filings.toolsItem 1. FINANCIAL STATEMENTS
111K characters. Original on sec.gov ·
Item 1. FINANCIAL STATEMENTS
Tesla, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
(unaudited)
| September 30, 2025 | December 31, 2024 | ||||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 18,289 | $ | 16,139 | |||||||
| Short-term investments | 23,358 | 20,424 | |||||||||
| Accounts receivable, net | 4,703 | 4,418 | |||||||||
| Inventory | 12,276 | 12,017 | |||||||||
| Prepaid expenses and other current assets | 6,027 | 5,362 | |||||||||
| Total current assets | 64,653 | 58,360 | |||||||||
| Operating lease vehicles, net | 5,019 | 5,581 | |||||||||
| Solar energy systems, net | 4,673 | 4,924 | |||||||||
| Property, plant and equipment, net | 39,407 | 35,836 | |||||||||
| Operating lease right-of-use assets | 5,783 | 5,160 | |||||||||
| Digital assets | 1,315 | 1,076 | |||||||||
| Intangible assets, net | 131 | 150 | |||||||||
| Goodwill | 257 | 244 | |||||||||
| Deferred tax assets | 6,637 | 6,524 | |||||||||
| Other non-current assets | 5,860 | 4,215 | |||||||||
| Total assets | $ | 133,735 | $ | 122,070 | |||||||
| Liabilities | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable | $ | 12,819 | $ | 12,474 | |||||||
| Accrued liabilities and other | 12,791 | 10,723 | |||||||||
| Deferred revenue | 3,756 | 3,168 | |||||||||
| Current portion of debt and finance leases | 1,924 | 2,456 | |||||||||
| Total current liabilities | 31,290 | 28,821 | |||||||||
| Debt and finance leases, net of current portion | 5,778 | 5,757 | |||||||||
| Deferred revenue, net of current portion | 3,746 | 3,317 | |||||||||
| Other long-term liabilities | 12,205 | 10,495 | |||||||||
| Total liabilities | 53,019 | 48,390 | |||||||||
| Commitments and contingencies (Note 10) | |||||||||||
| Redeemable noncontrolling interests in subsidiaries | 59 | 63 | |||||||||
| 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; 3,324 and 3,216 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively | 3 | 3 | |||||||||
| Additional paid-in capital | 41,597 | 38,371 | |||||||||
| Accumulated other comprehensive income (loss) | 207 | (670) | |||||||||
| Retained earnings | 38,163 | 35,209 | |||||||||
| Total stockholders’ equity | 79,970 | 72,913 | |||||||||
| Noncontrolling interests in subsidiaries | 687 | 704 | |||||||||
| Total liabilities and equity | $ | 133,735 | $ | 122,070 |
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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Automotive sales | $ | 20,359 | $ | 18,831 | $ | 49,071 | $ | 53,821 | |||||||||||||||
| Automotive regulatory credits | 417 | 739 | 1,451 | 2,071 | |||||||||||||||||||
| Automotive leasing | 429 | 446 | 1,311 | 1,380 | |||||||||||||||||||
| Total automotive revenues | 21,205 | 20,016 | 51,833 | 57,272 | |||||||||||||||||||
| Energy generation and storage | 3,415 | 2,376 | 8,934 | 7,025 | |||||||||||||||||||
| Services and other | 3,475 | 2,790 | 9,159 | 7,686 | |||||||||||||||||||
| Total revenues | 28,095 | 25,182 | 69,926 | 71,983 | |||||||||||||||||||
| Cost of revenues | |||||||||||||||||||||||
| Automotive sales | 17,365 | 15,743 | 42,393 | 45,602 | |||||||||||||||||||
| Automotive leasing | 225 | 247 | 692 | 761 | |||||||||||||||||||
| Total automotive cost of revenues | 17,590 | 15,990 | 43,085 | 46,363 | |||||||||||||||||||
| Energy generation and storage | 2,342 | 1,651 | 6,230 | 5,157 | |||||||||||||||||||
| Services and other | 3,109 | 2,544 | 8,526 | 7,192 | |||||||||||||||||||
| Total cost of revenues | 23,041 | 20,185 | 57,841 | 58,712 | |||||||||||||||||||
| Gross profit | 5,054 | 4,997 | 12,085 | 13,271 | |||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Research and development | 1,630 | 1,039 | 4,628 | 3,264 | |||||||||||||||||||
| Selling, general and administrative | 1,562 | 1,186 | 4,179 | 3,837 | |||||||||||||||||||
| Restructuring and other | 238 | 55 | 332 | 677 | |||||||||||||||||||
| Total operating expenses | 3,430 | 2,280 | 9,139 | 7,778 | |||||||||||||||||||
| Income from operations | 1,624 | 2,717 | 2,946 | 5,493 | |||||||||||||||||||
| Interest income | 439 | 429 | 1,231 | 1,127 | |||||||||||||||||||
| Interest expense | (76) | (92) | (253) | (254) | |||||||||||||||||||
| Other (expense) income, net | (28) | (263) | 173 | 100 | |||||||||||||||||||
| Income before income taxes | 1,959 | 2,791 | 4,097 | 6,466 | |||||||||||||||||||
| Provision for income taxes | 570 | 602 | 1,098 | 1,456 | |||||||||||||||||||
| Net income | 1,389 | 2,189 | 2,999 | 5,010 | |||||||||||||||||||
| Net income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries | 16 | 16 | 45 | 47 | |||||||||||||||||||
| Net income attributable to common stockholders | $ | 1,373 | $ | 2,173 | $ | 2,954 | $ | 4,963 | |||||||||||||||
| Net income per share of common stock attributable to common stockholders | |||||||||||||||||||||||
| Basic | $ | 0.43 | $ | 0.68 | $ | 0.92 | $ | 1.57 | |||||||||||||||
| Diluted | $ | 0.39 | $ | 0.62 | $ | 0.84 | $ | 1.43 | |||||||||||||||
| Weighted average shares used in computing net income per share of common stock | |||||||||||||||||||||||
| Basic | 3,227 | 3,198 | 3,223 | 3,192 | |||||||||||||||||||
| Diluted | 3,526 | 3,497 | 3,523 | 3,489 |
The accompanying notes are an integral part of these consolidated financial statements.
Tesla, Inc.
Consolidated Statements of Comprehensive Income
(in millions)
(unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net income | $ | 1,389 | $ | 2,189 | $ | 2,999 | $ | 5,010 | |||||||||||||||
| Other comprehensive income: | |||||||||||||||||||||||
| Foreign currency translation adjustment | 46 | 445 | 882 | 121 | |||||||||||||||||||
| Unrealized net gain (loss) on investments, net of tax | 3 | 8 | (5) | 8 | |||||||||||||||||||
| Total other comprehensive income: | 49 | 453 | 877 | 129 | |||||||||||||||||||
| Comprehensive income | 1,438 | 2,642 | 3,876 | 5,139 | |||||||||||||||||||
| Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries | 16 | 16 | 45 | 47 | |||||||||||||||||||
| Comprehensive income attributable to common stockholders | $ | 1,422 | $ | 2,626 | $ | 3,831 | $ | 5,092 |
The accompanying notes are an integral part of these consolidated financial statements.
Tesla, Inc.
Consolidated Statements of Redeemable Noncontrolling Interests and Equity
(in millions)
(unaudited)
| Three Months Ended September 30, 2025 | Redeemable Noncontrolling Interests | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Retained Earnings | Total Stockholders’ Equity | Noncontrolling Interests in Subsidiaries | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2025 | $ | 61 | 3,224 | $ | 3 | $ | 40,363 | $ | 158 | $ | 36,790 | $ | 77,314 | $ | 697 | $ | 78,011 | |||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for equity incentive awards | — | 100 | — | 512 | — | — | 512 | — | 512 | |||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | 722 | — | — | 722 | — | 722 | |||||||||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interests | (3) | — | — | — | — | — | — | (25) | (25) | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income | 1 | — | — | — | — | 1,373 | 1,373 | 15 | 1,388 | |||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | 49 | — | 49 | — | 49 | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2025 | $ | 59 | 3,324 | $ | 3 | $ | 41,597 | $ | 207 | $ | 38,163 | $ | 79,970 | $ | 687 | $ | 80,657 |
| Nine Months Ended September 30, 2025 | Redeemable Noncontrolling Interests | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive (Loss) Income | Retained Earnings | Total Stockholders’ Equity | Noncontrolling Interests in Subsidiaries | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | 63 | 3,216 | $ | 3 | $ | 38,371 | $ | (670) | $ | 35,209 | $ | 72,913 | $ | 704 | $ | 73,617 | |||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for equity incentive awards | — | 108 | — | 1,040 | — | — | 1,040 | — | 1,040 | |||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | 2,076 | — | — | 2,076 | — | 2,076 | |||||||||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interests | (7) | — | — | — | — | — | — | (59) | (59) | |||||||||||||||||||||||||||||||||||||||||||||||
| Shareholder settlement, net | — | — | — | 110 | — | — | 110 | — | 110 | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income | 3 | — | — | — | — | 2,954 | 2,954 | 42 | 2,996 | |||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | 877 | — | 877 | — | 877 | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2025 | $ | 59 | 3,324 | $ | 3 | $ | 41,597 | $ | 207 | $ | 38,163 | $ | 79,970 | $ | 687 | $ | 80,657 |
Tesla, Inc.
