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INCOME TAXES
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Components of Income Taxes

The Company’s tax rate is generally a function of the tax rates in the jurisdictions in which the Company operates, the relative amount of income earned by jurisdiction, and the relative amount of losses or income for which no tax benefit or expense is recognized due to a valuation allowance.

The components of ”Loss before income taxes” in the Consolidated Statements of Operations are as follows (in millions):

Years Ended December 31,
202320242025
United States$(5,406)$(4,717)$(3,601)
Foreign(25)(24)(19)
Total loss before income taxes$(5,431)$(4,741)$(3,620)

Current, deferred, and total income tax expense from continuing operations were entirely attributable to foreign operations for the years ended December 31, 2023, 2024 and 2025.
Provisions are made for estimated United States and foreign income taxes which may be incurred on the reversal of the basis differences in investments in foreign subsidiaries and corporate joint ventures not deemed to be indefinitely reinvested. Based on United States tax regulations, the Company does not anticipate foreign earnings would be subject to United States taxation upon repatriation. However, distributions of unremitted foreign earnings would be subject to foreign withholding taxes. The Company maintains that all foreign earnings are indefinitely reinvested. Accordingly, provisions have not been made on the Company’s basis differences in investments that primarily result from earnings in foreign subsidiaries which are deemed indefinitely reinvested. If recorded, the deferred tax liability associated with indefinitely reinvested basis differences would be immaterial to the financial statements.

Deferred tax assets and liabilities are recognized based on the future tax consequences attributable to (i) temporary differences that exist between the carrying value of assets and liabilities and their respective tax bases and (ii) operating loss and tax credit carryforwards on a taxing jurisdiction basis. The Company measures deferred tax assets and liabilities using enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid.

In determining whether a valuation allowance is needed, all available evidence is considered, both positive and negative. If, based on the weight of available evidence, it is more likely than not that the deferred tax assets will not be realized, a valuation allowance is recorded.

As of December 31, 2025, the Company recorded valuation allowances of $7,134 million for the portion of deferred tax assets that is not expected to be realized. The valuation allowance on net deferred tax assets increased by $906 million during the year ended December 31, 2025. The change in the valuation allowance is primarily due to additional net United States deferred tax assets recognized during the year. The Company had no releases of valuation allowances for the years ended December 31, 2024 and 2025. The Company continues to monitor the realizability of the United States deferred tax assets considering multiple factors, including results of operations. The Company will continue maintaining a full valuation
allowance on United States deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of the allowance. Release of all, or a portion, of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period the release is recorded.

A reconciliation of the provision for income taxes to its components at the United States statutory rate is shown below (in millions). Foreign items do not exceed 5% of computed statutory tax and therefore are not disaggregated. Changes in unrecognized tax positions are reported on a gross basis.

Years Ended December 31,
202320242025
Amount
(in millions)		PercentageAmount
(in millions)		PercentageAmount
(in millions)		Percentage
Federal income tax at statutory rate$(1,141)21 %$(996)21 %$(760)21 %
Domestic Federal
Effects of cross-border tax laws5 — %2 — %— — %
Tax credits
Research and development credits(150)3 %(135)3 %(5)— %
Other(11)— %(10)— %(8)— %
Nontaxable or nondeductible items— 
Nondeductible stock-based compensation and 162(m) limitation49 (1)%57 (1)%11 — %
Other2 — %22 — %4 — %
Other adjustments(1)— %35 (1)%20 (1)%
Change in valuation allowance1,226 (23)%1,007 (21)%733 (20)%
State and local income taxes, net of federal income tax effect ¹(7)— %(6)— %— — %
Foreign tax effects7 — %10 — %10 — %
Changes in unrecognized tax benefits22 — %19 — %1 — %
Provision for income taxes$1 — %$5 — %$6 — %
1 State taxes in California make up the majority (greater than 50 percent) of the tax effect in this category.

