tesla, inc. (tsla)

by:CTECHi     2020-03-20
☒Annual Report submitted under Section 13 or 15 (d)
1934 Securities Trading Act☐Transition reports submitted under sections 13 or 15 (d)
1934 Securities Trading Act☒☐☐☒☒☐☒☐☐☒☐☐☐☐☐☐☒Tesla CorporationPART I.
Business Risk factors address employee reviews property legal procedures security disclosure Part II.
The market for the common interests of registrants, related shareholder matters of stock securities and the purchase of selected financial data by the issuer management of the company\'s discussion and analysis of financial status and operational results quantitative and qualitative disclosure of financial statements and supplementary data on market risks in accounting financial disclosure controls and procedures Other Information Part 3.
Directors, executive officers and corporate governance executive compensation ownership, specific relationships and related transactions of certain beneficial owners and management and related shareholders, as well as schedule of directors independent chief accountant fees and services presentation and Financial Statements
View StatementsPART iitem 1.
Overview new versions of the Y-type, Tesla semi-truck, pickup and Tesla sports car with high remote and charging flexibility
In addition, we are using our technical expertise in battery, power electronics and integrated systems to manufacture and sell energy storage products.
At the end of 2016, we started to produce and deliver our latest generation of energy storage products Powerwall 2 and Powerpack 2.
When Powerwall 2 is 14 KW (“kWh”)
Home Battery with integrated inverter.
Powerpack 2 is an infinitely scalable energy storage system for commercial, industrial and utility applications, from up to 210 KW hours (AC)
Battery pack and 650 KVA (at 480V)inverters.
Similar to our electric vehicles, our energy storage products have been developed to receivethe-
Over time, air firmware and software updates that support additional features.
As of the end of 2019, our products and services have produced certain vehicle decorations for China in our Geely factory Shanghai, in addition, our team has expertise in light materials, considering the impact of quality on mileage, this is a very important feature of electric vehicles.
The Model S and Model X are made of lightweight aluminum body and chassis, with a variety of materials and production methods to help optimize the weight of the vehicle.
In addition, we have designed a Model 3 for mixed materials, which is both light and safe, and at the same time increases the cost
The effectiveness of this qualitymarket vehicle.
We are designing Model Y on the Model 3 platform and expect that Model Y will share about 75% of the components with Model 3, which we expect will reduce the production cost and time of Model Y cars.
Sales and marketing we continue to build a Tesla Supercharger network in North America, Europe, Asia and other markets to facilitate our customers, including supporting the long-term
Distance travel and ownership of the city.
Our Supercharger network is a strategic corporate initiative designed to provide fast charging solutions accessible to the public and remove barriers to wider adoption of electric vehicles due to perceived limited vehicle ranges
Tesla supercharger is an industrial grade high speed charger that charges much faster than other charging options, and we continue to develop our technology to provide us with faster charging time at a lower cost.
In order to meet the growing demand, the supercharger station usually has six to thirty superchargers and strategically follows
Driving routes and dense city centers allow Tesla owners to enjoy fast, reliable and ubiquitous charging through convenient, minimal stops.
It is free to use the Supercharger network, or a competitive fee is required.
Service and warranty your vehicle is designed to pass on-
Board systems with cellular connections allow us to diagnose and remedy many problems before looking at the vehicle.
When maintenance or service is required, the customer can arrange the service by contacting our Tesla service center, or our mobile service technicians can perform a series of services from the customer\'s home or other remote location.
Financial services certain items in our current financing projects outside North America provide customers with a resale value guarantee under which, these customers can choose to sell their vehicles to US on a predetermined future date, usually at the end of the term of the applicable loan or financing plan, for the pre-
Determined resale value.
In some markets, we also provide vehicle repurchase guarantees to financial institutions, which may require us
Determine the price.
Geely factory 1 is being manufactured in stages.
Tesla, Panasonic and other partners are currently completing part of production.
Our current plan is to continue to expand the Gigabit plant in the next few years, so that its capacity greatly exceeds the capacity of about 500,000 vehicles per year announced when we first started developing, in addition, we have also increased our ability to make energy storage products.
We also announced that we may manufacture the Y-type at Gigafactory 1 and we intend to produce it in bulk by the end of 2020.
As a manufacturer, we have to make our own government plans, incentives and regulations for solar systems.
Proof that our vehicle meets all applicable FMVSS as well as NHTSA Bumper Standards or exemption before the vehicle can be imported or sold in the United StatesS.
Many FMVSS are suitable for our vehicles such as collision-
Requirements for adaptability, collision avoidance and requirements for electric vehicles.
We also need to comply with other federal laws administered by NHTSA, including CAFE standards, anti-theft bill requirements, consumer information labeling requirements, warranty claims early warning reporting requirements, on-site reporting, death and injury reports and Foreign recalls, as well as owner\'s manual requirements.
Energy storage regulations-authorized renewable energy capability competitive intellectual property sector information available to employeessec. govwww. tesla. comir. tesla. comITEM 1A.
The production of risk factors and Model 3 may compromise our business prospects. The future business depends to a large extent on our plans to manufacture, sell and sell Model 3 cars. We offer these products at a lower price and we produce them in a much higher quantity than the S or X vehicles.
We started producing Model 3 in July 2017 and started delivering it to our customers, and since then our productivity has stabilized.
Certain trimming of Model 3 we have limited experience in manufacturing vehicles because we have recently achieved a large number and we expect Model 3 to grow further and succeed, we need to implement and improve efficiency and cost.
Effective manufacturing capabilities, processes and supply chains are necessary to support this quantity, including at the Geely plant in Shanghai.
We have adopted a higher degree of automation in the manufacturing process of Model 3 than before, and continue to implement additional automation.
In some cases, we have temporarily reduced the level of automation and introduced half of it.
