Reducing Carbon Footprint Even Further While emissions from the manufacturing phase can account for a relatively minor portion of lifetime vehicle emissions when Tesla Manufacturing Footprint: compared to the use phase, it is still an important part of lifecycle emissions. These are the steps that we are taking to reduce Current Actions the manufacturing GHG footprint: 3. Supply chain localization In alignment with our mission, Tesla believes in reducing emissions upstream of our factories, including the carbon footprint of our supply chains. When it comes to subcomponent manufacturing, such as the instrument panel and large stamped portions of the vehicle body, we believe the closer they are manufactured to our factories, the better. Localizing suppliers reduces the distance parts need to travel before they are assembled into our vehicles, and reduces the emissions associated with transportation. Supplier localization also supports the local community and its workforce and reduces the risk of a supply disruption due to geopolitical dynamics. While some components (for example, semiconductors) are and will continue to be fabricated at highly specialized manufacturing facilities in specific locations around the globe, heavy vehicle parts will increasingly be produced near our Gigafactories in order to be closer to our vehicle manufacturing process. As a testament to Tesla’s localization efforts and our strategy to manufacture key modules, such as the battery pack, drive unit and seating in-house at Tesla, Tesla’s Model 3 was recently awarded the top spot (Model Y was third) on the Cars.com American-Made Index. The index ranks vehicles using five factors: assembly location, parts content, engine (powertrain) origin, transmission origin and U.S. manufacturing workforce. Average Lifecycle Emissions in U.S. (gCO e/mi) 2 Origin of Non-Tesla Produced Vehicle Components 500 Model 3/Y Vehicle Manufacturing in California, USA Vehicle Manufacturing in Shanghai, China 400 Impacted by supply 300 chain localization Other 200 Other 14% 27% 100 0 North Model 3 Model 3 Model 3 Model 3 Avg. Mid-Size America China Ridesharing Use Personal Use Ridesharing Use Personal Use Premium ICE 86% (solar charged) (solar charged) (grid charged) (grid charged) 73% Manufacturing Phase Use Phase Component origin calculations are based on expenditures for non-Tesla produced Model 3 and Model Y vehicle components purchased in the fourth quarter of 2020. 19 Location information is based on country-of-origin data as captured through Tesla’s external supply base.