What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-04-24 compared with 2023-10-23 · 174 added, 284 removed, 505 unchanged (48% of the section changed)

2 unchanged sentences

(in millions, except per share data)

September 30,

2024 December 31,

13 unchanged sentences

Goodwill 250 253

Deferred tax assets 6,769 6,733

Other non-current assets 4,616 4,531

4 unchanged sentences

Deferred revenue 3,024 2,864

Customer deposits 894 1,063

Current portion of debt and finance leases 2,461 2,373

14 unchanged sentences

6,000 shares authorized;

3,179 and 3,164 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

3,189 and 3,185 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

Additional paid-in capital 35,763 34,892

7 unchanged sentences

(in millions, except per share data)

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Automotive sales $ 16,460 $ 18,878

16 unchanged sentences

Selling, general and administrative 1,374 1,076

Restructuring and other — — — 142

Total operating expenses 2,525 1,847

6 unchanged sentences

Net income 1,144 2,539

Net income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries 25 39 ( 38 ) 11

Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries 15 26

Net income attributable to common stockholders $ 1,129 $ 2,513

8 unchanged sentences

(in millions)

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Net income $ 1,144 $ 2,539

Other comprehensive income (loss):

Other comprehensive (loss) income:

Foreign currency translation adjustment ( 252 ) 130

Unrealized net gain (loss) on investments 7 ( 5 ) 8 ( 19 )

Adjustment for net loss realized and included in net income — — 4 —

Unrealized net (loss) gain on investments, net of tax ( 4 ) 6

Comprehensive income 888 2,675

Comprehensive income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries 25 39 ( 38 ) 11

Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries 15 26

Comprehensive income attributable to common stockholders $ 873 $ 2,649

1 unchanged sentence

Consolidated Statements of Redeemable Noncontrolling Interests and Equity

(in millions, except per share data)

Three Months Ended September 30, 2023 Redeemable

(in millions)

Three Months Ended March 31, 2024 Redeemable

Noncontrolling

6 unchanged sentences

Shares Amount

Balance as of June 30, 2023 $ 288 3,174 $ 3 $ 33,436 $ ( 410 ) $ 18,101 $ 51,130 $ 764 $ 51,894

Exercises of conversion feature of convertible senior notes — 0 0 0 — — 0 — 0

Balance as of December 31, 2023 $ 242 3,185 $ 3 $ 34,892 $ ( 143 ) $ 27,882 $ 62,634 $ 733 $ 63,367

Issuance of common stock for equity incentive awards — 4 — 251 — — 251 — 251

4 unchanged sentences

Other comprehensive loss — — — — ( 256 ) — ( 256 ) — ( 256 )

Balance as of September 30, 2023 $ 277 3,179 $ 3 $ 34,201 $ ( 692 ) $ 19,954 $ 53,466 $ 752 $ 54,218

Nine Months Ended September 30, 2023 Redeemable

Balance as of March 31, 2024 $ 73 3,189 $ 3 $ 35,763 $ ( 399 ) $ 29,011 $ 64,378 $ 729 $ 65,107

Three Months Ended March 31, 2023 Redeemable

Noncontrolling

7 unchanged sentences

Balance as of December 31, 2022 $ 409 3,164 $ 3 $ 32,177 $ ( 361 ) $ 12,885 $ 44,704 $ 785 $ 45,489

Exercises of conversion feature of convertible senior notes — 0 0 0 — — 0 — 0

Issuance of common stock for equity incentive awards — 5 — 231 — — 231 — 231

2 unchanged sentences

Buy-outs of noncontrolling interests — — — 5 — — 5 ( 12 ) ( 7 )

Net (loss) income ( 100 ) — — — — 7,069 7,069 62 7,131

Other comprehensive loss — — — — ( 331 ) — ( 331 ) — ( 331 )

Balance as of September 30, 2023 $ 277 3,179 $ 3 $ 34,201 $ ( 692 ) $ 19,954 $ 53,466 $ 752 $ 54,218

Three Months Ended September 30, 2022 Redeemable

Noncontrolling

Common Stock Additional

Capital Accumulated

Comprehensive

Earnings Total

Stockholders’

Noncontrolling

Shares Amount

Balance as of June 30, 2022 $ 421 3,122 $ 3 $ 30,944 $ ( 477 ) $ 5,906 $ 36,376 $ 861 $ 37,237

Exercises of conversion feature of convertible senior notes — 0 0 0 — — 0 — 0

Settlement of warrants — 29 0 0 — — 0 — 0

Issuance of common stock for equity incentive awards — 7 0 229 — — 229 — 229

Stock-based compensation — — — 419 — — 419 — 419

Distributions to noncontrolling interests ( 11 ) — — — — — — ( 36 ) ( 36 )

Net income 3 — — — — 2,513 2,513 23 2,536

Other comprehensive loss — — — — ( 465 ) — ( 465 ) — ( 465 )

Balance as of September 30, 2022 $ 421 3,158 $ 3 $ 31,592 $ ( 942 ) $ 9,198 $ 39,851 $ 852 $ 40,703

Nine Months Ended September 30, 2022 Redeemable

Noncontrolling

Common Stock Additional

Capital Accumulated

Comprehensive

Income (Loss)

Earnings Total

Stockholders’

Noncontrolling

Shares Amount

Balance as of December 31, 2021 $ 568 3,100 $ 3 $ 29,803 $ 54 $ 329 $ 30,189 $ 826 $ 31,015

Exercises of conversion feature of convertible senior notes — 0 0 0 — — 0 — 0

Settlements of warrants — 37 0 0 — — 0 — 0

Issuance of common stock for equity incentive awards — 21 0 474 — — 474 — 474

Stock-based compensation — — — 1,323 — — 1,323 — 1,323

Distributions to noncontrolling interests ( 36 ) — — — — — — ( 84 ) ( 84 )

Buy-out of noncontrolling interests ( 11 ) — — ( 8 ) — — ( 8 ) — ( 8 )

Net (loss) income ( 100 ) — — — — 8,869 8,869 110 8,979

Other comprehensive loss — — — — ( 996 ) — ( 996 ) — ( 996 )

Balance as of September 30, 2022 $ 421 3,158 $ 3 $ 31,592 $ ( 942 ) $ 9,198 $ 39,851 $ 852 $ 40,703

Other comprehensive income — — — — 136 — 136 — 136

Balance as of March 31, 2023 $ 407 3,169 $ 3 $ 32,878 $ ( 225 ) $ 15,398 $ 48,054 $ 774 $ 48,828

The accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

(in millions)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash Flows from Operating Activities

4 unchanged sentences

Inventory and purchase commitments write-downs 68 50

Foreign currency transaction net unrealized (gain) loss ( 317 ) 1

Foreign currency transaction net unrealized gain ( 63 ) ( 25 )

Deferred income taxes ( 11 ) ( 55 )

Non-cash interest and other operating activities ( 5 ) 15

Digital assets loss, net — 106

Changes in operating assets and liabilities:

2 unchanged sentences

Operating lease vehicles ( 12 ) ( 675 )

Prepaid expenses and other current assets 322 ( 865 )

Other non-current assets ( 2,655 ) ( 1,580 )

Accounts payable and accrued liabilities ( 24 ) 4,659

Prepaid expenses and other assets ( 972 ) ( 737 )

Accounts payable, accrued and other liabilities 1,247 1,403

Deferred revenue 195 106

Customer deposits ( 95 ) 251

Other long-term liabilities 2,066 1,016

Net cash provided by operating activities 242 2,513

2 unchanged sentences

Purchases of solar energy systems, net of sales ( 4 ) ( 1 )

Proceeds from sales of digital assets — 936

Purchase of intangible assets — ( 9 )

Purchases of investments ( 6,622 ) ( 2,015 )

Proceeds from maturities of investments 4,315 1,604

Proceeds from sales of investments 138 —

Business combinations, net of cash acquired ( 64 ) —

Net cash used in investing activities ( 5,084 ) ( 2,484 )

9 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents and restricted cash ( 79 ) 50

Net (decrease) increase in cash and cash equivalents and restricted cash ( 334 ) 2,005

Net decrease in cash and cash equivalents and restricted cash ( 4,725 ) ( 154 )

Cash and cash equivalents and restricted cash, beginning of period 17,189 16,924

9 unchanged sentences

The consolidated financial statements of Tesla, Inc.

(“Tesla”, the “Company”, “we”, “us” or “our”), including the consolidated balance sheet as of September 30, 2023, the consolidated statements of operations, the consolidated statements of comprehensive income, the consolidated statements of redeemable noncontrolling interests and equity for the three and nine months ended September 30, 2023 and 2022, and the consolidated statements of cash flows for the nine months ended September 30, 2023 and 2022, as well as other information disclosed in the accompanying notes, are unaudited.

(“Tesla”, the “Company”, “we”, “us” or “our”), including the consolidated balance sheet as of March 31, 2024, the consolidated statements of operations, the consolidated statements of comprehensive income, the consolidated statements of redeemable noncontrolling interests and equity, and the consolidated statements of cash flows for the three months ended March 31, 2024 and 2023, as well as other information disclosed in the accompanying notes, are unaudited.

The consolidated balance sheet as of December 31, 2023 was derived from the audited consolidated financial statements as of that date.

3 unchanged sentences

Reclassifications

Certain prior period balances have been reclassified to conform to the current period presentation in the accompanying notes.

Certain prior period balances have been reclassified to conform to the current period presentation in the consolidated financial statements and the accompanying notes.

Revenue Recognition

1 unchanged sentence

The following table disaggregates our revenue by major source (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Automotive sales $ 16,460 $ 18,878

7 unchanged sentences

Automotive Segment

Automotive Sales Revenue

Deferred revenue is related to the access to our Full Self Driving (“FSD”) features and ongoing maintenance, internet connectivity, free Supercharging programs and over-the-air software updates primarily on automotive sales, which amounted to $ 3.27 billion and $ 2.91 billion as of September 30, 2023 and December 31, 2022, respectively.

Automotive Sales

Deferred revenue related to the access to our Full Self Driving (Supervised) (“FSD”) Capability features and their ongoing maintenance, internet connectivity, free Supercharging programs and over-the-air software updates primarily on automotive sales amounted to $ 3.50 billion and $ 3.54 billion as of March 31, 2024 and December 31, 2023, respectively.

Deferred revenue is equivalent to the total transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied, as of the balance sheet date.

Revenue recognized from the deferred revenue balance as of December 31, 2022 and 2021 was $ 360 million and $ 169 million for nine months ended September 30, 2023 and 2022, respectively.

Of the total deferred revenue balance as of September 30, 2023, we expect to recognize $ 815 million of revenue in the next 12 months.

Revenue recognized from the deferred revenue balances as of December 31, 2023 and 2022 was $ 281 million and $ 134 million for the three months ended March 31, 2024 and 2023, respectively.

Of the total deferred revenue balance as of March 31, 2024, we expect to recognize $ 848 million of revenue in the next 12 months.

The remaining balance will be recognized at the time of transfer of control of the product or over the performance period.

We have been providing loans for financing our automotive deliveries in volume since fiscal year 2022.

As of September 30, 2023 and December 31, 2022, we have recorded net financing receivables on the consolidated balance sheets, of which $ 239 million and $ 128 million, respectively, is recorded within Accounts receivable, net, for the current portion and $ 1.11 billion and $ 665 million, respectively, is recorded within Other non-current assets for the long-term portion.

Automotive Regulatory Credits

During the nine months ended September 30, 2022, we had also recognized $ 288 million in revenue due to changes in regulation which entitled us to additional consideration for credits sold previously.

We have financing receivables on our consolidated balance sheets related to loans we provide for financing our automotive deliveries.

As of March 31, 2024 and December 31, 2023, we have current net financing receivables of $ 241 million and $ 242 million, respectively, in Accounts receivable, net, and $ 971 million and $ 1.04 billion, respectively, in Other non-current assets for the long-term portion.

Automotive Leasing Revenue

Direct Sales-Type Leasing Program

For the three and nine months ended September 30, 2023, we recognized $ 20 million and $ 197 million, respectively, of sales-type leasing revenue and $ 16 million and $ 149 million, respectively, of sales-type leasing cost of revenue.

For the three and nine months ended September 30, 2022, we recognized $ 161 million and $ 559 million, respectively, of sales-type leasing revenue and $ 97 million and $ 343 million, respectively, of sales-type leasing cost of revenue.

Lease receivables relating to sales-type leases are presented on the consolidated balance sheets as follows (in millions):

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Gross lease receivables $ 702 $ 780

7 unchanged sentences

Energy Generation and Storage Sales

We record as deferred revenue any non-refundable amounts that are collected from customers related to fees charged for prepayments, which is recognized as revenue ratably over the respective customer contract term.

As of September 30, 2023 and December 31, 2022, deferred revenue related to such customer payments amounted to $ 1.05 billion and $ 863 million, respectively, mainly due to billings for milestone payments.

Revenue recognized from the deferred revenue balance as of December 31, 2022 and 2021 was $ 511 million and $ 132 million for the nine months ended September 30, 2023 and 2022, respectively.

As of September 30, 2023, 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 $ 1.91 billion.

Of this amount, we expect to recognize $ 709 million in the next 12 months and the rest over the remaining performance obligation period.

We have been providing loans for financing our energy generation products in volume since fiscal year 2022.

As of September 30, 2023 and December 31, 2022, we have recorded net financing receivables on the consolidated balance sheets, of which $ 29 million and $ 24 million, respectively, is recorded within Accounts receivable, net, for the current portion and $ 541 million and $ 387 million, respectively, is recorded within Other non-current assets for the long-term portion.

We record as deferred revenue any non-refundable amounts that are collected from customers related to prepayments, which is recognized as revenue ratably over the respective customer contract term.