Automated or manual processes that require additional labor costs.
As we continue to ramp up the production of the Tesla plant and start the initial phase of the production of Model 3 at the Shanghai-based processing plant, there may also be additional bottlenecks that we have to address quickly and pay the price --
Effective way.
In addition, our Model 3 production plan usually requires significant investment in cash and management resources, as we further advance our ramp and start production in new locations such as China in the future, we expect some additional resources to be deployed.
We will be able to maintain and further expand our
Mass production of Model 3 at Tesla factory without exceeding our estimated cost and our expected schedule;
We will be able to continue to expand Gigafactory 1 in a timely manner to produce high quality lithium-
The ion batteries will be integrated into the battery modules, finished battery packs and drive unit assemblies of Model 3, in part to support production in China, as the level of local procurement and manufacturing is gradually increasing, allows us to sell all the costs of Model 3 at the target gross profit margin;
We will be able to build and start production at more facilities in the future, such as the Geely factory in Shanghai, to support our Model 3 international ramp based on our estimated cost and schedule;
The equipment and process we have selected for Model 3 production will be able to accurately manufacture a large number of Model 3 vehicles within specified design tolerances and high quality;
We will be able to maintain suppliers of necessary components in accordance with the terms and conditions we can accept, and we will be able to obtain high
Provide high quality components in a timely and necessary quantity to support high
Mass production;
We will be able to attract, recruit, hire, train and retain skilled staff to run high on our plans
Batch production facilities supporting Model 3, including Tesla factory, gigabit factory 1 and gigabit factory Shanghai.
While we improve the production level of vehicles, we also need to continue to increase the sales and delivery of vehicles significantly.
While we have a plan to sell and deliver an increased number of vehicles, however, our experience in selling, selling and delivering higher volumes of vehicles is limited. we may face difficulties in achieving sales and delivery targets in both existing and expanded new markets, for example, in Europe and China, we will launch the Model 3 for the first time in 2019.
In particular, for the first time we target Model 3, a large population with a wide range of potential customers, where we have limited experience forecasting demand and pricing products.
When we produce many variations (
Including regional version)
According to our expectations of Model 3, if our forecast is inaccurate, according to the limitations of the vehicle production line and the long lead time for purchasing certain parts, we may not be able to generate sales that match the particular vehicle we have the ability to produce.
Views on the features, quality, safety, performance and cost of electric vehicles;
Views on the limited range of electric vehicles that can be driven by one-time battery charging;
Competition including other types of alternative fuel vehicles
In hybrid vehicles and high fuel
Economy of internal combustion engine vehicle;
Fluctuations in oil and gasoline costs;
Government regulation and economic incentives
Use of charging facilities;
And concerns about our ability to survive in the future.
We rely on our suppliers, most of which are single
SOURCE suppliers, and the necessary components that these suppliers are unable to deliver our products at our schedule and at the price, quality level and quantity we can accept, or that we are unable to effectively manage them, it may have a significant adverse effect on our financial position and operational results.
Due to their failure to provide components that meet our quality control standards, we have also made a replacement.
Loss of any single or limited source supplier or disruption in the supply of components from these suppliers may result in changes in product design and delays in the delivery of products to customers, this can damage our relationship with our customers and lead to negative publicity, damage to our brand and material and adversely affected business, prospects, financial position and operating results.
For example, we may encounter some problems or delays to improve the localization level in China by local sourcing and manufacturing in our Geely factory Shanghai.
In addition, as our car production scale increases, we need to accurately predict, purchase, warehouse and transport to our manufacturing facilities components in a higher quantity.
If we are unable to accurately match the time and quantity of component purchases to our actual needs, or we are unable to successfully implement automation, inventory management, and other systems to accommodate the growing complexity of the supply chain, unexpected production disruptions, storage, transportation and writing can happen to us --
This may have a significant adverse effect on our financial position and operational results.
Future problems or delays in expanding gigabit Plant 1 or increasing operations there may have a negative impact on the production and profitability of our products, such as Model 3 and our energy storage products.
When we started to produce Model 3 in Shanghai, we partially supported the production of vehicles at the Shanghai Geely factory.
If we can\'t expand the scale of our business operations, in the process of our rapid development, including in the international community, we may not be able to effectively manage future growth and adapt to new conditions to successfully sell and serve our products.
Provide adequate sales, delivery, service and supercharger facilities in a timely manner, and our products and operations meet local requirements, local infrastructure, systems and processes required, and start the initial phase of the production of Model 3 at Shanghai Geely factory, cost increase, supply interruption or material shortage, especially lithium-
Ion batteries can damage our business.
Increased cost or reduced availability of materials used in batteries;
Due to quality problems or recalls from battery manufacturers, battery supply is interrupted, or any problems that may arise with batteries manufactured at our own facilities;
And the yen\'s exchange rate against the United States. S.
Dollars for our batteries.
Battery purchases for Model S and Model X and some raw materials for batteries used in Model 3 and energy storage products are currently denominated in yen.
The market we operate in is very competitive and our competition in these industries may not be successful.
We are currently facing competition from new and mature domestic and international competitors and expect to face competition from others in the future, including from companies with new technologies.
We plan to achieve sustained growth and demand by expanding and optimizing our retail, service and vehicle charging business, which will require a large amount of cash investment and management resources, and may not be able to meet expectations for additional sales, installation or service of our products or availability of publicly charged solutions.
In addition, the increasing number of Tesla cars will require us to continue to significantly increase the number of Supercharger stations and connectors around the world.
If we are not able to do this in a timely manner, our customers may not be satisfied, which may adversely affect our vehicle sales.