Consolidated Statements of Redeemable Noncontrolling Interests and Equity
(in millions)
(unaudited)
| Three Months Ended September 30, 2024 | Redeemable Noncontrolling Interests | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Total Stockholders’ Equity | Noncontrolling Interests in Subsidiaries | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2024 | $ | 72 | 3,194 | $ | 3 | $ | 36,443 | $ | (467) | $ | 30,908 | $ | 66,887 | $ | 723 | $ | 67,610 | |||||||||||||||||||||||||||||||||||||||
| Settlement of warrants | — | 9 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for equity incentive awards | — | 4 | — | 340 | — | — | 340 | — | 340 | |||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | 503 | — | — | 503 | — | 503 | |||||||||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interests | (3) | — | — | — | — | — | — | (29) | (29) | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income | 1 | — | — | — | — | 2,173 | 2,173 | 15 | 2,188 | |||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | 453 | — | 453 | — | 453 | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2024 | $ | 70 | 3,207 | $ | 3 | $ | 37,286 | $ | (14) | $ | 33,081 | $ | 70,356 | $ | 709 | $ | 71,065 |
| Nine Months Ended September 30, 2024 | Redeemable Noncontrolling Interests | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Total Stockholders’ Equity | Noncontrolling Interests in Subsidiaries | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2023 | $ | 242 | 3,185 | $ | 3 | $ | 34,892 | $ | (143) | $ | 27,882 | $ | 62,634 | $ | 733 | $ | 63,367 | |||||||||||||||||||||||||||||||||||||||
| Adjustments for prior periods from adopting ASU 2023-08, net of tax | — | — | — | — | — | 236 | 236 | — | 236 | |||||||||||||||||||||||||||||||||||||||||||||||
| Settlement of warrants | — | 9 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for equity incentive awards | — | 13 | — | 787 | — | — | 787 | — | 787 | |||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | 1,565 | — | — | 1,565 | — | 1,565 | |||||||||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interests | (11) | — | — | — | — | — | — | (66) | (66) | |||||||||||||||||||||||||||||||||||||||||||||||
| Buy-outs of noncontrolling interests | (166) | — | — | 42 | — | — | 42 | — | 42 | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income | 5 | — | — | — | — | 4,963 | 4,963 | 42 | 5,005 | |||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | 129 | — | 129 | — | 129 | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2024 | $ | 70 | 3,207 | $ | 3 | $ | 37,286 | $ | (14) | $ | 33,081 | $ | 70,356 | $ | 709 | $ | 71,065 |
The accompanying notes are an integral part of these consolidated financial statements.
Tesla, Inc.
Consolidated Statements of Cash Flows
(in millions)
(unaudited)
| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Cash Flows from Operating Activities | |||||||||||
| Net income | $ | 2,999 | $ | 5,010 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation, amortization and impairment | 4,505 | 3,872 | |||||||||
| Stock-based compensation | 1,871 | 1,420 | |||||||||
| Inventory and purchase commitments write-downs | 313 | 247 | |||||||||
| Foreign currency transaction net unrealized loss | 160 | 197 | |||||||||
| Deferred income taxes | 234 | 471 | |||||||||
| Non-cash interest and other operating activities | 235 | 83 | |||||||||
| Digital assets gain, net | (239) | (242) | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | (306) | 144 | |||||||||
| Inventory | (416) | (1,107) | |||||||||
| Operating lease vehicles | 54 | (82) | |||||||||
| Prepaid expenses and other assets | (2,280) | (2,639) | |||||||||
| Accounts payable, accrued and other liabilities | 2,979 | 2,504 | |||||||||
| Deferred revenue | 825 | 231 | |||||||||
| Net cash provided by operating activities | 10,934 | 10,109 | |||||||||
| Cash Flows from Investing Activities | |||||||||||
| Purchases of property and equipment excluding finance leases, net of sales | (6,134) | (8,562) | |||||||||
| Purchases of investments | (24,902) | (20,797) | |||||||||
| Proceeds from maturities of investments | 22,086 | 17,975 | |||||||||
| Proceeds from sales of investments | — | 200 | |||||||||
| Net cash used in investing activities | (8,950) | (11,184) | |||||||||
| Cash Flows from Financing Activities | |||||||||||
| Proceeds from issuances of debt | 4,232 | 4,360 | |||||||||
| Repayments of debt | (4,798) | (1,783) | |||||||||
| Proceeds from exercises of stock options and other stock issuances | 1,040 | 788 | |||||||||
| Principal payments on finance leases | (85) | (291) | |||||||||
| Proceeds received from directors in shareholder settlement | 277 | — | |||||||||
| Payment of legal fees associated with shareholder settlement | (176) | — | |||||||||
| Debt issuance costs | (5) | (6) | |||||||||
| Distributions paid to noncontrolling interests in subsidiaries | (56) | (76) | |||||||||
| Payments for buy-outs of noncontrolling interests in subsidiaries | — | (124) | |||||||||
| Net cash provided by financing activities | 429 | 2,868 | |||||||||
| Effect of exchange rate changes on cash and cash equivalents and restricted cash | 134 | (8) | |||||||||
| Net increase in cash and cash equivalents and restricted cash | 2,547 | 1,785 | |||||||||
| Cash and cash equivalents and restricted cash, beginning of period | 17,037 | 17,189 | |||||||||
| Cash and cash equivalents and restricted cash, end of period | $ | 19,584 | $ | 18,974 | |||||||
| Supplemental Non-Cash Investing and Financing Activities | |||||||||||
| Acquisitions of property and equipment included in liabilities | $ | 1,631 | $ | 2,727 | |||||||
| Leased assets obtained in exchange for finance lease liabilities | $ | — | $ | 32 | |||||||
| Leased assets obtained in exchange for operating lease liabilities | $ | 1,171 | $ | 1,232 |
The accompanying notes are an integral part of these consolidated financial statements.
Tesla, Inc.
Notes to Consolidated Financial Statements
(unaudited)
Note 1 – Summary of Significant Accounting Policies
Unaudited Interim Financial Statements
The consolidated financial statements of Tesla, Inc. (“Tesla”, the “Company”, “we”, “us” or “our”), including the consolidated balance sheet as of September 30, 2025, the consolidated statements of operations, the consolidated statements of comprehensive income, the consolidated statements of redeemable noncontrolling interests and equity for the three and nine months ended September 30, 2025 and 2024, and the consolidated statements of cash flows for the nine months ended September 30, 2025 and 2024, as well as other information disclosed in the accompanying notes, are unaudited. The consolidated balance sheet as of December 31, 2024 was derived from the audited consolidated financial statements as of that date. The interim consolidated financial statements and the accompanying notes should be read in conjunction with the annual consolidated financial statements and the accompanying notes contained in our Annual Report on Form 10-K for the year ended December 31, 2024.
The interim consolidated financial statements and the accompanying notes have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the results of operations for the periods presented. The consolidated results of operations for any interim period are not necessarily indicative of the results to be expected for the full year or for any other future years or interim periods.
Reclassifications
Certain prior period balances have been reclassified to conform to the current period presentation in the consolidated financial statements and the accompanying notes.
Revenue Recognition
Revenue by source
The following table disaggregates our revenue by major source (in millions):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Automotive sales | $ | 20,359 | $ | 18,831 | $ | 49,071 | $ | 53,821 | |||||||||||||||
| Automotive regulatory credits | 417 | 739 | 1,451 | 2,071 | |||||||||||||||||||
| Energy generation and storage sales | 3,281 | 2,228 | 8,548 | 6,616 | |||||||||||||||||||
| Services and other | 3,475 | 2,790 | 9,159 | 7,686 | |||||||||||||||||||
| Total revenues from sales and services | 27,532 | 24,588 | 68,229 | 70,194 | |||||||||||||||||||
| Automotive leasing | 429 | 446 | 1,311 | 1,380 | |||||||||||||||||||
| Energy generation and storage leasing | 134 | 148 | 386 | 409 | |||||||||||||||||||
| Total revenues | $ | 28,095 | $ | 25,182 | $ | 69,926 | $ | 71,983 |
Automotive Segment
Automotive Sales
Deferred revenue related to the access to our Full Self-Driving (“FSD”) (Supervised) features and their ongoing maintenance, internet connectivity, free Supercharging programs and over-the-air software updates primarily on automotive sales amounted to $3.83 billion and $3.60 billion as of September 30, 2025 and December 31, 2024, respectively.
Deferred revenue is equivalent to the total transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied, as of the balance sheet date. Revenue recognized from the deferred revenue balances as of December 31, 2024 and 2023 was $619 million and $711 million for the nine months ended September 30, 2025 and 2024, respectively. Of the total deferred revenue balance as of September 30, 2025, we expect to recognize $880 million of revenue in the next 12 months. The remaining balance will be recognized at the time of transfer of control of the product or over the performance period.
We have financing receivables on our consolidated balance sheets related to loans we provide for financing our automotive deliveries. As of September 30, 2025 and December 31, 2024, we had current net financing receivables of $231 million and $247 million, respectively, in Accounts receivable, net, and $612 million and $821 million, respectively, in Other non-current assets for the long-term portion.
