What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-10-24 compared with 2024-07-24 · 106 added, 89 removed, 653 unchanged (23% of the section changed)

2 unchanged sentences

(in millions, except per share data)

September 30,

2024 December 31,

36 unchanged sentences

6,000 shares authorized;

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

3,207 and 3,185 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 37,286 34,892

7 unchanged sentences

(in millions, except per share data)

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

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

2024 2023 2024 2023

22 unchanged sentences

Interest expense ( 92 ) ( 38 ) ( 254 ) ( 95 )

Other income, net 20 328 128 280

Other (expense) income, net ( 270 ) 37 ( 142 ) 317

Income before income taxes 2,784 2,045 6,224 7,782

12 unchanged sentences

(in millions)

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

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

2024 2023 2024 2023

Net income $ 2,183 $ 1,878 $ 4,821 $ 7,031

Other comprehensive (loss) income:

Other comprehensive income (loss):

Foreign currency translation adjustment 445 ( 289 ) 121 ( 343 )

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

Unrealized net gain on investments, net of tax 8 7 8 8

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

5 unchanged sentences

(in millions)

Three Months Ended June 30, 2024 Redeemable

Three Months Ended September 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

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

Settlement of warrants — 9 — — — — — — —

Issuance of common stock for equity incentive awards — 4 — 340 — — 340 — 340

2 unchanged sentences

Net income 1 — — — — 2,167 2,167 15 2,182

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

Other comprehensive income — — — — 453 — 453 — 453

Balance as of September 30, 2024 $ 70 3,207 $ 3 $ 37,286 $ ( 14 ) $ 32,656 $ 69,931 $ 709 $ 70,640

Nine Months Ended September 30, 2024 Redeemable

Noncontrolling

7 unchanged sentences

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

Settlement of warrants — 9 — — — — — — —

Issuance of common stock for equity incentive awards — 13 — 787 — — 787 — 787

3 unchanged sentences

Net income 5 — — — — 4,774 4,774 42 4,816

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

Other comprehensive income — — — — 129 — 129 — 129

Balance as of September 30, 2024 $ 70 3,207 $ 3 $ 37,286 $ ( 14 ) $ 32,656 $ 69,931 $ 709 $ 70,640

Three Months Ended September 30, 2023 Redeemable

Noncontrolling

6 unchanged sentences

Shares Amount

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

Issuance of common stock for equity incentive awards — 5 — 254 — — 254 — 254

3 unchanged sentences

Net income 4 — — — — 1,853 1,853 21 1,874

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

Other comprehensive loss — — — — ( 282 ) — ( 282 ) — ( 282 )

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

Noncontrolling

11 unchanged sentences

Buy-outs of noncontrolling interests ( 8 ) — — 3 — — 3 ( 12 ) ( 9 )

Net income ( 104 ) — — — — 5,216 5,216 41 5,257

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

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

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

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

1 unchanged sentence

(in millions)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash Flows from Operating Activities

4 unchanged sentences

Inventory and purchase commitments write-downs 247 361

Foreign currency transaction net unrealized gain ( 90 ) ( 283 )

Foreign currency transaction net unrealized loss (gain) 197 ( 317 )

Deferred income taxes 418 ( 316 )

16 unchanged sentences

Net cash used in investing activities

( 11,184 ) ( 10,780 )

Cash Flows from Financing Activities

6 unchanged sentences

Payments for buy-outs of noncontrolling interests in subsidiaries ( 124 ) ( 17 )

Net cash provided by (used in) financing activities 2,736 ( 561 )

Net cash provided by financing activities

Effect of exchange rate changes on cash and cash equivalents and restricted cash ( 8 ) ( 142 )

Net decrease in cash and cash equivalents and restricted cash ( 1,835 ) ( 1,045 )

Net increase (decrease) in cash and cash equivalents and restricted cash

1,785 ( 334 )

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

9 unchanged sentences

Unaudited Interim Financial Statements

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 financial statements, including the consolidated balance sheet as of September 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 nine months ended September 30, 2024 and 2023, and the consolidated statements of cash flows for the nine months ended September 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.

7 unchanged sentences

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

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

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

2024 2023 2024 2023

9 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 $ 3.66 billion and $ 3.54 billion as of June 30, 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 $ 3.61 billion and $ 3.54 billion as of September 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 $ 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.