To bring our products in line with various international regulations and safety requirements as well as charging and other power infrastructure, to organize local operating entities, to establish, configure and manage the difficulties of foreign operations and to attract the challenges of customers, tax, regulations and licensing requirements of foreign governments, our ability to enforce contractual rights;
Trade restrictions, customs regulations, tariffs and price or foreign exchange controls, and foreign preferences for domestic products.
For example, in China, which is a key market for us, some products, such as cars made in the United StatesS.
Bound by the government\'s recent increase in tariffs.
Although this increase has been temporarily suspended, the tariff may remain unchanged for an uncertain period of time, further increase and/or cause consumers to delay or choose another car brand with lower or no tariffs in the future.
In addition, recently we have increased import taxes on certain parts used in products from China, which may increase our costs and have a negative impact on our operating results.
Our vehicles and energy storage products take advantage of lithium
Ion batteries that are observed to catch fire or spray smoke and flame, these events raise concerns that future events may lead to more concerns about batteries used in automotive applications.
Unavailability, reduction or cancellation or adverse decisions of the US government and economic incentivesS.
Foreign countries that support the development and adoption of electric vehicles, energy storage products or solar energy may have some impact on our product and service needs.
We have failed to achieve the expected benefits of our significant investment and commitment in photovoltaic cell and module manufacturing, including if we fail to comply with the terms of our agreement with the New York State University Research Foundation on our Gigafactory 2, may have a negative impact on our business.
During these 10 years, the state of New York\'s comprehensive capital, operating expenses, cost of goods sales and other costs
Within one year of completion of all construction and related infrastructure, arrival of manufacturing equipment and receipt of certain licenses and other specific items in Gigafactory 2.
If we fail in any year, our concept of compensation for all employees reflects the origin of our business and emphasizes fairness --
Based on rewards and benefits in order to align their incentives with long-term
Long-term interests of our shareholders
Each of our current equity incentive plans and employee stock purchase plans provides for a \"evergreen\" clause that allows our board of directors to increase annually under the prescribed limits, the number of shares-
Based on the rewards that our personnel may grant and the shares of our common stock.
These plans are currently due in December 2019 and we need to extend them or develop new plans in order to continue to compensate employees after they are due, which requires approval from our shareholders.
In addition, there is no guarantee that these plans will be extended or that future plans will contain evergreen terms, which means that we must seek and obtain approval from shareholders on a regular basis, in order to increase the number of awards that may be awarded in the future and the shares purchased under these plans.
If we are unable to obtain shareholder approval and compensate our personnel in accordance with our compensation philosophy, our ability to retain and hire qualified personnel will be negatively affected.
Any unauthorized control or manipulation of our product systems can lead to loss of confidence in us and our products and harm our business.
We have been the subject of such reports in the past.
Our products and services are subject to changing substantive regulations that we do not comply with can seriously compromise the results of our business and operations.
We may choose or be forced to carry out product recalls or take other similar actions, which may adversely affect our brand image and financial performance.
If our warranty reserve is not sufficient to cover future warranty claims for our products, our business, prospects, financial position and results of operations may be materially adversely affected.
The warranty reserve includes our management\'s best estimate of the estimated cost of repairing or replacing items during the warranty period.
These estimates are based on the following actual claims
Date and estimate of the nature, frequency and cost of future claims.
These estimates are uncertain in themselves, and our history or expected experience will change as well. In particular, regarding products such as Model 3 and solar roof that we have recently introduced and/or products that we expect to produce much more than in the past, may lead to significant changes in our warranty reserves in the future. Long-
The ability of the regular debt obligation to pay the principal and interest on a regular basis at maturity, or to make payment or repurchase requirements for our convertible notes, or to refinance our debt as per our needs or wishes, depending on how we perform in the future, it depends on the economic, financial, competitive and other factors that we cannot control.
Our business may not continue to generate sufficient cash flow from operations in the future to meet the losses of our existing liabilities and any future liabilities that we may generate and to make the necessary capital expenditures.
If we cannot generate such cash flow, we may need to adopt one or more alternatives, such as reducing or delaying investment or capital expenditure, selling assets, refinance or obtain additional equity capital on terms that may be onerous or highly diluted.
Our ability to refinance existing or future debt will depend on the capital market and our financial position at that time.
In addition, legal, regulatory or agreements that govern our future debt may limit our ability to pay.
We may not be able to participate in these activities on ideal conditions or at all, which may result in default of our existing or future debt, and have a significant adverse impact on our business, operational results and financial position.
Our premium secured assets, based on the revolving credit agreement, generate additional debt or issue guarantees, set a lien, buy back shares or make other restricted payments, and make certain voluntary advances to specific debts.
In addition, in some cases, we need to comply with a fixed fee coverage rate.
Due to these financing, our operations and prospects may have a negative impact on our main source of liquidation. Our current or future car manufacturing costs, any significant uncertainty or new significant strategic investments or refinancing of our significant consolidated debt, even if the terms of these debts do not require this.
We need sufficient funds to fund our ongoing operations, ramp vehicle production, continuing R & D projects, building sales, delivery and service centers, building and deploying supercars at gigaffactory 2 in Shanghai-Ji processing plant build and start production of Model 3, and invest in the tools and manufacturing capital needed to introduce new cars. if we can\'t raise extra funds when needed, the results of our financial operations, business and prospects may be adversely affected.
In addition, we use funds from third parties
Allow our customers to access our solar energy system with little or no upfront cost.
The availability of this financing depends on many factors, including the confidence of investors in the solar industry, the quality and combination of our customer contracts, any regulatory changes that affect our existing customer contract economy, legal changes (
Including tax law)
Risks or government incentives related to these financing, and our ability to compete with other renewable energy companies for a limited number of potential investors.
Moreover, while interest rates remain low, they have risen in recent times.
If the rate of return required by investors increases due to an increase in interest rates, this will reduce the present value of the potential customer payment stream, so our financing structure increases our capital costs.
