# embedding_metadata

key: chroma:document
string_value:
Exhibit
	
	
	
Incorporated	by	Reference
	
Filed
Number
	
Exhibit	Description
	
Form
	
File	No.
	
Exhibit
	
Filing	Date
	
Herewith
	
	
	
	
	
	
	
	
	
	
	
	
	
		10.60
	
Third	Amendment	to	Amended	and	Restated
Agreement	For	Research	&	Development	Alliance	on
Triex	Module	Technology,	effective	as	of	February	12,
2015,	by	and	between	The	Research	Foundation	For
The	State	University	of	New	York,	on	behalf	of	the
College	of	Nanoscale	Science	and	Engineering	of	the
State	University	of	New	York,	and	Silevo,	Inc.
	
10-Q(1)
	
001-35758
	
10.16c
	
May	6,	2015
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
		10.61
	
Fourth	Amendment	to	Amended	and	Restated
Agreement	For	Research	&	Development	Alliance	on
Triex	Module	Technology,	effective	as	of	March	30,
2015,	by	and	between	The	Research	Foundation	For
The	State	University	of	New	York,	on	behalf	of	the
College	of	Nanoscale	Science	and	Engineering	of	the
State	University	of	New	York,	and	Silevo,	Inc.
	
10-Q(1)
	
001-35758
	
10.16d
	
May	6,	2015
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
		10.62
	
Fifth	Amendment	to	Amended	and	Restated
Agreement	For	Research	&	Development	Alliance	on
Triex	Module	Technology,	effective	as	of	June	30,
2015,	by	and	between	The	Research	Foundation	For


key: chroma:document
string_value:
2015,	by	and	between	The	Research	Foundation	For
The	State	University	of	New	York,	on	behalf	of	the
College	of	Nanoscale	Science	and	Engineering	of	the
State	University	of	New	York,	and	Silevo,	LLC.
	
10-Q(1)
	
001-35758
	
10.16e
	
July	30,	2015
	
	
		10.63
	
Sixth	Amendment	to	Amended	and	Restated
Agreement	For	Research	&	Development	Alliance	on
Triex	Module	Technology,	effective	as	of	September	1,
2015,	by	and	between	The	Research	Foundation	For
The	State	University	of	New	York,	on	behalf	of	the
College	of	Nanoscale	Science	and	Engineering	of	the
State	University	of	New	York,	and	Silevo,	LLC.
	
10-Q(1)
	
001-35758
	
10.16f
	
October	30,	2015
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
		10.64
	
Seventh	Amendment	to	Amended	and	Restated
Agreement	For	Research	&	Development	Alliance	on
Triex	Module	Technology,	effective	as	of	October	9,
2015,	by	and	between	The	Research	Foundation	For
The	State	University	of	New	York,	on	behalf	of	the
College	of	Nanoscale	Science	and	Engineering	of	the
State	University	of	New	York,	and	Silevo,	LLC
.
	
10-Q(1)
	
001-35758
	
10.16g
	
October	30,	2015
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
48


key: chroma:document
string_value:
Exhibit
	
	
	
Incorporated	by	Reference
	
Filed
Number
	
Exhibit	Description
	
Form
	
File	No.
	
Exhibit
	
Filing	Date
	
Herewith
	
	
	
	
	
	
	
	
	
	
	
	
	
		10.65
	
Eighth	Amendment	to	Amended	and	Restated
Agreement	For	Research	&	Development	Alliance	on
Triex	Module	Technology,	effective	as	of	October	26,
2015,	by	and	between	The	Research	Foundation	For
The	State	University	of	New	York,	on	behalf	of	the
College	of	Nanoscale	Science	and	Engineering	of	the
State	University	of	New	York,	and	Silevo,	LLC.
	
10-Q(1)
	
001-35758
	
10.16h
	
October	30,	2015
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
		10.66
	
Ninth	Amendment	to	Amended	and	Restated
Agreement	For	Research	&	Development	Alliance	on
Triex	Module	Technology,	effective	as	of	December	9,
2015,	by	and	between	The	Research	Foundation	For
The	State	University	of	New	York,	on	behalf	of	the
College	of	Nanoscale	Science	and	Engineering	of	the
State	University	of	New	York,	and	Silevo,	LLC.
	
10-K(1)
	
001-35758
	
10.16i
	
February	10,	2016
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
		10.67
	
Tenth	Amendment	to	Amended	and	Restated
Agreement	For	Research	&	Development	Alliance	on
Triex	Module	Technology,	effective	as	of	March	31,


key: chroma:document
string_value:
2017,	by	and	between	The	Research	Foundation	For
The	State	University	of	New	York,	on	behalf	of	the
Colleges	of	Nanoscale	Science	and	Engineering	of	the
State	University	of	New	York,	and	Silevo,	LLC.
	
10-Q
		
001-34756
		
10.8
		
May	10,	2017
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
		10.68
	
Eleventh	Amendment	to	Amended	and	Restated
Agreement	for	Research	&	Development	Alliance	on
Triex	Module	Technology,	effective	as	of	July	22,	2020,
among	the	Research	Foundation	for	the	State
University	of	New	York,	Silevo,	LLC	and	Tesla	Energy
Operations,	Inc
.
	
10-Q
	
001-34756
	
10.6
	
July	28,	2020
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
		10.69
	
Twelfth	Amendment	to	Amended	and	Restated
Agreement	for	Research	&	Development	Alliance	on
Triex	Module	Technology,	effective	as	of	May	1,	2021,
among	the	Research	Foundation	for	the	State
University	of	New	York,	Silevo,	LLC	and	Tesla	Energy
Operations,	Inc
.
	
10-Q
	
001-34756
	
10.1
	
October	25,	2021
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
49


key: chroma:document
string_value:
Exhibit
	
	
	
Incorporated	by	Reference
	
Filed
Number
	
Exhibit	Description
	
Form
	
File	No.
	
Exhibit
	
Filing	Date
	
Herewith
	
	
	
	
	
	
	
	
	
	
	
	
	
		10.70††
	
Grant	Contract	for	State-Owned	Construction	Land
Use	Right,	dated	as	of	October	17,	2018,	by	and
between	Shanghai	Planning	and	Land	Resource
Administration	Bureau,	as	grantor,	and	Tesla
(Shanghai)	Co.,	Ltd.,	as	grantee	(English	translation).
	
10-Q
		
001-34756
		
10.2
		
July	29,	2019
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
		10.71††
	
Facility	Agreement,	dated	as	of	September	26,	2019,
by	and	between	China	Merchants	Bank	Co.,	Ltd.
Beijing	Branch	and	Tesla	Automobile	(Beijing)	Co.,
Ltd.	(English	translation).
	
10-Q
		
001-34756
		
10.3
		
October	29,	2019
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
		10.72††
	
Statement	Letter	to	China	Merchants	Bank	Co.,	Ltd.
Beijing	Branch	from	Tesla	Automobile	(Beijing)	Co.,
Ltd.,	dated	as	of	September	26,	2019	(English
translation)
.
	
10-Q
		
001-34756
		
10.4
		
October	29,	2019
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
		10.73††


key: chroma:document
string_value:
10.73††
	
Fixed	Asset	Syndication	Loan	Agreement,	dated	as	of
December	18,	2019,	by	and	among	Tesla	(Shanghai)
Co.,	Ltd.,	China	Construction	Bank	Corporation,	China
(Shanghai)	Pilot	Free	Trade	Zone	Special	Area	Branch,
Agricultural	Bank	of	China	Shanghai	Changning	Sub-
branch,	Shanghai	Pudong	Development	Bank	Co.,	Ltd.,
Shanghai	Branch,	and	Industrial	and	Commercial
Bank	of	China	Limited,	China	(Shanghai)	Pilot	Free
Trade	Zone	Special	Area	Branch	(English	translation).
	
10-K
		
001-34756		
		
10.85		
		
February	13,	2020
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
		10.74††
	
Fixed	Asset	Syndication	Loan	Agreement	and
Supplemental	Agreement,	dated	as	of	December	18,
2019,	by	and	among	Tesla	(Shanghai)	Co.,	Ltd.,	China
Construction	Bank	Corporation,	China	(Shanghai)	Pilot
Free	Trade	Zone	Special	Area	Branch,	Agricultural
Bank	of	China	Shanghai	Changning	Sub-branch,
Shanghai	Pudong	Development	Bank	Co.,	Ltd.,
Shanghai	Branch,	and	Industrial	and	Commercial
Bank	of	China	Limited,	China	(Shanghai)	Pilot	Free
Trade	Zone	Special	Area	Branch	(English	translation).
	
10-K
		
001-34756		
		
10.86		
		
February	13,	2020		
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
50


key: chroma:document
string_value:
Exhibit
	
	
	
Incorporated	by	Reference
	
Filed
Number
	
Exhibit	Description
	
Form
	
File	No.
	
Exhibit
	
Filing	Date
	
Herewith
	
	
	
	
	
	
	
	
	
	
	
	
	
		10.75††
	
Syndication	Revolving	Loan	Agreement,	dated	as	of
December	18,	2019,	by	and	among	Tesla	(Shanghai)
Co.,	Ltd.	China	Construction	Bank	Corporation,	China
(Shanghai)	Pilot	Free	Trade	Zone	Special	Area	Branch,
Agricultural	Bank	of	China	Shanghai	Changning	Sub-
branch,	Shanghai	Pudong	Development	Bank	Co.,	Ltd.,
Shanghai	Branch,	and	Industrial	and	Commercial
Bank	of	China	Limited,	China	(Shanghai)	Pilot	Free
Trade	Zone	Special	Area	Branch	(English	translation).
	
10-K		
		
001-34756		
		
10.87		
		
February	13,	2020		
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
		10.76††
	
Working	Capital	Loan	Contact,	dated	as	of	May	7,
2020,	between	Industrial	and	Commercial	Bank	of
China,	China	(Shanghai)	Pilot	Free	Trade	Zone
Lingang	Special	Area	Branch	and	Tesla	(Shanghai)
Co.,	Ltd.
	
10-Q
	
001-34756		
	
10.5
	
July	28,	2020
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
		21.1
	
List	of	Subsidiaries	of	the	Registrant
	
10-K
	
001-34756	
	
21.1


key: chroma:document
string_value:
001-34756	
	
21.1
	
February	7,	2022
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
		23.1
		
Consent	of	PricewaterhouseCoopers	LLP,	Independent
Registered	Public	Accounting	Firm
		
10-K
		
001-34756	
	
		
23.1
		
February	7,	2022
		
	
	
	
	
	
	
	
	
	
	
	
	
	
	
		31.1
		
Rule	13a-14(a)	/	15(d)-14(a)	Certification	of	Principal
Executive	Officer
		
10-K
		
001-34756	
		
		
31.1
		
February	7,	2022
		
	
	
	
	
	
	
	
	
	
	
	
	
	
	
		31.2
		
Rule	13a-14(a)	/	15(d)-14(a)	Certification	of	Principal
Financial	Officer
		
10-K
		
001-34756			
		
31.2
		
February	7,	2022
		
	
	
	
	
	
	
	
	
	
	
	
	
	
	
		31.3
	
Rule	13a-14(a)	/	15(d)-14(a)	Certification	of	Principal
Executive	Officer
	
—	
	
—	
	
—	
	
—	
	
X
	
	
	
	
	
	
	
	
	
	
	
	
	
		31.4
	
Rule	13a-14(a)	/	15(d)-14(a)	Certification	of	Principal
Financial	Officer
	
—	
	
—	
	
—	
	
—	
	
X


key: chroma:document
string_value:
32.1*
		
Section	1350	Certifications
		
10-K
		
001-34756	
		
32.1
		
February	7,	2022
		
	
	
	
	
	
	
	
	
	
	
	
	
	
	
101.INS*
		
Inline	XBRL	Instance	Document
		
10-K
		
001-34756	
	
		
101.INS
		
February	7,	2022
		
	
	
	
	
	
	
	
	
	
	
	
	
	
	
101.SCH*
		
Inline	XBRL	Taxonomy	Extension	Schema	Document
		
10-K
		
001-34756	
	
		
101.SCH
		
February	7,	2022
		
	
	
	
	
	
	
	
	
	
	
	
	
	
	
51


key: chroma:document
string_value:
Exhibit
	
	
	
Incorporated	by	Reference
	
Filed
Number
	
Exhibit	Description
	
Form
	
File	No.
	
Exhibit
	
Filing	Date
	
Herewith
	
	
	
	
	
	
	
	
	
	
	
	
	
101.CAL*
		
Inline	XBRL	Taxonomy	Extension	Calculation	Linkbase
Document.
		
10-K
		
001-34756	
	
		
101.CAL
		
February	7,	2022
		
	
	
	
	
	
	
	
	
	
	
	
	
	
	
101.DEF*
		
Inline	XBRL	Taxonomy	Extension	Definition	Linkbase
Document
		
10-K
		
001-34756	
	
		
101.DEF
		
February	7,	2022
		
	
	
	
	
	
	
	
	
	
	
	
	
	
	
101.LAB*
		
Inline	XBRL	Taxonomy	Extension	Label	Linkbase
Document
		
10-K
		
001-34756	
	
		
101.LAB
		
February	7,	2022
		
	
	
	
	
	
	
	
	
	
	
	
	
	
	
101.PRE*
		
Inline	XBRL	Taxonomy	Extension	Presentation
Linkbase	Document
		
10-K
		
001-34756	
	
		
101.PRE
		
February	7,	2022
		
	
	
	
	
	
	
	
	
	
	
	
	
	
	
104
		
Cover	Page	Interactive	Data	File	(formatted	as	inline
XBRL	with	applicable	taxonomy	extension	information
contained	in	Exhibits	101)
		
	
		
	
		
	
		
	
		
	
	
*
Previously	filed	or	furnished,	as	applicable,	with	the	Original	Form	10-K.
**


key: chroma:document
string_value:
**
Indicates	a	management	contract	or	compensatory	plan	or	arrangement
†
Confidential	treatment	has	been	requested	for	portions	of	this	exhibit
††
Portions	of	this	exhibit	have	been	redacted	in	compliance	with	Regulation	S-K	Item	601(b)(10).
(1)
Indicates	a	filing	of	SolarCity
(2)
Indicates	a	filing	of	Maxwell	Technologies,	Inc.
	
52


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string_value:
SIGNATURES
Pursuant	to	the	requirements	of	Section	13	or	15(d)	the	Securities	Exchange	Act	of	1934,	the	registrant	has	duly	caused	this	report	to	be	signed
on	its	behalf	by	the	undersigned,	thereunto	duly	authorized.
	
	
	
Tesla,	Inc.
	
	
	
Date:	April	29,	2022
	
/s/	Zachary	J.	Kirkhorn
	
	
Zachary	J.	Kirkhorn
	
	
Chief	Financial	Officer
	
	
(Principal	Financial	Officer	and
Duly	Authorized	Officer)
	
	
53
	
Exhibit	31.3
CERTIFICATIONS
I,	Elon	Musk,	certify	that:
1.
I	have	reviewed	this	Amendment	No.	1	to	Annual	Report	on	Form	10-K	of	Tesla,	Inc.;	and
2.
Based	on	my	knowledge,	this	report	does	not	contain	any	untrue	statement	of	a	material	fact	or	omit	to	state	a	material	fact	necessary	to	make	the
statements	made,	in	light	of	the	circumstances	under	which	such	statements	were	made,	not	misleading	with	respect	to	the	period	covered	by	this
report.		
	
Date:	April	29,	2022
	
	
/s/	Elon	Musk
	
	
	
Elon	Musk
	
	
	
Chief	Executive	Officer
	
	
	
(Principal	Executive	Officer)
	
	
	
Exhibit	31.4
CERTIFICATIONS
I,	Zachary	J.	Kirkhorn,	certify	that:
1.
I	have	reviewed	this	Amendment	No.	1	to	Annual	Report	on	Form	10-K	of	Tesla,	Inc.;	and
2.
Based	on	my	knowledge,	this	report	does	not	contain	any	untrue	statement	of	a	material	fact	or	omit	to	state	a	material	fact	necessary	to	make	the


key: chroma:document
string_value:
statements	made,	in	light	of	the	circumstances	under	which	such	statements	were	made,	not	misleading	with	respect	to	the	period	covered	by	this
report.		
	
Date:	April	29,	2022
	
	
/s/	Zachary	J.	Kirkhorn
	
	
	
Zachary	J.	Kirkhorn
	
	
	
Chief	Financial	Officer
	
	
	
(Principal	Financial	Officer)


key: chroma:document
string_value:
UNITED	STATES
SECURITIES	AND	EXCHANGE	COMMISSION
Washington,	D.C.	20549
	
FORM	
10-K
	
(Mark	One)
☒
ANNUAL	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF	THE	SECURITIES	EXCHANGE	ACT	OF	1934
For	the	fiscal	year	ended	
December	31,	2020
	
OR
☐
TRANSITION	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF	THE	SECURITIES	EXCHANGE	ACT	OF	1934
For	the	transition	period	from	
																				
	to	
																					
Commission	File	Number:	
001-34756
	
Tesla,	Inc.
(Exact	name	of	registrant	as	specified	in	its	charter)
	
	
Delaware
	
91-2197729
(State	or	other	jurisdiction	of
incorporation	or	organization)
	
(I.R.S.	Employer
Identification	No.)
	
	
	
3500	Deer	Creek	Road
Palo	Alto
,	
California
	
94304
(Address	of	principal	executive	offices)
	
(Zip	Code)
(
650
)	
681-5000
(Registrant’s	telephone	number,	including	area	code)
Securities	registered	pursuant	to	Section	12(b)	of	the	Act:
	
Title	of	each	class
Trading	Symbol(s)
Name	of	each	exchange	on	which	registered
Common	stock
TSLA
The	Nasdaq	Global	Select	Market
	
Securities	registered	pursuant	to	Section	12(g)	of	the	Act:
None
	
Indicate	by	check	mark	whether	the	registrant	is	a	well-known	seasoned	issuer,	as	defined	in	Rule	405	of	the	Securities	Act.				
Yes
		
☒
				No		
☐


key: chroma:document
string_value:
Yes
		
☒
				No		
☐
Indicate	by	check	mark	if	the	registrant	is	not	required	to	file	reports	pursuant	to	Section	13	or	15(d)	of	the	Act.				Yes		
☐
				
No
		
☒
Indicate	by	check	mark	whether	the	registrant	(1)	has	filed	all	reports	required	to	be	filed	by	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934	(“Exchange	Act”)	during	the	preceding	12	months
(or	for	such	shorter	period	that	the	registrant	was	required	to	file	such	reports),	and	(2)	has	been	subject	to	such	filing	requirements	for	the	past	90	days.				
Yes
		
☒
				No		
☐
Indicate	by	check	mark	whether	the	registrant	has	submitted	electronically	every	Interactive	Data	File	required	to	be	submitted	pursuant	to	Rule	405	of	Regulation	S-T	(§	232.405	of	this	chapter)
	
during
the	preceding	12	months	(or	for	such	shorter	period	that	the	registrant	was	required	to	submit	such	files).				Yes		
☒
				No		
☐
Indicate	by	check	mark	whether	the	registrant	is	a	large	accelerated	filer,	an	accelerated	filer,	a	non-accelerated	filer,	a	smaller	reporting	company	or	an	emerging	growth	company.	See	the	definitions	of
“large	accelerated	filer,”	“accelerated	filer,”	“smaller	reporting	company”	and	“emerging	growth	company”	in	Rule	12b-2	of	the	Exchange	Act:
	
Large	accelerated	filer
	
☒
		
Accelerated	filer
	
☐
	
	
	
	
Non-accelerated	filer
	
☐
		
		
Smaller	reporting	company
	
☐


key: chroma:document
string_value:
Emerging	growth	company
	
☐
	
	
	
	
If	an	emerging	growth	company,	indicate	by	check	mark	if	the	registrant	has	elected	not	to	use	the	extended	transition	period	for	complying	with	any	new	or	revised	financial	accounting	standards
provided	pursuant	to	Section	13(a)	of	the	Exchange	Act.				
☐
Indicate	by	check	mark	whether	the	Registrant	has	filed	a	report	on	and	attestation	to	its	management’s	assessment	of	the	effectiveness	of	its	internal	control	over	financial	reporting	under	Section
404(b)	of	the	Sarbanes-Oxley	Act	(15	U.S.C.	7262(b))	by	the	registered	public	accounting	firm	that	prepared	or	issued	its	audit	report.	
☒
Indicate	by	check	mark	whether	the	registrant	is	a	shell	company	(as	defined	in	Rule	12b-2	of	the	Exchange	Act).				Yes		
☐
				No		
☒
The	aggregate	market	value	of	voting	stock	held	by	non-affiliates	of	the	registrant,	as	of	June	30,	2020,	the	last	day	of	the	registrant’s	most	recently	completed	second	fiscal	quarter,	was	$
160.57
	billion
(based	on	the	closing	price	for	shares	of	the	registrant’s	Common	Stock	as	reported	by	the	NASDAQ	Global	Select	Market	on	June	30,	2020).	Shares	of	Common	Stock	held	by	each	executive	officer,	director,
and	holder	of	5%	or	more	of	the	outstanding	Common	Stock	have	been	excluded	in	that	such	persons	may	be	deemed	to	be	affiliates.	This	determination	of	affiliate	status	is	not	necessarily	a	conclusive
determination	for	other	purposes.
As	of	February	1,	2021,	there	were	
959,853,504
	shares	of	the	registrant’s	Common	Stock	outstanding.


key: chroma:document
string_value:
shares	of	the	registrant’s	Common	Stock	outstanding.
DOCUMENTS	INCORPORATED	BY	REFERENCE
Portions	of	the	registrant’s	Proxy	Statement	for	the	2021	Annual	Meeting	of	Stockholders	are	incorporated	herein	by	reference	in	Part	III	of	this	Annual	Report	on	Form	10-K	to	the	extent	stated	herein.
Such	proxy	statement	will	be	filed	with	the	Securities	and	Exchange	Commission	within	120	days	of	the	registrant’s	fiscal	year	ended	December	31,	2020.


key: chroma:document
string_value:
TESLA,	INC.
ANNUAL	REPORT	ON	FORM	10-K	FOR	THE	YEAR	ENDED	DECEMBER	31,	2020
INDEX
	
	
	
	
	
Page
PART	I.
	
	
	
	
	
	
	
Item	1.
	
Business
		
4
Item	1A.
	
Risk	Factors
	
14
Item	1B.
	
Unresolved	Staff	Comments
	
27
Item	2.
	
Properties
	
27
Item	3.
	
Legal	Proceedings
	
28
Item	4.
	
Mine	Safety	Disclosures
	
28
	
	
	
PART	II.
	
	
	
	
	
	
Item	5.
	
Market	for	Registrant’s	Common	Equity,	Related	Stockholder	Matters	and	Issuer	Purchases	of	Equity	Securities
	
29
Item	6.
	
Selected	Consolidated	Financial	Data
	
30
Item	7.
	
Management’s	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations
	
31
Item	7A.
	
Quantitative	and	Qualitative	Disclosures	About	Market	Risk
	
49
Item	8.
	
Financial	Statements	and	Supplementary	Data
	
50
Item	9.
	
Changes	in	and	Disagreements	with	Accountants	on	Accounting	and	Financial	Disclosure
	
107
Item	9A.
	
Controls	and	Procedures
	
107
Item	9B.
	
Other	Information
	
107
	
	
	
PART	III.
	
	
	
	
	
	
Item	10.
	
Directors,	Executive	Officers	and	Corporate	Governance
	
108
Item	11.
	
Executive	Compensation
	
108
Item	12.
	
Security	Ownership	of	Certain	Beneficial	Owners	and	Management	and	Related	Stockholder	Matters
	
108
Item	13.


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string_value:
108
Item	13.
	
Certain	Relationships	and	Related	Transactions,	and	Director	Independence
	
108
Item	14.
	
Principal	Accountant	Fees	and	Services
	
108
	
	
	
	
PART	IV.
	
	
	
	
	
	
Item	15.
	
Exhibits	and	Financial	Statement	Schedules
	
108
Item	16.
	
Summary
	
125
	
	
	
Signatures
	
126
	
	
	
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Forward-Looking	Statements
The	discussions	in	this	Annual	Report	on	Form	10-K	contain	forward-looking	statements	reflecting	our	current	expectations	that	involve	risks	and	uncertainties.
These	forward-looking	statements	include,	but	are	not	limited	to,	statements	concerning	any	potential	future	impact	of	the	coronavirus	disease	(“COVID-19”)
pandemic	on	our	business,	our	strategy,	future	operations,	future	financial	position,	future	revenues,	projected	costs,	profitability,	expected	cost	reductions,
capital	adequacy,	expectations	regarding	demand	and	acceptance	for	our	technologies,	growth	opportunities	and	trends	in	the	market	in	which	we	operate,
prospects	and	plans	and	objectives	of	management.	The	words	“anticipates,”	“believes,”	“could,”	“estimates,”	“expects,”	“intends,”	“may,”	“plans,”	“projects,”
“will,”	“would”	and	similar	expressions	are	intended	to	identify	forward-looking	statements,	although	not	all	forward-looking	statements	contain	these
identifying	words.	We	may	not	actually	achieve	the	plans,	intentions	or	expectations	disclosed	in	our	forward-looking	statements	and	you	should	not	place
undue	reliance	on	our	forward-looking	statements.	Actual	results	or	events	could	differ	materially	from	the	plans,	intentions	and	expectations	disclosed	in	the
forward-looking	statements	that	we	make.
	These	forward-looking	statements	involve	risks	and	uncertainties	that	could	cause	our	actual	results	to	differ
materially	from	those	in	the	forward-looking	statements,	including,	without	limitation,	the	risks	set	forth	in	Part	I,	Item	1A,	“Risk	Factors”	in	this	Annual	Report
on	Form	10-K	and	in	our	other	filings	with	the	Securities	and	Exchange	Commission.	We	do	not	assume	any	obligation	to	update	any	forward-looking


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PART	I
ITEM	1.
BUSINESS
Overview
We	design,	develop,	manufacture,	sell	and	lease	high-performance	fully	electric	vehicles	and	energy	generation	and	storage	systems,	and	offer	services
related	to	our	sustainable	energy	products.	We	generally	sell	our	products	directly	to	customers,	including	through	our	website	and	retail	locations.	We	also
continue	to	grow	our	customer-facing	infrastructure	through	a	global	network	of	vehicle	service	centers,	Mobile	Service	technicians,	body	shops,	Supercharger
stations	and	Destination	Chargers	to	accelerate	the	widespread	adoption	of	our	products.	We	emphasize	performance,	attractive	styling	and	the	safety	of	our
users	and	workforce	in	the	design	and	manufacture	of	our	products	and	are	continuing	to	develop	full	self-driving	technology	for	improved	safety.	We	also	strive
to	lower	the	cost	of	ownership	for	our	customers	through	continuous	efforts	to	reduce	manufacturing	costs	and	by	offering	financial	services	tailored	to	our
products.	Our	mission	to	accelerate	the	world’s	transition	to	sustainable	energy,	engineering	expertise,	vertically	integrated	business	model	and	focus	on	user
experience	differentiate	us	from	other	companies.
Segment	Information
We	operate	as	two	reportable	segments:	(i)	automotive	and	(ii)	energy	generation	and	storage.
The	automotive	segment	includes	the	design,	development,	manufacturing,	sales	and	leasing	of	electric	vehicles	as	well	as	sales	of	automotive
regulatory	credits.	Additionally,	the	automotive	segment	is	also	comprised	of	services	and	other,	which	includes	non-warranty	after-sales	vehicle	services,	sales
of	used	vehicles,	retail	merchandise,	sales	by	our	acquired	subsidiaries	to	third	party	customers	and	vehicle	insurance	revenue.	The	energy	generation	and


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storage	segment	includes	the	design,	manufacture,	installation,	sales	and	leasing	of	solar	energy	generation	and	energy	storage	products	and	related	services
and	sales	of	solar	energy	systems	incentives.
Our	Products	and	Services
Automotive
Model	3
Model	3	is	a	four-door	mid-size	sedan	that	we	designed	for	manufacturability	with	a	base	price	for	mass-market	appeal,	which	we	began	delivering	in
July	2017.	We	currently	manufacture	Model	3	at	the	Fremont	Factory	and	at	Gigafactory	Shanghai.
Model	Y
Model	Y	is	a	compact	sport	utility	vehicle	(“SUV”)	built	on	the	Model	3	platform	with	seating	for	up	to	seven	adults,	which	we	began	delivering	in	March
2020.	We	currently	manufacture	Model	Y	at	the	Fremont	Factory	and	at	Gigafactory	Shanghai.
Model	S	and	Model	X
Model	S	is	a	four-door	full-size	sedan	that	we	began	delivering	in	June	2012.	Model	X	is	a	mid-size	SUV	with	seating	for	up	to	seven	adults,	which	we
began	delivering	in	September	2015.	Model	S	and	Model	X	feature	the	highest	performance	characteristics	and	longest	ranges	that	we	offer	in	a	sedan	and
SUV,	respectively,	and	we	manufacture	both	models	at	the	Fremont	Factory.
Future	Consumer	and	Commercial	Electric	Vehicles
We	have	also	announced	several	planned	electric	vehicles	to	address	additional	vehicle	markets,	including	specialized	consumer	electric	vehicles	in
Cybertruck	and	the	new	Tesla	Roadster	and	a	commercial	electric	vehicle	in	Tesla	Semi.	We	also	plan	to	introduce	in	the	future	a	lower-cost	vehicle	to	leverage
developments	in	our	proprietary	Full	Self-Driving	(“FSD”),	battery	cell	and	other	technologies.
Energy	Generation	and	Storage
Energy	Storage	Products


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Energy	Generation	and	Storage
Energy	Storage	Products
We	began	deliveries	of	the	most	recent	generations	of	Powerwall,	Powerpack	and	Megapack,	which	are	our	lithium-ion	battery	energy	storage	products
integrated	with	inverters	and	control	technology,	in	2016,	2017	and	2019,	respectively.	Powerwall	is	designed	to	store	energy	at	a	home	or	small	commercial
facility.	Megapack	and	Powerpack	are	energy	storage	solutions	for	commercial,	industrial,	utility	and	energy	generation	customers,	which	may	be	grouped
together	to	form	larger	installations	capable	of	reaching	gigawatt	hours	(“GWh”)	or	greater.	We	also	offer	integrated	systems	combining	energy	generation	and
storage.	Our	energy	storage	products	are	currently	assembled	at	Gigafactory	Nevada.
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We	
have	
also	develop
ed
	software	capabilities	for	
remotely	
control
ling
	and	dispatch
ing
	
our
	energy	storage	systems	across	a	wide	range	of	markets	and
applications
,	including	through	our	real-time	energy	trading	platform
.
Solar	Energy	Offerings
We	sell	retrofit	solar	energy	systems	to	customers	and	channel	partners	and	also	make	them	available	through	lease	and	power	purchase	agreement
(“PPA”)	arrangements	and	a	subscription-based	sale	of	solar	power,	which	is	currently	available	in	limited	U.S.	markets.	We	purchase	most	of	the	components
for	our	retrofit	solar	energy	systems	from	multiple	sources	to	ensure	competitive	pricing	and	adequate	supply.	We	also	design	and	manufacture	certain
components	for	our	solar	energy	products.
In	2019,	we	commenced	direct	customer	and	channel	partner	sales	of	the	third	generation	of	our	Solar	Roof,	which	combines	premium	glass	roof	tiles
with	energy	generation.	We	are	ramping	the	volume	production	of	Solar	Roof	at	Gigafactory	New	York,	and	we	are	improving	our	installation	capability	and
efficiency.
Technology
Automotive
Battery	and	Powertrain
Our	core	vehicle	technology	competencies	include	powertrain	engineering	and	manufacturing	and	our	ability	to	design	vehicles	that	utilize	the	unique
advantages	of	an	electric	powertrain.	We	have	designed	our	proprietary	powertrain	systems	to	be	adaptable,	efficient,	reliable	and	cost-effective	while
withstanding	the	rigors	of	an	automotive	environment.	We	offer	dual	motor	powertrain	vehicles,	which	use	two	electric	motors	to	maximize	traction	and
performance	in	an	all-wheel	drive	configuration,	and	are	introducing	vehicle	powertrain	technology	featuring	three	electric	motors	for	further	increased
performance.


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performance.
Among	other	things,	we	maintain	extensive	testing	and	R&D	capabilities	for	battery	cells,	packs	and	systems,	and	have	built	an	expansive	body	of
knowledge	on	lithium-ion	cell	chemistry	types	and	performance	characteristics.	In	order	to	enable	a	greater	supply	of	cells	for	our	products	with	higher	energy
density	at	lower	costs,	we	are	currently	using	our	expertise	to	develop	a	new	proprietary	lithium-ion	battery	cell	and	improved	manufacturing	processes.
Vehicle	Control	and	Infotainment	Software
The	performance	and	safety	systems	of	our	vehicles	and	their	battery	packs	require	sophisticated	control	software.	Control	systems	in	our	vehicles
optimize	performance,	customize	vehicle	behavior,	manage	charging	and	control	all	infotainment	functions.	We	develop	almost	all	of	this	software,	including
most	of	the	user	interfaces,	internally	and	update	our	vehicles’	software	regularly	through	over-the-air	updates.
Self-Driving	Development
We	have	expertise	in	developing	technologies,	systems	and	software	to	enable	self-driving	vehicles	using	primarily	vision	and	radar-based	sensors.	Our
FSD	Computer	runs	our	neural	networks	in	our	vehicles,	and	we	are	also	developing	additional	computer	hardware	to	better	enable	the	massive	amounts	of
field	data	captured	by	our	vehicles	to	continually	train	and	improve	these	neural	networks	for	real-world	performance.
Currently,	we	offer	in	our	vehicles	certain	advanced	driver	assist	systems	under	our	Autopilot	and	FSD	options.	Although	at	present	the	driver	is
ultimately	responsible	for	controlling	the	vehicle,	our	systems	provide	safety	and	convenience	functionality	that	relieves	drivers	of	the	most	tedious	and


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potentially	dangerous	aspects	of	road	travel	much	like	the	system	that	airplane	pilots	use,	when	conditions	permit.	As	with	other	vehicle	systems,	we	improve
these	functions	in	our	vehicles	over	time	through	over-the-air	updates.
We	intend	to	establish	in	the	future	an	autonomous	Tesla	ride-hailing	network,	which	we	expect	would	also	allow	us	to	access	a	new	customer	base	even
as	modes	of	transportation	evolve.
Energy	Generation	and	Storage
Energy	Storage	Products
We	leverage	many	of	the	component-level	technologies	from	our	vehicles	in	our	energy	storage	products.	By	taking	a	modular	approach	to	the	design	of
battery	systems,	we	can	optimize	manufacturing	capacity	among	our	energy	storage	products.	Additionally,	our	expertise	in	power	electronics	enables	us	to
interconnect	our	battery	systems	seamlessly	with	global	electricity	grids	while	providing	fast-acting	systems	for	power	injection	and	absorption.	We	have	also
developed	the	software	to	remotely	control	and	dispatch	our	energy	storage	systems	using	our	real-time	energy	trading	platform.
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Solar	Energy	Systems
We	have	engineered	Solar	Roof	over	numerous	iterations	to	combine	aesthetic	appeal	and	durability	with	power	generation.	The	efficiency	of	our	solar
energy	products	is	aided	by	our	own	solar	inverter,	which	also	incorporates	our	power	electronics	technologies.	We	designed	both	products	to	integrate	with
Powerwall.
Design	and	Engineering
Automotive
We	have	established	significant	in-house	capabilities	in	the	design	and	test	engineering	of	electric	vehicles	and	their	components	and	systems.	Our	team
has	core	competencies	in	computer	aided	design	as	well	as	durability,	strength	and	crash	test	simulations,	which	reduces	the	product	development	time	of	new
models.	Additionally,	our	team	has	expertise	in	selecting	and	working	with	a	range	of	materials	for	our	vehicles	to	balance	performance,	cost	and	durability	in
ways	that	are	best	suited	for	our	vehicles’	target	demographics	and	utility.	We	have	also	used	our	capabilities	to	achieve	complex	engineering	feats	in	stamping,
casting	and	thermal	systems,	and	are	currently	developing	designs	that	integrate	batteries	directly	with	vehicle	body	structures	without	separate	battery	packs
to	optimize	manufacturability,	weight,	range	and	cost	characteristics.
We	are	also	expanding	our	manufacturing	operations	globally	while	exploring	ways	to	localize	our	vehicle	designs	and	production	for	particular	markets,
including	country-specific	market	demands	and	factory	optimizations	for	local	workforces.	As	we	increase	our	capabilities,	particularly	in	the	areas	of
automation,	die-making	and	line-building,	we	are	also	making	strides	in	the	simulations	modeling	these	capabilities	prior	to	construction.
Energy	Generation	and	Storage


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Energy	Generation	and	Storage
Our	expertise	in	electrical,	mechanical,	civil	and	software	engineering	allows	us	to	design	and	manufacture	our	energy	generation	and	storage	products
and	components.	We	also	employ	our	design	and	engineering	expertise	to	customize	solutions	including	our	energy	storage	products,	solar	energy	systems
and/or	Solar	Roof	for	customers	to	meet	their	specific	needs.	We	have	developed	software	that	simplifies	and	expedites	the	design	process	and	maximizes	the
energy	production	of	each	solar	energy	system,	as	well	as	mounting	hardware	that	facilitates	solar	panel	installation.
Sales	and	Marketing
Historically,	we	have	been	able	to	generate	significant	media	coverage	of	our	company	and	our	products,	and	we	believe	we	will	continue	to	do	so.	Such
media	coverage	and	word	of	mouth	are	the	current	primary	drivers	of	our	sales	leads	and	have	helped	us	achieve	sales	without	traditional	advertising	and	at
relatively	low	marketing	costs.
Automotive
Direct	Sales
Our	vehicle	sales	channels	currently	include	our	website	and	an	international	network	of	company-owned	stores.	
In	some	jurisdictions,	we	also	have
galleries	to	educate	and	inform	customers	about	our	products,	but	such	locations	do	not	actually	transact	in	the	sale	of	vehicles.	
We	believe	this	infrastructure
enables	us	to	better	control	costs	of	inventory,	manage	warranty	service	and	pricing,	educate	consumers	about	electric	vehicles,	maintain	and	strengthen	the
Tesla	brand	and	obtain	rapid	customer	feedback.
We	reevaluate	our	sales	strategy	both	globally	and	at	a	location-by-location	level	from	time	to	time	to	optimize	our	current	sales	channels.	
Sales	of


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Sales	of
vehicles	in	the	automobile	industry	tend	to	be	cyclical	in	many	markets,	which	may	expose	us	to	volatility	from	time	to	time.
Used	Vehicle	Sales
Our	used	vehicle	business	supports	new	vehicle	sales	by	integrating	the	trade-in	of	a	customer’s	existing	Tesla	or	non-Tesla	vehicle	with	the	sale	of	a
new	or	used	Tesla	vehicle.	The	Tesla	and	non-Tesla	vehicles	we	acquire	as	trade-ins	are	subsequently	remarketed,	either	directly	by	us	or	through	third	parties.
We	also	remarket	used	Tesla	vehicles	acquired	from	other	sources	including	lease	returns.
Public	Charging
We	have	a	growing	global	network	of	Tesla	Superchargers,	which	are	our	industrial	grade,	high-speed	vehicle	chargers.	Where	possible,	we	co-locate
Superchargers	with	our	solar	and	energy	storage	systems	to	reduce	costs	and	promote	renewable	power.	Supercharger	stations	are	typically	placed	along	well-
traveled	routes	and	in	and	around	dense	city	centers	to	allow	Tesla	vehicle	owners	the	ability	to	enjoy	quick,	reliable	and	ubiquitous	charging	with	convenient,
minimal	stops.	Use	of	the	Supercharger	network	either	requires	payment	of	a	fee	or	is	free	under	certain	sales	programs.
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We	also	work	with	a	wide	variety	of	hospitality,	retail	and	public	destinations,	as	well	as	businesses	with	commuting	employees,	to	offer	additional
charging	options	for	our	customers.	These	Destination	Charging	and	workplace	locations	deploy	Tesla	Wall	Connectors	to	provide	charging	to	Tesla	vehicle
owners	who	patronize	or	are	employed	at	their	businesses.	
We	also	work	with	single-family	homeowners	and	multi-family	residential	entities	to	deploy	home
charging	solutions.
In-App	Upgrades
As	our	vehicles	are	capable	of	being	updated	remotely	over-the-air,	our	customers	may	purchase	additional	paid	options	and	features	through	the	Tesla
app.	We	expect	that	this	functionality	will	also	allow	us	to	offer	certain	options	and	features	on	a	subscription	basis	in	the	future.
Energy	Generation	and	Storage
We	market	and	sell	our	solar	and	energy	storage	products	to	residential,	commercial	and	industrial	customers	and	utilities	through	a	variety	of	channels.
We	emphasize	simplicity,	standardization	and	accessibility	to	make	it	easy	and	cost-effective	for	customers	to	adopt	clean	energy,	while	reducing	our	customer
acquisition	costs.
In	the	U.S.,	we	offer	residential	solar	and	energy	storage	products	directly	through	our	website,	stores	and	galleries,	as	well	as	through	our	network	of
channel	partners.	Outside	of	the	U.S.,	we	use	our	international	sales	organization	and	a	network	of	channel	partners	to	market	and	sell	these	products	for	the
residential	market.	We	also	sell	Powerwall	directly	to	utilities.	In	the	case	of	products	sold	to	utilities	or	channel	partners,	such	partners	typically	sell	the
product	and	manage	the	installation	in	customer	homes.


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product	and	manage	the	installation	in	customer	homes.
We	sell	our	commercial	and	utility-scale	energy	storage	systems	to	customers	through	our	U.S.	and	international	sales	organization	and	our	channel
partner	network.	In	certain	jurisdictions,	we	also	sell	installed	solar	energy	systems	(with	or	without	energy	storage)	to	commercial	customers	through	cash,
lease	and	PPA	transactions.
Service	and	Warranty
Automotive
Service
We	provide	service	for	our	electric	vehicles	at	our	company-owned	service	locations	and	through	Tesla	Mobile	Service	technicians	who	perform	work
remotely	at	customers’	homes	or	other	locations.	Performing	vehicle	service	ourselves	provides	us	with	the	capability	to	identify	problems	and	implement
solutions	and	improvements	faster,	and	optimize	logistics	and	inventory	better,	than	traditional	automobile	manufacturers	and	their	dealer	networks.	The
connectivity	of	our	vehicles	also	allows	us	to	diagnose	and	remedy	many	problems	remotely	and	proactively.
Vehicle	Limited	Warranties	and	Extended	Service	Plans
We	provide	a	manufacturer’s	limited	warranty	on	all	new	and	used	Tesla	vehicles	we	sell,	which	may	include	separate	limited	warranties	on	certain
components,	specific	types	of	damage	or	battery	capacity	retention.	We	also	currently	offer	extended	service	plans	that	provide	coverage	beyond	the	new
vehicle	limited	warranties	for	certain	models	in	specified	regions.
Energy	Generation	and	Storage
We	provide	service	and	repairs	to	our	energy	product	customers,	including	under	warranty	where	applicable.
Energy	Storage	Systems
We	generally	provide	manufacturer’s	limited	warranties	with	every	new	energy	storage	product	and	offer	certain	extended	limited	warranties	that	are


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available	at	the	time	of	purchase	of	the	system.	If	we	install	a	system,	we	also	provide	certain	limited	warranties	on	our	installation	workmanship.	As	part	of	our
energy	storage	system	contracts,	we	may	provide	the	customer	with	performance	guarantees	that	warrant	that	the	underlying	system	will	meet	or	exceed	the
minimum	energy	performance	requirements	specified	in	the	contract.
Solar	Energy	Systems
For	retrofit	solar	energy	systems,	we	provide	separate	limited	warranties	for	workmanship	and	against	roof	leaks,	and	for	Solar	Roof,	we	provide	limited
warranties	for	defects	and	weatherization.	For	components	not	manufactured	by	us,	we	generally	pass-through	the	applicable	manufacturers’	warranties.	As
part	of	our	solar	energy	system	contracts,	we	may	provide	the	customer	with	performance	guarantees	that	warrant	that	the	underlying	system	will	meet	or
exceed	the	minimum	energy	generation	requirements	specified	in	the	contract.
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Financial	Services
Automotive
Purchase	Financing	and	Leases
We	offer	leasing	and/or	loan	financing	arrangements	for	our	vehicles	in	certain	jurisdictions	in	North	America,	Europe	and	Asia	through	various	financial
institutions.	Under	certain	of	such	programs,	we	have	provided	resale	value	guarantees	or	buyback	guarantees	that	may	obligate	us	to	repurchase	the	subject
vehicles	at	pre-determined	values.	
We	also	offer	vehicle	financing	arrangements	in	certain	markets	for	specified	vehicle	models	directly	through	our	local
subsidiaries.
Insurance
In	August	2019,	we	launched	an	insurance	product	designed	for	our	customers,	which	offers	rates	that	are	often	better	than	other	alternatives.	This
product	is	currently	available	in	California,	and	we	plan	to	expand	both	the	markets	in	which	we	offer	insurance	products	and	our	ability	to	offer	such	products,
as	part	of	our	ongoing	effort	to	decrease	the	total	cost	of	ownership	for	our	customers.
Energy	Generation	and	Storage
Energy	Storage	Systems
We	currently	offer	certain	loan,	lease	and/or	PPA	options	to	residential	or	commercial	customers	who	pair	energy	storage	systems	with	solar	energy
systems.	We	intend	to	introduce	financial	services	offerings	for	customers	who	purchase	standalone	energy	storage	products	in	the	future.
Solar	Energy	Systems
We	offer	various	financing	options	to	our	solar	customers.	Our	solar	loan	offers	third-party	financing	to	enable	the	customer	to	purchase	and	own	a	solar
energy	system.	We	are	not	a	party	to	the	loan	agreement,	and	the	third-party	lender	has	no	recourse	against	us	with	respect	to	the	loan.	Our	solar	lease	offers


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customers	a	fixed	monthly	fee	at	rates	that	typically	translate	into	lower	monthly	utility	bills	and	an	electricity	production	guarantee.	Our	solar	PPA	charges
customers	a	fee	per	kilowatt-hour	based	on	the	amount	of	electricity	produced	by	our	solar	energy	systems.	We	monetize	the	customer	payments	we	receive
from	our	leases	and	PPAs	through	funds	we	have	formed	with	investors.	We	also	intend	to	introduce	financial	services	offerings	for	our	Solar	Roof	customers	in
the	future.
Manufacturing
Manufacturing	Facilities	in	the	Bay	Area,	California
We	manufacture	and	test	our	vehicles	at	our	manufacturing	facilities	in	the	Bay	Area	in	California,	including	the	Fremont	Factory	and	other	local
manufacturing	facilities.	We	also	manufacture	and	develop	certain	parts	and	components	that	are	critical	to	our	intellectual	property	and	quality	standards,
such	as	Model	S	and	Model	X	battery	packs	and	our	proprietary	lithium-ion	battery	cells,	at	these	locations.
Gigafactory	Nevada	near	Reno,	Nevada
We	have	integrated	battery	material,	cell,	module	and	battery	pack	production	for	Model	3,	Model	Y	and	our	energy	products	in	one	location	at
Gigafactory	Nevada.	In	addition,	we	manufacture	vehicle	drive	units	and	our	energy	storage	products	there.	Gigafactory	Nevada	allows	us	to	access	high
volumes	of	lithium-ion	battery	cells	manufactured	by	our	partner	Panasonic	there	while	achieving	a	significant	reduction	in	the	cost	of	our	battery	packs.	We
continue	to	invest	in	Gigafactory	Nevada	to	achieve	additional	output	there,	including	through	our	agreement	with	Panasonic.
Gigafactory	New	York	in	Buffalo,	New	York


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We	use	Gigafactory	New	York	for	the	development	and	production	of	our	Solar	Roof	and	other	solar	products	and	components,	energy	storage
components	and	Supercharger	components,	and	for	other	lessor-approved	functions.
Gigafactory	Shanghai	in	China
We	established	Gigafactory	Shanghai	to	increase	the	affordability	of	our	vehicles	for	customers	in	local	markets	by	reducing	transportation	and
manufacturing	costs	and	eliminating	the	impact	of	unfavorable	tariffs.	We	continue	to	increase	the	degree	of	localized	procurement	and	manufacturing	there.
Gigafactory	Shanghai	is	representative	of	our	plan	to	iteratively	improve	our	manufacturing	operations	as	we	establish	new	factories,	as	we	implemented	the
learnings	from	our	Model	3	ramp	at	the	Fremont	Factory	to	commence	and	ramp	our	production	there	quickly	and	cost-effectively.
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Other	Manufacturing
Generally,	we	continue	to	expand	production	capacity	at	our	existing	facilities.	We	also	intend	to	further	increase	cost-competitiveness	in	our	significant
markets	by	strategically	adding	local	manufacturing,	including	at	Gigafactory	Berlin	in	Germany	and	Gigafactory	Texas	in	Austin,	Texas,	which	are	under
construction.
Supply	Chain
Our	products	use	thousands	of	purchased	parts	that	are	sourced	from	hundreds	of	suppliers	across	the	world.	We	have	developed	close	relationships
with	vendors	of	key	parts	such	as	battery	cells,	electronics	and	complex	vehicle	assemblies.	Certain	components	purchased	from	these	suppliers	are	shared	or
are	similar	across	many	product	lines,	allowing	us	to	take	advantage	of	pricing	efficiencies	from	economies	of	scale.			
As	is	the	case	for	most	automotive	companies,	most	of	our	procured	components	and	systems	are	sourced	from	single	suppliers.	Where	multiple	sources
are	available	for	certain	key	components,	we	work	to	qualify	multiple	suppliers	for	them	where	it	is	sensible	to	do	so	in	order	to	minimize	production	risks
owing	to	disruptions	in	their	supply.	We	also	mitigate	risk	by	maintaining	safety	stock	for	key	parts	and	assemblies	and	die	banks	for	components	with	lengthy
procurement	lead	times.		
Our	products	use	various	raw	materials	including	aluminum,	steel,	cobalt,	lithium,	nickel	and	copper.	Pricing	for	these	materials	is	governed	by	market
conditions	and	may	fluctuate	due	to	various	factors	outside	of	our	control,	such	as	supply	and	demand	and	market	speculation.	We	strive	to	execute	long-term
supply	contracts	for	such	materials	at	competitive	pricing	when	feasible,	and	we	currently	believe	that	we	have	adequate	access	to	raw	materials	supplies	in


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order	to	meet	the	needs	of	our	operations.
Governmental	Programs,	Incentives	and	Regulations
Globally,	both	the	operation	of	our	business	by	us	and	the	ownership	of	our	products	by	our	customers	are	impacted	by	various	government	programs,
incentives	and	other	arrangements.	Our	business	and	products	are	also	subject	to	numerous	governmental	regulations	that	vary	among	jurisdictions.
Programs	and	Incentives
California	Alternative	Energy	and	Advanced	Transportation	Financing	Authority	Tax	Incentives
We	have	agreements	with	the	California	Alternative	Energy	and	Advanced	Transportation	Financing	Authority	that	provide	multi-year	sales	tax
exclusions	on	purchases	of	manufacturing	equipment	that	will	be	used	for	specific	purposes,	including	the	expansion	and	ongoing	development	of	electric
vehicles	and	powertrain	production	in	California.
Gigafactory	Nevada—Nevada	Tax	Incentives
In	connection	with	the	construction	of	Gigafactory	Nevada,	we	entered	into	agreements	with	the	State	of	Nevada	and	Storey	County	in	Nevada	that
provide	abatements	for	specified	taxes,	discounts	to	the	base	tariff	energy	rates	and	transferable	tax	credits	in	consideration	of	capital	investment	and	hiring
targets	that	were	met	at	Gigafactory	Nevada.	These	incentives	are	available	until	June	2024	or	June	2034,	depending	on	the	incentive.
Gigafactory	New	York—New	York	State	Investment	and	Lease
We	have	a	lease	through	the	Research	Foundation	for	the	State	University	of	New	York	(the	“SUNY	Foundation”)	with	respect	to	Gigafactory	New	York.
Under	the	lease	and	a	related	research	and	development	agreement,	we	are	continuing	to	designate	further	buildouts	at	the	facility.	We	are	required	to	comply


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with	certain	covenants,	including	hiring	and	cumulative	investment	targets.
As	we	temporarily	suspended	most	of	our	manufacturing	operations	at	Gigafactory	New	York	pursuant	to	a	New	York	State	executive	order	issued	in
March	2020	as	a	result	of	the	COVID-19	pandemic,	we	were	granted	a	one-year	deferral	of	our	obligation	to	be	compliant	with	our	applicable	targets	under
such	agreement	on	April	30,	2020,	which	was	memorialized	in	an	amendment	to	our	agreement	with	the	SUNY	Foundation	in	July	2020.
Gigafactory	Shanghai—Land	Use	Rights	and	Economic	Benefits
We	have	an	agreement	with	the	local	government	of	Shanghai	for	land	use	rights	at	Gigafactory	Shanghai.	Under	the	terms	of	the	arrangement,	we	are
required	to	meet	a	cumulative	capital	expenditure	target	and	an	annual	tax	revenue	target	starting	at	the	end	of	2023.	In	addition,	the	Shanghai	government
has	granted	to	our	Gigafactory	Shanghai	subsidiary	in	2019	and	2020	certain	incentives	to	be	used	in	connection	with	eligible	capital	investments	at
Gigafactory	Shanghai.	Finally,	the	Shanghai	government	granted	a	beneficial	corporate	income	tax	rate	of	15%	to	certain	eligible	enterprises,	which	is	lower
than	the	25%	statutory	corporate	income	tax	rate	in	China.	Our	Gigafactory	Shanghai	subsidiary	was	granted	this	lower	rate	for	2019	through	2023.
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Gigafactory	
Berlin	
–
	
Pending	
Grant
We	have	applied	for	a	grant	with	the	German	government	to	improve	the	design,	chemistry,	manufacturing	technology	and	recycling	of	lithium-ion
battery	cells	for	Gigafactory	Berlin.	The	grant	was	approved	by	the	European	Commission	in	January	2021	and	its	implementation	will	be	subject	to	a	grant
agreement	with	the	German	government.
Gigafactory	Texas	–	Tax	Incentives
In	connection	with	the	construction	of	Gigafactory	Texas,	we	entered	into	a	20-year	agreement	with	Travis	County	in	Texas	pursuant	to	which	we	would
receive	grant	funding	equal	to	70-80%	of	property	taxes	paid	by	us	to	Travis	County	and	a	separate	10-year	agreement	with	the	Del	Valle	Independent	School
District	in	Texas	pursuant	to	which	a	portion	of	the	taxable	value	of	our	property	would	be	capped	at	a	specified	amount,	in	each	case	subject	to	our	meeting
certain	minimum	economic	development	metrics	through	our	construction	and	operations	at	Gigafactory	Texas.
Regulatory	Credits
We	earn	tradable	credits	in	the	operation	of	our	business	under	various	regulations	related	to	zero-emission	vehicles	(“ZEVs”),	greenhouse	gas,	fuel
economy,	renewable	energy	and	clean	fuel.	We	sell	these	credits	to	other	regulated	entities	who	can	use	the	credits	to	comply	with	emission	standards,
renewable	energy	procurement	standards	and	other	regulatory	requirements.
Energy	Storage	System	Incentives	and	Policies
While	the	regulatory	regime	for	energy	storage	projects	is	still	under	development,	there	are	various	policies,	incentives	and	financial	mechanisms	at	the
federal,	state	and	local	levels	that	support	the	adoption	of	energy	storage.