Revenue recognized from the deferred revenue balances as of December 31, 2023 and 2022 was $ 711 million and $ 360 million for the nine months ended September 30, 2024 and 2023, respectively.

Of the total deferred revenue balance as of September 30, 2024, we expect to recognize $ 821 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 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.

As of September 30, 2024 and December 31, 2023, we had current net financing receivables of $ 245 million and $ 242 million, respectively, in Accounts receivable, net, and $ 868 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.

1 unchanged sentence

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.

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 liabilities.

The total recorded guarantee liabilities on vehicles sold under this program were immaterial as of September 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 $ 1.04 billion and $ 166 million as of September 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.

As of September 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 $ 4.72 billion.

Of this amount, we expect to recognize $ 683 million in the next 12 months and the rest over the remaining performance obligation period.

3 unchanged sentences

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Gross lease receivables $ 584 $ 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 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.

As of September 30, 2024 and December 31, 2023, deferred revenue related to such customer payments amounted to $ 1.73 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 $ 1.09 billion and $ 511 million for the nine months ended September 30, 2024 and 2023, respectively.

Of this amount, we expect to recognize $ 4.23 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 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.

As of September 30, 2024 and December 31, 2023, we had current net financing receivables of $ 32 million and $ 31 million, respectively, in Accounts receivable, net, and $ 641 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.

9 unchanged sentences

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 June 30, Six Months Ended June 30,

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

2024 2023 2024 2023

Net income attributable to common stockholders $ 2,167 $ 1,853 $ 4,774 $ 7,069

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

Buy-outs of noncontrolling interest — 2 ( 42 ) ( 3 )

Net income used in computing basic and diluted net income per share of common stock $ 2,167 $ 1,851 $ 4,816 $ 7,072

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 June 30, Six Months Ended June 30,

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

2024 2023 2024 2023

5 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 June 30, Six Months Ended June 30,

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

2024 2023 2024 2023

2 unchanged sentences

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,

2023 June 30,

2023 September 30,

2023 December 31,

8 unchanged sentences

These various factors may have a significant impact on our accounts receivable balance from period to period.

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.

As of September 30, 2024 and December 31, 2023, government rebates receivable was $ 315 million and $ 378 million, respectively, in Accounts receivable, net for the current portion and an immaterial amount and $ 207 million, respectively, in Other non-current assets for the long-term portion in our consolidated balance sheets.

Financing Receivables

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.

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

As of September 30, 2024 and December 31, 2023, the total outstanding balance of MyPower customer notes receivable, net of allowance for expected credit losses, was $ 250 million and $ 266 million, respectively, of which $ 5 million was due in the next 12 months.

As of September 30, 2024 and December 31, 2023, the allowance for expected credit losses was $ 36 million.

Concentration of Risk

2 unchanged sentences

These deposits are typically in excess of insured limits.

As of June 30, 2024 and December 31, 2023, no entity represented 10% or more of our total receivables balance.

As of September 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 June 30, Six Months Ended June 30,

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

2024 2023 2024 2023

17 unchanged sentences

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 with changes reported 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 statement of operations 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.

3 unchanged sentences

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.

This ASU will result in gains and losses recorded in the consolidated financial statements 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.

13 unchanged sentences

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

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

7 unchanged sentences

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 June 30, 2024 and December 31, 2023 consisted of the following (in millions):

June 30, 2024

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

September 30, 2024

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

15 unchanged sentences

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, 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):

The following table summarizes the fair value of our investments by stated contractual maturities as of September 30, 2024 (in millions):

Due in 1 year or less $ 15,336

Due in 1 year through 5 years 201

Due in 5 years through 10 years 19

Total $ 15,537

5 unchanged sentences

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

June 30, 2024 December 31, 2023

September 30, 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,

6 unchanged sentences

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 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.

During the three and nine months ended September 30, 2024, we recorded write-downs of $ 46 million and $ 114 million, respectively, in Cost of revenues in the consolidated statements of operations.

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.

Note 4 – Property, Plant and Equipment, Net

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

September 30,

2024 December 31,

10 unchanged sentences

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 AI-related assets which have not yet been placed in service.

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.

Depreciation expense during the three and nine months ended September 30, 2024 was $ 1.05 billion and $ 2.96 billion, respectively.

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

13 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 June 30, 2024 (in millions):

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

Net Carrying Value Unpaid

11 unchanged sentences

Automotive Asset-backed Notes 2,073 2,107 4,195 — 3.95 - 6.57 %

December 2024 - June 2035

August 2025 - June 2035

China Working Capital Facility — 2,851 2,851 — 2.27 % April 2025 (2)

36 unchanged sentences

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

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

As of September 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.

