What changed in this filing

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Item 1. Financial Statements

2024-07-24 compared with 2024-04-24 · 175 added, 112 removed, 567 unchanged (34% of the section changed)

40 unchanged sentences

6,000 shares authorized;

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

3,194 and 3,185 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 36,443 34,892

7 unchanged sentences

(in millions, except per share data)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Automotive sales $ 18,530 $ 20,419 $ 34,990 $ 39,297

16 unchanged sentences

Selling, general and administrative 1,277 1,191 2,651 2,267

Restructuring and other 622 — 622 —

Total operating expenses 2,973 2,134 5,498 3,981

2 unchanged sentences

Interest expense ( 86 ) ( 28 ) ( 162 ) ( 57 )

Other income (expense), net 108 ( 48 )

Other income, net 20 328 128 280

Income before income taxes 1,887 2,937 3,440 5,737

1 unchanged sentence

Net income 1,494 2,614 2,638 5,153

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

Net income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries 16 ( 89 ) 31 ( 63 )

Net income attributable to common stockholders $ 1,478 $ 2,703 $ 2,607 $ 5,216

8 unchanged sentences

(in millions)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Net income $ 1,494 $ 2,614 $ 2,638 $ 5,153

1 unchanged sentence

Foreign currency translation adjustment ( 72 ) ( 184 ) ( 324 ) ( 54 )

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

Unrealized net gain (loss) on investments, net of tax 4 ( 5 ) — 1

Net loss realized and included in net income — 4 — 4

Comprehensive income 1,426 2,429 2,314 5,104

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

Comprehensive income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries 16 ( 89 ) 31 ( 63 )

Comprehensive income attributable to common stockholders $ 1,410 $ 2,518 $ 2,283 $ 5,167

2 unchanged sentences

(in millions)

Three Months Ended March 31, 2024 Redeemable

Three Months Ended June 30, 2024 Redeemable

Noncontrolling

6 unchanged sentences

Shares Amount

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

Issuance of common stock for equity incentive awards — 5 — 196 — — 196 — 196

Stock-based compensation — — — 484 — — 484 — 484

Distributions to noncontrolling interests ( 2 ) — — — — — — ( 21 ) ( 21 )

Net income 1 — — — — 1,478 1,478 15 1,493

Other comprehensive loss — — — — ( 68 ) — ( 68 ) — ( 68 )

Balance as of June 30, 2024 $ 72 3,194 $ 3 $ 36,443 $ ( 467 ) $ 30,489 $ 66,468 $ 723 $ 67,191

Six Months Ended June 30, 2024 Redeemable

Noncontrolling

Common Stock Additional

Capital Accumulated

Comprehensive

Earnings Total

Stockholders’

Noncontrolling

Shares Amount

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

5 unchanged sentences

Other comprehensive loss — — — — ( 324 ) — ( 324 ) — ( 324 )

Balance as of June 30, 2024 $ 72 3,194 $ 3 $ 36,443 $ ( 467 ) $ 30,489 $ 66,468 $ 723 $ 67,191

Three Months Ended June 30, 2023 Redeemable

Noncontrolling

Common Stock Additional

Capital Accumulated

Comprehensive

Earnings Total

Stockholders’

Noncontrolling

Shares Amount

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

Three Months Ended March 31, 2023 Redeemable

Issuance of common stock for equity incentive awards — 5 — 63 — — 63 — 63

Stock-based compensation — — — 495 — — 495 — 495

Distributions to noncontrolling interests ( 9 ) — — — — — — ( 28 ) ( 28 )

Buy-outs of noncontrolling interests ( 3 ) — — — — — — — —

Net income ( 107 ) — — — — 2,703 2,703 18 2,721

Other comprehensive income — — — — ( 185 ) — ( 185 ) — ( 185 )

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

Six Months Ended June 30, 2023 Redeemable

Noncontrolling

13 unchanged sentences

Other comprehensive income — — — — ( 49 ) — ( 49 ) — ( 49 )

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

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

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

1 unchanged sentence

(in millions)

Three Months Ended March 31,

Six Months Ended June 30,

Cash Flows from Operating Activities

20 unchanged sentences

Proceeds from maturities of investments 11,305 5,143

Proceeds from sales of investments 200 138

Business combinations, net of cash acquired — ( 76 )

Net cash used in investing activities ( 8,309 ) ( 6,018 )

18 unchanged sentences

Notes to Consolidated Financial Statements

Note 1 – Summary of Significant Accounting Policies

Note 1 – Overview & Summary of Significant Accounting Policies

(“Tesla”, the “Company”, “we”, “us” or “our”) was incorporated in the State of Delaware on July 1, 2003 and converted to a Texas corporation on June 13, 2024.