If we can\'t make a third offer-
Party A\'s ownership arrangement, we may not be able to fund the installation of solar systems for rental or PPA customers\' systems, or our capital costs may increase and our liquidity may be negatively affected, this will have an adverse impact on our business, our financial position and the results of our operations.
Note 17 commitments and contingency expenses for consolidated financial statements listed in other parts of this year\'s report, Form 10-
Fluctuations in the currency exchange rate may have a negative impact on our financial results.
To stop manufacturing, selling or incorporating certain components or intellectual property rights in the goods and services we provide, to pay substantial damages and/or perhaps royalties, to redesign our products and services, and/or build and maintain alternative brands for our products and services.
Tesla is a height.
Its products, business, operating results, statements and actions are often reviewed by critics whose impact may have a negative impact on the perception of our brand and the market value of common stock.
Transactions related to our convertible notes may dilute the ownership interest of existing shareholders or otherwise lower the price of our common stock. couldITEM1B. ITEM2.
Property item month.
Promises and accidents. PART IIITEM5.
The following figure shows a comparison of the cumulative total return of our common stock from January 1-20, 2014 to December 31, the Nasdaq composite index and a group of all listed companies that share the same SIC code with us, that is, SIC code 3711 \"car and passenger car body \"(
Bus Company (Group).
This return is based on historical results and is not intended to imply future performance.
Data from the Nasdaq composite index and the group of bus and passenger car public companies showed that the investment in January 1, 2014 was $100 and the dividend was reinvested.
We have never announced or paid cash dividends on our common stock, nor are we expecting to pay any such cash dividends in the foreseeable future. 1.
50% convertible senior note issuers and related purchasers who are due to purchase 2018 equity securities. (1)
Business portfolio ,(2)
Summary of important accounting policies 7.
Management\'s Discussion and Analysis of the financial situation and results of operation mode 3 is the best --
Sales of advanced vehicles in the US in 2018.
The vehicle that the Model 3 customer deals to US continues to indicate that there is a broader addressable market for the vehicle compared to the existing owner of mid-
Size of the premium sedan.
In addition, because we only provide long-termrange, mid-
So far, we believe that with the introduction of cheaper variants, we will see an increase in demand, for example, the basic price we intend to offer in the future is $35,000, and additional financing options.
We started producing Model 3 for Europe and China in January 2019 and we think each model has a larger medium size
A bigger market for luxury cars than North America, we have so far delivered the Model 3 sedan exclusively.
We also believe that in terms of battery and power system technology, we have an advantage over our competitors because of the EPA-
It is expected that the rated range per kWh will be better than other electric vehicles that will be launched in the near future, and we have the ability to pass through the superthe-
Air software update.
We are producing variants (
Including regional version)
However, according to our demand for Model 3, our production capacity is limited and the lead time associated with purchasing certain parts is very long.
If our Model 3 demand expectations prove inaccurate, or we have encountered delays in introducing additional variants of the plan, including when we start offering Model 3 in new markets, we may not be able to produce sales in a timely manner that match the particular vehicle we have the ability to produce.
We may also be affected by trade policies, political uncertainties and the economic cycle, which are related to the geographical regions where we operate.
Car sales in the automotive industry are also often cyclical in many markets, which may cause us to face greater volatility in expanding and adjusting our operations and retail strategies.
In addition, the federal tax credit for purchasing qualified electric vehicles in the United StatesS.
The price of any Tesla car delivered in the first or second quarter of 2019 is reduced to $3,750 and will be further reduced to $1,875 per Tesla car delivered in 2019 or the fourth quarter, each Tesla car delivered thereafter was $0.
We believe in this stage.
May pull some of the vehicle demand into 2018 and may produce a similar pull
Forward on 2019, before every further reduction in the federal tax credit.
In the long run, we do not expect to have a meaningful impact on our sales in the USS.
Because we believe that even without incentives, each of our models offers compelling advice.
Globally, we are also working to, in some cases, have started, increase the value proposition and affordability of the products we offer to our customers, and provide other financing over time
For example, we intend to introduce rental options for Model 3.
Advance certain pruning of Model 3 for our customers-
Infrastructure remains a top priority.
Delivery of vehicles and related logistics to customers is a challenge during 2018, but we continue to improve these processes to maximize customer satisfaction, including the purchase of our own carshauling trucks.
We are also expanding our service capabilities for a fast-growing fleet of customers, including increasing our service locations and mobile service fleet to expand the service to two-
Transfer operations in the service center as needed and optimize our parts distribution network.
To increase the convenience of our customers, we have also updated the Tesla mobile app to schedule service appointments.
With further growth in Tesla car sales, we plan to continue to open new Tesla retail stores, service centers and body stores around the world, and plan to continue to expand our mobile service fleet.
We also plan to continue to significantly increase the number of Superchargers and destination charging connectors worldwide and develop our Supercharger technology to achieve faster charging times while reducing related costs.
However, in order to deliver more and more vehicles, we must stabilize and maintain our delivery and logistics model, and we have limited experience in this area, especially in markets outside North America.
In addition, if we encounter unexpected reliability problems with our growing customer vehicles (especially Model 3), it may put a burden on our service capabilities.
On March 2018, our shareholders approved a new 10-
Elon Musk\'s annual CEO performance award depends on achieving market value and operational milestones (
\"2018 CEO performance Award \").
So we may have a lot of extracash stock-
Compensation fees based on the duration of the award, as each operational milestone is likely to be attributed.
We offer a resale value guarantee or similar purchase
Feedback the terms to certain customers who purchase vehicles and finance vehicles through one of our designated commercial bank partners.
We also provide certain rental partners with resale value guarantees related to car sales.
At present, the two projects are only available in certain international markets. .
We also offer leasing services through leasing partners in certain jurisdictions.
