Using the Tesla financial statements provided, estimate the average interest rate that Tesla paid over the course of 2014 on their long-term debt. Please show your work.

(Hint #1: on the Balance Sheet, everything labeled ?Senior Notes? can be considered long-term debt. Assume that all of the interest expense Tesla paid is due to these senior notes.)

(Hint #2: remember that Income Statement numbers reflect what has happened to the firm over the entire year, while Balance Sheet numbers only reflect what is on the firm?s books at a single point in time, such as December 31, 2014. To estimate what Tesla?s debt was over the entire year (as opposed to the last day of the year), take the average of the December 31, 2014 and December 31, 2013 figures provided by the balance sheet.)

Tesla Motors, Inc. Consolidated Statements of Operations (in thousands, except share and per share data) 2014 Revenues Automotive sales Development services Total revenues Cost of revenues Automotive sales Development services Total cost of revenues Gross profit Operating expenses Research and development Selling, general and administrative Total operating expenses Loss from operations Interest income Interest expense Other income (expense), net Loss before income taxes Provision for income taxes Net loss Net loss per share of common stock, basic and diluted Weighted average shares used in computing net loss per share of common stock, basic and diluted $ Year Ended December 31, 2013 3,192,723 5,633 3,198,356 $ 2,310,011 6,674 2,316,685 881,671 $ $ 1,997,786 15,710 2,013,496 1,543,878 13,356 1,557,234 456,262 464,700 603,660 1,068,360 (186,689 ) 1,126 (100,886 ) 1,813 (284,636 ) 9,404 (294,040 ) $ (2.36 ) $ 124,539,343 231,976 285,569 517,545 (61,283 ) 189 (32,934 ) 22,602 (71,426 ) 2,588 (74,014 ) $ (0.62 ) $ 119,421,414 The accompanying notes are an integral part of these consolidated financial statements. 63 $ 2012 385,699 27,557 413,256 371,658 11,531 383,189 30,067 273,978 150,372 424,350 (394,283 ) 288 (254 ) (1,828 ) (396,077 ) 136 (396,213 ) (3.69 ) 107,349,188 Tesla Motors, Inc. Consolidated Balance Sheets (in thousands, except share and per share data) December 31, 2014 Assets Current assets Cash and cash equivalents Restricted cash and marketable securities Accounts receivable Inventory Prepaid expenses and other current assets Total current assets Operating lease vehicles, net Property, plant and equipment, net Restricted cash Other assets Total assets Liabilities and Stockholders' Equity Current liabilities Accounts payable Accrued liabilities Deferred revenue Capital lease obligations, current portion Customer deposits Convertible senior notes Total current liabilities Capital lease obligations, less current portion Deferred revenue, less current portion Convertible senior notes, less current portion Resale value guarantee Other long-term liabilities Total liabilities Commitments and contingencies (Note 11) Convertible senior notes (Notes 6) Stockholders' equity: Preferred stock; $0.001 par value; 100,000,000 shares authorized; no shares issued and outstanding Common stock; $0.001 par value; 2,000,000,000 shares authorized as of December 31, 2014 and 2013, respectively; 125,687,607 and 123,090,990 shares issued and outstanding as of December 31, 2014 and 2013, respectively Additional paid-in capital Accumulated deficit Total stockholders' equity Total liabilities and stockholders' equity $ $ $ $ 1,905,713 17,947 226,604 953,675 94,718 3,198,657 766,744 1,829,267 11,374 43,209 5,849,251 $ 777,946 268,884 191,651 9,532 257,587 601,566 2,107,166 12,267 292,271 1,806,518 487,879 173,244 4,879,345 $ $ 845,889 3,012 49,109 340,355 27,574 1,265,939 382,425 738,494 6,435 23,637 2,416,930 303,969 108,252 91,882 7,722 163,153 182 675,160 12,855 181,180 586,119 236,299 58,197 1,749,810 58,196 126 2,345,266 (1,433,682 ) 911,710 5,849,251 $ The accompanying notes are an integral part of these consolidated financial statements. 62 December 31, 2013 123 1,806,617 (1,139,620 ) 667,120 2,416,930 Tesla Motors, Inc. Consolidated Statements of Cash Flows (in thousands) Year Ended December 31, 2013 2014 Cash Flows From Operating Activities Net loss Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization Stock-based compensation Amortization of discount on convertible debt Inventory write-downs Amortization of Department of Energy (DOE) loan origination costs Change in fair value of DOE warrant liability Fixed asset disposal Other non-cash operating activities Foreign currency transaction (gain) loss Changes in operating assets and liabilities Accounts receivable Inventories and operating lease vehicles Prepaid expenses and other current assets Other assets Accounts payable Accrued liabilities Deferred revenue Customer deposits Resale value guarantee Other long-term liabilities Net cash provided by (used in) operating activities Cash Flows From Investing Activities Purchases of property and equipment excluding capital leases Withdrawals out of our dedicated DOE account, net (Increase) decrease in other restricted cash Purchases of short-term marketable securities Maturities of short-term marketable securities