Tesla 10-Q 2024-03-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

OR

o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number: 001-34756

Tesla, Inc.

(Exact name of registrant as specified in its charter)

Delaware						91-2197729
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

1 Tesla Road Austin, Texas						78725
(Address of principal executive offices)						(Zip Code)

(512) 516-8177

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading Symbol(s)			Name of each exchange on which registered
Common stock			TSLA			The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (“Exchange Act”) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer						x						Accelerated filer						o
Non-accelerated filer						o						Smaller reporting company						o
Emerging growth company						o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of April 18, 2024, there were 3,189,196,167 shares of the registrant’s common stock outstanding.

TESLA, INC.

FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2024

INDEX

						Page
PART I. FINANCIAL INFORMATION
Item 1.			Financial Statements			4
			Consolidated Balance Sheets			4
			Consolidated Statements of Operations			5
			Consolidated Statements of Comprehensive Income			6
			Consolidated Statements of Redeemable Noncontrolling Interests and Equity			7
			Consolidated Statements of Cash Flows			8
			Notes to Consolidated Financial Statements			9
Item 2.			Management's Discussion and Analysis of Financial Condition and Results of Operations			25
Item 3.			Quantitative and Qualitative Disclosures about Market Risk			33
Item 4.			Controls and Procedures			33
PART II. OTHER INFORMATION
Item 1.			Legal Proceedings			34
Item 1A.			Risk Factors			34
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds			34
Item 3.			Defaults Upon Senior Securities			34
Item 4.			Mine Safety Disclosures			34
Item 5.			Other Information			34
Item 6.			Exhibits			35
Signatures						36

Forward-Looking Statements

The discussions in this Quarterly Report on Form 10-Q contain forward-looking statements reflecting our current expectations that involve risks and uncertainties. These forward-looking statements include, but are not limited to, statements concerning supply chain constraints, our strategy, competition, future operations and production capacity, future financial position, future revenues, projected costs, profitability, expected cost reductions, capital adequacy, expectations regarding demand and acceptance for our technologies, growth opportunities and trends in the markets in which we operate, prospects and plans and objectives of management. The words “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the risks set forth in Part I, Item 1A, “Risk Factors” of the Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and that are otherwise described or updated from time to time in our other filings with the Securities and Exchange Commission (the “SEC”). The discussion of such risks is not an indication that any such risks have occurred at the time of this filing. We do not assume any obligation to update any forward-looking statements.

PART I. FINANCIAL INFORMATION

Tesla, Inc.

Consolidated Balance Sheets

(in millions, except per share data)

(unaudited)

			March 31, 2024						December 31, 2023
Assets
Current assets
Cash and cash equivalents			$	11,805					$	16,398
Short-term investments			15,058						12,696
Accounts receivable, net			3,887						3,508
Inventory			16,033						13,626
Prepaid expenses and other current assets			3,752						3,388
Total current assets			50,535						49,616
Operating lease vehicles, net			5,736						5,989
Solar energy systems, net			5,162						5,229
Property, plant and equipment, net			31,436						29,725
Operating lease right-of-use assets			4,367						4,180
Digital assets, net			184						184
Intangible assets, net			171						178
Goodwill			250						253
Deferred tax assets			6,769						6,733
Other non-current assets			4,616						4,531
Total assets			$	109,226					$	106,618
Liabilities
Current liabilities
Accounts payable			$	14,725					$	14,431
Accrued liabilities and other			9,243						9,080
Deferred revenue			3,024						2,864
Current portion of debt and finance leases			2,461						2,373
Total current liabilities			29,453						28,748
Debt and finance leases, net of current portion			2,899						2,857
Deferred revenue, net of current portion			3,214						3,251
Other long-term liabilities			8,480						8,153
Total liabilities			44,046						43,009
Commitments and contingencies (Note 10)
Redeemable noncontrolling interests in subsidiaries			73						242
Equity
Stockholders’ equity
Preferred stock; $0.001 par value; 100 shares authorized; no shares issued and outstanding			—						—
Common stock; $0.001 par value; 6,000 shares authorized; 3,189 and 3,185 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively			3						3
Additional paid-in capital			35,763						34,892
Accumulated other comprehensive loss			(399)						(143)
Retained earnings			29,011						27,882
Total stockholders’ equity			64,378						62,634
Noncontrolling interests in subsidiaries			729						733
Total liabilities and equity			$	109,226					$	106,618

The accompanying notes are an integral part of these consolidated financial statements.

