SecProbe.io

December 5, 2013
Via Email
Elon Musk
Chief Executive Officer
Tesla Motors, Inc.
3500 Deer Creek Road
Palo Alto, California 94304

Re: Tesla Motors, Inc.
 Form 10-K for Fiscal Year Ended December 31, 2012
Filed March 7, 2013
Form 10 -Q for Quarterly Period Ended September 30, 2013
Filed November 8, 2013
File No. 001 -34756

Dear Mr. Musk :

We have reviewed  your filing an d have the following comments.  In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.

Please r espond to this letter within 10  business days by confirming that you will revise
your document in future filings  (unless otherwise indicated)  and providing  any reque sted
informatio n.  If you do not believe our comments apply to your facts and circumstances, please
tell us why in your response.

After reviewing the information you provide in response to these  comments, we may
have  additional comments .

Form 10 -K for Fis cal Year Ended December 31, 2012

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of
Operations
Critical Accounting Policies and Estimates, page 69

1. Please include your policy for estimating r esidual values guaranteed to customers who
finance their vehicles through your banking partners as a critical accounting policy.
Include a discussion of the methodology and assumptions applied in determining the
estimated residual amounts and the likeliho od of materially different reported results if
different assumptions or conditions were to exist.

Elon Musk
Tesla Motors, Inc.
December 5, 2013
Page 2

 Revenues, page 78

2. Please quantify the amount of vehicle service revenue included in vehicle, options and
related sales and discuss any significant chang es in the amount from the prior period as
well as the factor(s) causing such changes.  In addition, if management expects the
introduction of the prepaid maintenance programs to have a material impact on the timing
of recognizing service revenue, please discuss this change in trend and its expected
impact  on service sales.

Notes to Consolidated Financial Statements, page 98
Maintenance Programs

3. We note per page 12 of your Business section that you announced a prepaid maintenance
program to include plans covering maintenance costs at either a fixed price per visit or
unlimited visits.  Please disclose your policy for accounting for both types of plans.

Form 10 -Q for Quarterly Period Ended September 30, 2013

Item 7.  Management’s Discussion and Analysis o f Financial Condition and Results of
Operations
Results of Operations, page 27

4. Please revise to disclose the number of units sold and the number delivered under resale
value guarantee terms and accounted for as operating leases.

Liquidity and Capital Resources, page 32

5. We n ote that at the end of May 2013  you announced the significant expansion of your
Supercharger network to include coverage on the U.S. west and east costs and around the
rest of the country.  Please discuss your expansion plan in more  detail including the
expected associated costs to achieve your goal.

Note 2.  Summary of Significant Accounting Policies
Resale value guarantee, page 10

6. We note your disclosure that in April 2013 you began offering resale value guarantees on
certain sal es financed through your banking partners.  We also note you account for such
transactions as operating leases.  With regard to measurement of expense during the term
of the operating lease, you disclose that you depreciate the cost of the respective
opera ting lease vehicles less the resale value guarantee amount to cost of automotive
sales over the contractual term of the guarantee program.  Please explain to us the basis
under GAAP for your use of this method, in which the depreciable basis excludes the
resale value guarantee amount and in which the depreciation rate is not based on the

Elon Musk
Tesla Motors, Inc.
December 5, 2013
Page 3

 useful life of the vehicles.  In this regard, ASC 840 -10-55-18 requires equipment to be
depreciated following the manufacturer’s normal depreciation policy.

7. We also note y our disclosure that you will adjust your depreciation estimates as needed,
if the resale value is projected to be lower in future periods.  Please explain to us the basis
under GAAP for your use of this method.

8. Please revise the presentation on your state ments of operations to separately classify
resale value guarantee sales as operating lease revenue and to separately present
associated costs (depreciation) within cost of revenues.

9. Please confirm to us that in future periods you will separately quantify product sales
revenue and associated cost of revenues related to previously delivered vehicles for
which customers did not elect to sell vehicles back to you under the resale value
guarantee.

10. Please revise your footnotes to include a table that rolls forw ard accounts related to resale
value guarantee operating leases for all periods presented.

Form 8 -K furnished November 5, 2013
Exhibit 99.1

11. We note the subheading of your third quarter shareholder letter cites non -GAAP gross
margin and net income without  also citing the most directly comparable GAAP measures.
Please revise to present, with equal or greater prominence, results on a GAAP basis
throughout your press releases.  Refer to Item 2.02 of Form 8 -K and Item 10(e)(1)(i)(A)
of Regulation S -K.

12. Page  10 of your third quarter shareholder letter includes a full non -GAAP income
statement.  Please revise to discontinue such presentation pursuant to question 102.10 of
the C&DIs on non -GAAP financial measures.

We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing includes the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require.   Since the company and its management are
in possession of a ll facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

 In responding to our comments, please provide  a written statement from the company
acknowledging that:

 the company is re sponsible for the adequacy and accuracy of the disclosure in the filing;

Elon Musk
Tesla Motors, Inc.
December 5, 2013
Page 4

  staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

 the company may not asse rt staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.

You may contact Theresa Messinese  at 202-551-3307  if you have questions regarding
comments on the financial statements and related matters.  Please contact me at 202-551-3380
with any other questions.

Sincerely,

 /s/ Lyn Shenk

 Lyn Shenk
Branch Chief

cc: Mark B. Baudler, Esq.
 Wilson Sonsini Goodrich & Rosati, P.C.