People and Culture In 2021, our focus remained on protecting people, the planet, our property and products. We were able to Safety improve our performance in Environmental, Health, Safety and Security (EHS&S) by turning to the experts in Tesla – our own employees. We evolved the way we define safety, developed internal tools to drive execution, actively sought worker improvement suggestions and established a more structured EHS&S audit program to identify safeguards and drive operational excellence throughout all areas of the business. Our EHS&S strategy remains focused on three pillars: 1. Do the Basics Right | 2. Engage and Empower Our Stakeholders | 3. Reduce Risk Changing how we define safety and build capacity: Human and Organizational Performance (HOP) and Operational Learning As we grew and evolved as an EHS&S organization, so did our view of safety. The Human and Organizational Performance (HOP) and Operational Learning group was developed in 2021 to integrate our new view of safety into the organization. In an ever-changing and dynamic work environment, we recognized the need to focus on creating the ability to fail safely. Creating the ability to fail safely is comprised of three components: 1. Engaged workers: workers who are connected to and care about the work they do. When workers are engaged, they are more likely to identify and communicate vulnerabilities in the system. 2. Agility: the ability to continuously navigate and adapt in an ever-changing, complex and dynamic work environment. 3. Safeguards: the hardware, software and human actions that directly prevent an event or mitigate a bad outcome. Instead of defining safety as the absence of accidents, we define safety as the presence of capacity. Capacity can be defined as the ability to mitigate outcomes and reduce system brittleness. 47