We are at risk of residual value through our exclusive financing entity and leasing partner leasing.
In addition, for leases provided directly from our exclusive financing entity, we take the credit risk of our customers.
We plan to continue to expand our financing products, including our leasing financing options and funding sources that support them, and support the overall financing needs of our customers.
If we are unable to arrange such options for our customers under attractive terms, our sales, financial results and cash flow may be negatively affected.
Important accounting policies and estimates important accounting policies car sales revenue car sales no resale value assurance includes income related to new car delivery, as well as specific other functions and services that meet the definition of performance obligations under the new revenue standard, including access to our Supercharger network, Internet connection, autopilot, full self
Drive here-the-
Air software update.
We confirm the car sales revenue when delivered to the customer, that is, when the control of the vehicle is transferred.
Payment is usually received at the point control transfer or in accordance with the payment conditions of the business practice.
Other features and services such as access to our Supercharger network, internet connection andthe-
The air software update is provided when the vehicle controls the transfer and is identified on a straight line over time
Because we have our own position.
Obligation to provide such services to customers.
We confirm the revenue associated with these other functions and services during the performance period, which is usually the expected life of the vehicle or eight vehicles
The annual service life of the vehicle.
Income related to autonomous driving and complete self
When the function is delivered to the customer, the driver function is recognized.
For our obligations related to car sales, we estimate the price of independent sales by considering the costs used to develop and deliver services, third-
Pricing by a party similar to the option and other information that may be provided.
The time of revenue recognition, we reduce the transaction price and record the reserve based on revenue for the estimated variable consideration related to future product returns.
Such estimates are based on historical experience and do not matter at all times proposed.
In addition, when we arrange the financing, any fees we pay or payable to the customer lender are recognized as an offset to the car sales revenue.
The amount charged to customers related to transportation and processing is classified as car revenue, and car sales with resale value guarantee that car rental vehicles are sold to rental partners with resale value assurance, and sell buyback options vehicles to customers who may exercise resale value guarantees.
Leasesautodynamic Regulatory cred we confirm in consolidated operating statements that revenue at the time of sales Regulatory credit is transferred to the purchaser as auto revenue.
Car rental revenue direct car rental program car sales to rental partners and provide resale value guarantee and repurchase option car sales to customers and resale value guarantee, in this case, sales, design and installation of utility-level solar systems and energy storage systems for large-scale commercial activities including engineering, after the customer pays milestone payments consistent with the contract
Specific stages of the project.
The revenue from these contracts is confirmed based on the cost generated as a percentage of the estimated total contract cost, using the completion percentage method. Certain large-
Sales of scale commercial and utility-level solar systems and energy storage systems also include operational and maintenance services negotiated with design and installation contracts and are therefore considered to be a combined contract installation service with the design.
For some large commercial and utility-level solar systems and energy storage systems that do not apply to the completion percentage method, recognize revenue when controlling transfers, which is the time when the product is delivered to the customer for energy storage systems, it is also the time for the project to obtain permission from solar system utilities.
Revenue from operations and maintenance services is recognized pro rata within the respective contract period.
Customer payments for such services are usually paid in advance each year or quarter.
Energy power generation and storage leasing we capitalize the initial direct costs of solar system leasing or PPAs, including incremental costs for contract management, recommended costs and sales commissions, as an integral part of the solar system, rent and rent, network, and then amortize these costs within the relevant lease or PPA term. Performance-
Stock reward-
When the realization of each performance milestone becomes possible, the compensation-based fee is confirmed during the expected performance realization of each performance milestone.
Performance-
Rewards based entirely on the award schedule based on performance and market conditions, stock
Based on the compensation fee is confirmed for each pair of performance and market conditions for a longer period of time during the expected realization period of performance and market conditions, start at the point in time when the relevant performance conditions are considered possible to achieve.
Using Monte Carlo simulations, the fair value of such awards is estimated at the date of award.
On December 2017, the staff of the Securities and Exchange Commission issued the first
118. Impact of the tax reduction and Employment Act on income tax accounting (“SAB 118”)
, Which allows us to record the interim amount during the measurement period, no more than one year from the date of promulgation.
Therefore, according to SAB 118, we completed our analysis in 2018, resulting in no significant adjustments to the provisional amount recorded in the previous year, taking into account the current legislation and guidance.
Compared to 2017, the combined rental business portfolio s2018 under our direct vehicle rental plan has increased by about 2017 Model 3 deliveries over 144,330, compared to 2016 of regulatory credit
Between $360 and $.
The year ended December 31, 2017 was 3 million per cent.
Sales of ZEV credits were $279.
7 million and non
ZEV regulated credit sales at $80.
The year ended December 31, 2017 was $6 million, compared to $215.
Credit sales of 4 million ZEV and $86.
In non 9 million
ZEV regulated credit sales for the year ended December 31, 2016.
This upgrade partiallyEnergy generated and stored the Segment2018 compared to the total 20172017 compared to the 2017 Grossmarginfor 206services2018 car remained relatively stable at the end of December 31, 2018 and 23% in 2017 years.
Due to the decrease of unit cost year by year, the comprehensive profit margin of improved Model S and Model X has increasedover-
The year begins with ongoing manufacturing efficiency and regulatory credit sales growth without associated costs.
Although the profit margin of Model 3 is increasing year by year, the increase is partially offset by the profit margin dilution of Model 3over-year.
As of December 31, 2018, the higher the proportion of Model 3 to our total car sales, the lower the total gross profit margin of our car, because the annual gross profit margin of Model 3 is lower than that of Model S and Model X due to temporary arrears
In the first half of 2018, manufacturing capacity was utilized at lower production volumes as we have not yet achieved significant manufacturing efficiency in the production of Model 3.