Unaudited Interim Financial Statements

The consolidated financial statements of Tesla, Inc.

(“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 financial statements, including the consolidated balance sheet as of June 30, 2024, the consolidated statements of operations, the consolidated statements of comprehensive income, the consolidated statements of redeemable noncontrolling interests and equity for the three and six months ended June 30, 2024 and 2023, and the consolidated statements of cash flows for the six months ended June 30, 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.

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Automotive sales $ 18,530 $ 20,419 $ 34,990 $ 39,297

8 unchanged sentences

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 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 $ 3.66 billion and $ 3.54 billion as of June 30, 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 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.

Revenue recognized from the deferred revenue balances as of December 31, 2023 and 2022 was $ 482 million and $ 256 million for the six months ended June 30, 2024 and 2023, respectively.

Of the total deferred revenue balance as of June 30, 2024, we expect to recognize $ 940 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 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.

As of June 30, 2024 and December 31, 2023, we have current net financing receivables of $ 244 million and $ 242 million, respectively, in Accounts receivable, net, and $ 919 million and $ 1.04 billion, respectively, in Other non-current assets for the long-term portion.

We offer resale value guarantees to our commercial banking partners in connection with certain vehicle leasing programs.

Under these programs, we originate the lease with our end customer and immediately transfer the lease and the underlying vehicle to our commercial banking partner, with the transaction being accounted for as a sale under ASC 606, Revenue from Contracts with Customers .

We estimate a guarantee liability in accordance with ASC 460, Guarantees and record it within other liabilities on our consolidated balance sheet.

On a quarterly basis, we assess the estimated market value of vehicles sold under this program to determine whether there have been changes to the amount of expected resale value guarantee payments.

The total recorded guarantee liabilities on vehicles sold under this program were immaterial as of June 30, 2024 and December 31, 2023.

Our maximum exposure on the guarantees we provide if they are unable to sell the vehicle at or above the vehicle’s contractual residual value at the end of the lease term was $ 807 million and $ 166 million as of June 30, 2024 and December 31, 2023, respectively.

Automotive Regulatory Credits

As of June 30, 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 $ 4.90 billion.

Of this amount, we expect to recognize $ 459 million in the next 12 months and the rest over the remaining performance obligation period.

Additionally, changes in regulations on automotive regulatory credits may significantly impact our remaining performance obligations and revenue to be recognized under these contracts.

Automotive Leasing Revenue

1 unchanged sentence

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Gross lease receivables $ 628 $ 780

8 unchanged sentences

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.

As of June 30, 2024 and December 31, 2023, deferred revenue related to such customer payments amounted to $ 1.49 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 $ 873 million and $ 329 million for the six months ended June 30, 2024 and 2023, respectively.

Of this amount, we expect to recognize $ 2.56 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.

As of June 30, 2024 and December 31, 2023, we have current net financing receivables of $ 28 million and $ 31 million, respectively, in Accounts receivable, net, and $ 626 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.

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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 March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Net income attributable to common stockholders $ 1,478 $ 2,703 $ 2,607 $ 5,216

2 unchanged sentences

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 March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Weighted average shares used in computing net income per share of common stock, basic 3,191 3,171 3,189 3,168

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 March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Stock-based awards 25 15 24 17

2 unchanged sentences

2024 December 31,

2023 March 31,

2023 June 30,

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 are dependent on contractual payment terms.

Our accounts receivable balances associated with sales of energy storage products are dependent on billing milestones and payment terms negotiated for each contract, and 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 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.

As of June 30, 2024 and December 31, 2023, government rebates receivable was $ 419 million and $ 378 million, respectively, in Accounts receivable, net for the current portion and $ 44 million and $ 207 million, respectively, in Other non-current assets for the long-term portion in our consolidated balance sheets.

Financing Receivables

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.

As of June 30, 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 June 30, 2024 and December 31, 2023, the majority of our financing receivables, excluding MyPower notes receivable, were originated in 2023 and 2022.

As of June 30, 2024 and December 31, 2023, the total outstanding balance of MyPower customer notes receivable, net of allowance for expected credit losses, was $ 256 million and $ 266 million, respectively, of which $ 5 million was due in the next 12 months.