We offer resale value guarantees to our commercial banking partners in connection with certain vehicle leasing programs. Under these programs, we originate the lease with our end customer and immediately transfer the lease and the underlying vehicle to our commercial banking partner, with the transaction being accounted for as a sale under ASC 606, Revenue from Contracts with Customers.
We receive upfront payment for the vehicle, do not bear casualty and credit risks during the lease term, and we provide a guarantee capped to a limit if they are unable to sell the vehicle at or above the vehicle’s contractual or determined residual value at the end of the lease term. We estimate a guarantee liability in accordance with ASC 460, Guarantees and record it within other liabilities on our consolidated balance sheets. On a quarterly basis, we assess the estimated market value of vehicles sold under these programs to determine whether there have been changes to the amount of expected resale value guarantee liabilities. As we accumulate more data related to the resale values of our vehicles or as market conditions change, there may be material changes to their estimated values. The total recorded guarantee liabilities on vehicles sold under these programs were immaterial as of September 30, 2025 and December 31, 2024. Our maximum exposure on the guarantees we provide if they are unable to sell the vehicle at or above the vehicle’s contractual residual value at the end of the lease term was $3.14 billion and $1.45 billion as of September 30, 2025 and December 31, 2024, respectively.
Automotive Regulatory Credits
As of September 30, 2025, total transaction price allocated to performance obligations that were unsatisfied or partially unsatisfied for contracts with an original expected length of more than one year was $3.27 billion. Of this amount, we expect to recognize $877 million in the next 12 months and the rest over the remaining performance obligation period. Changes in regulations on automotive regulatory credits may significantly impact our remaining performance obligations and revenue to be recognized under these contracts. In 2025, governmental and regulatory actions have repealed and/or restricted certain regulatory credit programs tied to our products, contributing to the $1.41 billion decrease in our remaining performance obligations as of September 30, 2025 compared to December 31, 2024.
Automotive Leasing Revenue
Direct Sales-Type Leasing Program
Lease receivables relating to sales-type leases are presented on the consolidated balance sheets as follows (in millions):
| September 30, 2025 | December 31, 2024 | ||||||||||
| Gross lease receivables | $ | 317 | $ | 484 | |||||||
| Unearned interest income | (19) | (38) | |||||||||
| Allowance for expected credit losses | (6) | (6) | |||||||||
| Net investment in sales-type leases | $ | 292 | $ | 440 | |||||||
| Reported as: | |||||||||||
| Prepaid expenses and other current assets | $ | 137 | $ | 152 | |||||||
| Other non-current assets | 155 | 288 | |||||||||
| Net investment in sales-type leases | $ | 292 | $ | 440 |
Energy Generation and Storage Segment
Energy Generation and Storage Sales
We record as deferred revenue any non-refundable amounts that are primarily related to prepayments from customers, which is recognized as revenue as or when the performance obligations are satisfied. As of September 30, 2025 and December 31, 2024, deferred revenue related to such customer payments amounted to $2.41 billion and $1.77 billion, respectively, mainly due to contractual payment terms. Revenue recognized from the deferred revenue balances as of December 31, 2024 and 2023 was $1.33 billion and $1.09 billion for the nine months ended September 30, 2025 and 2024, respectively. We have elected the practical expedient to omit disclosure of the amount of the transaction price allocated to remaining performance obligations for contracts with an original expected contract length of one year or less. As of September 30, 2025, total transaction price allocated to performance obligations that were unsatisfied or partially unsatisfied for contracts with an original expected length of more than one year was $9.71 billion. Of this amount, we expect to recognize $5.22 billion in the next 12 months and the rest over the remaining performance obligation period. Changes in government and economic incentives or tariffs may impact the transaction price or our ability to execute these existing contracts.
We have financing receivables on our consolidated balance sheets related to loans we provide for financing our energy products. As of September 30, 2025 and December 31, 2024, we had current net financing receivables of $38 million and $34 million, respectively, in Accounts receivable, net, and $703 million and $658 million, respectively, in Other non-current assets for the long-term portion.
Income Taxes
We are subject to income taxes in the U.S. and in many foreign jurisdictions. Significant judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets that are not more likely than not to be realized. We monitor the realizability of our deferred tax assets taking into account all relevant factors at each reporting period. In completing our assessment of realizability of our deferred tax assets, we consider our history of income (loss) measured at pre-tax income (loss) adjusted for permanent book-tax differences on a jurisdictional basis, volatility in actual earnings, excess tax benefits related to stock-based compensation in recent prior years and impacts of the timing of reversal of existing temporary differences. We also rely on our assessment of the Company’s projected future results of business operations, including uncertainty in future operating results relative to historical results, volatility in the market price of our common stock and its performance over time, variable macroeconomic conditions impacting our ability to forecast future taxable income, and changes in business that may affect the existence and magnitude of future taxable income. Our valuation allowance assessment is based on our best estimate of future results considering all available information.
Our provision for income taxes for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment.
Net Income per Share of Common Stock Attributable to Common Stockholders
The following table presents the reconciliation of net income attributable to common stockholders to net income used in computing basic and diluted net income per share of common stock (in millions):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net income attributable to common stockholders (1) | $ | 1,373 | $ | 2,173 | $ | 2,954 | $ | 4,963 | |||||||||||||||
| Less: Buy-outs of noncontrolling interest | — | — | — | (42) | |||||||||||||||||||
| Net income used in computing basic and diluted net income per share of common stock | $ | 1,373 | $ | 2,173 | $ | 2,954 | $ | 5,005 |
(1)As a result of the adoption of ASU No. 2023-08, Accounting for and Disclosure of Crypto Assets, the previously reported periods in 2024 have been recast. See Recent Accounting Pronouncements below for further details.
The following table presents the reconciliation of basic to diluted weighted average shares used in computing net income per share of common stock attributable to common stockholders (in millions):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Weighted average shares used in computing net income per share of common stock, basic | 3,227 | 3,198 | 3,223 | 3,192 | |||||||||||||||||||
| Add: | |||||||||||||||||||||||
| Stock-based awards | 299 | 290 | 300 | 286 | |||||||||||||||||||
| Convertible senior notes | — | — | — | 1 | |||||||||||||||||||
| Warrants | — | 9 | — | 10 | |||||||||||||||||||
| Weighted average shares used in computing net income per share of common stock, diluted | 3,526 | 3,497 | 3,523 | 3,489 |
The following table presents the potentially dilutive shares that were excluded from the computation of diluted net income per share of common stock attributable to common stockholders, because their effect was anti-dilutive (in millions):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Stock-based awards | 5 | 15 | 13 | 18 |
Restricted Cash
Our total cash and cash equivalents and restricted cash, as presented in the consolidated statements of cash flows, was as follows (in millions):
| September 30, 2025 | December 31, 2024 | September 30, 2024 | December 31, 2023 | ||||||||||||||||||||
| Cash and cash equivalents | $ | 18,289 | $ | 16,139 | $ | 18,111 | $ | 16,398 | |||||||||||||||
| Restricted cash included in prepaid expenses and other current assets | 588 | 494 | 483 | 543 | |||||||||||||||||||
| Restricted cash included in other non-current assets | 707 | 404 | 380 | 248 | |||||||||||||||||||
| Total as presented in the consolidated statements of cash flows | $ | 19,584 | $ | 17,037 | $ | 18,974 | $ | 17,189 |
Accounts Receivable and Allowance for Doubtful Accounts
Depending on the day of the week on which the end of a fiscal quarter falls, our accounts receivable balance may fluctuate as we are waiting for certain customer payments to clear through our banking institutions and receipts of payments from our financing partners, which can take up to approximately two weeks based on the contractual payment terms with such partners. Our accounts receivable balances associated with sales of energy storage products are dependent on billing milestones and payment terms negotiated for each contract, and our accounts receivable balances associated with our sales of regulatory credits are dependent on contractual payment terms. Additionally, government rebates can take up to a year or more to be collected depending on the customary processing timelines of the specific jurisdictions issuing them. These various factors may have a significant impact on our accounts receivable balance from period to period. As of September 30, 2025 and December 31, 2024, government rebates receivable was $310 million and $315 million, respectively, in Accounts receivable, net.
Financing Receivables
As of September 30, 2025 and December 31, 2024, the vast majority of our financing receivables were at current status with an immaterial balance being past due. As of September 30, 2025 and December 31, 2024, the majority of our financing receivables, excluding MyPower notes receivable, were originated in 2023 and 2022.
As of September 30, 2025 and December 31, 2024, the total outstanding balance of MyPower customer notes receivable, net of allowance for expected credit losses, was $243 million and $248 million, respectively, of which immaterial amounts were due in the next 12 months. As of September 30, 2025 and December 31, 2024, the allowance for expected credit losses was $28 million and $33 million, respectively.
Concentration of Risk
Credit Risk
Financial instruments that potentially subject us to a concentration of credit risk consist of cash, cash equivalents, investments, restricted cash, accounts receivable and other finance receivables. Our cash and investments balances are primarily on deposit at high credit quality financial institutions or invested in highly rated, investment-grade securities. These deposits are typically in excess of insured limits. As of September 30, 2025 and December 31, 2024, no entity represented 10% or more of our total receivables balance.
