UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2020

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-34756

Tesla, Inc.

(Exact name of registrant as specified in its charter)

Delaware	91-2197729
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3500 Deer Creek Road Palo Alto, California	94304
(Address of principal executive offices)	(Zip Code)

(650) 681-5000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock	TSLA	The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (“Exchange Act”) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of April 23, 2020, there were 185,371,105 shares of the registrant’s common stock outstanding.

TESLA, INC.

FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2020

INDEX

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	4
	Consolidated Balance Sheets	4
	Consolidated Statements of Operations	5
	Consolidated Statements of Comprehensive Loss	6
	Consolidated Statements of Redeemable Noncontrolling Interests and Equity	7
	Consolidated Statements of Cash Flow	8
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	47
Item 4	Control and Procedures	47
PART II. OTHER INFORMATION
Item 1.	Legal Proceeding	48
Item 1A.	Risk Factors	49
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	69
Item 3	Defaults Upon Senior Securities	69
Item 4.	Mine Safety Disclosures	69
Item 5.	Other Information	69
Item 6.	Exhibits	70
SIGNATURES		72

i

Forward-Looking Statements

The discussions in this Quarterly Report on Form 10-Q contain forward-looking statements reflecting our current expectations that involve risks and uncertainties. These forward-looking statements include, but are not limited to, statements concerning our strategy, future operations, future financial position, future revenues, projected costs, profitability, expected cost reductions, capital adequacy, expectations regarding demand and acceptance for our technologies, growth opportunities and trends in the market in which we operate, prospects and plans and objectives of management. The words “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the risks set forth in Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q and in our other filings with the Securities and Exchange Commission. We do not assume any obligation to update any forward-looking statements.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Tesla, Inc.

Consolidated Balance Sheets

(in millions, except per share data)

(unaudited)

	March 31,			December 31,
	2020			2019
Assets
Current assets
Cash and cash equivalents	$	8,080		$	6,268
Accounts receivable, net		1,274			1,324
Inventory		4,494			3,552
Prepaid expenses and other current assets		1,045			959
Total current assets		14,893			12,103
Operating lease vehicles, net		2,527			2,447
Solar energy systems, net		6,106			6,138
Property, plant and equipment, net		10,638			10,396
Operating lease right-of-use assets		1,197			1,218
Intangible assets, net		323			339
Goodwill		193			198
Other non-current assets		1,373			1,470
Total assets	$	37,250		$	34,309
Liabilities
Current liabilities
Accounts payable	$	3,970		$	3,771
Accrued liabilities and other		2,825			3,222
Deferred revenue		1,186			1,163
Customer deposits		788			726
Current portion of debt and finance leases		3,217			1,785
Total current liabilities		11,986			10,667
Debt and finance leases, net of current portion		10,666			11,634
Deferred revenue, net of current portion		1,199			1,207
Other long-term liabilities		2,667			2,691
Total liabilities		26,518			26,199
Commitments and contingencies (Note 12)
Redeemable noncontrolling interests in subsidiaries		632			643
Convertible senior notes (Note 10)		60			—
Equity
Stockholders' equity
Preferred stock; $0.001 par value; 100 shares authorized;    no shares issued and outstanding		—			—
Common stock; $0.001 par value; 2,000 shares authorized; 185 and    181 shares issued and outstanding as of March 31, 2020 and December 31,    2019, respectively		0			0
Additional paid-in capital		15,390			12,737
Accumulated other comprehensive loss		(113	)		(36	)
Accumulated deficit		(6,104	)		(6,083	)
Total stockholders' equity		9,173			6,618
Noncontrolling interests in subsidiaries		867			849
Total liabilities and equity	$	37,250		$	34,309

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

4

Tesla, Inc.

