Responsible Sourcing Tesla’s Supplier Audit program Supplier Audit Program In 2018, Tesla initiated its Supplier Audit program with the objective to extend our supplier performance evaluation to key environmental and social impact metrics relevant to Tesla’s business. This program extension was introduced at the time when Tesla was transitioning from a small automotive manufacturer to a company gaining recognition as the leader in electrical vehicle production. We recognized that this growth came with an increased ability to impact positive change on the practices of our suppliers, but also with an increased responsibility to drive such change in line with our mission statement. During the program pilot phase, we focused our efforts on suppliers that we deemed high risk based on their industry or the use of potentially dangerous processes and/or chemicals in the manufacturing of our parts. We chose to utilize the Responsible Business Alliance’s (RBA) Validated Assessment Program (VAP) as the basis for our audits. The RBA’s VAP is an audit protocol globally recognized for its breadth of topics and stringent requirements for supplier completion. It covers nearly 200 checkpoints across labor, health and safety, environmental, ethical and management system topics. Audits are conducted by independent third parties that are approved by the RBA, and all auditors must undergo training by the RBA on the audit standard and its implementation ensuring a globally and industry-wide standardized approach. In any case where any priority non-conformance (the most significant type) occurs, our audit procedures require that suppliers undergo a closure audit. These closure audits – which are a follow up to the original audit where the non-conformances were identified – allow suppliers to address all non-conformances in the earlier audits. Additional audits, rather than an immediate suspension of the business relationship, are preferred to improve working conditions and reduce the risk of continued deficiencies. As of the end of 2021, we had a total of 152 supplier locations go through our supplier audit at least once, representing 144 suppliers, or 10% of 2021 spend with our direct supply base. As part of these audits over 4,000 supplier employee interviews were conducted. 112