RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2023

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

Stock Warrants

In February 2019, the Company entered into a commercial letter agreement with Amazon.com, Inc. and its affiliates (“Amazon”), and in September 2019, the Company entered into a related framework agreement with Amazon Logistics, Inc. (“Logistics”). The Company refers to these agreements, together with any work orders, purchase orders, related agreements, and amendments thereunder or thereto, collectively, as the “EDV Agreement.” Under the EDV Agreement, the Company and Logistics have agreed to collaborate to design, develop, manufacture, and supply EDVs and/or certain component parts and related services for use in Amazon’s last mile delivery operations. In connection with the EDV Agreement, the Company provided a share-based sales incentive to Amazon, a principal stockholder, in the form of warrants to purchase preferred stock. These were converted to warrants to purchase an equivalent number of shares of Class A common stock upon the close of the Company’s IPO. The carrying value of the warrants was not material as of December 31, 2022 and 2023 and is amortized as an offset against revenues as Electric Delivery Vans (“EDVs”) are sold. The offset against revenues for the years ended December 31, 2022 and 2023 was not material.

2021 Convertible Notes

In July 2021, the Company issued the 2021 Convertible Notes to principal stockholders of the Company at that time, including: Amazon with $490 million principal amount, Ford Motor Company (“Ford”) with $415 million principal amount, and certain funds and accounts advised by T. Rowe Price Associates, Inc. (“T. Rowe Price”) with an aggregate $400 million principal amount. Upon the Company’s IPO, the 2021 Convertible Notes converted into 38 million shares of Class A common stock at a conversion price equal to $66.30 per share (refer to Note 8 "Debt" for more information about the 2021 Convertible Notes).

2026 Notes

The 2026 Notes were issued to certain new and existing principal stockholders, including T. Rowe Price with an aggregate $285 million principal amount (refer to Note 8 "Debt" for more information about the 2026 Notes).

Revenues

The Company recorded $343 million and $823 million in revenues from Amazon for the years ended December 31, 2022 and 2023, within “Revenues” in the Consolidated Statements of Operations, primarily related to the sale of EDVs in accordance with the EDV Agreement. As of December 31, 2022 and 2023, the uncollected amounts related to these revenues in “Accounts receivable, net” on the Consolidated Balance Sheets were $60 million and $6 million, respectively. As of December 31, 2022 and 2023, contract liabilities related to these revenues, primarily related to extended service contracts, were $14 million and $72 million, respectively. Refer to Note 2 "Summary of Significant Accounting Policies" for more information about revenue.

Operating Expenses

The Company obtained prototyping, engineering, and other R&D services from a wholly-owned subsidiary of Ford. Until May 2022, Ford was a principal stockholder and related party of the Company as a beneficial owner of more than 10 percent of the Company’s voting interests. The expense for services from Ford that the Company recognized in “Research and development” in the Consolidated Statement of Operations was not material through this time. Ford is no longer a related party.

The Company obtains data services, including hosting, storage, and compute from Amazon. During the year ended December 31, 2021, expenses related to these services were not material. During the years ended December 31, 2022 and 2023, expenses related to these services of $60 million and $63 million, respectively, were recorded in “Research and development” and “Selling, general, and administrative” in the Consolidated Statements of Operations. As of December 31, 2022 and 2023, the unpaid amounts related to these services were not material.

Unconditional Purchase Obligations and Commitments

Refer to Note 14 "Commitments and Contingencies" for more information about unconditional purchase obligations with Amazon.