INVENTORY AND INVENTORY VALUATION

3 Months Ended

Mar. 31, 2024

The following table summarizes the components of “Inventory” on the Condensed Consolidated Balance Sheets (in millions):


	December 31, 2023		March 31, 2024
Raw materials and work in progress	$	1,584	$	1,825
Finished goods	1,036		972
Total inventory	$	2,620	$	2,797

Inventory is stated at the lower of cost or net realizable value (“LCNRV”) and consists of raw materials, work in progress, finished goods, and service parts. Included within work in progress are end of line vehicles pending final inspection which have historically not been material. As of March 31, 2024, end of line vehicles increased to $290 million due to the vehicles awaiting a specific part. Subsequent to quarter end, the majority of these vehicles have been through final inspection and factory gated. The Company’s ending inventory was written down by $319 million and $328 million for LCNRV as of December 31, 2023 and March 31, 2024, respectively. Additionally, the Company has LCNRV losses related to firm purchase commitments which were $126 million and $45 million as of December 31, 2023 and March 31, 2024, respectively, and are

reflected in the “Inventory” component of “Accrued liabilities” on the Condensed Consolidated Balance Sheets. Refer to Note 7 "Accrued Liabilities" for more information about Accrued liabilities.

The Company recorded a $229 million and $150 million charge to reflect the LCNRV of inventory and losses on firm purchase commitments as of March 31, 2023 and March 31, 2024, respectively, in “Cost of revenues” in the Company’s Condensed Consolidated Statements of Operations.