Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Schedule of Disaggregation of Revenue by Major Source

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

	Year Ended December 31,
	2022		2021		2020
Automotive sales (1)	$	67,210	$	44,125	$	24,604
Automotive regulatory credits		1,776		1,465		1,580
Energy generation and storage sales		3,376		2,279		1,477
Services and other		6,091		3,802		2,306
Total revenues from sales and services		78,453		51,671		29,967
Automotive leasing		2,476		1,642		1,052
Energy generation and storage leasing		533		510		517
Total revenues	$	81,462	$	53,823	$	31,536

(1)Pricing adjustments on our vehicle offerings can impact the estimate of likelihood that customers would exercise their resale value guarantees, resulting in an adjustment of our sales return reserve on vehicles sold with resale value guarantees. Actual return rates being lower than expected and increases in resale values of our vehicles in 2021 resulted in a net release of our reserve of $365 million for the year ended December 31, 2021, which represented increases in automotive sales revenue. The net release or increase of reserves which impacted automotive sales revenue were immaterial for the years ended December 31, 2022 and December 31, 2020. Further, $324 million of the total revenue recognized as of December 31, 2022 is related to the general FSD feature release in North America in the fourth quarter of 2022.

Schedule of Deferred Revenue Activity

Deferred revenue related to the access to our FSD features, internet connectivity, free Supercharging programs and over-the-air software updates primarily on automotive sales consisted of the following (in millions):

	Year ended December 31,
	2022			2021
Deferred revenue— beginning of period	$	2,382		$	1,926
Additions		1,178			847
Net changes in liability for pre-existing contracts		(67	)		(25	)
Revenue recognized		(580	)		(366	)
Deferred revenue— end of period	$	2,913		$	2,382

Schedule of Reconciliation of Net Income Used in Computing Basic and Diluted Net Income Per Share of Common Stock and Basic to Diluted Weighted Average Shares Used in Computing Net Income Per Share of Common Stock

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):

	Year Ended December 31,
	2022			2021			2020
Net income attributable to common stockholders	$	12,556		$	5,519		$	721
Less: Buy-out of noncontrolling interest		(27	)		(5	)		31
Net income used in computing basic net income per share of common stock		12,583			5,524			690
Less: Dilutive convertible debt		(1	)		(9	)		—
Net income used in computing diluted net income per share of common stock	$	12,584		$	5,533		$	690

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, as adjusted to give effect to the 2022 Stock Split (in millions):

	Year Ended December 31,
	2022		2021		2020
Weighted average shares used in computing net income per share of common stock, basic		3,130		2,959		2,798
Add:
Stock-based awards		310		292		198
Convertible senior notes		3		29		141
Warrants		32		106		112
Weighted average shares used in computing net income per share of common stock, diluted		3,475		3,386		3,249

Schedule of Potentially Dilutive Shares that were Excluded from Computation of Diluted Net Income per Share of Common Stock

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, as adjusted to give effect to the 2022 Stock Split (in millions):

	Year Ended December 31,
	2022		2021		2020
Stock-based awards		4		1		6
Convertible senior notes (1)		—		—		3

(1)Under the modified retrospective method of adoption of ASU 2020-06, the dilutive impact of convertible senior notes was calculated using the if-converted method for the years ended December 31, 2022 and 2021. Certain convertible senior notes were calculated using the treasury stock method for the year ended December 31, 2020.

Business Combinations

We account for business acquisitions under ASC 805, Business Combinations. The total purchase consideration for an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities assumed at the acquisition date. Costs that are directly attributable to the acquisition are expensed as incurred. Identifiable assets (including intangible assets), liabilities assumed (including contingent liabilities) and noncontrolling interests in an acquisition are measured initially at their fair values at the acquisition date. We recognize goodwill if the fair value of the total purchase consideration and any noncontrolling interests is in excess of the net fair value of the identifiable assets acquired and the liabilities assumed. We recognize a bargain purchase gain within Other (expense) income, net, in the consolidated statement of operations if the net fair value of the identifiable assets acquired and the liabilities assumed is in excess of the fair value of the total purchase consideration and any noncontrolling interests. We include the results of operations of the acquired business in the consolidated financial statements beginning on the acquisition date.

Schedule of Cash and Cash Equivalents and Restricted Cash

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

	December 31,		December 31,		December 31,
	2022		2021		2020
Cash and cash equivalents	$	16,253	$	17,576	$	19,384
Restricted cash included in prepaid expenses and other    current assets		294		345		238
Restricted cash included in other non-current assets		377		223		279
Total as presented in the consolidated statements of cash flows	$	16,924	$	18,144	$	19,901

Estimated Useful Lives of Respective Assets

Depreciation and amortization is calculated using the straight-line method over the estimated useful lives of the respective assets, as follows:

Solar energy systems in service	30 to 35 years
Initial direct costs related to customer    solar energy system lease acquisition    costs	Lease term (up to 25 years)

Schedule of Estimated Useful Lives of Related Assets

Property, plant and equipment, net, including leasehold improvements, are recognized at cost less accumulated depreciation. Depreciation is generally computed using the straight-line method over the estimated useful lives of the respective assets, as follows:

Machinery, equipment, vehicles and    office furniture	3 to 15 years
Tooling	4 to 7 years
Building and building improvements	15 to 30 years
Computer equipment and software	3 to 10 years

Schedule of Accrued Warranty Activity

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

	Year Ended December 31,
	2022			2021			2020
Accrued warranty—beginning of period	$	2,101		$	1,468		$	1,089
Warranty costs incurred		(803	)		(525	)		(312	)
Net changes in liability for pre-existing warranties,    including expirations and foreign exchange impact		522			102			66
Provision for warranty		1,685			1,056			625
Accrued warranty—end of period	$	3,505		$	2,101		$	1,468

Schedule of Cumulative Effect of Changes Made to Consolidated Balance Sheet for Adoption of New Lease Standard

Accordingly, the cumulative effect of the changes made on our January 1, 2021 consolidated balance sheet for the adoption of the ASU was as follows (in millions):

	Balances at December 31, 2020			Adjustments from Adoption of ASU 2020-06			Balances at January 1, 2021
Assets
Property, plant and equipment, net	$	12,747		$	(45	)	$	12,702
Liabilities
Current portion of debt and finance leases		2,132			50			2,182
Debt and finance leases, net of current portion		9,556			219			9,775
Mezzanine equity
Convertible senior notes		51			(51	)		—
Equity
Additional paid-in capital		27,260			(474	)		26,786
Accumulated deficit		(5,399	)		211			(5,188	)