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For	example,	energy	storage	systems	that	are	charged	using	solar	energy	may	be	eligible	for	the	solar	energy-related	U.S.	federal	tax	credits	described
below.	The	Federal	Energy	Regulatory	Commission	(“FERC”)	has	also	taken	steps	to	enable	the	participation	of	energy	storage	in	wholesale	energy	markets.	In
addition,	California	and	a	number	of	other	states	have	adopted	procurement	targets	for	energy	storage,	and	behind-the-meter	energy	storage	systems	qualify
for	funding	under	the	California	Self	Generation	Incentive	Program.
Solar	Energy	System	Incentives	and	Policies
U.S.	federal,	state	and	local	governments	have	established	various	policies,	incentives	and	financial	mechanisms	to	reduce	the	cost	of	solar	energy	and
to	accelerate	the	adoption	of	solar	energy.	These	incentives	include	tax	credits,	cash	grants,	tax	abatements	and	rebates.
In	particular,	Sections	48	and	25D	of	the	U.S.	Internal	Revenue	Code	currently	provide	a	tax	credit	of	26%	of	qualified	commercial	or	residential
expenditures	for	solar	energy	systems,	which	may	be	claimed	by	our	customers	for	systems	they	purchase,	or	by	us	for	arrangements	where	we	own	the
systems.	These	tax	credits	are	currently	scheduled	to	decline	and/or	expire	in	2023	and	beyond.
Regulations
Vehicle	Safety	and	Testing
In	the	U.S.,	our	vehicles	are	subject	to	regulation	by	the	National	Highway	Traffic	Safety	Administration	(“NHTSA”),	including	all	applicable	Federal
Motor	Vehicle	Safety	Standards	(“FMVSS”)	and	the	NHTSA	bumper	standard.	Numerous	FMVSS	apply	to	our	vehicles,	such	as	crash-worthiness	requirements,


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crash	avoidance	requirements	and	electric	vehicle	requirements.	While	our	current	vehicles	fully	comply	and	we	expect	that	our	vehicles	in	the	future	will	fully
comply	with	all	applicable	FMVSS	with	limited	or	no	exemptions,	FMVSS	are	subject	to	change	from	time	to	time.	As	a	manufacturer,	we	must	self-certify	that
our	vehicles	meet	all	applicable	FMVSS	and	the	NHTSA	bumper	standard,	or	otherwise	are	exempt,	before	the	vehicles	may	be	imported	or	sold	in	the	U.S.
We	are	also	required	to	comply	with	other	federal	laws	administered	by	NHTSA,	including	the	CAFE	standards,	Theft	Prevention	Act	requirements,
consumer	information	labeling	requirements,	Early	Warning	Reporting	requirements	regarding	warranty	claims,	field	reports,	death	and	injury	reports	and
foreign	recalls,	owner’s	manual	requirements	and	additional	requirements	for	cooperating	with	safety	investigations	and	defect	and	recall	reporting.	The	U.S.
Automobile	Information	and	Disclosure	Act	also	requires	manufacturers	of	motor	vehicles	to	disclose	certain	information	regarding	the	manufacturer’s
suggested	retail	price,	optional	equipment	and	pricing.	In	addition,	federal	law	requires	inclusion	of	fuel	economy	ratings,	as	determined	by	the	U.S.
Department	of	Transportation	and	the	Environmental	Protection	Agency	(the	“EPA”),	and	5-star	safety	ratings	as	determined	by	NHTSA,	if	available.
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Our	vehicles	sold	outside	of	the	U.S.	are	subject	to	similar	foreign	safety,	environmental	and	other	regulations.	Many	of	those	regulations	are	different
from	those	applicable	in	the	U.S.	and	may	require	redesign	and/or	retesting
.	Some	of	those	regulations	impact	or	prevent	the	rollout	of	new	vehicle	features.
Additionally,	t
he	European	Union	has	established	new	rules	regarding	additional	compliance	oversight	that	commence
d
	in	2020,	and	there	is	also	regulatory
uncertainty	related	to	the	United	Kingdom’s	withdrawal	from	the	European	Union.
Self-Driving	Vehicles
Generally,	laws	pertaining	to	self-driving	vehicles	are	evolving	globally,	and	in	some	cases	may	create	restrictions	on	self-driving	features	that	we
develop.	While	there	are	currently	no	federal	U.S.	regulations	specifically	pertaining	to	self-driving	vehicles	or	self-driving	equipment,	NHTSA	has	published
recommended	guidelines	on	self-driving	vehicles,	and	retains	the	authority	to	investigate	and/or	take	action	on	the	safety	of	any	vehicle,	equipment	or	features
operating	on	public	roads.	Certain	U.S.	states	have	legal	restrictions	on	the	operation,	registration	or	licensure	of	self-driving	vehicles,	and	many	other	states
are	considering	them.	This	regulatory	patchwork	increases	the	legal	complexity	with	respect	to	self-driving	vehicles	in	the	U.S.
In	markets	that	follow	the	regulations	of	the	United	Nations	Economic	Commission	for	Europe,	some	requirements	restrict	the	design	of	advanced
driver-assistance	or	self-driving	features,	which	can	compromise	or	prevent	their	use	entirely.	Other	applicable	laws,	both	current	and	proposed,	may	hinder
the	path	and	timeline	to	introducing	self-driving	vehicles	for	sale	and	use	in	the	markets	where	they	apply.


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Other	key	markets,	including	China,	continue	to	consider	self-driving	regulation.	Any	implemented	regulations	may	differ	materially	from	those	in	the
U.S.	and	Europe,	which	may	further	increase	the	legal	complexity	of	self-driving	vehicles	and	limit	or	prevent	certain	features.
Automobile	Manufacturer	and	Dealer	Regulation
In	the	U.S.,	state	laws	regulate	the	manufacture,	distribution,	sale	and	service	of	automobiles,	and	generally	require	motor	vehicle	manufacturers	and
dealers	to	be	licensed	in	order	to	sell	vehicles	directly	to	residents.	Certain	states	have	asserted	that	the	laws	in	such	states	do	not	permit	automobile
manufacturers	to	be	licensed	as	dealers	or	to	act	in	the	capacity	of	a	dealer,	or	that	they	otherwise	restrict	a	manufacturer’s	ability	to	deliver	or	service
vehicles.	To	sell	vehicles	to	residents	of	states	where	we	are	not	licensed	as	a	dealer,	we	generally	conduct	the	transfer	of	title	out	of	the	state.	In	certain	such
states,	we	have	opened	“galleries”	that	serve	an	educational	purpose	and	where	the	title	transfer	may	not	occur.
Some	automobile	dealer	trade	associations	have	both	challenged	the	legality	of	our	operations	in	court	and	used	administrative	and	legislative	processes
to	attempt	to	prohibit	or	limit	our	ability	to	operate	existing	stores	or	expand	to	new	locations.	Certain	dealer	associations	have	also	actively	lobbied	state
licensing	agencies	and	legislators	to	interpret	existing	laws	or	enact	new	laws	in	ways	not	favorable	to	our	ownership	and	operation	of	our	own	retail	and
service	locations.	We	expect	such	challenges	to	continue,	and	we	intend	to	actively	fight	any	such	efforts.
Battery	Safety	and	Testing


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Battery	Safety	and	Testing
Our	battery	packs	are	subject	to	various	U.S.	and	international	regulations	that	govern	transport	of	“dangerous	goods,”	defined	to	include	lithium-ion
batteries,	which	may	present	a	risk	in	transportation.	We	conduct	testing	to	demonstrate	our	compliance	with	such	regulations.
We	use	lithium-ion	cells	in	our	high	voltage	battery	packs	in	our	vehicles	and	energy	storage	products.	The	use,	storage	and	disposal	of	our	battery
packs	are	regulated	under	existing	laws	and	are	the	subject	of	ongoing	regulatory	changes	that	may	add	additional	requirements	in	the	future.	We	have
agreements	with	third	party	battery	recycling	companies	to	recycle	our	battery	packs	and	we	are	also	piloting	our	own	recycling	technology.	
Solar	Energy—General
We	are	not	a	“regulated	utility”	in	the	U.S.,	although	we	are	subject	to	certain	state	and	federal	regulations	applicable	to	solar	and	battery	storage
providers.	To	operate	our	systems,	we	enter	into	standard	interconnection	agreements	with	applicable	utilities.	Sales	of	electricity	and	non-sale	equipment
leases	by	third	parties,	such	as	our	leases,	PPAs	and	subscription	agreements,	have	faced	regulatory	challenges	in	some	states	and	jurisdictions.
Solar	Energy—Net	Metering
Most	states	in	the	U.S.	make	net	energy	metering,	or	net	metering,	available	to	solar	customers.	Net	metering	typically	allows	solar	customers	to
interconnect	their	solar	energy	systems	to	the	utility	grid	and	offset	their	utility	electricity	purchases	by	receiving	a	bill	credit	for	excess	energy	generated	by
their	solar	energy	system	that	is	exported	to	the	grid.	In	certain	jurisdictions,	regulators	or	utilities	have	reduced	or	eliminated	the	benefit	available	under	net


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Competition
Automotive
The	worldwide	automotive	market	is	highly	competitive	and	we	expect	it	will	become	even	more	competitive	in	the	future	as	we	introduce	additional
vehicles	in	a	broader	cross-section	of	the	passenger	and	commercial	vehicle	market	and	expand	our	vehicles’	capabilities.
We	believe	that	our	vehicles	compete	in	the	market	both	based	on	their	traditional	segment	classification	as	well	as	based	on	their	propulsion
technology.	For	example,	Model	S	and	Model	X	compete	primarily	with	premium	sedans	and	premium	SUVs	and	Model	3	and	Model	Y	compete	with	small	to
medium-sized	sedans	and	compact	SUVs,	which	are	extremely	competitive	markets.	Competing	products	typically	include	internal	combustion	vehicles	from
more	established	automobile	manufacturers;	however,	many	established	and	new	automobile	manufacturers	have	entered	or	have	announced	plans	to	enter	the
market	for	electric	and	other	alternative	fuel	vehicles.	Overall,	we	believe	these	announcements	and	vehicle	introductions	promote	the	development	of	the
electric	vehicle	market	by	highlighting	the	attractiveness	of	electric	vehicles	relative	to	the	internal	combustion	vehicle.	Many	major	automobile	manufacturers
have	electric	vehicles	available	today	in	major	markets	including	the	U.S.,	China	and	Europe,	and	other	current	and	prospective	automobile	manufacturers	are
also	developing	electric	vehicles.	In	addition,	several	manufacturers	offer	hybrid	vehicles,	including	plug-in	versions.	
We	also	believe	that	there	is	increasing	competition	for	our	vehicle	offerings	as	a	platform	for	delivering	self-driving	technologies,	charging	solutions
and	other	features	and	services,	and	we	expect	to	compete	in	this	developing	market	through	continued	progress	on	our	Autopilot,	FSD	and	neural	network


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capabilities,	Supercharger	network	and	our	infotainment	offerings.
Energy	Generation	and	Storage
Energy	Storage	Systems
The	market	for	energy	storage	products	is	also	highly	competitive,	and	both	established	and	emerging	companies	have	introduced	products	that	are
similar	to	our	product	portfolio	or	that	are	alternatives	to	the	elements	of	our	systems.	We	compete	with	these	companies	based	on	price,	energy	density	and
efficiency.	We	believe	that	the	specifications	and	features	of	our	products,	our	strong	brand	and	the	modular,	scalable	nature	of	our	energy	storage	products
give	us	a	competitive	advantage	in	our	markets.
Solar	Energy	Systems
The	primary	competitors	to	our	solar	energy	business	are	the	traditional	local	utility	companies	that	supply	energy	to	our	potential	customers.	We
compete	with	these	traditional	utility	companies	primarily	based	on	price	and	the	ease	by	which	customers	can	switch	to	electricity	generated	by	our	solar
energy	systems.	We	also	compete	with	solar	energy	companies	that	provide	products	and	services	similar	to	ours.	Many	solar	energy	companies	only	install
solar	energy	systems,	while	others	only	provide	financing	for	these	installations.	We	believe	we	have	a	significant	expansion	opportunity	with	our	offerings	and
that	the	regulatory	environment	is	increasingly	conducive	to	the	adoption	of	renewable	energy	systems.
Intellectual	Property
We	place	a	strong	emphasis	on	our	innovative	approach	and	proprietary	designs	which	bring	intrinsic	value	and	uniqueness	to	our	product	portfolio.		As
part	of	our	business,	we	seek	to	protect	the	underlying	intellectual	property	rights	of	these	innovations	and	designs	such	as	with	respect	to	patents,	trademarks,


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copyrights,	trade	secrets	and	other	measures,	including	through	employee	and	third-party	nondisclosure	agreements	and	other	contractual	arrangements.	For
example,	we	place	a	high	priority	on	obtaining	patents	to	provide	the	broadest	and	strongest	possible	protection	to	enable	our	freedom	to	operate	our
innovations	and	designs	within	our	products	and	technologies	in	the	electric	vehicle	market	as	well	as	to	protect	and	defend	our	product	portfolio.	We	have	also
adopted	a	patent	policy	in	which	we	irrevocably	pledged	that	we	will	not	initiate	a	lawsuit	against	any	party	for	infringing	our	patents	through	activity	relating
to	electric	vehicles	or	related	equipment	for	so	long	as	such	party	is	acting	in	good	faith.	We	made	this	pledge	in	order	to	encourage	the	advancement	of	a
common,	rapidly-evolving	platform	for	electric	vehicles,	thereby	benefiting	ourselves,	other	companies	making	electric	vehicles	and	the	world.
Human	Capital	Resources
As	of	December	31,	2020,	our	full-time	count	for	our	and	our	subsidiaries’	employees	worldwide	was	70,757.	To	date,	we	have	not	experienced	any	work
stoppages	as	a	result	of	labor	disputes,	and	we	consider	our	relationship	with	our	employees	to	be	good.	Our	key	human	capital	objectives	in	managing	our
business	include	attracting,	developing	and	retaining	top	talent	while	integrating	diversity,	equity	and	inclusion	principles	and	practices	into	our	core	values.
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We	want	to	attract
	a	pool	of	diverse	and	exceptional	candidates	and	support	their	career	growth	once	they	become	employees.	
Our	efforts	begin	at	the
entry	level	with	
development,	apprenticeship	and	internship	programs	in	local	high	schools,	community	colleges	and	
four-year	colleges
.
	In	addition,	we	seek	to
hire	based	on	talent	rather	than	solely	on	educational	pedigree,	and	have	provided
	thousands	of	job	openings
,	including	in	our	local	communities,
	
for
	
capable
workers	
from	various	backgrounds	to	learn	
valuable	skills	
in	critical	operations	such	as	
in	manufacturing,	vehicle	service	and	energy	product	installation
.	We
also	emphasize	in	our	evaluation	and	career	development	efforts
	
internal	mobility	opportunities	for	employees	to	drive	professional	development.	Our	goal	is	a
long-term,	upward-bound	career	at	Tesla	for	every	employee
,	which	we	believe	also	drives	our
	retention	efforts
.
We	also	believe	that	our	ability	to	retain	our	workforce	is	dependent	on	our	ability	to	foster	an	environment	that	is	sustainably	safe,	respectful,	fair	and
inclusive	of	everyone	and	promotes	diversity,	equity	and	inclusion	inside	and	outside	of	our	business.	From	our	outreach	to	Historically	Black	Colleges	and
Universities	and	Hispanic	Serving	Institutions	to	sponsoring	employee	resource	groups	across	numerous	locations,	including	Asian	Pacific	Islanders	at	Tesla,
Black	at	Tesla,	Intersectionality,	Latinos	at	Tesla,	LGBTQ	at	Tesla,	Veterans	at	Tesla	and	Women	in	Tesla,	we	engage	these	networks	as	key	business	resources


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and	sources	of	actionable	feedback.	We	are	also	working	on	diversity	efforts	in	our	supply	chain	to	expand	our	outreach	and	support	to	small-	and	large-scale
suppliers	from	underrepresented	communities	to	emphasize	this	culture	with	our	own	employees.
Available	Information
We	file	or	furnish	periodic	reports	and	amendments	thereto,	including	our	Annual	Reports	on	Form	10-K,	our	Quarterly	Reports	on	Form	10-Q	and
Current	Reports	on	Form	8-K,	proxy	statements	and	other	information	with	the	Securities	and	Exchange	Commission	(“SEC”).	In	addition,	the	SEC	maintains	a
website	(
www.sec.gov
)	that	contains	reports,	proxy	and	information	statements,	and	other	information	regarding	issuers	that	file	electronically.	Our	website	is
located	at	
www.tesla.com
,	and	our	reports,	amendments	thereto,	proxy	statements	and	other	information	are	also	made	available,	free	of	charge,	on	our
investor	relations	website	at	
ir.tesla.com
	as	soon	as	reasonably	practicable	after	we	electronically	file	or	furnish	such	information	with	the	SEC.	The	information
posted	on	our	website	is	not	incorporated	by	reference	into	this	Annual	Report	on	Form	10-K.
	
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ITEM	1A.	RISK	FACTORS
You	should	carefully	consider	the	risks	described	below	together	with	the	other	information	set	forth	in	this	report,	which	could	materially	affect	our
business,	financial	condition	and	future	results.	The	risks	described	below	are	not	the	only	risks	facing	our	company.	Risks	and	uncertainties	not	currently
known	to	us	or	that	we	currently	deem	to	be	immaterial	also	may	materially	adversely	affect	our	business,	financial	condition	and	operating	results.
Risks	Related	to	Our	Ability	to	Grow	Our	Business
We	may	be	impacted	by	macroeconomic	conditions	resulting	from	the	global	COVID-19	pandemic.
Since	the	first	quarter	of	2020,	there	has	been	a	worldwide	impact	from	the	COVID-19	pandemic.	Government	regulations	and	shifting	social	behaviors
have	limited	or	closed	non-essential	transportation,	government	functions,	business	activities	and	person-to-person	interactions.	
In	some	cases,	the	relaxation	of
such	trends	has	recently	been	followed	by	actual	or	contemplated	returns	to	stringent	restrictions	on	gatherings	or	commerce,	including	in	parts	of	the	U.S.	and
a	number	of	areas	in	Europe.
We	temporarily	suspended	operations	at	each	of	our	manufacturing	facilities	worldwide	for	a	part	of	the	first	half	of	2020.	Some	of	our	suppliers	and
partners	also	experienced	temporary	suspensions	before	resuming,	including	Panasonic,	which	manufactures	battery	cells	for	our	products	at	our	Gigafactory
Nevada.	We	also	instituted	temporary	employee	furloughs	and	compensation	reductions	while	our	U.S.	operations	were	scaled	back.	Reduced	operations	or


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closures	at	motor	vehicle	departments,	vehicle	auction	houses	and	municipal	and	utility	company	inspectors	have	resulted	in	challenges	in	or	postponements
for	our	new	vehicle	deliveries,	used	vehicle	sales	and	energy	product	deployments.	Global	trade	conditions	and	consumer	trends	may	further	adversely	impact
us	and	our	industries.	For	example,	pandemic-related	issues	have	exacerbated	port	congestion	and	intermittent	supplier	shutdowns	and	delays,	resulting	in
additional	expenses	to	expedite	delivery	of	critical	parts.	Similarly,	increased	demand	for	personal	electronics	has	created	a	shortfall	of	microchip	supply,	and	it
is	yet	unknown	how	we	may	be	impacted.	Sustaining	our	production	trajectory	will	require	the	readiness	and	solvency	of	our	suppliers	and	vendors,	a	stable
and	motivated	production	workforce	and	ongoing	government	cooperation,	including	for	travel	and	visa	allowances.	The	contingencies	inherent	in	the
construction	of	and	ramp	at	new	facilities	such	as	Gigafactory	Shanghai,	Gigafactory	Berlin	and	Gigafactory	Texas	may	be	exacerbated	by	these	challenges.
We	cannot	predict	the	duration	or	direction	of	current	global	trends,	the	sustained	impact	of	which	is	largely	unknown,	is	rapidly	evolving	and	has	varied
across	geographic	regions.	Ultimately,	we	continue	to	monitor	macroeconomic	conditions	to	remain	flexible	and	to	optimize	and	evolve	our	business	as
appropriate,	and	we	will	have	to	accurately	project	demand	and	infrastructure	requirements	globally	and	deploy	our	production,	workforce	and	other	resources
accordingly.	If	current	global	market	conditions	continue	or	worsen,	or	if	we	cannot	or	do	not	maintain	operations	at	a	scope	that	is	commensurate	with	such


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conditions	or	are	later	required	to	or	choose	to	suspend	such	operations	again,	our	business,	prospects,	financial	condition	and	operating	results	may	be
harmed.
We	may	experience	delays	in	launching	and	ramping	the	production	of	our	products	and	features,	or	we	may	be	unable	to	control	our
manufacturing	costs.
We	have	previously	experienced	and	may	in	the	future	experience	launch	and	production	ramp	delays	for	new	products	and	features.	For	example,	we
encountered	unanticipated	supplier	issues	that	led	to	delays	during	the	ramp	of	Model	X	and	experienced	challenges	with	a	supplier	and	with	ramping	full
automation	for	certain	of	our	initial	Model	3	manufacturing	processes.	In	addition,	we	may	introduce	in	the	future	new	or	unique	manufacturing	processes	and
design	features	for	our	products.	There	is	no	guarantee	that	we	will	be	able	to	successfully	and	timely	introduce	and	scale	such	processes	or	features.
In	particular,	our	future	business	depends	in	large	part	on	increasing	the	production	of	mass-market	vehicles	including	Model	3	and	Model	Y,	which	we
are	planning	to	achieve	through	multiple	factories	worldwide.	We	have	relatively	limited	experience	to	date	in	manufacturing	Model	3	and	Model	Y	at	high
volumes	and	even	less	experience	building	and	ramping	vehicle	production	lines	across	multiple	factories	in	different	geographies.	In	order	to	be	successful,	we
will	need	to	implement,	maintain	and	ramp	efficient	and	cost-effective	manufacturing	capabilities,	processes	and	supply	chains	and	achieve	the	design
tolerances,	high	quality	and	output	rates	we	have	planned	at	our	manufacturing	facilities	in	California,	Nevada,	Texas,	China	and	Germany.	We	will	also
	need	to
hire,	train	and	compensate	skilled	employees	to	operate	these	facilities.


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Bottlenecks	and	other	unexpected	challenges	such	as	those	we	experienced	in	the	past
may	arise	during	our	production	ramps,	and	we	must	address	them	promptly	while	continuing	to	improve	manufacturing	processes	and	reducing	costs.	If	we
are	not	successful	in	achieving	these	goals,	we	could	face	delays	in	establishing	and/or	sustaining	our	Model	3	and	Model	Y	ramps	or	be	unable	to	meet	our
related	cost	and	profitability	targets.
We	may	also	experience	similar	future	delays	in	launching	and/or	ramping	production	of	our	energy	storage	products	and	Solar	Roof;	new	product
versions	or	variants;	new	vehicles	such	as	Tesla	Semi,	Cybertruck	and	the	new	Tesla	Roadster;	and	future	features	and	services	such	as	new	Autopilot	or	FSD
features	and	the	autonomous	Tesla	ride-hailing	network.	Likewise,	we	may	encounter	delays	with	the	design,	construction	and	regulatory	or	other	approvals
necessary	to	build	and	bring	online	future	manufacturing	facilities	and	products.
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Any	delay	or	other	complication	in	ramping	the	production	of	our	current	products	or	the	development,	manufacture,	launch	and	production	ramp	of	our
future	products,	features	and	services,	or	in	doing	so	cost-effectively	and	with	high	quality,	may	harm	our	brand,	business,	prospects,	financial	condition	and
operating	results.
We	may	be	unable	to	grow	our	global	product	sales,	delivery	and	installation	capabilities	and	our	servicing	and	vehicle	charging	networks,
or	we	may	be	unable	to	accurately	project	and	effectively	manage	our	growth.
Our	success	will	depend	on	our	ability	to	continue	to	expand	our	sales	capabilities
.	
We	also	frequently	adjust	our	retail	operations	and	product	offerings
in	order	to	optimize	our	reach,	costs,	product	line-up	and	model	differentiation	and	customer	experience.	However,	there	is	no	guarantee	that	such	steps	will	be
accepted	by	consumers	accustomed	to	traditional	sales	strategies.	For	example,	marketing	methods	such	as	touchless	test	drives	that	we	have	pioneered	in
certain	markets	
have	not	been	proven	at	scale.
	We	are	targeting	with	Model	3	and	Model	Y	a	global	mass	demographic	with	a	broad	range	of	potential
customers,	in	which	we	have	relatively	limited	experience	projecting	demand	and	pricing	our	products.	We	currently	produce	numerous	international	variants
at	a	limited	number	of	factories,	and	if	our	specific	demand	expectations	for	these	variants	prove	inaccurate,	we	may	not	be	able	to	timely	generate	deliveries
matched	to	the	vehicles	that	we	produce	in	the	same	timeframe	or	that	are	commensurate	with	the	size	of	our	operations	in	a	given	region.	Likewise,	as	we


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develop	and	grow	our	energy	products	and	services	worldwide,	our	success	will	depend	on	our	ability	to	correctly	forecast	demand	in	various	markets.
Because	we	do	not	have	independent	dealer	networks,	we	are	responsible	for	delivering	all	of	our	vehicles	to	our	customers.	While	we	have	improved
our	delivery	logistics,	we	may	face	difficulties	with	deliveries	at	increasing	volumes,	particularly	in	international	markets	requiring	significant	transit	times.	For
example,	we	saw	challenges	in	ramping	our	logistics	channels	in	China	and	Europe	to	initially	deliver	Model	3	there	in	the	first	quarter	of	2019.	We	have
deployed	a	number	of	delivery	models,	such	as	deliveries	to	customers’	homes	and	workplaces	and	touchless	deliveries,	but	there	is	no	guarantee	that	such
models	will	be	scalable	or	be	accepted	globally.	
Likewise,	as	we	ramp	Solar	Roof,	we	are	working	to	substantially	increase	installation
	personnel	and	decrease
installation	times.	If	we	are	not	successful	in	matching	such	capabilities	with	actual	production,	or	if	we	experience	unforeseen	production	delays	or	inaccurately
forecast	demand	for	the	Solar	Roof,	our	business,	financial	condition	and	operating	results	may	be	harmed.
Moreover,	because	of	our	unique	expertise	with	our	vehicles,	we	recommend	that	our	vehicles	be	serviced	by	us	or	by	certain	authorized	professionals.
If	we	experience	delays	in	adding	such	servicing	capacity	or	servicing	our	vehicles	efficiently,	or	experience	unforeseen	issues	with	the	reliability	of	our
vehicles,	particularly	higher-volume	and	newer	additions	to	our	fleet	such	as	Model	3	and	Model	Y,	it	could	overburden	our	servicing	capabilities	and	parts


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inventory.	Similarly,	the	increasing	number	of	Tesla	vehicles	also	requires	us	to	continue	to	rapidly	increase	the	number	of	our	Supercharger	stations	and
connectors	throughout	the	world.
There	is	no	assurance	that	we	will	be	able	to	ramp	our	business	to	meet	our	sales,	delivery,	installation,	servicing	and	vehicle	charging	targets	globally,
that	our	projections	on	which	such	targets	are	based	will	prove	accurate	or	that	the	pace	of	growth	or	coverage	of	our	customer	infrastructure	network	will
meet	customer	expectations.	
These	plans	require	significant	cash	investments	and	management	resources	and	there	is	no	guarantee	that	they	will	generate
additional	sales	or	installations	of	our	products,	or	that	we	will	be	able	to	avoid	cost	overruns	or	be	able	to	hire	additional	personnel	to	support	them.	
As	we
expand,	w
e	will	also	need	to	ensure	our	compliance	with	regulatory	requirements	in	various	jurisdictions	applicable	to	the	sale,	installation	and	servicing	of	our
products,	the	sale	or	dispatch	of	electricity	related	to	our	energy	products	and	the	operation	of	Superchargers.
	If	we	fail	to	manage	our	growth	effectively,	it	may
harm	our	brand,	business,	prospects,	financial	condition	and	operating	results.
Our	future	growth	and	success	are	dependent	upon	consumers’	demand	for	electric	vehicles	and	specifically	our	vehicles	in	an	automotive
industry	that	is	generally	competitive,	cyclical	and	volatile.
If	the	market	for	electric	vehicles	in	general	and	Tesla	vehicles	in	particular	does	not	develop	as	we	expect,	develops	more	slowly	than	we	expect,	or	if


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demand	for	our	vehicles	decreases	in	our	markets	or	our	vehicles	compete	with	each	other,	our	business,	prospects,	financial	condition	and	operating	results
may	be	harmed.
We	are	still	at	an	earlier	stage	and	have	limited	resources	and	production	relative	to	established	competitors	that	offer	internal	combustion	engine
vehicles.	In	addition,	electric	vehicles	still	comprise	a	small	percentage	of	overall	vehicle	sales.	As	a	result,	the	market	for	our	vehicles	could	be	negatively
affected	by	numerous	factors,	such	as:
	
•
perceptions	about	electric	vehicle	features,	quality,	safety,	performance	and	cost;
	
•
perceptions	about	the	limited	range	over	which	electric	vehicles	may	be	driven	on	a	single	battery	charge,	and	access	to	charging	facilities;
	
•
competition,	including	from	other	types	of	alternative	fuel	vehicles,	plug-in	hybrid	electric	vehicles	and	high	fuel-economy	internal	combustion
engine	vehicles;
	
•
volatility	in	the	cost	of	oil	and	gasoline,	such	as	wide	fluctuations	in	crude	oil	prices	during	2020;
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•
government	regulations	and	economic	incentives;	and
	
•
concerns	about	our	future	viability.
Finally,	the	target	demographics	for	our	vehicles,	particularly	Model	3	and	Model	Y,	are	highly	competitive.	Sales	of	vehicles	in	the	automotive	industry
tend	to	be	cyclical	in	many	markets,	which	may	expose	us	to	further	volatility	as	we	expand	and	adjust	our	operations	and	retail	strategies.	Moreover,	the
COVID-19	pandemic	may	negatively	impact	the	transportation	and	automotive	industries	long-term.	It	is	uncertain	as	to	how	such	macroeconomic	factors	will
impact	us	as	a	company	that	has	been	experiencing	growth	and	increasing	market	share	in	an	industry	that	has	globally	been	experiencing	a	recent	decline	in
sales.
Our	suppliers	may	fail	to	deliver	components	according	to	schedules,	prices,	quality	and	volumes	that	are	acceptable	to	us,	or	we	may	be
unable	to	manage	these	components	effectively.
Our	products	contain	thousands	of	parts	that	we	purchase	globally	from	hundreds	of	mostly	single-source	direct	suppliers,	generally	without	long-term
supply	agreements.	This	exposes	us	to	multiple	potential	sources	of	component	shortages,	such	as	those	that	we	experienced	in	2012	and	2016	with	our	Model
S	and	Model	X	ramps.	Unexpected	changes	in	business	conditions,	materials	pricing,	labor	issues,	wars,	governmental	changes,	tariffs,	natural	disasters	such
as	the	March	2011	earthquakes	in	Japan,	health	epidemics	such	as	the	global	COVID-19	pandemic,	trade	and	shipping	disruptions	and	other	factors	beyond	our
or	our	suppliers’	control	could	also	affect	these	suppliers’	ability	to	deliver	components	to	us	or	to	remain	solvent	and	operational.	For	example,	a	global


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shortage	of	microchips	has	been	reported	since	early	2021,	and	the	impact	to	us	is	yet	unknown.	The	unavailability	of	any	component	or	supplier	could	result	in
production	delays,	idle	manufacturing	facilities,	product	design	changes	and	loss	of	access	to	important	technology	and	tools	for	producing	and	supporting	our
products.	Moreover,	significant	increases	in	our	production,	such	as	for	Model	3	and	Model	Y,	or	product	design	changes	by	us	have	required	and	may	in	the
future	require	us	to	procure	additional	components	in	a	short	amount	of	time.	Our	suppliers	may	not	be	willing	or	able	to	sustainably	meet	our	timelines	or	our
cost,	quality	and	volume	needs,	or	to	do	so	may	cost	us	more,	which	may	require	us	to	replace	them	with	other	sources.	Finally,	we	have	limited	vehicle
manufacturing	experience	outside	of	the	Fremont	Factory	and	we	may	experience	issues	increasing	the	level	of	localized	procurement	at	our	Gigafactory
Shanghai	and	at	future	factories	such	as	Gigafactory	Berlin	and	Gigafactory	Texas.	While	we	believe	that	we	will	be	able	to	secure	additional	or	alternate
sources	or	develop	our	own	replacements	for	most	of	our	components,	there	is	no	assurance	that	we	will	be	able	to	do	so	quickly	or	at	all.	Additionally,	we	may
be	unsuccessful	in	our	continuous	efforts	to	negotiate	with	existing	suppliers	to	obtain	cost	reductions	and	avoid	unfavorable	changes	to	terms,	source	less
expensive	suppliers	for	certain	parts	and	redesign	certain	parts	to	make	them	less	expensive	to	produce.	Any	of	these	occurrences	may	harm	our	business,
prospects,	financial	condition	and	operating	results.


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prospects,	financial	condition	and	operating	results.
As	the	scale	of	our	vehicle	production	increases,	we	will	also	need	to	accurately	forecast,	purchase,	warehouse	and	transport	components	at	high
volumes	to	our	manufacturing	facilities	and	servicing	locations	internationally.	If	we	are	unable	to	accurately	match	the	timing	and	quantities	of	component
purchases	to	our	actual	needs	or	successfully	implement	automation,	inventory	management	and	other	systems	to	accommodate	the	increased	complexity	in
our	supply	chain	and	parts	management,	we	may	incur	unexpected	production	disruption,	storage,	transportation	and	write-off	costs,	which	may	harm	our
business	and	operating	results.
We	may	be	unable	to	meet	our	projected	construction	timelines,	costs	and	production	ramps	at	new	factories,	or	we	may	experience
difficulties	in	generating	and	maintaining	demand	for	products	manufactured	there.
Our	ability	to	increase	production	of	our	vehicles	on	a	sustained	basis,	make	them	affordable	globally	by	accessing	local	supply	chains	and	workforces
and	streamline	delivery	logistics	is	dependent	on	the	construction	and	ramp	of	Gigafactory	Shanghai,	Gigafactory	Berlin	and	Gigafactory	Texas.	The
construction	of	and	commencement	and	ramp	of	production	at	these	factories	are	subject	to	a	number	of	uncertainties	inherent	in	all	new	manufacturing
operations,	including	ongoing	compliance	with	regulatory	requirements,	procurement	and	maintenance	of	construction,	environmental	and	operational	licenses
and	approvals	for	additional	expansion,	potential	supply	chain	constraints,	hiring,	training	and	retention	of	qualified	employees	and	the	pace	of	bringing
production	equipment	and	processes	online	with	the	capability	to	manufacture	high-quality	units	at	scale.	For	example,	we	are	currently	constructing


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Gigafactory	Berlin	under	conditional	permits.	Moreover,	we	intend	to	incorporate	sequential	design	and	manufacturing	changes	into	vehicles	manufactured	at
each	new	factory.	We	have	limited	experience	to	date	with	developing	and	implementing	vehicle	manufacturing	innovations	outside	of	the	Fremont	Factory,	as
we	only	recently	began	production	at	Gigafactory	Shanghai.	In	particular,	the	majority	of	our	design	and	engineering	resources	are	currently	located	in
California.	In	order	to	meet	our	expectations	for	our	new	factories,	we	must	expand	and	manage	localized	design	and	engineering	talent	and	resources.	If	we
experience	any	issues	or	delays	in	meeting	our	projected	timelines,	costs,	capital	efficiency	and	production	capacity	for	our	new	factories,	expanding	and
managing	teams	to	implement	iterative	design	and	production	changes	there,	maintaining	and	complying	with	the	terms	of	any	debt	financing	that	we	obtain	to
fund	them	or	generating	and	maintaining	demand	for	the	vehicles	we	manufacture	there,	our	business,	prospects,	operating	results	and	financial	condition	may
be	harmed.
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We	will	need	to	maintain	and	significantly	grow	our	access	to	battery	cells,	including	through	the	development	and	manufacture	of	our
own	cells,	and	control	our	related	costs.
We	are	dependent	on	the	continued	supply	of	lithium-ion	battery	cells	for	our	vehicles	and	energy	storage	products,	and	we	will	require	substantially
more	cells	to	grow	our	business	according	to	our	plans.	Currently,	we	rely	on	suppliers	such	as	Panasonic	for	these	cells.	However,	we	have	to	date	fully
qualified	only	a	very	limited	number	of	such	suppliers	and	have	limited	flexibility	in	changing	suppliers.	Any	disruption	in	the	supply	of	battery	cells	from	our
suppliers	could	limit	production	of	our	vehicles	and	energy	storage	products.	In	the	long	term,	we	intend	to	supplement	cells	from	our	suppliers	with	cells
manufactured	by	us,	which	we	believe	will	be	more	efficient,	manufacturable	at	greater	volumes	and	cost-effective	than	currently	available	cells.	However,	our
efforts	to	develop	and	manufacture	such	battery	cells	have	required	and	may	require	significant	investments,	and	there	can	be	no	assurance	that	we	will	be
able	to	achieve	these	targets	in	the	timeframes	that	we	have	planned	or	at	all.	If	we	are	unable	to	do	so,	we	may	have	to	curtail	our	planned	vehicle	and	energy
storage	product	production	or	procure	additional	cells	from	suppliers	at	potentially	greater	costs,	either	of	which	may	harm	our	business	and	operating	results.
In	addition,	the	cost	of	battery	cells,	whether	manufactured	by	our	suppliers	or	by	us,	depends	in	part	upon	the	prices	and	availability	of	raw	materials


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such	as	lithium,	nickel,	cobalt	and/or	other	metals.	The	prices	for	these	materials	fluctuate	and	their	available	supply	may	be	unstable,	depending	on	market
conditions	and	global	demand	for	these	materials,	including	as	a	result	of	increased	global	production	of	electric	vehicles	and	energy	storage	products.	Any
reduced	availability	of	these	materials	may	impact	our	access	to	cells	and	any	increases	in	their	prices	may	reduce	our	profitability	if	we	cannot	recoup	the
increased	costs	through	increased	vehicle	prices.	Moreover,	any	such	attempts	to	increase	product	prices	may	harm	our	brand,	prospects	and	operating	results.
We	face	strong	competition	for	our	products	and	services	from	a	growing	list	of	established	and	new	competitors.
The	worldwide	automotive	market	is	highly	competitive	today	and	we	expect	it	will	become	even	more	so	in	the	future.	For	example,	Model	3	and	Model
Y	face	competition	from	existing	and	future	automobile	manufacturers	in	the	extremely	competitive	entry-level	premium	sedan	and	compact	SUV	markets.	A
significant	and	growing	number	of	established	and	new	automobile	manufacturers,	as	well	as	other	companies,	have	entered	or	are	reported	to	have	plans	to
enter	the	market	for	electric	and	other	alternative	fuel	vehicles,	including	hybrid,	plug-in	hybrid	and	fully	electric	vehicles,	as	well	as	the	market	for	self-driving
technology	and	other	vehicle	applications	and	software	platforms.	In	some	cases,	our	competitors	offer	or	will	offer	electric	vehicles	in	important	markets	such
as	China	and	Europe,	and/or	have	announced	an	intention	to	produce	electric	vehicles	exclusively	at	some	point	in	the	future.	Many	of	our	competitors	have


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significantly	greater	or	better-established	resources	than	we	do	to	devote	to	the	design,	development,	manufacturing,	distribution,	promotion,	sale	and	support
of	their	products.	Increased	competition	could	result	in	our	lower	vehicle	unit	sales,	price	reductions,	revenue	shortfalls,	loss	of	customers	and	loss	of	market
share,	which	may	harm	our	business,	financial	condition	and	operating	results.
We	also	face	competition	in	our	energy	generation	and	storage	business	from	other	manufacturers,	developers,	installers	and	service	providers	of
competing	energy	systems,	as	well	as	from	large	utilities.	Decreases	in	the	retail	or	wholesale	prices	of	electricity	from	utilities	or	other	renewable	energy
sources	could	make	our	products	less	attractive	to	customers	and	lead	to	an	increased	rate	of	residential	customer	defaults	under	our	existing	long-term	leases
and	PPAs.
	
Risks	Related	to	Our	Operations
We	may	experience	issues	with	lithium-ion	cells	or	other	components	manufactured	at	Gigafactory	Nevada,	which	may	harm	the
production	and	profitability	of	our	vehicle	and	energy	storage	products.
Our	plan	to	grow	the	volume	and	profitability	of	our	vehicles	and	energy	storage	products	depends	on	significant	lithium-ion	battery	cell	production	by
our	partner	Panasonic	at	Gigafactory	Nevada.	Although	Panasonic	has	a	long	track	record	of	producing	high-quality	cells	at	significant	volume	at	its	factories	in
Japan,	it	
has	relatively	limited	experience	with	cell	production	at	Gigafactory	Nevada
,	which	began	in	2017.	Moreover,	although	Panasonic	is	co-located	with	us
at	Gigafactory	Nevada,	it	is	free	to	make	its	own	operational	decisions,	such	as	its	determination	to	temporarily	suspend	its	manufacturing	there	in	response	to


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the	COVID-19	pandemic.	In	addition,	we	produce	several	vehicle	components,	such	as	battery	modules	and	packs	incorporating	the	cells	produced	by	Panasonic
for	Model	3	and	Model	Y	and	drive	units	(including	to	support	Gigafactory	Shanghai	production),	at	Gigafactory	Nevada,	and	we	also	manufacture	energy
storage	products	there.	In	the	past,	some	of	the	manufacturing	lines	for	certain	product	components	took	longer	than	anticipated	to	ramp	to	their	full	capacity,
and	additional	bottlenecks	may	arise	in	the	future	as	we	continue	to	increase	the	production	rate	and	introduce	new	lines.	If	we	or	Panasonic	are	unable	to	or
otherwise	do	not	maintain	and	grow	our	respective	operations	at	Gigafactory	Nevada	production,	or	if	we	are	unable	to	do	so	cost-effectively	or	hire	and	retain
highly-skilled	personnel	there,	our	ability	to	manufacture	our	products	profitably	would	be	limited,	which	may	harm	our	business	and	operating	results.
Finally,	the	high	volumes	of	lithium-ion	cells	and	battery	modules	and	packs	manufactured	at	Gigafactory	Nevada	are	stored	and	recycled	at	our	various
facilities.	Any	mishandling	of	battery	cells	may	cause	disruption	to	the	operation	of	such	facilities.	While
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we	have	implemented	safety	procedures	related	to	the	handling	of	the	cells,	there	can	be	no	assurance	that	a	safety
	issue	or	fire	related	to	the	cells	would	not
disrupt	our	
operations
.	Any	such	disruptions	or	issues	may	harm	our	brand	and	business.
We	face	risks	associated	with	maintaining	and	expanding	our	international	operations,	including	unfavorable	and	uncertain	regulatory,
political,	economic,	tax	and	labor	conditions.
We	are	subject	to	legal	and	regulatory	requirements,	political	uncertainty	and	social,	environmental	and	economic	conditions	in	numerous	jurisdictions,
over	which	we	have	little	control	and	which	are	inherently	unpredictable.	Our	operations	in	such	jurisdictions,	particularly	as	a	company	based	in	the	U.S.,
create	risks	relating	to	conforming	our	products	to	regulatory	and	safety	requirements	and	charging	and	other	electric	infrastructures;	organizing	local
operating	entities;	establishing,	staffing	and	managing	foreign	business	locations;	attracting	local	customers;	navigating	foreign	government	taxes,	regulations
and	permit	requirements;	enforceability	of	our	contractual	rights;	trade	restrictions,	customs	regulations,	tariffs	and	price	or	exchange	controls;	and
preferences	in	foreign	nations	for	domestically	manufactured	products.	Such	conditions	may	increase	our	costs,	impact	our	ability	to	sell	our	products	and
require	significant	management	attention,	and	may	harm	our	business	if	we	unable	to	manage	them	effectively.
Our	business	may	suffer	if	our	products	or	features	contain	defects,	fail	to	perform	as	expected	or	take	longer	than	expected	to	become
fully	functional.
If	our	products	contain	design	or	manufacturing	defects	that	cause	them	not	to	perform	as	expected	or	that	require	repair,	or	certain	features	of	our


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vehicles	such	as	new	Autopilot	or	FSD	features	take	longer	than	expected	to	become	enabled,	are	legally	restricted	or	become	subject	to	onerous	regulation,
our	ability	to	develop,	market	and	sell	our	products	and	services	may	be	harmed,	and	we	may	experience
	delivery	delays,	product	recalls,	product	liability,
breach	of	warranty	and	consumer	protection	claims	and	significant	warranty	and	other	expenses
.	In	particular,	our	products	are	highly	dependent	on	software,
which	is	inherently	complex	and	may	contain	latent	defects	or	errors	or	be	subject	to	external	attacks.	Issues	experienced	by	our	customers	have	included	those
related	to	the	Model	S	and	Model	X	17-inch	display	screen,	the	panoramic	roof	and	the	12-volt	battery	in	the	Model	S,	the	seats	and	doors	in	the	Model	X	and
the	operation	of	solar	panels	installed	by	us.	Although	we	attempt	to	remedy	any	issues	we	observe	in	our	products	as	effectively	and	rapidly	as	possible,	such
efforts	may	not	be	timely,	may	hamper	production	or	may	not	completely	satisfy	our	customers.	While	we	have	performed	extensive	internal	testing	on	our
products	and	features,	we	currently	have	a	limited	frame	of	reference	by	which	to	evaluate	their	long-term	quality,	reliability,	durability	and	performance
characteristics.	There	can	be	no	assurance	that	we	will	be	able	to	detect	and	fix	any	defects	in	our	products	prior	to	their	sale	to	or	installation	for	customers.
We	may	be	required	to	defend	or	insure	against	product	liability	claims.
The	automobile	industry	generally	experiences	significant	product	liability	claims,	and	as	such	we	face	the	risk	of	such	claims	in	the	event	our	vehicles


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do	not	perform	or	are	claimed	to	not	have	performed	as	expected.	As	is	true	for	other	automakers,	our	vehicles	have	been	involved	and	we	expect	in	the	future
will	be	involved	in	accidents	resulting	in	death	or	personal	injury,	and	such	accidents	where	Autopilot	or	FSD	features	are	engaged	are	the	subject	of	significant
public	attention.	We	have	experienced	and	we	expect	to	continue	to	face	claims	arising	from	or	related	to	misuse	or	claimed	failures	of	such	new	technologies
that	we	are	pioneering.	In	addition,	the	battery	packs	that	we	produce	make	use	of	lithium-ion	cells.	On	rare	occasions,	lithium-ion	cells	can	rapidly	release	the
energy	they	contain	by	venting	smoke	and	flames	in	a	manner	that	can	ignite	nearby	materials	as	well	as	other	lithium-ion	cells.	While	we	have	designed	our
battery	packs	to	passively	contain	any	single	cell’s	release	of	energy	without	spreading	to	neighboring	cells,	there	can	be	no	assurance	that	a	field	or	testing
failure	of	our	vehicles	or	other	battery	packs	that	we	produce	will	not	occur,	in	particular	due	to	a	high-speed	crash.	Likewise,	as	our	solar	energy	systems	and
energy	storage	products	generate	and	store	electricity,	they	have	the	potential	to	fail	or	cause	injury	to	people	or	property.	Any	product	liability	claim	may
subject	us	to	lawsuits	and	substantial	monetary	damages,	product	recalls	or	redesign	efforts,	and	even	a	meritless	claim	may	require	us	to	defend	it,	all	of
which	may	generate	negative	publicity	and	be	expensive	and	time-consuming.	In	most	jurisdictions,	we	generally	self-insure	against	the	risk	of	product	liability


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claims	for	vehicle	exposure,	meaning	that	any	product	liability	claims	will	likely	have	to	be	paid	from	company	funds	and	not	by	insurance.
We	will	need	to	maintain	public	credibility	and	confidence	in	our	long-term	business	prospects	in	order	to	succeed.
In	order	to	maintain	and	grow	our	business,	we	must	maintain	credibility	and	confidence	among	customers,	suppliers,	analysts,	investors,	ratings
agencies	and	other	parties	in	our	long-term	financial	viability	and	business	prospects.	Maintaining	such	confidence	may	be	challenging	due	to	our	limited
operating	history	relative	to	established	competitors;	customer	unfamiliarity	with	our	products;	any	delays	we	may	experience	in	scaling	manufacturing,
delivery	and	service	operations	to	meet	demand;	competition	and	uncertainty	regarding	the	future	of	electric	vehicles	or	our	other	products	and	services;	our
quarterly	production	and	sales	performance	compared	with	market	expectations;	and	other	factors	including	those	over	which	we	have	no	control.	In	particular,
Tesla’s	products,	business,	results	of	operations,	statements	and	actions	are	well-publicized	by	a	range	of	third	parties.	Such	attention	includes	frequent
criticism,	which	is	often	exaggerated	or	unfounded,	such	as	speculation	regarding	the	sufficiency	or	stability	of	our	management	team.	Any	such	negative
perceptions,	whether	caused	by	us	or	not,	may	harm	our	business	and	make	it	more	difficult	to	raise	additional	funds	if	needed.
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We	may	be	unable	to	effectively	grow,	
or	manage
	the	compliance,	residual	value,	financing	and	credit	risks	related	to,	our	various
financing	programs.
We	offer	financing	arrangements	for	our	vehicles	in	North	America,	Europe	and	Asia	primarily	through	various	financial	institutions.	We	also	currently
offer	vehicle	financing	arrangements	directly	through	our	local	subsidiaries	in	certain	markets.	Depending	on	the	country,	such	arrangements	are	available	for
specified	models	and	may	include	operating	leases	directly	with	us	under	which	we	typically	receive	only	a	very	small	portion	of	the	total	vehicle	purchase	price
at	the	time	of	lease,	followed	by	a	stream	of	payments	over	the	term	of	the	lease.	We	have	also	offered	various	arrangements	for	customers	of	our	solar	energy
systems	whereby	they	pay	us	a	fixed	payment	to	lease	or	finance	the	purchase	of	such	systems	or	purchase	electricity	generated	by	them.	If	we	do	not
successfully	monitor	and	comply	with	applicable	national,	state	and/or	local	financial	regulations	and	consumer	protection	laws	governing	these	transactions,
we	may	become	subject	to	enforcement	actions	or	penalties.
The	profitability	of	any	directly-leased	vehicles	returned	to	us	at	the	end	of	their	leases	depends	on	our	ability	to	accurately	project	our	vehicles’	residual
values	at	the	outset	of	the	leases,	and	such	values	may	fluctuate	prior	to	the	end	of	their	terms	depending	on	various	factors	such	as	supply	and	demand	of	our
used	vehicles,	economic	cycles	and	the	pricing	of	new	vehicles.	We	have	made	in	the	past	and	may	make	in	the	future	certain	adjustments	to	our	prices	from


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time	to	time	in	the	ordinary	course	of	business,	which	may	impact	the	residual	values	of	our	vehicles	and	reduce	the	profitability	of	our	vehicle	leasing	program.
The	funding	and	growth	of	this	program	also	relies	on	our	ability	to	secure	adequate	financing	and/or	business	partners.	If	we	are	unable	to	adequately	fund	our
leasing	program	through	internal	funds,	partners	or	other	financing	sources,	and	compelling	alternative	financing	programs	are	not	available	for	our	customers
who	may	expect	or	need	such	options,	we	may	be	unable	to	grow	our	vehicle	deliveries.	Furthermore,	if	our	vehicle	leasing	business	grows	substantially,	our
business	may	suffer	if	we	cannot	effectively	manage	the	resulting	greater	levels	of	residual	risk.
Similarly,	we	have	provided	resale	value	guarantees	to	vehicle	customers	and	partners	for	certain	financing	programs,	under	which	such	counterparties
may	sell	their	vehicles	back	to	us	at	certain	points	in	time	at	pre-determined	amounts.	However,	actual	resale	values	are	subject	to	fluctuations	over	the	term	of
the	financing	arrangements,	such	as	from	the	vehicle	pricing	changes	discussed	above.	If	the	actual	resale	values	of	any	vehicles	resold	or	returned	to	us
pursuant	to	these	programs	are	materially	lower	than	the	pre-determined	amounts	we	have	offered,	our	financial	condition	and	operating	results	may	be
harmed.
Finally,	our	vehicle	and	solar	energy	system	financing	programs	and	our	energy	storage	sales	programs	also	expose	us	to	customer	credit	risk.	In	the
event	of	a	widespread	economic	downturn	or	other	catastrophic	event,	our	customers	may	be	unable	or	unwilling	to	satisfy	their	payment	obligations	to	us	on	a


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timely	basis	or	at	all.	If	a	significant	number	of	our	customers	default,	we	may	incur	substantial	credit	losses	and/or	impairment	charges	with	respect	to	the
underlying	assets.
We	must	manage	ongoing	obligations	under	our	agreement	with	the	Research	Foundation	for	the	State	University	of	New	York	relating	to
our	Gigafactory	New	York.
We	are	party	to	an	operating	lease	and	a	research	and	development	agreement	through	the	SUNY	Foundation.	These	agreements	provide	for	the
construction	and	use	of	our	Gigafactory	New	York,	which	we	have	primarily	used	for	the	development	and	production	of	our	Solar	Roof	and	other	solar	products
and	components,	energy	storage	components	and	Supercharger	components,	and	for	other	lessor-approved	functions.	Under	this	agreement,	we	are	obligated
to,	among	other	things,	meet	employment	targets	as	well	as	specified	minimum	numbers	of	personnel	in	the	State	of	New	York	and	in	Buffalo,	New	York	and
spend	or	incur	$5.00	billion	in	combined	capital,	operational	expenses,	costs	of	goods	sold	and	other	costs	in	the	State	of	New	York	during	the	10-year	period
beginning	April	30,	2018.	As	we	temporarily	suspended	most	of	our	manufacturing	operations	at	Gigafactory	New	York	pursuant	to	a	New	York	State	executive
order	issued	in	March	2020	as	a	result	of	the	COVID-19	pandemic,	we	were	granted	a	one-year	deferral	of	our	obligation	to	be	compliant	with	our	applicable
targets	under	such	agreement	on	April	30,	2020,	which	was	memorialized	in	an	amendment	to	our	agreement	with	the	SUNY	Foundation	in	July	2020.	While	we


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expect	to	have	and	grow	significant	operations	at	Gigafactory	New	York	and	the	surrounding	Buffalo	area,	any	failure	by	us	in	any	year	over	the	course	of	the
term	of	the	agreement	to	meet	all	applicable	future	obligations	may	result	in	our	obligation	to	pay	a	“program	payment”	of	$41	million	to	the	SUNY	Foundation
for	such	year,	the	termination	of	our	lease	at	Gigafactory	New	York	which	may	require	us	to	pay	additional	penalties	and/or	the	need	to	adjust	certain	of	our
operations,	in	particular	our	production	ramp	of	the	Solar	Roof	or	other	components.	Any	of	the	foregoing	events	may	harm	our	business,	financial	condition
and	operating	results.
If	we	are	unable	to	attract,	hire	and	retain	key	employees	and	qualified	personnel,	our	ability	to	compete	may	be	harmed.
The	loss	of	the	services	of	any	of	our	key	employees	or	any	significant	portion	of	our	workforce	could	disrupt	our	operations	or	delay	the	development,
introduction	and	ramp	of	our	products	and	services.	In	particular,	we	are	highly	dependent	on	the	services	of	Elon	Musk,	our	Chief	Executive	Officer.	None	of
our	key	employees	is	bound	by	an	employment	agreement	for	any	specific	term	and	we	may	not	be	able	to	successfully	attract	and	retain	senior	leadership
necessary	to	grow	our	business.	Our	future	success	also	depends	upon	our	ability	to	attract,	hire	and	retain	a	large	number	of	engineering,	manufacturing,
marketing,	sales	and	delivery,	service,	installation,	technology	and	support	personnel,	especially	to	support	our	planned	high-volume	product	sales,	market	and
geographical
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expansion	and	technological	innovation
s
.	Recruiting	efforts,	particularly	for	senior	employees,	may	be	time-consuming,	which	may	delay	the	execution	of	our
plans.	If	we	are	not	successful	in	managing	these	risks,	our	business,	financial	condition	and	operating	results	may	be	harmed.
Employees	may	leave	Tesla	or	choose	other	employers	over	Tesla	due	to	various	factors,	such	as	a	very	competitive	labor	market	for	talented	individuals
with	automotive	or	technology	experience,	or	any	negative	publicity	related	to	us.	In	California,	Nevada	and	other	regions	where	we	have	operations,	there	is
increasing	competition	for	individuals	with	skillsets	needed	for	our	business,	including	specialized	knowledge	of	electric	vehicles,	software	engineering,
manufacturing	engineering	and	electrical	and	building	construction	expertise.	Moreover,	we	may	be	impacted	by	perceptions	relating	to	reductions	in	force
that	we	have	conducted	in	the	past	in	order	to	optimize	our	organizational	structure	and	reduce	costs	and	the	departure	of	certain	senior	personnel	for	various
reasons.	Likewise,	as	a	result	of	our	temporary	suspension	of	various	U.S.	manufacturing	operations	in	the	first	half	of	2020,	in	April	2020	we	temporarily
furloughed	certain	hourly	employees	and	reduced	most	salaried	employees’	base	salaries.	We	also	compete	with	both	mature	and	prosperous	companies	that
have	far	greater	financial	resources	than	we	do	and	start-ups	and	emerging	companies	that	promise	short-term	growth	opportunities.
Finally,	our	compensation	philosophy	for	all	of	our	personnel	reflects	our	startup	origins,	with	an	emphasis	on	equity-based	awards	and	benefits	in	order


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to	closely	align	their	incentives	with	the	long-term	interests	of	our	stockholders.	We	periodically	seek	and	obtain	approval	from	our	stockholders	for	future
increases	to	the	number	of	awards	available	under	our	equity	incentive	and	employee	stock	purchase	plans.	If	we	are	unable	to	obtain	the	requisite	stockholder
approvals	for	such	future	increases,	we	may	have	to	expend	additional	cash	to	compensate	our	employees	and	our	ability	to	retain	and	hire	qualified	personnel
may	be	harmed.
We	are	highly	dependent	on	the	services	of	Elon	Musk,	our	Chief	Executive	Officer.
We	are	highly	dependent	on	the	services	of	Elon	Musk,	our	Chief	Executive	Officer	and	largest	stockholder.	Although	Mr.	Musk	spends	significant	time
with	Tesla	and	is	highly	active	in	our	management,	he	does	not	devote	his	full	time	and	attention	to	Tesla.	Mr.	Musk	also	currently	serves	as	Chief	Executive
Officer	and	Chief	Technical	Officer	of	Space	Exploration	Technologies	Corp.,	a	developer	and	manufacturer	of	space	launch	vehicles,	and	is	involved	in	other
emerging	technology	ventures.
We	must	manage	risks	relating	to	our	information	technology	systems	and	the	threat	of	intellectual	property	theft,	data	breaches	and
cyber-attacks.
We	must	continue	to	expand	and	improve	our	information	technology	systems	as	our	operations	grow,	such	as	product	data	management,	procurement,
inventory	management,	production	planning	and	execution,	sales,	service	and	logistics,	dealer	management,	financial,	tax	and	regulatory	compliance	systems.
This	includes	the	implementation	of	new	internally	developed	systems	and	the	deployment	of	such	systems	in	the	U.S.	and	abroad.	We	must	also	continue	to


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maintain	information	technology	measures	designed	to	protect	us	against	intellectual	property	theft,	data	breaches,	sabotage	and	other	external	or	internal
cyber-attacks	or	misappropriation.	However,	the	implementation,	maintenance,	segregation	and	improvement	of	these	systems	require	significant	management
time,	support	and	cost,	and	there	are	inherent	risks	associated	with	developing,	improving	and	expanding	our	core	systems	as	well	as	implementing	new
systems	and	updating	current	systems,	including	disruptions	to	the	related	areas	of	business	operation.	These	risks	may	affect	our	ability	to	manage	our	data
and	inventory,	procure	parts	or	supplies	or	manufacture,	sell,	deliver	and	service	products,	adequately	protect	our	intellectual	property	or	achieve	and	maintain
compliance	with,	or	realize	available	benefits	under,	tax	laws	and	other	applicable	regulations.
Moreover,	if	we	do	not	successfully	implement,	maintain	or	expand	these	systems	as	planned,	our	operations	may	be	disrupted,	our	ability	to	accurately
and/or	timely	report	our	financial	results	could	be	impaired	and	deficiencies	may	arise	in	our	internal	control	over	financial	reporting,	which	may	impact	our
ability	to	certify	our	financial	results.	Moreover,	our	proprietary	information	or	intellectual	property	could	be	compromised	or	misappropriated	and	our
reputation	may	be	adversely	affected.	If	these	systems	or	their	functionality	do	not	operate	as	we	expect	them	to,	we	may	be	required	to	expend	significant
resources	to	make	corrections	or	find	alternative	sources	for	performing	these	functions.
Any	unauthorized	control	or	manipulation	of	our	products’	systems	could	result	in	loss	of	confidence	in	us	and	our	products.


