AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 18/10/2026
Moat31
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 1/4 · Charging access agreements and manufacturing scale establish useful capabilities, but no durable network economics or relative cost superiority. The conditional EV patent pledge also limits reliance on patent exclusion as a protective mechanism.
durability · 1/4 · Infrastructure requires continuing investment, while realized vehicle incentives and repeated Megapack selling-price declines show fragile protection against price pressure. Prospective Robotaxi superiority does not establish durability.
customer dependency · 2/4 · Growing paid charging, maintenance and FSD subscription revenue provide indirect evidence of continuing customer engagement. Mixed service revenue cannot establish repeat vehicle purchases or high switching costs, particularly as charging access extends to other manufacturers.
erosion resilience · 1/4 · The first-half 2026 recovery demonstrates adaptability, but partly benefits from a depressed factory-changeover comparison. Earlier delivery and pricing declines, continuing storage price pressure and mixed quarterly margins show limited demonstrated protection.
Pricing power44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 1/4 · 2025 vehicle selling prices declined with mix and incentives; Megapack prices declined in both the annual and subsequent quarterly comparisons. Higher first-half 2026 automotive selling prices primarily reflect mix and currency, providing weak evidence of discretionary pricing power.
retention · 2/4 · Increasing paid charging and FSD subscription revenue support continuing engagement indirectly. Maintenance and used-vehicle contributions prevent treating overall services growth as a retention rate, and the passages contain no customer cohort or renewal data.
margin resilience · 2/4 · First-half 2026 automotive and total gross margins improved, but second-quarter automotive margins declined slightly and energy margins fell materially. Earlier automotive margin erosion and ongoing selling-price pressure make resilience mixed; margins do not establish a moat by themselves.
contractual freedom · 2/4 · Changing vehicle incentives and negotiated storage terms demonstrate commercial flexibility. Predefined PPA rates and contractual obligations to refund certain storage tariffs constrain that freedom. The evidence does not establish unrestricted repricing of existing customer contracts.
Predictability82
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 75.00
- Revenue growth volatility (pp)
- 21.44
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 2.35
Financial strength100
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 99.16
- netDebtEbitGrade
- 100.00
- interestCoverageGrade
- 100.00
- currentRatioGrade
- 100.00
- Debt / FCF (x)
- 1.06
- Net debt / operating income (x)
- -2.28
- Interest coverage (x)
- 12.88
- Current ratio (x)
- 2.16
Capital allocation72
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 13.74
- 3-year average dilution (%)
- 1.00
- 3-year average SBC / revenue (%)
- 2.30
- cashConversionGrade
- 54.72
Management50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · First-half operating cash of $8.63 billion covered $8.28 billion of capital expenditures, with substantial liquidity retained. Cash growth relied materially on working capital; the $2 billion SpaceX investment, stock-funded acquisition and planned spending above $25 billion introduce allocation and dilution risks whose returns are unproven.
incentive alignment · 2/4 · Actual executive option grants and the later-disclosed CEO award's long service and holding requirements support alignment. Substantial recognized compensation expense and rising overall stock compensation impose shareholder costs. Award conditions are not evidence that performance milestones have been achieved or shares vested.
execution · 2/4 · Cumulative deliveries, multinational Model Y launches, energy deployment growth and stronger first-half 2026 deliveries demonstrate execution. The prior-year automotive decline and subsequent mixed energy results temper that record. This assessment uses operating outcomes indirectly rather than assuming announced AI ambitions will succeed.
governance · 2/4 · Disclosed independent Audit Committee oversight, related-party approval requirements and effective reporting controls provide safeguards. The shared-CEO SpaceX investment creates an actual conflict requiring oversight, and the proxy identifies an existing derivative-suit ownership threshold. The passages do not establish transaction fairness or the outcome of proposed governance changes.
Evidence
In particular, as other automotive manufacturers have announced their adoption of NACS and agreements with us to utilize our Superchargers, we must correspondingly expand our network in order to ensure adequate availability to meet customer demands.
MD&A / other manufacturers' NACS adoption and Supercharger access agreements · Filed 23/07/2026
Services and other revenue increased $2.64 billion, or 46%, in the six months ended June 30, 2026 as compared to the six months ended June 30, 2025.