Supply Risk
We are dependent on our suppliers, including single source suppliers, and the inability of these suppliers to deliver necessary components of our products in a timely manner at prices, quality levels and volumes acceptable to us, or our inability to efficiently manage these components from these suppliers, could have a material adverse effect on our business, prospects, financial condition and operating results.
Warranties
Accrued warranty activity consisted of the following (in millions):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Accrued warranty - beginning of period | $ | 7,512 | $ | 5,795 | $ | 6,716 | $ | 5,152 | |||||||||||||||
| Warranty costs incurred | (464) | (380) | (1,254) | (1,048) | |||||||||||||||||||
| Net changes in liability for pre-existing warranties, including expirations and foreign exchange impact | 300 | 231 | 726 | 295 | |||||||||||||||||||
| Provision for warranty | 727 | 717 | 1,887 | 1,964 | |||||||||||||||||||
| Accrued warranty - end of period | $ | 8,075 | $ | 6,363 | $ | 8,075 | $ | 6,363 |
Recent Accounting Pronouncements
Recently issued accounting pronouncements not yet adopted
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective for annual periods beginning after December 15, 2024, and will likely result in the required additional disclosures being included in our consolidated financial statements on either a prospective or retrospective basis, once adopted. We are currently evaluating the provisions of this ASU.
In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40). The ASU requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization, within relevant income statement captions. This ASU also requires disclosure of the total amount of selling expenses along with the definition of selling expenses. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Adoption of this ASU can either be applied prospectively to consolidated financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the consolidated financial statements. Early adoption is also permitted. This ASU will likely result in the required additional disclosures being included in our consolidated financial statements, once adopted. We are currently evaluating the provisions of this ASU.
In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in this update provide a practical expedient permitting an entity to assume that conditions at the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current classified accounts receivable and contract assets. This update is effective for annual periods beginning after December 15, 2025, including interim periods within those fiscal years. Adoption of this ASU can be applied prospectively for reporting periods after its effective date. Early adoption is permitted. We are currently evaluating the provisions of this ASU and do not expect this ASU to have a material impact on our consolidated financial statements.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The ASU simplifies the capitalization guidance by removing all references to prescriptive and sequential software development stages (referred to as “project stages”) throughout ASC 350-40. The ASU is effective for annual periods beginning after December 15, 2027, and interim periods within those fiscal years. Adoption of this ASU can be applied prospectively for reporting periods after its effective date; or follow a modified transition approach that is based on the status of the respective projects and whether software costs were capitalized before the date of adoption; or retrospectively to any or all prior periods presented in the consolidated financial statements. Early adoption is permitted. We are currently evaluating the provisions of this ASU.
Recently adopted accounting pronouncements
ASU 2023-08
In December 2023, the FASB issued ASU No. 2023-08, Accounting for and Disclosure of Crypto Assets (Subtopic 350-60) (“new crypto assets standard”). The new crypto assets standard requires certain crypto assets to be measured at fair value separately on the balance sheet with changes reported in the statement of operations each reporting period. The new crypto assets standard also enhances the other intangible asset disclosure requirements by requiring the name, cost basis, fair value, and number of units for each significant crypto asset holding. During the fourth quarter of 2024, we adopted the new crypto assets standard on a modified retrospective approach effective January 1, 2024. As such, the previously reported consolidated financial statements for the three and nine months ended September 30, 2024 have been recast to reflect the adoption of the new crypto assets standard. The following table presents the effects of these changes on the Company’s consolidated financial statements:
| As of September 30, 2024 | |||||||||||||||||
| Consolidated Balance Sheets (unaudited): | As Previously Reported | Adjustments from Adoption of the New Crypto Assets Standard | As Adjusted | ||||||||||||||
| Assets | |||||||||||||||||
| Digital assets, net | $ | 184 | $ | 545 | $ | 729 | |||||||||||
| Deferred tax assets | $ | 6,486 | $ | (120) | $ | 6,366 | |||||||||||
| Stockholders' equity | |||||||||||||||||
| Retained earnings | $ | 32,656 | $ | 425 | $ | 33,081 |
| Three Months Ended September 30, 2024 | |||||||||||||||||
| Consolidated Statement of Operations (unaudited): | As Previously Reported | Adjustments from Adoption of the New Crypto Assets Standard | As Adjusted | ||||||||||||||
| Other expense, net | $ | (270) | $ | 7 | $ | (263) | |||||||||||
| Provision for income taxes | $ | 601 | $ | 1 | $ | 602 | |||||||||||
| Net income attributable to common stockholders | $ | 2,167 | $ | 6 | $ | 2,173 | |||||||||||
| Net income per share attributable to common stockholders: | |||||||||||||||||
| Basic | $ | 0.68 | $ | — | $ | 0.68 | |||||||||||
| Diluted | $ | 0.62 | $ | — | $ | 0.62 |
| Nine Months Ended September 30, 2024 | |||||||||||||||||
| Consolidated Statement of Operations (unaudited): | As Previously Reported | Adjustments from Adoption of the New Crypto Assets Standard | As Adjusted | ||||||||||||||
| Other (expense) income, net | $ | (142) | $ | 242 | $ | 100 | |||||||||||
| Provision for income taxes | $ | 1,403 | $ | 53 | $ | 1,456 | |||||||||||
| Net income attributable to common stockholders | $ | 4,774 | $ | 189 | $ | 4,963 | |||||||||||
| Net income per share attributable to common stockholders: | |||||||||||||||||
| Basic | $ | 1.51 | $ | 0.06 | $ | 1.57 | |||||||||||
| Diluted | $ | 1.38 | $ | 0.05 | $ | 1.43 |
On July 4, 2025, the U.S. H.R.1, an act to provide for reconciliation pursuant to title II of H. Con. Res. 14. (the “OBBBA”) was enacted. The OBBBA introduces multiple tax law and other legislative changes, including modifications to income tax provisions such as domestic research and development expenses, capital expenditures, and U.S. taxation of international earnings; the repeal or acceleration of the sunset of certain tax credits under the 2022 Inflation Reduction Act and elimination of certain penalties for violations of certain regulatory credit programs. We have recognized the effects of the OBBBA provisions in our financial results to the extent they are applicable to the three and nine months ended September 30, 2025. We will continue to evaluate the impact of these provisions on our future consolidated financial statements, including loss of certain regulatory credit sales tied to our products and changes to the costs of our products.
Note 2 – Fair Value of Financial Instruments
ASC 820, Fair Value Measurements states that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The three-tiered fair value hierarchy, which prioritizes which inputs should be used in measuring fair value, is comprised of: (Level I) observable inputs such as quoted prices in active markets; (Level II) inputs other than quoted prices in active markets that are observable either directly or indirectly and (Level III) unobservable inputs for which there is little or no market data. The fair value hierarchy requires the use of observable market data when available in determining fair value. Our assets and liabilities that were measured at fair value on a recurring basis were as follows (in millions):
| September 30, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value | Level I | Level II | Level III | Fair Value | Level I | Level II | Level III | ||||||||||||||||||||||||||||||||||||||||
| Certificates of deposit and time deposits | $ | 15,099 | $ | — | $ | 15,099 | $ | — | $ | 12,767 | $ | — | $ | 12,767 | $ | — | |||||||||||||||||||||||||||||||
| Commercial paper | 3,014 | — | 3,014 | — | 3,919 | — | 3,919 | — | |||||||||||||||||||||||||||||||||||||||
| U.S. government securities | 5,229 | — | 5,229 | — | 3,620 | — | 3,620 | — | |||||||||||||||||||||||||||||||||||||||
| Corporate debt securities | 16 | — | 16 | — | 118 | — | 118 | — | |||||||||||||||||||||||||||||||||||||||
| Money market funds | 1,174 | 1,174 | — | — | 1,753 | 1,753 | — | — | |||||||||||||||||||||||||||||||||||||||
| Digital assets (1) | 1,315 | 1,315 | — | — | 1,076 | 1,076 | — | — | |||||||||||||||||||||||||||||||||||||||
| Total | $ | 25,847 | $ | 2,489 | $ | 23,358 | $ | — | $ | 23,253 | $ | 2,829 | $ | 20,424 | $ | — |
(1)As of September 30, 2025 and December 31, 2024, the majority of our digital assets were comprised of 11,509 units of Bitcoin held at an acquisition cost of $386 million.
Our assets classified within Level I of the fair value hierarchy were valued using quoted prices in active markets and our assets classified within Level II of the fair value hierarchy utilized the market approach to determine fair value of the investments.