Tesla, Inc.

Consolidated Statements of Operations

(in millions, except per share data)

(unaudited)

			Three Months Ended March 31,
			2024						2023
Revenues
Automotive sales			$	16,460					$	18,878
Automotive regulatory credits			442						521
Automotive leasing			476						564
Total automotive revenues			17,378						19,963
Energy generation and storage			1,635						1,529
Services and other			2,288						1,837
Total revenues			21,301						23,329
Cost of revenues
Automotive sales			13,897						15,422
Automotive leasing			269						333
Total automotive cost of revenues			14,166						15,755
Energy generation and storage			1,232						1,361
Services and other			2,207						1,702
Total cost of revenues			17,605						18,818
Gross profit			3,696						4,511
Operating expenses
Research and development			1,151						771
Selling, general and administrative			1,374						1,076
Total operating expenses			2,525						1,847
Income from operations			1,171						2,664
Interest income			350						213
Interest expense			(76)						(29)
Other income (expense), net			108						(48)
Income before income taxes			1,553						2,800
Provision for income taxes			409						261
Net income			1,144						2,539
Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries			15						26
Net income attributable to common stockholders			$	1,129					$	2,513
Net income per share of common stock attributable to common stockholders
Basic			$	0.37					$	0.80
Diluted			$	0.34					$	0.73
Weighted average shares used in computing net income per share of common stock
Basic			3,186						3,166
Diluted			3,484						3,468

The accompanying notes are an integral part of these consolidated fi

Showing the first 8K of 87K characters. Open the full section

The following discussion and analysis should be read in conjunction with the consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q.

Overview

Our mission is to accelerate the world’s transition to sustainable energy. We design, develop, manufacture, lease and sell high-performance fully electric vehicles, solar energy generation systems and energy storage products. We also offer maintenance, installation, operation, charging, insurance, financial and other services related to our products. Additionally, we are increasingly focused on products and services based on AI, robotics and automation.

In 2024, we produced approximately 433,000 consumer vehicles and delivered approximately 387,000 consumer vehicles through the first quarter. We are focused on profitable growth, including by leveraging existing factories and production lines to introduce new and more affordable products, increasing vehicle production, utilized capacity and delivery capabilities, reducing costs, improving and developing our vehicles and battery technologies, vertically integrating and localizing our supply chain, further improving and deploying our FSD capabilities, including through our planned robotaxi product, and expanding our global infrastructure, including our service and charging infrastructure.

In 2024, we deployed 4.05 GWh of energy storage products through the first quarter. We are focused on ramping the production and increasing the market penetration of our energy storage products.

During the three months ended March 31, 2024, we recognized total revenues of $21.30 billion, representing a decrease of $2.03 billion, compared to the prior year. During the three months ended March 31, 2024, our net income attributable to common stockholders was $1.13 billion, representing an unfavorable change of $1.38 billion, compared to the same period in the prior year. We continue to ramp production and build and optimize our manufacturing capacity, expand our operations while focusing on further cost reductions and operational efficiencies to enable increased deliveries and deployments of our products, and invest in research and development to accelerate our AI, software, and fleet-based profits for further revenue growth.