MD&A / first-half 2026 services revenue growth · Filed 23/07/2026
These increases were primarily due to increases in used vehicle sales volume and average selling price, non-warranty maintenance services and collision revenue and paid Supercharging sessions.
MD&A / services growth drivers including paid Supercharging · Filed 23/07/2026
As we expand our manufacturing operations and vehicle lineup globally, we will also have to continue to increase and staff our delivery, servicing and charging infrastructure accordingly, maintain our vehicle reliability and optimize our Supercharger locations to ensure cost effectiveness and customer satisfaction.
MD&A / delivery, servicing and charging infrastructure requirements · Filed 23/07/2026
Automotive and AI Enabled Products—Demand, Sales and Deliveries and Supporting Infrastructure Our cost reduction efforts, cost innovation strategies, and additional localized procurement and manufacturing are key to our vehicles’ affordability and have allowed us to competitively price our vehicles.
MD&A / management attribution of competitive pricing to cost reductions · Filed 23/07/2026
To name just a few: we delivered our 8 millionth vehicle, deployed more than 37 GWh of energy storage from Q3 2024 through the end of Q2 2025 and launched our new Model Y in four factories across three continents.
Shareholder letter / cumulative vehicle deliveries, storage deployments and factory launches · Filed 17/09/2025
2025 compared to 2024 Energy generation and storage revenue increased $2.69 billion, or 27%, in the year ended December 31, 2025 as compared to the year ended December 31, 2024 primarily due to increases in Megapack and Powerwall deployments, partially offset by a decrease in average selling price of Megapack.
MD&A / 2025 energy revenue and deployment growth with lower Megapack pricing · Filed 29/01/2026
Many of our competitors have significantly more or better-established resources than we do to devote to the design, development, manufacturing, distribution, promotion, sale and support of their products and services, and may achieve additional cost efficiencies owing to location and economic environments.
Risk factors / competitors' resources and potential cost efficiencies · Filed 29/01/2026
2025 compared to 2024 Automotive sales revenue decreased $6.66 billion, or 9%, in the year ended December 31, 2025 as compared to the year ended December 31, 2024, due a decrease of approximately 8% in cash deliveries and a lower average selling price per unit driven by sales mix and higher customer incentives such as attractive financing options.
MD&A / 2025 automotive revenue, cash deliveries and selling-price decline · Filed 29/01/2026
Energy Generation and Storage Segment Energy generation and storage revenue increased $350 million, or 13%, in the three months ended June 30, 2026 as compared to the three months ended June 30, 2025, primarily due to an increase in Megapack deployments, partially offset by a lower average selling price per Megapack unit and a decrease in Powerwall deployments.
MD&A / second-quarter 2026 energy deployments and lower Megapack selling prices · Filed 23/07/2026
Automotive sales revenue increased $6.77 billion, or 24%, in the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, due to an increase of approximately 18% in cash deliveries, in part from bringing down all of our vehicle factories simultaneously for the changeover to the New Model Y in the prior period.
MD&A / first-half 2026 automotive growth and prior-year factory changeovers · Filed 23/07/2026
Additionally, there was a higher average selling price per unit primarily driven by sales mix and a positive impact from the weakening of the United States dollar when compared to foreign currencies year over year and an increase from higher revenue from FSD (Supervised) subscriptions in the current period.