As of March 31, 2024 and December 31, 2023, deferred revenue related to such customer payments amounted to $ 1.78 billion and $ 1.60 billion, respectively, mainly due to contractual payment terms.

Revenue recognized from the deferred revenue balances as of December 31, 2023 and 2022 was $ 417 million and $ 230 million for the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024, 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 $ 3.86 billion.

Of this amount, we expect to recognize $ 1.00 billion in the next 12 months and the rest over the remaining performance obligation period.

We have financing receivables on our consolidated balance sheets related to loans we provide for financing our energy products.

As of March 31, 2024 and December 31, 2023, we have current net financing receivables of $ 32 million and $ 31 million, respectively, in Accounts receivable, net, and $ 608 million and $ 578 million, respectively, in Other non-current assets for the long-term portion.

We are subject to income taxes in the U.S.

1 unchanged sentence

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 that are not more likely than not to be realized.

The determination of the realizability of deferred tax assets requires significant judgment in assessing the likelihood of future tax consequences.

In completing our assessment of realizability of our deferred tax assets, we consider our history of losses measured at pre-tax income (loss) adjusted for permanent book-tax differences on a jurisdictional basis, volatility in actual earnings, excess tax benefits related to stock-based compensation in recent prior years, and impacts of the timing of reversal of existing temporary differences.

We monitor the realizability of our deferred tax assets taking into account all relevant factors at each reporting period.

In completing our assessment of realizability of our deferred tax assets, we consider our history of income (loss) measured at pre-tax income (loss) adjusted for permanent book-tax differences on a jurisdictional basis, volatility in actual earnings, excess tax benefits related to stock-based compensation in recent prior years, and impacts of the timing of reversal of existing temporary differences.

We also rely on our assessment of the Company’s projected future results of business operations, including uncertainty in future operating results relative to historical results, volatility in the market price of our common stock and its performance over time, variable macroeconomic conditions impacting our ability to forecast future taxable income, and changes in business that may affect the existence and magnitude of future taxable income.

Our valuation allowance assessment is based on our best estimate of future results considering all available information.

We monitor the realizability of the U.S.

deferred tax assets taking into account all relevant factors.

As of September 30, 2023, we continued to maintain a full valuation allowance on our U.S.

deferred tax assets.

We will release the valuation allowance when there is sufficient positive evidence to support a conclusion that it is more likely than not the deferred tax assets will be realized.

Depending on our operating results and the amount of stock-based compensation tax deductions available in the future, we may release the valuation allowance associated with the U.S.

deferred tax assets within the next year.

The timing and amount of the valuation allowance release could vary based on our assessment of all available evidence.

Release of all, or a portion, of the valuation allowance would result in the recognition of certain deferred tax assets and may result in a material decrease to income tax expense for the period the release is recorded.

There are transactions that occur during the ordinary course of business for which the ultimate tax determination is uncertain.

As of September 30, 2023 and December 31, 2022, the aggregate balances of our gross unrecognized tax benefits were $ 1.04 billion and $ 870 million, respectively, of which $ 616 million and $ 572 million, respectively, would not give rise to changes in our effective tax rate since these tax benefits would increase a deferred tax asset that is currently fully offset by a valuation allowance.

We file income tax returns in the U.S.

and various state and foreign jurisdictions.

We are currently under examination by the Internal Revenue Service (“IRS”) for the years 2015 to 2018.

Additional tax years within the periods 2004 to 2014 and 2019 to 2022 remain subject to examination for federal income tax purposes.

All net operating losses and tax credits generated to date are subject to adjustment for U.S.

federal and state income tax purposes.

Our returns for 2004 and subsequent tax years remain subject to examination in U.S.

state and foreign jurisdictions.

Given the uncertainty in timing and outcome of our tax examinations, an estimate of the range of the reasonably possible change in gross unrecognized tax benefits within twelve months cannot be made at this time.

Our provision for or benefit from income taxes for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period.

Each quarter, we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment.

Net Income per Share of Common Stock Attributable to Common Stockholders

The following table presents the reconciliation of net income attributable to common stockholders to net income used in computing basic and diluted net income per share of common stock (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Net income attributable to common stockholders $ 1,129 $ 2,513

Buy-out of noncontrolling interest ( 42 ) ( 5 )

Net income used in computing basic net income per share of common stock 1,851 3,292 7,072 8,861

Dilutive convertible debt ( 0 ) ( 0 ) ( 0 ) ( 1 )

Net income used in computing diluted net income per share of common stock $ 1,851 $ 3,292 $ 7,072 $ 8,862

Net income used in computing basic and diluted net income per share of common stock $ 1,171 $ 2,518

The following table presents the reconciliation of basic to diluted weighted average shares used in computing net income per share of common stock attributable to common stockholders (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Weighted average shares used in computing net income per share of common stock, basic 3,186 3,166

4 unchanged sentences

The following table presents the potentially dilutive shares that were excluded from the computation of diluted net income per share of common stock attributable to common stockholders, because their effect was anti-dilutive (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Stock-based awards 23 25

1 unchanged sentence

Our total cash and cash equivalents and restricted cash, as presented in the consolidated statements of cash flows, was as follows (in millions):

September 30,

2024 December 31,

2022 September 30,

2023 March 31,

2023 December 31,

5 unchanged sentences

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.

Our accounts receivable balances associated with our sales of regulatory credits are 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.

As of September 30, 2023 and December 31, 2022, we had $ 328 million and $ 753 million, respectively, of long-term government rebates receivable in Other non-current assets in our consolidated balance sheets.

As of March 31, 2024 and December 31, 2023, government rebates receivable was $ 572 million and $ 378 million, respectively, in Accounts receivable, net for the current portion and $ 45 million and $ 207 million, respectively, in Other non-current assets for the long-term portion in our consolidated balance sheets.

Financing Receivables

As of September 30, 2023 and December 31, 2022, the majority of our financing receivables were at current status with only immaterial balances being past due.

As of September 30, 2023, the majority of our financing receivables, excluding MyPower notes receivable, were originated in 2023 and 2022, and as of December 31, 2022, the majority of our financing receivables, excluding MyPower notes receivable, were originated in 2022.

As of September 30, 2023 and December 31, 2022, the total outstanding balance of MyPower customer notes receivable, net of allowance for expected credit losses, was $ 268 million and $ 280 million, respectively, of which $ 6 million and $ 7 million were due in the next 12 months as of September 30, 2023 and December 31, 2022, respectively.

As of September 30, 2023 and December 31, 2022, the allowance for expected credit losses was $ 37 million.

As of March 31, 2024 and December 31, 2023, the vast majority of our financing receivables were at current status with an immaterial balance being past due.

As of March 31, 2024 and December 31, 2023, the majority of our financing receivables, excluding MyPower notes receivable, were originated in 2023 and 2022.

As of March 31, 2024 and December 31, 2023, the total outstanding balance of MyPower customer notes receivable, net of allowance for expected credit losses, was $ 263 million and $ 266 million, respectively, of which $ 5 million was due in the next 12 months.

As of March 31, 2024 and December 31, 2023, the allowance for expected credit losses was $ 36 million.