Additionally, during the third quarter of 2024, we settled the warrants entered into in connection with the issuance of the 2024 Notes, resulting in the issuance of 8.5 million shares of our common stock.

The remaining warrants were settled in October 2024.

Automotive Asset-backed Notes

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.

During the nine months ended September 30, 2024, we transferred beneficial interests related to certain leased vehicles and financing receivables into special purpose entities and issued $ 1.57 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 $ 1.56 billion.

In October 2024, we transferred beneficial interests related to certain leased vehicles into a special purpose entity and issued $ 783 million in aggregate principal amount of Automotive Asset-backed Notes, with terms similar to our other previously issued Automotive-backed Notes.

China Working Capital Facility

5 unchanged sentences

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 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.

As of September 30, 2024, we had unrecognized stock-based compensation expense of $ 487 million under these grants to purchase or receive an aggregate 4.9 million shares of our common stock.

For awards probable of achievement, we estimate the unrecognized stock-based compensation expense of $ 457 million will be recognized over a weighted-average period of 4.3 years.

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.

For the three and nine months ended September 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 June 30, Six Months Ended June 30,

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

2024 2023 2024 2023

5 unchanged sentences

Note 9 – Income Taxes

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.

Our effective tax rate was 22 % and 23 % for the three and nine months ended September 30, 2024, respectively, compared to 8 % and 10 % for the three and nine months ended September 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 three and six months of 2024 and 2023 as compared to the U.S.

Our effective tax rates for the three and nine 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.

6 unchanged sentences

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 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.

As of September 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

3 unchanged sentences

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 .

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

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

2 unchanged sentences

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.

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 was held on August 2, 2024.

Litigation Related to Directors’ Compensation

6 unchanged sentences

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.

On August 14, 2024, the parties submitted a joint letter requesting that the Court approve and enter final judgment with respect to the settlement, and decide the fee request at a later date.

The settlement is not expected to have an adverse impact on our results of operations, cash flows or financial position.

8 unchanged sentences

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.

The appeal, which is pending in the United States Court of Appeals for the Ninth Circuit, has been fully briefed by the parties, and is scheduled for oral argument on October 25, 2024.

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.

1 unchanged sentence

Musk, among other things.

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.

Several of those actions were consolidated, and all have been stayed.

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 September 16, 2024.

The lawsuit has been stayed pending resolution of a motion to consolidate certain derivative lawsuits in the Delaware Court of Chancery referenced below.

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.

6 unchanged sentences

Tesla believes that the adjustments made by JP Morgan were neither proper nor commercially reasonable, as required under the stock warrant agreements.

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

JP Morgan filed a motion for judgment on the pleadings, which Tesla opposed, and on September 12, 2024, the Court denied JP Morgan’s motion.

Certain Derivative Lawsuits in Delaware

2 unchanged sentences

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

On August 6, 2024, the plaintiffs in these three actions moved to consolidate the matters into a single case, and a hearing on that motion is scheduled for November 18, 2024.

Litigation and Investigations Relating to Alleged Discrimination and Harassment

1 unchanged sentence

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

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 currently in discovery.

23 unchanged sentences

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

On August 8, 2024, the Court denied the plaintiff’s motion for leave to file an amended complaint and entered judgment for Tesla.

On September 5, 2024, the plaintiff filed a notice of appeal to United States Court of Appeals for the Second Circuit.

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.

12 unchanged sentences

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

On September 30, 2024, the Court granted Tesla’s motion to dismiss without prejudice.

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

12 unchanged sentences

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.

The ongoing requests for information include topics such as operations, technology (e.g., vehicle functionality, vehicle incidents, 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.

10 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,

4 unchanged sentences

Total current assets 342 440

Operating lease vehicles, net 451 —

Solar energy systems, net 2,524 3,278

13 unchanged sentences

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

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

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

2024 2023 2024 2023

6 unchanged sentences

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

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

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

2024 2023 2024 2023

4 unchanged sentences

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

September 30,

2024 December 31,

4 unchanged sentences

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

September 30,

2024 December 31,

5 unchanged sentences

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 .

These expenses were substantially paid with an immaterial accrual remaining in Accrued liabilities and other in our consolidated balance sheet as of September 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