We ended the first quarter of 2024 with $26.86 billion in cash and cash equivalents and investments, representing a decrease of $2.23 billion from the end of 2023. Our cash flows provided by operating activities during the three months ended March 31, 2024 and 2023 were $242 million and $2.51 billion, respectively, representing a decrease of $2.27 billion. Capital expenditures amounted to $2.77 billion during the three months ended March 31, 2024, compared to $2.07 billion during the same period ended March 31, 2023, representing an increase of $701 million. Overall growth has allowed our business to generally fund itself, and we will continue investing in a number of capital-intensive projects and research and development in upcoming periods.

Management Opportunities, Challenges and Uncertainties and 2024 Outlook

Automotive—Production

The following is a summary of the status of production of each of our announced vehicle models in production and under development, as of the date of this Quarterly Report on Form 10-Q:

Production Location						Vehicle Model(s)						Production Status
Fremont Factory						Model S / Model X						Active
						Model 3 / Model Y						Active
Gigafactory Shanghai						Model 3 / Model Y						Active
Gigafactory Berlin-Brandenburg						Model Y						Active
Gigafactory Texas						Model Y						Active
						Cybertruck						Active
Gigafactory Nevada						Tesla Semi						Pilot production
Various						Next Generation Platform						In development
TBD						Roadster						In development

We are focused on growing our manufacturing capacity, which includes capacity for manufacturing new vehicle models such as our Cybertruck and future vehicles utilizing aspects of our next generation platform, and ramping the production at our Gigafactories to their installed production capacities as well as increasing production rate and efficiency at our current factories. The next phase of production growth will depend on the continued ramp at our factories and be initiated by advances in autonomy and the introduction of new products, including those built on our next generation vehicle platform, as well as our ability to add to our available sources of battery cell supply by manufacturing our own cells that we are developing to have high-volume output, lower capital and production costs and longer range. Our goals are to improve vehicle performance, decrease production costs and increase affordability and customer awareness.

These plans are subject to uncertainties inherent in establishing and ramping manufacturing operations, which may be exacerbated by new product and manufacturing technologies we introduce, the number of concurrent international projects, any industry-wide component constraints, labor shortages and any future impact from events outside of our control. For example, during the first quarter of 2024, we experienced a sequential decline in production volumes partially caused by the early phase of the production ramp of the updated Model 3 at our Fremont factory, and factory shutdowns at Gigafactory Berlin-Brandenburg resulting from shipping diversions caused by the Red Sea conflict and an arson attack. Moreover, we have set ambitious technological targets with our plans for battery cells as well as for iterative manufacturing and design improvements for our vehicles with each new factory.

Automotive—Demand, Sales, Deliveries and Infrastructure

Our cost reduction efforts, cost innovation strategies, and additional localized procurement and manufacturing are key to our vehicles’ affordability and have allowed us to competitively price our vehicles. We will also continue to generate demand by improving our vehicles’ performance and functionality, including through product offerings and features based on artificial intelligence such as Autopilot, FSD (Supervised), and other software, and delivering new vehicles, such as our Cybertruck. In addition, we have been increasing awareness, and expanding our vehicle financing programs, including attractive leasing terms for our customers. Moreover, we expect to continue to benefit from ongoing electrification of the automotive sector and increasing environmental regulations and initiatives.

However, we operate in a cyclical industry that is sensitive to political and regulatory uncertainty, including with respect to trade and the environment, all of which can be compounded by inflationary pressures, rising energy prices, interest rate fluctuations and the liquidity of enterprise customers. For example, inflationary pressures have increased across the markets in which we operate. In an effort to curb this trend, central banks in developed countries raised interest rates rapidly and substantially, impacting the affordability of vehicle lease and finance arrangements. Further, sales of vehicles in the automotive industry also tend to be cyclical in many markets, which may expose us to increased volatility as we expand and adjust our operations. Moreover, as additional competitors enter the marketplace and help bring the world closer to sustainable transportation, we will have to adjust and continue to execute well to maintain our momentum. Additionally, our suppliers’ liquidity and allocation plans may be affected by current challenges in the North American automotive industry, which could reduce our access to components or result in unfavorable changes to cost. These macroeconomic and industry trends have had, and will likely continue to have, an impact on the pricing of, and order rate for our vehicles, and in turn our operating margin. Changes in government and economic incentives in relation to electric vehicles may also impact our sales. We will continue to adjust accordingly to such developments, and we believe our ongoing cost reduction, including improved production innovation and efficiency at our newest factories and lower logistics costs, and focus on operating leverage will continue to benefit us in relation to our competitors, while our new products will help enable future growth.