As of June 30, 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 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.

Our cash and investments balances are primarily on deposit at high credit quality financial institutions or invested in highly rated, investment-grade securities.

These deposits are typically in excess of insured limits.

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

As of June 30, 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.

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Accrued warranty—beginning of period $ 5,353 $ 3,965 $ 5,152 $ 3,505

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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 requires certain crypto assets to be measured at fair value separately on the balance sheet with changes reported 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.

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

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

Money market funds $ 368 $ 368 $ — $ — $ 109 $ 109 $ — $ —

government securities 4,122 — 4,122 — 5,136 — 5,136 —

Corporate debt securities 420 — 420 — 480 — 480 —

Certificates of deposit and time deposits $ 8,488 $ — $ 8,488 $ — $ 6,996 $ — $ 6,996 $ —

Commercial paper 4,311 — 4,311 — 470 — 470 —

government securities 3,312 — 3,312 — 5,136 — 5,136 —

Corporate debt securities 372 — 372 — 480 — 480 —

Money market funds 10 10 — — 109 109 — —

Total $ 16,493 $ 10 $ 16,483 $ — $ 13,191 $ 109 $ 13,082 $ —

1 unchanged sentence

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

Our cash, cash equivalents and investments classified by security type as of June 30, 2024 and December 31, 2023 consisted of the following (in millions):

June 30, 2024

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

Cash $ 14,227 $ — $ — $ 14,227 $ 14,227 $ —

Money market funds 368 — — 368 368 —

government securities 4,124 — ( 2 ) 4,122 — 4,122

Corporate debt securities 423 1 ( 4 ) 420 — 420

Certificates of deposit and time deposits 8,488 — — 8,488 — 8,488

Commercial paper 4,311 2 ( 2 ) 4,311 — 4,311

government securities 3,314 — ( 2 ) 3,312 398 2,914

Corporate debt securities 374 — ( 2 ) 372 — 372

Money market funds 10 — — 10 10 —

Total cash, cash equivalents and short-term investments $ 30,724 $ 2 $ ( 6 ) $ 30,720 $ 14,635 $ 16,085

2 unchanged sentences

Cash $ 15,903 $ — $ — $ 15,903 $ 15,903 $ —

Money market funds 109 — — 109 109 —

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

government securities 5,136 1 ( 1 ) 5,136 277 4,859

Corporate debt securities 485 1 ( 6 ) 480 — 480

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

Commercial paper 470 — — 470 109 361

Money market funds 109 — — 109 109 —

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 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):

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

For the three and six months ended June 30, 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 June 30, 2024 and December 31, 2023.

We have determined that the gross unrealized losses on our investments as of June 30, 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 June 30, 2024 (in millions):

Due in 1 year or less $ 15,832

4 unchanged sentences

Our financial instruments that are not re-measured at fair value include accounts receivable, financing receivables, other receivables, digital assets, accounts payable, accrued liabilities, customer deposits and debt.

The carrying values of these financial instruments materially approximate their fair values, other than our 2.00 % Convertible Senior Notes due in 2024 (“2024 Notes”) and digital assets.

We estimate the fair value of the 2024 Notes using commonly accepted valuation methodologies and market-based risk measurements that are indirectly observable, such as credit risk (Level II).

The carrying values of these financial instruments materially approximate their fair values, other than our 2.00 % Convertible Senior Notes due in 2024 (“2024 Notes”), which matured in the second quarter of 2024, and digital assets.

We estimated the fair value of the 2024 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 digital assets based on quoted prices in active markets (Level I).

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Carrying Value Fair Value Carrying Value Fair Value

9 unchanged sentences

Total $ 14,195 $ 13,626

(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.

(1) Finished goods inventory includes products-in-transit to fulfill customer orders, new vehicles, 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.

During the three and six months ended June 30, 2024, we recorded write-downs of $ 29 million and $ 68 million, respectively, in Cost of revenues in the consolidated statements of operations.

During the three and six months ended June 30, 2023, we recorded write-downs of $ 66 million and $ 105 million, respectively, in Cost of revenues in the consolidated statements of operations.