Our cash, cash equivalents and investments classified by security type as of September 30, 2025 and December 31, 2024 consisted of the following (in millions):
| September 30, 2025 | |||||||||||||||||||||||||||||||||||
| Adjusted Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Cash and Cash Equivalents | Short-Term Investments | ||||||||||||||||||||||||||||||
| Cash | $ | 17,115 | $ | — | $ | — | $ | 17,115 | $ | 17,115 | $ | — | |||||||||||||||||||||||
| Certificates of deposit and time deposits | 15,098 | 1 | — | 15,099 | — | 15,099 | |||||||||||||||||||||||||||||
| Commercial paper | 3,012 | 2 | — | 3,014 | — | 3,014 | |||||||||||||||||||||||||||||
| U.S. government securities | 5,227 | 4 | (2) | 5,229 | — | 5,229 | |||||||||||||||||||||||||||||
| Corporate debt securities | 16 | — | — | 16 | — | 16 | |||||||||||||||||||||||||||||
| Money market funds | 1,174 | — | — | 1,174 | 1,174 | — | |||||||||||||||||||||||||||||
| Total cash, cash equivalents and short-term investments | $ | 41,642 | $ | 7 | $ | (2) | $ | 41,647 | $ | 18,289 | $ | 23,358 |
| December 31, 2024 | |||||||||||||||||||||||||||||||||||
| Adjusted Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Cash and Cash Equivalents | Short-Term Investments | ||||||||||||||||||||||||||||||
| Cash | $ | 14,386 | $ | — | $ | — | $ | 14,386 | $ | 14,386 | $ | — | |||||||||||||||||||||||
| Certificates of deposit and time deposits | 12,767 | — | — | 12,767 | — | 12,767 | |||||||||||||||||||||||||||||
| Commercial paper | 3,908 | 11 | — | 3,919 | — | 3,919 | |||||||||||||||||||||||||||||
| U.S. government securities | 3,618 | 3 | (1) | 3,620 | — | 3,620 | |||||||||||||||||||||||||||||
| Corporate debt securities | 117 | 1 | — | 118 | — | 118 | |||||||||||||||||||||||||||||
| Money market funds | 1,753 | — | — | 1,753 | 1,753 | — | |||||||||||||||||||||||||||||
| Total cash, cash equivalents and short-term investments | $ | 36,549 | $ | 15 | $ | (1) | $ | 36,563 | $ | 16,139 | $ | 20,424 |
As of September 30, 2025 and December 31, 2024, investments held and restricted for our insurance business were $254 million and $286 million, respectively.
As of September 30, 2025, the majority of our short-term investments had contractual maturity dates within one year.
Disclosure of Fair Values
Our financial instruments that are not re-measured at fair value include accounts receivable, financing receivables, other receivables, accounts payable, accrued liabilities, customer deposits and debt. The carrying values of these financial instruments materially approximate their fair values.
Note 3 – Inventory
Our inventory consisted of the following (in millions):
| September 30, 2025 | December 31, 2024 | ||||||||||
| Raw materials | $ | 4,863 | $ | 5,242 | |||||||
| Work in process | 1,652 | 1,532 | |||||||||
| Finished goods (1) | 4,416 | 3,940 | |||||||||
| Service parts | 1,345 | 1,303 | |||||||||
| Total | $ | 12,276 | $ | 12,017 |
(1)Finished goods inventory includes products-in-transit to fulfill customer orders, new vehicles, used vehicles and energy products available for sale.
We write-down inventory for any excess or obsolete inventory or when we believe that the net realizable value of inventory is less than the carrying value. During the three and nine months ended September 30, 2025, we recorded write-downs of $65 million and $275 million, respectively, in Cost of revenues in the consolidated statements of operations. During the three and nine months ended September 30, 2024, we recorded write-downs of $46 million and $114 million, respectively, in Cost of revenues in the consolidated statements of operations.
Note 4 – Property, Plant and Equipment, Net
Our property, plant and equipment, net, consisted of the following (in millions):
| September 30, 2025 | December 31, 2024 | ||||||||||
| Machinery, equipment, vehicles and office furniture | $ | 20,161 | $ | 18,339 | |||||||
| Land and buildings | 11,476 | 10,677 | |||||||||
| AI infrastructure | 6,621 | 5,152 | |||||||||
| Tooling | 4,717 | 3,883 | |||||||||
| Leasehold improvements | 4,260 | 3,688 | |||||||||
| Computer equipment, hardware and software | 3,109 | 2,902 | |||||||||
| Construction in progress | 8,046 | 6,783 | |||||||||
| Property, plant and equipment | 58,390 | 51,424 | |||||||||
| Less: Accumulated depreciation | (18,983) | (15,588) | |||||||||
| Property, plant and equipment, net | $ | 39,407 | $ | 35,836 |
Construction in progress is primarily comprised of ongoing construction and expansion of our facilities, equipment and tooling related to the manufacturing of our products as well as AI-related assets which have not yet been placed in service.
Depreciation expense during the three and nine months ended September 30, 2025 was $1.35 billion and $3.65 billion, respectively. Depreciation expense during the three and nine months ended September 30, 2024 was $1.05 billion and $2.96 billion, respectively.
Note 5 – Accrued Liabilities and Other
Our accrued liabilities and other current liabilities consisted of the following (in millions):
| September 30, 2025 | December 31, 2024 | ||||||||||
| Accrued purchases (1) | $ | 2,735 | $ | 2,253 | |||||||
| Accrued warranty reserve, current portion | 2,310 | 1,917 | |||||||||
| Payroll and related costs | 1,821 | 1,532 | |||||||||
| Taxes payable (2) | 1,362 | 1,367 | |||||||||
| Customer deposits | 1,324 | 993 | |||||||||
| Operating lease liabilities, current portion | 921 | 807 | |||||||||
| Sales return reserve, current portion | 472 | 305 | |||||||||
| Other current liabilities | 1,846 | 1,549 | |||||||||
| Total | $ | 12,791 | $ | 10,723 |
(1)Accrued purchases primarily reflects receipts of goods and services for which we had not yet been invoiced. As we are invoiced for these goods and services, this balance will reduce and accounts payable will increase.
(2)Taxes payable primarily includes value added tax, income tax, sales tax, property tax and use tax payables.
Note 6 – Other Long-Term Liabilities
Our other long-term liabilities consisted of the following (in millions):
| September 30, 2025 | December 31, 2024 | ||||||||||
| Accrued warranty reserve | $ | 5,765 | $ | 4,799 | |||||||
| Operating lease liabilities | 5,165 | 4,603 | |||||||||
| Other non-current liabilities | 1,275 | 1,093 | |||||||||
| Total other long-term liabilities | $ | 12,205 | $ | 10,495 |
Note 7 – Debt
The following is a summary of our debt and finance leases as of September 30, 2025 (in millions):
| Net Carrying Value | Unpaid Principal Balance | Unused Committed Amount (1) | Contractual Interest Rates | Contractual Maturity Date | |||||||||||||||||||||||||||||||
| Current | Long-Term | ||||||||||||||||||||||||||||||||||
| Recourse debt: | |||||||||||||||||||||||||||||||||||
| RCF Credit Agreement | $ | — | $ | — | $ | — | $ | 5,000 | Not applicable | January 2028 | |||||||||||||||||||||||||
| Other | 1 | 2 | 3 | — | 4.70-5.75% | October 2025-January 2031 | |||||||||||||||||||||||||||||
| Total recourse debt | 1 | 2 | 3 | 5,000 | |||||||||||||||||||||||||||||||
| Non-recourse debt: | |||||||||||||||||||||||||||||||||||
| Automotive Asset-backed Notes | 1,711 | 1,796 | 3,519 | — | 2.53-6.57% | September 2026-June 2035 | |||||||||||||||||||||||||||||
| China Working Capital Facility | — | 3,230 | 3,230 | 2,387 | 2.11% | March 2026-September 2026 (2) | |||||||||||||||||||||||||||||
| Energy Asset-backed Notes | 51 | 362 | 417 | — | 5.08-6.25% | June 2050 | |||||||||||||||||||||||||||||
| Cash Equity Debt | 89 | 219 | 316 | — | 5.25-5.81% | July 2033-January 2035 | |||||||||||||||||||||||||||||
| Total non-recourse debt | 1,851 | 5,607 | 7,482 | 2,387 | |||||||||||||||||||||||||||||||
| Total debt | 1,852 | 5,609 | $ | 7,485 | $ | 7,387 | |||||||||||||||||||||||||||||
| Finance leases | 72 | 169 | |||||||||||||||||||||||||||||||||
| Total debt and finance leases | $ | 1,924 | $ | 5,778 |
The following is a summary of our debt and finance leases as of December 31, 2024 (in millions):
| Net Carrying Value | Unpaid Principal Balance | Unused Committed Amount (1) | Contractual Interest Rates | Contractual Maturity Date | |||||||||||||||||||||||||||||||
| Current | Long-Term | ||||||||||||||||||||||||||||||||||
| Recourse debt: | |||||||||||||||||||||||||||||||||||
| RCF Credit Agreement | $ | — | $ | — | $ | — | $ | 5,000 | Not applicable | January 2028 | |||||||||||||||||||||||||
| Other | 4 | 3 | 7 | — | 4.70-5.75% | March 2025-January 2031 | |||||||||||||||||||||||||||||
| Total recourse debt | 4 | 3 | 7 | 5,000 | |||||||||||||||||||||||||||||||
| Non-recourse debt: | |||||||||||||||||||||||||||||||||||
| Automotive Asset-backed Notes | 2,255 | 2,059 | 4,329 | — | 3.45-6.57% | September 2025-June 2035 | |||||||||||||||||||||||||||||
| China Working Capital Facility | — | 2,740 | 2,740 | — | 1.92% | April 2025 (2) | |||||||||||||||||||||||||||||
| Energy Asset-backed Notes | 54 | 434 | 493 | — | 4.80-6.25% | December 2025-June 2050 | |||||||||||||||||||||||||||||
| Cash Equity Debt | 30 | 299 | 338 | — | 5.25-5.81% | July 2033-January 2035 | |||||||||||||||||||||||||||||
| Total non-recourse debt | 2,339 | 5,532 | 7,900 | — | |||||||||||||||||||||||||||||||
| Total debt | 2,343 | 5,535 | $ | 7,907 | $ | 5,000 | |||||||||||||||||||||||||||||
| Finance leases | 113 | 222 | |||||||||||||||||||||||||||||||||
| Total debt and finance leases | $ | 2,456 | $ | 5,757 |
(1)There are no restrictions on draw-down or use for general corporate purposes with respect to any available committed funds under our RCF Credit Agreement, except certain specified conditions prior to draw-down. Refer to the notes to the consolidated financial statements included in our reporting on Form 10-K for the year ended December 31, 2024 for the terms of the facility.