As our production increases, we must work constantly to similarly increase vehicle delivery capability so that it does not become a bottleneck on our total deliveries. We are also committed to reducing the percentage of vehicles delivered in the third month of each quarter, which will help to reduce the cost per vehicle. As we expand our manufacturing operations globally, we will also have to continue to increase and staff our delivery, servicing and charging infrastructure accordingly, maintain our vehicle reliability and optimize our Supercharger locations to ensure cost effectiveness and customer satisfaction. In particular, as other automotive manufacturers have announced their adoption of the North American Charging Standard (“NACS”) and agreements with us to utilize our Superchargers, we must correspondingly expand our network in order to ensure adequate availability to meet customer demands. We also remain focused on continued enhancements of the capability and efficiency of our servicing operations.

Energy Generation and Storage Demand, Production and Deployment

The long-term success of this business is dependent upon incremental volume growth. We continue to increase the production of our energy storage products to meet high levels of demand, including the construction of a new Megafactory in Shanghai and the ongoing ramp at our Megafactory in Lathrop, California. For Megapack, energy storage deployments can vary meaningfully quarter to quarter depending on the timing of specific project milestones. As these product lines grow, we will have to maintain adequate battery cell supply for our energy storage products.

Cash Flow and Capital Expenditure Trends

Our capital expenditures are typically difficult to project beyond the short-term given the number and breadth of our core projects at any given time, and may further be impacted by uncertainties in future global market conditions. We are simultaneously developing and ramping new products, building or ramping manufacturing facilities on three continents, piloting the development and manufacture of new battery cell technologies, expanding our Supercharger network and investing in autonomy and other artificial intelligence enabled training and products, and the pace of our capital spend may vary depending on overall priority among projects, the pace at which we meet milestones, production adjustments to and among our various products, increased capital efficiencies and the addition of new projects. Owing and subject to the foregoing as well as the pipeline of announced projects under development, all other continuing infrastructure growth and varying levels of inflation, we currently expect our capital expenditures to exceed $10.00 billion in 2024 and be between $8.00 to $10.00 billion in each of the following two fiscal years.

Our business has generally been consistently generating cash flow from operations in excess of our level of capital spend, and with better working capital management resulting in shorter days sales outstanding than days payable outstanding, our sales growth is also generally facilitating positive cash generation. We have and will continue to utilize such cash flows, among other things, to do more vertical integration, expand our product roadmap, invest in autonomy and provide financing options to our customers. At the same time, we are likely to see heightened levels of capital expenditures during certain periods depending on the specific pace of our capital-intensive projects and other potential variables such as rising material prices and increases in supply chain and labor expenses resulting from changes in global trade conditions and labor availability. Overall, we expect our ability to be self-funding to continue as long as macroeconomic factors support current trends in our sales.

Critical Accounting Policies and Estimates

For a description of our critical accounting policies and estimates, refer to Part II, Item 7, Critical Accounting Policies and Estimates in our Annual Report on Form 10-K for the year ended December 31, 2023. There have been no material changes to our critical accounting policies and estimates since our Annual Report on Form 10-K for the year ended December 31, 2023.