The amount of income taxes paid, net of cash received, is shown by jurisdiction below (in millions):

Years Ended December 31,
202320242025
United States federal$— $— $— 
Domestic state and local— — — 
Foreign
Canada3 — 7 
Serbia— — 1 
Other— — — 
Total$3 $— $8 
Components of Deferred Tax Assets and Liabilities

The components of deferred tax assets and liabilities are as follows (in millions):

December 31, 2024December 31, 2025
Deferred tax assets:
Net operating loss and tax credit carryforwards$4,621 $5,783 
Inventory110 133 
Deferred revenues442 430 
Operating lease liabilities120 171 
Stock-based compensation49 44 
Accrued liabilities142 152 
Research and development capitalization925 673 
Other77 130 
Total deferred tax assets6,486 7,516 
Less: valuation allowances(6,228)(7,134)
Total net deferred tax assets258 382 
Deferred tax liabilities:
Property, plant, and equipment(75)(170)
Operating lease assets(103)(146)
Volkswagen Group loan commitment asset(51)(52)
Other(29)(13)
Total deferred tax liabilities(258)(381)
Net deferred tax assets$— $1 

The majority of the Company's gross loss carryforwards are generated in the United States. Federal net operating losses (“NOLs”) generated by the Company through December 31, 2017 totaling $81 million may be carried forward for 20 years and begin to expire in 2035. These NOLs may fully offset taxable income in the year utilized. Under the Tax Cuts and Jobs Act, federal losses generated in tax years beginning after December 31, 2017, totaling $19,044 million, may be carried forward indefinitely; but their deduction is limited to 80% of annual taxable income. In addition, the Company has federal and state tax credit carryforwards of $733 million that can be carried forward for 20 years and begin to expire in 2039. The NOLs and tax credits are fully offset by a valuation allowance. Additionally, the Company has $16,332 million of carryforwards for state NOLs.

Under Sections 382 and 383 of the Internal Revenue Code of 1986 (“Code”), an “ownership change” can impose annual limitations on NOLs and other credits (such as R&D tax credits). A greater than 50 percentage point aggregate change in ownership of certain significant stockholders over a three-year period can be considered an “ownership change”. As a result of such “ownership changes” previously experienced by the Company, tax credits are limited in their utilization, and the amounts above reflect such adjustment. NOLs are not expected to be limited.

Unrecognized Tax Benefits

The Company records uncertain tax positions using a two-step process. First, by determining whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position; and second, for those tax positions that meet the more-likely-than-not recognition threshold, by recognizing the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. When applicable, the Company includes interest and penalties related to income tax matters within the provision for income taxes. The Company had immaterial accrued interest and penalties through 2025.

The majority of the Company’s unrecognized tax benefits relate to its United States R&D tax credit, with an immaterial reserve on a position taken for the deductibility of stock compensation on a prior year foreign tax return. Because a full valuation allowance is maintained in the United States, there is no impact to the Consolidated Balance Sheets, and if recognized, none of the unrecognized tax benefit would impact the Company’s effective tax rate.
The Company had the following activity related to unrecognized tax benefits (in millions):

Years Ended December 31,
20242025
Beginning balance$61 $80 
Additions for current year tax positions17 1 
Additions for tax positions of prior years2 — 
Ending balance$80 $81 

The Company is subject to taxation and files income tax returns in the United States federal jurisdiction, plus state and foreign jurisdictions. Tax years after 2020 remain open in the Company’s major jurisdictions and are subject to examination by the taxing authorities. In late 2025, the Company received notification that its 2023 United States federal income tax return was selected for examination. Due to the Company’s losses in the United States, the audit is not expected to result in a tax liability.

Legislative Updates

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA”) was signed into law, introducing significant changes to the United States federal income tax code. The OBBBA includes provisions affecting corporate taxation, including the permanent restoration of 100% bonus depreciation on qualified property, the reinstatement of immediate expensing for domestic research and development ("R&D") costs, and changes to the deductibility of business interest expense. The Company continues to maintain a valuation allowance against its United States deferred tax assets as it is more likely than not that these assets will not be realized. However, the Company evaluated the impact of the OBBBA on its taxable income calculation, which is primarily driven by the removal of the capitalization requirement for domestic R&D. Because of the Company's losses in the United States, historical unamortized domestic costs will continue to be capitalized for tax purposes.

The Company does not expect to be subject to the Organization for Economic Co-operation and Development’s global minimum tax in any jurisdiction because of safe harbors. However, the requirements in each country will continue to be monitored and evaluated by the Company.