Inventory

9 Months Ended

Sep. 30, 2023

Inventory consists of the following as of September 30, 2023 and December 31, 2022 (in thousands):


	As of September 30, 2023		As of December 31, 2022
Raw materials	$	268,063	$	698
Work in progress	20,973		—
Finished goods	256,617		3,578
Total	$	545,653	$	4,276

Inventory was comprised of raw materials, work in progress related to the production of vehicles for sale and finished goods inventory including new vehicles available for sale. Expenditure related to services performed subsequent to the start of production of salable vehicles are expensed as incurred in cost of revenues in the Condensed Consolidated Statements of Operations.

The Company writes-down inventory for any excess or obsolete inventories or when we believe the net realizable value of inventories is less than the carrying value. The Company recorded an obsolescence reserve on inventories of $0.9 million for the three and nine months ended September 30, 2023. Fixed production overhead costs are allocated to inventory based on the normal capacity of the production facility. The Company recorded a $18.2 million inventory valuation adjustment in cost of revenues in the three months ended September 30, 2023, due to the ramp up in production which impacted the allocation of fixed production overhead costs.