(2)As we have the intent and ability to refinance the loan on a long-term basis, we recorded it in Debt and finance leases, net of current portion in the consolidated balance sheets.
Recourse debt refers to debt that is recourse to our general assets. Non-recourse debt refers to debt that is recourse to only assets of our subsidiaries. The differences between the unpaid principal balances and the net carrying values are due to debt discounts or deferred issuance costs. As of September 30, 2025, we were in material compliance with all financial debt covenants.
Automotive Asset-backed Notes
During the third quarter of 2025, we transferred beneficial interests related to certain leased vehicles into a special purpose entity and issued $750 million in aggregate principal amount of Automotive Asset-backed Notes, with terms similar to our other previously issued Automotive Asset-backed Notes. The proceeds from the issuance, net of debt issuance costs, were $746 million.
China Working Capital Facility
In March 2025, the China Working Capital Facility was amended to extend the availability of funds through April 2028. In addition, the maturity date for each borrowing is the earlier of one year from the date the funds are drawn or April 2029.
In September 2025, the China Working Capital Facility was further amended to increase the aggregate lender commitment by RMB 20.00 billion. Borrowings will bear interest at a rate equal to the Loan Prime Rate published by the People’s Bank of China minus 0.89% or 0.99%, as applicable under the terms of the agreement.
Note 8 – Equity Incentive Plans
2025 CEO Interim Award
In August 2025, the Board of Directors granted and issued 96.0 million shares of restricted stock to our CEO (the “2025 CEO Interim Award”), which will vest on the second anniversary of the grant date, assuming his continued employment as either the CEO or as an executive responsible for product development or operations (as approved by disinterested members of the Board of Directors) through the vesting date. Our CEO must pay the Company $23.34 per share (the “Purchase Price”) of restricted stock that vests, which is equal to the exercise price per share of the stock-based compensation plan awarded to Elon Musk in 2018 (the “2018 CEO Performance Award”).
Restricted stock under the 2025 CEO Interim Award will be immediately forfeited and returned (an “Early Forfeiture”) to the Company to preclude a “double dip” or windfall if, prior to vesting, there is a final, non-appealable judgment, order or decision of the Delaware courts with respect to the action captioned Tornetta v. Elon Musk et al., C.A. No. 2018-0408-KSJM (Del. Ch.), or any pending or future appeal, including In re Tesla, Inc. Derivative Litigation, Nos. 10, 2025, 11, 2025 (Del.) (a “Tornetta Decision Event”) (see Note 10, Commitments and Contingencies), that results in our CEO becoming able to exercise in full the 2018 CEO Performance Award. If a Tornetta Decision Event results in our CEO becoming able to exercise options covered by the 2018 CEO Performance Award, but does not result in Early Forfeiture, then, if the Tornetta Decision Event occurs before the 2025 CEO Interim Award vests, shares covered by the 2025 CEO Interim Award will be reduced to the extent that (a) the sum of the 2025 CEO Interim Award shares and any amount of options exercisable under the 2018 CEO Performance Award exceeds (b) the total number of options subject to the 2018 CEO Award in full (the “Excess Amount”), and if the Tornetta Decision Event occurs after the 2025 CEO Interim Award vests, then our CEO will return or otherwise repay us for shares issued under the 2025 CEO Interim Award (with us returning or repaying the Purchase Price) or forfeit options underlying the 2018 CEO Performance Award equal to the Excess Amount. The “no double dip” provision means that if our CEO gains the ability to exercise the 2018 CEO Performance Award, there will be no material additional benefit to him because the total number of shares awarded under the 2025 CEO Interim Award together with the 2018 CEO Performance Award cannot exceed the number of shares underlying the 2018 CEO Performance Award.
Our CEO must hold shares covered by the 2025 CEO Interim Award for five years from the date of grant, subject to certain exceptions, including to satisfy taxes due in respect of vesting of the 2025 CEO Interim Award and/or to pay the Purchase Price. The 2025 CEO Interim Award will vest on an accelerated basis prior to the second anniversary of the grant date if our CEO is in continued eligible service upon a change in control or his death.
Stock-based compensation expense associated with the 2025 CEO Interim Award is recognized over the requisite service period, based on the grant date fair value on the date the shares are issued, but only if and when the vesting of the award becomes probable. Additionally, our CEO stock-based compensation represents a non-cash expense and is recorded as a selling, general and administrative operating expense in our consolidated statement of operations. The grant date fair value of the 2025 CEO Interim Award is $26.06 billion. The grant date fair value is based upon the closing market price of our common stock as of the issuance date, less the Purchase Price, adjusted to take into account an illiquidity discount due to the required holding period.
As of September 30, 2025, the vesting of the 2025 CEO Interim Award is not deemed probable based on the probability of performance conditions being met. No stock-based compensation expense has been recorded for the 2025 Interim CEO Award for the three and nine months ended September 30, 2025.
2025 CEO Performance Award
In September 2025, the Board of Directors approved the issuance of approximately 423.7 million shares of performance-based restricted stock to our CEO (the “2025 CEO Performance Award”), which is subject to vote and approval by our shareholders at the 2025 Annual Meeting of Shareholders. The shares of restricted stock covered by the 2025 CEO Performance Award will only be issued following receipt of shareholder approval. The shares of restricted stock will be subject to performance-based, market-based and time-based vesting conditions and upon vesting will include an offset amount of $334.09 per share, which is the closing price on the Nasdaq Global Select Market of our common stock on September 3, 2025. The preliminary aggregate fair value estimate, assuming the actual achievement of all performance milestones, is disclosed in our 2025 proxy statement, based on a Monte Carlo simulation using $334.09 per share. Those amounts do not necessarily correspond to the actual value that may be recognized, which depends on, among other things, the market value of our common stock. The current market price of our common stock has increased since the grant date. Since the 2025 CEO Performance Award has not been approved by our shareholders and has not been issued, no stock-based compensation expense has been recorded for the 2025 CEO Performance Award for the three and nine months ended September 30, 2025.
Other Performance-Based Grants
From time to time, the Compensation Committee of our Board of Directors grants certain employees performance-based restricted stock units and stock options.
As of September 30, 2025, we had unrecognized stock-based compensation expense of $1.28 billion under these grants to purchase or receive an aggregate 10.7 million shares of our common stock. For awards probable of achievement, we estimate the unrecognized stock-based compensation expense of $819 million will be recognized over a weighted-average period of 3.5 years.
For the three and nine months ended September 30, 2025, we recorded $93 million and $185 million, respectively, of stock-based compensation expense related to these grants, net of forfeitures. For the three and nine months ended September 30, 2024, stock-based compensation expense related to these grants, net of forfeitures, were immaterial.
Summary Stock-Based Compensation Information
The following table summarizes our stock-based compensation expense by line item in the consolidated statements of operations (in millions):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Cost of revenues | $ | 207 | $ | 184 | $ | 629 | $ | 566 | |||||||||||||||
| Research and development | 335 | 191 | 910 | 572 | |||||||||||||||||||
| Selling, general and administrative | 121 | 82 | 332 | 280 | |||||||||||||||||||
| Restructuring and other | — | — | — | 2 | |||||||||||||||||||
| Total | $ | 663 | $ | 457 | $ | 1,871 | $ | 1,420 |
Note 9 – Income Taxes
Our effective tax rate was 29% and 27% for the three and nine months ended September 30, 2025, respectively, compared to 22% and 23% for the three and nine months ended September 30, 2024, respectively. The change in our effective tax rate was primarily due to changes in the mix of our jurisdictional earnings, a decrease in foreign income deductions resulting from lower taxable income attributable to the OBBBA and the remeasurement of our deferred tax assets related to net controlled foreign corporation tested income (“NCTI”) under the OBBBA.
Our effective tax rates for the first three and nine months of 2025 and 2024 as compared to the U.S. federal statutory rate of 21% were primarily impacted by the mix of our jurisdictional earnings subject to different tax rates, valuation allowances on our deferred tax assets and benefits from our U.S. research and development credits, and manufacturing production credits.
Note 10 – Commitments and Contingencies
Operating Lease Arrangements in Buffalo, New York and Shanghai, China
For a description of our operating lease arrangements in Buffalo, New York, and Shanghai, China, refer to Note 14, Commitments and Contingencies, in our Annual Report on Form 10-K for the year ended December 31, 2024. As of September 30, 2025, we have met and expect to meet the requirements under these arrangements, as may be modified and discussed from time to time, based on our current and anticipated level of operations.