Recent Accounting Pronouncements

See Note 1, Summary of Significant Accounting Policies, to the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Results of Operations

Revenues

			Three Months Ended March 31,												Change
(Dollars in millions)			2024						2023						$						%
Automotive sales			$	16,460					$	18,878					$	(2,418)					(13)		%
Automotive regulatory credits			442						521						(79)						(15)		%
Automotive leasing			476						564						(88)						(16)		%
Total automotive revenues			17,378						19,963						(2,585)						(13)		%
Services and other			2,288						1,837						451						25		%
Total automotive & services and other segment revenue			19,666						21,800						(2,134)						(10)		%
Energy generation and storage segment revenue			1,635						1,529						106						7		%
Total revenues			$	21,301					$	23,329					$	(2,028)					(9)		%

Automotive & Services and Other Segment

Automotive sales revenue decreased $2.42 billion, or 13%, in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, primarily due to lower average selling price on our vehicles driven by overall price reductions year over year. Additionally, there was a decrease of approximately 27,000 combined Model 3 and Model Y cash deliveries partially due to the early phase of the production ramp of the updated Model 3 at our Fremont factory and factory shutdowns resulting from shipping diversions caused by the Red Sea conflict and an arson attack at Gigafactory Berlin-Brandenburg. The decreases were partially offset by an increase of approximately 7,000 deliveries of other models as we ramped our production of Cybertruck.

Automotive regulatory credits revenue decreased $79 million, or 15%, in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023.

Automotive leasing revenue decreased $88 million, or 16%, in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. The decrease was primarily due to a decrease in direct sales-type leasing revenue driven by lower deliveries year over year.

Services and other revenue increased $451 million, or 25%, in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. The increase was primarily due to increases in non-warranty maintenance services and collision revenue, insurance services revenue, paid Supercharging revenue and part sales revenue. Additionally, there was higher used vehicle revenue driven by increases in volume partially offset by a decrease in average selling price of used vehicles.

Energy Generation and Storage Segment

Energy generation and storage revenue increased $106 million, or 7%, in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. The increase was primarily due to an increase in average selling price of Megapack partially offset by a decrease in solar deployments.

Cost of Revenues and Gross Margin

			Three Months Ended March 31,												Change
(Dollars in millions)			2024						2023						$						%
Cost of revenues
Automotive sales			$	13,897					$	15,422					$	(1,525)					(10)		%
Automotive leasing			269						333						(64)						(19)		%
Total automotive cost of revenues			14,166						15,755						(1,589)						(10)		%
Services and other			2,207						1,702						505						30		%
Total automotive & services and other segment cost of revenues			16,373						17,457						(1,084)						(6)		%
Energy generation and storage segment			1,232						1,361						(129)						(9)		%
Total cost of revenues			$	17,605					$	18,818					$	(1,213)					(6)		%
Gross profit total automotive			$	3,212					$	4,208
Gross margin total automotive			18.5		%				21.1		%
Gross profit total automotive & services and other segment			$	3,293					$	4,343
Gross margin total automotive & services and other segment			16.7		%				19.9		%
Gross profit energy generation and storage segment			$	403					$	168
Gross margin energy generation and storage segment			24.6		%				11.0		%
Total gross profit			$	3,696					$	4,511
Total gross margin			17.4		%				19.3		%

Automotive & Services and Other Segment

Cost of automotive sales revenue decreased $1.53 billion, or 10%, in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. Cost of automotive sales revenue decreased due to a decrease in the average combined cost per unit of our vehicles primarily from lower raw material costs, freight and duties in addition to the changes in deliveries year over year as discussed. Additionally, there were higher costs for Cybertruck and the updated Model 3 at our Fremont factory as a result of the temporary under-utilization of manufacturing capacity as production ramps.

Cost of automotive leasing revenue decreased $64 million, or 19%, in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. The decrease was primarily due to a decrease in direct sales-type leasing cost of revenue driven by lower deliveries year over year.

Cost of services and other revenue increased $505 million, or 30%, in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. The increase was generally in line with the changes in services and other revenue as discussed above.

Gross margin for total automotive decreased from 21.1% to 18.5% in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. The decrease was driven by the changes in automotive sales revenue and cost of revenue as well as a decrease in regulatory credits revenue, as discussed above.

Gross margin for total automotive & services and other segment decreased from 19.9% to 16.7% in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, primarily due to the automotive gross margin decrease discussed above.

