INVENTORY AND INVENTORY VALUATION

6 Months Ended

Jun. 30, 2024

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


	December 31, 2023		June 30, 2024
Raw materials and work in progress	$	1,584	$	1,918
Finished goods	1,036		665
Total inventory	$	2,620	$	2,583

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 June 30, 2024, vehicles which were substantially completed but awaiting final parts or quality inspection increased to $204 million. The balance of the Company’s inventory was written down by $319 million and $148 million from its cost to its net realizable value as of December 31, 2023 and June 30, 2024, respectively. Additionally, the Company has LCNRV losses related to firm purchase commitments which were $126 million and $31 million as of December 31, 2023 and June 30, 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 $220 million and $53 million charge to reflect the LCNRV of inventory and losses on firm purchase commitments as of June 30, 2023 and June 30, 2024, respectively, in “Cost of revenues” in the Company’s Condensed Consolidated Statements of Operations.