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Our	products	contain	complex	information	technology	systems.	For	example,	our	vehicles	and	energy	storage	products	are	designed	with	built-in	data
connectivity	to	accept	and	install	periodic	remote	updates	from	us	to	improve	or	update	their	functionality.	While	we	have	implemented	security	measures
intended	to	prevent	unauthorized	access	to	our	information	technology	networks,	our	products	and	their	systems,	malicious	entities	have	reportedly	attempted,
and	may	attempt	in	the	future,	to	gain	unauthorized	access	to	modify,	alter	and	use	such	networks,	products	and	systems	to	gain	control	of,	or	to	change,	our
products’	functionality,	user	interface	and	performance	characteristics	or	to	gain	access	to	data	stored	in	or	generated	by	our	products.	We	encourage
reporting	of	potential	vulnerabilities	in	the	security	of	our	products	through	our	security	vulnerability	reporting	policy,	and	we	aim	to	remedy	any	reported	and
verified	vulnerability.	However,	there	can	be	no	assurance	that	any	vulnerabilities	will	not	be	exploited	before	they	can	be	identified,	or	that	our	remediation
efforts	are	or	will	be	successful.
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Any	unauthorized	access	to	or	control	of	our	products	or	their	systems	or	any	loss	of	data	could	result	in	legal	claims
	or	government	investigations
.	In
addition,	regardless	of	their	veracity,	reports	of	unauthorized	access	to	our	products,	their	systems	or	data,	as	well	as	other	factors	that	may	result	in	the
perception	that	our	products,	their	systems	or	data	are	capable	of	being	hacked,	may	
harm	our	brand,	prospects	and	operating	results.	We	have	been	the
subject	of	such	reports	in	the	past.
Our	business	may	be	adversely	affected	by	any	disruptions	caused	by	union	activities.
It	is	not	uncommon	for	employees	of	certain	trades	at	companies	such	as	us	to	belong	to	a	union,	which	can	result	in	higher	employee	costs	and
increased	risk	of	work	stoppages.	Moreover,	regulations	in	some	jurisdictions	outside	of	the	U.S.	mandate	employee	participation	in	industrial	collective
bargaining	agreements	and	work	councils	with	certain	consultation	rights	with	respect	to	the	relevant	companies’	operations.	Although	we	work	diligently	to
provide	the	best	possible	work	environment	for	our	employees,	they	may	still	decide	to	join	or	seek	recognition	to	form	a	labor	union,	or	we	may	be	required	to
become	a	union	signatory.	From	time	to	time,	labor	unions	have	engaged	in	campaigns	to	organize	certain	of	our	operations,	as	part	of	which	such	unions	have
filed	unfair	labor	practice	charges	against	us	with	the	National	Labor	Relations	Board,	and	they	may	do	so	in	the	future.	In	September	2019,	an	administrative
law	judge	issued	a	recommended	decision	for	Tesla	on	certain	issues	and	against	us	on	certain	others.	The	National	Labor	Relations	Board	has	not	yet	adopted


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the	recommendation	and	we	have	appealed	certain	aspects	of	the	recommended	decision.	Any	unfavorable	ultimate	outcome	for	Tesla	may	have	a	negative
impact	on	the	perception	of	Tesla’s	treatment	of	our	employees.	Furthermore,	we	are	directly	or	indirectly	dependent	upon	companies	with	unionized	work
forces,	such	as	suppliers	and	trucking	and	freight	companies.	Any	work	stoppages	or	strikes	organized	by	such	unions	could	delay	the	manufacture	and	sale	of
our	products	and	may	harm	our	business	and	operating	results.
We	may	choose	to	or	be	compelled	to	undertake	product	recalls	or	take	other	similar	actions.
As	a	manufacturing	company,	we	must	manage	the	risk	of	product	recalls	with	respect	to	our	products.	Recalls	for	our	vehicles	have	resulted	from,	for
example,	industry-wide	issues	with	airbags	from	a	particular	supplier,	concerns	of	corrosion	in	Model	S	and	Model	X	power	steering	assist	motor	bolts,	certain
suspension	failures	in	Model	S	and	Model	X	and	issues	with	Model	S	and	Model	X	media	control	units.	In	addition	to	recalls	initiated	by	us	for	various	causes,
testing	of	or	investigations	into	our	products	by	government	regulators	or	industry	groups	may	compel	us	to	initiate	product	recalls	or	may	result	in	negative
public	perceptions	about	the	safety	of	our	products,	even	if	we	disagree	with	the	defect	determination	or	have	data	that	shows	the	actual	safety	risk	to	be	non-
existent.	In	the	future,	we	may	voluntarily	or	involuntarily	initiate	recalls	if	any	of	our	products	are	determined	by	us	or	a	regulator	to	contain	a	safety	defect	or


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be	noncompliant	with	applicable	laws	and	regulations,	such	as	U.S.	federal	motor	vehicle	safety	standards.	Such	recalls,	whether	voluntary	or	involuntary	or
caused	by	systems	or	components	engineered	or	manufactured	by	us	or	our	suppliers,	could	result	in	significant	expense,	supply	chain	complications	and
service	burdens,	and	may	harm	our	brand,	business,	prospects,	financial	condition	and	operating	results.
Our	current	and	future	warranty	reserves	may	be	insufficient	to	cover	future	warranty	claims.
We	provide	a	manufacturer’s	warranty	on	all	new	and	used	Tesla	vehicles	we	sell.	We	also	provide	certain	warranties	with	respect	to	the	energy
generation	and	storage	systems	we	sell,	including	on	their	installation	and	maintenance,	and	for	components	not	manufactured	by	us,	we	generally	pass
through	to	our	customers	the	applicable	manufacturers’	warranties.	As	part	of	our	energy	generation	and	storage	system	contracts,	we	may	provide	the
customer	with	performance	guarantees	that	warrant	that	the	underlying	system	will	meet	or	exceed	the	minimum	energy	generation	or	other	energy
performance	requirements	specified	in	the	contract.	Under	these	performance	guarantees,	we	bear	the	risk	of	electricity	production	or	other	performance
shortfalls,	even	if	they	result	from	failures	in	components	from	third	party	manufacturers.	These	risks	are	exacerbated	in	the	event	such	manufacturers	cease
operations	or	fail	to	honor	their	warranties.
If	our	warranty	reserves	are	inadequate	to	cover	future	warranty	claims	on	our	products,	our	financial	condition	and	operating	results	may	be	harmed.
Warranty	reserves	include	our	management’s	best	estimates	of	the	projected	costs	to	repair	or	to	replace	items	under	warranty,	which	are	based	on	actual


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claims	incurred	to	date	and	an	estimate	of	the	nature,	frequency	and	costs	of	future	claims.	Such	estimates	are	inherently	uncertain	and	changes	to	our
historical	or	projected	experience,	especially	with	respect	to	products	such	as	Model	3,	Model	Y	and	Solar	Roof	that	we	have	recently	introduced	and/or	that	we
expect	to	produce	at	significantly	greater	volumes	than	our	past	products,	may	cause	material	changes	to	our	warranty	reserves	in	the	future.
Our	insurance	coverage	strategy	may	not	be	adequate	to	protect	us	from	all	business	risks.
We	may	be	subject,	in	the	ordinary	course	of	business,	to	losses	resulting	from	products	liability,	accidents,	acts	of	God	and	other	claims	against	us,	for
which	we	may	have	no	insurance	coverage.	As	a	general	matter,	we	do	not	maintain	as	much	insurance	coverage	as	many	other	companies	do,	and	in	some
cases,	we	do	not	maintain	any	at	all.	Additionally,	the	policies	that	we	do	have	may	include	significant	deductibles	or	self-insured	retentions,	policy	limitations
and	exclusions,	and	we	cannot	be	certain	that	our	insurance	coverage	will	be	sufficient	to	cover	all	future	losses	or	claims	against	us.	A	loss	that	is	uninsured	or
which	exceeds	policy	limits	may	require	us	to	pay	substantial	amounts,	which	may	harm	our	financial	condition	and	operating	results.
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There	is	no	guarantee	that	we	will	have	sufficient	cash	flow	from	our	business	to	pay	our	substantial	indebtedness	or	that	we	will	not
incur	additional	indebtedness.
As	of	December	31,	2020,	we	and	our	subsidiaries	had	outstanding	$10.57	billion	in	aggregate	principal	amount	of	indebtedness	(see	Note	12,	
Debt
,	to
the	consolidated	financial	statements	included	elsewhere	in	this	Annual	Report	on	Form	10-K).	Our	substantial	consolidated	indebtedness	may	increase	our
vulnerability	to	any	generally	adverse	economic	and	industry	conditions.	We	and	our	subsidiaries	may,	subject	to	the	limitations	in	the	terms	of	our	existing	and
future	indebtedness,	incur	additional	debt,	secure	existing	or	future	debt	or	recapitalize	our	debt.
Holders	of	convertible	senior	notes	issued	by	us	or	our	subsidiary	may	convert	such	notes	at	their	option	prior	to	the	scheduled	maturities	of	the
respective	convertible	senior	notes	under	certain	circumstances	pursuant	to	the	terms	of	such	notes.	Upon	conversion	of	the	applicable	convertible	senior
notes,	we	will	be	obligated	to	deliver	cash	and/or	shares	pursuant	to	the	terms	of	such	notes.	For	example,	as	our	stock	price	has	significantly	increased
recently,	we	have	seen	higher	levels	of	early	conversions	of	such	“in-the-money”	convertible	senior	notes.	Moreover,	holders	of	such	convertible	senior	notes
may	have	the	right	to	require	us	to	repurchase	their	notes	upon	the	occurrence	of	a	fundamental	change	pursuant	to	the	terms	of	such	notes.


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Our	ability	to	make	scheduled	payments	of	the	principal	and	interest	on	our	indebtedness	when	due,	to	make	payments	upon	conversion	or	repurchase
demands	with	respect	to	our	convertible	senior	notes	or	to	refinance	our	indebtedness	as	we	may	need	or	desire,	depends	on	our	future	performance,	which	is
subject	to	economic,	financial,	competitive	and	other	factors	beyond	our	control.	Our	business	may	not	continue	to	generate	cash	flow	from	operations	in	the
future	sufficient	to	satisfy	our	obligations	under	our	existing	indebtedness	and	any	future	indebtedness	we	may	incur,	and	to	make	necessary	capital
expenditures.	If	we	are	unable	to	generate	such	cash	flow,	we	may	be	required	to	adopt	one	or	more	alternatives,	such	as	reducing	or	delaying	investments	or
capital	expenditures,	selling	assets,	refinancing	or	obtaining	additional	equity	capital	on	terms	that	may	be	onerous	or	highly	dilutive.	Our	ability	to	refinance
existing	or	future	indebtedness	will	depend	on	the	capital	markets	and	our	financial	condition	at	such	time.	In	addition,	our	ability	to	make	payments	may	be
limited	by	law,	by	regulatory	authority	or	by	agreements	governing	our	future	indebtedness.	We	may	not	be	able	to	engage	in	these	activities	on	desirable
terms	or	at	all,	which	may	result	in	a	default	on	our	existing	or	future	indebtedness	and	harm	our	financial	condition	and	operating	results.
Our	debt	agreements	contain	covenant	restrictions	that	may	limit	our	ability	to	operate	our	business.
The	terms	of	certain	of	our	credit	facilities,	including	our	senior	asset-based	revolving	credit	agreement,	contain,	and	any	of	our	other	future	debt


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agreements	may	contain,	covenant	restrictions	that	limit	our	ability	to	operate	our	business,	including	restrictions	on	our	ability	to,	among	other	things,	incur
additional	debt	or	issue	guarantees,	create	liens,	repurchase	stock,	or	make	other	restricted	payments,	and	make	certain	voluntary	prepayments	of	specified
debt.	In	addition,	under	certain	circumstances	we	are	required	to	comply	with	a	fixed	charge	coverage	ratio.	As	a	result	of	these	covenants,	our	ability	to
respond	to	changes	in	business	and	economic	conditions	and	engage	in	beneficial	transactions,	including	to	obtain	additional	financing	as	needed,	may	be
restricted.	Furthermore,	our	failure	to	comply	with	our	debt	covenants	could	result	in	a	default	under	our	debt	agreements,	which	could	permit	the	holders	to
accelerate	our	obligation	to	repay	the	debt.	If	any	of	our	debt	is	accelerated,	we	may	not	have	sufficient	funds	available	to	repay	it.
Additional	funds	may	not	be	available	to	us	when	we	need	or	want	them.
Our	business	and	our	future	plans	for	expansion	are	capital-intensive,	and	the	specific	timing	of	cash	inflows	and	outflows	may	fluctuate	substantially
from	period	to	period.	We	may	need	or	want	to	raise	additional	funds	through	the	issuance	of	equity,	equity-related	or	debt	securities	or	through	obtaining
credit	from	financial	institutions	to	fund,	together	with	our	principal	sources	of	liquidity,	the	costs	of	developing	and	manufacturing	our	current	or	future
products,	to	pay	any	significant	unplanned	or	accelerated	expenses	or	for	new	significant	strategic	investments,	or	to	refinance	our	significant	consolidated


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indebtedness,	even	if	not	required	to	do	so	by	the	terms	of	such	indebtedness.	We	cannot	be	certain	that	additional	funds	will	be	available	to	us	on	favorable
terms	when	required,	or	at	all.	If	we	cannot	raise	additional	funds	when	we	need	them,	our	financial	condition,	results	of	operations,	business	and	prospects
could	be	materially	and	adversely	affected.
We	may	be	negatively	impacted	by	any	early	obsolescence	of	our	manufacturing	equipment.
We	depreciate	the	cost	of	our	manufacturing	equipment	over	their	expected	useful	lives.	However,	product	cycles	or	manufacturing	technology	may
change	periodically,	and	we	may	decide	to	update	our	products	or	manufacturing	processes	more	quickly	than	expected.	Moreover,	improvements	in
engineering	and	manufacturing	expertise	and	efficiency	may	result	in	our	ability	to	manufacture	our	products	using	less	of	our	currently	installed	equipment.
Alternatively,	as	we	ramp	and	mature	the	production	of	our	products	to	higher	levels,	we	may	discontinue	the	use	of	already	installed	equipment	in	favor	of
different	or	additional	equipment.	The	useful	life	of	any	equipment	that	would	be	retired	early	as	a	result	would	be	shortened,	causing	the	depreciation	on	such
equipment	to	be	accelerated,	and	our	results	of	operations	may	be	harmed.
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We	
hold	and	
may	
acquire	
digital	assets	that	may	be	subject	to	volatile	market	prices,	
impairmen
t	and	unique	risks	of	loss.
	
In	January	2021,	we	updated	our	investment	policy	to	provide	us	with	more	flexibility	to	further	diversify	and	maximize	returns	on	our	cash	that	is	not
required	to	maintain	adequate	operating	liquidity.	As	part	of	the	policy,	which	was	duly	approved	by	the	Audit	Committee	of	our	Board	of	Directors,	we	may
invest	a	portion	of	such	cash	in	certain	alternative	reserve	assets	including	digital	assets,	gold	bullion,	gold	exchange-traded	funds	and	other	assets	as	specified
in	the	future.	Thereafter,	we	invested	an	aggregate	$1.50	billion	in	bitcoin	under	this	policy	and	may	acquire	and	hold	digital	assets	from	time	to	time	or	long-
term.	Moreover,	we	expect	to	begin	accepting	bitcoin	as	a	form	of	payment	for	our	products	in	the	near	future,	subject	to	applicable	laws	and	initially	on	a
limited	basis,	which	we	may	or	may	not	liquidate	upon	receipt.
	
The	prices	of	digital	assets	have	been	in	the	past	and	may	continue	to	be	highly	volatile,	including	as	a	result	of	various	associated	risks	and	uncertainties.
For	example,	the	prevalence	of	such	assets	is	a	relatively	recent	trend,	and	their	long-term	adoption	by	investors,	consumers	and	businesses	is	unpredictable.
Moreover,	their	lack	of	a	physical	form,	their	reliance	on	technology	for	their	creation,	existence	and	transactional	validation	and	their	decentralization	may
subject	their	integrity	to	the	threat	of	malicious	attacks	and	technological	obsolescence.	Finally,	the	extent	to	which	securities	laws	or	other	regulations	apply


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or	may	apply	in	the	future	to	such	assets	is	unclear	and	may	change	in	the	future.	If	we	hold	digital	assets	and	their	values	decrease	relative	to	our	purchase
prices,	our	financial	condition	may	be	harmed.
	
Moreover,	digital	assets	are	currently	considered	indefinite-lived	intangible	assets	under	applicable	accounting	rules,	meaning	that	any
	decrease	in	their
fair	values	below	our	carrying	values	for	such	assets	at	any	time	subsequent	to	their	acquisition	will	require	us	to	recognize	impairment	charges,	whereas
	we
may	make	no	upward	revisions	for	any	market	price	increases	until	a	sale,	which	may	adversely	affect	our	operating	results	in	any	period	in	which	such
impairment	occurs
.	Moreover,	there	is	no	guarantee	that	future	changes	in	GAAP	will	not	require	us	to	change	the	way	we	account	for	digital	assets	held	by	us.
	
Finally,	as	intangible	assets	without	centralized	issuers	or	governing	bodies,	digital	assets	have	been,	and	may	in	the	future	be,	subject	to	security
breaches,	cyberattacks	or	other	malicious	activities,	as	well	as	human	errors	or	computer	malfunctions	that	may	result	in	the	loss	or	destruction	of	private	keys
needed	to	access	such	assets.	While	we	intend	to	take	all	reasonable	measures	to	secure	any	digital	assets,	if	such	threats	are	realized	or	the	measures	or
controls	we	create	or	implement	to	secure	our	digital	assets	fail,	it	could	result	in	a	partial	or	total	misappropriation	or	loss	of	our	digital	assets,	and	our
financial	condition	and	operating	results	may	be	harmed.
We	are	exposed	to	fluctuations	in	currency	exchange	rates.


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We	transact	business	globally	in	multiple	currencies	and	have	foreign	currency	risks	related	to	our	revenue,	costs	of	revenue,	operating	expenses	and
localized	subsidiary	debt	denominated	in	currencies	other	than	the	U.S.	dollar,	currently	primarily	the	Chinese	yuan,	euro,	Canadian	dollar	and	British	pound.
To	the	extent	we	have	significant	revenues	denominated	in	such	foreign	currencies,	any	strengthening	of	the	U.S.	dollar	would	tend	to	reduce	our	revenues	as
measured	in	U.S.	dollars,	as	we	have	historically	experienced.	In	addition,	a	portion	of	our	costs	and	expenses	have	been,	and	we	anticipate	will	continue	to	be,
denominated	in	foreign	currencies,	including	the	Chinese	yuan	and	Japanese	yen.	If	we	do	not	have	fully	offsetting	revenues	in	these	currencies	and	if	the	value
of	the	U.S.	dollar	depreciates	significantly	against	these	currencies,	our	costs	as	measured	in	U.S.	dollars	as	a	percent	of	our	revenues	will	correspondingly
increase	and	our	margins	will	suffer.	Moreover,	while	we	undertake	limited	hedging	activities	intended	to	offset	the	impact	of	currency	translation	exposure,	it
is	impossible	to	predict	or	eliminate	such	impact.	As	a	result,	our	operating	results	may	be	harmed.
We	may	need	to	defend	ourselves	against	intellectual	property	infringement	claims,	which	may	be	time-consuming	and	expensive.
Our	competitors	or	other	third	parties	may	hold	or	obtain	patents,	copyrights,	trademarks	or	other	proprietary	rights	that	could	prevent,	limit	or
interfere	with	our	ability	to	make,	use,	develop,	sell	or	market	our	products	and	services,	which	could	make	it	more	difficult	for	us	to	operate	our	business.


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From	time	to	time,	the	holders	of	such	intellectual	property	rights	may	assert	their	rights	and	urge	us	to	take	licenses	and/or	may	bring	suits	alleging
infringement	or	misappropriation	of	such	rights,	which	could	result	in	substantial	costs,	negative	publicity	and	management	attention,	regardless	of	merit.
While	we	endeavor	to	obtain	and	protect	the	intellectual	property	rights	that	we	expect	will	allow	us	to	retain	or	advance	our	strategic	initiatives,	there	can	be
no	assurance	that	we	will	be	able	to	adequately	identify	and	protect	the	portions	of	intellectual	property	that	are	strategic	to	our	business,	or	mitigate	the	risk
of	potential	suits	or	other	legal	demands	by	our	competitors.	Accordingly,	we	may	consider	the	entering	into	licensing	agreements	with	respect	to	such	rights,
although	no	assurance	can	be	given	that	such	licenses	can	be	obtained	on	acceptable	terms	or	that	litigation	will	not	occur,	and	such	licenses	and	associated
litigation	could	significantly	increase	our	operating	expenses.	In	addition,	if	we	are	determined	to	have	or	believe	there	is	a	high	likelihood	that	we	have
infringed	upon	a	third	party’s	intellectual	property	rights,	we	may	be	required	to	cease	making,	selling	or	incorporating	certain	components	or	intellectual
property	into	the	goods	and	services	we	offer,	to	pay	substantial	damages	and/or	license	royalties,	to	redesign	our	products	and	services	and/or	to	establish	and
maintain	alternative
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branding	for	our	products	and	services.
	In	the	event	that	we	
are
	required	to	take	one	or	more	such	actions,	our	brand,	business,	financial	condition	and
operating	results	may	be	harmed.
Our	operations	could	be	adversely	affected	by	events	outside	of	our	control,	such	as	natural	disasters,	wars	or	health	epidemics.
We	may	be	impacted	by	natural	disasters,	wars,	health	epidemics	or	other	events	outside	of	our	control.	For	example,	our	corporate	headquarters,	the
Fremont	Factory	and	Gigafactory	Nevada	are	located	in	seismically	active	regions	in	Northern	California	and	Nevada,	and	our	Gigafactory	Shanghai	is	located
in	a	flood-prone	area.	If	major	disasters	such	as	earthquakes,	floods	or	other	events	occur,	or	our	information	system	or	communications	network	breaks	down
or	operates	improperly,	our	headquarters	and	production	facilities	may	be	seriously	damaged,	or	we	may	have	to	stop	or	delay	production	and	shipment	of	our
products.	In	addition,	the	global	COVID-19	pandemic	has	impacted	economic	markets,	manufacturing	operations,	supply	chains,	employment	and	consumer
behavior	in	nearly	every	geographic	region	and	industry	across	the	world,	and	we	have	been,	and	may	in	the	future	be,	adversely	affected	as	a	result.	We	may
incur	expenses	or	delays	relating	to	such	events	outside	of	our	control,	which	could	have	a	material	adverse	impact	on	our	business,	operating	results	and
financial	condition.
Risks	Related	to	Government	Laws	and	Regulations
Demand	for	our	products	and	services	may	be	impacted	by	the	status	of	government	and	economic	incentives	supporting	the	development
and	adoption	of	such	products.


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and	adoption	of	such	products.
Government	and	economic	incentives	that	support	the	development	and	adoption	of	electric	vehicles	in	the	U.S.	and	abroad,	including	certain	tax
exemptions,	tax	credits	and	rebates,	may	be	reduced,	eliminated	or	exhausted	from	time	to	time.	For	example,	a	$7,500	federal	tax	credit	that	was	available	in
the	U.S.	for	the	purchase	of	our	vehicles	was	reduced	in	phases	during	and	ultimately	ended	in	2019.	We	believe	that	this	sequential	phase-out	likely	pulled
forward	some	vehicle	demand	into	the	periods	preceding	each	reduction.	Moreover,	previously	available	incentives	favoring	electric	vehicles	in	areas	including
Ontario,	Canada,	Germany,	Hong	Kong,	Denmark	and	California	have	expired	or	were	cancelled	or	temporarily	unavailable,	and	in	some	cases	were	not
eventually	replaced	or	reinstituted,	which	may	have	negatively	impacted	sales.	Any	similar	developments	could	have	some	negative	impact	on	demand	for	our
vehicles,	and	we	and	our	customers	may	have	to	adjust	to	them.
In	addition,	certain	governmental	rebates,	tax	credits	and	other	financial	incentives	that	are	currently	available	with	respect	to	our	solar	and	energy
storage	product	businesses	allow	us	to	lower	our	costs	and	encourage	customers	to	buy	our	products	and	investors	to	invest	in	our	solar	financing	funds.
However,	these	incentives	may	expire	when	the	allocated	funding	is	exhausted,	reduced	or	terminated	as	renewable	energy	adoption	rates	increase,	sometimes
without	warning.	For	example,	the	U.S.	federal	government	currently	offers	certain	tax	credits	for	the	installation	of	solar	power	facilities	and	energy	storage


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systems	that	are	charged	from	a	co-sited	solar	power	facility;	however,	these	tax	credits	are	currently	scheduled	to	decline	and/or	expire	in	2023	and	beyond.
Likewise,	in	jurisdictions	where	net	metering	is	currently	available,	our	customers	receive	bill	credits	from	utilities	for	energy	that	their	solar	energy	systems
generate	and	export	to	the	grid	in	excess	of	the	electric	load	they	use.	The	benefit	available	under	net	metering	has	been	or	has	been	proposed	to	be	reduced,
altered	or	eliminated	in	several	jurisdictions,	and	has	also	been	contested	and	may	continue	to	be	contested	before	the	FERC.	Any	reductions	or	terminations	of
such	incentives	may	harm	our	business,	prospects,	financial	condition	and	operating	results	by	making	our	products	less	competitive	for	potential	customers,
increasing	our	cost	of	capital	and	adversely	impacting	our	ability	to	attract	investment	partners	and	to	form	new	financing	funds	for	our	solar	and	energy
storage	assets.
Finally,	we	and	our	fund	investors	claim	these	U.S.	federal	tax	credits	and	certain	state	incentives	in	amounts	based	on	independently	appraised	fair
market	values	of	our	solar	and	energy	storage	systems.	Nevertheless,	the	relevant	governmental	authorities	have	audited	such	values	and	in	certain	cases	have
determined	that	these	values	should	be	lower,	and	they	may	do	so	again	in	the	future.	Such	determinations	may	result	in	adverse	tax	consequences	and/or	our
obligation	to	make	indemnification	or	other	payments	to	our	funds	or	fund	investors.
We	are	subject	to	evolving	laws	and	regulations	that	could	impose	substantial	costs,	legal	prohibitions	or	unfavorable	changes	upon	our
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operations	or	products.
As	we	grow	our	manufacturing	operations	in	additional	regions,	we	are	or	will	be	subject	to	complex	environmental,	manufacturing,	health	and	safety
laws	and	regulations	at	numerous	jurisdictional	levels	in	the	U.S.,	China,	Germany	and	other	locations	abroad,	including	laws	relating	to	the	use,	handling,
storage,	recycling,	disposal	and/or	human	exposure	to	hazardous	materials,	product	material	inputs	and	post-consumer	products	and	with	respect	to
constructing,	expanding	and	maintaining	our	facilities.	The	costs	of	compliance,	including	remediations	of	any	discovered	issues	and	any	changes	to	our
operations	mandated	by	new	or	amended	laws,	may	be	significant,	and	any	failures	to	comply	could	result	in	significant	expenses,	delays	or	fines.	We	are	also
subject	to	laws	and	regulations	applicable	to	the	supply,	manufacture,	import,	sale	and	service	of	automobiles	both	domestically	and	abroad.	For	example,	in
countries	outside	of	the	U.S.,	we	are	required	to	meet	standards	relating	to	vehicle	safety,	fuel	economy	and
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emissions	that	are	often	materially	different	from	requirements	in	the	U.S.,	thus	resulting	in	additional	investment	into	the	vehicles	and	systems	to	ensure
regulatory	compliance	in	those	countries.	This	process	may	include	official	review	and	certification	of	our	vehicles	by	foreign	regulatory	agencies	prior	to
market	entry,	as	well	as	compliance	with	foreign	reporting	and	recall	management	systems	requirements.
In	particular,	we	offer	in	our	vehicles	Autopilot	and	FSD	features	that	today	assist	drivers	with	certain	tedious	and	potentially	dangerous	aspects	of	road
travel,	but	which	currently	require	drivers	to	remain	fully	engaged	in	the	driving	operation.	We	are	continuing	to	develop	our	FSD	technology	with	the	goal	of
achieving	full	self-driving	capability	in	the	future.	There	are	a	variety	of	international,	federal	and	state	regulations	that	may	apply	to	self-driving	vehicles,
which	include	many	existing	vehicle	standards	that	were	not	originally	intended	to	apply	to	vehicles	that	may	not	have	a	driver.	Such	regulations	continue	to
rapidly	change,	which	increases	the	likelihood	of	a	patchwork	of	complex	or	conflicting	regulations,	or	may	delay	products	or	restrict	self-driving	features	and
availability,	which	could	adversely	affect	our	business.
Finally,	as	a	manufacturer,	installer	and	service	provider	with	respect	to	solar	generation	and	energy	storage	systems	and	a	supplier	of	electricity
generated	and	stored	by	the	solar	energy	and	energy	storage	systems	we	install	for	customers,	we	are	impacted	by	federal,	state	and	local	regulations	and
policies	concerning	electricity	pricing,	the	interconnection	of	electricity	generation	and	storage	equipment	with	the	electric	grid	and	the	sale	of	electricity


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generated	by	third	party-owned	systems.	If	regulations	and	policies	that	adversely	impact	the	interconnection	or	use	of	our	solar	and	energy	storage	systems
are	introduced,	they	could	deter	potential	customers	from	purchasing	our	solar	and	energy	storage	products,	threaten	the	economics	of	our	existing	contracts
and	cause	us	to	cease	solar	and	energy	storage	system	sales	and	operations	in	the	relevant	jurisdictions,	which	may	harm	our	business,	financial	condition	and
operating	results.
Any	failure	by	us	to	comply	with	a	variety	of	U.S.	and	international	privacy	and	consumer	protection	laws	may	harm	us.
Any	failure	by	us	or	our	vendor	or	other	business	partners	to	comply	with	our	public	privacy	notice	or	with	federal,	state	or	international	privacy,	data
protection	or	security	laws	or	regulations	relating	to	the	processing,	collection,	use,	retention,	security	and	transfer	of	personally	identifiable	information	could
result	in	regulatory	or	litigation-related	actions	against	us,	legal	liability,	fines,	damages,	ongoing	audit	requirements	and	other	significant	costs.	Substantial
expenses	and	operational	changes	may	be	required	in	connection	with	maintaining	compliance	with	such	laws,	and	in	particular	certain	emerging	privacy	laws
are	still	subject	to	a	high	degree	of	uncertainty	as	to	their	interpretation	and	application.	For	example,	in	May	2018,	the	General	Data	Protection	Regulation
began	to	fully	apply	to	the	processing	of	personal	information	collected	from	individuals	located	in	the	European	Union,	and	has	created	new	compliance
obligations	and	significantly	increased	fines	for	noncompliance.	Similarly,	as	of	January	2020,	the	California	Consumer	Privacy	Act	imposes	certain	legal


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obligations	on	our	use	and	processing	of	personal	information	related	to	California	residents.	Finally,	new	privacy	and	cybersecurity	laws	are	coming	into	effect
in	China.	Notwithstanding	our	efforts	to	protect	the	security	and	integrity	of	our	customers’	personal	information,	we	may	be	required	to	expend	significant
resources	to	comply	with	data	breach	requirements	if,	for	example,	third	parties	improperly	obtain	and	use	the	personal	information	of	our	customers	or	we
otherwise	experience	a	data	loss	with	respect	to	customers’	personal	information.	A	major	breach	of	our	network	security	and	systems	may	result	in	fines,
penalties	and	damages	and	harm	our	brand,	prospects	and	operating	results.
We	could	be	subject	to	liability,	penalties	and	other	restrictive	sanctions	and	adverse	consequences	arising	out	of	certain	governmental
investigations	and	proceedings.
We	are	cooperating	with	certain	government	investigations	as	discussed	in	Note	16,	
Commitments	and	Contingencies
,	to	the	consolidated	financial
statements	included	elsewhere	in	this	Annual	Report	on	Form	10-K.	To	our	knowledge,	no	government	agency	in	any	such	ongoing	investigation	has	concluded
that	any	wrongdoing	occurred.	However,	we	cannot	predict	the	outcome	or	impact	of	any	such	ongoing	matters,	and	there	exists	the	possibility	that	we	could
be	subject	to	liability,	penalties	and	other	restrictive	sanctions	and	adverse	consequences	if	the	SEC,	the	U.S.	Department	of	Justice	or	any	other	government
agency	were	to	pursue	legal	action	in	the	future.	Moreover,	we	expect	to	incur	costs	in	responding	to	related	requests	for	information	and	subpoenas,	and	if
instituted,	in	defending	against	any	governmental	proceedings.


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For	example,	on	October	16,	2018,	the	U.S.	District	Court	for	the	Southern	District	of	New	York	entered	a	final	judgment	approving	the	terms	of	a
settlement	filed	with	the	Court	on	September	29,	2018,	in	connection	with	the	actions	taken	by	the	SEC	relating	to	Mr.	Musk’s	statement	on	August	7,	2018
that	he	was	considering	taking	Tesla	private.	Pursuant	to	the	settlement,	we,	among	other	things,	paid	a	civil	penalty	of	$20	million,	appointed	an	independent
director	as	the	chair	of	our	board	of	directors,	appointed	two	additional	independent	directors	to	our	board	of	directors	and	made	further	enhancements	to	our
disclosure	controls	and	other	corporate	governance-related	matters.	On	April	26,	2019,	this	settlement	was	amended	to	clarify	certain	of	the	previously-agreed
disclosure	procedures,	which	was	subsequently	approved	by	the	Court.	All	other	terms	of	the	prior	settlement	were	reaffirmed	without	modification.	Although
we	intend	to	continue	to	comply	with	the	terms	and	requirements	of	the	settlement,	if	there	is	a	lack	of	compliance	or	an	alleged	lack	of	compliance,	additional
enforcement	actions	or	other	legal	proceedings	may	be	instituted	against	us.
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We	may	face	regulatory	challenges	to	or	limitations	on	our	ability	to	sell	vehicles	directly.
While	we	intend	to	continue	to	leverage	our	most	effective	sales	strategies,	including	sales	through	our	website,	we	may	not	be	able	to	sell	our	vehicles
through	our	own	stores	in	certain	states	in	the	U.S.	with	laws	that	may	be	interpreted	to	impose	limitations	on	this	direct-to-consumer	sales	model.	It	has	also
been	asserted	that	the	laws	in	some	states	limit	our	ability	to	obtain	dealer	licenses	from	state	motor	vehicle	regulators,	and	such	assertions	persist.	In	certain
locations,	decisions	by	regulators	permitting	us	to	sell	vehicles	have	been	and	may	be	challenged	by	dealer	associations	and	others	as	to	whether	such	decisions
comply	with	applicable	state	motor	vehicle	industry	laws.	We	have	prevailed	in	many	of	these	lawsuits	and	such	results	have	reinforced	our	continuing	belief
that	state	laws	were	not	intended	to	apply	to	a	manufacturer	that	does	not	have	franchise	dealers.	In	some	states,	there	have	also	been	regulatory	and
legislative	efforts	by	dealer	associations	to	propose	laws	that,	if	enacted,	would	prevent	us	from	obtaining	dealer	licenses	in	their	states	given	our	current	sales
model.	A	few	states	have	passed	legislation	that	clarifies	our	ability	to	operate,	but	at	the	same	time	limits	the	number	of	dealer	licenses	we	can	obtain	or	stores
that	we	can	operate.	The	application	of	state	laws	applicable	to	our	operations	continues	to	be	difficult	to	predict.
Internationally,	there	may	be	laws	in	jurisdictions	we	have	not	yet	entered	or	laws	we	are	unaware	of	in	jurisdictions	we	have	entered	that	may	restrict


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our	sales	or	other	business	practices.	Even	for	those	jurisdictions	we	have	analyzed,	the	laws	in	this	area	can	be	complex,	difficult	to	interpret	and	may	change
over	time.	Continued	regulatory	limitations	and	other	obstacles	interfering	with	our	ability	to	sell	vehicles	directly	to	consumers	may	harm	our	financial
condition	and	operating	results.
Risks	Related	to	the	Ownership	of	Our	Common	Stock
The	trading	price	of	our	common	stock	is	likely	to	continue	to	be	volatile.
The	trading	price	of	our	common	stock	has	been	highly	volatile	and	could	continue	to	be	subject	to	wide	fluctuations	in	response	to	various	factors,	some
of	which	are	beyond	our	control.	Our	common	stock	has	experienced	over	the	last	52	weeks	an	intra-day	trading	high	of	$900.40	per	share	and	a	low	of	$70.10
per	share,	as	adjusted	
to	give	effect	to	the	
reflect	the	five-for-one	stock	split	effected	in	the	form	of	a	stock	dividend	in	August	2020	(the	“Stock	Split”)
.	The
stock	market	in	general,	and	the	market	for	technology	companies	in	particular,	has	experienced	extreme	price	and	volume	fluctuations	that	have	often	been
unrelated	or	disproportionate	to	the	operating	performance	of	those	companies.	In	particular,	a	large	proportion	of	our	common	stock	has	been	historically	and
may	in	the	future	be	traded	by	short	sellers	which	may	put	pressure	on	the	supply	and	demand	for	our	common	stock,	further	influencing	volatility	in	its	market
price.	Public	perception	and	other	factors	outside	of	our	control	may	additionally	impact	the	stock	price	of	companies	like	us	that	garner	a	disproportionate


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degree	of	public	attention,	regardless	of	actual	operating	performance.	In	addition,	in	the	past,	following	periods	of	volatility	in	the	overall	market	or	the	market
price	of	our	shares,	securities	class	action	litigation	has	been	filed	against	us.	While	we	defend	such	actions	vigorously,	any	judgment	against	us	or	any	future
stockholder	litigation	could	result	in	substantial	costs	and	a	diversion	of	our	management’s	attention	and	resources.
Our	financial	results	may	vary	significantly	from	period	to	period	due	to	fluctuations	in	our	operating	costs	and	other	factors.
We	expect	our	period-to-period	financial	results	to	vary	based	on	our	operating	costs,	which	we	anticipate	will	fluctuate	as	the	pace	at	which	we
continue	to	design,	develop	and	manufacture	new	products	and	increase	production	capacity	by	expanding	our	current	manufacturing	facilities	and	adding
future	facilities,	may	not	be	consistent	or	linear	between	periods.	Additionally,	our	revenues	from	period	to	period	may	fluctuate	as	we	introduce	existing
products	to	new	markets	for	the	first	time	and	as	we	develop	and	introduce	new	products.	As	a	result	of	these	factors,	we	believe	that	quarter-to-quarter
comparisons	of	our	financial	results,	especially	in	the	short	term,	are	not	necessarily	meaningful	and	that	these	comparisons	cannot	be	relied	upon	as	indicators
of	future	performance.	Moreover,	our	financial	results	may	not	meet	expectations	of	equity	research	analysts,	ratings	agencies	or	investors,	who	may	be
focused	only	on	short-term	quarterly	financial	results.	If	any	of	this	occurs,	the	trading	price	of	our	stock	could	fall	substantially,	either	suddenly	or	over	time.


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We	may	fail	to	meet	our	publicly	announced	guidance	or	other	expectations	about	our	business,	which	could	cause	our	stock	price	to
decline.
We	may	provide	from	time	to	time	guidance	regarding	our	expected	financial	and	business	performance.	Correctly	identifying	key	factors	affecting
business	conditions	and	predicting	future	events	is	inherently	an	uncertain	process,	and	our	guidance	may	not	ultimately	be	accurate	and	has	in	the	past	been
inaccurate	in	certain	respects,	such	as	the	timing	of	new	product	manufacturing	ramps.	Our	guidance	is	based	on	certain	assumptions	such	as	those	relating	to
anticipated	production	and	sales	volumes	(which	generally	are	not	linear	throughout	a	given	period),	average	sales	prices,	supplier	and	commodity	costs	and
planned	cost	reductions.	If	our	guidance	varies	from	actual	results	due	to	our	assumptions	not	being	met	or	the	impact	on	our	financial	performance	that	could
occur	as	a	result	of	various	risks	and	uncertainties,	the	market	value	of	our	common	stock	could	decline	significantly.
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Transactions	relating	to	our	convertible	senior	notes	may	dilute	the	ownership	interest	of	existing	stockholders,	or	may	otherwise	depress
the	price	of	our	common	stock.
The	conversion	of	some	or	all	of	the	convertible	senior	notes	issued	by	us	or	our	subsidiaries	would	dilute	the	ownership	interests	of	existing
stockholders	to	the	extent	we	deliver	shares	upon	conversion	of	any	of	such	notes	by	their	holders,	and	we	may	be	required	to	deliver	a	significant	number	of
shares.	Any	sales	in	the	public	market	of	the	common	stock	issuable	upon	such	conversion	could	adversely	affect	their	prevailing	market	prices.	In	addition,	the
existence	of	the	convertible	senior	notes	may	encourage	short	selling	by	market	participants	because	the	conversion	of	such	notes	could	be	used	to	satisfy	short
positions,	or	the	anticipated	conversion	of	such	notes	into	shares	of	our	common	stock	could	depress	the	price	of	our	common	stock.
Moreover,	in	connection	with	certain	of	the	convertible	senior	notes,	we	entered	into	convertible	note	hedge	transactions,	which	are	expected	to	reduce
the	potential	dilution	and/or	offset	potential	cash	payments	we	are	required	to	make	in	excess	of	the	principal	amount	upon	conversion	of	the	applicable	notes.
We	also	entered	into	warrant	transactions	with	the	hedge	counterparties,	which	could	separately	have	a	dilutive	effect	on	our	common	stock	to	the	extent	that
the	market	price	per	share	of	our	common	stock	exceeds	the	applicable	strike	price	of	the	warrants	on	the	applicable	expiration	dates.	In	addition,	the	hedge
counterparties	or	their	affiliates	may	enter	into	various	transactions	with	respect	to	their	hedge	positions,	which	could	also	affect	the	market	price	of	our
common	stock	or	the	convertible	senior	notes.


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common	stock	or	the	convertible	senior	notes.
If	Elon	Musk	were	forced	to	sell	shares	of	our	common	stock	that	he	has	pledged	to	secure	certain	personal	loan	obligations,	such	sales
could	cause	our	stock	price	to	decline.
Certain	banking	institutions	have	made	extensions	of	credit	to	Elon	Musk,	our	Chief	Executive	Officer,	a	portion	of	which	was	used	to	purchase	shares	of
common	stock	in	certain	of	our	public	offerings	and	private	placements	at	the	same	prices	offered	to	third-party	participants	in	such	offerings	and	placements.
We	are	not	a	party	to	these	loans,	which	are	partially	secured	by	pledges	of	a	portion	of	the	Tesla	common	stock	currently	owned	by	Mr.	Musk.	If	the	price	of
our	common	stock	were	to	decline	substantially,	Mr.	Musk	may	be	forced	by	one	or	more	of	the	banking	institutions	to	sell	shares	of	Tesla	common	stock	to
satisfy	his	loan	obligations	if	he	could	not	do	so	through	other	means.	Any	such	sales	could	cause	the	price	of	our	common	stock	to	decline	further.
Anti-takeover	provisions	contained	in	our	governing	documents,	applicable	laws	and	our	convertible	senior	notes	could	impair	a	takeover
attempt.
Our	certificate	of	incorporation	and	bylaws	afford	certain	rights	and	powers	to	our	board	of	directors	that	may	facilitate	the	delay	or	prevention	of	an
acquisition	that	it	deems	undesirable.	We	are	also	subject	to	Section	203	of	the	Delaware	General	Corporation	Law	and	other	provisions	of	Delaware	law	that
limit	the	ability	of	stockholders	in	certain	situations	to	effect	certain	business	combinations.	In	addition,	the	terms	of	our	convertible	senior	notes	may	require


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us	to	repurchase	such	notes	in	the	event	of	a	fundamental	change,	including	a	takeover	of	our	company.	Any	of	the	foregoing	provisions	and	terms	that	has	the
effect	of	delaying	or	deterring	a	change	in	control	could	limit	the	opportunity	for	our	stockholders	to	receive	a	premium	for	their	shares	of	our	common	stock,
and	could	also	affect	the	price	that	some	investors	are	willing	to	pay	for	our	common	stock.
	
ITEM	1B.
UNRESOLVED	STAFF	COMMENTS
None.
ITEM	2.
PROPERTIES
We	are	headquartered	in	Palo	Alto,	California.	Our	principal	facilities	include	a	large	number	of	properties	in	North	America,	Europe	and	Asia	utilized
for	manufacturing	and	assembly,	warehousing,	engineering,	retail	and	service	locations,	Supercharger	sites	and	administrative	and	sales	offices.	Our	facilities
are	used	to	support	both	of	our	reporting	segments,	and	are	suitable	and	adequate	for	the	conduct	of	our	business.	We	primarily	lease	such	facilities	with	the
exception	of	some	manufacturing	facilities.	The	following	table	sets	forth	the	location	of	our	primary	owned	and	leased	manufacturing	facilities.
	
Primary	Manufacturing	Facilities
	
Location
	
Owned	or	Leased
Fremont	Factory
	
Fremont,	California
	
Owned
Gigafactory	Nevada
	
Sparks,	Nevada
	
Owned
Gigafactory	New	York
	
Buffalo,	New	York
	
Leased
Gigafactory	Shanghai
	
Shanghai,	China
	
*
Gigafactory	Berlin
	
Grunheide,	Germany
	
Owned
Gigafactory	Texas
	
Austin,	Texas
	
Owned
	
*


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Austin,	Texas
	
Owned
	
*
We	own	the	building	and	the	land	use	rights	with	an	initial	term	of	50	years.	The	land	use	rights	are	treated	as	operating	lease	right-of-use	assets.
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ITEM	3.
LEGA
L	PROCEEDINGS
For	a	description	of	our	material	pending	legal	proceedings,	please	see	Note	16,	
Commitments	and	Contingencies
,	to	the	consolidated	financial
statements	included	elsewhere	in	this	Annual	Report	on	Form	10-K.
In	addition,	each	of	the	matters	below	is	being	disclosed	pursuant	to	Item	103	of	Regulation	S-K	because	it	relates	to	environmental	regulations	and
aggregate	civil	penalties	that	could	potentially	exceed	$1	million.	We	believe	that	any	proceeding	that	is	material	to	our	business	or	financial	condition	is	likely
to	have	potential	penalties	far	in	excess	of	such	amount.
The	Bay	Area	Air	Quality	Management	District	(“BAAQMD”)	has	issued	notices	of	violation	to	us	relating	to	air	permitting	and	related	compliance	for	the
Fremont	Factory,	but	has	not	initiated	formal	proceedings.	We	have	disputed	certain	of	these	allegations	and	have	asserted	that	there	has	been	no	related
adverse	community	or	environmental	impact.	While	we	have	not	yet	resolved	this	matter,	we	remain	in	close	communication	with	BAAQMD	with	respect	to	it.
We	do	not	currently	expect	any	material	adverse	impact	on	our	business.
The	German	Umweltbundesamt	has	issued	our	subsidiary	in	Germany	a	notice	and	fine	in	the	amount	of	12	million	euro	alleging	its	non-compliance
under	applicable	laws	relating	to	market	participation	notifications	and	take-back	obligations	with	respect	to	end-of-life	battery	products	required	thereunder.
This	is	primarily	relating	to	administrative	requirements,	but	Tesla	has	continued	to	take	back	battery	packs,	and	although	we	cannot	predict	the	outcome	of


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this	matter,	including	the	final	amount	of	any	penalties,	we	have	filed	our	objection	and	it	is	not	expected	to	have	a	material	adverse	impact	on	our	business.
We	have	
also	received	a	follow-up	information	request	from	the	EPA	under	Section	114(a)	of	the	Clean	Air	Act	of	1963,	as	amended	(the	“Clean	Air
Act”).	The	EPA	is	reviewing	the	compliance	of	our	Fremont	Factory	operations	with	applicable	requirements	under	the	Clean	Air	Act,	and	we	are	working	with
the	EPA	in	responding	its	requests	for	information.	While	the	outcome	of	this	matter	cannot	be	determined	at	this	time,	it	is	not	currently	expected	to	have	a
material	adverse
	impact	on	our	business.
	