Energy Generation and Storage Segment

Cost of energy generation and storage revenue decreased $129 million, or 9%, in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. The decrease was due to an increase in IRA manufacturing credits recognized year over year.

Gross margin for energy generation and storage increased from 11.0% to 24.6% in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. The increase was driven by the changes in energy generation and storage revenue and cost of revenue as discussed above.

Research and Development Expense

			Three Months Ended March 31,												Change
(Dollars in millions)			2024						2023						$						%
Research and development			$	1,151					$	771					$	380					49		%
As a percentage of revenues			5		%				3		%

Research and development (“R&D”) expenses increased $380 million, or 49%, in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. The overall increase was primarily driven by additional costs year over year related to AI, advancement of our proprietary battery cell technologies and other programs.

R&D expenses as a percentage of revenue increased from 3% to 5% in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 as we continue to expand our product roadmap and technologies.

Selling, General and Administrative Expense

			Three Months Ended March 31,												Change
(Dollars in millions)			2024						2023						$						%
Selling, general and administrative			$	1,374					$	1,076					$	298					28		%
As a percentage of revenues			6		%				5		%

Selling, general and administrative (“SG&A”) expenses increased $298 million, or 28%, in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. This was driven by a $176 million increase in employee and labor costs primarily from increased headcount, including professional services, a $62 million increase in facilities related expenses and a $41 million increase in promotions, advertising and other marketing expenses.

Interest Income

			Three Months Ended March 31,												Change
(Dollars in millions)			2024						2023						$						%
Interest income			$	350					$	213					$	137					64		%

Interest income increased $137 million, or 64%, in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. This increase was primarily due to higher interest earned on our cash and cash equivalents and short-term investments in the three months ended March 31, 2024 as compared to the prior period due to rising interest rates and our increasing portfolio balance.

Other Income (Expense), Net

			Three Months Ended March 31,												Change
(Dollars in millions)			2024						2023						$						%
Other income (expense), net			$	108					$	(48)					$	156					Not meaningful

Other income (expense), net, changed favorably by $156 million in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. The favorable change was primarily due to fluctuations in foreign currency exchange rates on our intercompany balances. As our intercompany balances are significant in nature and as we do not typically hedge foreign currency risk, we can experience significant fluctuations in foreign currency exchange rate gains and losses from period to period.

Provision for Income Taxes

			Three Months Ended March 31,												Change
(Dollars in millions)			2024						2023						$						%
Provision for income taxes			$	409					$	261					$	148					57%
Effective tax rate			26		%				9		%

Our provision for income taxes increased by $148 million in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. Our effective tax rate increased from 9% to 26% in the three months ended March 31, 2024 as compared to the prior period. These increases are primarily due to the impact of releasing the valuation allowance on our U.S. deferred tax assets in the fourth quarter of 2023 and changes in mix of jurisdictional earnings.

See Note 9, Income Taxes, to the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details.

Liquidity and Capital Resources

We expect to continue to generate net positive operating cash flow as we have done in the last five fiscal years. The cash we generate from our core operations enables us to fund ongoing operations and production, our research and development projects for new products and technologies including our proprietary battery cells, additional manufacturing ramps at existing manufacturing facilities, the construction of future factories, and the continued expansion of our retail and service locations, body shops, Mobile Service fleet, Supercharger, including to support NACS, energy product installation capabilities and autonomy and other artificial intelligence enabled products.

In addition, because a large portion of our future expenditures will be to fund our growth, we expect that if needed we will be able to adjust our capital and operating expenditures by operating segment. For example, if our near-term manufacturing operations decrease in scale or ramp more slowly than expected, including due to global economic or business conditions, we may choose to correspondingly slow the pace of our capital expenditures. Finally, we continually evaluate our cash needs and may decide it is best to raise additional capital or seek alternative financing sources to fund the rapid growth of our business, including through drawdowns on existing or new debt facilities or financing funds. Conversely, we may also from time to time determine that it is in our best interests to voluntarily repay certain indebtedness early.

