Inventory

6 Months Ended

Jun. 30, 2021

Inventory Disclosure [Abstract]

Inventory

Note 6 – Inventory

Our inventory consisted of the following (in millions):

	June 30,		December 31,
	2021		2020
Raw materials	$	2,067	$	1,508
Work in process		858		493
Finished goods (1)		1,318		1,666
Service parts		490		434
Total	$	4,733	$	4,101

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

For solar energy systems, we commence transferring component parts from inventory to construction in progress, a component of solar energy systems, once a lease or PPA contract with a customer has been executed and installation has been initiated. Additional costs incurred on the leased solar energy systems, including labor and overhead, are recorded within solar energy systems under construction.

We write-down inventory for any excess or obsolete inventories or when we believe that the net realizable value of inventories is less than the carrying value. During the three and six months ended June 30, 2021, we recorded write-downs of $35 million and $70 million, respectively, in Cost of revenues and Research and development expenses. During the three and six months ended June 30, 2020, we recorded write-downs of $37 million and $82 million, respectively, in Cost of revenues.