2017 revenue from power generation and storage, as compared to 2016, includes direct and indirect material and labor costs, warehouse rents, freight charges, warranty costs, other indirect costs, and amortization of certain acquired intangible assets.
In addition, if the arrangement is considered to be an operating lease, the cost of income mainly includes depreciation of the cost of leasing solar systems, maintenance costs associated with these systems and amortization of any initial direct costs.
2018 R & D expenses increased by $543 compared to the 2015for207.
Compared with the year ended December 31, 2017, the year ended December 31, 2016 was 7 million, or 65%.
This increase was mainly due to $274.
Due to our acquisition, the staff and labor force increased by 9 million, and due to the expansion of our car and energy generation and storage business, the staff and labor force increased and increased by $44.
3 million increase in inventory-
Based on compensation costs associated with the increase in the number of new employees and refresher employee stock grants and the number of employee stock awards.
In addition, in order to support the development of future products, there has been an increase in facilities expenses, depreciation expenses, professional and external service expenses and expenditure materials. in-
The process R & D final court order of October 2018 approved the settlement provisions relating to the SEC\'s legal action, which dealt with prior consideration by Elon Musk in an acquisition of 2018
Tesla\'s private proposal
Therefore, we confirm the settlement and legal costs of $30.
The year ended December 31, 2018 was 1 million per cent.
By the end of 2018, these expenses had been basically paid.
Under the income tax 2019, we will continue to use our increasing experience and lessons from past and present product ramps to do so at the level of capital efficiency spent per dollar, we expect this to be much higher than the historical level.
For example, based on our experience using ramping Model 3 at the Tesla plant, we expect that the capital expenditure of the Model 3 manufacturing capacity unit in Shanghai, Geely plant, will be lower than our production line in Fremont.
Similarly, based on such experience and the substantial commonality of components between Model Y and Model 3 that we expect, we believe that the production speed of type Y will be significantly faster than that of type 3, the cost per unit of manufacturing capacity will be lower than the Type 3 in Fremont.
Taking into account the new product pipeline currently planned, as well as the new product pipeline that is consistent with our current strategy of using our partners to manufacture batteries, and considering all other infrastructure growth and expansion in gigafuto1, we currently estimate that capital spending in Shanghai will be between $2. 5 to $3.
In the next two fiscal years, billions a year.
In addition, we expect that the cash we generate from our core business is usually enough to cover our future capital expenditures and pay us close
Regular debt (
Including a repayment of $920.
0 million is our 0.
25% convertible senior notes due on March 1, 2019)
Although we may choose to seek other financing channels.
For example, we expect that most of our investment in Shanghai will be funded through debt arranged by local Chinese financial institutions.
As always, we constantly assess our capital expenditure needs and may decide that it is best to raise more to fund the rapid growth of our business.
At least enough liquidity in the next 12 months.
A large part of our future spending is to fund our growth, and we can adjust our capital and operating expenses through the operations department, includes future body shops, mobile service fleets and supercharger networks for our products, retail and service locations. Long-
Fixed-term debt variable interest entities arrange a summary of cash flows of $2.
The period from 2018 was $32 billion.
$8 billion and $1 for the period from 2017.
44 billion for the period from 2016.
Capital expenditure for the period 2018 was $2.
$10 billion was obtained from the purchase of property and equipment, mainly for the production of Model 3 and the expansion of customer support infrastructure, as well as $218.
8 million design, acquire and install solar systems based on operating leases with customers.
Capital expenditure for the period 2017 was $3.
$41 billion, $666 from the purchase of property and equipment mainly used for model 3 production.
5 million design, acquire and install solar systems based on operating leases with customers.
We also paid $114.
5 million, excluding Cash acquired in 2017. Long-
Summary of contractual obligations of major accounting policies (1)(2)
Summary of important accounting policies.
With respect to the quantitative and qualitative disclosure of annual market risks as at December 31, 2018, we confirm Net foreign currency earnings of $1.
Other income 5 millionexpense)
Net, our biggest re-
Measurement exposure of euro, New Taiwan dollar and Canadian dollar.
For the year ended December 31, 2017, we confirmed a net loss of $52 in foreign exchange.
Other income 3 millionexpense)
Net, our biggest re-
Measured exposure to euro, Canadian and Norwegian krone. ITEM8.
Financial statements and supplementary data reports of independent certified public accountants consolidated balance sheet consolidated operating statements consolidated loss statements redeemable consolidated statements of non-controlling interests and Notes to Consolidated Financial Statements Consolidated cash flow statements independent certified public accountants reports first of all tesla\'s consolidated balance sheet, company.
And its subsidiaries (the “Company”)
Relevant Consolidated operating statements as of December 31, 2018 and 2017, as well as redeemable non-controlling equity and full loss of equity, cash flows for each year of the three years ending December 31, 2018, including related Notes (
Collectively referred to as \"Consolidated Financial Statements \").
We also audit the company\'s internal control of financial reports as of December 31, 2018, based on the standards established in Internal Control --
Integrated Framework (2013)
Issued by the Committee of Sponsoring Organizations of the tredeway Committee (COSO).
Internal Control-
The integrated framework these consolidated financial statements are used to maintain effective internal control over financial reporting and to assess the effectiveness of internal control over financial reporting, included in the management report under Project 9A on internal control of financial reporting.
Our responsibility is to comment on the consolidated financial statements of the company and the company\'s internal control over the financial reports in accordance with our audit.
We are a public accounting firm registered with the Public Company Accounting supervision committee (United States)(PCAOB)
And required to remain independent in the company in accordance with U. S. regulationsS.
Federal securities laws and applicable rules and regulations of the Securities and Exchange Commission and PCAOB.
Audit according to PCAOB standards.
These criteria require us to plan and execute audits to obtain a reasonable guarantee of whether there is no material misstatement in the consolidated financial statements, whether due to errors or fraud, is the internal control of the financial report effectively controlled in all important aspects. statements.