Note 4 – Property, Plant and Equipment, Net

2 unchanged sentences

Machinery, equipment, vehicles and office furniture $ 17,363 $ 16,309

Tooling 3,480 3,129

Leasehold improvements 3,291 3,136

Land and buildings 10,280 9,498

AI infrastructure 2,255 1,510

Leasehold improvements 3,398 3,136

Tooling 3,616 3,129

Computer equipment, hardware and software 2,649 2,409

AI infrastructure 2,468 1,510

Construction in progress 6,776 5,791

2 unchanged sentences

Total $ 32,902 $ 29,725

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.

Depreciation expense during the three and six months ended June 30, 2024 was $ 981 million and $ 1.91 billion, respectively.

Depreciation expense during the three and six months ended June 30, 2023 was $ 816 million and $ 1.54 billion, respectively.

Note 5 – Accrued Liabilities and Other

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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, income tax, sales tax, property tax and use tax payables.

(2) Taxes payable primarily includes value added tax, income tax, sales tax, property tax and use tax payables.

Note 6 – Other Long-Term Liabilities

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Note 7 – Debt

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

The following is a summary of our debt and finance leases as of June 30, 2024 (in millions):

Net Carrying Value Unpaid

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Recourse debt:

2024 Notes $ 21 $ — $ 21 $ — 2.00 % May 2024

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

Solar Bonds 1 6 7 — 4.70 - 5.75 %

Other 4 3 7 4 4.70 - 5.75 %

March 2025 - January 2031

Other 26 — 26 — 5.20 % December 2026

Total recourse debt 4 3 7 5,004

1 unchanged sentence

Automotive Asset-backed Notes 1,987 2,261 4,263 — 1.12 - 6.57 %

December 2024 - May 2031

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

December 2024 - June 2035

China Working Capital Facility — 2,751 2,751 — 2.27 % April 2025 (2)

Cash Equity Debt 29 317 355 — 5.25 - 5.81 %

July 2033 - January 2035

Solar Asset-backed Notes 4 6 11 — 4.80 % December 2026

Total non-recourse debt 2,020 5,335 7,380 —

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

Solar Bonds — 7 7 — 4.70 - 5.75 %

Other — 7 7 28 4.70 - 5.75 %

March 2025 - January 2031

Other — — — 28 Not applicable December 2026

Total recourse debt 37 7 44 5,028

2 unchanged sentences

July 2024 - May 2031

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

Cash Equity Debt 28 330 367 — 5.25 - 5.81 %

July 2033 - January 2035

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

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

4 unchanged sentences

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) The contractual maturity date of the China Working Capital Facility is April 2025, renewable until March 2026 at our discretion.

As we have the intent and ability to refinance the loan on a long-term basis, we recorded it in Debt and finance leases, net of current portion in the consolidated balance sheet.

Recourse debt refers to debt that is recourse to our general assets.

1 unchanged sentence

The differences between the unpaid principal balances and the net carrying values are due to debt discounts or deferred issuance costs.

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.

As of June 30, 2024, we were in material compliance with all financial debt covenants.

During the second quarter of 2024, the 2024 Notes reached maturity and were fully settled.

Automotive Asset-backed Notes

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.

During the first and second quarters of 2024, we transferred beneficial interests related to certain leased vehicles and financing receivables into special purpose entities and issued $ 1.10 billion in aggregate principal amount of Automotive Asset-backed Notes, with terms similar to our other previously issued Automotive Asset-backed Notes.

China Working Capital Facility

In April 2024, one of our subsidiaries entered into a loan agreement (the “China Working Capital Facility”) with lenders in China for an unsecured revolving facility of up to RMB 20.00 billion to be used for certain production expenditures as well as repayment of certain finance facilities.

Borrowed funds bear interest at a rate equal to the Loan Prime Rate published by the People’s Bank of China minus 1.18 %.

The China Working Capital Facility is non-recourse to our assets.

Note 8 – Equity Incentive Plans

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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.

As of June 30, 2024, we had unrecognized stock-based compensation expense of $ 506 million under these grants to purchase or receive an aggregate 4.2 million shares of our common stock.

For awards probable of achievement, we estimate the unrecognized stock-based compensation expense of $ 80 million will be recognized over a weighted-average period of 4.0 years.

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

For the three and six months ended June 30, 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 March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Cost of revenues $ 180 $ 181 $ 382 $ 373

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Selling, general and administrative 88 96 198 188

Restructuring and other 2 — 2 —

Total $ 439 $ 445 $ 963 $ 863

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.

Our effective tax rate was 21 % and 23 % for the three and six months ended June 30, 2024, respectively, compared to 11 % and 10 % for the three and six months ended June 30, 2023, respectively.