Concentration of Risk

Financial instruments that potentially subject us to a concentration of credit risk consist of cash, cash equivalents, investments, restricted cash, accounts receivable and financing receivables.

Our cash and investments balances are primarily comprised of deposits which are diversified among high credit quality financial institutions or invested in U.S.

government securities.

Financial instruments that potentially subject us to a concentration of credit risk consist of cash, cash equivalents, investments, restricted cash, accounts receivable and other finance receivables.

Our cash and investments balances are primarily on deposit at high credit quality financial institutions or invested in U.S.

government securities, commercial paper, corporate debt securities and money market funds.

These deposits are typically in excess of insured limits.

As of September 30, 2023 and December 31, 2022, no entity represented 10% or more of our total receivables balance.

As of March 31, 2024 and December 31, 2023, no entity represented 10% or more of our total receivables balance.

We are dependent on our suppliers, including 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.

Operating Lease Vehicles

The gross cost of operating lease vehicles as of September 30, 2023 and December 31, 2022 was $ 7.40 billion and $ 6.08 billion, respectively.

Operating lease vehicles on the consolidated balance sheets are presented net of accumulated depreciation of $ 1.28 billion and $ 1.04 billion as of September 30, 2023 and December 31, 2022, respectively.

Goodwill increased $ 56 million within the automotive segment from $ 194 million as of December 31, 2022 to $ 250 million as of September 30, 2023 primarily from a business combination and divestiture.

Accrued warranty activity consisted of the following (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Accrued warranty—beginning of period $ 5,152 $ 3,505

4 unchanged sentences

Recent Accounting Pronouncements

Recently adopted accounting pronouncements

In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805).

This ASU requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities (deferred revenue) from acquired contracts using the revenue recognition guidance in Topic 606.

At the acquisition date, the acquirer applies the revenue model as if it had originated the acquired contracts.

The ASU is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years.

We adopted this ASU prospectively on January 1, 2023.

This ASU has not and is currently not expected to have a material impact on our consolidated financial statements.

In March 2022, the FASB issued ASU 2022-02, Troubled Debt Restructurings and Vintage Disclosures.

This ASU eliminates the accounting guidance for troubled debt restructurings by creditors that have adopted ASU 2016-13, Measurement of Credit Losses on Financial Instruments, which we adopted on January 1, 2020.

This ASU also enhances the disclosure requirements for certain loan refinancing and restructurings by creditors when a borrower is experiencing financial difficulty.

In addition, the ASU amends the guidance on vintage disclosures to require entities to disclose current period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of ASC 326-20.

Recently issued accounting pronouncements not yet adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2023-07, Improvements to Reportable Segment Disclosures (Topic 280).

This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment's profit or loss.

This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources.

The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements.

Early adoption is also permitted.

This ASU will likely result in us including the additional required disclosures when adopted.

We are currently evaluating the provisions of this ASU and expect to adopt them for the year ending December 31, 2024.

In December 2023, the FASB issued ASU No.

2023-08, Accounting for and Disclosure of Crypto Assets (Subtopic 350-60).

This ASU requires certain crypto assets to be measured at fair value separately on the balance sheet and in the income statement each reporting period.

This ASU also enhances the other intangible asset disclosure requirements by requiring the name, cost basis, fair value, and number of units for each significant crypto asset holding.

The ASU is effective for annual periods beginning after December 15, 2024, including interim periods within those fiscal years.

We adopted the ASU prospectively on January 1, 2023.

This ASU has not and is currently not expected to have a material impact on our consolidated financial statements.

On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was enacted into law and is effective for taxable years beginning after December 31, 2022.

The IRA includes multiple incentives to promote clean energy, electric vehicles, battery and energy storage manufacture or purchase, in addition to a new corporate alternative minimum tax of 15% on adjusted financial statement income of corporations with profits greater than $1 billion.

Some of these measures are expected to materially affect our consolidated financial statements.

For the nine months ended September 30, 2023, the impact was primarily a reduction of our material costs.

We will continue to evaluate the effects of the IRA as more guidance is issued and the relevant implications to our consolidated financial statements.

Adoption of the ASU requires a cumulative-effect adjustment to the opening balance of retained earnings as of the beginning of the annual reporting period in which an entity adopts the amendments.

Early adoption is also permitted, including adoption in an interim period.

However, if the ASU is early adopted in an interim period, an entity must adopt the ASU as of the beginning of the fiscal year that includes the interim period.

This ASU will result in gains and losses recorded in the consolidated financial statements of operations and additional disclosures when adopted.

We are currently evaluating the adoption of this ASU and it could materially affect the carrying value of our crypto assets held and the gains and losses relating thereto, depending on the fair value at adoption.

In December 2023, the FASB issued ASU No.

2023-09, Improvements to Income Tax Disclosures (Topic 740).

The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid.

The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024.

Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance.

This ASU will likely result in the required additional disclosures being included in our consolidated financial statements, once adopted.

Note 2 – Fair Value of Financial Instruments

6 unchanged sentences

Our assets and liabilities that were measured at fair value on a recurring basis were as follows (in millions):

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Fair Value Level I Level II Level III Fair Value Level I Level II Level III

3 unchanged sentences

Certificates of deposit and time deposits 8,155 — 8,155 — 6,996 — 6,996 —

Commercial paper 2,411 — 2,411 — 470 — 470 —

Total $ 15,476 $ 368 $ 15,108 $ — $ 13,191 $ 109 $ 13,082 $ —

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.

government securities, certificates of deposit, time deposits and corporate debt securities are classified within Level II of the fair value hierarchy and the market approach was used to determine fair value of these investments.

Our cash, cash equivalents and investments classified by security type as of September 30, 2023 and December 31, 2022 consisted of the following (in millions):

September 30, 2023

government securities, certificates of deposit, commercial paper, time deposits and corporate debt securities are classified within Level II of the fair value hierarchy and the market approach was used to determine fair value of these investments.

Our cash, cash equivalents and investments classified by security type as of March 31, 2024 and December 31, 2023 consisted of the following (in millions):

March 31, 2024

Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents Short-Term Investments

4 unchanged sentences

Certificates of deposit and time deposits 8,155 — — 8,155 — 8,155

Commercial paper 2,414 — ( 3 ) 2,411 50 2,361

Total cash, cash equivalents and short-term investments $ 26,871 $ 1 $ ( 9 ) $ 26,863 $ 11,805 $ 15,058

6 unchanged sentences

Certificates of deposit and time deposits 6,995 1 — 6,996 — 6,996

Commercial paper 470 — — 470 109 361

Total cash, cash equivalents and short-term investments $ 29,098 $ 3 $ ( 7 ) $ 29,094 $ 16,398 $ 12,696

We record gross realized gains, losses and credit losses as a component of Other income (expense), net in the consolidated statements of operations.

For the three and nine months ended September 30, 2023 and 2022, we did not recognize any material gross realized gains, losses or credit losses.

The ending allowance balances for credit losses were immaterial as of September 30, 2023 and December 31, 2022.