Our audit of the internal control of the financial report includes understanding the internal control of the financial report, assessing the risk of significant weaknesses, and test and evaluate the design and operational effectiveness of internal control according to the assessed risk.
Our audit also includes the execution of other procedures that we consider necessary.
We believe that our audit provides a reasonable basis for our opinions.
Definition and limitations of Tesla\'s financial reporting internal controlsTesla, Inc. Tesla, Inc. Tesla, Inc. Tesla, Inc. Tesla, Inc.
Consolidation 18 variable interest entity arrangement, cash flow statement: income recognized by restricted cash income-
The income of the car rental income contract signed with the customer is accordingly, the cumulative impact of the changes made by us to adopt the new income standard on the consolidated balance sheet in January 1, 2018 is as follows (in thousands)
: According to the requirements of the new income standard, the impact of the adoption on our consolidated balance sheet is as follows (in thousands)
: According to the requirements of the new income standard, the impact of the adoption on our comprehensive operating statements and comprehensive loss statements is as follows (in thousands)
: Auto sales revenue no resale value auto sales guarantee within the time of revenue recognition we reduce the transaction price and record the revenue Reserve considered by the estimated variables related to future product returns
Such estimates are based on historical experience and do not matter at all times proposed.
In addition, when we arrange the financing, any fees we pay or payable to the customer lender are recognized as an offset to the car sales revenue.
Access to our Supercharger network, Internet connection, self-driving, fully self-contained
Drive here-the-
Air software update.
Car sales with resale value guarantee car rental vehicles are sold to rental partners with resale value guarantee and repurchase option vehicle sales to customers who may exercise resale value guarantee.
For some of the transactions required in ASC 840 \"lease\" to be considered as interest-bearing mortgage loans, we also Accrued interest fees based on the loan interest rate.
Deferred revenue activities related to access to our Supercharger network, Internet connection, autonomous driving, fully self-contained
Drive here-the-
Car sales aviation software updates with or without resale value assurance include the following (in thousands)
: Car sales without resale value guarantee car supervision credit car rental revenue direct car rental program.
At present, the direct vehicle rental program is only available for new leases to qualified customers in the United StatesS. and Canada.
Qualified customers can rent vehicles directly from Tesla for up to 48 months.
At the end of the rental period, the customer can choose to return the vehicle to us or purchase the vehicle as a pre-
The residual value determined.
We regard these lease transactions as operating leases.
We recorded the rental income directly.
Under the terms of the contract, we record the depreciation of these vehicles as the cost of car rental revenue.
As at December 31, 2018 of 2017 and 2016 we confirm the 393 dollar. 2million, $220.
$6 million and $112.
7 million respectively.
As of December 31, 2018 and 2017, we postponed $109.
$8 million and $96.
The lease amount is 6 million respectively
The relevant advance payment will be confirmed directly
The basis of the terms of the individual lease contract.
Sell vehicles with resale value guarantee and repurchase option lease to rental partners.
If we decide to buy back all vehicles, the maximum amount we may need to pay under this plan is $479.
8 million as at December 31, 2018, including $309.
12-Inside 8 millionmonth period.
We have $558 as of 2018.
There are 3 of these loans recorded in the resale value guarantee, $92.
5 million recorded in deferred income liabilities.
Provision of vehicles to customers with resale value assurance, in which case provision of exercise services and other energy generation and storage services to residential and small-scale commercial customers, including the installation of the energy storage system and revenue is identified when the control is transferred, when the product has been delivered, or, if we are performing the installation, when it is installed and accepted by the customer.
Payment for such storage systems is made in accordance with the payment conditions of the invoice or business practice.
For sales of large commercial and utility-level solar systems and energy storage systems including system engineering, design and installation, customers pay milestone payments consistent with the contract
Specific stages of the project.
Over time, revenue from such contracts is confirmed using the cost-based completion percentage method, which is a percentage of the estimated total contract cost. Certain large-
Sales of scale commercial and utility-level solar systems and energy storage systems also include operational and maintenance services negotiated with design and installation contracts and are therefore considered to be a combined contract installation service with the design.
For some large commercial and utility-level solar systems and energy storage systems that do not apply to the completion percentage method, recognize revenue when controlling transfers, which is the time when the product is delivered to the customer for energy storage systems, it is also the time for the project to obtain permission from solar system utilities.
Revenue from operations and maintenance services is recognized pro rata within the respective contract period.
Customer payments for such services are usually paid in advance each year or quarter.
Power generation and storage Leasingenergy power generation and storage products of solar system, customers purchase electricity from us according to the power purchase agreement (“PPAs”)
, We have determined that these agreements should be considered as operating leases under asc840.
Assuming that all other revenue recognition criteria are met, the income is recognized according to the rate specified in the contract.
Car sales.
Car rental.
Services and other services.
Energy generation and storage divide energy generation and storage revenue for performance-
Stock reward-
When the realization of each performance milestone becomes possible, the compensation-based fee is confirmed during the expected performance realization of each performance milestone.
Performance-
Rewards based entirely on the award schedule based on performance and market conditions, stock
Based on the compensation fee is confirmed for each pair of performance and market conditions for a longer period of time during the expected realization period of performance and market conditions, start at the point in time when the relevant performance conditions are considered possible to achieve.
Use Monte Carlo simulation to estimate the fair value of such awards on the date of award (
See Note 15 for equity incentive plans). Long-
The following table of fixed-term debt obligations lists the potential Diluted share excluded from the calculation of diluted net income (loss)
Common shares per share are attributable to common shareholders because their effect is
Dilution: business portfolio (1)
If our estimates of future sales prices or production costs change, additional and potential substantial increases in that reserve may be required.
The minor changes we estimate may result in significant charges for the financial results we report.
