PROPERTY, PLANT, AND EQUIPMENT, NET

9 Months Ended

Sep. 30, 2021

Property, Plant and Equipment [Abstract]

PROPERTY, PLANT, AND EQUIPMENT, NETProperty, plant, and equipment are recorded at cost, net of accumulated depreciation and impairments. Costs incurred for routine maintenance and repair are expensed when incurred.

The Company capitalizes certain qualified costs incurred in connection with the development of internal-use software. Costs incurred during the application development stage are evaluated to determine whether the costs meet the criteria for capitalization. Costs related to preliminary project activities and post implementation activities, including maintenance, are expensed as incurred.

Property, plant, and equipment are primarily depreciated using the straight-line method over the estimated useful life of the asset. Leasehold improvements are amortized over the period of lease or the life of the asset, whichever is shorter, using the straight-line method. Capitalized costs related to internal-use software are amortized using the straight-line method over the estimated useful life of the asset. Land is not depreciated.

The following table summarizes the components of “Property, plant, and equipment, net” (in millions):


	Estimated Useful Lives	December 31, 2020		September 30, 2021
Land, buildings, and building improvements	10 to 30 years	$	88	$	260
Leasehold improvements	Shorter of 10 years or lease term	51		151
Machinery, equipment, vehicles, and office furniture	5 to 15 years	88		1,327
Computer equipment, hardware, and software	3 to 10 years	51		147
Construction in progress		1,205		1,092
Total property, plant, and equipment		1,483		2,977
Accumulated depreciation and amortization		(38)		(121)
Total property, plant, and equipment, net		$	1,445	$	2,856

Depreciation and amortization expense was $7 million and $49 million for the three months ended September 30, 2020 and 2021, respectively. Depreciation and amortization expense was $17 million and $84 million for the nine months ended September 30, 2020 and 2021, respectively.

As of September 30, 2021, the carrying amount of construction in progress (“CIP”) amounted to $1,092 million. The majority of these costs related to the development of manufacturing lines, tooling, and other costs at the Normal Factory. The Normal Factory is the Company’s engineering, manufacturing, and assembly facility dedicated to the production of the Company’s R1T, R1S, and Electric Delivery Van (“EDV”) vehicles. The Company expects the majority of this CIP balance, which relates to the R1S and EDV programs, to go into service by December 31, 2021 as the Company launches production of these programs.