Net cash used in investing activities Cash Flows From Financing Activities Proceeds from issuance of convertible debt Proceeds from issuance of common stock in public offering Proceeds from issuance of warrants Proceeds from exercise of stock options and other stock issuances Proceeds from issuance of common stock in private placement Principal payments on DOE loans Purchase of convertible note hedges Common stock and convertible debt issuance costs Principal payments on capital leases and other debt Collateralized lease borrowing Proceeds from DOE loans Net cash provided by financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Supplemental Disclosures Interest paid Income taxes paid Supplemental noncash investing activities Acquisition of property and equipment included in accounts payable and accrued liabilities Estimated fair market value of facilities under build-to-suit lease $ $ $ (294,040 ) $ (74,014 ) $ (396,213 ) 231,931 156,496 69,734 15,609 14,178 7,471 (1,891 ) 106,083 80,737 9,143 8,918 5,558 (10,692 ) 1,796 1,815 (13,498 ) 28,825 50,145 4,929 1,854 154 1,406 143 (183,658 ) (1,050,264 ) (60,637 ) (4,493 ) 252,781 162,075 209,681 106,230 249,492 61,968 (57,337 ) (21,705 ) (460,561 ) (17,533 ) (434 ) 20,995 66,418 268,098 24,354 236,299 33,027 264,804 (17,303 ) (194,726 ) 1,121 (482 ) 189,944 9,603 (526 ) 47,056 10,255 (263,815 ) (969,885 ) (3,849 ) (205,841 ) 189,131 (990,444 ) (264,224 ) 14,752 55 (249,417 ) (239,228 ) 8,620 (1,330 ) (14,992 ) 40,000 (206,930 ) 2,300,000 389,160 100,455 (603,428 ) (35,149 ) (11,179 ) 3,271 2,143,130 (35,525 ) 1,059,824 845,889 1,905,713 660,000 360,000 120,318 95,307 55,000 (452,337 ) (177,540 ) (16,901 ) (8,425 ) 635,422 (6,810 ) 643,999 201,890 845,889 221,496 24,885 (12,710 ) (2,832 ) 188,796 419,635 (2,266 ) (53,376 ) 255,266 201,890 20,539 3,120 $ $ 254,393 50,076 The accompanying notes are an integral part of these consolidated financial statements. 66 2012 9,041 257 38,789 $ $ 6,938 117 44,890 Tesla Motors, Inc. Consolidated Statements of Stockholders' Equity (in thousands, except share and per share data) Common Stock Accumulated Deficit 104 $ 893,337 $ (669,393 ) $ 7,964,601 8 221,483 1,345,842 2 373,526 Shares Balance as of December 31, 2011 Issuance of common stock in October 2012 public offering at $28.25 per share, net of issuance costs of $584 Issuance of common stock upon exercise of stock options, net of repurchases Issuance of common stock under employee stock purchase plan Stock-based compensation Comprehensive loss: Net loss Unrealized loss on short-term marketable securities, net Total comprehensive loss Balance as of December 31, 2012 Issuance of common stock in May 2013 public offering at $92.20 per share, net of issuance costs of $6,367 Issuance of common stock in May 2013 concurrent private placements at $92.20 per share Conversion feature of convertible senior notes due 2018 Purchase of bond hedges Sales of warrant Issuance of common stock upon exercise of stock options Issuance of common stock upon release of restricted stock units, net of shares withheld for employee taxes Issuance of common stock under employee stock purchase plan Stock-based compensation Net loss Balance as of December 31, 2013 Conversion feature of convertible senior notes due 2019 and 2021 Purchase of bond hedges Sales of warrant Reclass from equity to mezzanine equity Issuance of common stock upon exercise of stock options Issuance of common stock upon release of restricted stock units, net of shares withheld for employee taxes Issuance of common stock under employee stock purchase plan Stock-based compensation Comprehensive loss: Net loss Unrealized gain on short-term marketable securities, net Total comprehensive loss Balance as of December 31, 2014 Accumulated Other Comprehensive Loss Additional Paid-In Capital Amount 104,530,305 $ Total Stockholders' Equity (3 ) $ 224,045 221,491 16,498 16,500 1 8,388 50,485 8,389 50,485 (396,213 ) (396,213 ) 114,214,274 115 1,190,191 (1,065,606 ) 3 3 (396,210 ) 124,700 3,902,862 3 353,629 353,632 596,272 3,852,673 1 3 55,000 82,842 (177,540 ) 120,318 82,570 55,001 82,842 (177,540 ) 120,318 82,573 6,166 (1,116 ) (1,116 ) 518,743 123,090,990 1 123 13,849 86,875 (74,014 ) 667,120 2,266,698 2 548,603 (603,428 ) 389,160 (58,199 ) 72,053 548,603 (603,428 ) 389,160 (58,199 ) 72,055 166,319 1 (190 ) (189 ) 163,600 13,848 86,875 1,806,617 28,571 162,079 (74,014 ) (1,139,620 ) (294,040 ) 125,687,607 $ 126 $ 2,345,266 $ (1,433,660 ) $ The accompanying notes are an integral part of these consolidated financial statements. 65 28,571 162,079 (294,040 ) (22 ) (22 ) $ (22 ) (294,062 ) 911,710 Tesla Motors, Inc. Consolidated Statements of Comprehensive Loss (in thousands) 2014 Net loss Other comprehensive income (loss), net of tax: Unrealized net loss on short-term marketable securities Reclassification adjustment for gain included in net loss Other comprehensive income (loss) Comprehensive loss Year Ended December 31, 2013 $ (294,040 ) $ (22 ) (22 ) (294,062 ) $ (74,014 ) $ (74,014 ) The accompanying notes are an integral part of these consolidated financial statements. 64 2012 $ (396,213 ) $ 3 3 (396,210 )