I
TEM	4.
MINE	SAFETY	DISCLOSURES
Not	applicable.
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PART	II
ITEM	5.
MARKET	FOR	REGISTRANT’S	COMMON	EQUITY,	RELATED	STOCKHOLDER	MATTERS	AND	ISSUER	PURCHASES	OF	EQUITY
SECURITIES
Market	Information
Our	common	stock	has	traded	on	The	NASDAQ	Global	Select	Market	under	the	symbol	“TSLA”	since	it	began	trading	on	June	29,	2010.	Our	initial	public
offering	was	priced	at	$3.40	per	share	on	June	28,	2010	as	adjusted	to	give	effect	to	
the	Stock	Split
.
Holders
As	of	February	1,	2021,	there	were	5,353	holders	of	record	of	our	common	stock.	A	substantially	greater	number	of	holders	of	our	common	stock	are
“street	name”	or	beneficial	holders,	whose	shares	are	held	by	banks,	brokers	and	other	financial	institutions.
Dividend	Policy
We	have	never	declared	or	paid	cash	dividends	on	our	common	stock.	We	currently	do	not	anticipate	paying	any	cash	dividends	in	the	foreseeable
future.	Any	future	determination	to	declare	cash	dividends	will	be	made	at	the	discretion	of	our	board	of	directors,	subject	to	applicable	laws,	and	will	depend
on	our	financial	condition,	results	of	operations,	capital	requirements,	general	business	conditions	and	other	factors	that	our	board	of	directors	may	deem
relevant.
Stock	Performance	Graph
This	performance	graph	shall	not	be	deemed	“filed”	for	purposes	of	Section	18	of	the	Securities	Exchange	Act	of	1934,	as	amended	(the	“Exchange
Act”),	or	incorporated	by	reference	into	any	filing	of	Tesla,	Inc.	under	the	Securities	Act	of	1933,	as	amended	(the	“Securities	Act”),	or	the	Exchange	Act,	except


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as	shall	be	expressly	set	forth	by	specific	reference	in	such	filing.
The	following	graph	shows	a	comparison,	from	January	1,	2016	through	December	31,	2020,	of	the	cumulative	total	return	on	our	common	stock,	The
NASDAQ	Composite	Index	and	a	group	of	all	public	companies	sharing	the	same	SIC	code	as	us,	which	is	SIC	code	3711,	“Motor	Vehicles	and	Passenger	Car
Bodies”	(Motor	Vehicles	and	Passenger	Car	Bodies	Public	Company	Group).	Such	returns	are	based	on	historical	results	and	are	not	intended	to	suggest	future
performance.	Data	for	The	NASDAQ	Composite	Index	and	the	Motor	Vehicles	and	Passenger	Car	Bodies	Public	Company	Group	assumes	an	investment	of	$100
on	January	1,	2016	and	reinvestment	of	dividends.	We	have	never	declared	or	paid	cash	dividends	on	our	common	stock	nor	do	we	anticipate	paying	any	such
cash	dividends	in	the	foreseeable	future.
	
	
Unregistered	Sales	of	Equity	Securities	and	Use	of	Proceeds
None.
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Purchases	of	Equity	Securities	by	the	Issuer	and	Affiliated	Purchasers
None.
	
ITEM	6.
SELECTED	CONSOLIDATED	FINANCIAL	DATA
The	following	selected	consolidated	financial	data	should	be	read	in	conjunction	with	“Management’s	Discussion	and	Analysis	of	Financial	Condition	and
Results	of	Operations”	and	the	consolidated	financial	statements	and	the	related	notes	included	elsewhere	in	this	Annual	Report	on	Form	10-K	and	from	the
historical	consolidated	financial	statements	not	included	herein	to	fully	understand	factors	that	may	affect	the	comparability	of	the	information	presented	below
(in	millions,	except	per	share	data).
	
	
	
Year	Ended	December	31,
	
	
	
2020
	
	
2019	(3)
	
	
2018	(2)
	
	
2017
	
	
2016	(1)
	
Consolidated	Statements	of	Operations	Data:
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
Total	revenues
	
$
31,536
	
	
$
24,578
	
	
$
21,461
	
	
$
11,759
	
	
$
7,000
	
Gross	profit
	
$
6,630
	
	
$
4,069
	
	
$
4,042
	
	
$
2,223
	
	
$
1,599
	
Income	(loss)	from	operations
	
$
1,994
	
	
$
(69
)
	
$
(388
)
	
$
(1,632
)
	
$
(667
)
Net	income	(loss)	attributable	to
			common	stockholders
	
$
721
	
	
$
(862
)
	
$
(976
)
	
$


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)
	
$
(976
)
	
$
(1,962
)
	
$
(675
)
Net	income	(loss)	per	share	of
			common	stock	attributable	to
			common	stockholders	(4)
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
Basic
	
$
0.74
	
	
$
(0.98
)
	
$
(1.14
)
	
$
(2.37
)
	
$
(0.94
)
Diluted
	
$
0.64
	
	
$
(0.98
)
	
$
(1.14
)
	
$
(2.37
)
	
$
(0.94
)
Weighted	average	shares	used	in
			computing	net	income	(loss)	per
			share	of	common	stock	(4)
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
Basic
	
	
933
	
	
	
887
	
	
	
853
	
	
	
829
	
	
	
721
	
Diluted
	
	
1,083
	
	
	
887
	
	
	
853
	
	
	
829
	
	
	
721
	
	
	
As	of	December	31,
	
	
	
2020
	
	
2019	(3)
	
	
2018	(2)
	
	
2017
	
	
2016	(1)
	
Consolidated	Balance	Sheet	Data:
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
Working	capital	(deficit)
	
$
12,469


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$
12,469
	
	
$
1,436
	
	
$
(1,686
)
	
$
(1,104
)
	
$
433
	
Total	assets
	
$
52,148
	
	
$
34,309
	
	
$
29,740
	
	
$
28,655
	
	
$
22,664
	
Total	long-term	liabilities
	
$
14,170
	
	
$
15,532
	
	
$
13,434
	
	
$
15,348
	
	
$
10,923
	
(1)
We	acquired	SolarCity	Corporation	(“SolarCity”)	on	November	21,	2016.	SolarCity’s	financial	results	have	been	included	in	our	financial	results	from	the
acquisition	date	as	previously	reported	in	our	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2016.
(2)
We	adopted	ASC	606	in	2018.	Prior	periods	have	not	been	revised.	For	further	details,	refer	to	Note	2,	
Summary	of	Significant	Accounting	Policies
,	of
the	notes	to	the	consolidated	financial	statements	included	in	our	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2018.
(3)
We	adopted	ASC	842	in	2019.	Prior	periods	have	not	been	revised.	For	further	details,	refer	to	Note	2,	
Summary	of	Significant	Accounting	Policies
,	of
the	notes	to	the	consolidated	financial	statements	included	in	our	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2019.
(4)
Prior	period	results	have	been	adjusted	to	give	effect	to	the	Stock	Split.	See	Note	1,	
Overview


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Overview
,	of	the	notes	to	the	consolidated	financial	statements
included	elsewhere	in	this	Annual	Report	on	Form	10-K	for	further	details.
	
	
	
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ITEM	7.
MANAGEMENT’S	DISCUSSION	AND	ANALYSIS	OF	FINANCIAL	CONDITION	AND	RESULTS	OF	OPERATIONS
The	following	discussion	and	analysis	should	be	read	in	conjunction	with	the	consolidated	financial	statements	and	the	related	notes	included	elsewhere
in	this	Annual	Report	on	Form	10-K.
	
For	discussion	related	to	changes	in	financial	condition	and	the	results	of	operations	for	fiscal	year	2018-related	items,
refer	to	Part	II,	Item	7.	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations	in	our	Annual	Report	on	Form	10-K	for	fiscal
year	2019,	which	was	filed	with	the	Securities	and	Exchange	Commission	on	February	13,	2020.
Overview	and	2020	Highlights
Our	mission	is	to	accelerate	the	world’s	transition	to	sustainable	energy.	We	design,	develop,	manufacture,	lease	and	sell	high-performance	fully	electric
vehicles,	solar	energy	generation	systems	and	energy	storage	products.	We	also	offer	maintenance,	installation,	operation,	financial	and	other	services	related
to	our	products.
In	2020,	we	produced	509,737	vehicles	and	delivered	499,647	vehicles.	We	are	currently	focused	on	increasing	vehicle	production	and	capacity,
developing	and	ramping	our	battery	cell	technology,	increasing	the	affordability	of	our	vehicles,	expanding	our	global	infrastructure	and	introducing	our	next
vehicles.
In	2020,	we	deployed	3.02	GWh	of	energy	storage	products	and	205	megawatts	of	solar	energy	systems.	We	are	currently	focused	on	ramping
production	of	energy	storage	products,	improving	our	Solar	Roof	installation	capability	and	efficiency	and	increasing	market	share	of	retrofit	solar	energy
systems.


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systems.
In	2020,	we	recognized	total	revenues	of	$31.54	billion,	representing	an	increase	of	$6.96	billion	compared	to	the	prior	year.	We	continue	to	ramp
production,	build	new	manufacturing	capacity	and	expand	our	operations	to	enable	increased	deliveries	and	deployments	of	our	products	and	further	revenue
growth.
In	2020,	our	net	income	attributable	to	common	stockholders	was	$721	million,	representing	a	favorable	change	of	$1.58	billion	compared	to	the	prior
year.	In	2020,	our	operating	margin	was	6.3%,	representing	a	favorable	change	of	6.6%	compared	to	the	prior	year.	We	continue	to	focus	on	operational
efficiencies,	while	we	have	seen	an	acceleration	of	non-cash	stock-based	compensation	expense	due	to	a	rapid	increase	in	our	market	capitalization	and	updates
to	our	business	outlook.
We	ended	2020	with	$19.38	billion	in	cash	and	cash	equivalents,	representing	an	increase	of	$13.12	billion	from	the	end	of	2019.	Our	cash	flows	from
operating	activities	during	2020	was	$5.94	billion,	compared	to	$2.41	billion	during	2019,	and	capital	expenditures	amounted	to	$3.16	billion	during	2020,
compared	to	$1.33	billion	during	2019.	Sustained	growth	has	allowed	our	business	to	generally	fund	itself,	but	we	will	continue	a	number	of	capital-intensive
projects	in	upcoming	periods.
Management	Opportunities,	Challenges	and	Risks	and	2021	Outlook
Impact	of	COVID-19	Pandemic


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Impact	of	COVID-19	Pandemic
	
There	continues	to	be	worldwide	impact	from	the	COVID-19	pandemic.	While	we	have	been	relatively	successful	in	navigating	such	impact	to	date,	we
have	previously	been	affected	by	temporary	manufacturing	closures,	employment	and	compensation	adjustments,	and	impediments	to	administrative	activities
supporting	our	product	deliveries	and	deployments.	There	are	also	ongoing	related	risks	to	our	business	depending	on	the	progression	of	the	pandemic,	and
recent	trends	in	certain	regions	have	indicated	potential	returns	to	limited	or	closed	government	functions,	business	activities	and	person-to-person
interactions.	Global	trade	conditions	and	consumer	trends	may	further	adversely	impact	us	and	our	industries.	For	example,	pandemic-related	issues	have
exacerbated	port	congestion	and	intermittent	supplier	shutdowns	and	delays,	resulting	in	additional	expenses	to	expedite	delivery	of	critical	parts.	Similarly,
increased	demand	for	personal	electronics	has	created	a	shortfall	of	microchip	supply,	and	it	is	yet	unknown	how	we	may	be	impacted.	Please	see	the
	“Results
of	Operations”	section	of	this	Item	below	and	certain	risk	factors	described	in	Part	I,	Item	1A,	Risk	Factors	in	this	Annual	Report	on	Form	10-K,	particularly	the
first	risk	factor	included	there,	for	more	detailed	descriptions	of	the	impact	and	risks	to	our	business.
We	cannot	predict	the	duration	or	direction	of	current	global	trends	from	this	pandemic,	the	sustained	impact	of	which	is	largely	unknown,	is	rapidly
evolving	and	has	varied	across	geographic	regions.	Ultimately,	we	continue	to	monitor	macroeconomic	conditions	to	remain	flexible	and	to	optimize	and	evolve


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our	business	as	appropriate,	and	we	will	have	to	accurately	project	demand	and	infrastructure	requirements	globally	and	deploy	our	production,	workforce	and
other	resources	accordingly.
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Automotive—Production
The	following	is	a	summary	of	the	status	of	production	of	each	of	our	announced	vehicle	models	in	production	and	under	development,	as	of	the	date	of
this	Annual	Report	on	Form	10-K:
	
Production	Location
	
Vehicle	Model(s)
	
Production	Status
Fremont	Factory
	
Model	S	and	Model	X
	
Active
	
	
Model	3	and	Model	Y
	
Active
Gigafactory	Shanghai
	
Model	3	and	Model	Y
	
Active
Gigafactory	Berlin
	
Model	Y
	
Constructing	manufacturing	facilities
Gigafactory	Texas
	
Model	Y
	
Constructing	manufacturing	facilities
	
	
Cybertruck
	
In	development
TBD
	
Tesla	Semi
	
In	development
	
	
Tesla	Roadster
	
In	development
	
We	recently	announced	updated	versions	of	Model	S	and	Model	X	featuring	a	redesigned	powertrain	and	other	improvements.	In	2021,	we	are	focused
on	ramping	these	models	on	new	manufacturing	equipment,	as	well	as	production	rates	of	Model	3	and	Model	Y,	to	at	least	the	capacity	that	we	have	installed.
The	next	phase	of	production	growth	will	depend	on	the	construction	of	Gigafactory	Berlin	and	Gigafactory	Texas,	each	of	which	is	progressing	as	planned	for
deliveries	beginning	in	2021.	Our	goal	is	to	continuously	decrease	production	costs	and	increase	the	affordability	of	our	vehicles.	We	are	continuing	to	develop
and	manufacture	our	own	battery	cells,	with	which	we	are	targeting	high-volume	output,	lower	capital	and	production	costs	and	longer	range.	As	cell	supply	is
critical	to	our	business,	coupling	this	strategy	with	cells	from	our	suppliers	will	help	us	stay	ahead	of	any	potential	constraints.


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However,	these	plans	are	subject	to	uncertainties	inherent	in	establishing	and	ramping	manufacturing	operations,	which	may	be	exacerbated	by	the
number	of	concurrent	international	projects	and	any	future	impact	from	events	outside	of	our	control	such	as	the	COVID-19	pandemic	and	any	industry-wide
component	constraints.	Moreover,	we	must	meet	ambitious	technological	targets	with	our	plans	for	battery	cells	as	well	as	for	iterative	manufacturing	and
design	improvements	for	our	vehicles	with	each	new	factory.
Automotive—Demand	and	Sales
Our	cost	reduction	efforts	and	additional	localized	procurement	and	manufacturing	are	key	to	our	vehicles’	affordability,	and	for	example	have	allowed
us	to	competitively	price	our	vehicles	in	China.	In	addition	to	opening	new	factories	in	2021,	we	will	also	continue	to	generate	demand	and	brand	awareness	by
improving	our	vehicles’	functionality,	including	Autopilot,	FSD	and	software	features,	and	introducing	anticipated	future	vehicles.	Moreover,	we	expect	to
benefit	from	ongoing	electrification	of	the	automotive	sector	and	increasing	environmental	awareness.
However,	we	operate	in	a	cyclical	industry	that	is	sensitive	to	trade,	environmental	and	political	uncertainty,	all	of	which	may	also	be	compounded	by
any	future	global	impact	from	the	COVID-19	pandemic.	On	the	other	hand,	there	have	been	recent	signs	of	recovery	from	competitors	that	experienced
downturns	in	2020,	meaning	that	we	will	have	to	continue	to	execute	well	to	maintain	the	momentum	that	we	have	gained	relative	to	an	ever-growing
competitive	landscape.
Automotive—Deliveries	and	Customer	Infrastructure


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Automotive—Deliveries	and	Customer	Infrastructure
	
As	our	deliveries	increase,	we	must	work	constantly	to	prevent	our	vehicle	delivery	capability	from	becoming	a	bottleneck	on	our	total	deliveries.
Situating	our	factories	closer	to	local	markets	should	mitigate	the	strain	on	our	deliveries.	In	any	case,	as	we	expand,	we	will	have	to	continue	to	increase	and
staff	our	delivery,	servicing	and	charging	infrastructure,	maintain	our	vehicle	reliability	and	optimize	our	Supercharger	locations	to	ensure	cost-effectiveness
and	customer	satisfaction.	In	particular,	we	remain	focused	on	increasing	the	capability	and	efficiency	of	our	servicing	operations.
Energy	Generation	and	Storage	Demand,	Production	and	Deployment
	
The	long-term	success	of	this	business	is	dependent	upon	increasing	margins	through	greater	volumes.	We	continue	to	increase	the	production	of	our
energy	storage	products	to	meet	high	levels	of	demand.	For	Powerwall,	better	availability	and	growing	grid	stability	concerns	drive	higher	interest,	and	cross-
selling	with	our	residential	solar	energy	products	will	continue	to	benefit	both	product	lines.	We	remain	committed	to	increasing	our	retrofit	solar	energy
business	by	offering	a	low-cost	and	simplified	online	ordering	experience.	In	addition,	we	are	working	to	improve	our	installation	capabilities	for	Solar	Roof	by
on-boarding	and	training	a	large	number	of	installers	and	reducing	the	installation	time	dramatically.	As	these	product	lines	grow,	we	will	have	to	maintain
adequate	battery	cell	supply	for	our	energy	storage	products	and	hire	additional	personnel,	particularly	skilled	electricians	to	support	the	ramp	of	Solar	Roof.
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Cash	Flow
	and
	Capital	Expenditure
	Trends
Our	capital	expenditures	are	typically	difficult	to	project	beyond	the	short	term	given	the	number	and	breadth	of	our	core	projects	at	any	given	time,	and
uncertainties	in	future	global	market	conditions	resulting	from	the	COVID-19	pandemic	currently	makes	projections	more	challenging.	We	are	simultaneously
ramping	new	products	in	the	new	Model	S	and	Model	X,	Model	Y	and	Solar	Roof,	constructing	or	ramping	manufacturing	facilities	on	three	continents	and
piloting	the	development	and	manufacture	of	new	battery	cell	technologies,	and	the	pace	of	our	capital	spend	may	vary	depending	on	overall	priority	among
projects,	the	pace	at	which	we	meet	milestones,	production	adjustments	to	and	among	our	various	products,	increased	capital	efficiencies	and	the	addition	of
new	projects.	Owing	and	subject	to	the	foregoing	as	well	as	the	pipeline	of	announced	projects	under	development	and	all	other	continuing	infrastructure
growth,	we	currently	expect	our	capital	expenditures	to	be	$4.50	to	$6.00	billion	in	2021	and	each	of	the	next	two	fiscal	years.
Our	business	has	recently	been	consistently	generating	cash	flow	from	operations	in	excess	of	our	level	of	capital	spend,	and	with	better	working	capital
management	resulting	in	shorter	days	sales	outstanding	than	days	payable	outstanding,	our	sales	growth	is	also	facilitating	positive	cash	generation.	On	the
other	hand,	we	are	likely	to	see	heightened	levels	of	capital	expenditures	during	certain	periods	depending	on	the	specific	pace	of	our	capital-intensive	projects.


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Moreover,	as	our	stock	price	has	significantly	increased	recently,	we	have	seen	higher	levels	of	early	conversions	of	“in-the-money”	convertible	senior	notes,
which	obligates	us	to	deliver	cash	and	or	shares	pursuant	to	the	terms	of	those	notes.	Overall,	we	expect	our	ability	to	be	self-funding	to	continue	as	long	as
macroeconomic	factors	support	current	trends	in	our	sales.	We	also	opportunistically	strengthened	our	liquidity	further	through	an	at-the-market	offering	of
common	stock	in	December	2020,	with	net	proceeds	to	us	of	approximately	$4.99	billion.
Operating	Expense	Trends
As	long	as	we	see	expanding	sales,	and	excluding	the	potential	impact	of	non-cash	stock	compensation	expense	attributable	to	the	2018	CEO
Performance	Award	and	impairment	charges	on	certain	assets	as	explained	below,	we	generally	expect	operating	expenses	relative	to	revenues	to	decrease	as
we	additionally	increase	operational	efficiency	and	process	automation.
In	March	2018,	our	stockholders	approved	a	performance-based	stock	option	award	to	our	CEO	(the	“2018	CEO	Performance	Award”),	consisting	of	12
vesting	tranches	contingent	on	the	achievement	of	specified	market	capitalization	and	operational	milestones.	We	incur	non-cash	stock-based	compensation
expense	for	each	tranche	only	after	the	related	operational	milestone	initially	becomes	probable	of	being	met	based	on	a	subjective	assessment	of	our	future
financial	performance,	and	if	this	happens	following	the	grant	date,	we	record	at	such	time	a	cumulative	catch-up	expense	that	may	be	significant	based	on	the
length	of	time	elapsed	from	the	grant	date.	Moreover,	the	remaining	expense	for	that	tranche	is	ratably	recorded	over	the	period	remaining	until	the	later	of	(i)


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the	expected	achievement	of	the	relevant	operational	milestone	(if	it	has	not	yet	been	achieved)	and	(ii)	the	expected	achievement	of	the	related	market
capitalization	milestone	(if	it	has	not	yet	been	achieved).	Upon	vesting	of	a	tranche,	all	remaining	associated	expense	is	recognized	immediately.	Because	the
expected	market	capitalization	achievements	are	generally	later	than	the	related	expected	operational	milestone	achievements,	the	achievement	of	the	former
earlier	than	expected	may	increase	the	magnitude	of	any	catch-up	expense	and/or	accelerate	the	rate	at	which	the	remaining	expense	is	recognized.	During
2020,	several	operational	milestones	became	probable	and	several	tranches	vested,	including	as	a	result	of	our	market	capitalization	increasing	rapidly,
resulting	in	the	recognition	or	acceleration	of	related	expense	earlier	than	anticipated	and	within	a	relatively	short	period	of	time.	See	Note	14,	
Equity	Incentive
Plans
—2018	CEO	Performance	Award,	to	the	consolidated	financial	statements	included	elsewhere	in	this	Annual	Report	on	Form	10-K	for	further	details
regarding	the	stock-based	compensation	relating	to	the	2018	CEO	Performance	Award.	As	our	market	capitalization	is	unpredictable	and	our	financial
performance	improves,	it	is	possible	that	the	earlier-than-planned	recognition	of	such	expenses	will	continue	in	the	near	term.
In	January	2021,	we	updated	our	investment	policy	to	provide	us	with	more	flexibility	to	further	diversify	and	maximize	returns	on	our	cash	that	is	not
required	to	maintain	adequate	operating	liquidity.	As	part	of	the	policy,	we	may	invest	a	portion	of	such	cash	in	certain	specified	alternative	reserve	assets.


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Thereafter,	we	invested	an	aggregate	$1.50	billion	in	bitcoin	under	this	policy.	Moreover,	we	expect	to	begin	accepting	bitcoin	as	a	form	of	payment	for	our
products	in	the	near	future,	subject	to	applicable	laws	and	initially	on	a	limited	basis,	which	we	may	or	may	not	liquidate	upon	receipt.
	Digital	assets	are
considered	indefinite-lived	intangible	assets	under	applicable	accounting	rules.	Accordingly,	any	decrease	in	their	fair	values	below	our	carrying	values	for	such
assets	at	any	time	subsequent	to	their	acquisition	will	require	us	to	recognize	impairment	charges,	whereas	we	may	make	no	upward	revisions	for	any	market
price	increases	until	a	sale.	As	we	currently	intend	to	hold	these	assets	long-term,	these	charges	may	negatively	impact	our	profitability	in	the	periods	in	which
such	impairments	occur	even	if	the	overall	market	values	of	these	assets	increase.
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Critical	Accounting	Policies	and	Estimates
The	consolidated	financial	statements	are	prepared	in	accordance	with	accounting	principles	generally	accepted	in	the	U.S.	(“GAAP”).	The	preparation
of	the	consolidated	financial	statements	requires	us	to	make	estimates	and	assumptions	that	affect	the	reported	amounts	of	assets,	liabilities,	revenues,	costs
and	expenses	and	related	disclosures.	We	base	our	estimates	on	historical	experience,	as	appropriate,	and	on	various	other	assumptions	that	we	believe	to	be
reasonable	under	the	circumstances.	Changes	in	the	accounting	estimates	are	reasonably	likely	to	occur	from	period	to	period.	Accordingly,	actual	results	could
differ	significantly	from	the	estimates	made	by	our	management.	We	evaluate	our	estimates	and	assumptions	on	an	ongoing	basis.	To	the	extent	that	there	are
material	differences	between	these	estimates	and	actual	results,	our	future	financial	statement	presentation,	financial	condition,	results	of	operations	and	cash
flows	may	be	affected.
Due	to	the	COVID-19	pandemic,	there	has	been	uncertainty	and	disruption	in	the	global	economy	and	financial	markets.	The	estimates	used	for,	but	not
limited	to,	determining	significant	economic	incentive	for	resale	value	guarantee	arrangements,	sales	return	reserves,	the	collectability	of	accounts	receivable,
inventory	valuation,	fair	value	of	long-lived	assets,	goodwill,	fair	value	of	financial	instruments,	fair	value	and	residual	value	of	operating	lease	vehicles	and
solar	energy	systems	subject	to	leases	could	be	impacted.	We	have	assessed	the	impact	and	are	not	aware	of	any	specific	events	or	circumstances	that	required


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an	update	to	our	estimates	and	assumptions	or	materially	affected	the	carrying	value	of	our	assets	or	liabilities	as	of	the	date	of	issuance	of	this	Annual	Report	on
Form	10-K.	
T
hese	estimates	may	change	as	new	events	occur	and	additional	information	is	obtained.	Actual	results	could	differ	materially	from	these	estimates
under	different	assumptions	or	conditions.
Revenue	Recognition
Automotive	Segment
Automotive	Sales	Revenue
Automotive	Sales	without	Resale	Value	Guarantee
Automotive	sales	revenue	includes	revenues	related	to	deliveries	of	new	vehicles	and	pay-per-use	charges,	and	specific	other	features	and	services	that
meet	the	definition	of	a	performance	obligation	under	ASC	606,	including	access	to	our	Supercharger	network,	internet	connectivity,	
FSD	features	
and	over-
the-air	software	updates.	We	recognize	revenue	on	automotive	sales	upon	delivery	to	the	customer,	which	is	when	the	control	of	a	vehicle	transfers.	Payments
are	typically	received	at	the	point	control	transfers	or	in	accordance	with	payment	terms	customary	to	the	business.	Other	features	and	services	such	as	access
to	our	Supercharger	network,	internet	connectivity	and	over-the-air	software	updates	are	provisioned	upon	control	transfer	of	a	vehicle	and	recognized	over
time	on	a	straight-line	basis	as	we	have	a	stand-ready	obligation	to	deliver	such	services	to	the	customer.	We	recognize	revenue	related	to	these	other	features
and	services	over	the	performance	period,	which	is	generally	the	expected	ownership	life	of	the	vehicle	or	the	eight-year	life	of	the	vehicle.	Revenue	related	to
FSD	features	is	recognized	when	functionality	is	delivered	to	the	customer.	For	our	obligations	related	to	automotive	sales,	we	estimate	standalone	selling	price


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by	considering	costs	used	to	develop	and	deliver	the	service,	third-party	pricing	of	similar	options	and	other	information	that	may	be	available.
At	the	time	of	revenue	recognition,	we	reduce	the	transaction	price	and	record	a	sales	return	reserve	against	revenue	for	estimated	variable
consideration	related	to	future	product	returns	based	on	historical	experience.	In	addition,	any	fees	that	are	paid	or	payable	by	us	to	a	customer’s	lender	when
we	arrange	the	financing	are	recognized	as	an	offset	against	automotive	sales	revenue.
Costs	to	obtain	a	contract	mainly	relate	to	commissions	paid	to	our	sales	personnel	for	the	sale	of	vehicles.	Commissions	are	not	paid	on	other
obligations	such	as	access	to	our	Supercharger	network,	internet	connectivity,	FSD	features	and	over-the-air	software	updates.	As	our	contract	costs	related	to
automotive	sales	are	typically	fulfilled	within	one	year,	the	costs	to	obtain	a	contract	are	expensed	as	incurred.	Amounts	billed	to	customers	related	to	shipping
and	handling	are	classified	as	automotive	sales	revenue,	and	we	have	elected	to	recognize	the	cost	for	freight	and	shipping	when	control	over	vehicles,	parts	or
accessories	have	transferred	to	the	customer	as	an	expense	in	cost	of	automotive	sales	revenue.	Our	policy	is	to	exclude	taxes	collected	from	a	customer	from
the	transaction	price	of	automotive	contracts.
Automotive	Sales	with	Resale	Value	Guarantee	or	a	Buyback	Option
We	offer	resale	value	guarantees	or	similar	buy-back	terms	to	certain	international	customers	who	purchase	vehicles	and	who	finance	their	vehicles
through	one	of	our	specified	commercial	banking	partners.	We	also	offer	resale	value	guarantees	in	connection	with	automotive	sales	to	certain	leasing


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partners.	Under	these	programs,	we	receive	full	payment	for	the	vehicle	sales	price	at	the	time	of	delivery	and	our	counterparty	has	the	option	of	selling	their
vehicle	back	to	us	during	the	guarantee	period,	which	currently	is	generally	at	the	end	of	the	term	of	the	applicable	loan	or	financing	program,	for	a	pre-
determined	resale	value.
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With	the	exception	of	
the	
Vehicle	Sales	to	Leasing	Partners	with	a	Resale	Value	Guarantee	and	a	Buyback	Option
	
program	discussed	within
the	
Automotive	Leasing
	section
	below
,	we	recognize	revenue	when	control	transfers	upon	delivery	to	customers	in	accordance	
with	
ASC	606
	as	a	sale	with	a
right	of	return	as	we	do	not	believe	the	customer	has	a	significant	economic	incentive	to	exercise	the	resale	value	guarantee	provided	to	them
	at	contract
inception
.	The	process	to	determine	whether	there	is	a	significant	economic	incentive	includes	a	comparison	of	a	vehicle’s	estimated	market	value	at	the	time
the	option	is	exercisable	with	the	guaranteed	resale	value	to	determine	the	customer’s	economic	incentive	to	exercise.	The	performance	obligations	and	the
pattern	of	recognizing	automotive	sales	with	resale	value	guarantees	are	consistent	with	automotive	sales	without	resale	value	guarantees	with	the	exception	of
our	estimate	for	sales	return	reserve.	Sales	return	reserves	for	automotive	sales	with	resale	value	guarantees	are	estimated	based	on	historical	experience	plus
consideration	for	expected	future	market	values.	
On	a	quarterly	basis,	we	assess	the	estimated	market	values	of	vehicles	under	our	buyback	options	program	to
determine	whether	there	have	been	changes	to	the	likelihood	of	future	product	returns.	As	we	accumulate	more	data	related	to	the	buyback	values	of	our
vehicles	or	as	market	conditions	change,	there	may	be	material	changes	to	their	estimated	values.
Automotive	Regulatory	Credits
We	earn	tradable	credits	in	the	operation	of	our	automotive	business	under	various	regulations	related	to	ZEVs,	greenhouse	gas,	fuel	economy	and	clean


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fuel.	We	sell	these	credits	to	other	regulated	entities	who	can	use	the	credits	to	comply	with	emission	standards	and	other	regulatory	requirements.	
Payments
for	automotive	regulatory	credits	are	typically	received	at	the	point	control	transfers	to	the	customer,	or	in	accordance	with	payment	terms	customary	to	the
business.	
We	recognize	revenue	on	the	sale	of	automotive	regulatory	credits	at	the	time	control	of	the	regulatory	credits	is	transferred	to	the	purchasing	party
as	automotive	sales	revenue	in	the	consolidated	statements	of	operations.
Automotive	Leasing	Revenue
Direct	Vehicle	Operating	Leasing	Program
We	have	outstanding	leases	under	our	direct	vehicle	operating	leasing	programs	in	the	U.S.,	Canada	and	in	certain	countries	in	Europe.	Qualifying
customers	are	permitted	to	lease	a	vehicle	directly	from	Tesla	for	up	to	48	months.	At	the	end	of	the	lease	term,	customers	are	required	to	return	the	vehicles
to	us	or	for	Model	S	and	Model	X	leases	in	certain	regions,	may	opt	to	purchase	the	vehicles	for	a	pre-determined	residual	value.	We	account	for	these	leasing
transactions	as	operating	leases.	We	record	leasing	revenues	to	automotive	leasing	revenue	on	a	straight-line	basis	over	the	contractual	term,	and	we	record
the	depreciation	of	these	vehicles	to	cost	of	automotive	leasing	revenue.
Our	policy	is	to	exclude	taxes	collected	from	a	customer	from	the	transaction	price	of	automotive	contracts.
Vehicle	Sales	to	Leasing	Partners	with	a	Resale	Value	Guarantee	and	a	Buyback	Option
We	offered	buyback	options	in	connection	with	automotive	sales	with	resale	value	guarantees	with	certain	leasing	partner	sales	in	the	U.S.	and	where
we	expected	the	customer	had	a	significant	economic	incentive	to	exercise	the	resale	value	guarantee	provided	to	them	at	contract	inception,	we	continued	to


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recognize	these	transactions	as	operating	leases.	These	transactions	entailed	a	transfer	of	leases,	which	we	had	originated	with	an	end-customer,	to	our	leasing
partner.	As	control	of	the	vehicles	had	not	been	transferred	in	accordance	with	ASC	606,	these	transactions	were	accounted	for	as	interest-bearing
collateralized	borrowings	in	accordance	with	ASC	840,	
Leases
,	prior	to	January	1,	2019.	Under	this	program,	cash	was	received	for	the	full	price	of	the	vehicle
and	the	collateralized	borrowing	value	was	generally	recorded	within	resale	value	guarantees	and	the	customer	upfront	down	payment	was	recorded	within
deferred	revenue.	We	amortize	the	deferred	revenue	amount	to	automotive	leasing	revenue	on	a	straight-line	basis	over	the	option	period	and	accrue	interest
expense	based	on	our	borrowing	rate.	We	capitalized	vehicles	under	this	program	to	operating	lease	vehicles,	net,	on	the	consolidated	balance	sheets,	and	we
record	depreciation	from	these	vehicles	to	cost	of	automotive	leasing	revenue	during	the	period	the	vehicle	is	under	a	lease	arrangement.	Cash	received	for
these	vehicles,	net	of	revenue	recognized	during	the	period,	is	classified	as	collateralized	lease	(repayments)	borrowings	within	cash	flows	from	financing
activities	in	the	consolidated	statements	of	cash	flows.	With	the	adoption	of	ASC	842	on	January	1,	2019,	all	new	agreements	under	this	program	are	accounted
for	as	operating	leases	under	ASC	842	and	there	was	no	material	change	in	the	timing	and	amount	of	revenue	recognized	over	the	term.	Consequently,	any
cash	flows	for	new	agreements	are	classified	as	operating	cash	activities	on	the	consolidated	statements	of	cash	flows.


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At	the	end	of	the	lease	term,	we	settle	our	liability	in	cash	by	either	purchasing	the	vehicle	from	the	leasing	partner	for	the	buyback	option	amount	or
paying	a	shortfall	to	the	option	amount	the	leasing	partner	may	realize	on	the	sale	of	the	vehicle.	Any	remaining	balances	within	deferred	revenue	and	resale
value	guarantee	will	be	settled	to	automotive	leasing	revenue.	
The	end	customer	can	extend	the	lease	for	a	period	of	up	to	6	months.	
In	cases	where	the	leasing
partner	retains	ownership	of	the	vehicle	after	the	end	of	our	option	period,	we	expense	the	net	value	of	the	leased	vehicle	to	cost	of	automotive	leasing	revenue.
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Direct	Sales-
T
ype	Leasing	Program
We	have	outstanding	direct	leases	and	vehicles	financed	by	us	under	loan	arrangements	accounted	for	as	sales-type	leases	under	ASC	842	in	certain
countries	in	Asia	and	Europe,	which	we	introduced	in	volume	during	the	third	quarter	of	2020.	Depending	on	the	specific	program,	customers	may	or	may	not
have	a	right	to	return	the	vehicle	to	us	during	or	at	the	end	of	the	lease	term.	If	the	customer	does	not	have	a	right	to	return,	the	customer	will	take	title	to	the
vehicle	at	the	end	of	the	lease	term	after	making	all	contractual	payments.	Under	the	programs	for	which	there	is	a	right	to	return,	the	purchase	option	is
reasonably	certain	to	be	exercised	by	the	lessee	and	we	therefore	expect	the	customer	to	take	title	to	the	vehicle	at	the	end	of	the	lease	term	after	making	all
contractual	payments.	Qualifying	customers	are	permitted	to	lease	a	vehicle	directly	under	these	programs	for	up	to	48	months.	Our	loan	arrangements	under
these	programs	can	have	terms	for	up	to	72	months.	We	recognize	all	revenue	and	costs	associated	with	the	sales-type	lease	as	automotive	leasing	revenue	and
automotive	leasing	cost	of	revenue,	respectively,	upon	delivery	of	the	vehicle	to	the	customer.	Interest	income	based	on	the	implicit	rate	in	the	lease	is	recorded
to	automotive	leasing	revenue	over	time	as	customers	are	invoiced	on	a	monthly	basis.
Energy	Generation	and	Storage	Segment
Energy	Generation	and	Storage	Sales
Energy	generation	and	storage	sales	revenue	consists	of	the	sale	of	solar	energy	systems	and	energy	storage	systems	to	residential,	small	commercial,


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and	large	commercial	and	utility	grade	customers,	including	solar	subscription-based	arrangements.	Energy	generation	and	storage	sales	revenue	also	includes
revenue	from	agreements	for	solar	energy	systems	and	PPAs	that	commence	after	January	1,	2019,	which	is	recognized	as	earned,	based	on	the	amount	of
capacity	provided	for	solar	energy	systems	or	electricity	delivered	for	PPAs	at	the	contractual	billing	rates,	assuming	all	other	revenue	recognition	criteria	have
been	met.	Under	the	practical	expedient	available	under	ASC	606-10-55-18,	we	recognize	revenue	based	on	the	value	of	the	service	which	is	consistent	with	the
billing	amount.	Sales	of	solar	energy	systems	to	residential	and	small	scale	commercial	customers	consist	of	the	engineering,	design	and	installation	of	the
system.	Post-installation,	residential	and	small	scale	commercial	customers	receive	a	proprietary	monitoring	system	that	captures	and	displays	historical	energy
generation	data.	Residential	and	small	scale	commercial	customers	pay	the	full	purchase	price	of	the	solar	energy	system	upfront.	Revenue	for	the	design	and
installation	obligation	is	recognized	when	control	transfers,	which	is	when	we	install	a	solar	energy	system	and	the	system	passes	inspection	by	the	utility	or
the	authority	having	jurisdiction.	Revenue	for	the	monitoring	service	is	recognized	ratably	as	a	stand-ready	obligation	over	the	warranty	period	of	the	solar
energy	system.	Sales	of	energy	storage	systems	to	residential	and	small	scale	commercial	customers	consist	of	the	installation	of	the	energy	storage	system	and
revenue	is	recognized	when	control	transfers,	which	is	when	the	product	has	been	delivered	or,	if	we	are	performing	installation,	when	installed	and
commissioned.	Payment	for	such	storage	systems	is	made	upon	invoice	or	in	accordance	with	payment	terms	customary	to	the	business.


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For	large	commercial	and	utility	grade	solar	energy	system	and	energy	storage	system	sales	which	consist	of	the	engineering,	design	and	installation	of
the	system,	customers	make	milestone	payments	that	are	consistent	with	contract-specific	phases	of	a	project.	Revenue	from	such	contracts	is	recognized	over
time	using	the	percentage	of	completion	method	based	on	cost	incurred	as	a	percentage	of	total	estimated	contract	costs	for	energy	storage	system	sales	and	as
a	percentage	of	total	estimated	labor	hours	for	solar	energy	system	sales.	Certain	large-scale	commercial	and	utility	grade	solar	energy	system	and	energy
storage	system	sales	also	include	operations	and	maintenance	service	which	are	negotiated	with	the	design	and	installation	contracts	and	are	thus	considered
to	be	a	combined	contract	with	the	design	and	installation	service.	For	certain	large	commercial	and	utility	grade	solar	energy	systems	and	energy	storage
systems	where	the	percentage	of	completion	method	does	not	apply,	revenue	is	recognized	when	control	transfers,	which	is	when	the	product	has	been
delivered	to	the	customer	and	commissioned	for	energy	storage	systems	and	when	the	project	has	received	permission	to	operate	from	the	utility	for	solar
energy	systems.	Operations	and	maintenance	service	revenue	is	recognized	ratably	over	the	respective	contract	term	for	solar	energy	system	sales	and	upon
delivery	of	the	service	for	energy	storage	system	sales.	Customer	payments	for	such	services	are	usually	paid	annually	or	quarterly	in	advance.
In	instances	where	there	are	multiple	performance	obligations	in	a	single	contract,	we	allocate	the	consideration	to	the	various	obligations	in	the
contract	based	on	the	relative	standalone	selling	price	method.	Standalone	selling	prices	are	estimated	based	on	estimated	costs	plus	margin	or	by	using


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market	data	for	comparable	products.	Costs	incurred	on	the	sale	of	residential	installations	before	the	solar	energy	systems	are	completed	are	included	as	work
in	process	within	inventory	in	the	consolidated	balance	sheets.	Any	fees	that	are	paid	or	payable	by	us	to	a	solar	loan	lender	would	be	recognized	as	an	offset
against	revenue.	Costs	to	obtain	a	contract	relate	mainly	to	commissions	paid	to	our	sales	personnel	related	to	the	sale	of	solar	energy	systems	and	energy
storage	systems.	As	our	contract	costs	related	to	solar	energy	system	and	energy	storage	system	sales	are	typically	fulfilled	within	one	year,	the	costs	to	obtain
a	contract	are	expensed	as	incurred.
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As	part	of	our	solar	energy	system	and	energy	storage	system	contracts,	we	may	provide	the	customer	with	performance	guarantees	that	warrant	that
the	underlying	system	will	meet	or	exceed	the	minimum	energy	generation	or	
energy	performance
	requirements	specified	in	the	contract.	In	certain	instances,
we	may	receive	a	bonus	payment	if	the	system	performs	above	a	specified	level.	Conversely,	if	a	solar	energy	system	or	energy	storage	system	does	not	meet
the	performance	guarantee	requirements,	we	may	be	required	to	pay	liquidated	damages.	Other	forms	of	variable	consideration	related	to	our	large	commercial
and	utility	grade	solar	energy	system	and	energy	storage	system	contracts	include	variable	customer	payments	that	will	be	made	based	on	our	energy	market
participation	activities.	Such	guarantees	and	variable	customer	payments	represent	a	form	of	variable	consideration	and	are	estimated	at	contract	inception	at
their	most	likely	amount	and	updated	at	the	end	of	each	reporting	period	as	additional	performance	data	becomes	available.	Such	estimates	are	included	in	the
transaction	price	only	to	the	extent	that	it	is	probable	a	significant	reversal	of	revenue	will	not	occur.
We	record	as	deferred	revenue	any	non-refundable	amounts	that	are	collected	from	customers	related	to	fees	charged	for	prepayments	and	remote
monitoring	service	and	operations	and	maintenance	service,	which	is	recognized	as	revenue	ratably	over	the	respective	customer	contract	term.	
Energy	Generation	and	Storage	Leasing
For	revenue	arrangements	where	we	are	the	lessor	under	operating	lease	agreements	for	energy	generation	and	storage	products,	we	record	lease
revenue	from	minimum	lease	payments,	including	upfront	rebates	and	incentives	earned	from	such	systems,	on	a	straight-line	basis	over	the	life	of	the	lease


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term,	assuming	all	other	revenue	recognition	criteria	have	been	met.	The	difference	between	the	payments	received	and	the	revenue	recognized	is	recorded	as
deferred	revenue	or	deferred	asset	on	the	consolidated	balance	sheet.
For	solar	energy	systems	where	customers	purchase	electricity	from	us	under	PPAs	prior	to	January	1,	2019,	we	have	determined	that	these	agreements
should	be	accounted	for	as	operating	leases	pursuant	to	ASC	840.	Revenue	is	recognized	based	on	the	amount	of	electricity	delivered	at	rates	specified	under
the	contracts,	assuming	all	other	revenue	recognition	criteria	are	met.
We	record	as	deferred	revenue	any	amounts	that	are	collected	from	customers,	including	lease	prepayments,	in	excess	of	revenue	recognized	and
operations	and	maintenance	service	fees,	which	is	recognized	as	revenue	ratably	over	the	respective	customer	contract	term.	Deferred	revenue	also	includes
the	portion	of	rebates	and	incentives	received	from	utility	companies	and	various	local	and	state	government	agencies,	which	is	recognized	as	revenue	over	the
lease	term.
We	capitalize	initial	direct	costs	from	
the	execution	of	agreements	for	solar	energy	systems	
and	PPAs,	which	include	the	referral	fees	and	sales
commissions,	as	an	element	of	solar	energy	systems,	net,	and	subsequently	amortize	these	costs	over	the	term	of	the	related	agreements.
Inventory	Valuation
Inventories	are	stated	at	the	lower	of	cost	or	net	realizable	value.	Cost	is	computed	using	standard	cost	for	vehicles	and	energy	storage	products,	which
approximates	actual	cost	on	a	first-in,	first-out	basis.	In	addition,	cost	for	solar	energy	systems	is	recorded	using	actual	cost.	We	record	inventory	write-downs


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for	excess	or	obsolete	inventories	based	upon	assumptions	about	current	and	future	demand	forecasts.	If	our	inventory	on-hand	is	in	excess	of	our	future
demand	forecast,	the	excess	amounts	are	written-off.
We	also	review	our	inventory	to	determine	whether	its	carrying	value	exceeds	the	net	amount	realizable	upon	the	ultimate	sale	of	the	inventory.	This
requires	us	to	determine	the	estimated	selling	price	of	our	vehicles	less	the	estimated	cost	to	convert	the	inventory	on-hand	into	a	finished	product.	Once
inventory	is	written-down,	a	new,	lower	cost	basis	for	that	inventory	is	established	and	subsequent	changes	in	facts	and	circumstances	do	not	result	in	the
restoration	or	increase	in	that	newly	established	cost	basis.
Should	our	estimates	of	future	selling	prices	or	production	costs	change,	additional	and	potentially	material	increases	to	this	reserve	may	be	required.	A
small	change	in	our	estimates	may	result	in	a	material	charge	to	our	reported	financial	results.
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Warranties
We	provide	a	manufacturer’s	warranty	on	all	new	and	used	vehicles	and	a	warranty	on	the	installation	and	components	of	the	energy	generation	and
storage	systems	we	sell	for	periods	typically	between	10	to	25	years.	We	accrue	a	warranty	reserve	for	the	products	sold	by	us,	which	includes	our	best
estimate	of	the	projected	costs	to	repair	or	replace	items	under	warranties	and	recalls	when	identified.	These	estimates	are	based	on	actual	claims	incurred	to
date	and	an	estimate	of	the	nature,	frequency	and	costs	of	future	claims.	These	estimates	are	inherently	uncertain	given	our	relatively	short	history	of	sales,
and	changes	to	our	historical	or	projected	warranty	experience	may	cause	material	changes	to	the	warranty	reserve	in	the	future.	The	warranty	reserve	does
not	include	projected	warranty	costs	associated	with	our	vehicles	subject	to	operating	lease	accounting	and	our	solar	energy	systems	under	lease	contracts	or
PPAs,	as	the	costs	to	repair	these	warranty	claims	are	expensed	as	incurred.	The	portion	of	the	warranty	reserve	expected	to	be	incurred	within	the	next	12
months	is	included	within	accrued	liabilities	and	other,	while	the	remaining	balance	is	included	within	other	long-term	liabilities	on	the	consolidated	balance
sheets.	Warranty	expense	is	recorded	as	a	component	of	cost	of	revenues	in	the	consolidated	statements	of	operations.
Stock-Based	Compensation
We	use	the	fair	value	method	of	accounting	for	our	stock	options	and	restricted	stock	units	(“RSUs”)	granted	to	employees	and	for	our	employee	stock
purchase	plan	(the	“ESPP”)	to	measure	the	cost	of	employee	services	received	in	exchange	for	the	stock-based	awards.	The	fair	value	of	stock	option	awards


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with	only	service	and/or	performance	conditions	is	estimated	on	the	grant	or	offering	date	using	the	Black-Scholes	option-pricing	model.	The	Black-Scholes
option-pricing	model	requires	inputs	such	as	the	risk-free	interest	rate,	expected	term	and	expected	volatility.	These	inputs	are	subjective	and	generally	require
significant	judgment.	The	fair	value	of	RSUs	is	measured	on	the	grant	date	based	on	the	closing	fair	market	value	of	our	common	stock.	The	resulting	cost	is
recognized	over	the	period	during	which	an	employee	is	required	to	provide	service	in	exchange	for	the	awards,	usually	the	vesting	period,	which	is	generally
four	years	for	stock	options	and	RSUs	and	six	months	for	the	ESPP.	Stock-based	compensation	expense	is	recognized	on	a	straight-line	basis,	net	of	actual
forfeitures	in	the	period.
For	performance-based	awards,	stock-based	compensation	expense	is	recognized	over	the	expected	performance	achievement	period	of	individual
performance	milestones	when	the	achievement	of	each	individual	performance	milestone	becomes	probable.	For	performance-based	awards	with	a	vesting
schedule	based	entirely	on	the	attainment	of	both	performance	and	market	conditions,	stock-based	compensation	expense	associated	with	each	tranche	is
recognized	over	the	longer	of	(i)	the	expected	achievement	period	for	the	operational	milestone	for	such	tranche	and	(ii)	the	expected	achievement	period	for
the	related	market	capitalization	milestone	determined	on	the	grant	date,	beginning	at	the	point	in	time	when	the	relevant	operational	milestone	is	considered
probable	of	being	achieved.	If	such	operational	milestone	becomes	probable	any	time	after	the	grant	date,	we	will	recognize	a	cumulative	catch-up	expense
from	the	grant	date	to	that	point	in	time.	If	the	related	market	capitalization	milestone	is	achieved	earlier	than	its	expected	achievement	period	and	the


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achievement	of	the	related	operational	milestone,	then	the	stock-based	compensation	expense	will	be	recognized	over	the	expected	achievement	period	for	the
operational	milestone,	which	may	accelerate	the	rate	at	which	such	expense	is	recognized.	If	additional	operational	milestones	become	probable,	stock-based
compensation	expense	will	be	recorded	in	the	period	it	becomes	probable	including	cumulative	catch-up	expense	for	the	service	provided	since	the	grant	date.
The	fair	value	of	such	awards	is	estimated	on	the	grant	date	using	Monte	Carlo	simulations.
As	we	accumulate	additional	employee	stock-based	awards	data	over	time	and	as	we	incorporate	market	data	related	to	our	common	stock,	we	may
calculate	significantly	different	volatilities	and	expected	lives,	which	could	materially	impact	the	valuation	of	our	stock-based	awards	and	the	stock-based
compensation	expense	that	we	will	recognize	in	future	periods.	Stock-based	compensation	expense	is	recorded	in	cost	of	revenues,	research	and	development
expense	and	selling,	general	and	administrative	expense	in	the	consolidated	statements	of	operations.
Income	Taxes
We	are	subject	to	taxes	in	the	U.S.	and	in	many	foreign	jurisdictions.	Significant	judgment	is	required	in	determining	our	provision	for	income	taxes,	our
deferred	tax	assets	and	liabilities	and	any	valuation	allowance	recorded	against	our	net	deferred	tax	assets.	We	make	these	estimates	and	judgments	about	our
future	taxable	income	that	are	based	on	assumptions	that	are	consistent	with	our	future	plans.	Tax	laws,	regulations	and	administrative	practices	may	be
subject	to	change	due	to	economic	or	political	conditions	including	fundamental	changes	to	the	tax	laws	applicable	to	corporate	multinationals.	The	U.S.,	many


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countries	in	the	European	Union	and	a	number	of	other	countries	are	actively	considering	changes	in	this	regard.	As	of	December	31,	2020,	we	had	recorded	a
full	valuation	allowance	on	our	net	U.S.	deferred	tax	assets	because	we	expect	that	it	is	more	likely	than	not	that	our	U.S.	deferred	tax	assets	will	not	be
realized.	Should	the	actual	amounts	differ	from	our	estimates,	the	amount	of	our	valuation	allowance	could	be	materially	impacted.
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Furthermore,	significant	judgment	is	required	in	evaluating	our	tax	positions.	In	the	ordinary	course	of	business,	there	are	many	transactions	and
calculations	for	which	the	ultimate	tax	settlement	is	uncertain.	As	a	result,	we	recognize	the	effect	of	this	uncertainty	on	our	tax	attributes	or	taxes	payable
based	on	our	estimates	of	the	eventual	outcome.	These	effects	are	recognized	when,	despite	our	belief	that	our	tax	return	positions	are	supportable,	we	believe
that	it	is	likely	that	some	of	those	positions	may	not	be	fully	sustained	upon	review	by	tax	authorities.	We	are	required	to	file	income	tax	returns	in	the	U.S.	and
various	foreign	jurisdictions,	which	requires	us	to	interpret	the	applicable	tax	laws	and	regulations	in	effect	in	such	jurisdictions.	Such	returns	are	subject	to
audit	by	the	various	federal,	state	and	foreign	taxing	authorities,	who	may	disagree	with	respect	to	our	tax	positions.	We	believe	that	our	consideration	is
adequate	for	all	open	audit	years	based	on	our	assessment	of	many	factors,	including	past	experience	and	interpretations	of	tax	law.	We	review	and	update	our
estimates	in	light	of	changing	facts	and	circumstances,	such	as	the	closing	of	a	tax	audit,	the	lapse	of	a	statute	of	limitations	or	a	change	in	estimate.	To	the
extent	that	the	final	tax	outcome	of	these	matters	differs	from	our	expectations,	such	differences	may	impact	income	tax	expense	in	the	period	in	which	such
determination	is	made.	The	eventual	impact	on	our	income	tax	expense	depends	in	part	if	we	still	have	a	valuation	allowance	recorded	against	our	deferred	tax
assets	in	the	period	that	such	determination	is	made.
Principles	of	Consolidation


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Principles	of	Consolidation
The	consolidated	financial	statements	reflect	our	accounts	and	operations	and	those	of	our	subsidiaries	in	which	we	have	a	controlling	financial	interest.
In	accordance	with	the	provisions	of	ASC	810,	
Consolidation
,	we	consolidate	any	variable	interest	entity	(“VIE”)	of	which	we	are	the	primary	beneficiary.	We
form	VIEs	with	our	financing	fund	investors	in	the	ordinary	course	of	business	in	order	to	facilitate	the	funding	and	monetization	of	certain	attributes	associated
with	our	solar	energy	systems	and	leases	under	our	direct	vehicle	leasing	programs.	The	typical	condition	for	a	controlling	financial	interest	ownership	is
holding	a	majority	of	the	voting	interests	of	an	entity;	however,	a	controlling	financial	interest	may	also	exist	in	entities,	such	as	VIEs,	through	arrangements
that	do	not	involve	controlling	voting	interests.	ASC	810	requires	a	variable	interest	holder	to	consolidate	a	VIE	if	that	party	has	the	power	to	direct	the
activities	of	the	VIE	that	most	significantly	impact	the	VIE’s	economic	performance	and	the	obligation	to	absorb	losses	of	the	VIE	that	could	potentially	be
significant	to	the	VIE	or	the	right	to	receive	benefits	from	the	VIE	that	could	potentially	be	significant	to	the	VIE.	We	do	not	consolidate	a	VIE	in	which	we	have
a	majority	ownership	interest	when	we	are	not	considered	the	primary	beneficiary.	We	have	determined	that	we	are	the	primary	beneficiary	of	all	the	VIEs.	We
evaluate	our	relationships	with	all	the	VIEs	on	an	ongoing	basis	to	ensure	that	we	continue	to	be	the	primary	beneficiary.	All	intercompany	transactions	and
balances	have	been	eliminated	upon	consolidation.