We have determined that the gross unrealized losses on our investments as of September 30, 2023 and December 31, 2022 were temporary in nature.

The following table summarizes the fair value of our investments by stated contractual maturities as of September 30, 2023 (in millions):

For the three months ended March 31, 2024 and 2023, we did not recognize any material gross realized gains, losses or credit losses.

The ending allowance balances for credit losses were immaterial as of March 31, 2024 and December 31, 2023.

We have determined that the gross unrealized losses on our investments as of March 31, 2024 and December 31, 2023 were temporary in nature.

The following table summarizes the fair value of our investments by stated contractual maturities as of March 31, 2024 (in millions):

Due in 1 year or less $ 14,805

8 unchanged sentences

The following table presents the estimated fair values and the carrying values (in millions):

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Carrying Value Fair Value Carrying Value Fair Value

3 unchanged sentences

Our inventory consisted of the following (in millions):

September 30,

2024 December 31,

4 unchanged sentences

Total $ 16,033 $ 13,626

(1) Finished goods inventory includes vehicles in transit to fulfill customer orders, new vehicles available for sale, used vehicles and energy products available for sale.

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 three and nine months ended September 30, 2023, we recorded write-downs of $ 43 million and $ 148 million, respectively, in Cost of revenues in the consolidated statements of operations.

During the three and nine months ended September 30, 2022, we recorded write-downs of $ 42 million and $ 91 million, respectively, in Cost of revenues in the consolidated statements of operations.

(1) Finished goods inventory includes products-in-transit to fulfill customer orders, new vehicles available for sale, used vehicles and energy products available for sale.

We write-down inventory for any excess or obsolete inventory or when we believe that the net realizable value of inventory is less than the carrying value.

During the three months ended March 31, 2024 and 2023, we recorded write-downs of $ 39 million in Cost of revenues in the consolidated statements of operations.

Note 4 – Property, Plant and Equipment, Net

Our property, plant and equipment, net, consisted of the following (in millions):

September 30,

2024 December 31,

3 unchanged sentences

Land and buildings 9,852 9,498

AI infrastructure 2,255 1,510

Computer equipment, hardware and software 2,534 2,409

3 unchanged sentences

Total $ 31,436 $ 29,725

Construction in progress is primarily comprised of construction of Gigafactory Texas, and equipment and tooling related to the manufacturing of our products.

Depreciation expense during the three and nine months ended September 30, 2023 was $ 897 million and $ 2.44 billion, respectively.

Depreciation expense during the three and nine months ended September 30, 2022 was $ 620 million and $ 1.75 billion, respectively.

Construction in progress is primarily comprised of ongoing construction and expansion of our facilities, equipment and tooling related to the manufacturing of our products as well as construction related to our AI infrastructure.

Depreciation expense during the three months ended March 31, 2024 and 2023 was $ 929 million and $ 722 million, respectively.

Note 5 – Accrued Liabilities and Other

Our accrued liabilities and other current liabilities consisted of the following (in millions):

September 30,

2024 December 31,

Accrued purchases (1) $ 2,635 $ 2,721

Taxes payable (2) 1,095 1,235

Payroll and related costs 1,192 1,026

Accrued warranty reserve, current portion 1,605 1,546

Sales return reserve, current portion 218 270

Payroll and related costs 1,464 1,325

Taxes payable (2) 1,186 1,204

Customer deposits 888 876

Operating lease liabilities, current portion 704 672

Sales return reserve, current portion 195 219

Other current liabilities 566 517

5 unchanged sentences

Our other long-term liabilities consisted of the following (in millions):

September 30,

2024 December 31,

4 unchanged sentences

Note 7 – Debt

The following is a summary of our debt and finance leases as of September 30, 2023 (in millions):

The following is a summary of our debt and finance leases as of March 31, 2024 (in millions):

Net Carrying Value Unpaid

9 unchanged sentences

March 2025 - January 2031

Other 26 — 26 — 5.20 % December 2026

Total recourse debt 48 6 54 5,000

1 unchanged sentence

Automotive Asset-backed Notes 2,054 2,405 4,475 — 0.60 - 6.57 %

July 2024 - August 2027

December 2024 - May 2031

Solar Asset-backed Notes 4 7 12 — 4.80 % December 2026

14 unchanged sentences

2024 Notes $ 37 $ — $ 37 $ — 2.00 % May 2024

Credit Agreement — — — 2,266 Not applicable July 2023

RCF Credit Agreement — — — 5,000 Not applicable January 2028

Solar Bonds — 7 7 — 4.70 - 5.75 %

March 2025 - January 2031

Other — — — 28 Not applicable December 2026

Total recourse debt 37 7 44 5,028

1 unchanged sentence

Automotive Asset-backed Notes 1,906 2,337 4,259 — 0.60 - 6.57 %

December 2023 - September 2025

July 2024 - May 2031

Solar Asset-backed Notes 4 8 13 — 4.80 % December 2026

1 unchanged sentence

July 2033 - January 2035

Automotive Lease-backed Credit Facilities — — — 151 Not applicable September 2024

Total non-recourse debt 1,938 2,675 4,639 —

2 unchanged sentences

Total debt and finance leases $ 2,373 $ 2,857

(1) There are no restrictions on draw-down or use for general corporate purposes with respect to any available committed funds under our RCF Credit Agreement.

(1) There are no restrictions on draw-down or use for general corporate purposes with respect to any available committed funds under our RCF Credit Agreement, except certain specified conditions prior to draw-down.

Refer to the notes to the consolidated financial statements included in our reporting on Form 10-K for the year ended December 31, 2023 for the terms of the facility.

(2) There were no restrictions on draw-down or use for general corporate purposes with respect to any available committed funds under our credit facilities, 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 or various other assets as described in the notes to the consolidated financial statements included in our report on Form 10-K for the year ended December 31, 2022.

Recourse debt refers to debt that is recourse to our general assets of the respective guarantors.

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 debt discounts or deferred issuance costs.

As of September 30, 2023, we were in material compliance with all financial debt covenants.

During the first three quarters of 2023, the closing price of our common stock continued to exceed 130 % of the applicable conversion price of our 2024 Notes on at least 20 of the last 30 consecutive trading days of the quarter, causing the 2024 Notes to be convertible by their holders during the second, third and fourth quarters of 2023.

Should the closing price conditions continue to be met in a future quarter for the 2024 Notes, the 2024 Notes will be convertible at their holders’ option during the immediately following quarter.

As of March 31, 2024, we were in material compliance with all financial debt covenants.

As of March 31, 2024, holders of the 2024 Notes have the option to convert and the 2024 Notes are set to mature in May 2024.

Automotive Asset-backed Notes

In the third quarter of 2023, we transferred beneficial interests related to certain leased vehicles into special purpose entities and issued $ 2.53 billion in aggregate principal amount of Automotive Asset-backed Notes, with terms similar to our other previously issued Automotive Asset-backed Notes.

The proceeds from the issuance, net of debt issuance costs, were $ 2.52 billion.

