Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2020

Schedule of Disaggregation of Revenue by Major Source

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

	Year Ended December 31,
	2020		2019		2018
Automotive sales without resale value guarantee	$	24,053	$	19,212	$	15,810
Automotive sales with resale value guarantee (1)		551		146		1,403
Automotive regulatory credits		1,580		594		419
Energy generation and storage sales		1,477		1,000		1,056
Services and other		2,306		2,226		1,391
Total revenues from sales and services		29,967		23,178		20,079
Automotive leasing		1,052		869		883
Energy generation and storage leasing		517		531		499
Total revenues	$	31,536	$	24,578	$	21,461

(1)

Due to pricing adjustments we made to our vehicle offerings during 2020 and 2019, we estimated that there was a greater likelihood that customers would exercise their buyback options and adjusted our sales return reserve on vehicles previously sold under our buyback options program, which resulted in a reduction of automotive sales with resale value guarantee. For the years ended December 31, 2020 and 2019, price adjustments resulted in a reduction of automotive sales with resale value guarantee by $72 million and $555 million, respectively. The amounts presented represent automotive sales with resale value guarantee net of such pricing adjustments’ impact.

Schedule of Deferred Revenue Activity

Deferred revenue activity related to the access to our Supercharger network, internet connectivity, 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,
	2020			2019
Deferred revenue on automotive sales with and without resale value guarantee— beginning of period	$	1,472		$	883
Additions		724			880
Net changes in liability for pre-existing contracts		56			9
Revenue recognized		(326	)		(300	)
Deferred revenue on automotive sales with and without resale value guarantee— end of period	$	1,926		$	1,472

Schedule of Reconciliation of Basic to Diluted Weighted Average Shares Used in Computing Net Income (Loss) Per Share of Common Stock, as Adjusted to Give Effect to Stock Split

The following table presents the reconciliation of basic to diluted weighted average shares used in computing net income (loss) per share of common stock attributable to common stockholders, as adjusted to give effect to the Stock Split (in millions):

	Year Ended December 31,
	2020		2019		2018
Weighted average shares used in computing net income (loss) per share of common stock, basic		933		887		853
Add:
Stock-based awards		66		—		—
Convertible senior notes		47		—		—
Warrants		37		—		—
Weighted average shares used in computing net income (loss) per share of common stock, diluted		1,083		887		853

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,
	2020		2019		2018
Stock-based awards		2		50		50
Convertible senior notes		1		5		7
Warrants		—		—		1

Schedule of Cash and Cash Equivalents and Restricted Cash

Our total cash and cash equivalents and restricted cash, as presented in the consolidated statements of cash flows, was as follows (in millions):

	December 31,		December 31,		December 31,
	2020		2019		2018
Cash and cash equivalents	$	19,384	$	6,268	$	3,686
Restricted cash included in prepaid expenses and other current assets		238		246		193
Restricted cash included in other non-current assets		279		269		398
Total as presented in the consolidated statements of cash flows	$	19,901	$	6,783	$	4,277

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

Property, plant and equipment, net, including leasehold improvements, are recognized at cost less accumulated depreciation. 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

Accrued warranty activity consisted of the following (in millions):

	Year Ended December 31,
	2020			2019			2018
Accrued warranty—beginning of period	$	1,089		$	748		$	402
Warranty costs incurred		(312	)		(250	)		(209	)
Net changes in liability for pre-existing warranties, including expirations and foreign exchange impact		66			36			(26	)
Additional warranty accrued from adoption of ASC 606		—			—			37
Provision for warranty		625			555			544
Accrued warranty—end of period	$	1,468		$	1,089		$	748