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balances	have	been	eliminated	upon	consolidation.
Noncontrolling	Interests	and	Redeemable	Noncontrolling	Interests
Noncontrolling	interests	and	redeemable	noncontrolling	interests	represent	third-party	interests	in	the	net	assets	under	certain	funding	arrangements,
or	funds,	that	we	enter	into	to	finance	the	costs	of	solar	energy	systems	and	vehicles	under	operating	leases.	We	have	determined	that	the	contractual
provisions	of	the	funds	represent	substantive	profit	sharing	arrangements.	We	have	further	determined	that	the	methodology	for	calculating	the	noncontrolling
interest	and	redeemable	noncontrolling	interest	balances	that	reflects	the	substantive	profit	sharing	arrangements	is	a	balance	sheet	approach	using	the
hypothetical	liquidation	at	book	value	(“HLBV”)	method.	We,	therefore,	determine	the	amount	of	the	noncontrolling	interests	and	redeemable	noncontrolling
interests	in	the	net	assets	of	the	funds	at	each	balance	sheet	date	using	the	HLBV	method,	which	is	presented	on	the	consolidated	balance	sheet	as
noncontrolling	interests	in	subsidiaries	and	redeemable	noncontrolling	interests	in	subsidiaries.	Under	the	HLBV	method,	the	amounts	reported	as
noncontrolling	interests	and	redeemable	noncontrolling	interests	in	the	consolidated	balance	sheet	represent	the	amounts	the	third	parties	would
hypothetically	receive	at	each	balance	sheet	date	under	the	liquidation	provisions	of	the	funds,	assuming	the	net	assets	of	the	funds	were	liquidated	at	their
recorded	amounts	determined	in	accordance	with	GAAP	and	with	tax	laws	effective	at	the	balance	sheet	date	and	distributed	to	the	third	parties.	The	third


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parties’	interests	in	the	results	of	operations	of	the	funds	are	determined	as	the	difference	in	the	noncontrolling	interest	and	redeemable	noncontrolling	interest
balances	in	the	consolidated	balance	sheets	between	the	start	and	end	of	each	reporting	period,	after	taking	into	account	any	capital	transactions	between	the
funds	and	the	third	parties.	However,	the	redeemable	noncontrolling	interest	balance	is	at	least	equal	to	the	redemption	amount.	The	redeemable
noncontrolling	interest	balance	is	presented	as	temporary	equity	in	the	mezzanine	section	of	the	consolidated	balance	sheet	since	these	third	parties	have	the
right	to	redeem	their	interests	in	the	funds	for	cash	or	other	assets.	For	certain	funds,	there	may	be	significant	fluctuations	in	net	income	(loss)	attributable	to
noncontrolling	interests	and	redeemable	noncontrolling	interests	in	subsidiaries	due	to	changes	in	the	liquidation	provisions	as	time-based	milestones	are
reached.
	
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Results	of	Operations
Effects	of	COVID-19
The	COVID-19	pandemic	impacted	our	business	and	financial	results	in	2020.
The	temporary	suspension	of	production	at	our	factories	during	the	first	half	of	2020	caused	production	limitations	that,	together	with	reduced	or	closed
government	and	third	party	partner	operations	in	the	year,	negatively	impacted	our	deliveries	and	deployments	in	2020.	While	we	resumed	operations	at	all	of
our	factories	worldwide,	our	temporary	suspension	at	our	factories	resulted	in	idle	capacity	charges	as	we	still	incurred	fixed	costs	such	as	depreciation,	certain
payroll	related	expenses	and	property	taxes.	As	part	of	our	response	strategy	to	the	business	disruptions	and	uncertainty	around	macroeconomic	conditions
caused	by	the	COVID-19	pandemic,	we	instituted	cost	reduction	initiatives	across	our	business	globally	to	be	commensurate	to	the	scope	of	our	operations	while
they	were	scaled	back	in	the	first	half	of	2020.	This	included	temporary	labor	cost	reduction	measures	such	as	employee	furloughs	and	compensation
reductions.	Additionally,	we	suspended	non-critical	operating	spend	and	opportunistically	renegotiated	supplier	and	vendor	arrangements.	As	part	of	various
governmental	responses	to	the	pandemic	granted	to	companies	globally,	we	received	certain	payroll	related	benefits	which	helped	to	reduce	the	impact	of	the
COVID-19	pandemic	on	our	financial	results.	Such	payroll	related	benefits	related	to	our	direct	headcount	have	been	primarily	netted	against	our	disclosed	idle
capacity	charges	and	they	marginally	reduced	our	operating	expenses.	The	impact	of	the	idle	capacity	charges	incurred	during	the	first	half	of	2020	were


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almost	entirely	offset	by	our	cost	savings	initiatives	and	payroll	related	benefits.
	
Revenues
	
	
	
Year	Ended	December	31,
	
	
2020
	
vs.
	
2019
	
Change
	
	
2019
	
vs.
	
2018
	
Change
	
(Dollars	in	millions)
	
2020
	
	
2019
	
	
2018
	
	
$
	
	
%
	
	
$
	
	
%
	
Automotive	sales
	
$
26,184
	
	
$
19,952
	
	
$
17,632
	
	
$
6,232
	
	
	
31
%
	
$
2,320
	
	
	
13
%
Automotive	leasing
	
	
1,052
	
	
	
869
	
	
	
883
	
	
	
183
	
	
	
21
%
	
	
(14
)
	
	
-2
%
Total	automotive	revenues
	
	
27,236
	
	
	
20,821
	
	
	
18,515
	
	
	
6,415
	
	
	
31
%
	
	
2,306
	
	
	
12
%
Services	and	other
	
	
2,306
	
	
	
2,226
	
	
	
1,391
	
	
	
80
	
	
	
4
%
	
	
835
	
	
	
60
%
Total	automotive	&	services	and	other
			segment	revenue
	
	
29,542
	
	
	
23,047
	
	
	
19,906
	
	
	
6,495
	
	
	
28
%
	
	
3,141
	
	
	
16
%


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3,141
	
	
	
16
%
Energy	generation	and	storage	segment	revenue
	
	
1,994
	
	
	
1,531
	
	
	
1,555
	
	
	
463
	
	
	
30
%
	
	
(24
)
	
	
-2
%
Total	revenues
	
$
31,536
	
	
$
24,578
	
	
$
21,461
	
	
$
6,958
	
	
	
28
%
	
$
3,117
	
	
	
15
%
	
Automotive	&	Services	and	Other	Segment
Automotive	sales	revenue	includes	revenues	related	to	cash	deliveries	of	new	Model	S,	Model	X,	Model	3	and	Model	Y	vehicles,	including	access	to	our
Supercharger	network,	internet	connectivity,	FSD	features	and	over-the-air	software	updates,	as	well	as	sales	of	regulatory	credits	to	other	automotive
manufacturers.	Cash	deliveries	are	vehicles	that	are	not	subject	to	lease	accounting.	Our	revenue	from	regulatory	credits	fluctuates	depending	on	when	a
contract	is	executed	with	a	buyer	and	when	the	credits	are	delivered.
Automotive	leasing	revenue	includes	the	amortization	of	revenue	for	vehicles	under	direct	operating	lease	agreements	as	well	as	those	sold	with	resale
value	guarantees	accounted	for	as	operating	leases	under	lease	accounting.	We	began	offering	direct	leasing	for	Model	3	vehicles	in	the	second	quarter	of	2019
and	we	began	offering	direct	leasing	for	Model	Y	vehicles	in	the	third	quarter	of	2020.	Additionally,	automotive	leasing	revenue	includes	direct	sales-type
leasing	programs	where	we	recognize	all	revenue	associated	with	the	sales-type	lease	upon	delivery	to	the	customer,	which	we	introduced	in	volume	during	the


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third	quarter	of	2020.
Services	and	other	revenue	consists	of	non-warranty	after-sales	vehicle	services,	sales	of	used	vehicles,	retail	merchandise,	sales	by	our	acquired
subsidiaries	to	third	party	customers	and	vehicle	insurance	revenue.
40


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2020	compared	to	2019
Automotive	sales	revenue	increased	$6.23	billion,	or	31%,	in	the	year	ended	December	31,	2020	as	compared	to	the	year	ended	December	31,
2019,
	primarily	due	to	an	increase	of	129,268	Model	3	and	Model	Y	cash	deliveries	despite	production	limitations	as	a	result	of	temporary	suspension	of
production	at	the	Fremont	Factory	and	Gigafactory	Nevada	during	the	first	half	of	2020.	We	were	able	to	increase	deliveries	year	over	year	from	production
ramping	at	both	Gigafactory	Shanghai	and	the	Fremont	Factory.	There	was	also	an	increase	of	$986	million	from	additional	sales	of	regulatory	credits	to	$1.58
billion	in	the	year	ended	December	31,	2020.	Additionally,	due	to	pricing	adjustments	we	made	to	our	vehicle	offerings	during	the	year	ended	December	31,
2019,	we	estimated	that	there	was	a	greater	likelihood	that	customers	would	exercise	their	buyback	options	and	adjusted	our	sales	return	reserve	on	vehicles
previously	sold	under	our	buyback	options	program	which	resulted	in	a	reduction	of	automotive	sales	revenue	of	$555	million.	We	made	further	pricing
adjustments	that	resulted	in	a	similar	but	smaller	reduction	of	automotive	sales	revenue	of	$72	million	during	the	year	ended	December	31,	2020.	The	smaller
reduction	in	revenue	from	pricing	adjustments	resulted	in	a	positive	impact	to	automotive	sales	revenue	of	$483	million	year	over	year.	These	factors	increasing
automotive	sales	revenue	were	partially	offset	by	a	decrease	in	the	combined	average	selling	price	of	Model	3	and	Model	Y.	Despite	the	inclusion	of	higher


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priced	Model	Y	deliveries	in	2020,	the	combined	average	selling	price	of	Model	3	and	Model	Y	decreased	due	to	a	higher	proportion	of	Model	3	Standard	Range
variants	in	our	sales	mix	compared	to	the	prior	year.	Additionally,	there	was	a	decrease	in	automotive	sales	revenue	from	8,669	fewer	Model	S	and	Model	X
cash	deliveries	at	a	relatively	consistent	combined	average	selling	price	in	the	year	ended	December	31,	2020	compared	to	the	prior	year.
Automotive	leasing	revenue	increased	$183	million,	or	21%,	in	the	year	ended	December	31,	2020	as	compared	to	the	year	ended	December	31,	2019
,
primarily	due	to	an	increase	in	cumulative	vehicles	under	our	direct	operating	lease	program	and	the	introduction	of	direct	sales-type	leasing	programs	which
we	began	offering	in	volume	during	the	third	quarter	of	2020	where	we	recognize	all	revenue	associated	with	the	sales-type	lease	upon	delivery	to	the
customer.	These	increases	were	partially	offset	by	the	decreases	in	automotive	leasing	revenue	associated	with	our	resale	value	guarantee	leasing	programs
accounted	for	as	operating	leases	as	those	portfolios	have	declined.
Services	and	other	revenue	increased	$80	million,	or	4%,	in	the	year	ended	December	31,	2020	as	compared	to	the	year	ended	December	31,
2019,
	primarily	due	to	an	increase	in	non-warranty	maintenance	services	revenue	as	our	fleet	continues	to	grow,	an	increase	in	retail	merchandise	revenue	and
an	increase	in	sales	by	our	acquired	subsidiaries	to	third	party	customers	as	we	had	a	partial	year	of	sales	in	the	prior	year	from	our	mid-year	2019	acquisitions.


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These	increases	were	partially	offset	by	a	decrease	in	used	vehicle	revenue	driven	by	a	reduction	in	non-Tesla	trade-ins.
Energy	Generation	and	Storage	Segment
Energy	generation	and	storage	revenue	includes	sales	and	leasing	of	solar	energy	generation	and	energy	storage	products,	services	related	to	such
products	and	sales	of	solar	energy	systems	incentives.
2020	compared	to	2019
Energy	generation	and	storage	revenue	increased	by	$463	million,	or	30%,	in	the	year	ended	December	31,	2020	as	compared	to	the	year	ended
December	31,	2019,	primarily	due	to	increases	in	deployments	of	Megapack,	solar	cash	and	loan	jobs	and	Powerwall,	partially	offset	by	a	decrease	in
deployments	of	Powerpack	and	reduced	average	selling	prices	on	our	solar	cash	and	loan	jobs	as	a	result	of	our	low	cost	solar	strategy.	Powerpack	deployments
have	decreased	following	the	introduction	of	our	Megapack	product,	which	we	began	deploying	in	late	2019.
41


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Cost	of	Revenues	and	Gross	Margin
	
	
	
Year	Ended	December	31,
	
	
2020	vs.	2019	Change
	
	
2019	vs.	2018	Change
	
(Dollars	in	millions)
	
2020
	
	
2019
	
	
2018
	
	
$
	
	
%
	
	
$
	
	
%
	
Cost	of	revenues
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
Automotive	sales
	
$
19,696
	
	
$
15,939
	
	
$
13,686
	
	
$
3,757
	
	
	
24
%
	
$
2,253
	
	
	
16
%
Automotive	leasing
	
	
563
	
	
	
459
	
	
	
488
	
	
	
104
	
	
	
23
%
	
	
(29
)
	
	
-6
%
Total	automotive	cost	of	revenues
	
	
20,259
	
	
	
16,398
	
	
	
14,174
	
	
	
3,861
	
	
	
24
%
	
	
2,224
	
	
	
16
%
Services	and	other
	
	
2,671
	
	
	
2,770
	
	
	
1,880
	
	
	
(99
)
	
	
-4
%
	
	
890
	
	
	
47
%
Total	automotive	&	services	and	other
			segment	cost	of	revenues
	
	
22,930
	
	
	
19,168
	
	
	
16,054
	
	
	
3,762


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16,054
	
	
	
3,762
	
	
	
20
%
	
	
3,114
	
	
	
19
%
Energy	generation	and	storage	segment
	
	
1,976
	
	
	
1,341
	
	
	
1,365
	
	
	
635
	
	
	
47
%
	
	
(24
)
	
	
-2
%
Total	cost	of	revenues
	
$
24,906
	
	
$
20,509
	
	
$
17,419
	
	
$
4,397
	
	
	
21
%
	
$
3,090
	
	
	
18
%
Gross	profit	total	automotive
	
$
6,977
	
	
$
4,423
	
	
$
4,341
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
Gross	margin	total	automotive
	
	
26
%
	
	
21
%
	
	
23
%
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
Gross	profit	total	automotive	&	services	and	other
			segment
	
$
6,612
	
	
$
3,879
	
	
$
3,852
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
Gross	margin	total	automotive	&	services	and	other
			segment
	
	
22
%
	
	
17
%
	
	
19
%
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
Gross	profit	energy	generation	and	storage	segment
	
$
18
	
	
$
190


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$
18
	
	
$
190
	
	
$
190
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
Gross	margin	energy	generation	and	storage	segment
	
	
1
%
	
	
12
%
	
	
12
%
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
Total	gross	profit
	
$
6,630
	
	
$
4,069
	
	
$
4,042
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
Total	gross	margin
	
	
21
%
	
	
17
%
	
	
19
%
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
Automotive	&	Services	and	Other	Segment
Cost	of	automotive	sales	revenue	includes	direct	parts,	material	and	labor	costs,	manufacturing	overhead,	including	depreciation	costs	of	tooling	and
machinery,	shipping	and	logistic	costs,	vehicle	connectivity	costs,	allocations	of	electricity	and	infrastructure	costs	related	to	our	Supercharger	network	and
reserves	for	estimated	warranty	expenses.	Cost	of	automotive	sales	revenues	also	includes	adjustments	to	warranty	expense	and	charges	to	write	down	the
carrying	value	of	our	inventory	when	it	exceeds	its	estimated	net	realizable	value	and	to	provide	for	obsolete	and	on-hand	inventory	in	excess	of	forecasted
demand.
Cost	of	automotive	leasing	revenue	includes	the	amortization	of	operating	lease	vehicles	over	the	lease	term,	cost	of	goods	sold	associated	with	direct


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sales-type	leases	which	were	introduced	in	volume	in	the	third	quarter	of	2020,	as	well	as	warranty	expenses	related	to	leased	vehicles.	Cost	of	automotive
leasing	revenue	also	includes	vehicle	connectivity	costs	and	allocations	of	electricity	and	infrastructure	costs	related	to	our	Supercharger	network	for	vehicles
under	our	leasing	programs.
Cost	of	services	and	other	revenue	includes	costs	associated	with	providing	non-warranty	after-sales	services,	costs	to	acquire	and	certify	used	vehicles,
costs	for	retail	merchandise,	and	costs	to	provide	vehicle	insurance.	Cost	of	services	and	other	revenue	also	includes	direct	parts,	material	and	labor	costs	and
manufacturing	overhead	associated	with	the	sales	by	our	acquired	subsidiaries	to	third	party	customers.
2020	compared	to	2019
Cost	of	automotive	sales	revenue	increased	$3.76	billion,	or	24%,	in	the	year	ended	December	31,	2020	as	compared	to	the	year	ended	December	31,
2019
,	primarily	due	to	an	increase	of	129,268	Model	3	and	Model	Y	cash	deliveries.	Due	to	pricing	adjustments	we	made	to	our	vehicle	offerings	during	the
year	ended	December	31,	2019,	we	estimated	that	there	was	a	greater	likelihood	that	customers	would	exercise	their	buyback	options	and	if	customers	elect	to
exercise	the	buyback	option,	we	expect	to	be	able	to	subsequently	resell	the	returned	vehicles,	which	resulted	in	a	reduction	of	cost	of	automotive	sales	revenue
of	$451	million.	We	made	further	pricing	adjustments	that	resulted	in	a	similar	but	smaller	reduction	of	cost	of	automotive	sales	revenue	of	$42	million	during


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the	year	ended	December	31,	2020.	Additionally,	there	was	an	increase	to	cost	of	automotive	sales	revenue	from	idle	capacity	charges	of	$213	million	as	a
result	of	temporary	suspension	of	production	at	the	Fremont	Factory	and	Gigafactory	Nevada	during	the	first	half	of	2020.	These	factors	increasing	cost	of
automotive	sales	revenue	were	partially	offset	by	a	decrease	in	average	Model	3	costs	per	unit	due	to	lower	material,	manufacturing,	freight	and	duty	costs
from	localized	procurement	and	manufacturing	in	China	and	a	higher	sales	mix	of	lower	end	trims,	as	well	as	a	decrease	of	8,669	Model	S	and	Model	X	cash
deliveries	in	the	year	ended	December	31,	2020	compared	to	the	prior	year.
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Cost	of	automotive	leasing	revenue	
increased
	
$104
	
million
,	or	
23%
,	in	the	year	ended	
December	31,	2020
	
as	
compared	to	the	year	ended	
December	31,
2019
,	primarily	due	to	an	increase	in	cumulative	vehicles	under	our	direct	operating	lease	program	and	the	introduction	of	direct	sales-type	leasing	programs
which	we	began	offering	in	volume	during	the	third	quarter	of	2020	where	we	recognize	all	cost	of	revenue	associated	with	the	sales-type	lease	upon	delivery	to
the	customer.	These	increases	were	partially	offset	by	the	decreases	in	cost	of	automotive	lease	revenue	associated	with	our	resale	value	guarantee	leasing
programs	which	are	accounted	for	as	operating	leases	as	those	portfolios	
have	declined
.
Cost	of	services	and	other	revenue	decreased	$99	million,	or	4%,	in	the	year	ended	December	31,	2020	as	compared	to	the	year	ended	December	31,
2019
,	primarily	due	to	a	decrease	in	used	vehicle	cost	of	revenue	driven	by	a	reduction	in	non-Tesla	trade-ins,	partially	offset	by	increases	in	non-warranty
maintenance	services	as	our	fleet	continues	to	grow	and	an	increase	in	costs	of	retail	merchandise	as	our	sales	have	increased.
Gross	margin	for	total	automotive	increased	from	21%	to	26%	in	the	year	ended	December	31,	2020	as	compared	to	the	year	ended	December	31,	2019
,
primarily	due	to	an	improvement	of	Model	3	gross	margin	primarily	from	lower	material,	manufacturing,	freight	and	duty	costs	from	localized	procurement	and


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manufacturing	in	China,	partially	offset	by	a	decrease	in	the	average	selling	price	of	Model	3	due	to	a	higher	proportion	of	Model	3	Standard	Range	variants	in
our	sales	mix	compared	to	the	prior	year.	Additionally,	there	was	an	increase	of	$986	million	in	sales	of	regulatory	credits	and	a	positive	impact	from	Model	Y
deliveries	in	2020	as	Model	Y	gross	margin	was	higher	than	our	prior	year	total	automotive	gross	margin.	These	increases	were	partially	offset	by	idle	capacity
charges	of	$213	million	as	a	result	of	a	temporary	suspension	of	production	at	the	Fremont	Factory	and	Gigafactory	Nevada	during	the	first	half	of	2020.
Gross	margin	for	total	automotive	&	services	and	other	segment	increased	from	17%	to	22%	in	the	year	ended	December	31,	2020	as	compared	to	the
year	ended	December	31,	2019,	
primarily	due	to	the	automotive	gross	margin	impacts	discussed	above	and	a	lower	proportion	of	services	and	other,	which
operated	at	a	lower	gross	margin	than	our	automotive	business,	within	the	segment	in	the	year	ended	December	31,	2020.	Additionally,	there	was	an
improvement	in	our	non-warranty	maintenance	services	gross	margin	due	to	increased	operational	efficiencies	despite	additional	costs	from	ramping	service
centers	to	accommodate	a	larger	deployed	fleet	and	an	improvement	in	our	used	vehicle	sales	gross	margin.
Energy	Generation	and	Storage	Segment
Cost	of	energy	generation	and	storage	revenue	includes	direct	and	indirect	material	and	labor	costs,	warehouse	rent,	freight,	warranty	expense,	other


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overhead	costs	and	amortization	of	certain	acquired	intangible	assets.	Cost	of	energy	generation	and	storage	revenue	also	includes	charges	to	write	down	the
carrying	value	of	our	inventory	when	it	exceeds	its	estimated	net	realizable	value	and	to	provide	for	obsolete	and	on-hand	inventory	in	excess	of	forecasted
demand.	In	agreements	for	solar	energy	system	and	PPAs	where	we	are	the	lessor,	the	cost	of	revenue	is	primarily	comprised	of	depreciation	of	the	cost	of
leased	solar	energy	systems,	maintenance	costs	associated	with	those	systems	and	amortization	of	any	initial	direct	costs.
2020	compared	to	2019
Cost	of	energy	generation	and	storage	revenue	increased	by	$635	million,	or	47%,	in	the	year	ended	December	31,	2020	as	compared	to	the	year	ended
December	31,	2019
,	primarily	due	to	increases	in	deployments	of	Megapack,	higher	costs	from	temporary	manufacturing	underutilization	of	our	Solar	Roof
ramp,	increases	in	deployments	of	Powerwall	and	idle	capacity	charges	of	$20	million	as	a	result	of	temporary	suspension	of	production	at	Gigafactory	New
York	during	the	first	half	of	2020.	These	increases	were	partially	offset	by	a	decrease	in	deployments	of	Powerpack.
Gross	margin	for	energy	generation	and	storage	decreased	from	12%	to	1%	in	the	year	ended	December	31,	2020	as	compared	to	the	year	ended
December	31,	2019
	primarily	due	to	a	higher	proportion	of	Solar	Roof	in	our	overall	energy	business	which	operated	at	lower	gross	margins	as	a	result	of


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temporary	manufacturing	underutilization	during	product	ramp.	Additionally,	there	were	lower	gross	margins	in	our	solar	cash	and	loan	business	from	reduced
average	selling	prices	as	a	result	of	our	low	cost	solar	strategy,	partially	offset	by	lower	materials	and	manufacturing	costs.
Research	and	Development	Expense
	
	
	
Year	Ended	December	31,
	
	
2020	vs.	2019	Change
	
	
2019	vs.	2018	Change
	
(Dollars	in	millions)
	
2020
	
	
2019
	
	
2018
	
	
$
	
	
%
	
	
$
	
	
%
	
Research	and	development
	
$
1,491
	
	
$
1,343
	
	
$
1,460
	
	
$
148
	
	
	
11
%
	
$
(117
)
	
	
-8
%
As	a	percentage	of	revenues
	
	
5
%
	
	
5
%
	
	
7
%
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
Research	and	development	(“R&D”)	expenses	consist	primarily	of	personnel	costs	for	our	teams	in	engineering	and	research,	manufacturing	engineering
and	manufacturing	test	organizations,	prototyping	expense,	contract	and	professional	services	and	amortized	equipment	expense.
43


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R&D
	
expenses	
increased
	
$148
	
million
,	or	
11%
,	in	the	
year	ended	
December	31,	2020
	
as	
compared	to	the	
year	ended	
December	31,	2019
.	The	increase
was	primarily	due	to	a	$62	million	increase	in	expensed	materials
	as	we	continue	to	expand	our	product	roadmap
,	$61	million	increase	in	stock-based
compensation	expense	primarily	related	to	the	issuance	of	equity	awards	in	
fiscal	year	2020
	at	higher	grant	date	fair	values	due	to	our	increased	share	price,
$20	million	increase	in	facilities,	freight	and	depreciation	expenses	and	a	$20	million	increase	in	employee	and	labor	related	expenses.
R&D	expenses	as	a	percentage	of	revenue	decreased	from	5.5%	to	4.7%	in	the	year	ended	December	31,	2020	as	compared	to	the	year	ended
December	31,	2019.	The	decrease	is	primarily	an	increase	in	total	revenues	from	expanding	sales,	partially	offset	by	an	increase	in	our	R&D	expenses	as
detailed	above.
Selling,	General	and	Administrative	Expense
	
	
	
Year	Ended	December	31,
	
	
2020	vs.	2019	Change
	
	
2019	vs.	2018	Change
	
(Dollars	in	millions)
	
2020
	
	
2019
	
	
2018
	
	
$
	
	
%
	
	
$
	
	
%
	
Selling,	general	and	administrative
	
$
3,145
	
	
$
2,646
	
	
$
2,835
	
	
$
499
	
	
	
19
%
	
$
(189
)
	
	
-7
%


key: chroma:document
string_value:
$
(189
)
	
	
-7
%
As	a	percentage	of	revenues
	
	
10
%
	
	
11
%
	
	
13
%
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
Selling,	general	and	administrative	(“SG&A”)	expenses	generally	consist	of	personnel	and	facilities	costs	related	to	our	stores,	marketing,	sales,
executive,	finance,	human	resources,	information	technology	and	legal	organizations,	as	well	as	fees	for	professional	and	contract	services	and	litigation
settlements.
SG&A	expenses	increased	$499	million,	or	19%,	in	the	year	ended	December	31,	2020	as	compared	to	the	year	ended	December	31,	2019.	
The	increase
is	primarily	due	to	an	increase	of	$625	million	in	stock-based	compensation	expense,	of	which	$542	million	was	attributable	to	the	2018	CEO	Performance
Award.	We	recorded	stock-based	compensation	expense	of	$838	million	in	the	year	ended	December	31,	2020	for	the	2018	CEO	Performance	Award	compared
to	$296	million	in	the	prior	year.	Of	the	expense	recorded	in	fiscal	year	2020,	$232	million	was	due	to	cumulative	catch-up	expense	for	the	service	provided
from	the	grant	date	when	three	operational	milestones	under	such	award	were	considered	probable	of	being	met	and	the	remaining	unamortized	expense	of
$357	million	for	the	first	four	tranches	were	recognized	upon	vesting	as	the	first	four	market	capitalization	milestones	were	achieved	(see	Note	14,	
Equity
Incentive	Plans


key: chroma:document
string_value:
Equity
Incentive	Plans
,	to	the	consolidated	financial	statements	included	elsewhere	in	this	Annual	Report	on	Form	10-K).	The	remaining	stock-based	compensation
expense	increase	of	$83	million	attributable	to	other	directors	and	employees	is	primarily	related	to	the	issuance	of	equity	awards	in	fiscal	year	2020	at	higher
grant	date	fair	values	due	to	our	increased	share	price.	The	increase	in	stock-based	compensation	was	partially	offset	by	a	decrease	of	$90	million	in	customer
promotional	costs,	facilities-related	expenses	and	sales	and	marketing	activities.	Additionally,	there	was	a	reduction	to	operating	expenses	for	costs	previously
incurred	in	the	amount	of	$43	million	for	the	settlement	in	part	of	the	securities	litigation	relating	to	the	SolarCity	acquisition	(see	Note	16,	
Commitments	and
Contingencies—Legal	Proceedings—Securities	Litigation	Relating	to	the	SolarCity	Acquisition
,	to	the	consolidated	financial	statements	included	elsewhere	in
this	Annual	Report	on	Form	10-K).
SG&A	expenses	as	a	percentage	of	revenue	decreased	from	11%	to	10%	in	year	ended	December	31,	2020	as	compared	to	the	year	ended	December	31,
2019.	The	decrease	is	primarily	from	an	increase	in	total	revenues	from	expanding	sales,	partially	offset	by	an	increase	in	our	SG&A	expenses	as	detailed
above.
Restructuring	and	other
	
	
	
Year	Ended	December	31,
	
	
2020	vs.	2019	Change
	
	
2019	vs.	2018	Change
	
(Dollars	in	millions)
	
2020
	
	
2019
	
	
2018
	
	
$
	
	
%
	
	
$
	
	
%


key: chroma:document
string_value:
%
	
	
$
	
	
%
	
Restructuring	and	other
	
$
—
	
	
$
149
	
	
$
135
	
	
$
(149
)
	
-100%
	
	
$
14
	
	
10%
	
As	a	percentage	of	revenues
	
	
0
%
	
	
1
%
	
	
1
%
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
During	the	year	ended	December	31,	2019,	we	carried	out	certain	restructuring	actions	in	order	to	reduce	costs	and	improve	efficiency.					There	were
no	restructuring	actions	in	the	year	ended	December	31,	2020.
Interest	Expense
	
	
	
Year	Ended	December	31,
	
	
2020	vs.	2019	Change
	
	
2019	vs.	2018	Change
	
(Dollars	in	millions)
	
2020
	
	
2019
	
	
2018
	
	
$
	
	
%
	
	
$
	
	
%
	
Interest	expense
	
$
(748
)
	
$
(685
)
	
$
(663
)
	
$
(63
)
	
	
9
%
	
$
(22
)
	
	
3
%
As	a	percentage	of	revenues
	
	
2
%
	
	
3
%
	
	
3
%
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
44


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Interest	expense	
increased
	by	
$63
	
million
,	or	
9%
,	in	the	
year	ended	
December	31,	2020
	as	compared	to	the	
year	ended	
December	31,	2019
,	primarily
due	to	
$105	million	of	losses	on	extinguishment	of	debt	in	
fiscal	year	2020
	
from	early	conversions	on	
our	convertible	senior	notes
,	partially	offset	by	a	decrease
in	interest	expense	due	to	a	decrease	in	our	weighted	average	interest	rate	as	compared	to	the	prior	year	and	an	increase	of	$17	million	in	the	amount	of
interest	we	capitalized	from	the	consolidated	statements	of	operations	to	property,	plant	and	equipment	on	the	consolidated	balance	sheets.	Increased
capitalization	results	in	lower	interest	expense.	The	amount	of	interest	we	capitalize	is	driven	by	our	construction	in	progress	balance,	which	increased	year-
over-year	due	to	our	construction	and	expansion	of	multiple	factories.
Other	Income	(Expense),	Net
	
	
	
Year	Ended	December	31,
	
	
2020	vs.	2019	Change
	
2019	vs.	2018	Change
	
(Dollars	in	millions)
	
2020
	
	
2019
	
	
2018
	
	
$
	
	
%
	
$
	
	
%
	
Other	(expense)	income,	net
	
$
(122
)
	
$
45
	
	
$
22
	
	
$
(167
)
	
Not
meaningful
	
$
23
	
	
105%
	
As	a	percentage	of	revenues
	
	
0
%
	
	
0
%
	
	
0
%


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string_value:
Other	(expense)	income,	net,	consists	primarily	of	foreign	exchange	gains	and	losses	related	to	our	foreign	currency-denominated	monetary	assets	and
liabilities	and	changes	in	the	fair	values	of	our	fixed-for-floating	interest	rate	swaps.	We	expect	our	foreign	exchange	gains	and	losses	will	vary	depending	upon
movements	in	the	underlying	exchange	rates.
Other	(expense)	income,	net,	changed	unfavorably	by	$167	million		in	the	year	ended	December	31,	2020	as	compared	to	the	year	ended	December	31,
2019.	
The	unfavorable	change	was	primarily	due	to	fluctuations	in	foreign	currency	exchange	rates	such	as	the	U.S.	dollar	depreciating	greater	than	5%
against	the	euro	and	the	Chinese	yuan	in	2020	compared	to	an	appreciation	of	2%	and	1%	against	the	same	currencies	in	the	prior	year,	respectively.
Provision	for	Income	Taxes
	
	
	
Year	Ended	December	31,
	
	
2020	vs.	2019	Change
	
	
2019	vs.	2018	Change
	
(Dollars	in	millions)
	
2020
	
	
2019
	
	
2018
	
	
$
	
	
%
	
	
$
	
	
%
	
Provision	for	income	taxes
	
$
292
	
	
$
110
	
	
$
58
	
	
$
182
	
	
	
165
%
	
$
52
	
	
	
90
%
Effective	tax	rate
	
	
25
%
	
	
-17
%
	
	
-6
%


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string_value:
Our	provision	for	income	taxes	increased	by	$182	million,	or	165%,	in	the	year	ended	December	31,	2020	as	compared	to	the	year	ended	December	31,
2019.	
The	increase	was	primarily	due	to	the	substantial	increases	in	taxable	profits	in	our	foreign	jurisdictions	year-over-year.
Our	effective	tax	rate	increased	from	-17%	to	25%	in	the	year	ended	December	31,	2020	as	compared	to	the	prior	year,	primarily	due	to	substantial	pre-
tax	income	in	the	year	ended	December	31,	2020	as	compared	to	a	pre-tax	loss	for	the	year	ended	December	31,	2019.
Net	Income	(Loss)	Attributable	to	Noncontrolling	Interests	and	Redeemable	Noncontrolling	Interests
	
	
	
Year	Ended	December	31,
	
	
2020	vs.	2019	Change
	
	
2019	vs.	2018	Change
(Dollars	in	millions)
	
2020
	
	
2019
	
	
2018
	
	
$
	
	
%
	
	
$
	
	
%
Net	income	(loss)	attributable	to	noncontrolling	interests	and
			redeemable	noncontrolling	interests	in	subsidiaries
	
$
141
	
	
$
87
	
	
$
(87
)
	
$
54
	
	
62%
	
	
$
174
	
	
Not
meaningful
	
Our	net	income	(loss)	attributable	to	noncontrolling	interests	and	redeemable	noncontrolling	interests	was	related	to	financing	fund	arrangements.


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Net	income	(loss)	attributable	to	noncontrolling	interests	and	redeemable	noncontrolling	interests	increased	by	$54	million,	or	62%,	in	the	year	ended
December	31,	2020	as	compared	to	the	year	ended	December	31,	2019.	
The	increase	was	primarily	due	to	lower	activities	from	new	financing	fund
arrangements.
Liquidity	and	Capital	Resources
As	of	December	31,	2020,	we	had	$19.38	billion	of	cash	and	cash	equivalents.	Balances	held	in	foreign	currencies	had	a	U.S.	dollar	equivalent	of
$6.76	billion	and	consisted	primarily	of	euros,	Chinese	yuan	and	Canadian	dollars.
	
Our	sources	of	cash	are
45


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predominantly	from	our	deliveries	of	vehicles,	sales	and	installations	of	our	energy	storage	products	and	solar	energy	systems,	proceeds	from	debt	facilities,
proceeds	from	financing	funds	and	proceeds	from	equity	offerings.
Our	sources	of	liquidity	and	cash	flows	enable	us	to	fund	ongoing	operations,	research	and	development	projects	for	new	products	and	technologies
including	our	announced	proprietary	battery	cells,	ongoing	production	and	additional	manufacturing	ramps	at	existing	manufacturing	facilities	such	as	the
Fremont	Factory,	Gigafactory	Nevada,	Gigafactory	Shanghai	and	Gigafactory	New	York,	the	construction	of	Gigafactory	Berlin	and	Gigafactory	Texas,	and	the
continued	expansion	of	our	retail	and	service	locations,	body	shops,	Mobile	Service	fleet,	Supercharger	network	and	energy	product	installation	capabilities.
As	discussed	in	and	subject	to	the	considerations	referenced	in	Part	II,	Item	7,	
Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results
of	Operations—Management	Opportunities,	Challenges	and	Risks	and	2021	Outlook—Cash	Flow	and	Capital	Expenditure	Trends
	in	this	Annual	Report	on
Form	10-K,	
we	currently	expect	our	capital	expenditures	to	be	$4.50	to	$6.00	billion	in	2021	and	in	each	of	the	next	two	fiscal	years.
We	expect	that	the	cash	we	generate	from	our	core	operations	will	generally	be	sufficient	to	cover	our	future	capital	expenditures	and	to	pay	down	our
near-term	debt	obligations,	although	we	may	choose	to	seek	alternative	financing	sources.	For	example,	our	local	subsidiary	has	entered	into	credit	facilities	to
support	construction	and	production	at	Gigafactory	Shanghai.	See	
Note	12,


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Note	12,	
Debt
,
	to	the	consolidated	financial	statements	included	elsewhere	in	this	Annual
Report	on	Form	10-K.	As	always,	we	continually	evaluate	our	capital	expenditure	needs	and	may	decide	it	is	best	to	raise	additional	capital	to	fund	the	rapid
growth	of	our	business
.
In	January	2021,	we	updated	our	investment	policy	to	provide	us	with	more	flexibility	to	further	diversify	and	maximize	returns	on	our	cash	that	is	not
required	to	maintain	adequate	operating	liquidity.	As	part	of	the	policy,	we	may	invest	a	portion	of	such	cash	in	certain	specified	alternative	reserve	assets.
Thereafter,	we	invested	an	aggregate	$1.50	billion	in	bitcoin	under	this	policy.	Moreover,	we	expect	to	begin	accepting	bitcoin	as	a	form	of	payment	for	our
products	in	the	near	future,	subject	to	applicable	laws	and	initially	on	a	limited	basis,	which	we	may	or	may	not	liquidate	upon	receipt.	We	believe	our	bitcoin
holdings	are	highly	liquid.	
However,	digital	assets	may	be	subject	to	volatile	market	prices,	which	may	be	unfavorable	at	the	time	when	we	want	or	need	to
liquidate	them.
We	have	an	agreement	to	spend	or	incur	$5.0	billion	in	combined	capital,	operational	expenses,	costs	of	goods	sold	and	other	costs	in	the	State	of	New
York	during	the	10-year	period	beginning	April	30,	2018,	which	we	expect	to	meet	through	our	operations.	As	we	temporarily	suspended	most	of	our
manufacturing	operations	at	Gigafactory	New	York	pursuant	to	a	New	York	State	executive	order	issued	in	March	2020	as	a	result	of	the	COVID-19	pandemic,


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we	were	granted	a	one-year	deferral	of	our	obligation	to	be	compliant	as	of	April	30,	2020	with	our	applicable	targets	under	such	agreement.
We	expect	that	our	current	sources	of	liquidity	together	with	our	projection	of	cash	flows	from	operating	activities	will	provide	us	with	adequate	liquidity
over	at	least	the	next	12	months,	even	considering	the	expected	levels	of	capital	expenditures	in	the	current	and	next	two	fiscal	years.	A	large	portion	of	our
future	expenditures	is	to	fund	our	growth,	and	we	can	adjust	our	capital	and	operating	expenditures	by	operating	segment,	including	future	expansion	of	our
product	offerings,	retail	and	service	locations,	body	shops,	Mobile	Service	fleet,	and	Supercharger	network.	For	example,	if	our	near-term	manufacturing
operations	decrease	in	scale	or	ramp	more	slowly	than	expected,	including	due	to	global	economic	conditions	and	levels	of	consumer	outlook	and	spend
impacting	demand	in	the	worldwide	transportation,	automotive	and	energy	product	industries,	we	may	choose	to	correspondingly	slow	the	pace	of	our	capital
expenditures.	We	may	need	or	want	to	raise	additional	funds	in	the	future,	and	these	funds	may	not	be	available	to	us	when	we	need	or	want	them,	or	at	all.	If
we	cannot	raise	additional	funds	when	we	need	or	want	them,	our	operations	and	prospects	could	be	negatively	affected.
In	addition,	we	had	$2.63	billion	of	unused	committed	amounts	under	our	credit	facilities	and	financing	funds	as	of	December	31,	2020,	
some	of	which
are	subject	to	satisfying	specified	conditions	prior	to	draw-down	(such	as	pledging	to	our	lenders	sufficient	amounts	of	qualified	receivables,	inventories,	leased


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vehicles	and	our	interests	in	those	leases,	solar	energy	systems	and	the	associated	customer	contracts,	our	interests	in	financing	funds	or	various	other	assets;
and	contributing	or	selling	qualified	solar	energy	systems	and	the	associated	customer	contracts	or	qualified	leased	vehicles	and	our	interests	in	those	leases
into	the	financing	funds).	For	details	regarding	our	indebtedness	and	financing	funds
,	refer	to	Note	12,	
Debt
,	and	Note	17,	
Variable	Interest	Entity
Arrangements
	to	the	consolidated	financial	statements	included	elsewhere	in	this	Annual	Report	on	Form	10-K.
Summary	of	Cash	Flows
	
	
	
Year	Ended	December	31,
	
(Dollars	in	millions)
	
2020
	
	
2019
	
	
2018
	
Net	cash	provided	by	operating	activities
	
$
5,943
	
	
$
2,405
	
	
$
2,098
	
Net	cash	used	in	investing	activities
	
$
(3,132
)
	
$
(1,436
)
	
$
(2,337
)
Net	cash	provided	by	financing	activities
	
$
9,973
	
	
$
1,529
	
	
$
574
	
46


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Cash	Flows	from	Operating	Activities
Our	cash	flows	from	operating	activities	are	significantly	affected	by	our	cash	investments	to	support	the	growth	of	our	business	in	areas	such	as
research	and	development	and	selling,	general	and	administrative	and	working	capital,	especially	inventory,	which	includes	vehicles	in	transit.	Our	operating
cash	inflows	include	cash	from	vehicle	sales,	customer	lease	payments,	customer	deposits,	cash	from	sales	of	regulatory	credits	and	energy	generation	and
storage	products.	These	cash	inflows	are	offset	by	our	payments	to	suppliers	for	production	materials	and	parts	used	in	our	manufacturing	process,	operating
expenses,	operating	lease	payments	and	interest	payments	on	our	financings.
Net	cash	provided	by	operating	activities	increased	by	$3.54	billion	to	$5.94	billion	during	the	year	ended	December	31,	2020	from	$2.40	billion	during
the	year	ended	December	31,	2019.	This	increase	was	primarily	due	to	the	increase	in	net	income	excluding	non-cash	expenses	and	gains	of	$2.82	billion,	
the
decrease	in	net	operating	assets	and	liabilities	of	$533	million	and	$188	million	of	the	repayment	of	our	0.25%	Convertible	Senior	Notes	due	in	2019	during	the
three	months	ended	March	31,	2019	(which	represents	the	portion	of	the	repayment	that	was	classified	as	an	operating	activity,	as	this	represented	an	interest
payment	on	the	deeply-discounted	convertible	senior	notes).	The	decrease	in	our	net	operating	assets	and	liabilities	was	mainly	driven	by	a	larger	increase	in


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accounts	payable	and	accrued	liabilities	in	the	year	ended	December	31,	2020	as	compared	to	the	prior	year	from	ramp	up	in	production	at	the	Fremont
Factory	and	Gigafactory	Shanghai.	The	decrease	in	our	net	operating	assets	and	liabilities	was	partially	offset	by	a	smaller	increase	in	deferred	revenue
primarily	due	to	delivery	of	regulatory	credits	in	2020	under	a	previous	arrangement	where	we	had	received	payment	in	advance	as	of	December	31,	2019,	a
larger	increase	in	operating	lease	vehicles	as	Model	3	direct	leasing	was	introduced	in	the	second	quarter	of	2019	and	Model	Y	direct	leasing	was	introduced	in
the	third	quarter	of	2020,	and	a	larger	increase	in	accounts	receivables	of	government	rebates	already	passed	through	to	customers.
Cash	Flows	from	Investing	Activities
Cash	flows	from	investing	activities	and	their	variability	across	each	period	related	primarily	to	capital	expenditures,	which	were	$3.16	billion	
for	the
year	ended	December	31,
	2020,	
mainly	for	Model	Y	production	expansion	at	the	Fremont	Factory,	expansion	of	Gigafactory	Shanghai	and	construction	of
Gigafactory	Berlin	and	Gigafactory	Texas
,	and	$1.33	billion	for	the	year	ended	December	31,	2019,	
mainly	for	Gigafactory	Shanghai	construction,	Model	3
production	ramp	and	Model	Y	preparations
.	
The	increase	in	capital	expenditures	was	partially	offset	by	decreases	of	$32	million	in	business	combinations,	net
of	cash	acquired,	and	$30	million	of	design,	acquisition	and	installation	of	solar	energy	systems	when	compared	to	the	prior	year.	Additionally,	we	received


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$123	million	and	$46	million,	respectively,	of	government	grants	in	connection	with	us	making	certain	manufacturing	equipment	investments	at	Gigafactory
Shanghai	for	the	years	ended	December	31,	2020	and	2019,	respectively.
Cash	Flows	from	Financing	Activities
Cash	flows	from	financing	activities	during	the	year	ended	December	31,	2020	consisted	primarily	of	
$12.27	billion	from	issuance	of	common	stock	in
public	offerings	in	2020,	net	of	issuance	costs,	and	$417	million	of	proceeds	from	exercise	of	stock	options	and	other	stock	issuances.	These	cash	inflows	were
partially	offset	by	$1.99	billion	of	cash	repayments	upon	early	conversions	of	our	convertible	senior	notes,	$338	million	principal	repayments	of	our	finance
leases,	collateralized	lease	repayments	of	$240	million	and	$219	million	net	payments	to	financing	fund	investors.
	See	Note	12,	
Debt
,	and	Note	2,	
Summary	of
Significant	Accounting	Policies
,	to	the	consolidated	financial	statements	included	elsewhere	in	this	Annual	Report	on	Form	10-K	for	further	details	regarding
our	debt	obligations	and	collateralized	borrowings,	respectively.
Cash	flows	from	financing	activities	during	the	year	ended	December	31,	2019	consisted	primarily	of	
$1.82	billion	from	the	issuance	of	the	2.00%
Convertible	Senior	Notes	due	in	2024	(“2024	Notes”),	net	of	transaction	costs,	and	$848	million	from	the	issuance	of	common	stock,	net	of	underwriting


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discounts,	in	registered	public	offerings,	$736	million	of	net	borrowings	under	loan	agreements	entered	into	by	certain	Chinese	subsidiaries,	$394	million	of	net
borrowings	for	automotive	asset-backed	notes	and	$174	million	from	the	issuance	of	warrants	in	connection	with	the	offering	of	the	2024	Notes.	These	cash
inflows	were	partially	offset	by	a	$732	million	portion	of	the	repayment	of	our	0.25%	Convertible	Senior	Notes	due	in	2019	that	was	classified	as	financing
activity,	a	$566	million	repayment	of	our	1.625%	Convertible	Senior	Notes	due	in	2019,	a	purchase	of	convertible	note	hedges	of	$476	million	in	connection
with	the	offering	of	the	2024	Notes	and	collateralized	lease	repayments	of	$389	million.
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Contractual	Obligations
We	are	party	to	contractual	obligations	involving	commitments	to	make	payments	to	third	parties,	including	certain	debt	financing	arrangements	and
leases,	primarily	for	stores,	service	centers,	certain	manufacturing	facilities	and	certain	corporate	offices.	These	also	include,	as	part	of	our	normal	business
practices,	contracts	with	suppliers	for	purchases	of	certain	raw	materials,	components	and	services	to	facilitate	adequate	supply	of	these	materials	and	services
and	capacity	reservation	contracts.	The	following	table	sets	forth,	as	of	December	31,	2020,	certain	significant	obligations	that	will	affect	our	future	liquidity	(in
millions):
	
	
	
	
	
	
	
Year	Ended	December	31,
	
	
	
	
	
	
	
Total
	
	
2021
	
	
2022
	
	
2023
	
	
2024
	
	
2025
	
	
Thereafter
	
Operating	lease	obligations,
			including	imputed	interest
	
$
1,846
	
	
$
366
	
	
$
327
	
	
$
279
	
	
$
245
	
	
$
204
	
	
$
425
	
Finance	lease	obligations,
			including	imputed	interest
	
	
1,635
	
	
	
462
	
	
	
446
	
	
	
412
	
	
	
299
	
	
	
9
	
	
	
7
	
Purchase	obligations	(1)
	
	
18,318
	
	
	
10,483
	
	
	
2,743
	
	
	
2,280
	
	
	
1,877
	
	
	
865
	
	
	
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865
	
	
	
70
	
Debt,	including	scheduled
			interest	(2)
	
	
11,695
	
	
	
2,100
	
	
	
2,172
	
	
	
2,602
	
	
	
2,021
	
	
	
2,109
	
	
	
691
	
Total
	
$
33,494
	
	
$
13,411
	
	
$
5,688
	
	
$
5,573
	
	
$
4,442
	
	
$
3,187
	
	
$
1,193
	
(1)
These	amounts	represent	(i)	purchase	orders	of	$5.95	billion	issued	under	binding	and	enforceable	agreements	with	all	vendors	as	of	December	31,
2020	and	(ii)	$12.37	billion	in	other	estimable	purchase	obligations	pursuant	to	such	agreements,	primarily	relating	to	the	purchase	of	lithium-ion	cells
produced	by	Panasonic	at	Gigafactory	Nevada,	including	any	additional	amounts	we	may	have	to	pay	vendors	if	we	do	not	meet	certain	minimum
purchase	obligations.	In	cases	where	no	purchase	orders	were	outstanding	under	binding	and	enforceable	agreements	as	of	December	31,	2020,	we
have	included	estimated	amounts	based	on	our	best	estimates	and	assumptions	or	discussions	with	the	relevant	vendors	as	of	such	date	or,	where
applicable,	on	amounts	or	assumptions	included	in	such	agreements	for	purposes	of	discussion	or	reference.	In	certain	cases,	such	estimated	amounts
were	subject	to	contingent	events.	Furthermore,	these	amounts	do	not	include	future	payments	for	purchase	obligations	that	were	recorded	in	accounts


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payable	or	accrued	liabilities	as	of	December	31,	2020.
(2)
This	includes	non-recourse	debt	repayments,	including	scheduled	interest,	of	$5.16	billion.	Non-recourse	debt	refers	to	debt	that	is	recourse	to	only
assets	of	our	subsidiaries.	Short-term	scheduled	interest	payments	and	amortization	of	convertible	senior	note	conversion	features,	debt	discounts	and
deferred	financing	costs	for	the	year	ended	December	31,	2020	is	$342	million.	Long-term	scheduled	interest	payments	and	amortization	of	convertible
senior	note	conversion	features,	debt	discounts	and	deferred	financing	costs	for	the	years	thereafter	is	$1.13	billion.
The	table	above	excludes	unrecognized	tax	benefits	of	$353	million	because	if	recognized,	they	would	be	an	adjustment	to	our	deferred	tax	assets.
We	offer	resale	value	guarantees	or	similar	buyback	terms	to	certain	customers	who	purchase	and	finance	their	vehicles	through	one	of	our	specified
commercial	banking	partners	and	certain	leasing	partners	(refer	to	
Automotive	Sales	with	Resale	Value	Guarantee	or	a	Buyback	Option
	in	Note	2,	
Significant
Accounting	Policies
,	to	the	consolidated	financial	statements	included	elsewhere	in	this	Annual	Report	on	Form	10-K).	The	maximum	amount	we	could	be
required	to	pay	under	these	programs,	should	customers	exercise	their	resale	value	guarantees	or	buyback	options,	would	be	$1.84	billion	over	the	next	five
years,	of	which	$394	million	is	within	a	12-month	period	from	December	31,	2020.	We	have	not	included	this	in	the	table	above	as	it	is	unknown	how	many


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customers	will	exercise	their	options.	Additionally,	we	plan	to	resell	any	vehicles	which	are	returned	to	us	and	therefore,	the	actual	exposure	to	us	is	deemed	to
be	limited.
Off-Balance	Sheet	Arrangements
During	the	periods	presented,	we	did	not	have	relationships	with	unconsolidated	entities	or	financial	partnerships,	such	as	entities	often	referred	to	as
structured	finance	or	special	purpose	entities,	which	were	established	for	the	purpose	of	facilitating	off-balance	sheet	arrangements	or	other	contractually
narrow	or	limited	purposes.
Recent	Accounting	Pronouncements
See	Note	2,	
Summary	of	Significant	Accounting	Policies
,	to	the	consolidated	financial	statements	included	elsewhere	in	this	Annual	Report	on	Form	10-
K.
	
