of qualified receivables, inventories, leased vehicles, etc.

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Please confirm that in future filings, if you are at risk of not satisfying these conditions, additional disclosure will be provided describing a known event or uncertainty that will result in or that is reasonably likely to affect your liquidity in a material way pursuant to Item 303(a)(1) of Regulation S-K. Additionally, we note the additional disclosure on page 43 that upon draw-down of any unused committed amounts, there are no restrictions on the use of such funds for general corporate purposes. However, we also note per the Form 8-K filed on August 23, 2017 that the Warehouse Agreements were established to support the Tesla Finance direct vehicle leasing program, therefore, it appears the unused committed funds cannot be used for general corporate purposes. Please advise.

We respectfully advise the Staff that our characterization of the Warehouse Agreements as “supporting” our direct vehicle leasing program is in reference to the fact that our direct vehicle leases and related vehicles (and only such assets) are eligible to be included in the borrowing base for these facilities. Once we have allocated the assets to the facilities, we may draw an amount of funds based on such assets, which allows us to receive a greater amount of cash upfront for our directly leased vehicles.

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After funds are drawn, however, the Warehouse Agreements (which have been filed with the Commission) do not restrict the manner in which they may be used by us, including for general corporate purposes. Nevertheless, in future filings, if there is a known event or uncertainty that will result in or that is reasonably likely to affect our liquidity in a material way pursuant to Item 303(a)(1) of Regulation S-K, we will provide additional disclosures.

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We note your response to prior comments 3 and 5. We continue to believe that a discussion of liquidity on a long term basis is required by Item 303 of Regulation S-K [see Instruction 5 to paragraph 303(a)] and SEC Release No. 33-6835.

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Therefore, please provide a discussion describing material planned capital expenditures affecting your initiatives and continued growth, their dependence on the progress of your ongoing Model 3 vehicle production ramp, and your current estimate of the required amounts resulting from expansion of Gigafactory 1, ramping production at Gigafactory 2, tooling and manufacturing capital required to introduce new vehicles and solar products, research and development projects, new delivery and service centers, and new Supercharger stations, for future periods beyond 2018. Similarly, if you decide not to incur such expenditures and therefore known uncertainty exists regarding continuation of your disclosed growth trends, and the adverse effect from the discontinuation of the growth trend is reasonably likely to be material, please revise your discussion in accordance with Item 303(a)(2) of Regulation S-K and SEC Release No. 33-6835.

We respectfully advise the Staff that we remain committed to disclosing our future capital expenditures to the extent we are able to estimate them. At this point of the Model 3 ramp and product roadmap, we are able to project our capital expenditures for a longer period of time than we were able to previously, and as noted above, have included in “Management’s Discussion and Analysis of Financial Condition and Results of Operation—Liquidity and Capital Resources” in the Q3 Form 10-Q the following:

“Considering the pipeline of new products planned at this point, and consistent with our

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current strategy of using a partner to manufacture cells, as well as considering all other infrastructure growth and expansion of Gigafactories 1, 2 and 3, we currently estimate that capital expenditures will be between $2.5 to $3.0 billion annually for the next two fiscal years.”

In future filings, to the best of our ability and in accordance with our then-current expectations, we will continue to update our disclosures about the future capital needs of our business.

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We note your response to prior comment 6 that you included amounts voluntarily repaid within 12 months following December 31, 2017 within the contractual obligations table. Per Item 303(a)(5) of Regulation S-K, amounts are to be aggregated by time period in which payments are due, not according to the timing of planned payments.

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Therefore, it does not appear appropriate to categorize the $1.1 billion of voluntary early repayments under the Credit Agreement [notes (e) and (3)] under the 2018 column unless they are due in 2018, but instead they should be explained in a footnote to the table. Similarly, with regard to the voluntary early repayments under the Warehouse Agreements [notes (f) and (4)], we note that you included the excess principal amount repaid during 2018 prior to the filing of the Form 10-K in the 2018 column. It appears that you should narratively describe these excess repayments, along with their sources, in a footnote to the table as well. Please revise future presentations accordingly.

to the Staff’s comment, we confirm that in any future report that includes a table of contractual obligations, in addition to including in the table the information required by Regulation S-K Item 303(a)(5), we will use one or more explanatory footnotes to the extent we believe that additional information not required by Item 303(a)(5) would be useful to understand our contractual commitments. Read in the reply ↗