SecProbe.io

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-3561

Mail Stop 3561

         April 12, 2010
  Elon Musk Chief Executive Officer Tesla Motors, Inc. 3500 Deer Creek Road  Palo Alto, California 94304
Re: Tesla Motors, Inc.
 Amendment No. 1 to
Registration Statement on Form S-1
Filed March 29, 2010
File No. 333-164593
 Dear Mr. Musk:
We have reviewed your filing and have the following comments.  Where
indicated, we think you should re vise your document in response to these comments.  If
you disagree, we will consider your explanation as to why our comment is inapplicable or
a revision is unnecessary.  Please be as deta iled as necessary in your explanation.  In
some of our comments, we may ask you to provide us with supplemental information so we may better understand your disclosure.  Af ter reviewing this information, we may or
may not raise additional comments.
Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our comments or on any other aspect of our review.  Feel free to call us at  the telephone numbers listed at the end of this letter.
 Prospectus Summary, page 1

 1. We note your response to comment five of our letter dated February 25, 2010.  You state on page four that “many incu mbent automobile manufacturers failed to
aggressively pursue fully electric vehicl e programs….”  Please revise or balance
this disclosure in light of  facts stated on page 90 that  GM has spent an estimated

Elon Musk
Tesla Motors, Inc.
April 12, 2010 Page 2
$1 billion in the development of the Vo lt and Toyota has spent an estimated $1
billion in the development of the Prius,  which is progressing toward a plug-in
electric version.  Additionally, consider whether phrases in the first bullet point
beginning on page 89 such as “failed to aggressively pursue”  and “rather than
investing heavily” are consis tent with these facts.
 Risk Factors, page 13

 2. We note your Rule 83 letter requesting confidentiality for your response to
comment 10 of our last letter.  We will address this under separate cover.
3. We note that you have removed disclosure regarding competitive disadvantages resulting from the lack of direct financ ing and related discounts on page 25.  You
also state on page 69 that “Prior to February 2010, we did not provide direct
financing… Starting in February 2010, we began offering a leasing program….”
Please clarify whether you offer direct fi nancing and related di scounts, in addition
to the leasing program you started in February 2010.
4. We note your response to comment 14 of our letter dated February 25, 2010, and
we reissue the comment.  For your sole s uppliers, either affirmatively state that
there are other alternative providers and th at you can switch if necessary or name
the sole suppliers and corresponding components.
5. Please revise the second risk factor on page 37 to capture th e risk that you are
likely to lose the sole customer in your  powertrain business if  it does what it has
announced publicly.
6. From the narrative in the la st risk factor on page 46 it is impossible to understand
how you could be subject to claims for damages.  Either revise or advise.

Management’s Discussion and Analysis of Financial Condition and Results of
Operations, page 62
Leasing Activities, page 82

7. We have reviewed your response to our prior comment number 20, as well as your expanded disclosure regarding the e xpected impact of your planned leasing
activities on your liquidity and capital resour ces.  In this regard, we do not believe
that your disclosure fully addresses our c oncerns.  As noted in our prior comment,
you have historically collected the full pur chase price of Tesla Roadsters sold in
the United States approximately three months prior to their production.  In
addition, per your discussion of cash flows from operati ng activities on page 83 of
MD&A, it appears that your  traditional practices of collecting refundable
reservation deposits and rece iving full upfront payment for vehicles sold in the
United States prior to their production, ha ve historically co ntributed to your

Elon Musk
Tesla Motors, Inc.
April 12, 2010 Page 3
ability to fund your working capital requi rements and to align production with
demand.  However, based upon your recent decision to allow qualified customers
to lease your vehicles, it appears that in  future periods, you may be required to
produce Tesla Roadster vehicles that will ultimately be leased, without the benefit
of receiving payment for such vehicles upfr ont.  Furthermore, it is unclear to us
whether (i) you expect to colle ct reservation fees (i.e., si milar to the fees collected
for vehicles being sold) prior to produci ng vehicles that will ultimately be leased
and (ii) whether your decision to lease ve hicles is expected to result in the
retention of larger invent ory balances (e.g., work-in-process or finished goods)
than have historically been retained.  In this regard, it w ould appear that the
factors cited above could result in  a significant increase in your cash
requirements, to the extent that they are applicable.  As such, please tell us and
expand your disclosure, as appropriate, to specifically  discuss (a) whether your
planned leasing operations can be expected to directly impact either your cash or
your working capital requirements and (b ) how you plan to fund the production of
leased vehicles as well as any expected  increases to your inventory levels, if
applicable.  Furthermore, please revise  your disclosure to discuss any other
significant business decisions or operationa l changes that may directly impact
your working capital, liquidity, and/or cap ital resources – particularly, if the
impact of those decisions or actions is e xpected to be material.  For example, you
state in your response to our prior comme nt number 18 that you recently reduced
the amount of reservation fees due prior to the delivery of your vehicles in the
European Union.  If this reduction to th e reservation fees due prior to vehicle
delivery, combined with your expected international sales growth (as disclosed on page 63 of MD&A), is expected to mate rially impact your liquidity or capital
resources, please discuss the expected impact in MD&A