	
	
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ITEM	7A.	QUANTITATIVE	AND	QUALITATIVE	DISCLOSURES	ABOUT	MARKET	RISK
Foreign	Currency	Risk
We	transact	business	globally	in	multiple	currencies	and	hence	have	foreign	currency	risks	related	to	our	revenue,	costs	of	revenue,	operating	expenses
and	localized	subsidiary	debt	denominated	in	currencies	other	than	the	U.S.	dollar	(primarily	the	Chinese	yuan,	euro,	Canadian	dollar	and	British	pound	in
relation	to	our	current	year	operations).	In	general,	we	are	a	net	receiver	of	currencies	other	than	the	U.S.	dollar	for	our	foreign	subsidiaries.	Accordingly,
changes	in	exchange	rates	affect	our	revenue	and	other	operating	results	as	expressed	in	U.S.	dollars	as	we	do	not	typically	hedge	foreign	currency	risk.
We	have	also	experienced,	and	will	continue	to	experience,	fluctuations	in	our	net	income	(loss)	as	a	result	of	gains	(losses)	on	the	settlement	and	the	re-
measurement	of	monetary	assets	and	liabilities	denominated	in	currencies	that	are	not	the	local	currency	(primarily	consisting	of	our	intercompany	and	cash
and	cash	equivalents	balances).	For	the	year	ended	December	31,	2020,	we	recognized	a	net	foreign	currency	loss	of	$114	million	in	other	(expense)	income,
net,	with	our	largest	re-measurement	exposures	from	the	U.S.	dollar,	euro	and	Canadian	dollar	as	our	subsidiaries’	monetary	assets	and	liabilities	are
denominated	in	various	local	currencies.	
For	the	year	ended	December	31,	2019,	we	recognized	a	net	foreign	currency	gain	of	$48	million	in	other	(expense)
income
,	net,	with	our	largest	re-measurement	exposures	from	the


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U.S.	dollar,	British	pound	and	Canadian	dollar
.
We	considered	the	historical	trends	in	foreign	currency	exchange	rates	and	determined	that	it	is	reasonably	possible	that	adverse	changes	in	foreign
currency	exchange	rates	of	10%	for	all	currencies	could	be	experienced	in	the	near-term.	These	changes	were	applied	to	our	total	monetary	assets	and
liabilities	denominated	in	currencies	other	than	our	local	currencies	at	the	balance	sheet	date	to	compute	the	impact	these	changes	would	have	had	on	our	net
income	(loss)	before	income	taxes.	These	changes	would	have	resulted	in	a	benefit	of	$8	million	at	December	31,	2020	and	an	adverse	impact	of	$362	million	at
December	31,	2019	assuming	no	foreign	currency	hedging.
Interest	Rate	Risk
We	are	exposed	to	interest	rate	risk	on	our	borrowings	that	bear	interest	at	floating	rates.	Pursuant	to	our	risk	management	policies,	in	certain	cases,
we	utilize	derivative	instruments	to	manage	some	of	this	risk.	We	do	not	enter	into	derivative	instruments	for	trading	or	speculative	purposes.	A	hypothetical
10%	change	in	interest	rates	on	our	floating	rate	debt	would	have	increased	or	decreased	our	interest	expense	for	the	years	ended	December	31,	2020	and
2019	by	$4	million	and	$8	million,	respectively.
	
	
	
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ITEM	
8.	FINANCIAL	STATEME
N
TS	AND	SUPPLEMENTARY	DATA
	
Index	to	Consolidated	Financial	Statements
	
	
		
Page
Report	of	Independent	Registered	Public	Accounting	Firm
		
51
Consolidated	Balance	Sheets
		
54
Consolidated	Statements	of	Operations
		
55
Consolidated	Statements	of	Comprehensive	Income	(Loss)
		
56
Consolidated	Statements	of	Redeemable	Noncontrolling	Interests	and	Equity
		
57
Consolidated	Statements	of	Cash	Flows
		
58
Notes	to	Consolidated	Financial	Statements
		
59
	
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Report	of	Independent	Registered	Public	Accounting	Firm
	
To	the
	
Board	of	Directors	and	Stockholders	of	Tesla,	Inc.
	
Opinions	on	the	Financial	Statements	and	Internal	Control	over	Financial	Reporting
	
We	have	audited	the	accompanying	
consolidated	balance	sheets	of	Tesla,	Inc.	and	its	subsidiaries
	
(the	“Company”)	as	of	December	31,	2020	and	2019,
	
and	the
related	consolidated	
statements	of	operations,	of	comprehensive	income	(loss),	of	redeemable	noncontrolling	interests	and	equity	and	of	cash	flows	for	each	of
the	three	years	in	the	period	ended	December	31,	2020,	including	the	related	notes	(collectively	referred	to	as	the	“consolidated	financial	statements”).
	
We	also
have	audited	the	Company's	internal	control	over	financial	reporting	as	of	December	31,	2020,	based	on	criteria	established	in	
Internal	Control	-	Integrated
Framework
	
(2013)
	
issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission	(COSO).		
	
In	our	opinion,	the	consolidated
	
financial	statements	referred	to	above	present	fairly,	in	all	material	respects,	the	financial	position	of	the	Company	as	of
December	31,	2020	and	2019,	and	the	results	of	its	operations	and	its	cash	flows	for	each	of	the	three	years	in	the	period	ended	December	31,	2020	in
conformity	with	accounting	principles	generally	accepted	in	the	United	States	of	America.	
Also	in	our	opinion,	the	Company	maintained,	in	all	material	respects,
effective	internal	control	over	financial	reporting	as	of	December	31,	2020,	based	on	criteria	established	in	
Internal	Control	-	Integrated	Framework


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Internal	Control	-	Integrated	Framework
	
(2013)
issued	by	the	COSO.
Changes	in	Accounting	Principles
As	discussed	in	Note	2	to	the	consolidated	financial	statements,	the	Company	changed	the	manner	in	which	it	accounts	for	leases	in	2019	and	the	manner	in
which	it	accounts	for	revenue	from	contracts	with	customers	in	2018.
	
Basis	for	Opinions
	
The	Company's	management	is	responsible	for	these	
consolidated	financial	statements,	for	maintaining	effective	internal	control	over	financial	reporting,	and
for	its	assessment	of	the	effectiveness	of	internal	control	over	financial	reporting,	included	in	Management's	Report	on	Internal	Control	over	Financial
Reporting	appearing	under	Item	9A.	Our	responsibility	is	to	express	opinions	on	the	Company’s	consolidated	financial	
statements	and	on	the	Company's
internal	control	over	financial	reporting	based	on	our
	audits.	We	are	a	public	accounting	firm	registered	with	the	Public	Company	Accounting	Oversight	Board
(United	States)	(PCAOB)	and	are	required	to	be	independent	with	respect	to	the	Company	in	accordance	with	the	U.S.	federal	securities	laws	and	the	applicable
rules	and	regulations	of	the	Securities	and	Exchange	Commission	and	the	PCAOB.
	
We	conducted	our
	audits	i
n	accordance	with	the	standards	of	the	PCAOB.	
Those	standards	require	that	we	plan	and	perform	the	audits	to	obtain	reasonable
assurance	about	whether	the	consolidated	financial	
statements	are	free	of	material	misstatement,	whether	due	to	error	or	fraud,	and	whether	effective	internal
control	over	financial	reporting	was	maintained	in	all	material	respects.		
	
Our	audits	of	the


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Our	audits	of	the	
consolidated	financial	statements	included	performing	procedures	to	assess	the	risks	of	material	misstatement	of	the	consolidated	financial
statements,	whether	due	to	error	or	fraud,	and	performing	procedures	that	respond	to	those	risks.	Such	procedures	included	examining,	on	a	test	basis,
evidence	regarding	the	amounts	and	disclosures	in	the	consolidated	financial	statements.	Our	audits	also	included	evaluating	the	accounting	principles	used
and	significant	estimates	made	by	management,	as	well	as	evaluating	the	overall	presentation	of	the	consolidated	financial	
statements.	Our	audit	of	internal
control	over	financial	reporting	included	obtaining	an	understanding	of	internal	control	over	financial	reporting,	assessing	the	risk	that	a	material	weakness
exists,	and	testing	and	evaluating	the	design	and	operating	effectiveness	of	internal	control	based	on	the	assessed	risk.	Our	audits	also	included	performing
such	other	procedures	as	we	considered	necessary	in	the	circumstances.	We	believe	that	our	audits	provide	a	reasonable	basis	for	our	opinions.
	
Definition	and	Limitations	of	Internal	Control	over	Financial	Reporting
	
A	company’s	internal	control	over	financial	reporting	is	a	process	designed	to	provide	reasonable	assurance	regarding	the	reliability	of	financial	reporting	and
the	preparation	of	financial	statements	for	external	purposes	in	accordance	with	generally	accepted	accounting	principles.	A	company’s	internal	control	over
financial	reporting	includes	those	policies	and	procedures	that	(i)	pertain	to	the	maintenance	of	records	that,	in	reasonable	detail,	accurately	and	fairly	reflect
the	transactions	and	dispositions	of	the	assets	of	the	company;	(ii)	provide	reasonable	assurance	that	transactions	are	recorded	as	necessary	to	permit


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preparation	of	financial	statements	in	accordance	with	generally	accepted	accounting	principles,	and	that	receipts	and	expenditures	of	the	company	are	being
made	only	in	accordance	with	authorizations	of	management	and	directors	of	the	company;	and	(iii)	provide	reasonable	assurance	regarding	prevention	or
timely	detection	of	unauthorized	acquisition,	use,	or	disposition	of	the	company’s	assets	that	could	have	a	material	effect	on	the	financial	statements.
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Because	of	its	inherent	limitations,	internal	control	over	financial	reporting	may	not	prevent	or	detect	misstatements.	Also,	projections	of	any	evaluation	of
effectiveness	to	future	periods	are	subject	to	the	risk	that	controls	may	become	inadequate	because	of	changes	in	conditions,	or	that	the	degree	of	compliance
with	the	policies	or	procedures	may	deteriorate.
	
Critical	Audit	Matters
	
The	critical	audit	matters	communicated	below
	
are	matters
	
arising	from	the	current	period	audit	of	the	
consolidated	financial	statements	that	were
communicated	or	required	to	be	communicated	to	the	audit	committee	and	that	(i)	relate	to	accounts	or	disclosures	that	are	material	to	the	consolidated
financial	statements	and	(ii)	involved	our	especially	challenging,	subjective,	or	complex	judgments.	The	communication	of	critical	audit	matters	does	not	alter	in
any	way	our	opinion	on	the	consolidated	
financial	statements,	taken	as	a	whole,	and	we	are	not,	by	communicating	the	critical	audit	matters	below,	providing
separate	opinions	on	the	critical	audit	matters	or	on	the	accounts	or	disclosures	to	which	they	relate.
	
Automotive	Sales	To	Customers	With	a	Resale	Value	Guarantee	or	Buyback	Option
	
As	described	in	Note	2	to	the	consolidated	financial	statements,	the	sales	return	reserve	related	to	resale	value	guarantees	or	buyback	options	was	$703	million
as	of	December	31,	2020,	of	which	$202	million	was	short-term.	The	Company	offers	some	customers	resale	value	guarantees	or	buyback	options.	Under	these
programs,	the	Company	receives	full	payment	for	the	vehicle	sales	price	at	the	time	of	delivery	and	the	customer	has	the	option	of	selling	their	vehicle	back	to


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the	Company	during	the	guarantee	period	for	a	pre-determined	resale	value.	In	circumstances	where	management	does	not	believe	the	customer	has	a
significant	economic	incentive	to	exercise	the	resale	value	guarantee	or	buyback	option	provided	to	them	at	contract	inception,	the	Company	recognizes
revenue	when	control	transfers	upon	delivery	to	a	customer	as	a	sale	with	a	right	of	return.	In	circumstances	where	management	believes	the	customer	has	a
significant	economic	incentive	to	exercise	the	resale	value	guarantee	or	buyback	option	at	contract	inception,	the	Company	recognizes	the	transaction	as	an
operating	lease.	Management’s	determination	of	whether	there	is	a	significant	economic	incentive	includes	comparing	a	vehicle’s	estimated	market	value	at	the
time	the	option	is	exercisable	with	the	guaranteed	resale	value.	Sales	return	reserves	are	estimated	based	on	historical	experience	plus	consideration	for
expected	future	market	values.	On	a	quarterly	basis,	management	assesses	the	estimated	future	market	values	of	vehicles	under	these	programs,	taking	into
account	price	adjustments	on	vehicle	offerings	and	changes	in	market	conditions	subsequent	to	the	initial	sale	to	determine	the	need	for	changes	to	the
reserve.		
	
The	principal	considerations	for	our	determination	that	performing	procedures	relating	to	automotive	sales	to	customers	with	a	resale	value	guarantee	or
buyback	option	is	a	critical	audit	matter	are	the	significant	judgment	by	management	in	determining	the	sales	return	reserve	when	customers	do	not	have	a
significant	economic	incentive	to	exercise	their	option;	this	in	turn	led	to	a	high	degree	of	auditor	judgment,	subjectivity,	and	effort	in	performing	procedures
and	evaluating	audit	evidence	related	to	the	sales	return	reserve	when	customers	do	not	have	a	significant	economic	incentive.


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Addressing	the	matter	involved	performing	procedures	and	evaluating	audit	evidence	in	connection	with	forming	our	overall	opinion	on	the	consolidated
financial	statements.	These	procedures	included	testing	the	effectiveness	of	controls	relating	to	automotive	revenue	recognition	for	sales	to	customers	with	a
resale	value	guarantee	or	buyback	option	as	well	as	the	related	sales	return	reserve,	including	controls	over	management’s	estimate	of	expected	future	market
values	and	historical	experience.	These	procedures	also	included,	among	others,	testing	management’s	process	for	determining	whether	customers	have	a
significant	economic	incentive	to	exercise	their	put	rights	under	the	resale	value	guarantee	and	buyback	option	programs	and,	if	not,	the	related	sales	return
reserve.	This	included	evaluating	the	appropriateness	of	the	model	applied	and	the	reasonableness	of	significant	assumptions	related	to	historical	experience
and	the	estimated	expected	future	market	values	used	in	the	comparison	to	guaranteed	resale	amounts.	Evaluating	assumptions	related	to	historical	experience
and	estimated	expected	future	market	values	involved	evaluating	whether	the	assumptions	used	were	reasonable	considering	current	and	past	performance
and	consistency	with	evidence	obtained	in	other	areas	of	the	audit.	Procedures	were	performed	to	evaluate	the	reliability,	completeness	and	relevance	of
management’s	data	used	in	the	development	of	the	historical	experience	assumption.
	
Automotive	Warranty	Reserve
	
As	described	in	Note	2	to	the	consolidated	financial	statements,	total	accrued	warranty,	which	primarily	relates	to	the	automotive	segment,	was	$1,468	million
as	of	December	31,	2020.	The	Company	provides	a	manufacturer’s	warranty	on	all	new	and	used	Tesla	vehicles.	As	described	in	Note	2,	a	warranty	reserve	is


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accrued	for	these	products	sold,	which	includes	management’s	best	estimate	of	the	projected	costs	to	repair	or	replace	items	under	warranty,	including	recalls
when	identified.	These	estimates	are	based	on	actual	claims	incurred	to	date	and	an	estimate	of	the	nature,	frequency	and	costs	of	future	claims.		
	
52


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The	principal	considerations	for	our	determination	that	performing	procedures	relating	to	the	automotive	warranty	reserve	is	a	critical	audit	matter	are	the
significant	judgment	by	management	in	determining	the	warranty	reserve;	this	in	turn	led	to	
significant	auditor	judgment,	
subjectivity,	and	
effort	in	performing
procedures	to
	evaluate	the	estimate	of	the	nature,	frequency	and	costs	of	future	claims,	and	the	audit	effort	involved	the
	use	of	professionals	with	specialized
skill	and	knowledge.
		
Addressing	the	matter	involved	performing	procedures	and	evaluating	audit	evidence	in	connection	with	forming	our	overall	opinion	on	the	consolidated
financial	statements.	These	procedures	included	testing	the	effectiveness	of	controls	relating	to	management’s	estimate	of	the	automotive	warranty	reserve,
including	controls	over	management’s	estimate	of	the	nature,	frequency	and	costs	of	future	claims	as	well	as	the	completeness	and	accuracy	of	actual	claims
incurred	to	date.	These	procedures	also	included,	among	others,	testing	management’s	process	for	determining	the	automotive	warranty	reserve.	This	included
evaluating	the	appropriateness	of	the	model	applied	and	the	reasonableness	of	significant	assumptions	related	to	the	nature	and	frequency	of	future	claims	and
the	related	costs	to	repair	or	replace	items	under	warranty.	Evaluating	the	assumptions	related	to	the	nature	and	frequency	of	future	claims	and	the	related
costs	to	repair	or	replace	items	under	warranty	involved	evaluating	whether	the	assumptions	used	were	reasonable	considering	current	and	past	performance,
including	a	lookback	analysis	comparing	prior	period	forecasted	claims	to	actual	claims	incurred.	These	procedures	also	included	developing	an	independent


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estimate	of	a	portion	of	the	warranty	accrual,	comparing	the	independent	estimate	to	management’s	estimate	to	evaluate	the	reasonableness	of	the	estimate,
and	testing	the	completeness	and	accuracy	of	historical	vehicle	claims.	Procedures	were	performed	to	test	the	reliability,	completeness,	and	relevance	of
management’s	data	related	to	the	historical	claims	processed	and	that	such	claims	were	appropriately	used	by	management	in	the	estimation	of	future	claims.
Professionals	with	specialized	skill	and	knowledge	were	used	to	assist	in	evaluating	the	appropriateness	of	aspects	of	management’s	model	for	estimating	the
nature	and	frequency	of	future	claims,	and	testing	management’s	warranty	reserve	for	a	portion	of	future	warranty	claims.
	
	
/s/	PricewaterhouseCoopers	LLP
	
San	Jose,	California
February	8,	2021
	
We	have	served	as	the	Company’s	auditor	since	2005.
	
	
	
	
	
53


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Tesla,	Inc.
Consolidated	Balance	Sheets
(in	millions,	except	per	share	data)
	
	
	
December	31,
	
	
December	31,
	
	
	
2020
	
	
2019
	
Assets
	
	
	
	
	
	
	
	
Current	assets
	
	
	
	
	
	
	
	
Cash	and	cash	equivalents
	
$
19,384
	
	
$
6,268
	
Accounts	receivable,	net
	
	
1,886
	
	
	
1,324
	
Inventory
	
	
4,101
	
	
	
3,552
	
Prepaid	expenses	and	other	current	assets
	
	
1,346
	
	
	
959
	
Total	current	assets
	
	
26,717
	
	
	
12,103
	
Operating	lease	vehicles,	net
	
	
3,091
	
	
	
2,447
	
Solar	energy	systems,	net
	
	
5,979
	
	
	
6,138
	
Property,	plant	and	equipment,	net
	
	
12,747
	
	
	
10,396
	
Operating	lease	right-of-use	assets
	
	
1,558
	
	
	
1,218
	
Intangible	assets,	net
	
	
313
	
	
	
339
	
Goodwill
	
	
207
	
	
	
198
	
Other	non-current	assets
	
	
1,536
	
	
	
1,470
	
Total	assets
	
$
52,148
	
	
$
34,309
	
Liabilities
	
	
	
	
	
	
	
	
Current	liabilities
	
	
	
	
	
	
	
	
Accounts	payable
	
$
6,051
	
	
$
3,771


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6,051
	
	
$
3,771
	
Accrued	liabilities	and	other
	
	
3,855
	
	
	
3,222
	
Deferred	revenue
	
	
1,458
	
	
	
1,163
	
Customer	deposits
	
	
752
	
	
	
726
	
Current	portion	of	debt	and	finance	leases
	
	
2,132
	
	
	
1,785
	
Total	current	liabilities
	
	
14,248
	
	
	
10,667
	
Debt	and	finance	leases,	net	of	current	portion
	
	
9,556
	
	
	
11,634
	
Deferred	revenue,	net	of	current	portion
	
	
1,284
	
	
	
1,207
	
Other	long-term	liabilities
	
	
3,330
	
	
	
2,691
	
Total	liabilities
	
	
28,418
	
	
	
26,199
	
Commitments	and	contingencies	(Note	16)
	
	
	
	
	
	
	
	
Redeemable	noncontrolling	interests	in	subsidiaries
	
	
604
	
	
	
643
	
Convertible	senior	notes	(Note	12)
	
	
51
	
	
	
—
	
Equity
	
	
	
	
	
	
	
	
Stockholders'	equity
	
	
	
	
	
	
	
	
Preferred	stock;	$
0.001
	par	value;	
100
	shares	authorized;
			
no
	shares	issued	and	outstanding
	
	
—
	
	
	
—
	
Common	stock;	$
0.001
	par	value;	
2,000
	shares	authorized;	
960
	and
			
905
	shares	issued	and	outstanding	as	of	December	31,	2020	and	December	31,


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2019,	respectively	(1)
	
	
1
	
	
	
1
	
Additional	paid-in	capital	(1)
	
	
27,260
	
	
	
12,736
	
Accumulated	other	comprehensive	income	(loss)
	
	
363
	
	
	
(
36
)
Accumulated	deficit
	
	
(
5,399
)
	
	
(
6,083
)
Total	stockholders'	equity
	
	
22,225
	
	
	
6,618
	
Noncontrolling	interests	in	subsidiaries
	
	
850
	
	
	
849
	
Total	liabilities	and	equity
	
$
52,148
	
	
$
34,309
	
	
(1)
Prior	period	results	have	been	adjusted	to	reflect	the	
five
-for-one	stock	split	effected	in	the	form	of	a	stock	dividend	in	August	2020
.	See	Note	1,
Overview
,	for	details.
	
The	accompanying	notes	are	an	integral	part	of	these	consolidated	financial	statements.
54


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Tesla,	Inc.
	
Consolidated	Statements	of	Operations
(in	millions,	except	per	share	data)
	
	
	
Year	Ended	December	31,
	
	
	
2020
	
	
2019
	
	
2018
	
Revenues
	
	
	
	
	
	
	
	
	
	
	
	
Automotive	sales
	
$
26,184
	
	
$
19,952
	
	
$
17,632
	
Automotive	leasing
	
	
1,052
	
	
	
869
	
	
	
883
	
Total	automotive	revenues
	
	
27,236
	
	
	
20,821
	
	
	
18,515
	
Energy	generation	and	storage
	
	
1,994
	
	
	
1,531
	
	
	
1,555
	
Services	and	other
	
	
2,306
	
	
	
2,226
	
	
	
1,391
	
Total	revenues
	
	
31,536
	
	
	
24,578
	
	
	
21,461
	
Cost	of	revenues
	
	
	
	
	
	
	
	
	
	
	
	
Automotive	sales
	
	
19,696
	
	
	
15,939
	
	
	
13,686
	
Automotive	leasing
	
	
563
	
	
	
459
	
	
	
488
	
Total	automotive	cost	of	revenues
	
	
20,259
	
	
	
16,398
	
	
	
14,174
	
Energy	generation	and	storage
	
	
1,976
	
	
	
1,341
	
	
	
1,365
	
Services	and	other
	
	
2,671
	
	
	
2,770
	
	
	
1,880


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2,770
	
	
	
1,880
	
Total	cost	of	revenues
	
	
24,906
	
	
	
20,509
	
	
	
17,419
	
Gross	profit
	
	
6,630
	
	
	
4,069
	
	
	
4,042
	
Operating	expenses
	
	
	
	
	
	
	
	
	
	
	
	
Research	and	development
	
	
1,491
	
	
	
1,343
	
	
	
1,460
	
Selling,	general	and	administrative
	
	
3,145
	
	
	
2,646
	
	
	
2,835
	
Restructuring	and	other
	
	
—
	
	
	
149
	
	
	
135
	
Total	operating	expenses
	
	
4,636
	
	
	
4,138
	
	
	
4,430
	
Income	(loss)	from	operations
	
	
1,994
	
	
	
(
69
)
	
	
(
388
)
Interest	income
	
	
30
	
	
	
44
	
	
	
24
	
Interest	expense
	
	
(
748
)
	
	
(
685
)
	
	
(
663
)
Other	(expense)	income,	net
	
	
(
122
)
	
	
45
	
	
	
22
	
Income	(loss)	before	income	taxes
	
	
1,154
	
	
	
(
665
)
	
	
(
1,005
)
Provision	for	income	taxes
	
	
292
	
	
	
110
	
	
	
58
	
Net	income	(loss)
	
	
862
	
	
	
(
775
)
	
	
(
1,063
)


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775
)
	
	
(
1,063
)
Net	income	(loss)	attributable	to	noncontrolling	interests	and
			redeemable	noncontrolling	interests	in	subsidiaries
	
	
141
	
	
	
87
	
	
	
(
87
)
Net	income	(loss)	attributable	to	common	stockholders
	
$
721
	
	
$
(
862
)
	
$
(
976
)
	
	
	
	
	
	
	
	
	
	
	
	
	
Less:	Buy-out	of	noncontrolling	interest
	
	
31
	
	
	
8
	
	
	
—
	
Net	income	(loss)	used	in	computing	net
			income	(loss)	per	share	of	common	stock
	
$
690
	
	
$
(
870
)
	
$
(
976
)
Net	income	(loss)	per	share	of	common	stock	attributable
			to	common	stockholders	(1)
	
	
	
	
	
	
	
	
	
	
	
	
Basic
	
$
0.74
	
	
$
(
0.98
)
	
$
(
1.14
)
Diluted
	
$
0.64
	
	
$
(
0.98
)
	
$
(
1.14
)
Weighted	average	shares	used	in	computing	net
			income	(loss)	per	share	of	common	stock	(1)
	
	
	
	
	
	
	
	
	
	
	
	
Basic
	
	
933
	
	
	
887
	
	
	
853
	
Diluted
	
	
1,083
	
	
	
887
	
	
	
853
	
	
(1)
Prior	period	results	have	been	adjusted	to	reflect	the	
five


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five
-for-one	stock	split	effected	in	the	form	of	a	stock	dividend	in	August	2020
.	See	Note	1,
Overview
,	for	details.
	
The	accompanying	notes	are	an	integral	part	of	these	consolidated	financial	statements.
55


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Tesla,	Inc.
Consolidated	Statements	of	Comprehensive	Income	(Loss)
(in	millions)
	
	
	
Year	Ended	December	31,
	
	
	
2020
	
	
2019
	
	
2018
	
Net	income	(loss)
	
$
862
	
	
$
(
775
)
	
$
(
1,063
)
Other	comprehensive	income	(loss):
	
	
	
	
	
	
	
	
	
	
	
	
Foreign	currency	translation	adjustment
	
	
399
	
	
	
(
28
)
	
	
(
42
)
Comprehensive	income	(loss)
	
	
1,261
	
	
	
(
803
)
	
	
(
1,105
)
Less:	Comprehensive	income	(loss)	attributable	to
			noncontrolling	interests	and	redeemable
			noncontrolling	interests	in	subsidiaries
	
	
141
	
	
	
87
	
	
	
(
87
)
Comprehensive	income	(loss)	attributable	to	common	stockholders
	
$
1,120
	
	
$
(
890
)
	
$
(
1,018
)
	
The	accompanying	notes	are	an	integral	part	of	these	consolidated	financial	statements.
	
	
	
	
56


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Tesla,	Inc.
Consolidated	Statements	of	Redeemable	Noncontrolling	Interests	and	Equity
(in	millions,	except	per	share	data)
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
Accumulated
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
Redeemable
	
	
	
	
	
	
	
	
	
	
	
Additional
	
	
	
	
	
	
Other
	
	
Total
	
	
Noncontrolling
	
	
	
	
	
	
	
Noncontrolling
	
	
	
Common	Stock
	
	
Paid-In
	
	
Accumulated
	
	
Comprehensive
	
	
Stockholders'
	
	
Interests	in
	
	
Total
	
	
	
Interests
	
	
	
Shares
	
(1)
	
	
Amount
	
(1)
	
	
Capital
	
(1)
	
	
Deficit
	
	
Income	(Loss)
	
	
Equity
	
	
Subsidiaries
	
	
Equity
	
Balance	as	of	December	31,	2017
	
$
398
	
	
	
	
844
	
	
$
1
	
	
$
9,177
	
	
$
(
4,974
)
	
$
33
	
	
$
4,237
	
	
$
997
	
	
$
5,234
	
Adjustments	for	prior	periods	from	adopting	ASC	606
	
	
8
	
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
623
	
	
	
—
	
	
	
623


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—
	
	
	
623
	
	
	
(
89
)
	
	
534
	
Adjustments	for	prior	periods	from	adopting	Accounting	Standards
Update	No.	2017-05
	
	
—
	
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
9
	
	
	
—
	
	
	
9
	
	
	
—
	
	
	
9
	
Exercises	of	conversion	feature	of	convertible	senior	notes
	
	
—
	
	
	
	
1
	
	
	
0
	
	
	
0
	
	
	
—
	
	
	
—
	
	
	
0
	
	
	
—
	
	
	
0
	
Issuance	of	common	stock	for	equity	incentive	awards
	
	
—
	
	
	
	
18
	
	
	
0
	
	
	
296
	
	
	
—
	
	
	
—
	
	
	
296
	
	
	
—
	
	
	
296
	
Stock-based	compensation
	
	
—
	
	
	
	
—
	
	
	
—
	
	
	
775
	
	
	
—
	
	
	
—
	
	
	
775
	
	
	
—
	
	
	
775
	
Contributions	from	noncontrolling	interests
	
	
276
	
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
161
	
	
	
161
	
Distributions	to	noncontrolling	interests
	
	
(
61
)


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(
61
)
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
(
210
)
	
	
(
210
)
Other
	
	
(
3
)
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
—
	
Net	loss
	
	
(
62
)
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
(
976
)
	
	
—
	
	
	
(
976
)
	
	
(
25
)
	
	
(
1,001
)
Other	comprehensive	loss
	
	
—
	
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
(
41
)
	
	
(
41
)
	
	
—
	
	
	
(
41
)
Balance	as	of	December	31,	2018
	
$
556
	
	
	
	
863
	
	
$
1
	
	
$
10,248
	
	
$
(
5,318
)
	
$
(
8
)
	
$
4,923
	
	
$
834
	
	
$
5,757
	
Adjustments	for	prior	periods	from	adopting	ASC	842
	
	
—
	
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
97
	
	
	
—
	
	
	
97


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—
	
	
	
97
	
	
	
—
	
	
	
97
	
Conversion	feature	of	
2.00
%	Convertible	Senior	Notes	due	in	2024
("2024	Notes")
	
	
—
	
	
	
	
—
	
	
	
—
	
	
	
491
	
	
	
—
	
	
	
—
	
	
	
491
	
	
	
—
	
	
	
491
	
Purchase	of	convertible	note	hedges
	
	
—
	
	
	
	
—
	
	
	
—
	
	
	
(
476
)
	
	
—
	
	
	
—
	
	
	
(
476
)
	
	
—
	
	
	
(
476
)
Sales	of	warrants
	
	
—
	
	
	
	
—
	
	
	
—
	
	
	
174
	
	
	
—
	
	
	
—
	
	
	
174
	
	
	
—
	
	
	
174
	
Issuance	of	common	stock	for	equity	incentive	awards	and
acquisitions,	net	of	transaction	costs
	
	
—
	
	
	
	
24
	
	
	
0
	
	
	
482
	
	
	
—
	
	
	
—
	
	
	
482
	
	
	
—
	
	
	
482
	
Issuance	of	common	stock	in	May	2019	public	offering	at	$
48.60
	per
share	(1),	net	of
			issuance	costs	of	$
15
	
	
—
	
	
	
	
18
	
	
	
0
	
	
	
848
	
	
	
—
	
	
	
—


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—
	
	
	
—
	
	
	
848
	
	
	
—
	
	
	
848
	
Stock-based	compensation
	
	
—
	
	
	
	
—
	
	
	
—
	
	
	
973
	
	
	
—
	
	
	
—
	
	
	
973
	
	
	
—
	
	
	
973
	
Contributions	from	noncontrolling	interests
	
	
105
	
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
174
	
	
	
174
	
Distributions	to	noncontrolling	interests
	
	
(
65
)
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
(
198
)
	
	
(
198
)
Other
	
	
(
1
)
	
	
	
—
	
	
	
—
	
	
	
(
4
)
	
	
—
	
	
	
—
	
	
	
(
4
)
	
	
—
	
	
	
(
4
)
Net	income	(loss)
	
	
48
	
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
(
862
)
	
	
—
	
	
	
(
862
)
	
	
39
	
	
	
(
823
)
Other	comprehensive	loss
	
	
—
	
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
—


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string_value:
—
	
	
	
—
	
	
	
(
28
)
	
	
(
28
)
	
	
—
	
	
	
(
28
)
Balance	as	of	December	31,	2019
	
$
643
	
	
	
	
905
	
	
$
1
	
	
$
12,736
	
	
$
(
6,083
)
	
$
(
36
)
	
$
6,618
	
	
$
849
	
	
$
7,467
	
Adjustments	for	prior	periods	from	adopting	ASU	2016-13
	
	
	
	
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
(
37
)
	
	
—
	
	
	
(
37
)
	
	
—
	
	
	
(
37
)
Reclassification	between	equity	and	mezzanine	equity	for	convertible
senior	notes
	
	
—
	
	
	
	
—
	
	
	
—
	
	
	
(
51
)
	
	
—
	
	
	
—
	
	
	
(
51
)
	
	
—
	
	
	
(
51
)
Exercises	of	conversion	feature	of	convertible	senior	notes
	
	
—
	
	
	
	
2
	
	
	
0
	
	
	
59
	
	
	
—
	
	
	
—
	
	
	
59
	
	
	
—
	
	
	
59
	
Issuance	of	common	stock	for	equity	incentive	awards
	
	
—
	
	
	
	
19
	
	
	
0
	
	
	
417
	
	
	
—


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417
	
	
	
—
	
	
	
—
	
	
	
417
	
	
	
—
	
	
	
417
	
Issuance	of	common	stock	in	public	offerings,	net	of
			issuance	costs	of	$68	(1)
	
	
—
	
	
	
	
34
	
	
	
0
	
	
	
12,269
	
	
	
—
	
	
	
—
	
	
	
12,269
	
	
	
—
	
	
	
12,269
	
Stock-based	compensation
	
	
—
	
	
	
	
—
	
	
	
—
	
	
	
1,861
	
	
	
—
	
	
	
—
	
	
	
1,861
	
	
	
—
	
	
	
1,861
	
Contributions	from	noncontrolling	interests
	
	
7
	
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
17
	
	
	
17
	
Distributions	to	noncontrolling	interests
	
	
(
67
)
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
(
132
)
	
	
(
132
)
Buy-outs	of	noncontrolling	interests
	
	
(
4
)
	
	
	
—
	
	
	
—
	
	
	
(
31
)
	
	
—
	
	
	
—
	
	
	
(
31
)
	
	
—
	
	
	
(
31
)


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string_value:
—
	
	
	
(
31
)
Net	income
	
	
25
	
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
721
	
	
	
—
	
	
	
721
	
	
	
116
	
	
	
837
	
Other	comprehensive	income
	
	
—
	
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
399
	
	
	
399
	
	
	
—
	
	
	
399
	
Balance	as	of	December	31,	2020
	
$
604
	
	
	
	
960
	
	
$
1
	
	
$
27,260
	
	
$
(
5,399
)
	
$
363
	
	
$
22,225
	
	
$
850
	
	
$
23,075
	
(1)
Prior	period	results	have	been	adjusted	to	reflect	the	
five
-for-one	stock	split	effected	in	the	form	of	a	stock	dividend	in	August	2020
.	See	Note	1,
Overview
,	for	details	regarding	stock	split	and	public	offerings.
The	accompanying	notes	are	an	integral	part	of	these	consolidated	financial	statements.
	
57


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Tesla,	Inc.
Consolidated	Statements	of	Cash	Flows
(in	millions)
	
	
	
Year	Ended	December	31,
	
	
	
2020
	
	
2019
	
	
2018
	
Cash	Flows	from	Operating	Activities
	
	
	
	
	
	
	
	
	
	
	
	
Net	income	(loss)
	
$
862
	
	
$
(
775
)
	
$
(
1,063
)
Adjustments	to	reconcile	net	income	(loss)	to	net	cash	provided	by	operating	activities:
	
	
	
	
	
	
	
	
	
	
	
	
Depreciation,	amortization	and	impairment
	
	
2,322
	
	
	
2,154
	
	
	
1,901
	
Stock-based	compensation
	
	
1,734
	
	
	
898
	
	
	
749
	
Amortization	of	debt	discounts	and	issuance	costs
	
	
180
	
	
	
188
	
	
	
159
	
Inventory	and	purchase	commitments	write-downs
	
	
202
	
	
	
193
	
	
	
85
	
Loss	on	disposals	of	fixed	assets
	
	
117
	
	
	
146
	
	
	
162
	
Foreign	currency	transaction	net	loss	(gain)
	
	
114
	
	
	
(
48
)
	
	
(
2
)
Non-cash	interest	and	other	operating	activities
	
	
228
	
	
	
186
	
	
	
49
	
Operating	cash	flow	related	to	repayment	of	discounted	convertible	senior	notes
	
	
—
	
	
	
(
188
)
	
	
—


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(
188
)
	
	
—
	
Changes	in	operating	assets	and	liabilities,	net	of	effect	of	business	combinations:
	
	
	
	
	
	
	
	
	
	
	
	
Accounts	receivable
	
	
(
652
)
	
	
(
367
)
	
	
(
497
)
Inventory
	
	
(
422
)
	
	
(
429
)
	
	
(
1,023
)
Operating	lease	vehicles
	
	
(
1,072
)
	
	
(
764
)
	
	
(
215
)
Prepaid	expenses	and	other	current	assets
	
	
(
251
)
	
	
(
288
)
	
	
(
82
)
Other	non-current	assets
	
	
(
344
)
	
	
115
	
	
	
(
207
)
Accounts	payable	and	accrued	liabilities
	
	
2,102
	
	
	
646
	
	
	
1,797
	
Deferred	revenue
	
	
321
	
	
	
801
	
	
	
406
	
Customer	deposits
	
	
7
	
	
	
(
58
)
	
	
(
96
)
Other	long-term	liabilities
	
	
495
	
	
	
(
5
)
	
	
(
25
)
Net	cash	provided	by	operating	activities
	
	
5,943
	
	
	
2,405
	
	
	
2,098
	
Cash	Flows	from	Investing	Activities
	
	
	
	
	
	
	
	
	
	
	
	
Purchases	of	property	and	equipment	excluding	finance	leases,	net	of	sales
	
	
(
3,157
)
	
	
(
1,327
)
	
	
(


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(
1,327
)
	
	
(
2,101
)
Purchases	of	solar	energy	systems,	net	of	sales
	
	
(
75
)
	
	
(
105
)
	
	
(
218
)
Receipt	of	government	grants
	
	
123
	
	
	
46
	
	
	
—
	
Purchase	of	intangible	assets
	
	
(
10
)
	
	
(
5
)
	
	
—
	
Business	combinations,	net	of	cash	acquired
	
	
(
13
)
	
	
(
45
)
	
	
(
18
)
Net	cash	used	in	investing	activities
	
	
(
3,132
)
	
	
(
1,436
)
	
	
(
2,337
)
Cash	Flows	from	Financing	Activities
	
	
	
	
	
	
	
	
	
	
	
	
Proceeds	from	issuances	of	common	stock	in	public	offerings,	net	of	issuance	costs
	
	
12,269
	
	
	
848
	
	
	
—
	
Proceeds	from	issuances	of	convertible	and	other	debt
	
	
9,713
	
	
	
10,669
	
	
	
6,176
	
Repayments	of	convertible	and	other	debt
	
	
(
11,623
)
	
	
(
9,161
)
	
	
(
5,247
)
Repayments	of	borrowings	issued	to	related	parties
	
	
—
	
	
	
—
	
	
	
(
100
)
Collateralized	lease	repayments
	
	
(
240
)
	
	
(
389
)
	
	
(
559
)
Proceeds	from	exercises	of	stock	options	and	other	stock	issuances
	
	
417


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string_value:
417
	
	
	
263
	
	
	
296
	
Principal	payments	on	finance	leases
	
	
(
338
)
	
	
(
321
)
	
	
(
181
)
Debt	issuance	costs
	
	
(
6
)
	
	
(
37
)
	
	
(
15
)
Purchase	of	convertible	note	hedges
	
	
—
	
	
	
(
476
)
	
	
—
	
Proceeds	from	issuance	of	warrants
	
	
—
	
	
	
174
	
	
	
—
	
Proceeds	from	investments	by	noncontrolling	interests	in	subsidiaries
	
	
24
	
	
	
279
	
	
	
437
	
Distributions	paid	to	noncontrolling	interests	in	subsidiaries
	
	
(
208
)
	
	
(
311
)
	
	
(
227
)
Payments	for	buy-outs	of	noncontrolling	interests	in	subsidiaries
	
	
(
35
)
	
	
(
9
)
	
	
(
6
)
Net	cash	provided	by	financing	activities
	
	
9,973
	
	
	
1,529
	
	
	
574
	
Effect	of	exchange	rate	changes	on	cash	and	cash	equivalents	and	restricted	cash
	
	
334
	
	
	
8
	
	
	
(
23
)
Net	increase	in	cash	and	cash	equivalents	and	restricted	cash
	
	
13,118
	
	
	
2,506
	
	
	
312
	
Cash	and	cash	equivalents	and	restricted	cash,	beginning	of	period
	
	
6,783
	
	
	
4,277
	
	
	
3,965


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4,277
	
	
	
3,965
	
Cash	and	cash	equivalents	and	restricted	cash,	end	of	period
	
$
19,901
	
	
$
6,783
	
	
$
4,277
	
Supplemental	Non-Cash	Investing	and	Financing	Activities
	
	
	
	
	
	
	
	
	
	
	
	
Equity	issued	in	connection	with	business	combination
	
$
—
	
	
$
207
	
	
$
—
	
Acquisitions	of	property	and	equipment	included	in	liabilities
	
$
1,088
	
	
$
562
	
	
$
249
	
Estimated	fair	value	of	facilities	under	build-to-suit	leases
	
$
—
	
	
$
—
	
	
$
94
	
Supplemental	Disclosures
	
	
	
	
	
	
	
	
	
	
	
	
Cash	paid	during	the	period	for	interest,	net	of	amounts	capitalized
	
$
444
	
	
$
455
	
	
$
381
	
Cash	paid	during	the	period	for	taxes,	net	of	refunds
	
$
115
	
	
$
54
	
	
$
35
	
	
The	accompanying	notes	are	an	integral	part	of	these	consolidated	financial	statements.
	
	
	
58


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Tesla,	Inc.
Notes	to	Consolidated	Financial	Statements
	
Note	1	–	Overview
Tesla,	Inc.	(“Tesla”,	the	“Company”,	“we”,	“us”	or	“our”)	was	incorporated	in	the	State	of	Delaware	on	July	1,	2003.	We	design,	develop,	manufacture
and	sell	high-performance	fully	electric	vehicles	and	design,	manufacture,	install	and	sell	solar	energy	generation	and	energy	storage	products.	Our	Chief
Executive	Officer,	as	the	chief	operating	decision	maker	(“CODM”),	organizes	our	company,	manages	resource	allocations	and	measures	performance	among
two
	operating	and	reportable	segments:	(i)	automotive	and	(ii)	energy	generation	and	storage.
As	of	and	following	December	31,	2020,	there	has	continued	to	be	widespread	impact	from	the	coronavirus	disease	(“COVID-19”)	pandemic.	In	2020,	we
temporarily	suspended	operations	at	each	of	our	manufacturing	facilities	worldwide	for	a	part	of	the	first	half	of	the	year.	Some	of	our	suppliers	and	partners
also	experienced	temporary	suspensions	before	resuming,	including	Panasonic,	which	manufactures	battery	cells	for	our	products	at	our	Gigafactory	Nevada.
We	also	instituted	temporary	employee	furloughs	and	compensation	reductions	while	our	U.S.	operations	were	scaled	back.	Finally,	
reduced	operations	or
closures	at	motor	vehicle	departments,	vehicle	auction	houses	and	municipal	and	utility	company	inspectors	resulted	in	challenges	in	or	postponements	for	our
new	vehicle	deliveries,	used	vehicle	sales,	and	energy	product	deployments.
	By	the	second	half	of	2020,	however,	we	resumed	operations	at	all	of	our


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manufacturing	facilities	and	have	continued	to	increase	our	output	and	add	additional	capacity	and	work	with	each	of	our	suppliers	and	government	agencies
on	meeting,	ramping	and	sustaining	our	production.	On	the	other	hand,	certain	government	regulations	and	shifting	social	behaviors	have	continued	to	limit	or
close	non-essential	transportation,	government	functions,	business	activities	and	person-to-person	interactions.	In	some	cases,	the	relaxation	of	such	trends	has
recently	been	followed	by	actual	or	contemplated	returns	to	stringent	restrictions	on	gatherings	or	commerce.	We	cannot	predict	the	duration	or	direction	of
such	trends,	which	have	also	adversely	affected	and	may	in	the	future	affect	our	operations.
On	February	19,	2020,	we	completed	a	public	offering	of	our	common	stock	and	issued	a	total	of	
15.2
	million	shares	(
as	adjusted	to	give	effect	to	the
Stock	Split,	as	described	in	the	paragraph	below)
,
	for	total	cash	proceeds	of	$
2.31
	billion,	net	of	underwriting	discounts	and	offering	costs	of	$
28
	million.
On	August	10,	2020,	our	Board	of	Directors	declared	a	
five
-for-one	split	of	the	Company’s	common	stock	effected	in	the	form	of	a	stock	dividend	(the
“Stock	Split”).	Each	stockholder	of	record	on	August	21,	2020	received	a	dividend	of	four	additional	shares	of	common	stock	for	each	then-held	share,
distributed	after	close	of	trading	on	August	28,	2020.	All	share	and	per	share	amounts	presented	herein	have	been	retroactively	adjusted	to	reflect	the	impact
of	the	Stock	Split.
On	September	1,	2020,	we	entered	into	an	Equity	Distribution	Agreement	with	certain	sales	agents	to	sell	$


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5.00
	billion	in	shares	of	our	common	stock
from	time	to	time	through	an	“at-the-market”	offering	program.	Such	sales	were	completed	by	September	4,	2020	and	settled	by	September	9,	2020,	with	the
sale	of	
11,141,562
	shares	of	common	stock	resulting	in	gross	proceeds	of	$5.00	billion	and	net	proceeds	of	$
4.97
	billion,	net	of	sales	agents’	commissions	of	$
25
million	and	other	offering	costs	of	$
1
	million.
On	December	8,	2020,	we	entered	into	a	separate	Equity	Distribution	Agreement	with	certain	sales	agents	to	sell	$
5.00
	billion	in	shares	of	our	common
stock	from	time	to	time	through	an	“at-the-market”	offering	program.	Such	sales	were	completed	by	December	9,	2020	and	settled	by	December	11,	2020,	with
the	sale	of	
7,915,589
	shares	of	common	stock	resulting	in	gross	proceeds	of	$5.00	billion	and	net	proceeds	of	$
4.99
	billion,	net	of	sales	agents’	commissions	of
$
13
	million	and	other	offering	costs	of	$
1
	million.
	
59


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Note	2	–	Summary	of	Significant	Accounting	Policies
Principles	of	Consolidation
The	accompanying	consolidated	financial	statements	have	been	prepared	in	conformity	with	U.S.	generally	accepted	accounting	principles	(“GAAP”)	and
reflect	our	accounts	and	operations	and	those	of	our	subsidiaries	in	which	we	have	a	controlling	financial	interest.	In	accordance	with	the	provisions	of
Accounting	Standards	Codification	(“ASC”)	810,	Consolidation,	we	consolidate	any	variable	interest	entity	(“VIE”)	of	which	we	are	the	primary	beneficiary.	We
form	VIEs	with	financing	fund	investors	in	the	ordinary	course	of	business	in	order	to	facilitate	the	funding	and	monetization	of	certain	attributes	associated
with	solar	energy	systems	and	leases	under	our	direct	vehicle	leasing	programs.	The	typical	condition	for	a	controlling	financial	interest	ownership	is	holding	a
majority	of	the	voting	interests	of	an	entity;	however,	a	controlling	financial	interest	may	also	exist	in	entities,	such	as	VIEs,	through	arrangements	that	do	not
involve	controlling	voting	interests.	ASC	810	requires	a	variable	interest	holder	to	consolidate	a	VIE	if	that	party	has	the	power	to	direct	the	activities	of	the	VIE
that	most	significantly	impact	the	VIE’s	economic	performance	and	the	obligation	to	absorb	losses	of	the	VIE	that	could	potentially	be	significant	to	the	VIE	or
the	right	to	receive	benefits	from	the	VIE	that	could	potentially	be	significant	to	the	VIE.	We	do	not	consolidate	a	VIE	in	which	we	have	a	majority	ownership
interest	when	we	are	not	considered	the	primary	beneficiary.	We	have	determined	that	we	are	the	primary	beneficiary	of	all	the	VIEs	(see	Note	17,	
Variable


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Variable
Interest	Entity	Arrangements
).	We	evaluate	our	relationships	with	all	the	VIEs	on	an	ongoing	basis	to	ensure	that	we	continue	to	be	the	primary	beneficiary.	All
intercompany	transactions	and	balances	have	been	eliminated	upon	consolidation.
Use	of	Estimates
The	preparation	of	financial	statements	in	conformity	with	U.S.	generally	accepted	accounting	principles	(“GAAP”)	requires	management	to	make	estimates
and	assumptions	that	affect	the	reported	amounts	of	assets,	liabilities,	revenues,	costs	and	expenses	and	related	disclosures	in	the	accompanying	notes.
Due	to	the	COVID-19	pandemic,	there	has	been	uncertainty	and	disruption	in	the	global	economy	and	financial	markets.	The	estimates	used	for,	but	not
limited	to,	determining	significant	economic	incentive	for	resale	value	guarantee	arrangements,	sales	return	reserves,	the	collectability	of	accounts	receivable,
inventory	valuation,	fair	value	of	long-lived	assets,	goodwill,	fair	value	of	financial	instruments,	fair	value	and	residual	value	of	operating	lease	vehicles	and	solar
energy	systems	subject	to	leases	could	be	impacted.	We	have	assessed	the	impact	and	are	not	aware	of	any	specific	events	or	circumstances	that	required	an
update	to	our	estimates	and	assumptions	or	materially	affected	the	carrying	value	of	our	assets	or	liabilities	as	of	the	date	of	issuance	of	this	Annual	Report	on
Form	10-K.	These	estimates	may	change	as	new	events	occur	and	additional	information	is	obtained.	Actual	results	could	differ	materially	from	these	estimates
under	different	assumptions	or	conditions.
Reclassifications
Certain	prior	period	balances	have	been	reclassified	to	conform	to	the	current	period	presentation	in	the	consolidated	financial	statements	and	the


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accompanying	notes.	Restricted	cash	and	MyPower	customer	notes	receivable	have	been	reclassified	to	other	assets	and	resale	value	guarantees	has	been
reclassified	to	other	liabilities.
Revenue	
Recognition
	
Adoption	of	ASC	606	revenue	standard
On	January	1,	2018,	we	adopted	ASC	606,	
Revenue	from	Contracts	with	Customers
,	using	the	modified	retrospective	method.
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Revenue	by	source
The	following	table	disaggregates	our	revenue	by	major	source	(in	millions):
	
	
	
Year	Ended	December	31,
	
	
	
2020
	
	
2019
	
	
2018
	
Automotive	sales	without	resale	value	guarantee
	
$
24,053
	
	
$
19,212
	
	
$
15,810
	
Automotive	sales	with	resale	value	guarantee	(1)
	
	
551
	
	
	
146
	
	
	
1,403
	
Automotive	regulatory	credits
	
	
1,580
	
	
	
594
	
	
	
419
	
Energy	generation	and	storage	sales
	
	
1,477
	
	
	
1,000
	
	
	
1,056
	
Services	and	other
	
	
2,306
	
	
	
2,226
	
	
	
1,391
	
Total	revenues	from	sales	and	services
	
	
29,967
	
	
	
23,178
	
	
	
20,079
	
Automotive	leasing
	
	
1,052
	
	
	
869
	
	
	
883
	
Energy	generation	and	storage	leasing
	
	
517
	
	
	
531
	
	
	
499
	
Total	revenues
	
$
31,536
	
	
$
24,578
	
	
$
21,461
	
	
	
(1)
Due	to	pricing	adjustments	we	made	to	our	vehicle	offerings	during	2020	and	2019,	we	estimated	that	there	was	a	greater	likelihood	that
customers	would	exercise	their	buyback	options	and	adjusted	our	sales	return	reserve	on	vehicles	previously	sold	under	our	buyback	options


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program,	which	resulted	in	a	reduction	of	automotive	sales	with	resale	value	guarantee.	For	the	years	ended	December	31,	2020	and	2019,	price
adjustments	resulted	in	a	reduction	of	automotive	sales	with	resale	value	guarantee	by	$
72
	million	and	$
555
	million,	respectively.	The	amounts
presented	represent	automotive	sales	with	resale	value	guarantee	net	of	such	pricing	adjustments’	impact.
	