Automotive Lease-backed Credit Facilities

In the third quarter of 2023, we terminated our Automotive Lease-backed Credit Facilities and the previously committed funds are no longer available for future borrowings.

In the first quarter of 2024, we transferred beneficial interests related to certain leased vehicles into a special purpose entity and issued $ 750 million in aggregate principal amount of Automotive Asset-backed Notes, with terms similar to our other previously issued Automotive Asset-backed Notes.

The proceeds from the issuance, net of debt issuance costs, were $ 747 million.

Note 8 – Equity Incentive Plans

Other Performance-Based Grants

From time to time, the Compensation Committee of our Board of Directors grants certain employees performance-based restricted stock units (“RSUs”) and stock options.

As of September 30, 2023, we had unrecognized stock-based compensation expense of $ 525 million under these grants to purchase or receive an aggregate 4.7 million shares of our common stock.

From time to time, the Compensation Committee of our Board of Directors grants certain employees performance-based restricted stock units and stock options.

As of March 31, 2024, we had unrecognized stock-based compensation expense of $ 613 million under these grants to purchase or receive an aggregate 5.0 million shares of our common stock.

For awards probable of achievement, we estimate the unrecognized stock-based compensation expense of $ 104 million will be recognized over a weighted-average period of 4.8 years.

For the three and nine months ended September 30, 2023, we recorded $ 10 million and $ 56 million, respectively, of stock-based compensation expense related to these grants, net of forfeitures.

For the three and nine months ended September 30, 2022, we recorded $ 31 million and $ 134 million, respectively, of stock-based compensation expense related to these grants, net of forfeitures.

For the three months ended March 31, 2024 and 2023, stock-based compensation expense related to these grants, net of forfeitures, were immaterial.

Summary Stock-Based Compensation Information

The following table summarizes our stock-based compensation expense by line item in the consolidated statements of operations (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Cost of revenues $ 202 $ 192

2 unchanged sentences

Total $ 524 $ 418

Our income tax benefits recognized from stock-based compensation arrangements in each of the periods presented were immaterial due to cumulative losses and valuation allowances.

Note 9 – Income Taxes

Our effective tax rate was 26 % percent for the three months ended March 31, 2024, compared to 9 % for the three months ended March 31, 2023.

The increase in our effective tax rate is primarily due to the impact of releasing the valuation allowance on our U.S.

deferred tax assets in the fourth quarter of 2023 and changes in the mix of our jurisdictional earnings.

Our effective tax rates for the first three months of 2024 and 2023 differed from the U.S.

federal statutory rate of 21% primarily due to the mix of our jurisdictional earnings subject to different tax rates, impact of valuation allowances on our deferred tax assets, as well as benefits from our U.S.

tax credits and the Inflation Reduction Act of 2022 (“IRA”) manufacturing credits.

We are subject to tax examinations in the U.S.

federal, state, and foreign jurisdictions.

Note 10 – Commitments and Contingencies

1 unchanged sentence

For a description of our operating lease arrangements in Buffalo, New York, and Shanghai, China, refer to Note 15, Commitments and Contingencies , in our Annual Report on Form 10-K for the year ended December 31, 2023.

As of September 30, 2023, we expect to meet the requirements under these arrangements based on our current and anticipated level of operations.

As of March 31, 2024, we expect to meet the requirements under these arrangements, as may be modified from time to time, based on our current and anticipated level of operations.

Legal Proceedings

Litigation Relating to the SolarCity Acquisition

Between September 1, 2016 and October 5, 2016, seven lawsuits were filed in the Delaware Court of Chancery by purported stockholders of Tesla challenging our acquisition of SolarCity Corporation (“SolarCity”).

Following consolidation, the lawsuit names as defendants the members of Tesla’s board of directors as then constituted and alleges, among other things, that board members breached their fiduciary duties in connection with the acquisition.

The complaint asserts both derivative claims and direct claims on behalf of a purported class and seeks, among other relief, unspecified monetary damages, attorneys’ fees and costs.

On January 22, 2020, all of the director defendants except Elon Musk reached a settlement to resolve the lawsuit against them for an amount to be paid entirely under the applicable insurance policy.

The settlement, which does not involve an admission of any wrongdoing by any party, was approved by the Court on August 17, 2020.

Tesla received payment of approximately $ 43 million on September 16, 2020, which has been recognized in our consolidated statements of operations as a reduction to Selling, general and administrative operating expenses for costs previously incurred related to the acquisition of SolarCity.

The trial was held from July 12 to July 23, 2021 and on August 16, 2021.

On October 22, 2021, the Court approved the parties’ joint stipulation that (a) the class is decertified and the action shall continue exclusively as a derivative action under Court of Chancery Rule 23.1 and (b) the direct claims against Elon Musk are dismissed with prejudice.

Following post-trial briefing, post-trial argument was held on January 18, 2022.

On April 27, 2022, the Court entered judgment in favor of Mr.

Musk on all counts.

On May 26, 2022, the plaintiff filed a notice of appeal.

Oral argument was held before the Supreme Court of Delaware on March 29, 2023, and on June 6, 2023, the Supreme Court of Delaware affirmed the Court of Chancery’s decision.

These plaintiffs and others filed parallel actions in the U.S.

District Court for the District of Delaware on or about April 21, 2017.

They include claims for violations of the federal securities laws and breach of fiduciary duties by Tesla’s board of directors.

Those actions were consolidated and stayed pending the above-referenced Chancery Court litigation.

On October 16, 2023, these plaintiffs filed a voluntary dismissal of the action.

Litigation Relating to 2018 CEO Performance Award

On June 4, 2018, a purported Tesla stockholder filed a putative class and derivative action in the Delaware Court of Chancery against Elon Musk and the members of Tesla’s board of directors as then constituted, alleging corporate waste, unjust enrichment and that such board members breached their fiduciary duties by approving the stock-based compensation plan awarded to Elon Musk in 2018.

The complaint seeks, among other things, monetary damages and rescission or reformation of the stock-based compensation plan.

On August 31, 2018, defendants filed a motion to dismiss the complaint;

plaintiff filed its opposition brief on November 1, 2018;

and defendants filed a reply brief on December 13, 2018.

The hearing on the motion to dismiss was held on May 9, 2019.

On September 20, 2019, the Court granted the motion to dismiss as to the corporate waste claim but denied the motion as to the breach of fiduciary duty and unjust enrichment claims.

Defendants’ answer was filed on December 3, 2019.

On January 25, 2021, the Court conditionally certified certain claims and a class of Tesla stockholders as a class action.

On September 30, 2021, plaintiff filed a motion for leave to file a verified amended derivative complaint.

On October 1, 2021, defendants Kimbal Musk and Steve Jurvetson moved for summary judgment as to the claims against them.

Following the motion, plaintiff agreed to voluntarily dismiss the claims against Kimbal Musk and Steve Jurvetson.

Plaintiff also moved for summary judgment on October 1, 2021.