The improvement of car rental RevenueLeasehold is in continuous depreciation-
Line up based on their estimated service life or a shorter period of time for the relevant lease terms.
Intangible assets Deferred investment tax credit reconfirm the most recent accounting statement with the client\'s contract income deferred effective date the client\'s contract with the agent consider confirming the performance obligation and license due to accounting standards Update 2014-09 and 2014-
16 according to the staff announcement at the EITF meeting on March 3, 2016
Scope improvement and practical expediency technical correction and improvement of revenue recognition lease, coding improvement of topic842
Reduced measurement scope of credit loss in financial instruments improved cash flow statement for the topic326 classification of certain cash income and cash payments: on January 2017, FASB released ASU No. 2017-
01. clarify the definition of a business and specify which transactions should be accounted for as acquisitions (or disposals)
Assets or business.
Asus starts in December 15, 2017 and is valid in the medium and annual period.
Asus will be adopted in the future.
We passed the ASU on January 1, 2018 but had no significant impact on the consolidated financial statements.
Simplify the test of goodwill loss profit and loss, from the confirmation of the scope of modification of non-financial assets accounting to targeted improvement of hedge activity accounting, the actual expediency of land easement to the topic842 leas is the service contract at the time of acquisition, we have reached a reward arrangement of up to $25.
8 million of the payment depends on our continued service within 36 months of the acquisition date.
During the period earned, these payments should have been accounted for as compensation fees.
However, during the three months ended March 31, 2017, we terminated the incentive compensation arrangement and accelerated the payment under that arrangement.
As a result, we recorded the entire $25.
8 million as compensation costs for the three months ended March 31, 2017, included in sales, general and administrative costs in the consolidated statement of business.
Identifiable intangible asset acquisition Stock compensation fair value of acquired assets and liabilities1)
Intangible asset Note 4-intangible asset our conclusion is that a part of intellectual property and development is not commercially feasible and therefore a loss of $13 is confirmed to be waived.
3 million restructuring and other expenses in consolidated business statements.
Another $26.
For the year ended December 31, 2018, 5 million per cent of intellectual property and development was put into production, note 5-fair value and fair value measurement of financial instruments. The three-
The input of the priority of the hierarchical fair value level should be measured at fair value, including :(LevelI)
Observable inputs from active markets, such as quotations; (LevelII)
Input other than quotation in the active market observed directly or indirectly, and (LevelIII)
Unobservable input with little or no market data.
The fair value hierarchy requires the use of observable market data when determining fair value.
The assets and liabilities we regularly measure at fair value are as follows (in thousands)
: Valuation methods and markets generally accepted for disclosure of fair value
Indirectly observable risk-based metrics, such as credit risk (LevelII)
In addition, note 7-net solar system for lease and to be leased (1)
Panasonic 2018, 208december31 works with us to invest in production equipment for the manufacture of batteries and to supply them to us.
According to our arrangement with Panasonic, we plan to purchase full production from their production equipment at negotiated prices.
As these terms convey to us, the right to use as defined in ASC840, leasing their production equipment, which we consider to be leased assets at the beginning of production.
This leads us to record their production equipment costs in property, plant and equipment on the consolidated balance sheet and record the corresponding liabilities in long-
Regular debt and capital leasing.
For all suppliers and partners that we plan to purchase the full output from production equipment located in Gigafactory 1, we have applied similar accounting.
As of the 31st and 2017 th of 2018, our capital costs totaled $1.
$24 billion and $473.
According to our Panasonic arrangement, the production equipment on the consolidated balance sheet is 3 million respectively.
We have put together a total cost of $4 into Gigafactory 1, including the cost under Panasonic\'s arrangement.
$62 billion and $3.
15 billion, 2018 and 2017, respectively.
Accrued purchases primarily reflect receipts for goods and services that we have not yet invoiced.
When we invoice for these goods and services, the balance will decrease and the accounts payable will increase.
Due to the adoption of new revenue standards, sales of cars with resale value assurance are now considered as sales with return rights requiring a corresponding sales return reserve, when reserves are current liabilities and other long-term liabilities, they are included in accrued liabilities and other liabilities
When the reserve is a non-recurring liability
The current amount on the consolidated balance sheet.
For car sales without resale value assurance, we recorded on the consolidated balance sheet an estimated variable consideration income reserve associated with future Accrued liabilities and other product returns.
For more information, see Note 2, summary of important accounting policies.
Summary of revenue recognition for important accounting policies note 13-Long-
On 2018, the following is our summary of debt as of December 31, 2017 (in thousands)
* On December 31, 2018, the principal of 1,000 bills was initially convertible into 8 for every $2018.
0306 shares of our common stock, equivalent to the initial conversion price of $124.
$52 per share, adjusted when a specific event occurs.
The holder of 2018 Notes may convert by himself on or after March 1, 2018.
In addition, the holders of 2018 Notes can only convert themselves by March 1, 2018 if :(1)
For any quarter beginning after September 30, 2013, if the closing price of our common stock is at least 20 trading days (
Whether continuous)
Within 30 consecutive trading days prior to this quarter, more than or equal to 130% of the conversion price; (2)
In five
Business day after any five items-
For consecutive trading days, the transaction price of 2018 Notes is less than 98% of the daily closing price of our common shares in these five years
Date of continuous trading or (3)
If we make a designated distribution to the holders of ordinary shares, or if a designated company transaction occurs.
Upon conversion, we will pay the cash of the principal and, if applicable, we will deliver the shares of common stock (
In lieu of all or part of our common shares in cash, in accordance with our rights)
Convert values based on daily.
If a fundamental change occurs before the due date, the holder of the 2018 note may require us to repurchase all or part of its 2018 note at a repurchase price equal to 100% of the principal plus any accrued and unpaid interest.
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