Legal Proceedings
Litigation Relating to 2018 CEO Performance Award
On June 4, 2018, a purported Tesla stockholder filed a putative class and derivative action in the Delaware Court of Chancery against Elon Musk and the members of Tesla’s board of directors as then constituted, alleging corporate waste, unjust enrichment and that such board members breached their fiduciary duties by approving the 2018 CEO Performance Award. Trial was held November 14-18, 2022. On January 30, 2024, the Court issued an opinion finding that the 2018 CEO Performance Award should be rescinded. Plaintiff’s counsel filed a brief seeking a fee award of 29,402,900 Tesla shares, plus expenses of $1,120,115.50. Tesla opposed the fee request, and at Tesla’s 2024 Annual Meeting of Stockholders, 72% of the disinterested voting shares of Tesla, excluding shares owned by Mr. Musk and Kimbal Musk, voted to ratify the 2018 CEO Performance Award. Because Tesla’s disinterested stockholders voted to ratify the 2018 CEO Performance Award, Mr. Musk and the other director defendants, joined by Tesla, filed a brief seeking to revise the Court’s January 30, 2024 opinion. On December 2, 2024, the Court issued an opinion denying the motion to revise the Court’s January 30, 2024 opinion and awarded Plaintiff’s counsel fees in the amount of $345 million. A final judgment was entered by the Court, and the director defendants and Tesla appealed the decisions to the Delaware Supreme Court. Tesla and the Director Defendants filed their response briefs on March 11, 2025. Plaintiffs filed their opening brief on April 25, 2025, and reply briefs were filed on May 16, 2025. Oral argument occurred on October 15, 2025. We are awaiting the Delaware Supreme Court’s decision, and if the appeal were unsuccessful, it could result in a material adverse impact on our business and reported earnings due to the uncertainty and potentially significant costs associated with replacing or revising Mr. Musk’s compensation package, the types of which were described in our 2024 proxy statement.
Litigation Related to Directors’ Compensation
On June 17, 2020, a purported Tesla stockholder filed a derivative action in the Delaware Court of Chancery, purportedly on behalf of Tesla, against certain of Tesla’s current and former directors regarding compensation awards granted to Tesla’s directors, other than Elon Musk, between 2017 and 2020. The suit asserts claims for breach of fiduciary duty and unjust enrichment and seeks declaratory and injunctive relief, unspecified damages and other relief. Defendants filed their answer on September 17, 2020.
On July 14, 2023, the parties filed a Stipulation and Agreement of Compromise and Settlement, which does not involve an admission of any wrongdoing by any party. Pursuant to the terms of the agreement, Tesla provided notice of the proposed settlement to stockholders of record as of July 14, 2023. The Court held a hearing regarding the settlement on October 13, 2023, after which it took the settlement and Plaintiff’s counsel fees request under advisement. On January 8, 2025, the Court approved the settlement and awarded Plaintiff’s counsel fees in the amount of approximately $176 million. A final judgment was entered by the Court on January 13, 2025.
The Company disagrees with the amount of attorneys’ fees awarded by the court. On February 10, 2025, Tesla appealed the attorneys’ fee award amount to the Delaware Supreme Court. Tesla did not appeal the Delaware Court of Chancery’s approval of the underlying settlement. Also on February 10, 2025, a single shareholder appealed the approval of the settlement. This shareholder’s appeal does not seek to alter any material terms (e.g., financial contributions or the defendants’ obligations under the Settlement Agreement). The Delaware Court of Chancery had previously rejected this shareholder’s objections when approving the Settlement Agreement. Tesla’s appeal of the attorneys’ fee award and the single shareholder’s appeal have been fully briefed, and oral argument is scheduled for October 29, 2025.
Because neither Tesla’s appeal nor the shareholder’s appeal seeks to vacate the Settlement Agreement or materially modify its terms, the Company implemented the provisions of the Settlement Agreement in May 2025 by cancelling the options requiring cancellation under its terms.
In connection with the settlement, Tesla received $277 million from certain directors and paid Plaintiff’s counsel fees of $176 million (which, as noted above, the Company is appealing) in the three months ended March 31, 2025. We recorded a $31 million reversal of previously recognized stock-based compensation expense in association with the returned awards and increased our provision for income taxes in relation to the return of directors’ compensation. As the settlement was an equity transaction, the net impact to additional paid-in-capital was $110 million in the three months ended March 31, 2025.
Litigation Relating to Potential Going Private Transaction
Between October 17, 2018 and March 8, 2021, seven derivative lawsuits were filed in the Delaware Court of Chancery, purportedly on behalf of Tesla, against Mr. Musk and the members of Tesla’s board of directors, as constituted at relevant times, in relation to statements made and actions connected to a potential going private transaction, with certain of the lawsuits challenging additional Twitter posts by Mr. Musk, among other things. Several of those actions were consolidated. On September 19, 2025, one of the non-consolidated cases was dismissed with prejudice through a stipulation and order. The other cases remain stayed. In addition to these cases, two derivative lawsuits were filed on October 25, 2018 and February 11, 2019 in the U.S. District Court for the District of Delaware, purportedly on behalf of Tesla, against Mr. Musk and the members of the Tesla board of directors as then constituted. Those cases were also consolidated, and on April 25, 2025, were dismissed with prejudice through a stipulation and order.
On October 21, 2022, a lawsuit was filed in the Delaware Court of Chancery by a purported shareholder of Tesla alleging, among other things, that board members breached their fiduciary duties in connection with their oversight of the Company’s 2018 settlement with the SEC, as amended. Among other things, the plaintiff seeks reforms to the Company’s corporate governance and internal procedures, unspecified damages, and attorneys’ fees. The lawsuit has been stayed.
Certain Derivative Lawsuits in Delaware
Before converting from a Delaware to Texas corporation on June 13, 2024, three separate derivative actions brought by purported Tesla stockholders were filed in the Delaware Court of Chancery on May 24, June 10 and June 13, 2024, purportedly on behalf of Tesla, against current and former directors regarding topics involving Elon Musk and others, X Corp. (formerly Twitter) and x.AI. These suits assert various claims, including breach of fiduciary duty and breach of contract, and seek unspecified damages and other relief. On August 6, 2024, the plaintiffs in these three actions moved to consolidate the matters into a single case. The Court consolidated two of the three cases. Tesla and the directors filed motions to dismiss, and oral argument on those motions is scheduled for October 22, 2025.
Litigation and Investigations Relating to Alleged Discrimination and Harassment
On February 9, 2022, the California Civil Rights Department (“CRD,” formerly “DFEH”) filed a civil complaint against Tesla in Alameda County, California Superior Court, alleging systemic race discrimination, hostile work environment and pay equity claims, among others. CRD’s amended complaint seeks monetary damages and injunctive relief. The case is currently in discovery. No trial date is set but is expected to occur during 2026.
Additionally, on June 1, 2022 the Equal Employment Opportunity Commission (“EEOC”) issued a cause finding against Tesla that closely parallels the CRD’s allegations. On September 28, 2023, the EEOC filed a civil complaint against Tesla in the United States District Court for the Northern District of California asserting claims for race harassment and retaliation and seeking, among other things, monetary and injunctive relief. The case is in discovery with no trial date set.
Other Litigation Related to Our Products and Services
We are also subject to various lawsuits that seek monetary and other injunctive relief. These lawsuits include proposed class actions and other consumer claims that allege, among other things, purported defects and misrepresentations related to our products and services. For example, on September 14, 2022, a proposed class action was filed against Tesla, Inc. and related entities in the U.S. District Court for the Northern District of California, alleging various claims about the Company’s driver assistance technology systems under state and federal law. This case was later consolidated with several other proposed class actions, and a Consolidated Amended Complaint was filed on October 28, 2022, which seeks damages and other relief on behalf of all persons who purchased or leased from Tesla between January 1, 2016, to the present. On October 5, 2022, a proposed class action complaint was filed in the U.S. District Court for the Eastern District of New York asserting similar state and federal law claims against the same defendants. On September 30, 2023, the Court dismissed this action with leave to amend the complaint. On November 20, 2023, the plaintiff moved to amend the complaint, which Tesla opposed. On August 8, 2024, the Court denied the plaintiff’s motion for leave to file an amended complaint and entered judgment for Tesla. On September 5, 2024, the plaintiff filed a notice of appeal to United States Court of Appeals for the Second Circuit, and oral argument occurred on March 20, 2025. On April 25, 2025, the Second Circuit affirmed the lower court’s order and dismissed the case. On March 22, 2023, the plaintiffs in the Northern District of California consolidated action filed a motion for a preliminary injunction to order Tesla to (1) cease using the term “Full Self-Driving Capability” (FSD Capability), (2) cease the sale and activation of FSD Capability and deactivate FSD Capability on Tesla vehicles, and (3) provide certain notices to consumers about proposed court-findings about the accuracy of the use of the terms Autopilot and FSD Capability. Tesla opposed the motion. On September 30, 2023, the Court denied the request for a preliminary injunction, compelled four of five plaintiffs to arbitration, and dismissed the claims of the fifth plaintiff with leave to amend the complaint. On October 31, 2023, the remaining plaintiff in the Northern District of California action filed an amended complaint, which Tesla moved to dismiss, and on May 15, 2024, the Court granted in part and denied in part Tesla’s motion. On May 6, 2025, the plaintiff filed a motion for class certification, which Tesla opposed, and on August 18, 2025, the Court certified a class comprised of California consumers who are not subject to an arbitration agreement. On October 2, 2023, a similar proposed class action was filed in San Diego County Superior Court in California. Tesla subsequently removed the San Diego County case to federal court and on January 8, 2024, the federal court granted Tesla’s motion to transfer the case to the U.S. District Court for the Northern District of California. Tesla moved to compel arbitration, which the plaintiff did not oppose, and on June 27, 2024, the Court stayed the case pending arbitration.
