Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2019

Deferred revenue activity related to the access to our Supercharger network, internet connectivity, Autopilot, FSD features and over-the-air software updates on automotive sales with and without resale value guarantee consisted of the following (in millions):

	Year ended December 31,
	2019			2018
Deferred revenue on automotive sales with and without resale value guarantee— beginning of period	$	883		$	476
Additions		880			532
Net changes in liability for pre-existing contracts		9			(13	)
Revenue recognized		(300	)		(112	)
Deferred revenue on automotive sales with and without resale value guarantee— end of period	$	1,472		$	883

Schedule of Disaggregation of Revenue by Major Source

The following table disaggregates our revenue by major source (in millions):

	Year Ended December 31,
	2019		2018
Automotive sales without resale value guarantee	$	19,212	$	15,810
Automotive sales with resale value guarantee (1)		146		1,403
Automotive regulatory credits		594		419
Energy generation and storage sales (2)		1,000		1,056
Services and other		2,226		1,391
Total revenues from sales and services		23,178		20,079
Automotive leasing		869		883
Energy generation and storage leasing (2)		531		499
Total revenues	$	24,578	$	21,461

(1)

We made pricing adjustments to our vehicle offerings in 2019, which resulted in a reduction of automotive sales with resale value guarantee revenues. Refer to Automotive Sales with Resale Value Guarantee section above for details. The amount presented represents automotive sales with resale value guarantee in year ended December 31, 2019 net of such pricing adjustments impact.

(2)

Under ASC 842, Leases, solar energy system sales and PPAs that commence after January 1, 2019, where we are the lessor and were previously accounted for as leases, no longer meet the definition of a lease and are instead accounted for in accordance with the new revenue standard (refer to the Leases section below for details).

Schedule of Potentially Dilutive Shares that were Excluded from Computation of Diluted Net Income (Loss) per Share of Common Stock

The following table presents the potentially dilutive shares that were excluded from the computation of diluted net income (loss) per share of common stock attributable to common stockholders, because their effect was anti-dilutive (in millions):

	Year Ended December 31,
	2019		2018		2017
Stock-based awards		10		10		10
Convertible senior notes		1		1		2
Warrants		—		—		1

Schedule of Cash and Cash Equivalents and Restricted Cash

The following table totals cash and cash equivalents and restricted cash as reported on the consolidated balance sheets; the sums are presented in the consolidated statements of cash flows (in millions):

	December 31,		December 31,		December 31,		December 31,
	2019		2018		2017		2016
Cash and cash equivalents	$	6,268	$	3,686	$	3,368	$	3,393
Restricted cash, current portion		246		193		155		106
Restricted cash, net of current portion		269		398		442		268
Total as presented in the consolidated statements of cash flows	$	6,783	$	4,277	$	3,965	$	3,767

Estimated Useful Lives of Respective Assets

Depreciation and amortization is calculated using the straight-line method over the estimated useful lives of the respective assets, as follows:

Solar energy systems in service

30 to 35 years

Initial direct costs related to customer

solar energy system lease acquisition

costs

Lease term (up to 25 years)

Schedule of Estimated Useful Lives of Related Assets

Depreciation is generally computed using the straight-line method over the estimated useful lives of the respective assets, as follows:

Machinery, equipment, vehicles and

office furniture

2 to 12 years

Building and building improvements

15 to 30 years

Computer equipment and software

3 to 10 years

Schedule of Accrued Warranty Activity

	Year Ended December 31,
	2019			2018			2017
Accrued warranty—beginning of period	$	748		$	402		$	267
Assumed warranty liability from acquisition		—			—			5
Warranty costs incurred		(250	)		(209	)		(123	)
Net changes in liability for pre-existing warranties, including expirations and foreign exchange impact		36			(26	)		4
Additional warranty accrued from adoption of the new revenue standard		—			37			—
Provision for warranty		555			544			249
Accrued warranty—end of period	$	1,089		$	748		$	402

Adoption of ASU 2016-02 [Member]

Schedule of Cumulative Effect of Changes Made to Consolidated Balance Sheet for Adoption of New Lease Standard

The cumulative effect of the changes made to our consolidated balance sheet as of January 1, 2019 for the adoption of the new lease standard was as follows (in millions):

	Balances at December 31, 2018			Adjustments from Adoption of New Lease Standard			Balances at January 1, 2019
Assets
Prepaid expenses and other current assets	$	366		$	—		$	366
Property, plant and equipment, net		11,330			(1,617	)		9,713
Operating lease right-of-use assets		—			1,286			1,286
Other assets		572			(141	)		431
Liabilities
Accrued liabilities and other		2,094			118			2,212
Current portion of long-term debt and finance leases		2,568			—			2,568
Long-term debt and finance leases, net of current portion		9,404			—			9,404
Other long-term liabilities		2,710			(687	)		2,023
Equity
Accumulated deficit		(5,318	)		97			(5,221	)