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.

Our effective tax rates for the three and six months of 2024 and 2023 as compared to the U.S.

federal statutory rate of 21% were primarily impacted by the mix of our jurisdictional earnings subject to different tax rates, valuation allowances on our deferred tax assets, and benefits from our U.S.

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

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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 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.

As of June 30, 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

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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.

On January 30, 2024, the Court issued an opinion finding that the 2018 CEO Performance Award should be rescinded.

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.

Tesla opposed the fee request on June 7, 2024, and a hearing was held on July 8, 2024.

At Tesla’s 2024 Annual Meeting of Stockholders, 72 % of the disinterested voting shares of Tesla, excluding shares owned by Mr.

Musk and Kimbal Musk, voted to ratify the 2018 CEO Performance Award.

On June 28, 2024, because Tesla’s disinterested stockholders voted to ratify the 2018 CEO Performance Award, Mr.

Musk and the other director defendants, joined by Tesla, filed a brief seeking to revise the Court’s January 30, 2024 opinion, and a hearing is scheduled for August 2, 2024.

Litigation Related to Directors’ Compensation

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On July 14, 2023, plaintiffs filed a notice of appeal.

The appeal, which is pending in the United States Court of Appeals for the Ninth Circuit, has been fully briefed by the parties.

Between October 17, 2018 and March 8, 2021, seven derivative lawsuits were filed in the Delaware Court of Chancery, purportedly on behalf of Tesla, against Mr.

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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 June 3, 2024.

The parties reached an agreement to stay the case until September 16, 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.

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JP Morgan filed a motion for judgment on the pleadings, which Tesla opposed, and that motion is currently pending before the Court.

Certain Derivative Lawsuits in Delaware

Before converting from a Delaware to Texas corporation on June 13, 2024, three separate derivative actions brought by purported Tesla stockholders were filed in the Delaware Court of Chancery on May 24, June 10 and June 13, 2024, purportedly on behalf of Tesla, against current and former directors regarding topics involving Elon Musk and others, X Corp.

(formerly Twitter) and x.AI.

These suits assert various claims, including breach of fiduciary duty and breach of contract, and seek unspecified damages and other relief.

Litigation and Investigations Relating to Alleged Discrimination and Harassment

On October 4, 2021, in a case captioned Diaz v.

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.

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.

On February 9, 2022, 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.

CRD’s amended complaint seeks monetary damages and injunctive relief.

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The case is currently in discovery.

Trial is scheduled for October 14, 2024.

Trial is scheduled for September 15, 2025.

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

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.

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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.

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

On May 15, 2024, plaintiffs filed a second amended consolidated complaint purportedly on behalf of Tesla, against Mr.

On July 1, 2024, the defendants moved to dismiss the second amended consolidated complaint.

Other Litigation Related to Our Products and Services

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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.

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 31, 2023, the remaining plaintiff in the Northern District of California action filed an amended complaint, which Tesla moved to dismiss, and on May 15, 2024, the Court granted in part and denied in part Tesla’s motion.

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

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District Court for the Northern District of California.

Tesla moved to compel arbitration, which the plaintiff did not oppose, and on June 27, 2024, the Court stayed the case pending arbitration.

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

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District Court for the Northern District of California.

Several similar complaints have also been filed in the same court and these cases have now all been consolidated.

Several similar complaints were also filed in the same court and these cases have now all been consolidated.

These complaints allege that Tesla violates federal antitrust and warranty laws through its repair, service, and maintenance practices and seeks, among other relief, damages for persons who paid Tesla for repairs services or Tesla compatible replacement parts from March 2019 to March 2023.

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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.

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

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

On June 17, 2024, the Court granted in part and denied in part Tesla’s motion to dismiss the Consolidated Second Amended Complaint.

The Company intends to vigorously defend itself in these matters;

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Automotive segment

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

United States $ 13,256 $ 11,332 $ 23,018 $ 22,579

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Germany 4,228 4,258

China 2,755 2,820

Other international 4,124 4,067

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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.

In the second quarter of 2024, we initiated and substantially completed certain restructuring actions to reduce costs and improve efficiency.

As a result, we recognized $ 583 million of employee termination expenses in Restructuring and other in our consolidated income statement.

These expenses were substantially paid during the quarter with the remaining unpaid immaterial accrual recorded in Accrued liabilities and other in our consolidated balance sheet as of June 30, 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