MD&A / automotive selling-price mix, currency and FSD subscription revenue · Filed 23/07/2026
2024 Change 2024 vs. 2023 Change (Dollars in millions) 2025 2024 2023 $ % $ % Cost of revenues Automotive sales $ 56,267 $ 61,870 $ 65,121 $ (5,603) (9) % $ (3,251) (5) % Automotive leasing 898 1,003 1,268 (105) (10) % (265) (21) % Total automotive cost of revenues 57,165 62,873 66,389 (5,708) (9) % (3,516) (5) % Services and other 11,599 9,921 7,830 1,678 17 % 2,091 27 % Total automotive & services and other segment cost of revenues 68,764 72,794 74,219 (4,030) (6) % (1,425) (2) % Energy generation and storage segment 8,969 7,446 4,894 1,523 20 % 2,552 52 % Total cost of revenues $ 77,733 $ 80,240 $ 79,113 $ (2,507) (3) % $ 1,127 1 % Gross profit total automotive $ 12,361 $ 14,197 $ 16,030 Gross margin total automotive 17.8 % 18.4 % 19.4 % Gross profit total automotive & services and other segment $ 13,292 $ 14,810 $ 16,519 Gross margin total automotive & services and other segment 16.2 % 16.9 % 18.2 % Gross profit energy generation and storage segment $ 3,802 $ 2,640 $ 1,141 Gross margin energy generation and storage segment 29.8 % 26.2 % 18.9 % Total gross profit $ 17,094 $ 17,450 $ 17,660 Total gross margin 18.0 % 17.9 % 18.2 % Automotive & Services and Other Segment Cost of automotive sales revenue includes direct and indirect materials, labor costs, manufacturing overhead, including depreciation costs of tooling and machinery, shipping and logistic costs, tariffs, reserves for estimated warranty expenses, FSD (Supervised) ongoing maintenance costs, vehicle connectivity costs, and allocations of electricity and infrastructure costs related to our free Supercharging programs.
MD&A / 2023–2025 segment gross profits and margins · Filed 29/01/2026
31 Table of Contents Cost of Revenues and Gross Margin Three Months Ended June 30, Change Six Months Ended June 30, Change (Dollars in millions) 2026 2025 $ % 2026 2025 $ % Cost of revenues Automotive sales $ 16,866 $ 13,567 $ 3,299 24 % $ 29,482 $ 25,028 $ 4,454 18 % Automotive leasing 187 228 (41) (18) % 383 467 (84) (18) % Total automotive cost of revenues 17,053 13,795 3,258 24 % 29,865 25,495 4,370 17 % Services and other 3,933 2,880 1,053 37 % 7,332 5,417 1,915 35 % Total automotive & services and other segment cost of revenues 20,986 16,675 4,311 26 % 37,197 30,912 6,285 20 % Energy generation and storage segment 2,499 1,943 556 29 % 3,955 3,888 67 2 % Total cost of revenues $ 23,485 $ 18,618 $ 4,867 26 % $ 41,152 $ 34,800 $ 6,352 18 % Gross profit total automotive $ 3,463 $ 2,866 $ 6,885 $ 5,133 Gross margin total automotive 16.9 % 17.2 % 18.7 % 16.8 % Gross profit total automotive & services and other segment $ 4,111 $ 3,032 $ 7,879 $ 5,400 Gross margin total automotive & services and other segment 16.4 % 15.4 % 17.5 % 14.9 % Gross profit energy generation and storage segment $ 640 $ 846 $ 1,592 $ 1,631 Gross margin energy generation and storage segment 20.4 % 30.3 % 28.7 % 29.6 % Total gross profit $ 4,751 $ 3,878 $ 9,471 $ 7,031 Total gross margin 16.8 % 17.2 % 18.7 % 16.8 % Automotive & Services and Other Segment Cost of automotive sales revenue increased $3.30 billion, or 24%, in the three months ended June 30, 2026 as compared to the three months ended June 30, 2025, due to the increase in deliveries year over year as discussed above.
MD&A / second-quarter and first-half 2026 segment gross profits and margins · Filed 23/07/2026
For our energy generation PPA arrangements, customers are charged solely based on actual power produced by the installed energy generation system at a predefined rate per kilowatt-hour of power produced.
Lease disclosures / predefined energy PPA rates · Filed 29/01/2026
Our accounts receivable balances associated with sales of energy storage products are dependent on billing milestones and payment terms negotiated for each contract, and our accounts receivable balances associated with our sales of regulatory credits are dependent on contractual payment terms.
Accounting policies / negotiated energy storage billing and payment terms · Filed 23/07/2026
We continue to monitor these developments and their potential impact on our results of operations, including reduction of revenue for any future potential refunds to certain energy storage customers for which a contractual obligation exists.
Commitments and contingencies / contractual tariff refunds to certain storage customers · Filed 23/07/2026
Our cash flows provided by operating activities were $8.63 billion during the six months ended June 30, 2026, compared to $4.70 billion during the same period ended June 30, 2025, representing an increase of $3.94 billion.
