Offer Letter - Gilbert Passin

Tesla Motors, Inc. is excited to extend you an offer for the position of Vice President of Manufacturing on the terms set forth below.

In this role you will perform the duties customarily associated with this position. You will report to Elon Musk, Chairman and CEO. Your duties, responsibilities, job title, and work location may be changed at any time by Tesla. We are pleased to have you join the Tesla team.

Your salary will be $250,000 per year, subject to standard payroll deductions and withholdings. As an exempt employee, you will not be entitled to overtime. You will be eligible for vacation and sick leave according to Tesla’s standard policy. You will also be eligible to receive all other benefits Tesla may provide to its employees (e.g., health and dental insurance coverage) after your enrollment on February 1, 2010. Tesla may consider you for bonuses, although the amount of such bonuses, if any, and the criteria for determining the award of such bonuses, if any, shall be in the sole discretion of Tesla. Of course, Tesla reserves the right to modify your compensation and benefits from time to time, as it deems necessary. The effective date of your employment will be February 1, 2010.

Stock Options: Subject to the approval of Tesla’s Board of Directors, you will be granted a stock option to purchase an aggregate of 200,000 shares of Tesla’s Common Stock pursuant to Tesla’s Equity Incentive Plan then in effect. Your stock options will vest commencing upon your first day of employment (1/4th of the shares vest one year after the Vesting Commencement Date, and 1/48th of the shares vest monthly thereafter over the next three years).

401K Program: You will be eligible to sign up for Tesla’s 401K program after your first pay check. Our 401K program is administered by Fidelity Investments.

Vacation Program: Tesla offers Regular full-time employees and part-time employees who work 20 hours per week are eligible for PTO immediately and will accrue PTO at 1.25 days per month (for a total of 15 days per calendar year).

By accepting this offer, you represent and warrant that your employment with Tesla will not violate any agreements, obligations or understandings that you may have with any third party or

prior employer. We want to emphasize that we do not wish you to bring any confidential or proprietary materials of any former employer which would violate any obligations you may have to your former employer. You further represent and warrant that you have read, understand, and accept the terms of your Stock Option Agreement, in particular, the vesting schedule of the shares of Tesla’s Common Stock thereof. You agree not to make any unauthorized disclosure to Tesla or use on behalf of Tesla any confidential information belonging to any of your former employers (except in accordance with agreements between Tesla and any such former employer). You also warrant that you do not possess any property containing a third party’s confidential and proprietary information. Of course, during your employment with Tesla, you may make use of information generally known and used by persons with training and experience comparable to your own, and information which is common knowledge in the industry or is otherwise legally available in the public domain.

As a Tesla employee, you will be expected to abide by all Tesla policies and procedures, and, as a condition of your employment, you will sign and comply with Tesla’s standard confidentiality agreement which prohibits unauthorized use or disclosure of Tesla confidential information or the confidential information of Tesla’s clients.

You may terminate your employment with Tesla at any time and for any reason whatsoever simply by notifying Tesla. Likewise, Tesla may terminate your employment at any time and for any reason whatsoever, with or without cause or advance notice. This at-will employment relationship cannot be changed except by a writing authorized on behalf of an officer of Tesla.

This letter agreement constitutes the complete, final and exclusive embodiment of the entire agreement between you and Tesla with respect to the terms and conditions of your employment, and it supersedes any other agreements or promises made to you by anyone, whether oral or written. This Agreement cannot be changed, amended, or modified except in a written agreement signed by an officer of Tesla. This letter agreement shall be construed and interpreted in accordance with the laws of the State of California.

If you choose to accept our offer under the terms described above, please indicate your acceptance, by signing below and returning it to me prior to January 3, 2010 at which time this offer will expire.

We look forward to your favorable reply and to a productive and enjoyable work relationship.

Very truly yours,

Tesla Motors, Inc.

/s/ Elon Musk

Elon Musk

Chairman of the Board and CEO

To ensure the rapid and economical resolution of disputes that may arise in connection with your employment with Tesla, you and Tesla agree that any and all disputes, claims, or causes of action, in law or equity, arising from or relating to your employment, or the termination of your employment, will be resolved, to the fullest extent permitted by law by final, binding and confidential arbitration in San Francisco, California conducted by the Judicial Arbitration and Mediation Services/Endispute, Inc. (“JAMS”), or its successors, under the then current rules of JAMS for employment disputes; provided that:

Nothing in this Agreement is intended to prevent either your or Tesla from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration. Notwithstanding the foregoing, you and Tesla each have the right to resolve any issue or dispute arising under the Proprietary Information and Inventions Agreement by Court action instead of arbitration.

Arbitrable claims do not include, and this Agreement does not apply to or otherwise restrict, administrative claims you may bring before any government agency where, as a matter of law, the parties may not restrict your ability to file such claims (including the Equal Employment Opportunity Commission and the National Labor Relations Board). Otherwise, it is agreed that arbitration shall be the exclusive remedy for administrative claims.

Please find below the details of your relocation package from Pleasanton to Southern California.

We will pay for two years temporary living in Southern California in a reasonable one bedroom apartment. We will also allow you to expense your travel costs from the Bay Area to Southern California.

With regard to selling your current home in Pleasanton, we will allow you to expense all reasonable costs incurred in respect of both legal and real estate selling costs.

You can also expense all your costs in regard to packing, shipping and transport of your goods from Pleasanton to Southern California.

We will also allow you to expense any actual costs incurred in buying a new home in Southern California.

You will be expected to submit your expenses or approval. The relocation package above is open for two years from the start of your employment.

Very truly yours,

Tesla Motors, Inc.

/s/ Elon Musk

Elon Musk

Chairman of the Board and CEO



Date:		1/1/2010


Date:		1/1/2010