Automotive	Segment
Automotive	Sales	Revenue
Automotive	Sales	without	Resale	Value	Guarantee
Automotive	sales	revenue	includes	revenues	related	to	deliveries	of	new	vehicles	and	pay-per-use	charges,	and	specific	other	features	and	services	that
meet	the	definition	of	a	performance	obligation	under	ASC	606,	including	access	to	our	Supercharger	network,	internet	connectivity,	Full	Self-Driving	(“FSD”)
features	and	over-the-air	software	updates.	We	recognize	revenue	on	automotive	sales	upon	delivery	to	the	customer,	which	is	when	the	control	of	a	vehicle
transfers.	Payments	are	typically	received	at	the	point	control	transfers	or	in	accordance	with	payment	terms	customary	to	the	business.	Other	features	and
services	such	as	access	to	our	Supercharger	network,	internet	connectivity	and	over-the-air	software	updates	are	provisioned	upon	control	transfer	of	a	vehicle
and	recognized	over	time	on	a	straight-line	basis	as	we	have	a	stand-ready	obligation	to	deliver	such	services	to	the	customer.	We	recognize	revenue	related	to
these	other	features	and	services	over	the	performance	period,	which	is	generally	the	expected	ownership	life	of	the	vehicle	or	the	eight-year	life	of	the	vehicle.
Revenue	related	to	FSD	features	is	recognized	when	functionality	is	delivered	to	the	customer.	For	our	obligations	related	to	automotive	sales,	we	estimate


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standalone	selling	price	by	considering	costs	used	to	develop	and	deliver	the	service,	third-party	pricing	of	similar	options	and	other	information	that	may	be
available.
At	the	time	of	revenue	recognition,	we	reduce	the	transaction	price	and	record	a	sales	return	reserve	against	revenue	for	estimated	variable
consideration	related	to	future	product	returns.	Such	return	rate	estimates	are	based	on	historical	experience	and	are	immaterial	in	all	periods	presented.	In
addition,	any	fees	that	are	paid	or	payable	by	us	to	a	customer’s	lender	when	we	arrange	the	financing	are	recognized	as	an	offset	against	automotive	sales
revenue.
Costs	to	obtain	a	contract	mainly	relate	to	commissions	paid	to	our	sales	personnel	for	the	sale	of	vehicles.	Commissions	are	not	paid	on	other
obligations	such	
as
	
access	to	our	Supercharger	network,	internet	connectivity,	FSD	features	and	over-the-air	software	updates.
	As	our	contract	costs	related	to
automotive	sales	are	typically	fulfilled	within	one	year,	the	costs	to	obtain	a	contract	are	expensed	as	incurred.	Amounts	billed	to	customers	related	to	shipping
and	handling	are	classified	as	automotive	sales	revenue,	and	we	have	elected	to	recognize	the	cost	for	freight	and	shipping	when	control	over	vehicles,	parts,	or
accessories	have	transferred	to	the	customer	as	an	expense	in	cost	of	automotive	sales	revenue.	Our	policy	is	to	exclude	taxes	collected	from	a	customer	from
the	transaction	price	of	automotive	contracts.
61


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Automotive	Sales	with	Resale	Value	Guarantee	or	a	Buyback	Option
We	offer	resale	value	guarantees	or	similar	buy-back	terms	to	certain	international	customers	who	purchase	vehicles	and	who	finance	their	vehicles
through	one	of	our	specified	commercial	banking	partners.	We	also	offer	resale	value	guarantees	in	connection	with	automotive	sales	to	certain	leasing
partners.	Under	these	programs,	we	receive	full	payment	for	the	vehicle	sales	price	at	the	time	of	delivery	and	our	counterparty	has	the	option	of	selling	their
vehicle	back	to	us	during	the	guarantee	period,	which	currently	is	generally	at	the	end	of	the	term	of	the	applicable	loan	or	financing	program,	for	a	pre-
determined	resale	value.
With	the	exception	of	the	
Vehicle	Sales	to	Leasing	Partners	with	a	Resale	Value	Guarantee	and	a	Buyback	Option
	program	discussed	within	the
Automotive	Leasing	section	below,	we	recognize	revenue	when	control	transfers	upon	delivery	to	customers	
in	accordance	with	ASC	606	
as	a	sale	with	a	right
of	return	as	we	do	not	believe	the	customer	has	a	significant	economic	incentive	to	exercise	the	resale	value	guarantee	provided	to	them	at	contract	inception.
The	process	to	determine	whether	there	is	a	significant	economic	incentive	includes	a	comparison	of	a	vehicle’s	estimated	market	value	at	the	time	the	option	is
exercisable	with	the	guaranteed	resale	value	to	determine	the	customer’s	economic	incentive	to	exercise.	The	performance	obligations	and	the	pattern	of
recognizing	automotive	sales	with	resale	value	guarantees	are	consistent	with	automotive	sales	without	resale	value	guarantees	with	the	exception	of	our
estimate	for	sales	return	reserve.	Sales	return	reserves	for	automotive	sales	with	resale	value	guarantees	are	estimated	based	on	historical	experience	plus


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consideration	for	expected	future	market	values.	
On	a	quarterly	basis,	we	assess	the	estimated	market	values	of	vehicles	under	our	buyback	options	program	to
determine	whether	there	have	been	changes	to	the	likelihood	of	future	product	returns.	As	we	accumulate	more	data	related	to	the	buyback	values	of	our
vehicles	or	as	market	conditions	change,	there	may	be	material	changes	to	their	estimated	values.	Due	to	price	adjustments	we	made	to	our	vehicle	offerings
during	2020,	we	estimated	that	there	is	a	greater	likelihood	that	customers	will	exercise	their	buyback	options	that	were	provided	prior	to	such	adjustments.	As
a	result,	along	with	the	estimated	variable	consideration	related	to	normal	future	product	returns	for	vehicles	sold	under	the	buyback	options	program,	we
adjusted	our	sales	return	reserve	on	vehicles	previously	sold	under	our	buyback	options	program	resulting	in	a	reduction	of	automotive	sales	revenues	of	
$
72
million	for	the	year	ended	December	31,	2020.	If	customers	elect	to	exercise	the	buyback	option,	we	expect	to	be	able	to	subsequently	resell	the	returned
vehicles,	which	resulted	in	a	corresponding	reduction	in	cost	of	automotive	sales	of	$
42
	million	for	the	year	ended	December	31,	2020.	The	net	impact	was	
$
30
million	reduction	in	gross	profit	for	the	year	ended	December	31,	2020.	The	total	sales	return	reserve	on	vehicles	previously	sold	under	our	buyback	options
program	was	$
703
	million	and	$
639
	million	as	of	December	31,	2020	and	December	31,	2019,	respectively,	of	which	$
202
	million	and	
$
93
	million	was	short
term,	respectively.


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93
	million	was	short
term,	respectively.
Deferred	revenue	activity	related	to	the	access	to	our	Supercharger	network,	internet	connectivity,	FSD	features	and	over-the-air	software	updates	on
automotive	sales	with	and	without	resale	value	guarantee	consisted	of	the	following	(in	millions):
	
	
	
Year	ended	December	31,
	
	
	
2020
	
	
2019
	
Deferred	revenue	on	automotive	sales	with	and	without
			resale	value	guarantee—	beginning	of	period
	
$
1,472
	
	
$
883
	
Additions
	
	
724
	
	
	
880
	
Net	changes	in	liability	for	pre-existing	contracts
	
	
56
	
	
	
9
	
Revenue	recognized
	
	
(
326
)
	
	
(
300
)
Deferred	revenue	on	automotive	sales	with	and	without
			resale	value	guarantee—	end	of	period
	
$
1,926
	
	
$
1,472
	
	
Deferred	revenue	is	equivalent	to	the	total	transaction	price	allocated	to	the	performance	obligations	that	are	unsatisfied,	or	partially	unsatisfied,	as	of
December	31,	2020.	From	the	deferred	revenue	balance	as	of	December	31,	2019,	revenue	recognized	during	the	year	ended	December	31,	2020	was
$
283
	million.	
From	the	deferred	revenue	balance	as	of	December	31,	2018,	revenue	recognized	during	the	year	ended	December	31,	2019	was	$
220
	million.	
Of
the	total	deferred	revenue	on	automotive	sales	with	and	without	resale	value	guarantees	as	of	December	31,	2020,	we	expect	to	recognize	$
1.13
	billion	of


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1.13
	billion	of
revenue	in	the	next	12	months.	The	remaining	balance	will	be	recognized	over	the	performance	period	as	discussed	above	in	Automotive	Sales	without	Resale
Value	Guarantee.
Automotive	Regulatory	Credits
We	earn	tradable	credits	in	the	operation	of	our	automotive	business	under	various	regulations	related	to	zero-emission	vehicles,	greenhouse	gas,	fuel
economy	and	clean	fuel.	We	sell	these	credits	to	other	regulated	entities	who	can	use	the	credits	to	comply	with	emission	standards	and	other	regulatory
requirements.
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Payments	for	automotive	regulatory	credits	are	typically	received	at	the	point	control	transfers	to	the	customer,	or	in	accordance	with	payment	terms
customary	to	the	business.	
We	recognize	revenue	on	the	sale	of	automotive	regulatory	credits	at	the	time	control	of	the	regulatory	credits	is	transferred	to	the
purchasing	party	as	automotive	sales	revenue	in	the	consolidated	statements	of	operations.	Revenue	from	the	sale	of	automotive	regulatory	credits	totaled	$
1.58
billion,	$
594
	million	and	$
419
	million	for	the	years	ended	December	31,	2020,	2019	and	2018,	respectively.	
Deferred	revenue	related	to	sales	of	automotive
regulatory	credits	was	$
21
	million	and	$
140
	million	as	of	
December	31,	2020
	and	2019,	respectively.	We	expect	to	recognize	the	majority	of	the	deferred	revenue
as	of	December	31,	2020	in	the	next	
12
	months.
Automotive	Leasing	Revenue
Direct	Vehicle	Operating	Leasing	Program
We	have	outstanding	leases	under	our	direct	vehicle	operating	leasing	programs	in	the	U.S.,	Canada	and	in	certain	countries	in	Europe.	Qualifying
customers	are	permitted	to	lease	a	vehicle	directly	from	Tesla	for	up	to	
48
	months.	At	the	end	of	the	lease	term,	customers	are	required	to	return	the	vehicles
to	us	or	for	Model	S	and	Model	X	leases	in	certain	regions,	may	opt	to	purchase	the	vehicles	for	a	pre-determined	residual	value.	
We	account	for	these	leasing
transactions	as	operating	leases.	We	record	leasing	revenues	to	
automotive	leasing	revenue
	on	a	straight-line	basis	over	the	contractual	term,	and	we	record


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the	depreciation	of	these	vehicles	to	cost	of	automotive	leasing	revenue.	For	the	years	ended	December	31,	2020,	2019	and	2018,	we	recognized	$
752
	million,
$
532
	million	and	$
393
	million	of	direct	vehicle	leasing	revenue,	respectively.	As	of	December	31,	2020	and	2019,	we	had	deferred	$
293
	million	and
$
218
	million,	respectively,	of	lease-related	upfront	payments,	which	will	be	recognized	on	a	straight-line	basis	over	the	contractual	terms	of	the	individual
leases.
Our	policy	is	to	exclude	taxes	collected	from	a	customer	from	the	transaction	price	of	automotive	contracts.
Vehicle	Sales	to	Leasing	Partners	with	a	Resale	Value	Guarantee	and	a	Buyback	Option
We	offered	buyback	options	in	connection	with	automotive	sales	with	resale	value	guarantees	with	certain	leasing	partner	sales	in	the	U.S.	and	
where
we	expected	the	customer	had	a	significant	economic	incentive	to	exercise	the	resale	value	guarantee	provided	to	them	at	contract	inception,	we	continued	to
recognize	these	transactions	as	operating	leases
.	These	transactions	entailed	a	transfer	of	leases,	which	we	had	originated	with	an	end-customer,	to	our	leasing
partner.	As	control	of	the	vehicles	had	not	been	transferred	
in	accordance	with	ASC	606
,	these	transactions	were	accounted	for	as	interest-bearing
collateralized	borrowings	in	accordance	with	ASC	840,	
Leases
,	prior	to	January	1,	2019.	Under	this	program,	cash	was	received	for	the	full	price	of	the	vehicle
and	the	collateralized	borrowing	value	was	generally	recorded	within	resale	value	guarantees	and	the	customer	upfront	down	payment	was	recorded	within


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deferred	revenue.	We	amortize	the	deferred	revenue	amount	to	automotive	leasing	revenue	on	a	straight-line	basis	over	the	option	period	and	accrue	interest
expense	based	on	our	borrowing	rate.	The	option	period	expires	at	the	earlier	of	the	end	of	the	contractual	option	period	or	the	pay-off	of	the	initial	loan.	We
capitalized	vehicles	under	this	program	to	operating	lease	vehicles,	net,	on	the	consolidated	balance	sheets,	and	we	record	depreciation	from	these	vehicles	to
cost	of	automotive	leasing	revenue	during	the	period	the	vehicle	is	under	a	lease	arrangement.	Cash	received	for	these	vehicles,	net	of	revenue	recognized
during	the	period,	is	classified	as	collateralized	lease	(repayments)	borrowings	within	cash	flows	from	financing	activities	in	the	consolidated	statements	of	cash
flows.	Following	the	adoption	of	ASC	842	on	January	1,	2019,	all	new	agreements	under	this	program	are	accounted	for	as	operating	leases	and	there	was	no
material	change	in	the	timing	and	amount	of	revenue	recognized	over	the	term.	Consequently,	any	cash	flows	for	new	agreements	are	classified	as	operating
cash	activities	on	the	consolidated	statements	of	cash	flows.
At	the	end	of	the	lease	term,	we	settle	our	liability	in	cash	by	either	purchasing	the	vehicle	from	the	leasing	partner	for	the	buyback	option	amount	or
paying	a	shortfall	to	the	option	amount	the	leasing	partner	may	realize	on	the	sale	of	the	vehicle.	Any	remaining	balances	within	deferred	revenue	and	resale
value	guarantee	will	be	settled	to	automotive	leasing	revenue.	
The	end	customer	can	extend	the	lease	for	a	period	of	up	to	6	months.	
In	cases	where	the	leasing


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In	cases	where	the	leasing
partner	retains	ownership	of	the	vehicle	after	the	end	of	our	option	period,	we	expense	the	net	value	of	the	leased	vehicle	to	cost	of	automotive	leasing	revenue
.
The	maximum	amount	we	could	be	required	to	pay	under	this	program,	should	we	decide	to	repurchase	all	vehicles,	was	$
42
	million	and	$
214
	million	as	of
December	31,	2020	and	2019,	respectively,	including	$
23
	
million
	within	a	12-month	period	from	December	31,	2020.	
As	of	December	31,	2020	and	2019
,
	we
had	$
42
	million
	and	$
238
	million,	respectively,	of	such	borrowings	recorded	in	accrued	liabilities	and	other	and	other	long-term	liabilities	and	$
11
	
million
	and
$
29
	million,	respectively,	recorded	in	deferred	revenue	liability.	For	the	years	ended	December	31,	2020,	2019	and	2018,	we	recognized	$
77
	million,	$
186
million	and	$
332
	million,	respectively,	of	leasing	revenue	related	to	this	program.	The	net	carrying	amount	of	operating	lease	vehicles	under	this	program	was
$
43
	million	and	$
190
	million,	respectively,	as	of	December	31,	2020	and	2019.
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Direct	Sales-Type	Leasing	Program
We	have	outstanding	direct	leases	and	vehicles	financed	by	us	under	loan	arrangements	accounted	for	as	sales-type	leases	under	ASC	842	in	certain
countries	in	Asia	and	Europe,	which	we	introduced	in	volume	during	the	third	quarter	of	2020.	Depending	on	the	specific	program,	customers	may	or	may	not
have	a	right	to	return	the	vehicle	to	us	during	or	at	the	end	of	the	lease	term.	If	the	customer	does	not	have	a	right	to	return,	the	customer	will	take	title	to	the
vehicle	at	the	end	of	the	lease	term	after	making	all	contractual	payments.	Under	the	programs	for	which	there	is	a	right	to	return,	the	purchase	option	is
reasonably	certain	to	be	exercised	by	the	lessee	and	we	therefore	expect	the	customer	to	take	title	to	the	vehicle	at	the	end	of	the	lease	term	after	making	all
contractual	payments.	Qualifying	customers	are	permitted	to	lease	a	vehicle	directly	under	these	programs	for	up	to	
48
	months.	Our	loan	arrangements	under
these	programs	can	have	terms	for	up	to	
72
	months.	We	recognize	all	revenue	and	costs	associated	with	the	sales-type	lease	as	automotive	leasing	revenue	and
automotive	leasing	cost	of	revenue,	respectively,	upon	delivery	of	the	vehicle	to	the	customer.	Interest	income	based	on	the	implicit	rate	in	the	lease	is	recorded
to	automotive	leasing	revenue	over	time	as	customers	are	invoiced	on	a	monthly	basis.	
For	the	year	ended	December	31,	2020,	we	recognized	$
120
	million	of
sales-type	leasing	revenue	and	$
87
	million	of	sales-type	leasing	cost	of	revenue.			
Services	and	Other	Revenue


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Services	and	Other	Revenue
Services	and	other	revenue	consists	of	non-warranty	after-sales	vehicle	services,	sales	of	used	vehicles,	retail	merchandise,	sales	by	our	acquired
subsidiaries	to	third	party	customers,	and	vehicle	insurance	revenue.
Revenues	related	to	repair	and	maintenance	services	are	recognized	over	time	as	services	are	provided	and	extended	service	plans	are	recognized	over
the	performance	period	of	the	service	contract	as	the	obligation	represents	a	stand-ready	obligation	to	the	customer.	We	sell	used	vehicles,	services,	service
plans,	vehicle	components	and	merchandise	separately	and	thus	use	standalone	selling	prices	as	the	basis	for	revenue	allocation	to	the	extent	that	these	items
are	sold	in	transactions	with	other	performance	obligations.	Payment	for	used	vehicles,	services,	and	merchandise	are	typically	received	at	the	point	when
control	transfers	to	the	customer	or	in	accordance	with	payment	terms	customary	to	the	business.	Payments	received	for	prepaid	plans	are	refundable	upon
customer	cancellation	of	the	related	contracts	and	are	included	within	customer	deposits	on	the	consolidated	balance	sheets.	Deferred	revenue	related	to
services	and	other	revenue	was	immaterial	as	of	December	31,	2020	and	2019.
	
Energy	Generation	and	Storage	Segment
Energy	Generation	and	Storage	Sales
Energy	generation	and	storage	sales	revenue	consists	of	the	sale	of	solar	energy	systems	and	energy	storage	systems	to	residential,	small	commercial,
and	large	commercial	and	utility	grade	customers.	Energy	generation	and	storage	sales	revenue	also	includes	revenue	from	agreements	for	solar	energy
systems	and	power	purchase	agreements	(“PPAs”)	that	commence	after	January	1,	2019,	which	is	recognized	as	earned,	based	on	the	amount	of	capacity


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provided	for	solar	energy	systems	or	electricity	delivered	for	PPAs	at	the	contractual	billing	rates,	assuming	all	other	revenue	recognition	criteria	have	been
met.	Under	the	practical	expedient	available	under	ASC	606-10-55-18,	we	recognize	revenue	based	on	the	value	of	the	service	which	is	consistent	with	the
billing	amount.	Sales	of	solar	energy	systems	to	residential	and	small	scale	commercial	customers	consist	of	the	engineering,	design,	and	installation	of	the
system.	Post	installation,	residential	and	small	scale	commercial	customers	receive	a	proprietary	monitoring	system	that	captures	and	displays	historical	energy
generation	data.	Residential	and	small	scale	commercial	customers	pay	the	full	purchase	price	of	the	solar	energy	system	upfront.	Revenue	for	the	design	and
installation	obligation	is	recognized	when	control	transfers,	which	is	when	we	install	a	solar	energy	system	and	the	system	passes	inspection	by	the	utility	or
the	authority	having	jurisdiction.	Revenue	for	the	monitoring	service	is	recognized	ratably	as	a	stand-ready	obligation	over	the	warranty	period	of	the	solar
energy	system.	
Sales	of	energy	storage	systems	to	residential	and	small	scale	commercial	customers	consist	of	the	installation	of	the	energy	storage	system	and
revenue	is	recognized	when	control	transfers,	which	is	when	the	product	has	been	delivered	or,	if	we	are	performing	installation,	when	installed	and
commissioned.	Payment	for	such	storage	systems	is	made	upon	invoice	or	in	accordance	with	payment	terms	customary	to	the	business.
For	large	commercial	and	utility	grade	solar	energy	system	and	energy	storage	system	sales	which	consist	of	the	engineering,	design,	and	installation	of
the	system,	customers	make	milestone	payments	that	are	consistent	with	contract-specific	phases	of	a	project.	Revenue	from	such	contracts	is	recognized	over


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time	using	the	percentage	of	completion	method	based	on	cost	incurred	as	a	percentage	of	total	estimated	contract	costs
	for	energy	storage	system	sales	and	as
a	percentage	of	total	estimated	labor	hours	for	solar	energy	system	sales
.	Certain	large-scale	commercial	and	utility	grade	solar	energy	system	and	energy
storage	system	sales	also	include	operations	and	maintenance	service	which	are	negotiated	with	the	design	and	installation	contracts	and	are	thus	considered
to	be	a	combined	contract	with	the	design	and	installation	service.	For	certain	large	commercial	and	utility	grade	solar	energy	systems	and	energy	storage
systems	where	the	percentage	of	completion	method	does	not	apply,	
revenue	is	recognized	when	control	transfers,	which	is	when	the	product	has	been
delivered	to	the	customer	and	commissioned	for	energy	storage	systems	and	when	the	project	has	received	permission	to	operate	from	the	utility	for	solar
energy	systems.	
Operations	and	maintenance	service	revenue	is	recognized	ratably	over	the	respective	contract	term
	for	solar	energy	system	sales	and	upon
delivery	of	the	service	for	energy	storage	system	sales
.	Customer	payments	for	such	services	are	usually	paid	annually	or	quarterly	in	advance.
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In	instances	where	there	are	multiple	performance	obligations	in	a	single	contract,	we	allocate	the	consideration	to	the	various	obligations	in	the
contract	based	on	the	relative	standalone	selling	price	method.	Standalone	selling	prices	are	estimated	based	on	estimated	costs	plus	margin	or	using	market
data	for	comparable	products.	Costs	incurred	on	the	sale	of	residential	installations	before	the	solar	energy	systems	are	completed	are	included	as	work	in
process	within	inventory	in	the	consolidated	balance	sheets.	
A
ny	fees	that	are	paid	or	payable	by	us	to	a	solar	loan	lender	would	be	recognized	as	an	offset
against	revenue.	Costs	to	obtain	a	contract	relate	mainly	to	commissions	paid	to	our	sales	personnel	related	to	the	sale	of	solar	energy	systems	and	energy
storage	systems.	As	our	contract	costs	related	to	solar	energy	system	and	energy	storage	system	sales	are	typically	fulfilled	within	one	year,	the	costs	to	obtain
a	contract	are	expensed	as	incurred.
As	part	of	our	solar	energy	system	and	energy	storage	system	contracts,	we	may	provide	the	customer	with	performance	guarantees	that	warrant	that
the	underlying	system	will	meet	or	exceed	the	minimum	energy	generation	or	energy	performance	requirements	specified	in	the	contract.	In	certain	instances,
we	may	receive	a	bonus	payment	if	the	system	performs	above	a	specified	level.	Conversely,	if	a	solar	energy	system	or	energy	storage	system	does	not	meet
the	performance	guarantee	requirements,	we	may	be	required	to	pay	liquidated	damages.	Other	forms	of	variable	consideration	related	to	our	large	commercial
and	utility	grade	solar	energy	system	and	energy	storage	system	contracts	include	variable	customer	payments	that	will	be	made	based	on	our	energy	market


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participation	activities.	Such	guarantees	and	variable	customer	payments	represent	a	form	of	variable	consideration	and	are	estimated	at	contract	inception	at
their	most	likely	amount	and	updated	at	the	end	of	each	reporting	period	as	additional	performance	data	becomes	available.	Such	estimates	are	included	in	the
transaction	price	only	to	the	extent	that	it	is	probable	a	significant	reversal	of	revenue	will	not	occur.
We	record	as	deferred	revenue	any	non-refundable	amounts	that	are	collected	from	customers	related	to	fees	charged	for	prepayments	and	remote
monitoring	service	and	operations	and	maintenance	service,	which	is	recognized	as	revenue	ratably	over	the	respective	customer	contract	term.	As	of
December	31,	2020	and	2019,	deferred	revenue	related	to	such	customer	payments	amounted	to	$
187
	million	and	$
156
	million,	respectively.	Revenue
recognized	from	the	deferred	revenue	balance	as	of	December	31,	2019	was	$
34
	million	for	the	year	ended	December	31,	2020.	
Revenue	recognized	from	the
deferred	revenue	balance	as	of	December	31,	2018	was	$
41
	million	for	the	year	ended	December	31,	2019.	
We	have	elected	the	practical	expedient	to	omit
disclosure	of	the	amount	of	the	transaction	price	allocated	to	remaining	performance	obligations	for	energy	generation	and	storage	sales	with	an	original
expected	contract	length	of	one	year	or	less	and	the	amount	that	we	have	the	right	to	invoice	when	that	amount	corresponds	directly	with	the	value	of	the
performance	to	date.	As	of	December	31,	2020,	total	transaction	price	allocated	to	performance	obligations	that	were	unsatisfied	or	partially	unsatisfied	for
contracts	with	an	original	expected	length	of	more	than	one	year	was	$
100


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100
	million.	Of	this	amount,	we	expect	to	recognize	$
6
	million	in	the	next	12	months	and
the	remaining	over	a	period	up	to	
27
	years.
Energy	Generation	and	Storage	Leasing
For	revenue	arrangements	where	we	are	the	lessor	under	operating	lease	agreements	for	
energy	generation	and	storage	products
,	we	record	lease
revenue	from	minimum	lease	payments,	including	upfront	rebates	and	incentives	earned	from	such	systems,	on	a	straight-line	basis	over	the	life	of	the	lease
term,	assuming	all	other	revenue	recognition	criteria	have	been	met.	The	difference	between	the	payments	received	and	the	revenue	recognized	is	recorded	as
deferred	revenue	or	deferred	asset	on	the	consolidated	balance	sheet.
For	solar	energy	systems	where	customers	purchase	electricity	from	us	under	PPAs	prior	to	January	1,	2019,	we	have	determined	that	these	agreements
should	be	accounted	for	as	operating	leases	pursuant	to	ASC	840.	Revenue	is	recognized	based	on	the	amount	of	electricity	delivered	at	rates	specified	under
the	contracts,	assuming	all	other	revenue	recognition	criteria	are	met.
We	record	as	deferred	revenue	any	amounts	that	are	collected	from	customers,	including	lease	prepayments,	in	excess	of	revenue	recognized	and
operations	and	maintenance	service	fees,	which	is	recognized	as	revenue	ratably	over	the	respective	customer	contract	term.	As	of	December	31,	2020	and
2019,	deferred	revenue	related	to	such	customer	payments	amounted	to	$
206
	million	and	$
226
	million,	respectively.	Deferred	revenue	also	includes	the	portion
of	rebates	and	incentives	received	from	utility	companies	and	various	local	and	state	government	agencies,	which	is	recognized	as	revenue	over	the	lease	term.


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As	of	December	31,	2020	and	2019,	deferred	revenue	from	rebates	and	incentives	amounted	to	$
29
	million	and	$
36
	million,	respectively.
We	capitalize	initial	direct	costs	from	the	execution	of	agreements	for	solar	energy	systems	and	PPAs,	which	include	the	referral	fees	and	sales
commissions,	as	an	element	of	solar	energy	systems,	net,	and	subsequently	amortize	these	costs	over	the	term	of	the	related	agreements.
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Cost	of	Revenues
Automotive	Segment
Automotive	Sales
Cost	of	automotive	sales	revenue	includes	direct	parts,	material	and	labor	costs,	manufacturing	overhead,	including	depreciation	costs	of	tooling	and
machinery,	shipping	and	logistic	costs,	vehicle	connectivity	costs,	allocations	of	electricity	and	infrastructure	costs	related	to	our	Supercharger	network,	and
reserves	for	estimated	warranty	expenses.	Cost	of	automotive	sales	revenues	also	includes	adjustments	to	warranty	expense	and	charges	to	write	down	the
carrying	value	of	our	inventory	when	it	exceeds	its	estimated	net	realizable	value	and	to	provide	for	obsolete	and	on-hand	inventory	in	excess	of	forecasted
demand
.
Automotive	Leasing
Cost	of	automotive	leasing	revenue	includes	the	amortization	of	operating	lease	vehicles	over	the	lease	term,	cost	of	goods	sold	associated	with	direct
sales-type	leases,	as	well	as	warranty	expenses	related	to	leased	vehicles.	Cost	of	automotive	leasing	revenue	also	includes	vehicle	connectivity	costs	and
allocations	of	electricity	and	infrastructure	costs	related	to	our	Supercharger	network	for	vehicles	under	our	leasing	programs.
Services	and	Other
Costs	of	services	and	other	revenue	includes	costs	associated	with	providing	non-warranty	after-sales	
services
,	costs	to	acquire	and	certify	used
vehicles,	costs	for	retail	merchandise,	and	costs	to	provide	vehicle	insurance.	Cost	of	services	and	other	revenue	also	includes	direct	parts,	material	and	labor
costs,	manufacturing	overhead	associated	with	the	sales	by	our	acquired	subsidiaries	to	third	party	customers
.
Energy	Generation	and	Storage	Segment
Energy	Generation	and	Storage
Cost	of


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Energy	Generation	and	Storage
Cost	of	
energy	generation	and	storage	revenue	includes	direct	and	indirect	material	and	labor	costs,	warehouse	rent,	freight,	warranty	expense,	other
overhead	costs	and	amortization	of	certain	acquired	intangible	assets.	
Cost	of	energy	generation	and	storage	revenue	also	includes	charges	to	write	down	the
carrying	value	of	our	inventory	when	it	exceeds	its	estimated	net	realizable	value	and	to	provide	for	obsolete	and	on-hand	inventory	in	excess	of	forecasted
demand.	
In	agreements	for	solar	energy	system	and	PPAs	where	we	are	the	lessor,	the	cost	of	revenue	is	primarily	comprised	of	depreciation	of	the	cost	of
leased	solar	energy	systems,	maintenance	costs	associated	with	those	systems	and	amortization	of	any	initial	direct	costs.
	
Leases
We	adopted	ASC	842,	
Leases
,	as	of	January	1,	2019	using	the	cumulative	effect	adjustment	approach	(“adoption	of	the	new	lease	standard”).	In	addition,
we	elected	the	package	of	practical	expedients	permitted	under	the	transition	guidance	within	the	new	standard,	which	allowed	us	to	carry	forward	the	historical
determination	of	contracts	as	leases,	lease	classification	and	not	reassess	initial	direct	costs	for	historical	lease	arrangements.	Accordingly,	previously	reported
financial	statements,	including	footnote	disclosures,	have	not	been	recast	to	reflect	the	application	of	the	new	standard	to	all	comparative	periods	presented.	The
finance	lease	classification	under	ASC	842	includes	leases	previously	classified	as	capital	leases	under	ASC	840.
Research	and	Development	Costs
Research	and	development	costs	are	expensed	as	incurred.
Marketing,	Promotional	and	Advertising	Costs


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Marketing,	Promotional	and	Advertising	Costs
Marketing,	promotional	and	advertising	costs	are	expensed	as	incurred	and	are	included	as	an	element	of	selling,	general	and	administrative	expense	in
the	consolidated	statement	of	operations.	Marketing,	promotional	and	advertising	costs	were	immaterial	for							the	years	ended	December	31,	2020,	2019	and
2018.
Income	Taxes
Income	taxes	are	computed	using	the	asset	and	liability	method,	under	which	deferred	tax	assets	and	liabilities	are	determined	based	on	the	difference
between	the	financial	statement	and	tax	bases	of	assets	and	liabilities	using	enacted	tax	rates	in	effect	for	the	year	in	which	the	differences	are	expected	to
affect	taxable	income.	Valuation	allowances	are	established	when	necessary	to	reduce	deferred	tax	assets	to	the	amount	expected	to	be	realized.
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We	record	liabilities	related	to	uncertain	tax	positions	when,	despite	our	belief	that	our	tax	return	positions	are	supportable,	we	believe	that	it	is	more
likely	than	not	that	those	positions	may	not	be	fully	sustained	upon	review	by	tax	authorities.	Accrued	interest	and	penalties	related	to	unrecognized	tax
benefits	are	classified	as	income	tax	expense.
The	Tax	Cuts	and	Jobs	Act	("TCJA")	subjects	a	U.S.	shareholder	to	tax	on	global	intangible	low-taxed	income	(“GILTI”)	earned	by	certain	foreign
subsidiaries.	Under	GAAP,	we	can	make	an	accounting	policy	election	to	either	treat	taxes	due	on	the	GILTI	inclusion	as	a	current	period	expense	or	factor	such
amounts	into	our	measurement	of	deferred	taxes.	We	elected	the	deferred	method,	under	which	we	recorded	the	corresponding	deferred	tax	assets	and
liabilities	on	our	consolidated	balance	sheets,	currently	subject	to	valuation	allowance.		
		
Comprehensive	Income	(Loss)
Comprehensive	income	(loss)	is	comprised	of	net	income	(loss)	and	other	comprehensive	income	(loss).	Other	comprehensive	
income
	(loss)	consists	of
foreign	currency	translation	adjustments	that	have	been	excluded	from	the	determination	of	net	income	(loss).
Stock-Based	Compensation
We	recognize	compensation	expense	for	costs	related	to	all	share-based	payments,	including	stock	options,	restricted	stock	units	(“RSUs”)	and	our
employee	stock	purchase	plan	(the	“ESPP”).	The	fair	value	of	stock	option	awards	with	only	service	and/or	performance	conditions	is	estimated	on	the	grant	or
offering	date	using	the	Black-Scholes	option-pricing	model.	The	fair	value	of	RSUs	is	measured	on	the	grant	date	based	on	the	closing	fair	market	value	of	our


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common	stock.	Stock-based	compensation	expense	is	recognized	on	a	straight-line	basis	over	the	requisite	service	period,	net	of	actual	forfeitures	in	the	period.
For	performance-based	awards,	stock-based	compensation	expense	is	recognized	over	the	expected	performance	achievement	period	of	individual
performance	milestones	when	the	achievement	of	each	individual	performance	milestone	becomes	probable.	For	performance-based	awards	with	a	vesting
schedule	based	entirely	on	the	attainment	of	both	performance	and	market	conditions,	stock-based	compensation	expense	associated	with	each	tranche	is
recognized	over	the	longer	of	(i)	the	expected	achievement	period	for	the	operational	milestone	for	such	tranche	and	(ii)	the	expected	achievement	period	for
the	related	market	capitalization	milestone	determined	on	the	grant	date,	beginning	at	the	point	in	time	when	the	relevant	operational	milestone	is	considered
probable	of	being	achieved.	If	such	operational	milestone	becomes	probable	any	time	after	the	grant	date,	we	will	recognize	a	cumulative	catch-up	expense
from	the	grant	date	to	that	point	in	time.	If	the	related	market	capitalization	milestone	is	achieved	earlier	than	its	expected	achievement	period	and	the
achievement	of	the	related	operational	milestone,	then	the	stock-based	compensation	expense	will	be	recognized	over	the	expected	achievement	period	for	the
operational	milestone,	which	may	accelerate	the	rate	at	which	such	expense	is	recognized.	The	fair	value	of	such	awards	is	estimated	on	the	grant	date	using
Monte	Carlo	simulations	(see	Note	14,	
Equity	Incentive	Plans
).
As	we	accumulate	additional	employee	stock-based	awards	data	over	time	and	as	we	incorporate	market	data	related	to	our	common	stock,	we	may


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calculate	significantly	different	volatilities	and	expected	lives,	which	could	materially	impact	the	valuation	of	our	stock-based	awards	and	the	stock-based
compensation	expense	that	we	will	recognize	in	future	periods.	Stock-based	compensation	expense	is	recorded	in	cost	of	revenues,	research	and	development
expense	and	selling,	general	and	administrative	expense	in	the	consolidated	statements	of	operations.
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Noncontrolling	Interests	and	Redeemable	Noncontrolling	Interests
Noncontrolling	interests	and	redeemable	noncontrolling	interests	represent	third-party	interests	in	the	net	assets	under	certain	funding	arrangements,
or	funds,	that	we	enter	into	to	finance	the	costs	of	solar	energy	systems	and	vehicles	under	operating	leases.	We	have	determined	that	the	contractual
provisions	of	the	funds	represent	substantive	profit	sharing	arrangements.	We	have	further	determined	that	the	methodology	for	calculating	the	noncontrolling
interest	and	redeemable	noncontrolling	interest	balances	that	reflects	the	substantive	profit	sharing	arrangements	is	a	balance	sheet	approach	using	the
hypothetical	liquidation	at	book	value	(“HLBV”)	method.	We,	therefore,	determine	the	amount	of	the	noncontrolling	interests	and	redeemable	noncontrolling
interests	in	the	net	assets	of	the	funds	at	each	balance	sheet	date	using	the	HLBV	method,	which	is	presented	on	the	consolidated	balance	sheet	as
noncontrolling	interests	in	subsidiaries	and	redeemable	noncontrolling	interests	in	subsidiaries.	Under	the	HLBV	method,	the	amounts	reported	as
noncontrolling	interests	and	redeemable	noncontrolling	interests	in	the	consolidated	balance	sheet	represent	the	amounts	the	third	parties	would
hypothetically	receive	at	each	balance	sheet	date	under	the	liquidation	provisions	of	the	funds,	assuming	the	net	assets	of	the	funds	were	liquidated	at	their
recorded	amounts	determined	in	accordance	with	GAAP	and	with	tax	laws	effective	at	the	balance	sheet	date	and	distributed	to	the	third	parties.	The	third
parties’	interests	in	the	results	of	operations	of	the	funds	are	determined	as	the	difference	in	the	noncontrolling	interest	and	redeemable	noncontrolling	interest


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balances	in	the	consolidated	balance	sheets	between	the	start	and	end	of	each	reporting	period,	after	taking	into	account	any	capital	transactions	between	the
funds	and	the	third	parties.	However,	the	redeemable	noncontrolling	interest	balance	is	at	least	equal	to	the	redemption	amount.	The	redeemable
noncontrolling	interest	balance	is	presented	as	temporary	equity	in	the	mezzanine	section	of	the	consolidated	balance	sheet	since	these	third	parties	have	the
right	to	redeem	their	interests	in	the	funds	for	cash	or	other	assets.	For	certain	funds,	there	may	be	significant	fluctuations	in	the	ending	balance	of	redeemable
noncontrolling	interest	in	subsidiaries	and	net	income	(loss)	attributable	to	noncontrolling	interests	and	redeemable	noncontrolling	interests	in	subsidiaries	due
to	changes	in	the	liquidation	provisions	as	time-based	milestones	are	reached.
Net	Income	(Loss)	per	Share	of	Common	Stock	Attributable	to	Common	Stockholders
Basic	net	income	(loss)	per	share	of	common	stock	attributable	to	common	stockholders	is	calculated	by	dividing	net	income	(loss)	attributable	to
common	stockholders	by	the	weighted-average	shares	of	common	stock	outstanding	for	the	period.	During	the	year	ended	December	31,	2020,	we	decreased
net	income	attributable	to	common	stockholders	by	$
31
	million	
to	arrive	at	the	numerator	used	to	calculate	net	income	per	share.	During	the	year	
ended
December	31,	2019,	we	increased	net	loss	attributable	to	common	stockholders	by	$
8
	million	to	arrive	at	the	numerator	used	to	calculate	net	loss	per	share.


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These	adjustments	represent	the	difference	between	the	cash	we	paid	to	the	financing	fund	investors	for	their	noncontrolling	interest	in	our	subsidiaries	and
the	carrying	amount	of	the	noncontrolling	interest	on	our	consolidated	balance	sheets,	in	accordance	with	ASC	260,	
Earnings	per	Share
.	Potentially	dilutive
shares,	which	are	based	on	the	weighted-average	shares	of	common	stock	underlying	outstanding	stock-based	awards,	warrants	and	convertible	senior	notes
using	the	treasury	stock	method	or	the	if-converted	method,	as	applicable,	are	included	when	calculating	diluted	net	income	(loss)	per	share	of	common	stock
attributable	to	common	stockholders	when	their	effect	is	dilutive.	Since	we	intend	to	settle	or	have	settled	in	cash	the	principal	outstanding	under	our	
0.25
%
Convertible	Senior	Notes	due	in	
2019
	(“2019	Notes”),	
1.25
%	Convertible	Senior	Notes	due	in	
2021
	(“2021	Notes”),	
2.375
%	Convertible	Senior	Notes	due	in
2022
	(“2022	Notes”),	
2024
	Notes	and	our	subsidiary’s	
5.50
%	Convertible	Senior	Notes	due	in	
2022
,	
we	use	the	treasury	stock	method	applied	using	our
average	share	price	during	the	period	when	calculating	their	potential	dilutive	effect,	if	any
.	Furthermore,	in	connection	with	the	offerings	of	our	convertible
senior	notes,	we	entered	into	convertible	note	hedges	and	warrants	(see	Note	12,	
Debt
).	However,	our	convertible	note	hedges	are	not	included	when
calculating	potentially	dilutive	shares	since	their	effect	is	always	anti-dilutive.


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Warrants	which	have	a	strike	price	above	our	average	share	price	during	the
period	were	out	of	the	money	and	were	not	included	in	the	tables	below.	Warrants	will	be	included	in	the	weighted-average	shares	used	in	computing	basic	net
income	(loss)	per	share	of	common	stock	in	the	period(s)	they	are	settled.
	
The	following	table	presents	the	reconciliation	of	basic	to	diluted	weighted	average	shares	used	in	computing	net	income	(loss)	per	share	of	common
stock	attributable	to	common	stockholders,	as	adjusted	to	give	effect	to	the	Stock	Split	(in	millions):
	
	
	
Year	Ended	December	31,
	
	
	
2020
	
	
2019
	
	
2018
	
Weighted	average	shares	used	in	computing
			net	income	(loss)	per	share	of	common
			stock,	basic
	
	
933
	
	
	
887
	
	
	
853
	
Add:
	
	
	
	
	
	
	
	
	
	
	
	
Stock-based	awards
	
	
66
	
	
	
—
	
	
	
—
	
Convertible	senior	notes
	
	
47
	
	
	
—
	
	
	
—
	
Warrants
	
	
37
	
	
	
—
	
	
	
—
	
Weighted	average	shares	used	in	computing
			net	income	(loss)	per	share	of	common	stock,
			diluted
	
	
1,083
	
	
	
887
	
	
	
853
	
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The	following	table	presents	the	potentially	dilutive	shares	that	were	excluded	from	the	computation	of	diluted	net	income	(loss)	per	share	of	common
stock	attributable	to	common	stockholders,	because	their	effect	was	anti-dilutive	(in	millions):
	
	
	
Year	Ended	December	31,
	
	
	
2020
	
	
2019
	
	
2018
	
Stock-based	awards
	
	
2
	
	
	
50
	
	
	
50
	
Convertible	senior	notes
	
	
1
	
	
	
5
	
	
	
7
	
Warrants
	
	
—
	
	
	
—
	
	
	
1
	
	
	
Business	Combinations
We	account	for	business	acquisitions	under	ASC	805,	
Business	Combinations
.	The	total	purchase	consideration	for	an	acquisition	is	measured	as	the	fair
value	of	the	assets	given,	equity	instruments	issued	and	liabilities	assumed	at	the	acquisition	date.	Costs	that	are	directly	attributable	to	the	acquisition	are
expensed	as	incurred.	Identifiable	assets	(including	intangible	assets),	liabilities	assumed	(including	contingent	liabilities)	and	noncontrolling	interests	in	an
acquisition	are	measured	initially	at	their	fair	values	at	the	acquisition	date.	We	recognize	goodwill	if	the	fair	value	of	the	total	purchase	consideration	and	any
noncontrolling	interests	is	in	excess	of	the	net	fair	value	of	the	identifiable	assets	acquired	and	the	liabilities	assumed.	We	recognize	a	bargain	purchase	gain
within	other	income	(expense),	net,	on	the	consolidated	statement	of	operations	if	the	net	fair	value	of	the	identifiable	assets	acquired	and	the	liabilities


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assumed	is	in	excess	of	the	fair	value	of	the	total	purchase	consideration	and	any	noncontrolling	interests.	We	include	the	results	of	operations	of	the	acquired
business	in	the	consolidated	financial	statements	beginning	on	the	acquisition	date.
Cash	and	Cash	Equivalents
All	highly	liquid	investments	with	an	original	maturity	of	three	months	or	less	at	the	date	of	purchase	are	considered	cash	equivalents.	Our	cash
equivalents	are	primarily	comprised	of	money	market	funds.
Restricted	Cash
We	maintain	certain	cash	balances	restricted	as	to	withdrawal	or	use.	Our	restricted	cash	is	comprised	primarily	of	cash	as	collateral	for	our	sales	to
lease	partners	with	a	resale	value	guarantee,	letters	of	credit,	real	estate	leases,	insurance	policies,	credit	card	borrowing	facilities	and	certain	operating
leases.	In	addition,	restricted	cash	includes	cash	received	from	certain	fund	investors	that	have	not	been	released	for	use	by	us	and	cash	held	to	service	certain
payments	under	various	secured	debt	facilities.	We	record	restricted	cash	as	other	assets	in	the	consolidated	balance	sheets	and	determine	current	or	non-
current	classification	based	on	the	expected	duration	of	the	restriction.
Our	total	cash	and	cash	equivalents	and	restricted	cash,	as	presented	in	the	consolidated	statements	of	cash	flows,	was	as	follows	(in	millions):
	
	
	
December	31,
	
	
December	31,
	
	
December	31,
	
	
	
2020
	
	
2019
	
	
2018
	
Cash	and	cash	equivalents
	
$
19,384
	
	
$
6,268
	
	
$
3,686
	
Restricted	cash	included	in	prepaid	expenses
			and	other	current	assets
	
	
238


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238
	
	
	
246
	
	
	
193
	
Restricted	cash	included	in	other	non-current	assets
	
	
279
	
	
	
269
	
	
	
398
	
Total	as	presented	in	the	consolidated	statements	of	cash	flows
	
$
19,901
	
	
$
6,783
	
	
$
4,277
	
	
Accounts	Receivable	and	Allowance	for	Doubtful	Accounts
Accounts	receivable	primarily	include	amounts	related	to	receivables	from	financial	institutions	and	leasing	companies	offering	various	financing
products	to	our	customers,	sales	of	energy	generation	and	storage	products,	sales	of	regulatory	credits	to	other	automotive	manufacturers,	government	rebates
already	passed	through	to	customers	and	maintenance	services	on	vehicles	owned	by	leasing	companies.	We	provide	an	allowance	against	accounts	receivable
for	the	amount	we	expect	to	be	uncollectible.	We	write-off	accounts	receivable	against	the	allowance	when	they	are	deemed	uncollectible.
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Depending	on	the	day	of	the	week	on	which	the	end	of	a	fiscal	quarter	falls,	our	accounts	receivable	balance	may	fluctuate	as	we	are	waiting	for	certain
customer	payments	to	clear	through	our	banking	institutions	and	receipts	of	payments	from	our	financing	partners,	which	can	take	up	to	approximately	two
weeks	based	on	the	contractual	payment	terms	with	such	partners.	Our	accounts	receivable	balances	associated	with	our	sales	of	regulatory	credits,	which	are
typically	transferred	to	other	manufacturers	during	the	last	few	days	of	the	quarter,	is	dependent	on	contractual	payment	terms.	
Additionally,	government
rebates
	
can	take	
up	to	a	
year
	or	more
	to	be	collected
	
depending	on
	the	customary	processing	timelines	
of
	the	
specific	jurisdictions	issuing	them
.	
These	various
factors	may	have	a	significant	impact	on	our	accounts	receivable	balance	from	period	to	period
.
MyPower	Customer	Notes	Receivable
We	have	customer	notes	receivable	under	the	legacy	MyPower	loan	program.	MyPower	was	offered	by	one	of	our	subsidiaries	to	provide	residential
customers	with	the	option	to	finance	the	purchase	of	a	solar	energy	system	through	a	
30
-year	loan.	The	outstanding	balances,	net	of	any	allowance	for	credit
losses,	are	presented	on	the	consolidated	balance	sheet	as	a	component	of	prepaid	expenses	and	other	current	assets	for	the	current	portion	and	as	other	non-
current	assets	for	the	long-term	portion.	We	adopted	
ASC	326,	
Financial	Instruments	–	Credit	Losses
,	
on	January	1,	2020	on	a	modified	retrospective	basis.


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Under	ASC	326,	expected	credit	loss	for	customer	notes	receivable	are	measured	on	a	collective	basis	and	are	determined	as	the	difference	between	the
amortized	cost	basis	and	the	present	value	of	cash	flows	expected	to	be	collected.	In	determining	expected	credit	losses,	we	consider	our	historical	level	of
credit	losses,	current	economic	trends,	and	reasonable	and	supportable	forecasts	that	affect	the	collectability	of	the	future	cash	flows.	We	write-off	customer
notes	receivable	when	they	are	deemed	uncollectible	and	the	amount	of	potentially	uncollectible	amounts	has	been	insignificant.	Using	a	modified	retrospective
approach	for	the	impact	upon	adoption,	we	recorded	an	increase	to	the	allowance	for	credit	losses	of	$
37
	million	on	January	1,	2020,	with	an	offset	to
accumulated	deficit.	As	of	December	31,	2020	and	2019,	the	total	outstanding	balance	of	MyPower	customer	notes	receivable,	net	of	allowance	for	credit
losses,	was	$
334
	million	and	$
402
	million,	respectively,	of	which	$
9
	million	was	due	in	the	next	12	months	as	of	December	31,	2020	and	2019,	respectively.	As
of	December	31,	2020,	the	allowance	for	credit	losses	was	$
45
	million.	In	addition,	there	were	
no
	material	non-accrual	or	past	due	customer	notes	receivable	as
of	December	31,	2020.
Concentration	of	Risk
Credit	Risk
Financial	instruments	that	potentially	subject	us	to	a	concentration	of	credit	risk	consist	of	cash,	cash	equivalents,	restricted	cash,	accounts	receivable,


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convertible	note	hedges,	and	interest	rate	swaps.	Our	cash	balances	are	primarily	invested	in	money	market	funds	or	on	deposit	at	high	credit	quality	financial
institutions	in	the	U.S.	These	deposits	are	typically	in	excess	of	insured	limits.	As	of	December	31,	2020	and	2019,	
no
	entity	represented	
10
%	or	more	of	our
total	accounts	receivable	balance.	The	risk	of	concentration	for	our	convertible	note	hedges	and	interest	rate	swaps	is	mitigated	by	transacting	with	several
highly-rated	multinational	banks.
Supply	Risk
We	are	dependent	on	our	suppliers,	the	majority	of	which	are	single	source	suppliers,	and	the	inability	of	these	suppliers	to	deliver	necessary
components	of	our	products	in	a	timely	manner	at	prices,	quality	levels	and	volumes	acceptable	to	us,	or	our	inability	to	efficiently	manage	these	components
from	these	suppliers,	could	have	a	material	adverse	effect	on	our	business,	prospects,	financial	condition	and	operating	results.
Although	all	of	our	manufacturing	facilities	are	operational,	and	we	continue	to	increase	our	output	and	add	additional	capacity	and	are	working	with
each	of	our	suppliers	and	government	agencies	on	meeting,	ramping	and	sustaining	our	production,	our	ability	to	sustain	this	trajectory	depends,	among	other
things,	on	the	readiness	and	solvency	of	our	suppliers	and	vendors	through	any	macroeconomic	factors	resulting	from	the	COVID-19	pandemic.
Inventory	Valuation
Inventories	are	stated	at	the	lower	of	cost	or	net	realizable	value.	Cost	is	computed	using	standard	cost	for	vehicles	and	energy	storage	products,	which


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approximates	actual	cost	on	a	first-in,	first-out	basis.	In	addition,	cost	for	solar	energy	systems	is	recorded	using	actual	cost.	We	record	inventory	write-downs
for	excess	or	obsolete	inventories	based	upon	assumptions	about	current	and	future	demand	forecasts.	If	our	inventory	on-hand	is	in	excess	of	our	future
demand	forecast,	the	excess	amounts	are	written-off.
We	also	review	our	inventory	to	determine	whether	its	carrying	value	exceeds	the	net	amount	realizable	upon	the	ultimate	sale	of	the	inventory.	This
requires	us	to	determine	the	estimated	selling	price	of	our	vehicles	less	the	estimated	cost	to	convert	the	inventory	on-hand	into	a	finished	product.	Once
inventory	is	written-down,	a	new,	lower	cost	basis	for	that	inventory	is	established	and	subsequent	changes	in	facts	and	circumstances	do	not	result	in	the
restoration	or	increase	in	that	newly	established	cost	basis.
Should	our	estimates	of	future	selling	prices	or	production	costs	change,	additional	and	potentially	material	increases	to	this	reserve	may	be	required.	A
small	change	in	our	estimates	may	result	in	a	material	charge	to	our	reported	financial	results.
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Operating	Lease	Vehicles
Vehicles	that	are	leased	as	part	of	our	direct	vehicle	leasing	program	and	vehicles	delivered	to	leasing	partners	with	a	resale	value	guarantee	and	a
buyback	option	where	there	is	significant	economic	incentive	to	exercise	at	contract	inception	are	classified	as	operating	lease	vehicles	as	the	related	revenue
transactions	are	treated	as	operating	leases	under	ASC	842	(
refer	to	the	Automotive	Leasing	Revenue	section	above	for	details
).	Operating	lease	vehicles	are
recorded	at	cost	less	accumulated	depreciation.	We	generally	depreciate	their	value,	less	salvage	value,	using	the	straight-line-method	to	cost	of	automotive
leasing	revenue	over	the	contractual	period.	The	gross	cost	of	operating	lease	vehicles	as	of	December	31,	2020	and	2019	was	$
3.54
	billion	and	$
2.85
	billion,
respectively.	Operating	lease	vehicles	on	the	consolidated	balance	sheets	are	presented	net	of	accumulated	depreciation	of	$
446
	million	and	$
406
	million	as	of
December	31,	2020	and	2019,	respectively.
Solar	Energy	Systems,	Net
We	are	the	lessor	of	solar	energy	systems.	Prior	to	January	1,	2019,	these	leases	
were	accounted	for	as	operating	leases	in	accordance	with	ASC	840.
Under	ASC	840,	to	determine	lease	classification,	we	evaluated	the	lease	terms	to	determine	whether	there	was	a	transfer	of	ownership	or	bargain	purchase
option	at	the	end	of	the	lease,	whether	the	lease	term	was	greater	than	
75
%	of	the	useful	life	or	whether	the	present	value	of	the	minimum	lease	payments
exceeded	
90
%	of	the	fair	value	at	lease	inception.