Accordingly, we believe that our current sources of funds will provide us with adequate liquidity during the 12-month period following March 31, 2024, as well as in the long-term.

See the sections below for more details regarding the material requirements for cash in our business and our sources of liquidity to meet such needs.

Material Cash Requirements

From time to time in the ordinary course of business, we enter into agreements with vendors for the purchase of components and raw materials to be used in the manufacture of our products. However, due to contractual terms, variability in the precise growth curves of our development and production ramps, and opportunities to renegotiate pricing, we generally do not have binding and enforceable purchase orders under such contracts beyond the short-term, and the timing and magnitude of purchase orders beyond such period is difficult to accurately project.

As discussed in and subject to the considerations referenced in Part I, Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations—Management Opportunities, Challenges and Uncertainties and 2024 Outlook—Cash Flow and Capital Expenditure Trends in this Quarterly Report on Form 10-Q, we currently expect our capital expenditures to support our projects globally to exceed $10.00 billion in 2024 and be between $8.00 to $10.00 billion in each of the following two fiscal years. We also have certain obligations in connection with our operations at Gigafactory New York and Gigafactory Shanghai, as outlined in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Material Cash Requirements in our Annual Report on Form 10-K for the year ended December 31, 2023.

As of March 31, 2024, we and our subsidiaries had outstanding $4.90 billion in aggregate principal amount of indebtedness, of which $2.14 billion is scheduled to become due in the succeeding 12 months. For details regarding our indebtedness, refer to Note 7, Debt, to the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Sources and Conditions of Liquidity

Our sources to fund our material cash requirements are predominantly from our deliveries and servicing of new and used vehicles, sales and installations of our energy storage products, interest income, and proceeds from debt facilities and equity offerings, when applicable.

As of March 31, 2024, we had $11.81 billion and $15.06 billion of cash and cash equivalents and short-term investments, respectively. Balances held in foreign currencies had a U.S. dollar equivalent of $3.47 billion and consisted primarily of Chinese yuan and euros. We had $5.00 billion of unused committed credit amounts as of March 31, 2024. For details regarding our indebtedness, refer to Note 7, Debt, to the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

We continue adapting our strategy to meet our liquidity and risk objectives, such as investing in U.S. government securities and other investments, to do more vertical integration, expand our product roadmap and provide financing options to our customers.

Summary of Cash Flows

			Three Months Ended March 31,
(Dollars in millions)			2024						2023
Net cash provided by operating activities			$	242					$	2,513
Net cash used in investing activities			$	(5,084)					$	(2,484)
Net cash provided by (used in) financing activities			$	196					$	(233)

Cash Flows from Operating Activities

Net cash provided by operating activities decreased by $2.27 billion to $242 million during the three months ended March 31, 2024 from $2.51 billion during the three months ended March 31, 2023. This decrease was primarily due to unfavorable changes in net operating assets and liabilities of $1.19 billion and the decrease in net income excluding non-cash expenses, gains and losses of $1.08 billion.

Cash Flows from Investing Activities

Cash flows from investing activities and their variability across each period related primarily to capital expenditures, which were $2.77 billion for the three months ended March 31, 2024 and $2.07 billion for the three months ended March 31, 2023, mainly for global factory expansion, machinery and equipment and AI related capital expenditures as we expand or enhance our product roadmap. We also purchased $2.31 billion and $411 million of short-term investments, net of proceeds from maturities, for the three months ended March 31, 2024 and 2023, respectively.

Cash Flows from Financing Activities

Net cash from financing activities changed by $429 million to $196 million net cash provided by financing activities during the three months ended March 31, 2024 from $233 million net cash used in financing activities during the three months ended March 31, 2023. The change was primarily due to a $776 million increase in proceeds from issuances of debt, partially offset by a $289 million increase in repayments of debt and a $94 million increase in payments for buy-outs of noncontrolling interests in subsidiaries. See Note 7, Debt, to the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details regarding our debt obligations.

