tsla-10q_20200930.htm

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 September 30, 2020

☐	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 October 20, 2020, there were 947,900,733 shares of the registrant’s common stock outstanding.

TESLA, INC.

FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 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 Income (Loss)	6
	Consolidated Statements of Redeemable Noncontrolling Interests and Equity	7
	Consolidated Statements of Cash Flow	9
	Notes to Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	48
Item 4	Control and Procedures	48

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	49
Item 1A.	Risk Factors	50
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	63
Item 3	Defaults Upon Senior Securities	63
Item 4.	Mine Safety Disclosures	63
Item 5.	Other Information	63
Item 6.	Exhibits	64

SIGNATURES		66

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 any potential future impact of the coronavirus disease (“COVID-19”) pandemic on our business, 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)

	September 30,			December 31,
	2020			2019
Assets
Current assets
Cash and cash equivalents	$	14,531		$	6,268
Accounts receivable, net		1,757			1,324
Inventory		4,218			3,552
Prepaid expenses and other current assets		1,238			959
Total current assets		21,744			12,103
Operating lease vehicles, net		2,742			2,447
Solar energy systems, net		6,025			6,138
Property, plant and equipment, net		11,848			10,396
Operating lease right-of-use assets		1,375			1,218
Intangible assets, net		318			339
Goodwill		203			198
Other non-current assets		1,436			1,470
Total assets	$	45,691		$	34,309
Liabilities
Current liabilities
Accounts payable	$	4,958		$	3,771
Accrued liabilities and other		3,252			3,222
Deferred revenue		1,258			1,163
Customer deposits		708			726
Current portion of debt and finance leases		3,126			1,785
Total current liabilities		13,302			10,667
Debt and finance leases, net of current portion		10,559			11,634
Deferred revenue, net of current portion		1,233			1,207
Other long-term liabilities		3,049			2,691
Total liabilities		28,143			26,199
Commitments and contingencies (Note 12)
Redeemable noncontrolling interests in subsidiaries		608			643
Convertible senior notes (Note 10)		48			—
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; 948 and 905 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively (1)		1			1
Additional paid-in capital (1)		21,574			12,736
Accumulated other comprehensive income (loss)		125			(36	)
Accumulated deficit		(5,669	)		(6,083	)
Total stockholders' equity		16,031			6,618
Noncontrolling interests in subsidiaries		861			849
Total liabilities and equity	$	45,691		$	34,309

(1)	Prior period results have been adjusted to reflect the five-for-one stock split effected in the form of a stock dividend in August 2020. See Note 1, Overview for details.

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

Tesla, Inc.

Consolidated Statements of Operations

(in millions, except per share data)

(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Revenues
Automotive sales	$	7,346		$	5,132		$	17,150		$	13,809
Automotive leasing		265			221			772			644
Total automotive revenues		7,611			5,353			17,922			14,453
Energy generation and storage		579			402			1,242			1,095
Services and other		581			548			1,628			1,646
Total revenues		8,771			6,303			20,792			17,194
Cost of revenues
Automotive sales		5,361			4,014			12,774			11,124
Automotive leasing		145			117			415			340
Total automotive cost of revenues		5,506			4,131			13,189			11,464
Energy generation and storage		558			314			1,189			956
Services and other		644			667			1,850			2,096
Total cost of revenues		6,708			5,112			16,228			14,516
Gross profit		2,063			1,191			4,564			2,678
Operating expenses
Research and development		366			334			969			998
Selling, general and administrative		888			596			2,176			1,947
Restructuring and other		—			—			—			161
Total operating expenses		1,254			930			3,145			3,106
Income (loss) from operations		809			261			1,419			(428	)
Interest income		6			15			24			34
Interest expense		(163	)		(185	)		(502	)		(515	)
Other (expense) income, net		(97	)		85			(166	)		70
Income (loss) before income taxes		555			176			775			(839	)
Provision for income taxes		186			26			209			68
Net income (loss)		369			150			566			(907	)
Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries		38			7			115			60
Net income (loss) attributable to common stockholders	$	331		$	143		$	451		$	(967	)

Less: Buy-out of noncontrolling interest		31			-			31			8
Net income (loss) used in computing net income (loss) per share of common stock	$	300		$	143		$	420		$	(975	)
Net income (loss) per share of common stock attributable to common stockholders (1)
Basic	$	0.32		$	0.16		$	0.45		$	(1.11	)
Diluted	$	0.27		$	0.16		$	0.40		$	(1.11	)
Weighted average shares used in computing net income (loss) per share of common stock (1)
Basic		937			897			927			882
Diluted		1,105			922			1,059			882

(1)	Prior period results have been adjusted to reflect the five-for-one stock split effected in the form of a stock dividend in August 2020. See Note 1, Overview for details.

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

Tesla, Inc.

Consolidated Statements of Comprehensive Income (Loss)

(in millions)

(unaudited)

	Three Months Ended September 30,					Nine Months Ended September 30,
	2020		2019			2020		2019
Net income (loss)	$	369	$	150		$	566	$	(907	)
Other comprehensive income (loss):
Foreign currency translation adjustment		165		(114	)		161		(112	)
Comprehensive income (loss)		534		36			727		(1,019	)
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries		38		7			115		60
Comprehensive income (loss) attributable to common stockholders	$	496	$	29		$	612	$	(1,079	)

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

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
Three Months Ended September 30, 2019	Interests		Shares (1)		Amount (1)		Capital (1)		Deficit			Loss			Equity		Subsidiaries		Equity
Balance as of June 30, 2019	$	580		896	$	1	$	12,051	$	(6,331	)	$	(6	)	$	5,715	$	854	$	6,569
Issuance of common stock for equity incentive awards and acquisitions, net of transaction costs		—		5		0		79		—			—			79		—		79
Stock-based compensation		—		—		—		217		—			—			217		—		217
Contributions from noncontrolling interests