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90
%	of	the	fair	value	at	lease	inception.
	Agreements	for	solar	energy	system	leases	and	PPAs	that	commence	after	January	1,	2019	no	longer	meet	the
definition	of	a	lease	upon	the	adoption	of	ASC	842	and	are	instead	accounted	for	in	accordance	with	ASC	606.	We	utilize	periodic	appraisals	to	estimate	useful
lives	and	fair	values	at	lease	inception	and	residual	values	at	lease	termination.	Solar	energy	systems	are	stated	at	cost	less	accumulated	depreciation.
Depreciation	and	amortization	is	calculated	using	the	straight-line	method	over	the	estimated	useful	lives	of	the	respective	assets,	as	follows:
	
Solar	energy	systems	in	service
	
	
	
30
	to	
35
	years
Initial	direct	costs	related	to	customer
			solar	energy	system	lease	acquisition
			costs
	
	
	
Lease	term	(up	to	25
years)
	
Solar	energy	systems	pending	interconnection	will	be	depreciated	as	solar	energy	systems	in	service	when	they	have	been	interconnected	and	placed	in-
service.	Solar	energy	systems	under	construction	represents	systems	that	are	under	installation,	which	will	be	depreciated	as	solar	energy	systems	in	service
when	they	are	completed,	interconnected	and	placed	in	service.	Initial	direct	costs	related	to	customer	solar	energy	system	agreement	acquisition	costs	are
capitalized	and	amortized	over	the	term	of	the	related	customer	agreements.
Property,	Plant	and	Equipment,	net
Property,	plant	and	equipment,	net,	including	leasehold	improvements,	are	recognized	at	cost	less	accumulated	depreciation.	Depreciation	is	generally
computed	using	the	straight-line	method	over	the	estimated	useful	lives	of	the	respective	assets,	as	follows:
	
Machinery,	equipment,	vehicles	and
			office	furniture


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office	furniture
	
	
	
2
	to	
12
	years
Building	and	building	improvements
	
	
	
15
	to	
30
	years
Computer	equipment	and	software
	
	
	
3
	to	
10
	years
	
Leasehold	improvements	are	depreciated	on	a	straight-line	basis	over	the	shorter	of	their	estimated	useful	lives	or	the	terms	of	the	related	leases.
Upon	the	retirement	or	sale	of	our	property,	plant	and	equipment,	the	cost	and	associated	accumulated	depreciation	are	removed	from	the	consolidated
balance	sheet,	and	the	resulting	gain	or	loss	is	reflected	on	the	consolidated	statement	of	operations.	Maintenance	and	repair	expenditures	are	expensed	as
incurred	while	major	improvements	that	increase	the	functionality,	output	or	expected	life	of	an	asset	are	capitalized	and	depreciated	ratably	over	the	identified
useful	life.
Interest	expense	on	outstanding	debt	is	capitalized	during	the	period	of	significant	capital	asset	construction.	Capitalized	interest	on	construction-in-
progress	is	included	within	property,	plant	and	equipment,	net	and	is	amortized	over	the	life	of	the	related	assets.
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Long-Lived	Assets	Including	Acquired	Intangible	Assets
We	review	our	property,	plant	and	equipment,	solar	energy	systems,	long-term	prepayments	and	intangible	assets	for	impairment	whenever	events	or
changes	in	circumstances	indicate	that	the	carrying	amount	of	an	asset	(or	asset	group)	may	not	be	recoverable.	We	measure	recoverability	by	comparing	the
carrying	amount	to	the	future	undiscounted	cash	flows	that	the	asset	is	expected	to	generate.	If	the	asset	is	not	recoverable,	its	carrying	amount	would	be
adjusted	down	to	its	fair	value.	For	the	year	ended	December	31,	2020,	we	have	recognized	no	material	impairments	of	our	long-lived	assets.	For	the	years
ended	December	31,	2019	and	2018,	we	have	recognized	certain	impairments	of	our	long-lived	assets	(refer	to		Note	22,	
Restructuring	and	Other
,	for	further
details).
Intangible	assets	with	definite	lives	are	amortized	on	a	straight-line	basis	over	their	estimated	useful	lives,	which	range	from	
one
	to	
thirty
	years
.
Goodwill
We	assess	goodwill	for	impairment	annually	in	the	fourth	quarter,	or	more	frequently	if	events	or	changes	in	circumstances	indicate	that	it	might	be
impaired,	by	comparing	its	carrying	value	to	the	reporting	unit’s	fair	value.	For	the	years	ended	December	31,	2020,	2019,	and	2018,	we	had	
no
t	recognized
any	impairment	of	goodwill.
Capitalization	of	Software	Costs
For	costs	incurred	in	development	of	internal	use	software,	we	capitalize	costs	incurred	during	the	application	development	stage	to	property,	plant	and


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equipment,	net	on	the	consolidated	balance	sheets.	Costs	related	to	preliminary	project	activities	and	post-implementation	activities	are	expensed	as	incurred.
Internal	use	software	is	amortized	on	a	straight-line	basis	over	its	estimated	useful	life	of	
three	years
.	We	evaluate	the	useful	lives	of	these	assets	on	an	annual
basis,	and	we	test	for	impairment	whenever	events	or	changes	in	circumstances	occur	that	could	impact	the	recoverability	of	these	assets.
Foreign	Currency
We	determine	the	functional	and	reporting	currency	of	each	of	our	international	subsidiaries	and	their	operating	divisions	based	on	the	primary
currency	in	which	they	operate.	In	cases	where	the	functional	currency	is	not	the	U.S.	dollar,	we	recognize	a	cumulative	translation	adjustment	created	by	the
different	rates	we	apply	to	current	period	income	or	loss	and	the	balance	sheet.	For	each	subsidiary,	we	apply	the	monthly	average	functional	exchange	rate	to
its	monthly	income	or	loss	and	the	month-end	functional	currency	rate	to	translate	the	balance	sheet.
Foreign	currency	transaction	gains	and	losses	are	a	result	of	the	effect	of	exchange	rate	changes	on	transactions	denominated	in	currencies	other	than
the	functional	currency.	Transaction	gains	and	losses	are	recognized	in	other	(expense)	income,	net,	in	the	consolidated	statements	of	operations.	For	the	years
ended	December	31,	2020,	2019	and	2018,	we	recorded	net	foreign	currency	transaction	losses	of	$
114
	million,	gains	of	$
48
	million	and	gains	of	$
2
	million,
respectively.
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Warranties
We	provide	a	manufacturer’s	warranty	on	all	new	and	used	vehicles	and	
a	warranty	on	the	installation	and	components	of	the	energy	generation	and
storage	systems	we	sell	for	periods	typically	between	10	to	25	years.
	We	accrue	a	warranty	reserve	for	the	products	sold	by	us,	which	includes	our	best
estimate	of	the	projected	costs	to	repair	or	replace	items	under	warranties	and	recalls	when	identified.	These	estimates	are	based	on	actual	claims	incurred	to
date	and	an	estimate	of	the	nature,	frequency	and	costs	of	future	claims.	These	estimates	are	inherently	uncertain	given	our	relatively	short	history	of	sales,
and	changes	to	our	historical	or	projected	warranty	experience	may	cause	material	changes	to	the	warranty	reserve	in	the	future.	The	warranty	reserve	does
not	include	projected	warranty	costs	associated	with	our	vehicles	subject	to	operating	lease	accounting	and	our	solar	energy	systems	under	lease	contracts	or
PPAs,	as	the	costs	to	repair	these	warranty	claims	are	expensed	as	incurred.	The	portion	of	the	warranty	reserve	expected	to	be	incurred	within	the	next
12	months	is	included	within	accrued	liabilities	and	other,	while	the	remaining	balance	is	included	within	other	long-term	liabilities	on	the	consolidated	balance
sheets.	Warranty	expense	is	recorded	as	a	component	of	cost	of	revenues	in	the	consolidated	statements	of	operations.	Due	to	the	magnitude	of	our	automotive
business,	accrued	warranty	balance	was	primarily	related	to	our	automotive	segment.	
Accrued	warranty	activity	consisted	of	the	following	(in	millions):
	
	
	
	
Year	Ended	December	31,
	
	
	
2020
	
	
2019
	
	
2018


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2019
	
	
2018
	
Accrued	warranty—beginning	of	period
	
$
1,089
	
	
$
748
	
	
$
402
	
Warranty	costs	incurred
	
	
(
312
)
	
	
(
250
)
	
	
(
209
)
Net	changes	in	liability	for	pre-existing	warranties,
			including	expirations	and	foreign	exchange	impact
	
	
66
	
	
	
36
	
	
	
(
26
)
Additional	warranty	accrued	from	adoption	of	ASC	606
	
	
—
	
	
	
—
	
	
	
37
	
Provision	for	warranty
	
	
625
	
	
	
555
	
	
	
544
	
Accrued	warranty—end	of	period
	
$
1,468
	
	
$
1,089
	
	
$
748
	
	
Solar	Renewable	Energy	Credits
We	account	for	Solar	Renewable	Energy	Certificates	(“SRECs”)	when	they	are	purchased	by	us	or	sold	to	third	parties.	For	SRECs	generated	by	solar
energy	systems	owned	by	us	and	minted	by	government	agencies,	we	do	not	recognize	any	specifically	identifiable	costs	as	there	are	no	specific	incremental
costs	incurred	to	generate	the	SRECs.	We	recognize	revenue	within	the	energy	generation	and	storage	segment	from	the	sale	of	an	SREC	when	the	SREC	is
transferred	to	the	buyer,	and	the	cost	of	the	SREC,	if	any,	is	then	recorded	to	energy	generation	and	storage	cost	of	revenue.
Nevada	Tax	Incentives
In	connection	with	the	construction	of	Gigafactory	Nevada,	we	entered	into	agreements	with	the	State	of	Nevada	and	Storey	County	in	Nevada	that


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provide	abatements	for	specified	taxes,	discounts	to	the	base	tariff	energy	rates	and	transferable	tax	credits	of	up	to	$
195.0
	million	in	consideration	of	capital
investment	and	hiring	targets	that	were	met	at	Gigafactory	Nevada.	These	incentives	are	available	until	June	2024	or	June	2034,	depending	on	the	incentive.	As
of	December	31,	2020	and	2019,	we	had	earned	the	maximum	of	$
195
	million	of	transferable	tax	credits	under	these	agreements.
Gigafactory	Texas	Tax	Incentives
In	connection	with	the	construction	of	Gigafactory	Texas,	we	entered	into	a	
20
-year	agreement	with	Travis	County	in	Texas	pursuant	to	which	we	would
receive	grant	funding	equal	to	
70
-
80
%	of	property	taxes	paid	by	us	to	Travis	County	and	a	separate	
10
-year	agreement	with	the	Del	Valle	Independent	School
District	in	Texas	pursuant	to	which	a	portion	of	the	taxable	value	of	our	property	would	be	capped	at	a	specified	amount,	in	each	case	subject	to	our	meeting
certain	minimum	economic	development	metrics	through	our	construction	and	operations	at	Gigafactory	Texas.	As	of	December	31,	2020,	we	had	
no
t	yet
received	any	grant	funding	related	to	property	taxes	paid	to	Travis	County.
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Recent	Accounting	Pronouncements
Recently	issued	accounting	pronouncements	not	yet	adopted
In	December	2019,	the	FASB	issued	ASU	No.	2019-12,	Simplifying	the	Accounting	for	Income	Taxes,	as	part	of	its	initiative	to	reduce	complexity	in
accounting	standards.	The	amendments	in	the	ASU	include	removing	exceptions	to	incremental	intraperiod	tax	allocation	of	losses	and	gains	from	different
financial	statement	components,	exceptions	to	the	method	of	recognizing	income	taxes	on	interim	period	losses,	and	exceptions	to	deferred	tax	liability
recognition	related	to	foreign	subsidiary	investments.	In	addition,	the	ASU	requires	that	entities	recognize	franchise	tax	based	on	an	incremental	method	and
requires	an	entity	to	evaluate	the	accounting	for	step-ups	in	the	tax	basis	of	goodwill	as	inside	or	outside	of	a	business	combination.	The	amendments	in	the
ASU	are	effective	for	fiscal	years	beginning	after	December	15,	2020,	including	interim	periods	therein.	Early	adoption	of	the	standard	is	permitted,	including
adoption	in	interim	or	annual	periods	for	which	financial	statements	have	not	yet	been	issued.	We	have	not	early	adopted	this	ASU	as	of	December	31,	2020.
The	ASU	is	currently	not	expected	to	have	a	material	impact	on	our	consolidated	financial	statements.
In	March	2020,	the	FASB	issued	ASU	No.	2020-04,	Facilitation	of	the	Effects	of	Reference	Rate	Reform	on	Financial	Reporting	(Topic	848).	The	ASU
provides	optional	expedients	and	exceptions	for	applying	GAAP	to	transactions	affected	by	reference	rate	(e.g.,	LIBOR)	reform	if	certain	criteria	are	met,	for	a


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limited	period	of	time	to	ease	the	potential	burden	in	accounting	for	(or	recognizing	the	effects	of)	reference	rate	reform	on	financial	reporting.	The	ASU	is
effective	as	of	March	12,	2020	through	December	31,	2022.	We	will	evaluate	transactions	or	contract	modifications	occurring	as	a	result	of	reference	rate
reform	and	determine	whether	to	apply	the	optional	guidance	on	an	ongoing	basis.	The	ASU	is	currently	not	expected	to	have	a	material	impact	on	our
consolidated	financial	statements.
In	August	2020,	the	FASB	issued	ASU	2020-06,	Accounting	for	Convertible	Instruments	and	Contracts	in	an	Entity’s	Own	Equity.	The	ASU	simplifies	the
accounting	for	convertible	instruments	by	removing	certain	separation	models	in	ASC	470-	20,	Debt—Debt	with	Conversion	and	Other	Options,	for	convertible
instruments.	The	ASU	updates	the	guidance	on	certain	embedded	conversion	features	that	are	not	required	to	be	accounted	for	as	derivatives	under	Topic	815,
Derivatives	and	Hedging,	or	that	do	not	result	in	substantial	premiums	accounted	for	as	paid-in	capital,	such	that	those	features	are	no	longer	required	to	be
separated	from	the	host	contract.	The	convertible	debt	instruments	will	be	accounted	for	as	a	single	liability	measured	at	amortized	cost.	This	will	also	result	in
the	interest	expense	recognized	for	convertible	debt	instruments	to	be	typically	closer	to	the	coupon	interest	rate	when	applying	the	guidance	in	Topic	835,
Interest.	Further,	the	ASU	made	amendments	to	the	EPS	guidance	in	Topic	260	for	convertible	instruments,	the	most	significant	impact	of	which	is	requiring


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the	use	of	the	if-converted	method	for	diluted	EPS	calculation,	and	no	longer	allowing	the	net	share	settlement	method.	The	ASU	also	made	revisions	to	Topic
815-40,	which	provides	guidance	on	how	an	entity	must	determine	whether	a	contract	qualifies	for	a	scope	exception	from	derivative	accounting.	The
amendments	to	Topic	815-40	change	the	scope	of	contracts	that	are	recognized	as	assets	or	liabilities.	The	ASU	is	effective	for	interim	and	annual	periods
beginning	after	December	15,	2021,	with	early	adoption	permitted	for	periods	beginning	after	December	15,	2020.	Adoption	of	the	ASU	can	either	be	on	a
modified	retrospective	or	full	retrospective	basis.
We	will	adopt	the	ASU	on	January	1,	2021	on	a	modified	retrospective	basis.	The	adoption	is	expected	to	reduce	additional	paid	in	capital	and
convertible	senior	notes	(mezzanine	equity)	by	approximately	$
475
	million	and	$
50
	million,	respectively	for	the	recombination	of	the	equity	conversion
component	of	our	convertible	debt	remaining	outstanding,	which	was	initially	separated	and	recorded	in	equity,	remove	the	remaining	debt	discounts	recorded
for	this	previous	separation	for	approximately	$
269
	million	and	reduce	property,	plant	and	equipment	for	previously	capitalized	interest	by	approximately	$
45
million,	as	a	result.	The	net	effect	of	these	adjustments	will	be	recorded	as	a	reduction	in	the	balance	of	our	opening	accumulated	deficit	as	of	January	1,	2021.
We	currently	expect	the	adoption	of	the	ASU	will	result	in	the	reduction	of	non-cash	interest	expense		for	the	year	ending	December	31,	2021	and	until


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the	affected	notes	have	been	settled,	before	the	impact	of	reduction	of	our	interest	capitalization,	which	is	not	expected	to	be	material.	The	reduction	of
depreciation	expense	through	cost	of	goods	sold	is	not	expected	to	be	material	for	the	year	ending	December	31,	2021.	These	reduced	expenses	will	increase
the	income	attributable	to	common	stockholders	for	both	basic	and	diluted	earnings	per	share.	The	required	use	of	the	if	converted	method	is	not	expected	to
have	a	significant	impact	on	the	calculation	of	common	share	equivalents	included	in	the	measure	of	our	diluted	earnings	per	share	for	our	2021	Notes,	2022
Notes,	2024	Notes	and	our	subsidiary’s	5.50%	Convertible	Senior	Notes	due	in	2022.	The	amendments	to	the	derivative	accounting	guidance	are	not	expected
to	have	a	material	impact	on	our	consolidated	financial	statements.	The	adoption	will	have	no	impact	on	the	consolidated	statement	of	cash	flows.
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Recently	adopted	accounting	pronouncements
In	June	2016,	the	FASB	issued	ASU	No.	2016-13,	Measurement	of	Credit	Losses	on	Financial	Instruments,	to	require	financial	assets	carried	at
amortized	cost	to	be	presented	at	the	net	amount	expected	to	be	collected	based	on	historical	experience,	current	conditions	and	forecasts.	Subsequently,	the
FASB	issued	ASU	No.	2018-19,	Codification	Improvements	to	Topic	326,	to	clarify	that	receivables	arising	from	operating	leases	are	within	the	scope	of	lease
accounting	standards.	Further,	the	FASB	issued	ASU	No.	2019-04,	ASU	No.	2019-05,	ASU	2019-10,	ASU	2019-11,	ASU	2020-02	and	ASU	2020-03	to	provide
additional	guidance	on	the	credit	losses	standard.	Adoption	of	the	ASUs	is	on	a	modified	retrospective	basis.	We	adopted	the	ASUs	on	
January	1,	2020
.	The
ASUs	did	not	have	a	material	impact	on	our	consolidated	financial	statements.	ASU	No.	2016-13	applies	to	all	financial	assets	including	loans,	trade	receivables
and	any	other	financial	assets	not	excluded	from	the	scope	that	have	the	contractual	right	to	receive	cash.	The	adoption	of	this	ASU	did	not	have	any	impact
except	on	MyPower	customer	notes	receivable.	Refer	to	MyPower	Customer	Notes	Receivable	above	for	further	details.
In	January	2017,	the	FASB	issued	ASU	No.	2017-04,	Simplifying	the	Test	for	Goodwill	Impairment,	to	simplify	the	test	for	goodwill	impairment	by


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removing	Step	2.	An	entity	will,	therefore,	perform	the	goodwill	impairment	test	by	comparing	the	fair	value	of	a	reporting	unit	with	its	carrying	amount	and
recognizing	an	impairment	charge	for	the	amount	by	which	the	carrying	amount	exceeds	the	fair	value,	not	to	exceed	the	total	amount	of	goodwill	allocated	to
the	reporting	unit.	An	entity	still	has	the	option	to	perform	a	qualitative	assessment	to	determine	if	the	quantitative	impairment	test	is	necessary.	We	adopted
the	ASU	prospectively	on	
January	1,	2020
.	The	ASU	did	not	have	a	material	impact	on	our	consolidated	financial	statements.
In	August	2018,	the	FASB	issued	ASU	No.	2018-15,	Customer’s	Accounting	for	Implementation	Costs	Incurred	in	a	Cloud	Computing	Arrangement	that
Is	a	Service	Contract.	The	ASU	aligns	the	requirements	for	capitalizing	implementation	costs	incurred	in	a	hosting	arrangement	that	is	a	service	contract	with
the	requirements	for	capitalizing	implementation	costs	incurred	to	develop	or	obtain	internal-use	software	(and	hosting	arrangements	that	include	an	internal-
use	software	license).	We	adopted	the	ASU	prospectively	on	
January	1,	2020
.	The	ASU	did	not	have	a	material	impact	on	our	consolidated	financial	statements.
	
Note	3	–	Business	Combinations
For	the	year	ended	December	31,	2020,	we	completed	various	acquisitions	for	which	consideration	was	immaterial	on	an	individual	basis	and	in
aggregate.
Maxwell	Acquisition
On	
May	16,	2019
	(the	“Acquisition	Date”),	we	completed	our	strategic	acquisition	of	Maxwell	Technologies,	Inc.	(“Maxwell”),	an	energy	storage	and


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power	delivery	products	company,	for	its	complementary	technology	and	workforce.	Pursuant	to	the	related	Agreement	and	Plan	of	Merger,	
each	issued	and
outstanding	share	of	Maxwell	common	stock	was	converted	into	
0.0965
	(the	“Exchange	Ratio”)	shares	of	our	common	stock,	
as	adjusted	to	give	effect	to	the
Stock	Split
.
	In	addition,	Maxwell’s	stock	option	awards	and	restricted	stock	unit	awards	were	assumed	by	us	and	converted	into	corresponding	equity	awards	in
respect	of	our	common	stock	based	on	the	Exchange	Ratio,	with	the	awards	retaining	the	same	vesting	and	other	terms	and	conditions	as	in	effect	immediately
prior	to	the	acquisition.
Fair	Value	of	Purchase	Consideration
The	Acquisition	Date	fair	value	of	the	purchase	consideration	was	$
207
	million	(
as	adjusted	to	give	effect	to	the	Stock	Split,
	
4,514,840
	shares	issued	at
$
45.90
	per	share,	the	opening	price	of	our	common	stock	on	the	Acquisition	Date).
Fair	Value	of	Assets	Acquired	and	Liabilities	Assumed
	
We	accounted	for	the	acquisition	using	the	purchase	method	of	accounting	for	business	combinations	under	ASC	805,	Business	Combinations.	The	total
purchase	price	was	allocated	to	the	tangible	and	identifiable	intangible	assets	acquired	and	liabilities	based	on	their	estimated	fair	values	as	of	the	Acquisition
Date.		
Fair	value	estimates	are	based	on	a	complex	series	of	judgments	about	future	events	and	uncertainties	and	rely	heavily	on	estimates	and	assumptions.
The	judgments	used	to	determine	the	estimated	fair	value	assigned	to	each	class	of	assets	acquired	and	liabilities	assumed,	as	well	as	asset	lives	and	the


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expected	future	cash	flows	and	related	discount	rates,	can	materially	impact	our	consolidated	financial	statements.	Significant	inputs	used	for	the	model
included	the	amount	of	cash	flows,	the	expected	period	of	the	cash	flows	and	the	discount	rates.
75


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The	allocation	of	the	purchase	price	was	based	on	management’s	estimate	of	the	Acquisition	Date	fair	values	of	the	assets	acquired	and	liabilities
assumed,	as	follows	(in	millions):
	
Assets	acquired:
	
	
	
	
Cash	and	cash	equivalents
	
$
32
	
Accounts	receivable
	
	
24
	
Inventory
	
	
32
	
Property,	plant	and	equipment,	net
	
	
27
	
Operating	lease	right-of-use	assets
	
	
10
	
Intangible	assets
	
	
105
	
Prepaid	expenses	and	other	assets,	current	and	non-current
	
	
3
	
Total	assets	acquired
	
	
233
	
Liabilities	and	equity	assumed:
	
	
	
	
Accounts	payable
	
	
(
10
)
Accrued	liabilities	and	other
	
	
(
28
)
Debt	and	finance	leases,	current	and	non-current
	
	
(
44
)
Deferred	revenue,	current
	
	
(
1
)
Other	long-term	liabilities
	
	
(
14
)
Additional	paid-in	capital
	
	
(
8
)
Total	liabilities	and	equity	assumed
	
	
(
105
)
Net	assets	acquired
	
	
128
	
Goodwill
	
	
79
	
Total	purchase	price
	
$
207
	
Goodwill	represented	the	excess	of	the	purchase	price	over	the	fair	value	of	the	net	assets	acquired	and	was	primarily	attributable	to	the	expected
synergies	from	integrating	Maxwell’s	technology	into	our	automotive	segment	as	well	as	the	acquired	talent.	Goodwill	is	not	deductible	for	U.S.	income	tax
purposes	and	is	not	amortized.
Identifiable	Intangible	Assets	Acquired
The	determination


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Identifiable	Intangible	Assets	Acquired
The	determination	
of	the	fair	value	of	identified	intangible	assets	and	their	respective	useful	lives	were	as	follows	(in	millions,	except	for	estimated
useful	life):
	
	
	
Fair	Value
	
	
Useful	Life
(in	years)
	
Developed	technology
	
$
102
	
	
	
9
	
Customer	relations
	
	
2
	
	
	
9
	
Trade	name
	
	
1
	
	
	
10
	
Total	intangible	assets
	
$
105
	
	
	
	
	
Maxwell’s	results	of	operations	since	the	Acquisition	Date	have	been	included	within	the	automotive	segment.	Standalone	and	pro	forma	results	of
operations	have	not	been	presented	because	they	were	not	material	to	the	consolidated	financial	statements.
Other	2019	Acquisitions
During	the	year	ended	December	31,	2019,	
we	completed	various	other	acquisitions	generally	for	the	related	technology	and	workforce.	Total
consideration	for	these	acquisitions	was	$
96
	million,	of	which	$
80
	million	was	paid	in	cash.	In	aggregate,	$
36
	million	was	attributed	to	intangible	assets,	$
51
million	was	attributed	to	goodwill	within	the	automotive	segment,	and	$
9
	million	was	attributed	to	net	assets	assumed.	Goodwill	is	not	deductible	for	U.S.
income	tax	purposes.	The	identifiable	intangible	assets	were	related	to	purchased	technology,	with	estimated	useful	lives	of	
one
	to	
nine
	years
.
Standalone	and	pro	forma	results	of	operations	have	not	been	presented	because	they	were	not	material	to	the	consolidated	financial	statements,	either
individually	or	in	aggregate.


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individually	or	in	aggregate.
	
Note	4	–	Goodwill	and	Intangible	Assets
Goodwill	increased	
$
9
	million	within	the	automotive	segment	from	$
198
	million	as	of	December	31,	2019	to	
$
207
	million	as	of	December	31,	2020	due	to
completed	business	combinations	and	foreign	currency	translation	adjustments	during	the	year	ended	December	31,	2020.	There	were	
no
	accumulated
impairment	losses	as	of	December	31,	2020	and	2019.
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Information	regarding	our	intangible	assets	
including	assets	recognized	from	our	acquisitions	
was	as	follows	(in	millions):
	
	
	
December	31,	2020
	
	
December	31,	2019
	
	
	
Gross
	
Carrying
Amount
	
	
Accumulated
Amortization
	
	
Other
	
	
Net	Carrying
Amount
	
	
Gross	Carrying
Amount
	
	
Accumulated
Amortization
	
	
Other
	
	
Net	Carrying
Amount
	
Finite-lived
			intangible	assets:
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
Developed	technology
	
$
302
	
	
$
(
111
)
	
$
3
	
	
$
194
	
	
$
291
	
	
$
(
72
)
	
$
1
	
	
$
220
	
Trade	names
	
	
3
	
	
	
(
1
)
	
	
—
	
	
	
2
	
	
	
3
	
	
	
(
1
)
	
	
1
	
	
	
3
	
Favorable	contracts	and
			leases,	net
	
	
113
	
	
	
(
32
)
	
	
—
	
	
	
81
	
	
	
113
	
	
	
(
24
)
	
	
—
	
	
	
89
	
Other
	
	
38
	
	
	
(
18
)
	
	
1
	
	
	
21
	
	
	
38
	
	
	
(
16
)
	
	
—


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(
16
)
	
	
—
	
	
	
22
	
Total	finite-lived
			intangible	assets
	
	
456
	
	
	
(
162
)
	
	
4
	
	
	
298
	
	
	
445
	
	
	
(
113
)
	
	
2
	
	
	
334
	
Indefinite-lived
			intangible	assets:
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
Gigafactory	Nevada
			water	rights
	
	
15
	
	
	
—
	
	
	
—
	
	
	
15
	
	
	
5
	
	
	
—
	
	
	
—
	
	
	
5
	
In-process	research
			and	development
			("IPR&D")
	
	
—
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
60
	
	
	
—
	
	
	
(
60
)
	
	
—
	
Total	infinite-lived
			intangible	assets
	
	
15
	
	
	
—
	
	
	
—
	
	
	
15
	
	
	
65
	
	
	
—
	
	
	
(
60
)
	
	
5
	
Total	intangible	assets
	
$
471
	
	
$
(
162
)
	
$
4
	
	
$
313
	
	
$
510
	
	
$
(
113
)
	
$
(
58
)
	
$
339


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(
58
)
	
$
339
	
	
Amortization	expense	during	the	years	ended	December	31,	2020,	2019	and	2018	was	$
51
	million,	$
44
	million	and	$
66
	million,	respectively.
Total	future	amortization	expense	for	finite-lived	intangible	assets	was	estimated	as	follows	(in	millions):
	
2021
	
	
$
51
	
2022
	
	
	
50
	
2023
	
	
	
44
	
2024
	
	
	
29
	
2025
	
	
	
29
	
Thereafter
	
	
	
95
	
Total
	
	
$
298
	
Note	5	–	Fair	Value	of	Financial	Instruments
ASC	820
,	Fair	Value	Measurements
,	states	that	fair	value	is	an	exit	price,	representing	the	amount	that	would	be	received	to	sell	an	asset	or	paid	to
transfer	a	liability	in	an	orderly	transaction	between	market	participants.	As	such,	fair	value	is	a	market-based	measurement	that	should	be	determined	based
on	assumptions	that	market	participants	would	use	in	pricing	an	asset	or	a	liability
.	The	three-tiered	fair	value	hierarchy,	which	prioritizes	which	inputs	should
be	used	in	measuring	fair	value,	is	comprised	of:	(Level	I)	observable	inputs	such	as	quoted	prices	in	active	markets;	(Level	II)	inputs	other	than	quoted	prices
in	active	markets	that	are	observable	either	directly	or	indirectly	and	(Level	III)	unobservable	inputs	for	which	there	is	little	or	no	market	data.	The	fair	value
hierarchy	requires	the	use	of	observable	market	data	when	available	in	determining	fair	value.	
Our	assets	and	liabilities	that	were	measured	at	fair	value	on	a


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recurring	basis	were	as	follows	(in	millions):
	
	
	
December	31,	2020
	
	
December	31,	2019
	
	
	
Fair	Value
	
	
Level	I
	
	
Level	II
	
	
Level	III
	
	
Fair	Value
	
	
Level	I
	
	
Level	II
	
	
Level	III
	
Money	market	funds	(cash	and
			cash	equivalents)
	
$
13,847
	
	
$
13,847
	
	
$
—
	
	
$
—
	
	
$
1,632
	
	
$
1,632
	
	
$
—
	
	
$
—
	
Interest	rate	swap	assets
	
	
—
	
	
	
—
	
	
	
—
	
	
	
—
	
	
	
1
	
	
	
—
	
	
	
1
	
	
	
—
	
Interest	rate	swap	liabilities
	
	
58
	
	
	
—
	
	
	
58
	
	
	
—
	
	
	
(
27
)
	
	
—
	
	
	
(
27
)
	
	
—
	
Total
	
$
13,905
	
	
$
13,847
	
	
$
58
	
	
$
—
	
	
$
1,606
	
	
$
1,632
	
	
$
(
26
)
	
$
—
	
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All	of	our	money	market	funds	were	classified	within	Level	I	of	the	fair	value	hierarchy	because	they	were	valued	using	quoted	prices	in	active	markets.
Our	interest	rate	swaps	were	classified	within	Level	II	of	the	fair	value	hierarchy	because	they	were	valued	using	alternative	pricing	sources	or	models	that
utilized	market	observable	inputs,	including	current	and	forward	interest	rates.
Interest	Rate	Swaps
We	enter	into	fixed-for-floating	interest	rate	swap	agreements	to	swap	variable	interest	payments	on	certain	debt	for	fixed	interest	payments,	as
required	by	certain	of	our	lenders.	We	do	not	designate	our	interest	rate	swaps	as	hedging	instruments.	Accordingly,	our	interest	rate	swaps	are	recorded	at
fair	value	on	the	consolidated	balance	sheets	within	other	non-current	assets	or	other	long-term	liabilities,	with	any	changes	in	their	fair	values	recognized	as
other	(expense)	income,	net,	in	the	consolidated	statements	of	operations	and	with	any	cash	flows	recognized	as	operating	activities	in	the	consolidated
statements	of	cash	flows.	
Our	interest	rate	swaps	outstanding	were	as	follows	(in	millions):
	
	
	
December	31,	2020
	
	
December	31,	2019
	
	
	
Aggregate	Notional
Amount
	
	
Gross	Asset	at
Fair	Value
	
	
Gross	Liability	at
Fair	Value
	
	
Aggregate	Notional
Amount
	
	
Gross	Asset	at
Fair	Value
	
	
Gross	Liability	at
Fair	Value
	
Interest	rate	swaps
	
$
554
	
	
$
—
	
	
$
58
	
	
$
821
	
	
$
1
	
	
$
27


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$
1
	
	
$
27
	
	
Our	interest	rate	swaps	activity	was	as	follows	(in	millions):
	
	
	
Year	Ended	December	31,
	
	
	
2020
	
	
2019
	
	
2018
	
Gross	losses
	
$
42
	
	
$
51
	
	
$
12
	
Gross	gains
	
$
6
	
	
$
11
	
	
$
22
	
	
Disclosure	of	Fair	Values
Our	financial	instruments	that	are	not	re-measured	at	fair	value	include	accounts	receivable,	MyPower	customer	notes	receivable,	accounts	payable,
accrued	liabilities,	customer	deposits	and	debt.	The	carrying	values	of	these	financial	instruments	other	than	our	2021	Notes,	2022	Notes,	2024	Notes,	our
subsidiary’s	
Zero
-Coupon	Convertible	Senior	Notes	due	in	2020	and	
our	subsidiary’s	
5.50
%	Convertible	Senior	Notes	due	in	
2022
	(collectively	referred	to	as
“Convertible	Senior	Notes”	below),	
5.30
%
	Senior	Notes	due	in	2025	(“2025	Notes”),	solar	asset-backed	notes	and	solar	loan-backed	notes	approximate	their	fair
values.
We	estimate	the	fair	value	of	the	Convertible	Senior	Notes	and	the	2025	Notes	using
	commonly	accepted	valuation	methodologies	and	market-based	risk
measurements	that	are	indirectly	observable,	such	as	credit	risk	(Level	II)
.	
In	addition,	
we	estimate	the	fair	values	of	our	solar	asset-backed	notes	and	solar
loan-backed	notes	based	on	rates	currently	offered	for	instruments	with	similar	maturities	and	terms	(Level	III).	
The	following	table	presents	the	estimated	fair


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The	following	table	presents	the	estimated	fair
values	and	the	carrying	values	(in	millions):
	
	
	
December	31,	2020
	
	
December	31,	2019
	
	
	
Carrying
	
Value
	
	
Fair	Value
	
	
Carrying
	
Value
	
	
Fair	Value
	
Convertible	Senior	Notes
	
$
1,971
	
	
$
24,596
	
	
$
3,729
	
	
$
6,110
	
2025	Notes
	
$
1,785
	
	
$
1,877
	
	
$
1,782
	
	
$
1,748
	
Solar	asset-backed	notes
	
$
1,115
	
	
$
1,137
	
	
$
1,155
	
	
$
1,211
	
Solar	loan-backed	notes
	
$
146
	
	
$
152
	
	
$
175
	
	
$
189
	
	
	
Note	6	–	Inventory
Our	inventory	consisted	of	the	following	(in	millions):
	
	
	
December	31,
	
	
December	31,
	
	
	
2020
	
	
2019
	
Raw	materials
	
$
1,508
	
	
$
1,428
	
Work	in	process
	
	
493
	
	
	
362
	
Finished	goods	(1)
	
	
1,666
	
	
	
1,356
	
Service	parts
	
	
434
	
	
	
406
	
Total
	
$
4,101
	
	
$
3,552
	
	
(1)
Finished	goods	inventory	includes	vehicles	in	transit	to	fulfill	customer	orders,	new	vehicles	available	for	sale,	used	vehicles,	energy	storage	products


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For	solar	energy	systems,	we	commence	transferring	component	parts	from	inventory	to	construction	in	progress,	a	component	of	solar	energy	systems
,
once	a	lease	
or	PPA	
contract	with	a	customer	has	been	executed	and	installation	has	been	initiated.	Additional	costs	incurred	on	the	leased	
solar	energy
systems,	including	labor	and	overhead,	are	recorded	within	
solar	energy	systems	under	construction
.
We	write-down	inventory	for	any	excess	or	obsolete	inventories	or	when	we	believe	that	the	net	realizable	value	of	inventories	is	less	than	the	carrying
value.	During	the	years	ended	December	31,	2020,	2019	and	2018,	we	recorded	write-downs	of	$
145
	million,	$
138
	million	and	$
78
	million,	respectively,	in	cost
of	revenues.
	
	
	
Note	7	–	Solar	Energy	Systems,	Net
Solar	energy	systems,	net,	consisted	of	the	following	(in	millions):
	
	
	
December	31,
	
	
December	31,
	
	
	
2020
	
	
2019
	
Solar	energy	systems	in	service
	
$
6,758
	
	
$
6,682
	
Initial	direct	costs	related	to	customer	solar	energy
			system	lease	acquisition	costs
	
	
103
	
	
	
102
	
	
	
	
6,861
	
	
	
6,784
	
Less:	accumulated	depreciation	and	amortization	(1)
	
	
(
955
)
	
	
(
723
)
	
	
	
5,906
	
	
	
6,061
	
Solar	energy	systems	under	construction
	
	
28
	
	
	
18
	
Solar	energy	systems	pending	interconnection
	
	
45


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Solar	energy	systems	pending	interconnection
	
	
45
	
	
	
59
	
Solar	energy	systems,	net	(2)
	
$
5,979
	
	
$
6,138
	
(1)
Depreciation	and	amortization	expense	during	the	years	ended	December	31,	2020,	2019	and	2018	was	$
232
	million,	$
227
	million	and	$
276
	million,
respectively.
(2)
As	of	December	31,	2020	and	2019,	solar	energy	systems,	net,	included	$
36
	million	of	gross	finance	leased	assets	with	accumulated	depreciation	and
amortization	of	$
7
	million	and	$
6
	million,	respectively.
	
	
Note	8	–	Property,	Plant	and	Equipment,	Net
Our	property,	plant	and	equipment,	net,	consisted	of	the	following	(in	millions):
	
	
	
December	31,
	
	
December	31,
	
	
	
2020
	
	
2019
	
Machinery,	equipment,	vehicles	and	office	furniture
	
$
8,493
	
	
$
7,167
	
Tooling
	
	
1,811
	
	
	
1,493
	
Leasehold	improvements
	
	
1,421
	
	
	
1,087
	
Land	and	buildings
	
	
3,662
	
	
	
3,024
	
Computer	equipment,	hardware	and	software
	
	
856
	
	
	
595
	
Construction	in	progress
	
	
1,621
	
	
	
764
	
	
	
	
17,864
	
	
	
14,130
	
Less:	Accumulated	depreciation
	
	
(
5,117
)
	
	
(
3,734
)
Total
	
$


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(
3,734
)
Total
	
$
12,747
	
	
$
10,396
	
	
Construction	in	progress	is	primarily	comprised	of	construction	of	Gigafactory	Berlin	and	Gigafactory	Texas,	expansion	of	Gigafactory	Shanghai	and
equipment	and	tooling	related	to	the	manufacturing	of	our	products.	We	are	currently	constructing	Gigafactory	Berlin	under	conditional	permits.	Completed
assets	are	transferred	to	their	respective	asset	classes,	and	depreciation	begins	when	an	asset	is	ready	for	its	intended	use.	Interest	on	outstanding	debt	is
capitalized	during	periods	of	significant	capital	asset	construction	and	amortized	over	the	useful	lives	of	the	related	assets.	During	the	years	ended	December
31,	2020	and	2019,	we	capitalized	$
48
	million	and	$
31
	million,	respectively,	of	interest.
Depreciation	expense	during	the	years	ended	December	31,	2020,	2019	and	2018	was	$
1.57
	billion,	$
1.37
	billion	and	$
1.11
	billion,	respectively.	Gross
property,	plant	and	equipment	under	finance	leases	as	of	December	31,	2020	and	2019	was	$
2.28
	billion	and	$
2.08
	billion,	respectively,	with	accumulated
depreciation	of	$
816
	million	and	$
483
	million,	respectively.
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Panasonic	has	partnered	with	us	on	Gigafactory	Nevada	with	investments	in	the	production	equipment	that	it	uses	to	manufacture	and	supply	us	with
battery	cells.	Under	our	arrangement	with	Panasonic,	we	plan	to	purchase	the	full	output	from	their	production	equipment	at	negotiated	prices.	As	the	terms	of
the	arrangement	convey	a	finance	lease	under	ASC	842,	Leases,	we	account	for	their	production	equipment	as	leased	assets	when	production	commences.	
We
account	for	each	lease	and	any	non-lease	components	associated	with	that	lease	as	a	single	lease	component	for	all	asset	classes,	except	production	equipment
classes	embedded	in	supply	agreements.	
This	results	in	us	recording	the	cost	of	their	production	equipment	within	property,	plant	and	equipment,	net,	on	the
consolidated	balance	sheets	with	a	corresponding	liability	recorded	to	debt	and	finance	leases.	Depreciation	on	Panasonic	production	equipment	is	computed
using	the	units-of-production	method	whereby	capitalized	costs	are	amortized	over	the	total	estimated	productive	life	of	the	respective	assets.	As	of
December	31,	2020
	and	2019,	we	had	cumulatively	capitalized	costs	of	$
1.77
	billion	and	$
1.73
	billion,	respectively,
	on	the	consolidated	balance	sheets	in
relation	to	the	production	equipment	under	our	Panasonic	arrangement.
In	2019,	the	Shanghai	government	agreed	to	provide	$
85
	million	of	certain	incentives	in	connection	with	us	making	certain	manufacturing	equipment
investments	at	Gigafactory	Shanghai,	of	which	$
46
	million	was	received	in	cash	and	the	remaining	$
39
	million	was	in	the	form	of	assets	and	services


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39
	million	was	in	the	form	of	assets	and	services
contributed	by	the	government.	In	2020,	the	Shanghai	government	agreed	to	provide	an	additional	$
122
	million	of	such	incentives.	Of	the	total	incentives
provided	between	both	years,	$
123
	million	was	received	in	cash	in	2020.	
Proceeds	from	the	grant	must	be	spent	on	qualified	capital	investments	at	Gigafactory
Shanghai	as	stipulated	in	the	agreement.	
These	incentives	were	taken	as	a	reduction	to	property,	plant	and	equipment,	net,	on	the	consolidated	balance	sheets
and	cash	receipts	are	reflected	as	investing	cash	inflows	on	the	consolidated	statements	of	cash	flows.
	
	
Note	9	–	Accrued	Liabilities	and	Other
	
As	of	December	31,	2020	and	2019,	accrued	liabilities	and	other	current	liabilities	consisted	of	the	following	(in	millions):
	
	
	
December	31,
	
	
December	31,
	
	
	
2020
	
	
2019
	
Accrued	purchases	(1)
	
$
901
	
	
$
638
	
Taxes	payable	(2)
	
	
777
	
	
	
611
	
Payroll	and	related	costs
	
	
654
	
	
	
466
	
Accrued	warranty	reserve,	current	portion
	
	
479
	
	
	
344
	
Sales	return	reserve,	current	portion
	
	
417
	
	
	
272
	
Operating	lease	liabilities,	current	portion
	
	
286
	
	
	
228
	
Accrued	interest
	
	
77
	
	
	
86
	
Resale	value	guarantees,	current	portion
	
	
23
	
	
	
317


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23
	
	
	
317
	
Other	current	liabilities
	
	
241
	
	
	
260
	
Total
	
$
3,855
	
	
$
3,222
	
	
(1)
Accrued	purchases	primarily	reflects	receipts	of	goods	and	services	that	we	had	not	been	invoiced	yet.	As	we	are	invoiced	for	these	goods	and	services,
this	balance	will	reduce	and	accounts	payable	will	increase.
(2)
Taxes	payable	includes	value	added	tax,	sales	tax,	property	tax,	use	tax	and	income	tax	payables.
	
	
Note	10	–	Other	Long-Term	Liabilities
As	of	December	31,	2020	and	2019,	other	long-term	liabilities	consisted	of	the	following	(in	millions):
	
	
	
December	31,
	
	
December	31,
	
	
	
2020
	
	
2019
	
Operating	lease	liabilities
	
$
1,254
	
	
$
956
	
Accrued	warranty	reserve
	
	
989
	
	
	
745
	
Sales	return	reserve
	
	
500
	
	
	
545
	
Deferred	tax	liability
	
	
151
	
	
	
66
	
Resale	value	guarantees
	
	
19
	
	
	
36
	
Other	non-current	liabilities
	
	
417
	
	
	
343
	
Total	other	long-term	liabilities
	
$
3,330
	
	
$
2,691
	
	
	
80


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Note	11	–	Customer	Deposits
Customer	deposits	primarily	consisted	of	cash	payments	from	customers	at	the	time	they	place	an	order	or	reservation	for	a	vehicle	or	an	energy
product	and	any	additional	payments	up	to	the	point	of	delivery	or	the	completion	of	installation,	including	the	fair	values	of	any	customer	trade-in	vehicles	that
are	applicable	toward	a	new	vehicle	purchase.	
Customer	deposits	also	include	prepayments	on	contracts	that	can	be	cancelled	without	significant	penalties,
such	as	vehicle	maintenance	plans.	
Customer	deposit	amounts	and	timing	vary	depending	on	the	vehicle	model,	the	energy	product	and	the	country	of	delivery.
In	the	case	of	a	vehicle,	customer	deposits	are	fully	refundable.	In	the	case	of	an	energy	generation	or	storage	product,	customer	deposits	are	fully	refundable
prior	to	the	entry	into	a	purchase	agreement	or	in	certain	cases	for	a	limited	time	thereafter	(in	accordance	with	applicable	laws).	Customer	deposits	are
included	in	current	liabilities	until	refunded	or	until	they	are	applied	towards	the	customer’s	purchase	balance.
	
Note	12	–	Debt
The	following	is	a	summary	of	our	debt	and	finance	leases	as	of	December	31,	2020	(in	millions):
	
	
	
	
	
	
	
Unpaid
	
	
Unused
	
	
	
	
	
	
	
	
	
Net	Carrying	Value
	
	
Principal
	
	
Committed
	
	
Contractual
	
	
Contractual
	
	
Current
	
	
Long-Term
	
	
Balance
	
	
Amount	(1)
	
	
Interest	Rates
	
	
Maturity	Date
Recourse	debt:


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2021	Notes
	
$
419
	
	
	
—
	
	
	
422
	
	
	
—
	
	
	
1.25
%
	
March	2021
2022	Notes
	
	
115
	
	
	
366
	
	
	
503
	
	
	
—
	
	
	
2.375
%
	
March	2022
2024	Notes
	
	
171
	
	
	
856
	
	
	
1,282
	
	
	
—
	
	
	
2.00
%
	
May	2024
2025	Notes
	
	
—
	
	
	
1,785
	
	
	
1,800
	
	
	
—
	
	
	
5.30
%
	
August	2025
Credit	Agreement
	
	
—
	
	
	
1,895
	
	
	
1,895
	
	
	
278
	
	
	
3.3
%
	
July	2023
Solar	Bonds	and	other	Loans
	
	
4
	
	
	
49
	
	
	
55
	
	
	
—
	
	
	
3.6%-5.8
%
	
January	2021	-	January	2031
Total	recourse	debt
	
	
709
	
	
	
4,951
	
	
	
5,957
	
	
	
278
	
	
	
	
	
	
	
Non-recourse	debt:
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
Automotive	Asset-backed	Notes
	
	
777
	
	
	
921
	
	
	
1,705


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921
	
	
	
1,705
	
	
	
—
	
	
	
0.6%-7.9
%
	
August	2021-August	2024
Solar	Asset-backed	Notes
	
	
39
	
	
	
1,076
	
	
	
1,141
	
	
	
—
	
	
	
3.0%-7.7
%
	
September	2024-February	2048
China	Loan	Agreements
	
	
—
	
	
	
616
	
	
	
616
	
	
	
1,372
	
	
	
4.0
%
	
June	2021-December	2024
Cash	Equity	Debt
	
	
18
	
	
	
408
	
	
	
439
	
	
	
—
	
	
	
5.3%-5.8
%
	
July	2033-January	2035
Solar	Loan-backed	Notes
	
	
13
	
	
	
133
	
	
	
152
	
	
	
—
	
	
	
4.8%-7.5
%
	
September	2048-September	2049
Warehouse	Agreements
	
	
37
	
	
	
257
	
	
	
294
	
	
	
806
	
	
	
1.7%-1.8
%
	
September	2022
Solar	Term	Loan
	
	
151
	
	
	
—
	
	
	
151
	
	
	
—
	
	
	
3.7
%
	
January	2021
Automotive	Lease-backed	Credit	Facilities
	
	
14
	
	
	
19
	
	
	
33
	
	
	
153
	
	
	
1.9%-5.9
%
	
September	2022-November	2022
Solar	Revolving	Credit	Facility	and


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Solar	Revolving	Credit	Facility	and
			other	Loans
	
	
—
	
	
	
81
	
	
	
81
	
	
	
23
	
	
	
2.7%-5.1
%
	
June	2022-February	2033
Total	non-recourse	debt
	
	
1,049
	
	
	
3,511
	
	
	
4,612
	
	
	
2,354
	
	
	
	
	
	
	
Total	debt
	
	
1,758
	
	
	
8,462
	
	
$
10,569
	
	
$
2,632
	
	
	
	
	
	
	
Finance	leases
	
	
374
	
	
	
1,094
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
Total	debt	and	finance	leases
	
$
2,132
	
	
$
9,556
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
81


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The	following	is	a	summary	of	our	debt	
and	finance	leases	
as	of	
December	31,	2019
	(in	millions):
	
	
	
	
	
	
	
	
Unpaid
	
	
	
Unused
	
	
	
	
	
	
	
	
	
	
Net	Carrying	Value
	
	
	
Principal
	
	
	
Committed
	
	
	
Contractual
	
	
Contractual
	
	
Current
	
	
	
Long-Term
	
	
	
Balance
	
	
	
Amount	(1)
	
	
	
Interest	Rates
	
	
Maturity	Date
Recourse	debt:
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
2021	Notes
	
$
	
—
	
	
	
$
	
1,304
	
	
	
$
	
1,380
	
	
	
$
	
—
	
	
	
	
1.25
%
	
March	2021
2022	Notes
	
	
	
—
	
	
	
	
	
902
	
	
	
	
	
978
	
	
	
	
	
—
	
	
	
	
2.375
%
	
March	2022
2024	Notes
	
	
	
—
	
	
	
	
	
1,383
	
	
	
	
	
1,840
	
	
	
	
	
—
	
	
	
	
2.00
%
	
May	2024
2025	Notes
	
	
	
—
	
	
	
	
	
1,782
	
	
	
	
	
1,800


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1,800
	
	
	
	
	
—
	
	
	
	
5.3
%
	
August	2025
Credit	Agreement
	
	
	
141
	
	
	
	
	
1,586
	
	
	
	
	
1,727
	
	
	
	
	
499
	
	
	
	
2.7%-4.8
%
	
June	2020-July	2023
Zero-Coupon	Convertible	Senior	Notes	due	in
			2020
	
	
	
97
	
	
	
	
	
—
	
	
	
	
	
103
	
	
	
	
	
—
	
	
	
	
0.0
%
	
December	2020
Solar	Bonds	and	other	Loans
	
	
	
15
	
	
	
	
	
53
	
	
	
	
	
70
	
	
	
	
	
—
	
	
	
	
3.6%-5.8
%
	
March	2020-January	2031
Total	recourse	debt
	
	
	
253
	
	
	
	
	
7,010
	
	
	
	
	
7,898
	
	
	
	
	
499
	
	
	
	
	
	
	
	
Non-recourse	debt:
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
Automotive	Asset-backed	Notes
	
	
	
573
	
	
	
	
	
997
	
	
	
	
	
1,577
	
	
	
	
	
—
	
	
	
	
2.0%-7.9
%


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2.0%-7.9
%
	
February	2020-	May	2023
Solar	Asset-backed	Notes
	
	
	
32
	
	
	
	
	
1,123
	
	
	
	
	
1,183
	
	
	
	
	
—
	
	
	
	
4.0%-7.7
%
	
September	2024-February	2048
China	Loan	Agreements
	
	
	
444
	
	
	
	
	
297
	
	
	
	
	
741
	
	
	
	
	
1,542
	
	
	
	
3.7%-4.0
%
	
September	2020-December	2024
Cash	Equity	Debt
	
	
	
10
	
	
	
	
	
430
	
	
	
	
	
454
	
	
	
	
	
—
	
	
	
	
5.3%-5.8
%
	
July	2033-January	2035
Solar	Loan-backed	Notes
	
	
	
11
	
	
	
	
	
164
	
	
	
	
	
182
	
	
	
	
	
—
	
	
	
	
4.8%-7.5
%
	
September	2048-September	2049
Warehouse	Agreements
	
	
	
21
	
	
	
	
	
146
	
	
	
	
	
167
	
	
	
	
	
933
	
	
	
	
3.1%-3.6
%
	
September	2021
Solar	Term	Loans
	
	
	
8
	
	
	
	
	
152
	
	
	
	
	
161
	
	
	
	
	
—
	
	
	
	
5.4
%
	
January	2021


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5.4
%
	
January	2021
Automotive	Lease-backed	Credit	Facility
	
	
	
24
	
	
	
	
	
16
	
	
	
	
	
40
	
	
	
	
	
—
	
	
	
	
4.2%-5.9
%
	
November	2022
Solar	Revolving	Credit	Facility	and
			other	Loans
	
	
	
23
	
	
	
	
	
67
	
	
	
	
	
89
	
	
	
	
	
6
	
	
	
	
4.5%-7.4
%
	
March	2020-June	2022
Total	non-recourse	debt
	
	
	
1,146
	
	
	
	
	
3,392
	
	
	
	
	
4,594
	
	
	
	
	
2,481
	
	
	
	
	
	
	
	
Total	debt
	
	
	
1,399
	
	
	
	
	
10,402
	
	
	
$
	
12,492
	
	
	
$
	
2,980
	
	
	
	
	
	
	
	
Finance	leases
	
	
	
386
	
	
	
	
	
1,232
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
Total	debt	and	finance	leases
	
$
	
1,785
	
	
	
$
	
11,634
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
(1)


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(1)
There	are	no	restrictions	on	draw-down	or	use	for	general	corporate	purposes	with	respect	to	any	available	committed	funds	under	our	credit	facilities
and	financing	funds,	except	certain	specified	conditions	prior	to	draw-down,	including	pledging	to	our	lenders	sufficient	amounts	of	qualified
receivables,	inventories,	leased	vehicles	and	our	interests	in	those	leases,	solar	energy	systems	and	the	associated	customer	contracts,	our	interests	in
financing	funds	or	various	other	assets	and	as	may	be	further	described	below.
Recourse	debt	refers	to	debt	that	is	recourse	to	our	general	assets.	Non-recourse	debt	refers	to	debt	that	is	recourse	to	only	assets	of	our	subsidiaries.
The	differences	between	the	unpaid	principal	balances	and	the	net	carrying	values	are	due	to	convertible	senior	note	conversion	features,	debt	discounts	or
deferred	financing	costs.	As	of	December	31,	2020,	we	were	in	material	compliance	with	all	financial	debt	covenants,	which	include	minimum	liquidity	and
expense-coverage	balances	and	ratios.
2021	Notes,	Bond	Hedges	and	Warrant	Transactions
In	March	2014,	we	issued	$
1.20
	billion	in	aggregate	principal	amount	of	our	2021	Notes	in	a	public	offering.	In	April	2014,	we	issued	an	additional
$
180
	million	in	aggregate	principal	amount	of	the	notes,	pursuant	to	the	exercise	in	full	of	the	overallotment	options	by	the	underwriters.	The	total	net	proceeds
from	the	issuances,	after	deducting	transaction	costs,	were	$
1.36
	billion.
As	adjusted	to	give	effect	to	the	Stock	Split,	
each	$
1,000


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each	$
1,000
	of	principal	of	these	notes	is	now	convertible	into	
13.8940
	shares	of	our	common	stock,	which	is
equivalent	to	a	conversion	price	of	$
71.97
	per	share,	subject	to	adjustment	upon	the	occurrence	of	specified	events.	Holders	of	these	notes	have	been	able	to
elect	to	convert	on	or	after	December	1,	2020.	The	settlement	of	such	an	election	to	convert	the	outstanding	notes	would	be	in	cash	for	the	principal	amount
and,	if	applicable,	cash	and/or	shares	of	our	common	stock	for	any	conversion	premium	at	our	election.	As	of	December	1,	2020,	holders	of	these	notes	have	the
option	to	convert.	Such	holders	also	had	the	option	to	convert	prior	to	December	1,	2020	under	the	circumstances	further	described	below.
		
	
			
Upon	the	early
conversion	of	the	2021	Notes,	we	will	pay	cash	for	the	principal	amount	and	deliver	shares	of	our	common	stock	based	on	a	daily	conversion	value.	If	a
fundamental	change	occurs	prior	to	the	applicable	maturity	date,	holders	of	these	notes	may	require	us	to	repurchase	all	or	a	portion	of	their	notes	for	cash	at	a
repurchase	price	equal	to	
100
%	of	the	principal	amount	plus	any	accrued	and	unpaid	interest.	In	addition,	if	specific	corporate	events	occur	prior	to	the
applicable	maturity	date,	we	would	increase	the	conversion	rate	for	a	holder	who	elects	to	convert	their	notes	in	connection	with	such	an	event	in	certain
circumstances.
In	accordance	with	GAAP	relating	to	embedded	conversion	features,	we	initially	valued	and	bifurcated	the	conversion	features	associated	with	these
notes.	We	recorded	to	stockholders’	equity	$
369


