Tesla Motors Secures $40 Million Investment Round Led by VantagePoint Venture Partners and Elon Musk

SAN CARLOS, California -- (May 31, 2006) -- Tesla Motors today announced the completion of its $40 million Series C financing led by VantagePoint Venture Partners, one of the largest CleanTech investors in Silicon Valley, and by Elon Musk, founder of Paypal and CEO of SpaceX. Other institutional investors include Draper Fisher Jurvetson and JP Morgan Bay Area Equity Fund. Several individuals with strong interest in CleanTech investment also participated, including Sergey Brin, Larry Page, Nick Pritzker (through his investment partnership, Tao LLC), and Jeff Skoll (through his investment company, Capricorn Management LLC). The financing will be used to launch the company's first product, a high performance electric sportscar, and to support final safety compliance testing and production. The company also announced that Jim Marver, managing partner and co-founder of VantagePoint Venture Partners, will join Tesla's Board of Directors.

"We are pleased to have VantagePoint Venture Partners as one of our lead investors on this round because of their commitment to hands-on investing, particularly in CleanTech companies," said Martin Eberhard, CEO of Tesla Motors, "and we are proud of Mr. Musk's continued confidence in Tesla Motors expressed through his strong participation in every round of financing and his leadership on the Board of Directors."

"Tesla is driving change throughout the CleanTech sector in bringing to market real-world innovations for consumers. The company will be instrumental in transforming the way that consumers view CleanTech products -- they can now have style and speed -- and be good for the environment," said Jim Marver of VantagePoint Venture Partners.

"By leading the technology change from gasoline to electric vehicles, I believe Tesla has the potential to be one of the great car companies of the 21st century," said Elon Musk, Chairman of Tesla Motors. "The starting point is a high performance sportscar, but the long term vision is to build cars of all kinds, including low cost family vehicles. Tesla is one of those rare opportunities to change the world in a positive way and build a valuable company in the process."

About Tesla Motors

Tesla Motors was founded in June 2003 by Martin Eberhard and Marc Tarpenning to create efficient electric cars for people who love to drive. The company currently employs 70 people, including teams in California, the UK and Taiwan. The background and experience of Tesla's employees mirrors the vehicle itself, drawing from diverse expertise in the electronics, automotive and Internet industries.

Tesla Motors creates vehicles that conform to all U.S. safety, environmental and durability standards. Tesla's cars include modern safety equipment such as airbags, front crumple zones, side impact protection, and 2-1/2 mph bumpers. Tesla will sell cars in the US only when they pass the Federal Motor Vehicle Safety Standard (FMVSS).

For more information, visit www.teslamotors.com. Tesla will reveal further details of its business and its cars in early July, 2006.

About VantagePoint Venture Partners

VantagePoint Venture Partners is one of the largest venture capital firms in the industry with more than $2.8 billion in capital under management. The Firm invests exclusively in technology driven companies and is organized around deep expertise and resources in five principal areas of interest: CleanTech, Communications, Healthcare, Semiconductors and Software/Internet. VantagePoint is a multi-stage investor, investing in high growth businesses at all stages of development. The Firm supports each of its portfolio companies, including recent CleanTech investments in Miasole, New Energy Capital, STM Power and Solar Century with the resources of a dedicated team of VantagePoint professionals able to contribute a blend of company building, technology, operations, marketing, and corporate finance expertise. For more information: www.vpvp.com.

About Elon Musk

Elon Musk is the founder and CEO of SpaceX, a company developing a family of satellite launch vehicles intended to reduce the cost and increase the reliability of access to space. Mr. Musk is also the co-founder of PayPal where he served as the company's chairman and CEO. Prior to PayPal Mr. Musk co-founded Zip2 Corporation which was sold to Compaq in 1999. Mr. Musk is an early investor in Tesla Motors and also serves as Chairman of the Board of Directors for the company.

About Draper Fisher Jurvetson

Draper Fisher Jurvetson is the only venture capital firm with global presence through a network of affiliated funds, with offices in more than 30 cities around the world and more than $3 billion in capital commitments. DFJ's mission is to identify, provide capital for, and serve extraordinary entrepreneurs anywhere who want to change the world. Over the past twenty years, DFJ has been proud to back approximately 300 companies across a myriad of sectors including such industry changing catalysts as Hotmail (acquired by MSFT), Baidu (BIDU), Skype (acquired by EBAY), United Online (UNTD), Overture (acquired by YHOO), Interwoven (IWOV), 411 (acquired by YHOO), Parametric (PMTC), and Digidesign (acquired by AVID). The DFJ website is www.dfj.com.

About The Bay Area Equity Fund Managed by JP Morgan

The Bay Area Equity Fund is a $75 million venture capital fund whose goal is to deliver market-rate venture capital returns to investors while generating significant social returns to the communities around its portfolio companies. The Fund invests in the economic strengths of the Bay Area, focusing on growth companies in the technology, healthcare and consumer goods and services sectors. The Fund makes investments primarily in private, mid-to-late stage companies located in or near low-to-moderate income neighborhoods of the 10-county Bay Area. Visit http://www.jpmorgan.com/pages/jpmorgan/investbk/marketmaking/baef for more information.