Consolidated Statements of Operations

(in millions, except per share data)

(unaudited)

	Three Months Ended March 31,
	2020			2019
Revenues
Automotive sales	$	4,893		$	3,509
Automotive leasing		239			215
Total automotive revenues		5,132			3,724
Energy generation and storage		293			324
Services and other		560			493
Total revenues		5,985			4,541
Cost of revenues
Automotive sales		3,699			2,856
Automotive leasing		122			117
Total automotive cost of revenues		3,821			2,973
Energy generation and storage		282			316
Services and other		648			686
Total cost of revenues		4,751			3,975
Gross profit		1,234			566
Operating expenses
Research and development		324			340
Selling, general and administrative		627			704
Restructuring and other		—			44
Total operating expenses		951			1,088
Income (loss) from operations		283			(522	)
Interest income		10			9
Interest expense		(169	)		(158	)
Other (expense) income, net		(54	)		26
Income (loss) before income taxes		70			(645	)
Provision for income taxes		2			23
Net income (loss)		68			(668	)
Net income attributable to noncontrolling interests and    redeemable noncontrolling interests in subsidiaries		52			34
Net income (loss) attributable to common stockholders	$	16		$	(702	)
Net income (loss) per share of common stock attributable to    common stockholders
Basic	$	0.09		$	(4.10	)
Diluted	$	0.08		$	(4.10	)
Weighted average shares used in computing net income (loss) per    share of common stock
Basic		183			173
Diluted		199			173

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

5

Tesla, Inc.

Consolidated Statements of Comprehensive Loss

(in millions)

(unaudited)

	Three Months Ended March 31,
	2020			2019
Net income (loss)	$	68		$	(668	)
Other comprehensive loss:
Foreign currency translation adjustment		(77	)		(27	)
Comprehensive loss		(9	)		(695	)
Less: Comprehensive income attributable to noncontrolling    interests and redeemable noncontrolling interests in subsidiaries		52			34
Comprehensive loss attributable to common stockholders	$	(61	)	$	(729	)

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

6

Tesla, Inc.

Consolidated Statements of Redeemable Noncontrolling Interests and Equity

(in millions, except per share data)

(unaudited)

														Accumulated
	Redeemable							Additional						Other			Total			Noncontrolling
	Noncontrolling			Common Stock				Paid-In			Accumulated			Comprehensive			Stockholders'			Interests in			Total
	Interests			Shares		Amount		Capital			Deficit			Loss			Equity			Subsidiaries			Equity
Balance as of December 31, 2018	$	556			173	$	0	$	10,249		$	(5,318	)	$	(8	)	$	4,923		$	834		$	5,757
Adjustments for prior periods from adopting ASC 842		—			—		—		—			97			—			97			—			97
Issuance of common stock for equity incentive awards and acquisitions, net of transaction costs		—			1		0		93			—			—			93						93
Stock-based compensation		—			—		—		230			—			—			230			—			230
Contributions from noncontrolling interests		31			—		—		—			—			—			—			16			16
Distributions to noncontrolling interests		(11	)		—		—		—			—			—			—			(28	)		(28	)
Other		—			—		—		(8	)		—			—			(8	)		—			(8	)
Net (loss) income		(6	)		—		—		—			(702	)		—			(702	)		40			(662	)
Other comprehensive loss		—			—		—		—			—			(27	)		(27	)		—			(27	)
Balance as of March 31, 2019	$	570			174	$	0	$	10,564		$	(5,923	)	$	(35	)	$	4,606		$	862		$	5,468

													Accumulated
	Redeemable						Additional						Other			Total			Noncontrolling
	Noncontrolling		Common Stock				Paid-In			Accumulated			Comprehensive			Stockholders'			Interests in		Total
	Interests		Shares		Amount		Capital			Deficit			Loss			Equity			Subsidiaries		Equity
Balance as of December 31, 2019	$	643		181	$	0	$	12,737		$	(6,083	)	$	(36	)	$	6,618		$	849	$	7,467
Adjustments for prior periods from adopting ASU 2016-13		—		—		—		—			(37	)		—			(37	)		—		(37	)
Reclassification from equity to mezzanine equity for 1.25%    Convertible Senior Notes due in 2021		—		—		—		(60	)		—			—			(60	)		—		(60	)
Issuance of common stock for equity incentive awards		—		1	0			160			—			—			160			—		160
Issuance of common stock in February 2020 public offering at $767.00 per    share, net of issuance costs of $28		—		3	0			2,309			—			—			2,309			—		2,309
Stock-based compensation		—		—		—		244			—			—			244			—		244
Contributions from noncontrolling interests		2		—