Cash Flows from Operating Activities, page 83

8. We have reviewed your response to our prior comment number 21, as well as your revised disclosure regarding your “C ash Flows from Operating Activities.”
While we acknowledge that your expande d disclosure provides additional
information regarding your cash flows fr om operations, we continue to believe
that your disclosure could be enhanc ed by refocusing your discussion on your
company’s actual cash receipts and disburse ments, rather than the reconciling
items presented on the face of your statemen ts of cash flows, which were prepared
using the indirect method.  For example,  for each of your comparable reporting
periods, we believe that you should quantify, as well as analyze and discuss, (i)
your company’s actual cash receipts related to its development arrangement with Daimler and (ii) your company’s actual cas h received in the form of refundable
reservation fees, as opposed to focusing your disclosure on th e period-to-period
changes in the related liability balan ces.  Similarly, we believe that your
disclosure should specifical ly quantify and discuss the amount(s) of other material
operating cash receipts and disbursements, such as cash receipts related to sales

Elon Musk
Tesla Motors, Inc.
April 12, 2010 Page 4
and cash disbursements related to purchase s of inventory.  Please revise your
disclosure accordingly, or advise.

Business, page 90

9. We note your response to comment 23 of our letter dated February 25, 2010.
Your disclosure in the third full bullet point on page 90 suggests that incumbent
automobile manufacturers are not close to  producing all electric  vehicles, stating
that “New product launches by incumben t automobile manufacturers from
development to production have historic ally been lengthy” and referring to a
“need to develop an entirely new powertrain and the sophisticat ed battery cooling,
power, safety and management systems.”  However we note from the
supplemental materials you have provid ed that the General Motors Volt is
scheduled to go into produc tion in 2010 and the Nissan Leaf is scheduled to go on
sale this year.  Please revise.

Certain Relationships and Relate d Party Transactions, page 151

10. We note your response to comment 28 of our letter dated February 25, 2009.
Please revise to clarify the number of Series E convertible preferred stock
obtained at either $2.5124 or $1.0050 per share, for each related person.  It may
be helpful to revise the ta ble at the bottom of page 152 to indicate the amount of
interest that was converted, in addition to the principal already shown.  Also
specify which related persons converted at which price per share.  Please clarify
whether the February 2008 debt financ ing warrants were exercised or are
currently outstanding.  We also note that you have indicated a principal amount
related to the December 2008 financing but not the February 2008 financing for
Jasper Holdings, LLC.
11. We note your disclosure on page 62 rega rding Daimler’s plans to increase its
purchase of battery packs and chargers by 40% and the development and sale of modular battery packs for electric delivery  vans for Freightliner Custom Chassis
Corporation.  Please provide related party disclosure regarding these transactions
and file any executed agreements as exhibits to your next amendment.

Exhibit 5.1

12. Please revise your legality opinion or confirm to us in a response to indicate that
the opinion opines upon Delaware law incl uding the statutory provisions and all
applicable judicial decisions  interpreting those laws.

* * * * *

As appropriate, please amend your regist ration statement in response to these

Elon Musk
Tesla Motors, Inc. April 12, 2010 Page 5  comments.  You may wish to provide us with marked copies of the amendment to expedite our review.  Please furnish a cove r letter with your amendment that keys your
responses to our comments and provides any requested information.  Detailed cover
letters greatly facilitate our review.  In your  responses, please include the page numbers
of the amendment where we can find the changes.   Please understand that we may have
additional comments after reviewing your amendment and responses to our comments.
You may contact Jeffrey S ears at (202) 551-3302 or Lyn Shenk at (202) 551-3380
if you have questions regarding comments on the financial statements and related
matters.  Please contact John Dana Brown at (202) 551-3859 or the undersigned at (202) 551-3750 with any other questions.
        S i n c e r e l y ,
Max A. Webb Assistant Director

cc: Mark B. Baudler, Esq  Fax: (650) 493-6811