Foreign Currency Risk

We transact business globally in multiple currencies and hence have foreign currency risks related to our revenue, costs of revenue and operating expenses denominated in currencies other than the U.S. dollar (primarily the Chinese yuan and euro in relation to our current year operations). In general, we are a net receiver of currencies other than the U.S. dollar for our foreign subsidiaries. Accordingly, changes in exchange rates affect our operating results as expressed in U.S. dollars as we do not typically hedge foreign currency risk.

We have also experienced, and will continue to experience, fluctuations in our net income as a result of gains (losses) on the settlement and the re-measurement of monetary assets and liabilities denominated in currencies that are not the local currency (primarily consisting of our intercompany and cash and cash equivalents balances).

We considered the historical trends in foreign currency exchange rates and determined that it is reasonably possible that adverse changes in foreign currency exchange rates of 10% for all currencies could be experienced in the near-term. These changes were applied to our total monetary assets and liabilities denominated in currencies other than our local currencies at the balance sheet date to compute the impact these changes would have had on our net income before income taxes. These changes would have resulted in a gain or loss of $431 million at March 31, 2024 and $1.01 billion at December 31, 2023, assuming no foreign currency hedging.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that our management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of March 31, 2024, our disclosure controls and procedures were designed at a reasonable assurance level and were effective to provide reasonable assurance that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the quarter ended March 31, 2024, which has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For a description of our material pending legal proceedings, please see Note 10, Commitments and Contingencies, to the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

In addition, each of the matters below is being disclosed pursuant to Item 103 of Regulation S-K because it relates to environmental regulations and aggregate civil penalties that we currently believe could potentially exceed $1 million. We believe that any proceeding that is material to our business or financial condition is likely to have potential penalties far in excess of such amount.

District attorneys in certain California counties conducted an investigation into Tesla’s waste segregation practices.

In February 2024, the Superior Court of California for the County of San Joaquin entered a stipulated judgment as agreed to by all parties to settle this matter. As part of the settlement terms, Tesla agreed to certain practices with respect to our waste management activities and payment of approximately $1.5 million in civil penalties and fees.

Our operations and financial results are subject to various risks and uncertainties, including the factors discussed in Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2023, which could adversely affect our business, financial conditions and future results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

None of the Company’s directors or officers adopted, modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company’s fiscal quarter ended March 31, 2024, as such terms are defined under Item 408(a) of Regulation S-K, except as follows:

On February 5, 2024, Kathleen Wilson-Thompson, one of our directors, adopted a Rule 10b5-1 trading arrangement for the potential sale of up to 280,000 shares of our common stock, subject to certain conditions. The arrangement's expiration date is February 28, 2025.

See Index to Exhibits at the end of this Quarterly Report on Form 10-Q for the information required by this Item.

INDEX TO EXHIBITS

Exhibit Number												Incorporated by Reference																								Filed Herewith
			Exhibit Description						Form						File No.						Exhibit						Filing Date
31.1						Rule 13a-14(a) / 15(d)-14(a) Certification of Principal Executive Officer						—						—						—						—						X
31.2						Rule 13a-14(a) / 15(d)-14(a) Certification of Principal Financial Officer						—						—						—						—						X
32.1*						Section 1350 Certifications						—						—						—						—
101.INS						Inline XBRL Instance Document						—						—						—						—						X
101.SCH						Inline XBRL Taxonomy Extension Schema Document						—						—						—						—						X
101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document.						—						—						—						—						X
101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document						—						—						—						—						X
101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document						—						—						—						—						X
101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document						—						—						—						—						X
104						Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)

• Furnished herewith

† Portions of this exhibit have been redacted in compliance with Regulation S-K Item 601(b)(10)(iv)

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

			Tesla, Inc.
Date: April 23, 2024			/s/ Vaibhav Taneja
			Vaibhav Taneja
			Chief Financial Officer
			(Principal Financial Officer and Duly Authorized Officer)