On October 27, 2021, the Court approved the parties’ joint stipulation that, among other things, (a) all claims against Kimbal Musk and Steve Jurvetson in the Complaint are dismissed with prejudice;

(b) the class is decertified and the action shall continue exclusively as a derivative action under Court of Chancery Rule 23.1;

and (c) the direct claims against the remaining defendants are dismissed with prejudice.

On November 18, 2021, the remaining defendants (a) moved for partial summary judgment, (b) opposed plaintiff’s summary judgment motion and (c) opposed the plaintiff’s motion to amend his complaint.

In January 2022, the case was assigned to a different judge.

On February 24, 2022, the court (i) granted plaintiff’s motion to amend his complaint, and (ii) canceled oral argument on the summary judgment motions, stating that the court is “skeptical that this litigation can be resolved based on the undisputed facts” and the “case is going to trial,” but that the “parties may reassert their arguments made in support of summary judgment in their pre-trial and post-trial briefs.” Trial was held November 14-18, 2022.

Trial was held November 14-18, 2022.

Post-trial briefing and argument are now complete.

On January 30, 2024, the Court issued an opinion ordering recission of Mr.

Musk’s 2018 compensation plan.

Plaintiff’s counsel have filed a brief seeking a fee award of 29,402,900 Tesla shares, plus expenses of $ 1,120,115.50 .

Tesla’s opposition to the fee request is due on June 7, 2024, and a hearing is scheduled for July 8, 2024.

On April 17, 2024, Tesla filed a preliminary proxy statement which included a number of proposals, including a proposal to ratify the 2018 CEO Performance Award.

Litigation Related to Directors’ Compensation

2 unchanged sentences

Defendants filed their answer on September 17, 2020.

Trial is currently set for November 27, 2023, to December 1, 2023.

On July 14, 2023, the parties filed a Stipulation and Agreement of Compromise and Settlement, which does not involve an admission of any wrongdoing by any party.

1 unchanged sentence

Pursuant to the terms of the agreement, Tesla provided notice of the proposed settlement to stockholders of record as of July 14, 2023.

The general terms, conditions and timing of this proposed settlement are further set forth in the Form 8-K filed on July 20, 2023, which includes, among other things, the court-approved notice of the proposed settlement.

The Court held a hearing regarding the settlement on October 13, 2023, after which it took the settlement and plaintiff counsels’ fee request under advisement.

12 unchanged sentences

Musk, among other things.

Five of those actions were consolidated, and all seven actions have been stayed pending resolution of the above-referenced consolidated purported stockholder class action.

Five of those actions were consolidated, and all seven actions have been stayed pending resolution of the appeal in the above-referenced consolidated purported stockholder class action.

In addition to these cases, two derivative lawsuits were filed on October 25, 2018 and February 11, 2019 in the U.S.

4 unchanged sentences

Among other things, the plaintiff seeks reforms to the Company’s corporate governance and internal procedures, unspecified damages, and attorneys’ fees.

The parties reached an agreement to stay the case until December 5, 2023.

The parties reached an agreement to stay the case until June 3, 2024.

On November 15, 2021, JPMorgan Chase Bank (“JP Morgan”) filed a lawsuit against Tesla in the Southern District of New York alleging breach of a stock warrant agreement that was entered into as part of a convertible notes offering in 2014.

10 unchanged sentences

Tesla, a jury in the Northern District of California returned a verdict against Tesla on claims by a former contingent worker that he was subjected to race discrimination while assigned to work at Tesla’s Fremont Factory from 2015-2016.

On November 16, 2021, Tesla filed a post-trial motion for relief that included a request for a new trial or reduction of the jury’s damages.

On April 13, 2022, the Court granted Tesla’s motion in part, reducing the total damages and conditionally denied the motion for a new trial subject to the plaintiff’s acceptance of the reduced award.

On June 21, 2022, the plaintiff rejected the reduced award and, as a result, on June 27, 2022, the Court ordered a new trial on damages only, which commenced on March 27, 2023, after which a jury returned a verdict of $ 3,175,000 .

A retrial was held starting on March 27, 2023, after which a jury returned a verdict of $ 3,175,000 .

As a result, the damages awarded against Tesla were reduced from an initial $ 136.9 million (October 4, 2021) down to $ 15 million (April 13, 2022), and then further down to $ 3.175 million (April 3, 2023).

On November 2, 2023, the plaintiff filed a notice of appeal, and on November 16, 2023, Tesla filed a notice of cross appeal.

In March 2024, the parties reached a confidential settlement resolving all claims in this matter.

On February 9, 2022, shortly after the first Diaz jury verdict, the California Civil Rights Department (“CRD,” formerly “DFEH”) filed a civil complaint against Tesla in Alameda County, California Superior Court, alleging systemic race discrimination, hostile work environment and pay equity claims, among others.

1 unchanged sentence

On September 22, 2022, Tesla filed a cross complaint against CRD, alleging that it violated the Administrative Procedures Act by failing to follow statutory pre-requisites prior to filing suit and that cross complaint was subject to a sustained demurrer, which Tesla later amended and refiled.

The case is now in discovery.

The case is currently in discovery.

Trial is scheduled for October 14, 2024.

Additionally, on June 1, 2022 the Equal Employment Opportunity Commission (“EEOC”) issued a cause finding against Tesla that closely parallels the CRD’s allegations.

Tesla engaged in a mandatory mediation with the EEOC in June 2023, which did not result in a resolution.

On September 28, 2023, the EEOC filed a civil complaint against Tesla in the United States District Court for the Northern District of California asserting claims for race harassment and retaliation and seeking, among other things, monetary and injunctive relief.

On December 18, 2023, Tesla filed a motion to stay the case.

Separately, on December 26, 2023, Tesla filed a motion to dismiss the case.

Both motions were subsequently denied.

On June 16, 2022, two Tesla stockholders filed separate derivative actions in the U.S.

3 unchanged sentences

On July 22, 2022, the Court consolidated the two cases and on September 6, 2022, plaintiffs filed a consolidated complaint.

On November 7, 2022, the defendants filed a motion to dismiss the case.

Plaintiffs filed a response of January 13, 2023, and the defendants replied on February 17, 2023.

On September 15, 2023, the Court dismissed the action but granted plaintiffs leave to file an amended complaint.

On November 7, 2022, the defendants filed a motion to dismiss the case and on September 15, 2023, the Court dismissed the action but granted plaintiffs leave to file an amended complaint.

On November 2, 2023, plaintiff filed an amended complaint purportedly on behalf of Tesla, against Elon Musk.

On December 19, 2023, the defendants moved to dismiss the amended complaint, which the Court granted on April 12, 2024, with leave for the Plaintiffs to amend.

Other Litigation Related to Our Products and Services

We are also subject to various lawsuits that seek monetary and other injunctive relief.

These lawsuits include proposed class actions and other consumer claims that allege, among other things, defects and misrepresentations related to our products and services.

These lawsuits include proposed class actions and other consumer claims that allege, among other things, purported defects and misrepresentations related to our products and services.

For example, on September 14, 2022, a proposed class action was filed against Tesla, Inc.