MD&A / first-half 2026 operating cash generation · Filed 23/07/2026
Capital expenditures amounted to $8.28 billion during the six months ended June 30, 2026, compared to $3.89 billion during the same period ended June 30, 2025, representing an increase of $4.40 billion.
MD&A / first-half 2026 capital expenditures · Filed 23/07/2026
We ended the second quarter of 2026 with $43.52 billion in cash and cash equivalents and short-term investments, representing a decrease of $535 million from the end of 2025.
MD&A / cash and short-term investments · Filed 23/07/2026
This increase was primarily due to favorable changes in net operating assets and liabilities of $3.01 billion and an increase in net income excluding non-cash expenses, gains and losses of $933 million.
Cash flows / working-capital contribution to operating cash growth · Filed 23/07/2026
Additionally, we invested $2.00 billion in SpaceX common stock during the six months ended June 30, 2026.
Cash flows / investment in SpaceX common stock · Filed 23/07/2026
We currently expect our capital expenditures to be in excess of $25 billion in 2026, driven by our AI initiatives, including investments in compute infrastructure and data centers, the expansion and ramp of our manufacturing and R&D production lines and facilities, and growth in our fleet of company-operated AI-enabled assets and our retail, service and charging footprint.
MD&A / expected 2026 capital expenditures · Filed 23/07/2026
Note 3 – Acquisition In the second quarter of 2026, Tesla acquired an AI hardware company in an asset acquisition for $1.95 billion in Tesla common stock and equity awards, of which $1.73 billion is subject to certain service conditions and/or performance milestones dependent on the successful deployment of the company's technology and $222 million was allocated to a patent and related developed technology intangible asset.
Acquisition note / stock-funded AI hardware acquisition and conditional awards · Filed 23/07/2026
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”).
Stock compensation / CEO award service and vesting requirements · Filed 23/07/2026
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 compensation / CEO award holding requirements and exceptions · Filed 23/07/2026
For the three and six months ended June 30, 2026, we recorded stock-based compensation expense of $267 million and $527 million, respectively, related to the 2025 CEO Performance Award.
Stock compensation / recognized 2025 CEO Performance Award expense · Filed 23/07/2026
Since 2020, equity awards granted to our NEOs have primarily been in the form of stock options: Xiaotong (Tom) Zhu, our Senior Vice President, APAC and Global Vehicle Manufacturing, received 100% of his equity award in the form of stock option awards upon his promotion to such role in 2023, and Vaibhav Taneja, our Chief Financial Officer, received approximately 80% of his equity award in the form of stock options in 2024, following the 2024 review of our compensation programs as discussed in the “Executive Compensation for Fiscal Year 2024 — Compensation Discussion and Analysis — Compensation Philosophy” section below and in consideration of his promotion in August 2023 to the role of Chief Financial Officer.
Executive compensation / actual executive stock-option grants · Filed 17/09/2025
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): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Cost of revenues $ 258 $ 213 $ 485 $ 422 Research and development 487 298 908 575 Selling, general and administrative 406 124 788 211 Total $ 1,151 $ 635 $ 2,181 $ 1,208 Note 10 – Income Taxes During the three months ended June 30, 2026, following the enactment of California Senate Bill 122 (SB 122) into law and based on the relevant weight of positive and negative evidence, including the consideration of our expected California tax liabilities, we concluded that it is more likely than not that our California deferred tax assets, other than research and development tax credits, are realizable.
Stock compensation / first-half 2026 and comparative compensation expense · Filed 23/07/2026
122 2025 Proxy Statement TABLE OF CONTENTS Audit Committee Members ROBYN DENHOLM JOE GEBBIA JACK HARTUNG JAMES MURDOCH Primary Responsibilities Audit • Reviewing and approving the selection of Tesla’s independent auditors, and approving the audit and non-audit services to be performed by Tesla’s independent auditors • Discussing the scope and results of the audit with the independent auditors and reviewing with management and the independent auditors Tesla’s interim and year-end operating results Oversight and Compliance • Providing oversight, recommendations, and under specified thresholds, approvals, regarding significant financial matters and investment practices, including any material acquisitions and divestitures • Reviewing and monitoring the integrity of Tesla’s financial statements and Tesla’s compliance with legal and regulatory requirements as they relate to financial statements or accounting matters • Reviewing the adequacy and effectiveness of Tesla’s internal control policies and procedures in addition to Tesla’s risk management, data privacy, data security and artificial intelligence Reporting • Reviewing and discussing the accounting assessment of our annual Impact Report and other sustainability disclosures • Preparing the audit committee report that the SEC requires in Tesla’s annual proxy statement Financial Expertise and Independence Each member of the Audit Committee is “independent” as such term is defined for audit committee members by the listing standards of Nasdaq and applicable laws.
