Inventory

3 Months Ended

Mar. 31, 2020

Inventory Disclosure [Abstract]

Inventory

Note 5 – Inventory

Our inventory consisted of the following (in millions):

	March 31,		December 31,
	2020		2019
Raw materials	$	1,653	$	1,428
Work in process		494		362
Finished goods (1)		1,961		1,356
Service parts		386		406
Total	$	4,494	$	3,552

(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. Finished goods inventory increased from December 31, 2019 to March 31, 2020 due to limited capacity to deliver or install our products at the end of the first quarter in 2020.

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 months ended March 31, 2020 and 2019, we recorded write-downs of $45 million and $64 million, respectively, in cost of revenues.