On February 27, 2023, a proposed class action was filed in the U.S. District Court for the Northern District of California against Tesla, Inc., Elon Musk and certain current and former Company executives. The complaint alleges that the defendants made material misrepresentations and omissions about the Company’s Autopilot and FSD Capability technologies and seeks money damages and other relief on behalf of persons who purchased Tesla stock between February 19, 2019, and February 17, 2023. An amended complaint was filed on September 5, 2023, naming only Tesla, Inc. and Elon Musk as defendants. On November 6, 2023, Tesla moved to dismiss the amended complaint. On September 30, 2024, the Court granted Tesla’s motion to dismiss without prejudice. On November 26, 2024, the court issued a final judgment in Tesla’s favor, and on December 23, 2024, the plaintiffs filed a notice of appeal to the United States Court of Appeals for the Ninth Circuit. The appeal has been fully briefed, and oral argument is scheduled for November 20, 2025.
On August 4, 2025, a proposed class action was filed in the U.S. District Court Western District of Texas against Tesla, Inc., Elon Musk, and certain current and former Company executives. The complaint alleges that the defendants violated federal securities laws through alleged material misrepresentations in public filings regarding the effectiveness of Autopilot, Full-Self Driving (Supervised), and Robotaxi. The complaint seeks monetary damages and other relief on behalf of persons who purchased Tesla stock between April 19, 2023, and June 22, 2025.
The Company intends to vigorously defend itself in these matters; however, we cannot predict the outcome or impact. We are unable to reasonably estimate the possible loss or range of loss, if any, associated with these claims, unless noted.
Benavides v. Tesla, Inc.
On August 1, 2025, a jury in the U.S. District Court for the Southern District of Florida reached a verdict in a product liability trial relating to certain allegations regarding the use of our Autopilot technology in a 2019 accident that resulted in a fatality and injuries. The jury awarded $129 million in total compensatory damages, finding the driver 67% at fault and the Company 33% at fault. The jury also awarded $200 million in punitive damages. On September 15, 2025, the Company filed a post-trial motion for judgment as a matter of law or, in the alternative, a new trial on all issues or an amended judgment to lesser compensatory and punitive damages. Although we believe that the facts and law do not justify the damages awarded, the Company has recorded an immaterial accrual.
We have experienced, and we expect to continue to face, claims and regulatory scrutiny arising from or related to misuse or claimed failures or alleged misrepresentations of new technologies that we are pioneering. We are unable to reasonably estimate the possible loss or range of loss, if any, associated with these claims.
Certain Investigations and Other Matters
We regularly receive requests for information, including subpoenas, from regulators and governmental authorities such as the National Highway Traffic Safety Administration, the National Transportation Safety Board, the Securities and Exchange Commission (“SEC”), the Department of Justice (“DOJ”), and various local, state, federal, and international agencies. The ongoing requests for information include topics such as operations, technology (e.g., vehicle functionality, vehicle incidents, Autopilot and FSD Capability and Robotaxi), compliance, finance, data privacy, and other matters related to Tesla’s business, its personnel, and related parties. We routinely cooperate with such formal and informal requests for information, investigations, and other inquiries. To our knowledge no government agency in any ongoing investigation has concluded that any wrongdoing occurred. We cannot predict the outcome or impact of any ongoing matters. Should the government decide to pursue an enforcement action, there exists the possibility of a material adverse impact on our business, results of operations, prospects, cash flows, financial position or brand.
We are also subject to various other legal proceedings, risks and claims that arise from the normal course of business activities. For example, on August 5, 2023, a putative class action was filed in the United States District Court for the Northern District of California, purportedly on behalf of all U.S. individuals impacted by a data misappropriation incident earlier that year. Several additional lawsuits followed, each asserting claims under various state laws and seeking monetary damages and other relief. If an unfavorable ruling or development were to occur in these or other possible legal proceedings, risks and claims, there exists the possibility of a material adverse impact on our business, results of operations, prospects, cash flows, financial position or brand.
Note 11 – Variable Interest Entity Arrangements
The aggregate carrying values of the variable interest entities’ assets and liabilities, after elimination of any intercompany transactions and balances, in the consolidated balance sheets were as follows (in millions):
| September 30, 2025 | December 31, 2024 | ||||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 75 | $ | 49 | |||||||
| Accounts receivable, net | 21 | 18 | |||||||||
| Prepaid expenses and other current assets | 319 | 276 | |||||||||
| Total current assets | 415 | 343 | |||||||||
| Operating lease vehicles, net | 301 | 392 | |||||||||
| Solar energy systems, net | 2,209 | 2,310 | |||||||||
| Other non-current assets | 198 | 183 | |||||||||
| Total assets | $ | 3,123 | $ | 3,228 | |||||||
| Liabilities | |||||||||||
| Current liabilities | |||||||||||
| Accrued liabilities and other | $ | 47 | $ | 32 | |||||||
| Deferred revenue | 6 | 6 | |||||||||
| Current portion of debt and finance leases | 1,646 | 2,114 | |||||||||
| Total current liabilities | 1,699 | 2,152 | |||||||||
| Deferred revenue, net of current portion | 62 | 71 | |||||||||
| Debt and finance leases, net of current portion | 1,680 | 1,834 | |||||||||
| Total liabilities | $ | 3,441 | $ | 4,057 |
Note 12 – Segment Reporting and Information about Geographic Areas
We have two operating and reportable segments: (i) automotive and (ii) energy generation and storage. The following table presents revenues, cost of revenues and gross profit by reportable segment (in millions):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Automotive segment | |||||||||||||||||||||||
| Revenues | $ | 24,680 | $ | 22,806 | $ | 60,992 | $ | 64,958 | |||||||||||||||
| Cost of revenues (1) | $ | 20,699 | $ | 18,534 | $ | 51,611 | $ | 53,555 | |||||||||||||||
| Gross profit | $ | 3,981 | $ | 4,272 | $ | 9,381 | $ | 11,403 | |||||||||||||||
| Energy generation and storage segment | |||||||||||||||||||||||
| Revenues | $ | 3,415 | $ | 2,376 | $ | 8,934 | $ | 7,025 | |||||||||||||||
| Cost of revenues (2) | $ | 2,342 | $ | 1,651 | $ | 6,230 | $ | 5,157 | |||||||||||||||
| Gross profit | $ | 1,073 | $ | 725 | $ | 2,704 | $ | 1,868 |
(1)Depreciation and amortization included in Cost of revenues for the automotive segment for the three and nine months ended September 30, 2025 was $959 million and $2.80 billion, respectively. Depreciation and amortization included in Cost of revenues for the automotive segment for the three and nine months ended September 30, 2024 was $938 million and $2.70 billion, respectively.
(2)Depreciation and amortization included in Cost of revenues for the energy generation and storage segment for the three and nine months ended September 30, 2025 was $92 million and $262 million, respectively. Depreciation and amortization included in Cost of revenues for the energy generation and storage segment for the three and nine months ended September 30, 2024 was $95 million and $280 million, respectively.
The following table presents revenues by geographic area based on the sales location of our products (in millions):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| United States | $ | 14,598 | $ | 12,584 | $ | 36,740 | $ | 35,602 | |||||||||||||||
| China | 5,653 | 5,665 | 14,261 | 14,893 | |||||||||||||||||||
| Other international | 7,844 | 6,933 | 18,925 | 21,488 | |||||||||||||||||||
| Total | $ | 28,095 | $ | 25,182 | $ | 69,926 | $ | 71,983 |
The following table presents long-lived assets by geographic area (in millions):
| September 30, 2025 | December 31, 2024 | ||||||||||
| United States | $ | 34,797 | $ | 32,461 | |||||||
| Germany | 4,765 | 4,175 | |||||||||
| Other international | 4,518 | 4,124 | |||||||||
| Total | $ | 44,080 | $ | 40,760 |
The following table presents inventory by reportable segment (in millions):
| September 30, 2025 | December 31, 2024 | ||||||||||
| Automotive | $ | 9,381 | $ | 9,988 | |||||||
| Energy generation and storage | 2,895 | 2,029 | |||||||||
| Total | $ | 12,276 | $ | 12,017 |
Note 13 – Restructuring and Other
In the third quarter of 2025, we initiated certain actions in order to reduce costs and improve efficiency through convergence of AI chip design efforts. As a result, we recognized $238 million of expenses, within our automotive segment, related to charges for supercomputer assets, contract terminations and employee terminations.
In the second quarter of 2024, we initiated and substantially completed certain restructuring actions to reduce costs and improve efficiency. As a result, we recognized $583 million of employee termination expenses in Restructuring and other in our consolidated income statement.
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