Governance / Audit Committee responsibilities and disclosed independence · Filed 17/09/2025
84 The Committee assessed whether there were risks associated with allowing transactions between the Company and other entities in which Musk is a significant equityholder to count toward achievement of the milestones and determined that the Company’s interests are already protected by the Company’s Related Party Transaction policy, which requires the prior approval of the Audit Committee (composed of independent directors) for any such transactions.
Compensation committee analysis / related-party transaction approval policy · Filed 17/09/2025
The following table presents the reconciliation of basic to diluted weighted average shares used in computing net income per share of common stock attributable to common stockholders (in millions): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Weighted average shares used in computing net income per share of common stock, basic 3,237 3,223 3,235 3,220 Add: Stock-based awards 303 296 303 300 Weighted average shares used in computing net income per share of common stock, diluted 3,540 3,519 3,538 3,520 The following table presents the potentially dilutive shares that were excluded from the computation of diluted net income per share of common stock attributable to common stockholders, because their effect was anti-dilutive (in millions): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Stock-based awards 12 15 9 14 Restricted Cash Our total cash and cash equivalents and restricted cash, as presented in the consolidated statements of cash flows, was as follows (in millions): June 30, 2026 December 31, 2025 June 30, 2025 December 31, 2024 Cash and cash equivalents $ 15,219 $ 16,513 $ 15,587 $ 16,139 Restricted cash included in prepaid expenses and other current assets 496 389 559 494 Restricted cash included in other non-current assets 710 714 589 404 Total as presented in the consolidated statements of cash flows $ 16,425 $ 17,616 $ 16,735 $ 17,037 SpaceX Equity Investment We are presumed to have significant influence over our equity method investment in SpaceX under ASC 323, Equity Method Investments and Joint Ventures, as our CEO also serves as the CEO of SpaceX but as we do not have control over the investee, we have elected the fair value option in accordance with ASC 825, Financial Instruments, to provide a more relevant measure of the investment’s current economic value to financial statement users.
Accounting policies / SpaceX investment and shared CEO relationship · Filed 23/07/2026
Our management concluded that our internal control over financial reporting was effective as of December 31, 2025.
Controls and procedures / management conclusion on financial reporting controls · Filed 29/01/2026
A shareholder proposal to amend the bylaws to repeal 3% derivative suit ownership threshold.
Voting materials / proposal to repeal existing derivative-suit ownership threshold · Filed 17/09/2025
A-34 TABLE OF CONTENTS 3) 1 Million Robotaxis With recent substantial advancements in autonomous technologies, it is clear that the ride-hailing market has substantial growth potential.69 Currently, Waymo, one of the most mature companies to compete in the autonomous ride-hailing market, is estimated to be valued upwards of $45 billion70 with only 1,500 vehicles in operation as of May 2025 and another 2,000 projected to be built throughout the next year.71 Tesla’s competitive advantage in this space is clear: the Committee believes Tesla’s Robotaxi program will offer faster scalability at a significantly lower cost.
Proposed compensation rationale / Waymo comparison and prospective Robotaxi cost claims · Filed 17/09/2025
Successful Robotaxi deployment may also threaten the market share currently dominated by existing ride-sharing companies like Uber and Lyft.
Proposed compensation rationale / potential competition with Uber and Lyft · Filed 17/09/2025
We have yet to commercialize Bots and cannot predict how demand for Bots will develop, either from commercial or consumer applications.
Risk factors / Bots not yet commercialized as disclosed in the annual filing · Filed 29/01/2026
We have also adopted a patent policy in which we irrevocably pledged that we will not initiate a lawsuit against any party for infringing our patents through activity relating to electric vehicles or related equipment for so long as such party is acting in good faith.
Intellectual property / conditional pledge against EV patent infringement lawsuits · Filed 29/01/2026