5 unchanged sentences

On September 30, 2023, the Court dismissed this action with leave to amend the complaint.

On March 22, 2023, the plaintiffs in the California consolidated action filed a motion for a preliminary injunction to order Tesla to (1) cease using the term “Full Self-Driving Capability” (FSDC), (2) cease the sale and activation of FSDC and deactivate FSDC on Tesla vehicles, and (3) provide certain notices to consumers about proposed court-findings about the accuracy of the use of the terms Autopilot and FSDC.

On November 20, 2023, the plaintiff moved to amend the complaint, which Tesla opposed.

On March 22, 2023, the plaintiffs in the Northern District of California consolidated action filed a motion for a preliminary injunction to order Tesla to (1) cease using the term “Full Self-Driving Capability” (FSD Capability), (2) cease the sale and activation of FSD Capability and deactivate FSD Capability on Tesla vehicles, and (3) provide certain notices to consumers about proposed court-findings about the accuracy of the use of the terms Autopilot and FSD Capability.

Tesla opposed the motion.

On September 30, 2023, the Court denied the request for a preliminary injunction, compelled four of five plaintiffs to arbitration, and dismissed the claims of the fifth plaintiff with leave to amend the complaint.

Subsequently, on October 2, 2023, a similar proposed class action was filed in San Diego County Superior Court in California.

On October 31, 2023, the remaining plaintiff in the Northern District of California action filed an amended complaint, which Tesla has moved to dismiss.

On October 2, 2023, a similar proposed class action was filed in San Diego County Superior Court in California.

Tesla subsequently removed the San Diego County case to federal court and on January 8, 2024, the federal court granted Tesla’s motion to transfer the case to the U.S.

District Court for the Northern District of California.

On February 27, 2023, a proposed class action was filed in the U.S.

District Court for the Northern District of California against Tesla, Inc., Elon Musk and certain current and former Company executives.

The complaint alleges that the defendants made material misrepresentations and omissions about the Company’s Autopilot and FSDC technologies and seeks money damages and other relief on behalf of persons who purchased Tesla stock between February 19, 2019 and February 17, 2023.

The complaint alleges that the defendants made material misrepresentations and omissions about the Company’s Autopilot and FSD Capability technologies and seeks money damages and other relief on behalf of persons who purchased Tesla stock between February 19, 2019 and February 17, 2023.

An amended complaint was filed on September 5, 2023, naming only Tesla, Inc.

and Elon Musk as defendants.

On April 13, 2023, a putative Tesla shareholder filed a related shareholder derivative complaint against the members of Tesla’s board of directors and certain current and former executives, alleging contribution for violations of the federal securities law, breach of fiduciary duties, waste, and unjust enrichment.

The complaint asserted derivative claims and seeks, among other relief, unspecified monetary damages, attorneys’ fees and costs.

On July 19, 2023, the plaintiff in the shareholder derivative action voluntarily dismissed the complaint without prejudice.

On March 14, 2023, a proposed class action was filed in the U.S.

On November 6, 2023, Tesla moved to dismiss the amended complaint.

On March 14, 2023, a proposed class action was filed against Tesla, Inc.

District Court for the Northern District of California.

2 unchanged sentences

On July 17, 2023, these plaintiffs filed a consolidated amended complaint.

On September 27, 2023, the court granted Tesla’s motion to compel arbitration as to three of the plaintiffs, and on November 17, 2023, the court granted Tesla’s motion to dismiss without prejudice.

The plaintiffs filed a Consolidated Second Amended Complaint on December 12, 2023, which Tesla has moved to dismiss.

Plaintiffs also appealed the court’s arbitration order, which was denied.

The Company intends to vigorously defend itself in these matters;

2 unchanged sentences

Certain Investigations and Other Matters

We receive requests for information from regulators and governmental authorities, such as the National Highway Traffic Safety Administration, the National Transportation Safety Board, the SEC, the Department of Justice (“DOJ”) and various local, state, federal and international agencies.

We routinely cooperate with such regulatory and governmental requests, including subpoenas, formal and informal requests and other investigations and inquiries.

For example, the SEC had issued subpoenas to Tesla in connection with Elon Musk’s prior statement that he was considering taking Tesla private.

The take-private investigation was resolved and closed with a settlement entered into with the SEC in September 2018 and as further clarified in April 2019 in an amendment.

The SEC also has periodically issued subpoenas to us seeking information on our governance processes around compliance with the SEC settlement, as amended.

Separately, the Company has received requests for information, including subpoenas, from the DOJ.

These have included requests for documents related to Tesla’s Autopilot and FSD features.

Additionally, the Company has received requests for information, including subpoenas from the DOJ, regarding certain matters associated with personal benefits, related parties, vehicle range and personnel decisions.

We regularly receive requests for information, including subpoenas, from regulators and governmental authorities such as the National Highway Traffic Safety Administration, the National Transportation Safety Board, the Securities and Exchange Commission (“SEC”), the Department of Justice (“DOJ”), and various local, state, federal, and international agencies.

The ongoing requests for information include topics such as operations, technology (e.g., vehicle functionality, Autopilot and FSD Capability), compliance, finance, data privacy, and other matters related to Tesla’s business, its personnel, and related parties.

We routinely cooperate with such formal and informal requests for information, investigations, and other inquiries.

To our knowledge no government agency in any ongoing investigation has concluded that any wrongdoing occurred.

2 unchanged sentences

We are also subject to various other legal proceedings, risks and claims that arise from the normal course of business activities.

For example, during the second quarter of 2023, a foreign news outlet reported that it obtained certain misappropriated data including, purportedly, among other things, non-public Tesla business and personal information.

For example, during the second quarter of 2023, a foreign news outlet reported that it obtained certain misappropriated data including, purportedly non-public Tesla business and personal information.

Tesla has made notifications to potentially affected individuals (current and former employees) and regulatory authorities and we are working with certain law enforcement and other authorities.

4 unchanged sentences

The aggregate carrying values of the variable interest entities’ assets and liabilities, after elimination of any intercompany transactions and balances, in the consolidated balance sheets were as follows (in millions):

September 30,

2024 December 31,

14 unchanged sentences

Debt and finance leases, net of current portion 1,997 2,041

Other long-term liabilities — 3

Total liabilities $ 4,022 $ 3,777

3 unchanged sentences

The following table presents revenues and gross profit by reportable segment (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Automotive segment

5 unchanged sentences

The following table presents revenues by geographic area based on the sales location of our products (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

United States $ 9,762 $ 11,247

3 unchanged sentences

The following table presents long-lived assets by geographic area (in millions):

September 30,

2024 December 31,

5 unchanged sentences

The following table presents inventory by reportable segment (in millions):

September 30,

2024 December 31,

2 unchanged sentences

Total $ 16,033 $ 13,626

Note 13 – Restructuring and Other

In April 2024, we initiated certain restructuring actions in order to reduce costs and improve efficiency.

As a result, we expect to recognize in excess of $ 350 million of costs primarily related to employee termination expenses in the second quarter of 2024.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements