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Shortlisted candidates will be contacted and will then be required to submit two letters of recommendation. Interviews will be conducted on the Virtual European Job Market and on a rolling basis until the position is filled. For any further information or clarification, please contact job eiee.

We will be filling at least three positions with an expected start date of July 1, Our excellence can only be fully realized by faculty, students, and staff who share our commitment to these values. We ask that all applicants include a Statement of Contributions to Diversity, Equity, and Inclusion with their application package.

Berkeley Haas is committed to addressing the family needs of faculty, including dual career couples and single parents. We are also interested in candidates who have had non-traditional career paths or who have taken time off for family reasons, or who have achieved excellence in careers outside academia. Berkeley Haas seeks candidates who will contribute to the research, teaching, and service missions of the Business and Public Policy group.

Our core themes involve political institutions, public policy, norms and values, the law, and the many private and public governance arrangements that shape societal outcomes. Berkeley Haas seeks candidates who will help advance the research, teaching, and service missions of the Economic Analysis and Policy Group. Successful candidates will have demonstrated a strong record and promise for continued productivity. Berkeley Haas seeks candidates who will help advance the research, teaching, and service missions of the Finance group.

Candidates conducting research in any area of Finance are encouraged to apply. Basic qualifications: Applicants must have a PhD or equivalent international degree or enrolled in a PhD or equivalent international degree granting program at the time of application.

Preferred qualifications: We are especially interested in applicants with a PhD in Business, Business and Public Policy, Economics, Finance, or a closely related field. We prefer applicants who currently have a PhD or who have advanced to PhD candidacy and will complete the doctoral degree or equivalent degree within six months of the start date. All letters will be treated as confidential per University of California policy and California state law.

Please refer potential referees, including when letters are provided via a third party i. All qualified applicants will receive consideration for employment without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, disability, age or protected veteran status.

These awards are designed to promote high-quality research on the challenges and institutions of international economic diplomacy in a changing world. Research projects that seek to understand the causes and consequences of the institutions of economic globalization e. Commercial diplomats operate within a set of domestic and international institutions that governs their behavior in international negotiations. But we know little about the specifics of these rules and procedures, how they came into being, how they vary over time and across countries, and how they affect economic outcomes.

Postdoctoral research on the institutions of economic globalization can help answer questions about the welfare and distributional consequences of these institutions and, ultimately, result in the better design of these institutions. Outstanding scholars anywhere in the world are eligible to apply. The Center invites applications from candidates with a background in economics, political science, economic history, legal history, and other disciplines bearing on the study of economic diplomacy.

Selected candidates will be required to be in residence for the duration of the appointment, health conditions permitting, and to interact with faculty and Ph. D students, giving at least one research talk. Selected postdoctoral scholars are also expected to attend CCD events and related seminars, and to post their research on the CCD website. Applicants are required to hold a Ph.

Cover letter explaining the candidate's scholarly career, prospective or actual doctoral defense date, and academic interests. Applications will be reviewed on a rolling basis, but it is highly recommended that you apply before May 15, for full consideration. To apply, send a message to lisalee ucsd. Banco de Portugal is the central bank of Portugal and a member of the Eurosystem.

The Economics and Research Department combines economic research with the policy tasks related to its mission as a member of the Eurosystem, and to the analysis of the Portuguese economy. The Department has a group of research economists whose principal task is to improve knowledge in topics relevant for a central bank.

Other fields related to central banking, such as macro, will also be considered;. Applicants should submit a CV, three letters of recommendation, a research paper, and a brief letter stating their professional interests and motivation for the application. Interviews will take place during the European Job Market, which will take place online between 14 and 18 December The Cornell SC Johnson College of Business at Cornell University invites applications from qualified individuals for a tenure track faculty position for an economist in strategy and business economics, intended for placement in the Samuel Curtis Johnson Graduate School of Management beginning July Rank is open assistant, associate and full professor with a strong preference for prior research record, and experience teaching Microeconomics.

Salary and rank are commensurate with experience and qualifications. The position will be based in Ithaca, NY. High-quality academic research to be placed in leading economics journals, and preferably of theoretical or empirical applied Teaching graduate students, primarily MBA-level Microeconomics Service to the School, Area, College and University.

Candidates must have a PhD in Economics by the time they start in the position. The search committee will be reviewing applications on a rolling basis; the position will remain open until filled. Interviews for select candidates will take place by zoom.

Diversity and Inclusion are a part of Cornell University's heritage. Cornell University actively seeks to meet the needs of dual-career couples with its Dual Career program, and is a member of the Upstate New York Higher Education Recruitment Consortium that assists with dual career searches. Cornell University is an innovative Ivy League university and a great place to work. Our inclusive community of scholars, students and staff impart an uncommon sense of larger purpose and contribute creative ideas to further the university's mission of teaching, discovery and engagement.

If you require an accommodation for a disability in order to complete an employment application or to participate in the recruiting process, you are encouraged to contact Cornell University's Department of Inclusion and Workforce Diversity at voice , fax , or email at owdi cornell. For general questions about the position or the application process, please contact the Recruiter listed in the job posting.

Applicants that do not have internet access are encouraged to visit your local library, or local Department of Labor. You may also visit the office of Workforce Recruitment and Retention Monday - Friday between the hours of a. Please read the required Notice to Applicants statement by clicking here. This notice contains important information about applying for a position at Cornell as well as some of your rights and responsibilities as an applicant.

We also recognize a lawful preference in employment practices for Native Americans living on or near Indian reservations. Our inclusive community of scholars, students, and staff impart an uncommon sense of larger purpose, and contribute creative ideas to further the university's mission of teaching, discovery, and engagement.

The field is open. Successful candidates for our faculty positions will demonstrate evidence of a commitment to advancing equity and inclusion. For more information about the position, including required qualifications and application materials, go to:. Please direct questions to: facrecruit-econ berkeley. All qualified applicants will receive consideration for employment without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, disability, age, or protected veteran status.

All rights reserved. We are inviting applications from researchers in either or both of the following two areas: 1 industrial organization and business strategy; and 2 international business and international trade. Applicants should demonstrate an interest in and potential to conduct high quality research in a related field and be very close to completing or have completed a Ph.

We welcome applications from outstanding candidates who demonstrate a strong interest in business decision-making. Overlapping interests in real estate and urban economics, competition policy, innovation, or public policy would be welcome. Duties include developing and maintaining an active research program aimed at making a significant contribution to the profession, teaching in the Undergraduate, MBA and Ph.

Teaching and service requirements are similar to other research-intensive universities. The Division consists of economists who conduct research in areas such as international trade, industrial organization, public policy, innovation, and urban and real estate economics. A completed application will include a cover letter, a curriculum vitae, one or two research papers, a record of teaching effectiveness, and three letters of reference. The deadline for applications is Friday, December 4, ; however, applications may be considered after this date until the position is filled.

This replaces the in-person interviews that are normally conducted at the ASSA meetings. Following these interviews, candidates who move to the final round of consideration may be asked to visit in person if public health conditions and travel restrictions allow at that time. Subject to budgetary approval, the position starts July 1, UBC hires on the basis of merit and is strongly committed to equity and diversity within its community.

We especially welcome applications from visible minority group members, women, Aboriginal persons, persons with disabilities, persons of minority sexual orientations and gender identities, and others with the skills and knowledge to productively engage with diverse communities. Applicants to faculty positions at the University of British Columbia are asked to complete the following equity survey.

Your participation is voluntary and confidential. The information will not be used to determine eligibility for employment. The survey takes only a few minutes. Chapin Hall is an independent policy research center at the University of Chicago that provides public and private decision-makers with rigorous research and achievable solutions to support them in improving the lives of children, families, and communities.

Chapin Hall partners with policymakers, practitioners, and philanthropists at the forefront of research and policy development by applying a unique blend of scientific research, real-world experience, and policy expertise to construct actionable information, practical tools, and, ultimately, positive change for children, youth, and families. Established in , Chapin Hall's areas of research include child welfare systems, community capacity to support children and families, and youth homelessness.

For more information about Chapin Hall, visit www. Also take a moment and view this video clip from various staff regarding why they enjoy working at Chapin Hall. Chapin Hall at the University of Chicago is seeking a full-time Senior Researcher applied micro economist to contribute methodological and strategic guidance to empirical projects related to early childhood, programs for school-aged youth, family self-sufficiency, and related social policy topics which have an emphasis on ensuring wellbeing and opportunity for disadvantaged communities.

Chapin Hall is committed to ensuring the health and safety of our staff. Centers for Disease Control and Prevention guidance. During this time travel is temporarily suspended. The physical demands described here are representative of those that must be met by an employee to successfully perform the essential functions of this job.

Reasonable accommodations may be made to enable individuals with disabilities to perform the essential functions. Pre-employment background checks are required for all Chapin Hall at the University of Chicago positions. Formal expressions of interest are accepted online only. A cover letter, resume, writing sample, and reference contact information are required to be considered for this position.

Individuals in need of reasonable accommodations to complete the application process should contact Human Resources by calling , or by sending an email to humanresources chapinhall. Chapin Hall at the University of Chicago is an Affirmative Action, Equal Opportunity Employer that values and actively seeks diversity in its workforce. All qualified applicants will receive consideration for employment without regard to race, color, religion, sex, national origin, status as an individual with disability, age, protected veteran status, or any other status protected by law.

Applicants should have completed or be nearing completion of a Ph. Duties include developing and maintaining an active research program aimed at making a significant contribution to the profession, teaching in the undergraduate and graduate programs, supervising Ph. UBC Sauder's Finance Division ranks among the leading finance groups in the world in terms of both research and teaching. The research interests of the Finance Division cover most major topics and methodologies in financial economics.

More information about the Finance Division can be found on its website at: www. Appointment is available July 1, or January 1, , and is subject to final budgetary approval. Equity and diversity are essential to academic excellence. An open and diverse community fosters the inclusion of voices that have been underrepresented or discouraged. We encourage applications from members of groups that have been marginalized on any grounds enumerated under the B.

All qualified candidates are encouraged to apply; however, Canadians and permanent residents will be given priority. A completed application will include a cover letter, a current curriculum vitae, a record of teaching effectiveness, as well as one or two recent publications or working papers and three letters of reference. The deadline for applications is November 25, ; however, applications may be considered after this date until the position is filled.

The Department of Economics seeks to recruit an Assistant Professor of Economics tenure-track whose research interests focus on macroeconomics, beginning July 1, Candidates should have a Ph. Applications for Assistant Professor must be received by November 15, to be guaranteed full consideration, but will be accepted until the position is filled.

The Department of Economics seeks to recruit an Assistant Professor of Economics tenure-track whose research interests focus on applied microeconomics, including development, public, IO, urban, environmental or labor as well as applied econometrics, beginning July 1, Qtron Investments is looking for experienced research professionals with intellectual curiosity and devotion, those who strive to question and move boundaries — Ph.

You will work as a member of the investment team to advance investment strategies, build stock-selection models, and assist in portfolio management. This opportunity represents an exciting career path in the investment field for scientists who wish to disrupt the very core of the investment industry. Analyze industry-specific and macroeconomic data to facilitate investment decisions.

Experience with financial modeling and quantitative back-testing. Knowledge of empirical alpha factor research, financial statement analysis, forecasting methodologies, and public equity markets. Qualified candidates, please, contact hcm qtroninvestments. For more information, please visit us at www. Founded in , Qtron Investments is a growing quantitative equity manager that serves institutional clients in the Global Equity space.

Innovation and Technology are at the centers of our business. We seek to harness competitive advantages through creative research, technical knowhow, and investment acumen. Qtron Investments is looking for professionals with intellectual curiosity, responsibility, and devotion.

The Econometric Institute at Erasmus University Rotterdam invites applications for a full-time tenure-track faculty position at the Assistant Professor level starting in September Applicants should have or be very near completion of a PhD by the start date. Candidates should demonstrate excellence in research and teaching and a commitment to university service.

The compensation package is competitive at the European level and includes several secondary benefits. Favorable tax agreements may apply to non-Dutch applicants. The Econometric Institute has a long and strong research tradition in econometrics, statistics, data science, and operations research, with 50 faculty members across these areas.

Research at the Econometric Institute focuses on developing novel methods in econometrics and operations research, and on applications of such methods in finance, marketing, macroeconomics, transportation and logistics. ESE is one of the largest and most successful economics schools in Europe, offering excellent research facilities to its faculty.

The school offers an international bachelor and master program in econometrics and operations research, attracting bachelor and new master students per year. For inquiries please contact Dick van Dijk djvandijk ese. Consideration of candidates will begin immediately and will continue until the position is filled.

The application should include a cover letter, CV, a job market paper, three letters of reference or alternatively a list of three names , and copies of recent teaching evaluations if any. The Econometric Institute at Erasmus University Rotterdam invites applications for three-year non-tenure-track faculty positions at the Assistant Professor level starting in September or a mutually agreed date. There are multiple positions in the areas of econometrics, quantitative finance, quantitative marketing, operations research, computational statistics, machine learning, data science, and computer science.

Massachusetts Institute of Technology MIT in Cambridge, Massachusetts has openings at the junior tenure-track faculty level beginning July 1, , or as soon thereafter as possible. No economic field constraints. Will consider only candidates with a PhD in Economics by start date of employment, and with strong recommendations from graduate school faculty and established potential in research and teaching.

Responsibilities include teaching 1 subject per term the first year and 1. Applications must be received by November 15, Interviews will be conducted virtually starting January 6, The School of Economics and Finance at Queen Mary University of London invites applications from scholars of international distinction for appointments in finance.

Positions are available at the academic levels of Reader and Professor equivalent to Associate Professor and Professor. You should also have experience of, delivering teaching and assessment. The School of Economics and Finance is highly regarded as one of the top economics and finance departments in the UK and ranks 1st among research-intensive London institutions for overall student satisfaction in Economics, according to the National Student Survey.

We are renowned for excellence in research, teaching, and student experience. At Queen Mary University of London, we believe that a diversity of ideas helps us achieve the previously unthinkable. We continue to embrace diversity of thought and opinion in everything we do, in the belief that when views collide, disciplines interact, and perspectives intersect, truly original thought takes form.

In addition, we offer a range of work life balance and family friendly, inclusive employment policies, flexible working arrangements, and campus facilities including an on-site nursery at the Mile End campus. The posts are based at the Mile End Campus in London.

They are full time, permanent appointments, with an expected start date of September Professorial salaries will be commensurate with level, skills and experience. Reasonable adjustments will be made at each stage of the recruitment process for any candidate with a disability.

We are open to considering applications from candidates wishing to work flexibly. We particularly welcome applications from women and BAME applicants who are currently underrepresented in the School. To apply for the position, candidates must upload their curriculum vitae and complete an on-line application form on this link. Please indicate the level of the role you are applying for in the application form.

Review of applications will be ongoing and continue until the position is filled, and no later than June 1, We invite outstanding candidates in all fields, especially in applied economics for one of the positions. SAS operates in English and currently employs 29 full-time faculty from 17 countries , most of whom received their PhDs from universities top-ranked globally.

Teaching at SAS involves only small classes 20 students max and remarkable flexibility in creating your own electives. Knowledge of Russian is NOT required. Normally, we offer one-year or three-year full-time renewable contracts starting in August with no limit to the number of renewals.

We can also consider suitable and interested candidates for an initial visiting professor appointment as early as Spring Salaries are internationally competitive. We provide research allowance, free health insurance, as well as an extensive support of our designated staff members, who can help new faculty members with such things as settling in Tyumen or applying for grants. Candidates should send their CV, job market paper, and a cover letter to job.

Junior applicants should also request 3 recommendation letters to be sent to the same email address. The cover letter should explicitly detail interdisciplinary research interests of the candidate and how they can manifest in SAS. Initial interviews will be conducted online; short-listed candidates will be invited for a campus visit. All inquiries regarding this job posting should be addressed to job.

To apply, send a message to job. The Faculty of Arts and Social Sciences at Sabanci University is seeking applicants for a full-time faculty position at any rank. While a priority will be given to candidates specializing in Macroeconomics, strong candidates in all fields will also be considered. Preferred candidate is expected to demonstrate a strong commitment to scholarly research and high-quality teaching.

The medium of instruction at Sabanci University is English. Employment starts in September The search committee will contact selected candidates for online interviews. A complete application package includes a cover letter, CV, research papers and 3 recommendation letters.

The application deadline is December 1, The Department of Economics at Boston College invites applications for two tenure-track positions beginning in Fall The first position is for a labor economist. We are especially interested in candidates at the level of Associate or Full Professor, who can provide intellectual leadership in labor and related fields across applied microeconomics, but candidates at the level of Assistant Professor will also be considered.

The second position is at the level of Assistant Professor. We are interested in candidates in applied microeconomics, particularly in labor, health, education, development, and public economics. All candidates will teach in the undergraduate and Ph. To apply, please submit a cover letter, curriculum vitae, job market paper, and arrange to have three letters of recommendation sent. Boston College is a Jesuit, Catholic university that strives to integrate research excellence with a foundational commitment to formative liberal arts education.

We encourage applications from candidates who are committed to fostering a diverse and inclusive academic community. Both junior and senior candidates are invited to apply. Candidates should show strong research potential and ability to teach at undergraduate and postgraduate levels. Junior applicants must have a completed Ph. Applications from all fields of economics are accepted. For more information contact Ebru Voyvoda at voyvoda metu.

Candidates are expected to complete their Ph. The Finance Department has a total of 19 permanent faculty members in Paris and Singapore and is strongly dedicated to research. ESSEC offers training in finance and business administration at all levels undergraduate, master and Ph.

Courses are taught in English. We have multiple job openings, and the priority will be given to candidates with research areas in Macroeconomics, Finance and Applied Microeconomics. The positions are open to all nationalities, and the knowledge of Russian is not required as teaching and research are conducted in English. Please indicate your interest in the cover letter.

Candidates must hold a Ph. The successful candidate is expected to produce high-quality research publishable in reputable peer-reviewed journals. Senior candidates must have demonstrated excellence in research and teaching. The university offers health insurance free of charge and language assistance; travel support and other research assistance are generous.

Since we have heavy emphasis placed on high quality research, the teaching load of newly hired faculty is relatively low and service is minimal. Please submit by the indicated deadlines i a CV, ii a statement of research interests, iii your job market paper, iv at least 3 reference letters and v a cover letter.

Optionally, you may submit additional papers. More information about the university is available at www. For any queries, please contact Mariya Teteryatnikova at mteteryatnikova hse. Toggle navigation Main menu. Log in to see all active positions and to submit an application. Map of all positions log in to see more. Ad title. Sort by date posted, earliest first date posted, latest first posting end date, earliest first posting start date, latest first.

When the page was loaded, it was UTC. Featured advertisement. Applicants in all areas of finance are invited to apply. Location of job: No. Application deadline: 30 Oct midnight UTC. Economist see ad for location Flexible start date. European Competition Policy practice Compass Lexecon. To apply for this position, log in and choose your Applicant role or, if you have no account, create one.

Location of job: See advertisement. Application deadline: 1 Oct midnight UTC. Duration: 1 year. Governance Lab. Postdoctoral Scholar Political Economy. Responsibilities: Working with international researchers and in-country teams to help identify and conduct scoping for research questions across broad themes of federalisation, economic growth, and inclusion.

Oversee field-based team to manage research project activities, including intervention implementation, and contribute to field-based scoping, survey design, and survey testing. Drafting and finalizing research documents in consultation with principal investigators; may include scoping plans, questionnaires, literature reviews, as well as synthesizing findings into summaries for both academic and non-academic audiences. Identifying and liaising with potential partners and stakeholders, including governments,development organizations, and other researchers.

Manage and supervise technical aspects of select research projects in collaboration with the research team. Carry out data analysis under the direction of senior researchers using statistical and econometric tools. Provide appropriate inputs and support for administrative requirements of the project portfolio, upon request, which may include financial management, budgeting, procurement, contract set-up and compliance, grant reporting, deliverable tracking, etc.

Manage relationships with funding organizations and partner institutions; work with partners inthe government to set strategic priorities as well as coordinate project administration and logistics. Support with publication of research articles and policy briefs, and other such publications, as directed by lead researchers. Support the team in conducting and leading research and insights dissemination activities such as seminars, webinars, etc.

Supervision and mentoring of junior research staff. Other tasks, as required. Basic Qualifications: Nepali language skills are a must. An in-depth understanding of key frameworks in development economics and political economy. A PhD in political science, economics, public policy, or a related field such as social anthropology of development.

Strong quantitative research skills including comfort with analyzing large primary and administrative data sets using STATA, R, or python. Excellent oral and written English communication skills essential. Excellent attention to detail.

Solid understanding of research project design and processes, experience with various identification strategies including RCTs. Preferred Qualifications: Previous experience of working in Nepal or engaging with Nepal-based projects. Experience of conducting complex and long-term research engagements in developing countries Nepal strongly preferred. Understanding of Nepali history and culture preferred, as well as a deep interest in developing this expertise is a must.

What we offer: A competitive salary by local standards The opportunity to develop research skills in the field A dynamic and engaging environment which involves multiple stakeholders An opportunity to grow within the organization An opportunity to directly influence policies in Nepal Regular travel within Nepal How to Apply: If you are interested in this position, please email contact govlab. Postdoctoral Scholar Marketing. Preferred Knowledge and Skills The ideal candidate for this position will be quantitatively trained with expertise in statistical and econometric methodologies, and with a solid understanding of causal inference and social science methods.

Knowledge of structural econometric methods, a plus. Experience with large datasets and interest in consumer behavior, e-commerce and related business questions PhD degree or combination of education and relevant experience in a quantitative discipline such as quantitative marketing, economics, operations research, statistics or engineering data-science and related disciplines.

Occasionally use a telephone. Rarely writing by hand. Promote Culture of Safety: Demonstrates commitment to personal responsibility and value for safety; communicates safety concerns; uses and promotes safe behaviors based on training and lessons learned.

It welcomes applications from women, members of minority groups, veterans, persons with disabilities, and others who would bring additional dimensions to the university's research and teaching mission. Economics Boston University. Lecturer Any field. Duration: 6 years.

Assistant Professor Finance. Andreas Knabe Postfach Magdeburg Germany To apply for this position, log in and choose your Applicant role or, if you have no account, create one. Interviews: Interviews will be conducted remotely by video starting December, Application deadline: 1 Apr midnight UTC.

Research Federal Reserve Bank of Philadelphia. Application deadline: 1 Mar midnight UTC. Duration: 3 years. Postdoctoral Scholar Any field. Complete applications include: 1. Cover letter 2. Job market papers 4. Application deadline: 31 Jan midnight UTC. Assistant Professor Any field. Associate Professor Microeconomics.

Smith School of Business Queen's University. Assistant Professor Business Economics. Qualifications Candidates must have a PhD or equivalent degree in management or a cognate discipline with a record of teaching, research, and service that is tracking toward a successful tenure application. Compensation Salary will be commensurate with qualifications and experience. The City The University is situated on the traditional territories of the Haudenosaunee and Anishinaabe, in historic Kingston on the shores of Lake Ontario.

How to Apply The effective date of the appointment will be July 01, Note: only selected candidates will be contacted for interviews. School of Environment and Sustainability University of Saskatchewan. Additionally, please submit 1 the names of three references who can speak to your research and teaching abilities; 2 a short statement on your teaching philosophy and experience; and, 3 a page statement describing your research agenda, including accomplishments to date, objectives for the next 5 years, strategies for community engagement, and plans for external funding, in confidence to: Dr.

Other nonacademic Urban; Rural; Regional Economics. Application deadline: 24 Dec midnight UTC. How to Apply The effective date of the appointment will be July 1, Interviews: Interviews will be conducted remotely by video starting January, Federal Reserve Bank of Dallas.

Application deadline: 18 Dec midnight UTC. Duration: 2 years. Application requirements A curriculum vitae An academic paper A research statement Three recommendation letters To apply for this position, log in and choose your Applicant role or, if you have no account, create one. Teaching is optional. Knowledge of Italian is not required. For additional information or any inquiry please write to postdoc dse.

Location of job: Via Cantarane 24, Verona, , Italy map. Application deadline: 15 Dec midnight UTC. Hertie School. Please upload the documents in the following order: Motivation letter CV including publication list and the names of two references A diversity statement of no more than one page One or more writing samples.

Location of job: Friedrichstrasse , Berlin, , Germany map. Economics University of Nottingham. School of Economics, University of Nottingham Academic Vacancies The School of Economics at the University of Nottingham carries out world-leading research and teaching with an international reputation for excellence across all areas of economics. In your application, please indicate your availability to attend either event. Interviews for shortlisted candidates will be conducted remotely by video in early Application deadline: 30 Nov midnight UTC.

Other nonacademic Any field. The Business School of the University of Amsterdam is seeking candidates for the following position: - Assistant Professor of Finance tenure track , or - Associate Professor of Finance tenured We welcome applications from highly qualified candidates in all major fields in finance. The initial contract is for a two-year period, which can be renewed. Application procedure: Applications will be accepted online through www.

Application deadline: 25 Nov midnight UTC. Postdocs are also expected to plan and regularly participate in all weekly seminars and research colloquia, including the: 1. Bi-weekly internal meetings to workshop research; 2. Monthly Foreign Policy speaker series with policymakers in Washington D. Awards will be announced in March Joint Research Center European Commission. Application deadline: 15 Nov midnight UTC. Other nonacademic Environmental; Ag.

Detailed job descriptions: Climate Economics Integrated Assessment Modelling : The institute maintains a series of IAMs focused on climate economic analysis, and is looking for a researcher focused on model development, including: energy systems modelling, macro-economic modelling, distributional impacts, technological change, uncertainty and decision theory. Deadline: March 31, To apply for this position, log in and choose your Applicant role or, if you have no account, create one.

Location of job: Via Bergognone 34, Milan, , Italy map. Application deadline: 30 Sep midnight UTC. Assistant Professor, Finance Berkeley Haas seeks candidates who will help advance the research, teaching, and service missions of the Finance group. Qualifications Basic qualifications: Applicants must have a PhD or equivalent international degree or enrolled in a PhD or equivalent international degree granting program at the time of application. Please contact [facultyrecruitment haas.

Duration: 12 months. To apply, please provide the below by email to Lisa Lee at lisalee ucsd. Current curriculum vitae including publications. One writing sample limit of pages. Three letters of recommendation sent directly to Lisa Lee at lisalee ucsd. Banco de Portugal. Location of job: Banco de Portugal - Dep. Application deadline: 31 Jul midnight UTC. High-quality academic research to be placed in leading economics journals, and preferably of theoretical or empirical applied Teaching graduate students, primarily MBA-level Microeconomics Service to the School, Area, College and University Job Qualifications: Candidates must have a PhD in Economics by the time they start in the position.

Application Instructions: The search committee will be reviewing applications on a rolling basis; the position will remain open until filled. Employment Assistance: If you require an accommodation for a disability in order to complete an employment application or to participate in the recruiting process, you are encouraged to contact Cornell University's Department of Inclusion and Workforce Diversity at voice , fax , or email at owdi cornell.

Notice to Applicants: Please read the required Notice to Applicants statement by clicking here. Location of job: East Ave. Economics University of California, Berkeley. Assistant Professor Industrial Organization. Application deadline: 30 Jun midnight UTC. Chapin Hall. Other nonacademic Microeconomics. Must be able to remain in a stationary position for extended periods of time.

Must be able to operate a computer extensively for four 4 or more hours per day. Economics Brown University. Assistant Professor Macroeconomics; Monetary. Qtron Investments. Econometrics Erasmus University Rotterdam. About the Econometric Institute The Econometric Institute has a long and strong research tradition in econometrics, statistics, data science, and operations research, with 50 faculty members across these areas.

Application Procedure For inquiries please contact Dick van Dijk djvandijk ese. Department of Economics Massachusetts Institute of Technology. About the School The School of Economics and Finance is highly regarded as one of the top economics and finance departments in the UK and ranks 1st among research-intensive London institutions for overall student satisfaction in Economics, according to the National Student Survey.

Application process To apply for the position, candidates must upload their curriculum vitae and complete an on-line application form on this link. Informal enquiries about the position please contact Derek Judge at d. Application deadline: 1 Jun midnight UTC. School of Advanced Studies University of Tyumen. Offer Normally, we offer one-year or three-year full-time renewable contracts starting in August with no limit to the number of renewals. Applications Review of applications will begin immediately, and the positions will remain open until filled.

Location of job: ul. Interviews: Interviews will be conducted remotely by video starting November, Location of job: Sabanci Universitesi, Orta Mah. Universite Cad. Application deadline: 31 May midnight UTC. These scalable systems may be used in homes, commercial facilities and on the utility grid, and are capable of numerous applications including backup or off-grid power, peak demand reduction, demand response, reducing intermittency of renewable energy generation, facilitation of the use of renewable energy generation over fossil fuel generation, and other grid services and wholesale electric market services.

Drawing on our solar business expertise, we can also offer integrated systems combining energy generation and storage. Like our vehicles, our energy storage products can be remotely updated over-the-air with software or firmware improvements. Segment Information. We operate as two reportable segments: i automotive and ii energy generation and storage. The automotive segment includes the design, development, manufacturing, sales, and leasing of electric vehicles as well as sales of automotive regulatory credits.

Additionally, the automotive segment is also comprised of services and other, which includes non-warranty after-sales vehicle services, sales of used vehicles, retail merchandise, sales by our acquired subsidiaries to third party customers, and vehicle insurance revenue.

The energy generation and storage segment includes the design, manufacture, installation, sales, and leasing of solar energy generation and energy storage products, services related to such products, and sales of solar energy system incentives.

Our Products and Services. Model 3. Model 3 is a four-door mid-size sedan that we designed for manufacturability with a base price for mass-market appeal, which we began delivering in July We currently manufacture Model 3 at the Fremont Factory as well as at Gigafactory Shanghai, where we are ramping production with an installed annual production capacity for , Model 3 vehicles. We currently offer Model 3 in rear-wheel drive and dual motor all-wheel drive variants, including a Performance version of the latter.

Model Y. We currently manufacture Model Y at the Fremont Factory, and are further ramping production there and making preparations for production next at Gigafactory Shanghai. Model S is a four-door full-size sedan that we began delivering in June Model S introduced Tesla vehicle mainstays such as a large touchscreen driver interface, Autopilot hardware, over-the-air software updates, and fast charging through our Supercharger network. Model X is a mid-size SUV with seating for up to seven adults, which we began delivering in September Model X introduced features including unique falcon wing doors for easy access to passenger seating and an all-glass panoramic windshield.

Model S and Model X feature the highest performance characteristics and longest ranges that we offer in a sedan and SUV, respectively. Future Consumer and Commercial Electric Vehicles. In addition, we have unveiled a number of planned electric vehicles to address a broader cross-section of the vehicle market, including specialized consumer electric vehicles in Cybertruck and the new Tesla Roadster and a commercial electric vehicle in Tesla Semi.

Energy Generation and Storage. Energy Storage Products. We began deliveries of the current generations of our Powerwall and Powerpack products in late and , respectively, and of our Megapack product in late Powerwall is a Powerpack and Megapack can also be combined with renewable energy generation sources to create microgrids that provide communities with clean, resilient and affordable power.

We also develop and advance our software capabilities for the control and optimal dispatch of energy storage systems across a wide range of markets and applications, which can be sent to our systems through over-the-air updates. Solar Energy Offerings. The major components of our retrofit solar energy systems include solar panels that convert sunlight into electrical current, inverters that convert the electrical output from the panels to a usable current compatible with the electric grid, racking that attaches the solar panels to the roof or ground, electrical hardware that connects the solar energy system to the electric grid, and our monitoring device.

We purchase the majority of these components, and we do so from multiple sources to ensure competitive pricing and adequate supply. We also design and manufacture certain components for our solar energy products. In , we commenced direct customer and channel partner sales of the third generation of our Solar Roof, which features aesthetically pleasing and durable glass roofing tiles designed to complement the architecture of homes and commercial buildings while turning sunlight into electricity.

We are ramping the volume production of this version of the Solar Roof at Gigafactory New York, and are increasing our installation capabilities by training our personnel and third party partners. Our core vehicle technology competencies include battery and powertrain engineering and manufacturing, as well as our ability to design vehicles that utilize the unique advantages of an electric powertrain.

Our core intellectual property includes our electric powertrain and our work on developing self-driving technologies. Our powertrain consists of our battery pack, power electronics, motor, gearbox, and control software. We offer several powertrain variants for our vehicles that incorporate years of research and development. In addition, we have designed our vehicles to incorporate the latest advances in consumer technologies, such as mobile computing, sensing, displays, and connectivity.

Battery and Powertrain. We optimize the design of the lithium-ion cells we use and of our battery packs to achieve high energy density at decreasing costs while also maintaining safety, reliability and long life in the rigors of an automotive environment. Our proprietary technology includes systems for high density energy storage, cooling, safety, charge balancing, structural durability, and electronics management.

We have also pioneered advanced manufacturing techniques to manufacture large volumes of battery packs with high quality at low cost. We believe that the flexibility that we have built into our designs, combined with our research and real-world performance data, will enable us to continue to evaluate new battery cells and optimize battery pack system performance and cost for our current and future vehicles.

The primary technological advantages to our proprietary power electronics designs include the ability to drive large amounts of electrical current in a small physical package with high efficiency and low cost, and to recharge on a wide variety of electricity sources at home, at the office or on the road, including at our Superchargers.

We offer dual motor powertrain vehicles, which use two electric motors to maximize traction and performance in an all-wheel drive configuration. The near-instantaneous response of the motors, combined with low centers of gravity, provides drivers with controlled performance and increased traction control. We are also developing vehicle powertrain technology featuring three electric motors for further increased performance.

Vehicle Control and Infotainment Software. The performance and safety systems of our vehicles and their battery packs require sophisticated control software. There are numerous processors in our vehicles to control these functions, and we write custom firmware for many of these processors.

Software algorithms control traction, vehicle stability, the acceleration and regenerative braking of the vehicle, climate control and thermal management, and are also used extensively to monitor the charge state of the battery pack and to manage all of its safety systems. Drivers use the information and control systems in our vehicles to optimize performance, customize vehicle behavior, manage charging modes and times and control all infotainment functions.

We develop almost all of this software, including most of the user interfaces, internally. Self-Driving Development. We have expertise in developing technologies, systems and software to achieve self-driving vehicles. We are equipping all new Tesla vehicles with hardware needed for full self-driving in the future, including a new powerful and proprietary on-board computer that we introduced in This hardware suite enables field data from the on-board camera, radar, ultrasonics, and GPS to continually train and improve our neural network for real-world performance.

Currently, we offer in our vehicles certain advanced driver assist systems under our Autopilot and FSD options, including auto-steering, traffic aware cruise control, automated lane changing, automated parking, driver warning systems, and a Smart Summon feature that enables vehicles to be remotely summoned over short distances in parking lots and driveways. These systems relieve our drivers of the most tedious and potentially dangerous aspects of road travel, and the field data feedback loops from the on-board hardware, as well as over-the-air firmware updates, allow us to improve them over time.

Although at present the driver is ultimately responsible for controlling the vehicle, our systems provide safety and convenience functionality that allows our customers to rely on them much like the system that airplane pilots use when conditions permit.

We are leveraging many of the component-level technologies from our vehicles to advance our energy storage products, including high density energy storage, cooling, safety, charge balancing, structural durability, and electronics management. By taking a modular approach to the design of battery systems, we are able to maximize manufacturing capacity to produce our Powerwall, Powerpack and Megapack products. Additionally, we are making significant strides in the area of bi-directional, grid-tied power electronics that enable us to interconnect our battery systems seamlessly with global electricity grids while providing fast-acting systems for power injection and absorption.

Solar Energy Systems. We are continually innovating and developing new technologies to facilitate the growth of our solar energy business. For example, we have developed proprietary software to reduce solar energy system design and installation timelines and costs, and the Solar Roof is designed to work seamlessly with Powerwall.

Design and Engineering. We have created significant in-house capabilities in the design and test engineering of electric vehicles and their components and systems. We design, engineer and test bodies, chassis, exteriors, interiors, heating and cooling and low voltage electrical systems in-house, and to a lesser extent, in conjunction with our suppliers.

Our team has core competencies in computer aided design and crash test simulations, which reduces the product development time of new models. We continue to grow our capabilities, including for on-site crash testing, durability testing and component validation. Additionally, our team has expertise in selecting and working with various materials. For example, given the impact of mass on range, which is very important for passenger vehicles, Model S and Model X are built with lightweight aluminum bodies and chassis which incorporate a variety of materials and production methods that help optimize vehicle weight, and Model 3 and Model Y are built with a mix of materials to be lightweight and safe while also increasing cost-effectiveness for these mass-market vehicles.

On the other hand, to accommodate the durability required of work vehicles, we plan to use a thick cold-rolled stainless steel alloy and ultra-strong glass for Cybertruck while employing our expertise in battery engineering to maintain excellent range. We have an in-house engineering team that both designs our energy storage products themselves, and works with our residential, commercial and utility customers to design bespoke systems incorporating our products.

We also have an in-house team that designs a customized solar energy system or Solar Roof for each of our customers, including an integrated energy storage system when requested by the customer. We have developed software that simplifies and expedites the design process and optimizes the design to maximize the energy production of each system.

This team completes a structural analysis of each building and produces a full set of structural design and electrical blueprints that contain the specifications for all system components. Additionally, this team specifies complementary mounting and grounding hardware where required. Sales and Marketing. Historically, we have been able to generate significant media coverage of our company and our products, and we believe we will continue to do so. Such media coverage and word of mouth are the current primary drivers of our sales leads and have helped us achieve sales without traditional advertising and at relatively low marketing costs.

Direct Sales. We market and sell our vehicles directly to customers using means that we believe will maximize our reach, improve the overall customer experience and maximize capital efficiency. Currently, our sales channels include our website and an international network of company-owned stores. In some states, we have also opened galleries to educate and inform customers about our products, but such locations do not actually transact in the sale of vehicles.

We believe this infrastructure enables us to better control costs of inventory, manage warranty service and pricing, educate consumers about electric vehicles and charging, maintain and strengthen the Tesla brand, and obtain rapid customer feedback. We reevaluate our sales strategy both globally and at a location-by-location level from time to time to optimize our current sales channels.

Sales of vehicles in the automobile industry also tend to be cyclical in many markets, which may expose us to volatility from time to time. Used Vehicle Sales. The Tesla and non-Tesla vehicles we acquire through trade-ins are subsequently remarketed, either directly by us or through third-parties. We also receive used Tesla vehicles to resell through lease returns and other sources. Public Charging. Each Tesla Supercharger is an industrial grade, high-speed charger designed to recharge a Tesla vehicle significantly more quickly than other charging options, and we continue to evolve our technology to allow for even faster charging times at lower cost to us.

Where possible, we are co-locating Superchargers with our solar and energy storage systems to further reduce costs and promote renewable power. Supercharger stations typically are strategically placed along well-traveled routes and in dense city centers to allow Tesla vehicle owners the ability to enjoy quick, reliable and ubiquitous charging with convenient, minimal stops.

Use of the Supercharger network is either free under certain sales programs or requires a competitive fee. We also work with a wide variety of hospitality, retail, and public destinations, as well as businesses with commuting employees, to offer additional charging options for our customers.

These Destination Charging and workplace locations deploy Tesla Wall Connectors to provide charging to Tesla vehicle owners who patronize or are employed at their businesses. We also work with single-family homeowners and multi-family residential entities to deploy home charging solutions in our communities. We market and sell our solar and energy storage products to individuals, commercial and industrial customers and utilities through a variety of channels.

In the U. Outside of the U. We also sell Powerwall directly to utilities. In the case of products sold to such utilities or channel partners, such partners typically sell and install the product in customer homes. We sell Powerpack and Megapack systems to commercial and utility customers through our international sales organization, which consists of experienced energy industry professionals in all of our target markets, as well as through our channel partner network.

In certain jurisdictions, we also sell installed solar energy systems with or without energy storage to commercial customers through cash, lease and PPA transactions. Service and Warranty. Performing vehicle service ourselves provides us with the capability to identify problems, find solutions, and incorporate improvements faster, and optimize logistics and inventory for service parts better, than traditional automobile manufacturers.

Our vehicles are also designed with the capability to wirelessly upload data to us via an on-board system with cellular connectivity, allowing us to diagnose and remedy many problems before ever looking at the vehicle. Each new vehicle has a four year or 50, mile New Vehicle Limited Warranty, subject to separate limited warranties for the supplemental restraint system, battery and drive unit, and body rust perforation. The Extended Service plans cover the repair or replacement of vehicle parts for up to an additional four years or up to an additional 50, miles after the expiration of the New Vehicle Limited Warranty.

Energy Storage Systems. In addition, we offer certain extended warranties, which customers are able to purchase from us at the time they purchase an energy storage system, including a 20 year extended protection plan for Powerwall and a selection of 10 or 20 year performance guarantees for Powerpack and Megapack. In circumstances where we install a Powerwall or Powerpack system, we also provide certain warranties on our installation workmanship. All of the warranties for our energy storage systems are subject to customary limitations and exclusions.

For retrofit solar energy systems, we provide a workmanship warranty for up to 20 years from installation and a separate warranty against roof leaks. We also pass-through the inverter and module manufacturer warranties typically 10 years and 25 years respectively. When we lease a retrofit solar energy system, we compensate the customer if their system produces less energy than guaranteed over a specified period.

For the Solar Roof, we provide a warranty against defects for 25 years, a 25 year weatherization warranty and a power output warranty. For all systems retrofit and Solar Roof we also provide service and repair either under warranty or for a fee during the entire term of the customer relationship. Financial Services. Purchase Financing and Leases. In certain international markets, we offer resale value guarantees to customers who purchase and finance their vehicles through one of our specified commercial banking partners, under which those customers have the option of selling their vehicles back to us at preset future dates, generally at the end of the terms of the applicable loans or financing programs, for pre-determined resale values.

In certain markets, we also offer vehicle buyback guarantees to financial institutions, which may obligate us to repurchase the vehicles for pre-determined prices. In August , we launched an insurance product designed for our customers, which offers rates that are often better than other alternatives.

This product is currently available in California, and we plan to expand both the markets in which we offer insurance products and our ability to offer such products, as part of our ongoing effort to decrease the total cost of ownership for our customers. We currently offer a loan product to residential customers who purchase Powerwall together with a new solar energy system, and lease and PPA options to commercial customers who purchase a Powerpack system together with a new solar energy system.

We intend to introduce financial services offerings for customers who purchase standalone energy storage products in the future. We are an industry leader in offering innovative financing alternatives that allow our customers to take direct advantage of available tax credits and incentives to reduce the cost of owning a solar energy system through a solar loan, or to make the switch to solar energy with little to no upfront costs under a lease or PPA.

Our solar loan offers third-party financing directly to a qualified customer to enable the customer to purchase and own a solar energy system. We are not a party to the loan agreement between the customer and the third-party lender, and the third-party lender has no recourse against us with respect to the loan. Our solar lease offers customers a fixed monthly fee, at rates that typically translate into lower monthly utility bills, and an electricity production guarantee.

Our solar PPA charges customers a fee per kWh based on the amount of electricity produced by our solar energy systems. We monetize the customer payments we receive from our leases and PPAs through funds we have formed with investors. We also intend to introduce financial services offerings for our Solar Roof customers in the future. We have also selected a site near Berlin, Germany to build a factory for the European market, which we refer to as Gigafactory Berlin.

Manufacturing Facilities in the Bay Area, California. We manufacture our vehicles, and certain parts and components that are critical to our intellectual property and quality standards, at our manufacturing facilities in the Bay Area in California, including the Fremont Factory, and other local manufacturing facilities.

Our Bay Area facilities contain several manufacturing operations, including stamping, machining, casting, plastics, body assembly, paint operations, seat assembly, final vehicle assembly and end-of-line testing for our vehicles, as well as production of battery packs and drive units for Model S and Model X. Some major vehicle component systems are purchased from suppliers; however, we have a high level of vertical integration in our manufacturing processes at our Bay Area facilities.

Gigafactory Nevada. Gigafactory Nevada is a facility where we work together with our suppliers to integrate battery material, cell, module and battery pack production in one location. We use the battery packs manufactured at Gigafactory Nevada for Model 3, Model Y and our energy storage products. Finally, the assembly of Megapack systems takes place at Gigafactory Nevada, allowing us to ship deployment-ready systems directly to customers.

We have designed Gigafactory Nevada to allow us access to high volumes of lithium-ion battery cells while achieving a significant reduction in the cost of our battery packs, and we have an agreement with Panasonic to partner with us on Gigafactory Nevada with investments in production equipment that it is using to manufacture and supply us with battery cells.

Given its importance to the production of our vehicle and energy storage products, in particular Model 3, Model Y and Megapack, we continue to invest in Gigafactory Nevada to achieve additional production output there. Gigafactory New York. We have primarily used our manufacturing facility in Buffalo, New York, which we refer to as Gigafactory New York, for the development and production of our Solar Roof and other solar products and components, energy storage components, and Supercharger components, and for other lessor-approved functions.

In particular, our manufacturing operations at Gigafactory New York are increasing significantly as we ramp the production of the third generation of our Solar Roof there. Gigafactory Shanghai. In December , we commenced production of Model 3 vehicles at Gigafactory Shanghai, which we have established in order to increase the affordability of our vehicles for customers in local markets by reducing transportation and manufacturing costs and eliminating certain tariffs on vehicles imported into China from the U.

At Gigafactory Shanghai, we have installed annual production capacity for , Model 3 vehicles that we believe we will eventually be able to push to actual rates of production in excess of such number , subject to local production of battery packs, which we began ramping there later than other processes. We have also commenced construction of the next phase of Gigafactory Shanghai to add Model Y manufacturing capacity at least equivalent to that for Model 3.

Much of the investment in Gigafactory Shanghai has been and is expected to continue to be provided through local debt financing, including a RMB 9. We are supplementing such financing with limited direct capital expenditures by us, at a lower cost per unit of production capacity than that of Model 3 production at the Fremont Factory. Other Manufacturing. Generally, we continue to expand production capacity at our existing facilities. We also intend to further increase cost-competitiveness in our significant markets by strategically adding local manufacturing, including at our planned Gigafactory Berlin.

Supply Chain. Our products use thousands of purchased parts that are sourced from hundreds of suppliers across the world. We have developed close relationships with vendors of key parts such as battery cells, electronics and complex vehicle assemblies. Certain components purchased from these suppliers are shared or are similar across many product lines, allowing us to take advantage of pricing efficiencies from economies of scale. As is the case for most automotive companies, most of our procured components and systems are sourced from single suppliers.

Certain key components we use have multiple available sources, and we work to qualify multiple suppliers for each such component where it is sensible to do so, in order to minimize production risks owing to disruptions in their supply. We also mitigate risk by maintaining safety stock for key parts and assemblies and die banks for components with lengthy procurement lead times. Our products use various raw materials including aluminum, steel, cobalt, lithium, nickel and copper.

Pricing for these materials is governed by market conditions and may fluctuate due to various factors outside of our control, such as supply and demand and market speculation. We currently believe that we have adequate access to raw materials supplies in order to meet the needs of our operations.

Governmental Programs, Incentives and Regulations. Globally, both the operation of our business by us and the ownership of our products by our customers are impacted by a number of government programs, incentives and other arrangements. Our business and products are also subject to a number of governmental regulations that vary among jurisdictions. Programs and Incentives. Gigafactory Nevada—Nevada Tax Incentives.

In connection with the construction of Gigafactory Nevada, we have entered into agreements with the State of Nevada and Storey County in Nevada that provide abatements for sales, use, real property, personal property and employer excise taxes, discounts to the base tariff energy rates and transferable tax credits.

As a result, as of December 31, , we had earned the maximum amount of credits. Under the lease and a related research and development agreement, there continues to be, on behalf of the SUNY Foundation, installation of certain utilities and other improvements and acquisition of certain manufacturing equipment designated by us to be used at Gigafactory New York.

The terms of such agreement require us to comply with a number of covenants, including required hiring and cumulative investment targets, which we have met to date as of the applicable measurement dates. We have a lease arrangement with the local government of Shanghai for land use rights at Gigafactory Shanghai.

Under the terms of the arrangement, we are required to meet a cumulative capital expenditure target and an annual tax revenue target starting at the end of , which we believe will be attainable even if our actual vehicle production at Gigafactory Shanghai were far lower than the volumes we are forecasting. Tesla Regulatory Credits. We have sold these credits, and will continue to sell future credits, to automotive companies and other regulated entities who can use the credits to comply with emission standards and other regulatory requirements.

These laws provide that automakers may bank or sell to other regulated parties their excess credits if they earn more credits than the minimum quantity required by those laws. Tesla also earns other types of saleable regulatory credits in the United States and abroad, including greenhouse gas, fuel economy, renewable energy, and clean fuels credits. Likewise, several U. Energy Storage Systems—Incentives. The regulatory regime for energy storage projects is still under development.

Nevertheless, there are various policies, incentives and financial mechanisms at the federal, state and local levels that support the adoption of energy storage. In addition, California and a number of other states have adopted procurement targets for energy storage, and behind the meter energy storage systems qualify for funding under the California Self Generation Incentive Program. Order is currently under review before the U. Court of Appeals for the D.

These incentives include tax credits, cash grants, tax abatements and rebates. We claim the Section 48 commercial credit when available for both our residential and commercial projects, based on ownership of the solar energy system. The federal government also provides accelerated depreciation for eligible commercial solar energy systems.

Customers who purchase their solar energy systems for cash or through our solar loan offering are eligible to claim the Section 25D investment tax credit. In addition to the federal ITC, many U. Vehicle Safety and Testing. Our vehicles fully comply with all applicable FMVSSs without the need for any exemptions, and we expect future Tesla vehicles to either fully comply or comply with limited exemptions related to new technologies.

Additionally, there are regulatory changes being considered for several FMVSS, and while we anticipate compliance, there is no assurance until final regulation changes are enacted. As a manufacturer, we must self-certify that our vehicles meet all applicable FMVSS, as well as the NHTSA bumper standard, or otherwise are exempt, before the vehicles can be imported or sold in the U.

Numerous FMVSS apply to our vehicles, such as crash-worthiness requirements, crash avoidance requirements, and electric vehicle requirements. In addition, this law allows inclusion of city and highway fuel economy ratings, as determined by EPA, as well as crash test ratings as determined by NHTSA if such tests are conducted.

Our vehicles sold outside of the U. Many of those regulations are different from those applicable in the U. These changes could impact the rollout of new vehicle features in Europe. There are no federal U. Certain U. This patchwork increases the legal complexity for our vehicles. In Europe, certain vehicle safety regulations apply to self-driving braking and steering systems, and certain treaties also restrict the legality of certain higher levels of self-driving vehicles.

Self-driving laws and regulations are expected to continue to evolve in numerous jurisdictions in the U. Automobile Manufacturer and Dealer Regulation. State laws regulate the manufacture, distribution, sale and service of automobiles, and generally require motor vehicle manufacturers and dealers to be licensed in order to sell vehicles directly to consumers in the state. As we open additional Tesla stores and service centers, we secure dealer licenses or their equivalent and engage in sales activities to sell our vehicles directly to consumers.

To sell vehicles to residents of states where we are not licensed as a dealer, we generally conduct the transfer of title out of the state. As we expand our retail footprint in the U. We expect that the dealer associations will continue to mount challenges to our business model.

Battery Safety and Testing. The regulations vary by mode of shipping transportation, such as by ocean vessel, rail, truck, or air. We have completed the applicable transportation tests for our battery packs, demonstrating our compliance with applicable regulations. We use lithium-ion cells in our high voltage battery packs in our vehicles and energy storage products.

The use, storage, and disposal of our battery packs is regulated under federal law. We have agreements with third party battery recycling companies to recycle our battery packs and we are also developing our own recycling technology. Solar Energy—General.

To operate our systems, we obtain interconnection agreements from the utilities. In most cases, interconnection agreements are standard form agreements that have been pre-approved by the public utility commission or other regulatory body.

Sales of electricity and non-sale equipment leases by third parties, such as our leases, PPAs and subscription agreements, face regulatory challenges in some states and jurisdictions. Solar Energy—Net Metering. Most states in the U. Net metering typically allows solar customers to interconnect their on-site solar energy systems to the utility grid and offset their utility electricity purchases by receiving a bill credit for excess energy generated by their solar energy system that is exported to the grid.

In certain jurisdictions, regulators or utilities have reduced or eliminated the benefit available under net metering, or have proposed to do so. Solar Energy—Mandated Renewable Capacity. Many states also have adopted procurement requirements for renewable energy production, such as an enforceable renewable portfolio standard, or RPS, or other policies that require covered entities to procure a specified percentage of total electricity delivered to customers in the state from eligible renewable energy sources, such as solar energy systems.

We believe that our vehicles compete in the market both based on their traditional segment classification as well as based on their propulsion technology. Competing products typically include internal combustion vehicles from more established automobile manufacturers; however, many established and new automobile manufacturers have entered or have announced plans to enter the alternative fuel vehicle market.

Overall, we believe these announcements and vehicle introductions promote the development of the alternative fuel vehicle market by highlighting the attractiveness of alternative fuel vehicles, particularly those fueled by electricity, relative to the internal combustion vehicle. Many major automobile manufacturers have electric vehicles available today in major markets including the U. In addition, several manufacturers offer hybrid vehicles, including plug-in versions.

Our vehicles also compete in the market based on the compelling user experience that they offer. We believe that a key factor in our success will be our Autopilot and FSD technologies that currently enable the driver-assistance features in our vehicles, and in which we are making significant strides through our proprietary and powerful FSD computer and remotely updateable artificial intelligence software.

Ultimately, while we are subject to regulatory constraints over which we have no control, our goal is a fully autonomously-driven future that improves safety and provides our customers with convenience and additional income through participation in an autonomous Tesla ride-hailing network. This network, which will also include our own fleet of vehicles, will also allow us to access a new customer base even as modes of transportation evolve.

Finally, our vehicles offer unparalleled in-vehicle entertainment features, currently including Internet search, music services, passenger karaoke, and parked video streaming and gaming. The market for energy storage products is also highly competitive. Established companies, such as AES Energy Storage, Siemens, LG Chem and Samsung, as well as various emerging companies, have introduced products that are similar to our product portfolio.

There are several companies providing individual components of energy storage systems such as cells, battery modules, and power electronics as well as others providing integrated systems. We compete with these companies based on price, energy density and efficiency.

We believe that the specifications of our products, our strong brand, and the modular, scalable nature of our Powerpack and Megapack products give us a competitive advantage when marketing our products. The primary competitors to our solar energy business are the traditional local utility companies that supply energy to our potential customers. We compete with these traditional utility companies primarily based on price, predictability of price and the ease by which customers can switch to electricity generated by our solar energy systems.

We also compete with solar energy companies that provide products and services similar to ours. Many solar energy companies only install solar energy systems, while others only provide financing for these installations. In the residential solar energy system installation market, our primary competitors include Vivint Solar Inc.

The electricity produced by solar installations still represents a small fraction of total U. We also believe that residential solar energy generation is gaining favorable regulatory momentum, as exemplified in part by the state of California recently requiring that new homes be built with solar generation starting in Intellectual Property.

We place a strong emphasis on our innovative approach and proprietary designs which bring intrinsic value and uniqueness to our product portfolio. As part of our business, we seek to protect the underlying intellectual property rights of these innovations and designs such as with respect to patents, trademarks, copyrights, trade secrets and other measures, including through employee and third party nondisclosure agreements and other contractual arrangements. For example, we place a high priority on obtaining patents to provide the broadest and strongest possible protection to enable our freedom to operate our innovations and designs within our products and technologies in the electric vehicle market as well as to protect and defend our product portfolio.

We have also adopted a patent policy in which we irrevocably pledged that we will not initiate a lawsuit against any party for infringing our patents through activity relating to electric vehicles or related equipment for so long as such party is acting in good faith. We made this pledge in order to encourage the advancement of a common, rapidly-evolving platform for electric vehicles, thereby benefiting ourselves, other companies making electric vehicles, and the world.

To date, we have not experienced any work stoppages, and we consider our relationship with our employees to be good. Available Information. In addition, the SEC maintains a website www. Our website is located at www. The information posted on our website is not incorporated by reference into this Annual Report on Form K. ITEM 1A. You should carefully consider the risks described below together with the other information set forth in this report, which could materially affect our business, financial condition and future results.

The risks described below are not the only risks facing our company. Risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and operating results. Risks Related to Our Business and Industry.

We have experienced in the past, and may experience in the future, delays or other complications in the design, manufacture, launch, and production ramp of our vehicles, energy products, and product features, or may not realize our manufacturing cost targets, which could harm our brand, business, prospects, financial condition and operating results. We have previously experienced launch and production ramp delays or other complications in connection with new vehicle models such as Model S, Model X and Model 3, and new vehicle features such as the all-wheel drive dual motor drivetrain on Model S and the second version of our Autopilot hardware.

For example, we encountered unanticipated supply chain constraints that led to initial delays in producing Model X and an isolated supplier limitation in the manufacture of Model 3. Similarly, during our initial Model 3 production ramp, we had challenges ramping fully automated processes, such as portions of the battery module assembly line, material flow system and the general assembly line, which we addressed by reducing the levels of automation and introducing semi-automated or manual processes.

In addition, we have used a number of new manufacturing technologies, techniques and processes for our vehicles, such as aluminum spot welding systems and high-speed blow forming of certain difficult to stamp vehicle parts, and we may introduce new processes in the future. We have also introduced unique design features in our vehicles with different manufacturing challenges, such as large display screens, dual motor drivetrain, hardware for our Autopilot and FSD features and falcon-wing doors.

There is no guarantee that we will be able to successfully and timely introduce and scale any such new processes or features. In particular, our future business depends in large part on the high-volume production of Model 3 and Model Y, which we believe are our vehicles with the largest markets. We have limited experience to date in manufacturing Model 3 at high volumes and continuously increasing its production rates, particularly across multiple vehicle manufacturing facilities, which we commenced in the fourth quarter of with Gigafactory Shanghai coming online.

Bottlenecks such as those we have experienced in the past with new product ramps and other unexpected challenges may also arise as we ramp production, and it will be important that we address them promptly while continuing to reduce our manufacturing costs. Moreover, we will need to hire, train and compensate skilled employees to operate high-volume production facilities to support our vehicle ramp at the Fremont Factory and Gigafactory Shanghai, as well as at Gigafactory Nevada to support the manufacture of battery packs and drive units for certain of our vehicles.

Finally, because our vehicle models, in particular Model 3 and Model Y, may share certain parts, suppliers or production facilities with each other, the volume or efficiency of production with respect to one model may impact also the production of other models or lead to bottlenecks that impact the production of all models. Likewise, we may encounter delays with the design, construction and regulatory or other approvals necessary to build and bring online future manufacturing facilities, including our planned Gigafactory Berlin in Germany.

Any significant delay or other complication in the production ramp of our current products or the development, manufacture, launch and production ramp of our future products, features and services, including complications associated with expanding our production capacity and supply chain or obtaining or maintaining related regulatory approvals, or inability to manage such ramps cost-effectively, could materially damage our brand, business, prospects, financial condition and operating results.

We may be unable to meet our growing product sales, delivery and installation plans and vehicle servicing and charging network needs, or accurately project and manage this growth internationally, any of which could harm our business and prospects. Concurrent with developing, launching and ramping our products, our success will depend on our ability to continue to significantly increase their sales, deliveries, installations and servicing worldwide, while allocating our available resources among multiple products simultaneously.

As we expand globally, we will also need to ensure we are in compliance with any regulatory requirements applicable to the sale, installation and service of our products, the sale of electricity generated through our solar energy systems and operation of Superchargers in various jurisdictions, which could take considerable time and expense.

These plans require significant cash investments and management resources and there is no guarantee that they will ultimately generate additional sales or installations of our products. We continuously evaluate, and as appropriate evolve, our retail operations and product offerings in order to maximize our reach and optimize our costs, vehicle line-up and model differentiation, and purchasing experience. However, there is no guarantee that each step in our evolving strategy will be perceived as intended by prospective customers accustomed to more traditional sales models.

In particular, we are targeting with Model 3 and Model Y a global mass demographic with a broad range of potential customers, in which we have limited experience projecting demand and pricing our products. Until we ramp local production at Gigafactory Shanghai and in the future at Gigafactory Berlin, we will have to contend with predominantly single-factory vehicle production at the Fremont Factory for numerous international variants.

If our specific demand expectations for these variants prove inaccurate, we may not be able to timely generate sales matched to the specific vehicles that we produce in the same timeframe or that are commensurate with our operations in a given region, which may negatively impact our deliveries and operating results in a particular period.

Likewise, as we develop and grow our energy storage product and solar business worldwide, our success will depend on our ability to correctly forecast demand for our products in different markets. Moreover, because we do not have independent dealer networks, we are responsible for delivering all of our vehicles to our customers and meeting their vehicle servicing needs. While we have substantially implemented and improved many aspects of our delivery and service operations, we still have relatively limited experience with, and may face difficulties in, such deliveries and servicing at high volumes, particularly in international markets as we expand.

For example, significant transit time may be required to transport vehicles in volume into international markets, and we also saw challenges in initially ramping our logistical channels in China and Europe as we delivered Model 3 there for the first time in the first quarter of Likewise, because of our unique expertise with our vehicles, we recommend that our vehicles be serviced by our service centers, Mobile Service technicians or certain authorized professionals that we have specifically trained and equipped.

If we experience delays in adding such servicing capacity or experience unforeseen issues with the reliability of our vehicles, particular higher-volume and newer additions to our fleet such as Model 3 and Model Y, it could overburden our servicing capabilities and parts inventory.

ELLERY ROBERTS PARALLEL INVESTMENT DEFINITION

Drivers use the information and control systems in our vehicles to optimize performance, customize vehicle behavior, manage charging modes and times and control all infotainment functions. We develop almost all of this software, including most of the user interfaces, internally.

Self-Driving Development. We have expertise in developing technologies, systems and software to achieve self-driving vehicles. We are equipping all new Tesla vehicles with hardware needed for full self-driving in the future, including a new powerful and proprietary on-board computer that we introduced in This hardware suite enables field data from the on-board camera, radar, ultrasonics, and GPS to continually train and improve our neural network for real-world performance. Currently, we offer in our vehicles certain advanced driver assist systems under our Autopilot and FSD options, including auto-steering, traffic aware cruise control, automated lane changing, automated parking, driver warning systems, and a Smart Summon feature that enables vehicles to be remotely summoned over short distances in parking lots and driveways.

These systems relieve our drivers of the most tedious and potentially dangerous aspects of road travel, and the field data feedback loops from the on-board hardware, as well as over-the-air firmware updates, allow us to improve them over time.

Although at present the driver is ultimately responsible for controlling the vehicle, our systems provide safety and convenience functionality that allows our customers to rely on them much like the system that airplane pilots use when conditions permit. We are leveraging many of the component-level technologies from our vehicles to advance our energy storage products, including high density energy storage, cooling, safety, charge balancing, structural durability, and electronics management.

By taking a modular approach to the design of battery systems, we are able to maximize manufacturing capacity to produce our Powerwall, Powerpack and Megapack products. Additionally, we are making significant strides in the area of bi-directional, grid-tied power electronics that enable us to interconnect our battery systems seamlessly with global electricity grids while providing fast-acting systems for power injection and absorption.

Solar Energy Systems. We are continually innovating and developing new technologies to facilitate the growth of our solar energy business. For example, we have developed proprietary software to reduce solar energy system design and installation timelines and costs, and the Solar Roof is designed to work seamlessly with Powerwall. Design and Engineering.

We have created significant in-house capabilities in the design and test engineering of electric vehicles and their components and systems. We design, engineer and test bodies, chassis, exteriors, interiors, heating and cooling and low voltage electrical systems in-house, and to a lesser extent, in conjunction with our suppliers. Our team has core competencies in computer aided design and crash test simulations, which reduces the product development time of new models.

We continue to grow our capabilities, including for on-site crash testing, durability testing and component validation. Additionally, our team has expertise in selecting and working with various materials. For example, given the impact of mass on range, which is very important for passenger vehicles, Model S and Model X are built with lightweight aluminum bodies and chassis which incorporate a variety of materials and production methods that help optimize vehicle weight, and Model 3 and Model Y are built with a mix of materials to be lightweight and safe while also increasing cost-effectiveness for these mass-market vehicles.

On the other hand, to accommodate the durability required of work vehicles, we plan to use a thick cold-rolled stainless steel alloy and ultra-strong glass for Cybertruck while employing our expertise in battery engineering to maintain excellent range. We have an in-house engineering team that both designs our energy storage products themselves, and works with our residential, commercial and utility customers to design bespoke systems incorporating our products. We also have an in-house team that designs a customized solar energy system or Solar Roof for each of our customers, including an integrated energy storage system when requested by the customer.

We have developed software that simplifies and expedites the design process and optimizes the design to maximize the energy production of each system. This team completes a structural analysis of each building and produces a full set of structural design and electrical blueprints that contain the specifications for all system components.

Additionally, this team specifies complementary mounting and grounding hardware where required. Sales and Marketing. Historically, we have been able to generate significant media coverage of our company and our products, and we believe we will continue to do so. Such media coverage and word of mouth are the current primary drivers of our sales leads and have helped us achieve sales without traditional advertising and at relatively low marketing costs.

Direct Sales. We market and sell our vehicles directly to customers using means that we believe will maximize our reach, improve the overall customer experience and maximize capital efficiency. Currently, our sales channels include our website and an international network of company-owned stores.

In some states, we have also opened galleries to educate and inform customers about our products, but such locations do not actually transact in the sale of vehicles. We believe this infrastructure enables us to better control costs of inventory, manage warranty service and pricing, educate consumers about electric vehicles and charging, maintain and strengthen the Tesla brand, and obtain rapid customer feedback. We reevaluate our sales strategy both globally and at a location-by-location level from time to time to optimize our current sales channels.

Sales of vehicles in the automobile industry also tend to be cyclical in many markets, which may expose us to volatility from time to time. Used Vehicle Sales. The Tesla and non-Tesla vehicles we acquire through trade-ins are subsequently remarketed, either directly by us or through third-parties. We also receive used Tesla vehicles to resell through lease returns and other sources.

Public Charging. Each Tesla Supercharger is an industrial grade, high-speed charger designed to recharge a Tesla vehicle significantly more quickly than other charging options, and we continue to evolve our technology to allow for even faster charging times at lower cost to us. Where possible, we are co-locating Superchargers with our solar and energy storage systems to further reduce costs and promote renewable power.

Supercharger stations typically are strategically placed along well-traveled routes and in dense city centers to allow Tesla vehicle owners the ability to enjoy quick, reliable and ubiquitous charging with convenient, minimal stops. Use of the Supercharger network is either free under certain sales programs or requires a competitive fee.

We also work with a wide variety of hospitality, retail, and public destinations, as well as businesses with commuting employees, to offer additional charging options for our customers. These Destination Charging and workplace locations deploy Tesla Wall Connectors to provide charging to Tesla vehicle owners who patronize or are employed at their businesses.

We also work with single-family homeowners and multi-family residential entities to deploy home charging solutions in our communities. We market and sell our solar and energy storage products to individuals, commercial and industrial customers and utilities through a variety of channels. In the U. Outside of the U. We also sell Powerwall directly to utilities. In the case of products sold to such utilities or channel partners, such partners typically sell and install the product in customer homes.

We sell Powerpack and Megapack systems to commercial and utility customers through our international sales organization, which consists of experienced energy industry professionals in all of our target markets, as well as through our channel partner network.

In certain jurisdictions, we also sell installed solar energy systems with or without energy storage to commercial customers through cash, lease and PPA transactions. Service and Warranty. Performing vehicle service ourselves provides us with the capability to identify problems, find solutions, and incorporate improvements faster, and optimize logistics and inventory for service parts better, than traditional automobile manufacturers.

Our vehicles are also designed with the capability to wirelessly upload data to us via an on-board system with cellular connectivity, allowing us to diagnose and remedy many problems before ever looking at the vehicle.

Each new vehicle has a four year or 50, mile New Vehicle Limited Warranty, subject to separate limited warranties for the supplemental restraint system, battery and drive unit, and body rust perforation. The Extended Service plans cover the repair or replacement of vehicle parts for up to an additional four years or up to an additional 50, miles after the expiration of the New Vehicle Limited Warranty.

Energy Storage Systems. In addition, we offer certain extended warranties, which customers are able to purchase from us at the time they purchase an energy storage system, including a 20 year extended protection plan for Powerwall and a selection of 10 or 20 year performance guarantees for Powerpack and Megapack. In circumstances where we install a Powerwall or Powerpack system, we also provide certain warranties on our installation workmanship.

All of the warranties for our energy storage systems are subject to customary limitations and exclusions. For retrofit solar energy systems, we provide a workmanship warranty for up to 20 years from installation and a separate warranty against roof leaks. We also pass-through the inverter and module manufacturer warranties typically 10 years and 25 years respectively.

When we lease a retrofit solar energy system, we compensate the customer if their system produces less energy than guaranteed over a specified period. For the Solar Roof, we provide a warranty against defects for 25 years, a 25 year weatherization warranty and a power output warranty. For all systems retrofit and Solar Roof we also provide service and repair either under warranty or for a fee during the entire term of the customer relationship.

Financial Services. Purchase Financing and Leases. In certain international markets, we offer resale value guarantees to customers who purchase and finance their vehicles through one of our specified commercial banking partners, under which those customers have the option of selling their vehicles back to us at preset future dates, generally at the end of the terms of the applicable loans or financing programs, for pre-determined resale values.

In certain markets, we also offer vehicle buyback guarantees to financial institutions, which may obligate us to repurchase the vehicles for pre-determined prices. In August , we launched an insurance product designed for our customers, which offers rates that are often better than other alternatives. This product is currently available in California, and we plan to expand both the markets in which we offer insurance products and our ability to offer such products, as part of our ongoing effort to decrease the total cost of ownership for our customers.

We currently offer a loan product to residential customers who purchase Powerwall together with a new solar energy system, and lease and PPA options to commercial customers who purchase a Powerpack system together with a new solar energy system. We intend to introduce financial services offerings for customers who purchase standalone energy storage products in the future.

We are an industry leader in offering innovative financing alternatives that allow our customers to take direct advantage of available tax credits and incentives to reduce the cost of owning a solar energy system through a solar loan, or to make the switch to solar energy with little to no upfront costs under a lease or PPA. Our solar loan offers third-party financing directly to a qualified customer to enable the customer to purchase and own a solar energy system. We are not a party to the loan agreement between the customer and the third-party lender, and the third-party lender has no recourse against us with respect to the loan.

Our solar lease offers customers a fixed monthly fee, at rates that typically translate into lower monthly utility bills, and an electricity production guarantee. Our solar PPA charges customers a fee per kWh based on the amount of electricity produced by our solar energy systems. We monetize the customer payments we receive from our leases and PPAs through funds we have formed with investors. We also intend to introduce financial services offerings for our Solar Roof customers in the future.

We have also selected a site near Berlin, Germany to build a factory for the European market, which we refer to as Gigafactory Berlin. Manufacturing Facilities in the Bay Area, California. We manufacture our vehicles, and certain parts and components that are critical to our intellectual property and quality standards, at our manufacturing facilities in the Bay Area in California, including the Fremont Factory, and other local manufacturing facilities.

Our Bay Area facilities contain several manufacturing operations, including stamping, machining, casting, plastics, body assembly, paint operations, seat assembly, final vehicle assembly and end-of-line testing for our vehicles, as well as production of battery packs and drive units for Model S and Model X. Some major vehicle component systems are purchased from suppliers; however, we have a high level of vertical integration in our manufacturing processes at our Bay Area facilities.

Gigafactory Nevada. Gigafactory Nevada is a facility where we work together with our suppliers to integrate battery material, cell, module and battery pack production in one location. We use the battery packs manufactured at Gigafactory Nevada for Model 3, Model Y and our energy storage products. Finally, the assembly of Megapack systems takes place at Gigafactory Nevada, allowing us to ship deployment-ready systems directly to customers. We have designed Gigafactory Nevada to allow us access to high volumes of lithium-ion battery cells while achieving a significant reduction in the cost of our battery packs, and we have an agreement with Panasonic to partner with us on Gigafactory Nevada with investments in production equipment that it is using to manufacture and supply us with battery cells.

Given its importance to the production of our vehicle and energy storage products, in particular Model 3, Model Y and Megapack, we continue to invest in Gigafactory Nevada to achieve additional production output there. Gigafactory New York. We have primarily used our manufacturing facility in Buffalo, New York, which we refer to as Gigafactory New York, for the development and production of our Solar Roof and other solar products and components, energy storage components, and Supercharger components, and for other lessor-approved functions.

In particular, our manufacturing operations at Gigafactory New York are increasing significantly as we ramp the production of the third generation of our Solar Roof there. Gigafactory Shanghai. In December , we commenced production of Model 3 vehicles at Gigafactory Shanghai, which we have established in order to increase the affordability of our vehicles for customers in local markets by reducing transportation and manufacturing costs and eliminating certain tariffs on vehicles imported into China from the U.

At Gigafactory Shanghai, we have installed annual production capacity for , Model 3 vehicles that we believe we will eventually be able to push to actual rates of production in excess of such number , subject to local production of battery packs, which we began ramping there later than other processes.

We have also commenced construction of the next phase of Gigafactory Shanghai to add Model Y manufacturing capacity at least equivalent to that for Model 3. Much of the investment in Gigafactory Shanghai has been and is expected to continue to be provided through local debt financing, including a RMB 9. We are supplementing such financing with limited direct capital expenditures by us, at a lower cost per unit of production capacity than that of Model 3 production at the Fremont Factory.

Other Manufacturing. Generally, we continue to expand production capacity at our existing facilities. We also intend to further increase cost-competitiveness in our significant markets by strategically adding local manufacturing, including at our planned Gigafactory Berlin. Supply Chain. Our products use thousands of purchased parts that are sourced from hundreds of suppliers across the world. We have developed close relationships with vendors of key parts such as battery cells, electronics and complex vehicle assemblies.

Certain components purchased from these suppliers are shared or are similar across many product lines, allowing us to take advantage of pricing efficiencies from economies of scale. As is the case for most automotive companies, most of our procured components and systems are sourced from single suppliers. Certain key components we use have multiple available sources, and we work to qualify multiple suppliers for each such component where it is sensible to do so, in order to minimize production risks owing to disruptions in their supply.

We also mitigate risk by maintaining safety stock for key parts and assemblies and die banks for components with lengthy procurement lead times. Our products use various raw materials including aluminum, steel, cobalt, lithium, nickel and copper. Pricing for these materials is governed by market conditions and may fluctuate due to various factors outside of our control, such as supply and demand and market speculation. We currently believe that we have adequate access to raw materials supplies in order to meet the needs of our operations.

Governmental Programs, Incentives and Regulations. Globally, both the operation of our business by us and the ownership of our products by our customers are impacted by a number of government programs, incentives and other arrangements. Our business and products are also subject to a number of governmental regulations that vary among jurisdictions.

Programs and Incentives. Gigafactory Nevada—Nevada Tax Incentives. In connection with the construction of Gigafactory Nevada, we have entered into agreements with the State of Nevada and Storey County in Nevada that provide abatements for sales, use, real property, personal property and employer excise taxes, discounts to the base tariff energy rates and transferable tax credits.

As a result, as of December 31, , we had earned the maximum amount of credits. Under the lease and a related research and development agreement, there continues to be, on behalf of the SUNY Foundation, installation of certain utilities and other improvements and acquisition of certain manufacturing equipment designated by us to be used at Gigafactory New York. The terms of such agreement require us to comply with a number of covenants, including required hiring and cumulative investment targets, which we have met to date as of the applicable measurement dates.

We have a lease arrangement with the local government of Shanghai for land use rights at Gigafactory Shanghai. Under the terms of the arrangement, we are required to meet a cumulative capital expenditure target and an annual tax revenue target starting at the end of , which we believe will be attainable even if our actual vehicle production at Gigafactory Shanghai were far lower than the volumes we are forecasting.

Tesla Regulatory Credits. We have sold these credits, and will continue to sell future credits, to automotive companies and other regulated entities who can use the credits to comply with emission standards and other regulatory requirements. These laws provide that automakers may bank or sell to other regulated parties their excess credits if they earn more credits than the minimum quantity required by those laws. Tesla also earns other types of saleable regulatory credits in the United States and abroad, including greenhouse gas, fuel economy, renewable energy, and clean fuels credits.

Likewise, several U. Energy Storage Systems—Incentives. The regulatory regime for energy storage projects is still under development. Nevertheless, there are various policies, incentives and financial mechanisms at the federal, state and local levels that support the adoption of energy storage. In addition, California and a number of other states have adopted procurement targets for energy storage, and behind the meter energy storage systems qualify for funding under the California Self Generation Incentive Program.

Order is currently under review before the U. Court of Appeals for the D. These incentives include tax credits, cash grants, tax abatements and rebates. We claim the Section 48 commercial credit when available for both our residential and commercial projects, based on ownership of the solar energy system. The federal government also provides accelerated depreciation for eligible commercial solar energy systems. Customers who purchase their solar energy systems for cash or through our solar loan offering are eligible to claim the Section 25D investment tax credit.

In addition to the federal ITC, many U. Vehicle Safety and Testing. Our vehicles fully comply with all applicable FMVSSs without the need for any exemptions, and we expect future Tesla vehicles to either fully comply or comply with limited exemptions related to new technologies. Additionally, there are regulatory changes being considered for several FMVSS, and while we anticipate compliance, there is no assurance until final regulation changes are enacted. As a manufacturer, we must self-certify that our vehicles meet all applicable FMVSS, as well as the NHTSA bumper standard, or otherwise are exempt, before the vehicles can be imported or sold in the U.

Numerous FMVSS apply to our vehicles, such as crash-worthiness requirements, crash avoidance requirements, and electric vehicle requirements. In addition, this law allows inclusion of city and highway fuel economy ratings, as determined by EPA, as well as crash test ratings as determined by NHTSA if such tests are conducted.

Our vehicles sold outside of the U. Many of those regulations are different from those applicable in the U. These changes could impact the rollout of new vehicle features in Europe. There are no federal U. Certain U. This patchwork increases the legal complexity for our vehicles. In Europe, certain vehicle safety regulations apply to self-driving braking and steering systems, and certain treaties also restrict the legality of certain higher levels of self-driving vehicles.

Self-driving laws and regulations are expected to continue to evolve in numerous jurisdictions in the U. Automobile Manufacturer and Dealer Regulation. State laws regulate the manufacture, distribution, sale and service of automobiles, and generally require motor vehicle manufacturers and dealers to be licensed in order to sell vehicles directly to consumers in the state.

As we open additional Tesla stores and service centers, we secure dealer licenses or their equivalent and engage in sales activities to sell our vehicles directly to consumers. To sell vehicles to residents of states where we are not licensed as a dealer, we generally conduct the transfer of title out of the state. As we expand our retail footprint in the U. We expect that the dealer associations will continue to mount challenges to our business model.

Battery Safety and Testing. The regulations vary by mode of shipping transportation, such as by ocean vessel, rail, truck, or air. We have completed the applicable transportation tests for our battery packs, demonstrating our compliance with applicable regulations. We use lithium-ion cells in our high voltage battery packs in our vehicles and energy storage products. The use, storage, and disposal of our battery packs is regulated under federal law. We have agreements with third party battery recycling companies to recycle our battery packs and we are also developing our own recycling technology.

Solar Energy—General. To operate our systems, we obtain interconnection agreements from the utilities. In most cases, interconnection agreements are standard form agreements that have been pre-approved by the public utility commission or other regulatory body. Sales of electricity and non-sale equipment leases by third parties, such as our leases, PPAs and subscription agreements, face regulatory challenges in some states and jurisdictions.

Solar Energy—Net Metering. Most states in the U. Net metering typically allows solar customers to interconnect their on-site solar energy systems to the utility grid and offset their utility electricity purchases by receiving a bill credit for excess energy generated by their solar energy system that is exported to the grid. In certain jurisdictions, regulators or utilities have reduced or eliminated the benefit available under net metering, or have proposed to do so. Solar Energy—Mandated Renewable Capacity.

Many states also have adopted procurement requirements for renewable energy production, such as an enforceable renewable portfolio standard, or RPS, or other policies that require covered entities to procure a specified percentage of total electricity delivered to customers in the state from eligible renewable energy sources, such as solar energy systems. We believe that our vehicles compete in the market both based on their traditional segment classification as well as based on their propulsion technology.

Competing products typically include internal combustion vehicles from more established automobile manufacturers; however, many established and new automobile manufacturers have entered or have announced plans to enter the alternative fuel vehicle market. Overall, we believe these announcements and vehicle introductions promote the development of the alternative fuel vehicle market by highlighting the attractiveness of alternative fuel vehicles, particularly those fueled by electricity, relative to the internal combustion vehicle.

Many major automobile manufacturers have electric vehicles available today in major markets including the U. In addition, several manufacturers offer hybrid vehicles, including plug-in versions. Our vehicles also compete in the market based on the compelling user experience that they offer. We believe that a key factor in our success will be our Autopilot and FSD technologies that currently enable the driver-assistance features in our vehicles, and in which we are making significant strides through our proprietary and powerful FSD computer and remotely updateable artificial intelligence software.

Ultimately, while we are subject to regulatory constraints over which we have no control, our goal is a fully autonomously-driven future that improves safety and provides our customers with convenience and additional income through participation in an autonomous Tesla ride-hailing network.

This network, which will also include our own fleet of vehicles, will also allow us to access a new customer base even as modes of transportation evolve. Finally, our vehicles offer unparalleled in-vehicle entertainment features, currently including Internet search, music services, passenger karaoke, and parked video streaming and gaming. The market for energy storage products is also highly competitive. Established companies, such as AES Energy Storage, Siemens, LG Chem and Samsung, as well as various emerging companies, have introduced products that are similar to our product portfolio.

There are several companies providing individual components of energy storage systems such as cells, battery modules, and power electronics as well as others providing integrated systems. We compete with these companies based on price, energy density and efficiency. We believe that the specifications of our products, our strong brand, and the modular, scalable nature of our Powerpack and Megapack products give us a competitive advantage when marketing our products.

The primary competitors to our solar energy business are the traditional local utility companies that supply energy to our potential customers. We compete with these traditional utility companies primarily based on price, predictability of price and the ease by which customers can switch to electricity generated by our solar energy systems.

We also compete with solar energy companies that provide products and services similar to ours. Many solar energy companies only install solar energy systems, while others only provide financing for these installations. In the residential solar energy system installation market, our primary competitors include Vivint Solar Inc.

The electricity produced by solar installations still represents a small fraction of total U. We also believe that residential solar energy generation is gaining favorable regulatory momentum, as exemplified in part by the state of California recently requiring that new homes be built with solar generation starting in Intellectual Property.

We place a strong emphasis on our innovative approach and proprietary designs which bring intrinsic value and uniqueness to our product portfolio. As part of our business, we seek to protect the underlying intellectual property rights of these innovations and designs such as with respect to patents, trademarks, copyrights, trade secrets and other measures, including through employee and third party nondisclosure agreements and other contractual arrangements. For example, we place a high priority on obtaining patents to provide the broadest and strongest possible protection to enable our freedom to operate our innovations and designs within our products and technologies in the electric vehicle market as well as to protect and defend our product portfolio.

We have also adopted a patent policy in which we irrevocably pledged that we will not initiate a lawsuit against any party for infringing our patents through activity relating to electric vehicles or related equipment for so long as such party is acting in good faith.

We made this pledge in order to encourage the advancement of a common, rapidly-evolving platform for electric vehicles, thereby benefiting ourselves, other companies making electric vehicles, and the world. To date, we have not experienced any work stoppages, and we consider our relationship with our employees to be good.

Available Information. In addition, the SEC maintains a website www. Our website is located at www. The information posted on our website is not incorporated by reference into this Annual Report on Form K. ITEM 1A. You should carefully consider the risks described below together with the other information set forth in this report, which could materially affect our business, financial condition and future results. The risks described below are not the only risks facing our company.

Risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and operating results. Risks Related to Our Business and Industry. We have experienced in the past, and may experience in the future, delays or other complications in the design, manufacture, launch, and production ramp of our vehicles, energy products, and product features, or may not realize our manufacturing cost targets, which could harm our brand, business, prospects, financial condition and operating results.

We have previously experienced launch and production ramp delays or other complications in connection with new vehicle models such as Model S, Model X and Model 3, and new vehicle features such as the all-wheel drive dual motor drivetrain on Model S and the second version of our Autopilot hardware. For example, we encountered unanticipated supply chain constraints that led to initial delays in producing Model X and an isolated supplier limitation in the manufacture of Model 3.

Similarly, during our initial Model 3 production ramp, we had challenges ramping fully automated processes, such as portions of the battery module assembly line, material flow system and the general assembly line, which we addressed by reducing the levels of automation and introducing semi-automated or manual processes.

In addition, we have used a number of new manufacturing technologies, techniques and processes for our vehicles, such as aluminum spot welding systems and high-speed blow forming of certain difficult to stamp vehicle parts, and we may introduce new processes in the future. We have also introduced unique design features in our vehicles with different manufacturing challenges, such as large display screens, dual motor drivetrain, hardware for our Autopilot and FSD features and falcon-wing doors.

There is no guarantee that we will be able to successfully and timely introduce and scale any such new processes or features. In particular, our future business depends in large part on the high-volume production of Model 3 and Model Y, which we believe are our vehicles with the largest markets.

We have limited experience to date in manufacturing Model 3 at high volumes and continuously increasing its production rates, particularly across multiple vehicle manufacturing facilities, which we commenced in the fourth quarter of with Gigafactory Shanghai coming online. Bottlenecks such as those we have experienced in the past with new product ramps and other unexpected challenges may also arise as we ramp production, and it will be important that we address them promptly while continuing to reduce our manufacturing costs.

Moreover, we will need to hire, train and compensate skilled employees to operate high-volume production facilities to support our vehicle ramp at the Fremont Factory and Gigafactory Shanghai, as well as at Gigafactory Nevada to support the manufacture of battery packs and drive units for certain of our vehicles.

Finally, because our vehicle models, in particular Model 3 and Model Y, may share certain parts, suppliers or production facilities with each other, the volume or efficiency of production with respect to one model may impact also the production of other models or lead to bottlenecks that impact the production of all models. Likewise, we may encounter delays with the design, construction and regulatory or other approvals necessary to build and bring online future manufacturing facilities, including our planned Gigafactory Berlin in Germany.

Any significant delay or other complication in the production ramp of our current products or the development, manufacture, launch and production ramp of our future products, features and services, including complications associated with expanding our production capacity and supply chain or obtaining or maintaining related regulatory approvals, or inability to manage such ramps cost-effectively, could materially damage our brand, business, prospects, financial condition and operating results.

We may be unable to meet our growing product sales, delivery and installation plans and vehicle servicing and charging network needs, or accurately project and manage this growth internationally, any of which could harm our business and prospects. Concurrent with developing, launching and ramping our products, our success will depend on our ability to continue to significantly increase their sales, deliveries, installations and servicing worldwide, while allocating our available resources among multiple products simultaneously.

As we expand globally, we will also need to ensure we are in compliance with any regulatory requirements applicable to the sale, installation and service of our products, the sale of electricity generated through our solar energy systems and operation of Superchargers in various jurisdictions, which could take considerable time and expense. These plans require significant cash investments and management resources and there is no guarantee that they will ultimately generate additional sales or installations of our products.

We continuously evaluate, and as appropriate evolve, our retail operations and product offerings in order to maximize our reach and optimize our costs, vehicle line-up and model differentiation, and purchasing experience. However, there is no guarantee that each step in our evolving strategy will be perceived as intended by prospective customers accustomed to more traditional sales models.

In particular, we are targeting with Model 3 and Model Y a global mass demographic with a broad range of potential customers, in which we have limited experience projecting demand and pricing our products. Until we ramp local production at Gigafactory Shanghai and in the future at Gigafactory Berlin, we will have to contend with predominantly single-factory vehicle production at the Fremont Factory for numerous international variants.

If our specific demand expectations for these variants prove inaccurate, we may not be able to timely generate sales matched to the specific vehicles that we produce in the same timeframe or that are commensurate with our operations in a given region, which may negatively impact our deliveries and operating results in a particular period. Likewise, as we develop and grow our energy storage product and solar business worldwide, our success will depend on our ability to correctly forecast demand for our products in different markets.

Moreover, because we do not have independent dealer networks, we are responsible for delivering all of our vehicles to our customers and meeting their vehicle servicing needs. While we have substantially implemented and improved many aspects of our delivery and service operations, we still have relatively limited experience with, and may face difficulties in, such deliveries and servicing at high volumes, particularly in international markets as we expand. For example, significant transit time may be required to transport vehicles in volume into international markets, and we also saw challenges in initially ramping our logistical channels in China and Europe as we delivered Model 3 there for the first time in the first quarter of Likewise, because of our unique expertise with our vehicles, we recommend that our vehicles be serviced by our service centers, Mobile Service technicians or certain authorized professionals that we have specifically trained and equipped.

If we experience delays in adding such servicing capacity or experience unforeseen issues with the reliability of our vehicles, particular higher-volume and newer additions to our fleet such as Model 3 and Model Y, it could overburden our servicing capabilities and parts inventory. Finally, the increasing number of Tesla vehicles also requires us to continue to rapidly increase the number of our Supercharger stations and connectors throughout the world.

We are also expanding our installation capabilities for the Solar Roof as we continue its manufacturing ramp by training both our own personnel and third party installers. If we are not successful in growing this overall installation capability to keep pace with our increasing production, or if we experience unforeseen delays in the production ramp or inaccurately forecast demand for the Solar Roof, our operating results may be negatively impacted.

There is no assurance that we will be able to ramp our business to meet our sales, delivery, servicing, charging and installation targets globally, that our projections on which such targets are based will prove accurate, or that the pace of growth or coverage of our customer infrastructure network will meet customer expectations. Moreover, we may not be successful in undertaking this global expansion if we are unable to avoid cost overruns and other unexpected operating costs, adapt our products and conduct our operations to meet local requirements and regulations , implement required local infrastructure, systems and processes, and find and hire a significant number of additional sales, service, electrical installation, construction and administrative personnel.

If we fail to manage our growth effectively, it could result in negative publicity and damage to our brand and have a material adverse effect on our business, prospects, financial condition and operating results. We operate in the automotive industry, which is generally susceptible to cyclicality and volatility. Our growth is highly dependent upon the worldwide adoption by consumers of alternative fuel vehicles in general and electric vehicles in particular.

Although we have successfully grown demand for our vehicles thus far, there is no guarantee of such future demand, or that our vehicles will not compete with one another in the market. Moreover, the target demographics for our vehicles, in particular the mass market demographic for Model 3 and Model Y, are highly competitive. If the market for electric vehicles in general and Tesla vehicles in particular does not develop as we expect, develops more slowly than we expect, or if demand for our vehicles decreases in our markets, our business, prospects, financial condition and operating results could be harmed.

We have only relatively recently achieved high-volume production of vehicles, and are still at an earlier stage and have limited resources relative to our competitors. Moreover, the market for alternative fuel vehicles is rapidly evolving. As a result, the market for our vehicles could be affected by numerous factors, such as:. In addition, sales of vehicles in the automotive industry tend to be cyclical in many markets, which may expose us to increased volatility, especially as we expand and adjust our operations and retail strategies.

Specifically, it is uncertain as to how such macroeconomic factors will impact us as a company that has been experiencing growth and increasing market share in an industry that has globally been experiencing a recent decline in sales. We are dependent on our suppliers, the majority of which are single-source suppliers, and the inability of these suppliers to deliver necessary components of our products according to our schedule and at prices, quality levels and volumes acceptable to us, or our inability to efficiently manage these components, could have a material adverse effect on our financial condition and operating results.

Our products contain thousands of purchased parts that we source globally from hundreds of direct suppliers. We attempt to mitigate our supply chain risk by entering into long-term agreements where it is practical and beneficial to do so, including agreements we entered into with Panasonic to be our manufacturing partner and supplier; qualifying and obtaining components from multiple sources where sensible, such as the PV panels for our retrofit solar installations that we purchase from a variety of suppliers; and maintaining safety stock for key parts and assemblies and die banks for components with lengthy procurement lead times.

However, our limited, and in most cases single-source, supply chain exposes us to multiple potential sources of delivery failure or component shortages for our production, such as those which we experienced in and in connection with our slower-than-planned Model S and Model X ramps.

The loss of any supplier, particularly a single- or limited-source supplier, or the disruption in the supply of components from our suppliers, could lead to product design changes, production delays of key revenue-generating products, idle manufacturing facilities, and potential loss of access to important technology and parts for producing, servicing and supporting our products, any of which could result in negative publicity, damage to our brand and a material and adverse effect on our business, prospects, financial condition and operating results.

We may also be impacted by changes in our supply chain or production needs. We have experienced in the past, and may experience in the future, cost increases from certain of our suppliers in order to meet our quality targets and development timelines as well as due to our design changes. While we believe that we will be able to secure additional or alternate sources of supply for most of our components in a relatively short time frame, there is no assurance that we will be able to do so or develop our own replacements for certain highly customized components.

Additionally, we continuously negotiate with existing suppliers to obtain cost reductions and avoid unfavorable changes to terms, seek new and less expensive suppliers for certain parts, and attempt to redesign certain parts to make them less expensive to produce.

If we are unsuccessful in our efforts to control and reduce supplier costs, our operating results will suffer. Furthermore, as the scale of our vehicle production increases, we will need to accurately forecast, purchase, warehouse and transport components to our manufacturing facilities and servicing locations internationally and at much higher volumes.

If we are unable to accurately match the timing and quantities of component purchases to our actual needs or successfully implement automation, inventory management and other systems to accommodate the increased complexity in our supply chain, we may incur unexpected production disruption, storage, transportation and write-off costs, which could have a material adverse effect on our financial condition and operating results.

Any problems or delays in expanding Gigafactory Nevada or ramping and maintaining operations there could negatively affect the production and profitability of our products, such as Model 3, Model Y and our energy storage products. In addition, the battery cells produced there store large amounts of energy. To lower the cost of cell production and produce cells in high volume, we have vertically integrated the production of lithium-ion cells at Gigafactory Nevada, where we also manufacture battery packs and drive units for certain vehicles and energy storage products and assemble our Megapack product.

Production of lithium-ion cells at Gigafactory Nevada began in , and we have no other direct experience in the production of lithium-ion cells. Given the size and complexity of this undertaking, it is possible that future events could result in issues or delays in further ramping our products and expanding production output at Gigafactory Nevada. In order to achieve our volume and gross margin targets for our vehicles and energy storage products, we must continue to sustain and ramp significant cell production at Gigafactory Nevada, which, among other things, requires Panasonic to successfully operate and further ramp its cell production lines at significant volumes.

Although Panasonic has a long track record of producing high-quality cells at significant volume at its factories in Japan, it has relatively limited experience with cell production at Gigafactory Nevada. In addition, we produce several components for Model 3 and Model Y, such as battery modules incorporating the lithium- ion cells produced by Panasonic and drive units including to support Gigafactory Shanghai production , at Gigafactory Nevada. Some of the manufacturing lines for such components took longer than anticipated to ramp to their full capacity.

While we have largely overcome this bottleneck after deploying multiple semi-automated lines and improving our original lines, additional bottlenecks may arise as we continue to increase the production rate and introduce new lines. If we are unable to maintain Gigafactory Nevada production, ramp output additionally over time as needed, and do so cost-effectively, or if we or Panasonic are unable to hire and retain a substantial number of highly skilled personnel, our ability to supply battery packs or other components for Model 3, Model Y and our other products could be negatively impacted, which could negatively affect our brand and harm our business, prospects, financial condition and operating results.

In addition, the high volumes of lithium-ion cells and battery modules and packs manufactured at Gigafactory Nevada are stored and recycled at our various facilities. Any mishandling of battery cells may cause disruption to the operation of such facilities. While we have implemented safety procedures related to the handling of the cells, there can be no assurance that a safety issue or fire related to the cells would not disrupt our operations.

Such disruptions or issues could negatively affect our brand and harm our business, prospects, financial condition and operating results. Any issues or delays in meeting our projected timelines, costs and production at or funding the ramp of Gigafactory Shanghai, or any difficulties in generating and maintaining local demand for vehicles manufactured there, could adversely impact our business, prospects, operating results and financial condition.

As part of our continuing work to increase production of our vehicles on a sustained basis, and in order to make them affordable in international markets by accessing local supply chains and workforces, we have established Gigafactory Shanghai in China. Currently, we have installed annual production capacity for , Model 3 vehicles there that we believe we will eventually be able to push to actual rates of production in excess of such number , and we have commenced construction of the next phase of Gigafactory Shanghai to add Model Y manufacturing capacity at least equivalent to that for Model 3.

The ramp and further expansion of Gigafactory Shanghai are subject to a number of uncertainties inherent in all new manufacturing operations, including ongoing compliance with regulatory requirements, maintenance of operational licenses and approvals for additional expansion, potential supply chain constraints, hiring, training and retention of qualified employees, and the pace of bringing production equipment and processes online with the capability to manufacture high-quality units at scale.

We have limited experience to date with operating manufacturing facilities abroad, and only recently began to sell Model 3 in China. If we experience any issues or delays in meeting our projected timelines, costs, capital efficiency and production capacity for Gigafactory Shanghai, or in maintaining and complying with the terms of local debt financing that we intend will largely fund it, or in generating and maintaining demand locally for the vehicles we manufacture at Gigafactory Shanghai, our business, prospects, operating results and financial condition could be adversely impacted.

In particular, local manufacturing is critical to our expansion and sales in China, which is the largest market for electric vehicles in the world. Our vehicle sales in China have been negatively impacted in the past by certain tariffs on automobiles manufactured in the U. If we are not able to successfully and timely ramp Gigafactory Shanghai, we may continue to be exposed to the impact of such unfavorable tariffs, duties or costs to our detriment compared to locally-based competitors.

There can be no assurance that these investments will achieve expected returns, and the Company may not be able to develop and market new products and services successfully. The Company currently holds a significant number of patents, trademarks and copyrights and has registered, and applied to register, numerous patents, trademarks and copyrights. The Company has a minority market share in the global smartphone, personal computer and tablet markets.

The Company faces substantial competition in these markets from companies that have significant technical, marketing, distribution and other resources, as well as established hardware, software and digital content supplier relationships. Competition has been particularly intense as competitors have aggressively cut prices and lowered product margins.

Certain competitors may have the resources, experience or cost structures to provide products at little or no profit or even at a loss. Some of the markets in which the Company competes have from time to time experienced little to no growth or contracted. There can be no assurance the Company will be able to continue to provide products and services that compete effectively.

To remain competitive and stimulate customer demand, the Company must successfully manage frequent introductions and transitions of products and services. Due to the highly volatile and competitive nature of the industries in which the Company competes, the Company must continually introduce new products, services and technologies, enhance existing products and services, effectively stimulate customer demand for new and upgraded products and services, and successfully manage the transition to these new and upgraded products and services.

Accordingly, the Company cannot determine in advance the ultimate effect of new product and service introductions and transitions. The Company depends on the performance of carriers, wholesalers, retailers and other resellers. The Company distributes its products through cellular network carriers, wholesalers, retailers and resellers, many of whom distribute products from competing manufacturers.

The Company also sells its products and resells third-party products in most of its major markets directly to consumers, small and mid-sized businesses, and education, enterprise and government customers through its retail and online stores and its direct sales force.

These programs can require a substantial investment while not assuring return or incremental sales. The Company is exposed to the risk of write-downs on the value of its inventory and other assets, in addition to purchase commitment cancellation risk. The Company records a write-down for product and component inventories that have become obsolete or exceed anticipated demand, or for which cost exceeds net realizable value. The Company also accrues necessary cancellation fee reserves for orders of excess products and components.

If the Company determines that an impairment has occurred, it records a write-down equal to the amount by which the carrying value of the asset exceeds its fair value. Although the Company believes its inventory, capital assets, inventory prepayments and other assets and purchase commitments are currently recoverable, no assurance can be given that the Company will not incur write-downs, fees, impairments and other charges given the rapid and unpredictable pace of product obsolescence in the industries in which the Company competes.

The Company orders components for its products and builds inventory in advance of product announcements and shipments. Because the Company currently obtains certain components from single or limited sources, the Company is subject to significant supply and pricing risks. While the Company has entered into agreements for the supply of many components, there can be no assurance that the Company will be able to extend or renew these agreements on similar terms, or at all.

Therefore, the Company remains subject to significant risks of supply shortages and price increases that could materially adversely affect its financial condition and operating results. The Company depends on component and product manufacturing and logistical services provided by outsourcing partners, many of which are located outside of the U.

A significant concentration of this manufacturing is currently performed by a small number of outsourcing partners, often in single locations. The Company has also outsourced much of its transportation and logistics management. Although arrangements with these partners may contain provisions for product defect expense reimbursement, the Company generally remains responsible to the consumer for warranty and out-of-warranty service in the event of product defects and could experience an unanticipated product defect liability.

While the Company relies on its partners to adhere to its supplier code of conduct, material violations of the supplier code of conduct could occur. The Company relies on single-source outsourcing partners in the U. In addition, manufacturing or logistics in these locations or transit to final destinations can be disrupted for a variety of reasons including, but not limited to, natural and man-made disasters, information technology system failures, commercial disputes, military actions, economic, business, labor, environmental, public health or political issues, or international trade disputes.

The Company has invested in manufacturing process equipment, much of which is held at certain of its outsourcing partners, and has made prepayments to certain of its suppliers associated with long-term supply agreements. While these arrangements help ensure the supply of components and finished goods, if these outsourcing partners or suppliers experience severe financial problems or other disruptions in their business, such continued supply can be reduced or terminated and the recoverability of manufacturing process equipment or prepayments can be negatively impacted.

The Company offers complex hardware and software products and services that can be affected by design and manufacturing defects. Sophisticated operating system software and applications, such as those offered by the Company, often have issues that can unexpectedly interfere with the intended operation of hardware or software products.

Defects can also exist in components and products the Company purchases from third parties. There can be no assurance the Company will be able to detect and fix all issues and defects in the hardware, software and services it offers. The Company relies on access to third-party digital content, which may not be available to the Company on commercially reasonable terms or at all.

The Company contracts with numerous third parties to offer their digital content to customers. This includes the right to sell currently available content. The licensing or other distribution arrangements with these third parties are for relatively short terms and do not guarantee the continuation or renewal of these arrangements on commercially reasonable terms, if at all.

Some third-party content providers and distributors currently or in the future may offer competing products and services, and can take actions to make it more difficult or impossible for the Company to license or otherwise distribute their content in the future. The Company may be unable to continue to offer a wide variety of content at commercially reasonable prices with acceptable usage rules, or continue to expand its geographic reach.

Some third-party digital content providers require the Company to provide digital rights management and other security solutions. If requirements change, the Company may have to develop or license new technology to provide these solutions. There is no assurance the Company will be able to develop or license such solutions at a reasonable cost and in a timely manner. The Company believes decisions by customers to purchase its hardware products depend in part on the availability of third-party software applications and services.

This analysis may be based on factors such as the market position of the Company and its products, the anticipated revenue that may be generated, expected future growth of product sales, and the costs of developing such applications and services. The Company relies on the continued availability and development of compelling and innovative software applications for its products.

The Company retains a commission from sales through these platforms. If developers reduce their use of these platforms to distribute their applications and offer in-app purchases to customers, then the volume of sales, and the commission that the Company earns on those sales, would decrease.

The Company relies on access to third-party intellectual property, which may not be available to the Company on commercially reasonable terms or at all. From time to time, the Company has been notified that it may be infringing certain patents or other intellectual property rights of third parties. Based on experience and industry practice, the Company believes licenses to such third-party intellectual property can generally be obtained on commercially reasonable terms.

There is, however, no assurance that the necessary licenses can be obtained on commercially reasonable terms or at all. The Company could be impacted by unfavorable results of legal proceedings, such as being found to have infringed on intellectual property rights.

The Company is subject to various legal proceedings and claims that have arisen in the ordinary course of business and have not yet been fully resolved, and new claims may arise in the future. In addition, agreements entered into by the Company sometimes include indemnification provisions which can subject the Company to costs and damages in the event of a claim against an indemnified third party. Claims against the Company based on allegations of patent infringement or other violations of intellectual property rights have generally increased over time and may continue to increase.

In particular, the Company has historically faced a significant number of patent claims relating to its cellular-enabled products, and new claims may arise in the future. For example, technology and other patent-holding companies frequently assert their patents and seek royalties and often enter into litigation based on allegations of patent infringement or other violations of intellectual property rights.

The Company is vigorously defending infringement actions in courts in several U. The plaintiffs in these actions frequently seek injunctions and substantial damages. In recognition of these considerations, the Company may enter into licensing agreements or other arrangements to settle litigation and resolve such disputes. No assurance can be given that such agreements can be obtained on acceptable terms or that litigation will not occur.

The outcome of litigation is inherently uncertain. Further, such an outcome could result in significant compensatory, punitive or trebled monetary damages, disgorgement of revenue or profits, remedial corporate measures or injunctive relief against the Company that could materially adversely affect its financial condition and operating results.

While the Company maintains insurance coverage for certain types of claims, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise. The technology industry, including, in some instances, the Company, is subject to intense media, political and regulatory scrutiny, which exposes the Company to government investigations, legal actions and penalties.

The Company also has entered into substantial lease commitments for retail space. Certain stores have been designed and built to serve as high-profile venues to promote brand awareness. The Company has invested, and in the future may invest, in new business strategies or acquisitions. These new ventures are inherently risky and may not be successful. The Company is exposed to information technology system failures or network disruptions caused by natural disasters, accidents, power disruptions, telecommunications failures, acts of terrorism or war, computer viruses, physical or electronic break-ins, or other events or disruptions.

There may be losses or unauthorized access to or releases of confidential information, including personally identifiable information, that could subject the Company to significant reputational, financial, legal and operational consequences. The Company devotes significant resources to network and data security, including through the use of encryption and other security measures intended to protect its systems and data. Although malicious attacks perpetrated to gain access to confidential information, including PII, affect many companies across various industries, the Company is at a relatively greater risk of being targeted because of its high profile and the value of the confidential information it creates, owns, manages, stores and processes.

The Company has implemented systems and processes intended to secure its information technology systems and prevent unauthorized access to or loss of sensitive data, including through the use of encryption and authentication technologies. As with all companies, these security measures may not be sufficient for all eventualities and may be vulnerable to hacking, employee error, malfeasance, system error, faulty password management or other irregularities.

In addition to the risks relating to general confidential information described above, the Company is also subject to specific obligations relating to health data and payment card data. Under payment card rules and obligations, if cardholder information is potentially compromised, the Company could be liable for associated investigatory expenses and could also incur significant fees or fines if the Company fails to follow payment card industry data security standards.

While the Company maintains insurance coverage that is intended to address certain aspects of data security risks, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise. The Company is subject to federal, state and international laws relating to the collection, use, retention, security and transfer of PII.

In many cases, these laws apply not only to third-party transactions, but also may restrict transfers of PII among the Company and its international subsidiaries. Several jurisdictions have passed laws in this area, and other jurisdictions are considering imposing additional restrictions. These laws continue to develop and may be inconsistent from jurisdiction to jurisdiction. Complying with emerging and changing international requirements may cause the Company to incur substantial costs or require the Company to change its business practices.

Noncompliance could result in significant penalties or legal liability. The Company makes statements about its use and disclosure of PII through its privacy policy, information provided on its website and press statements. Any failure by the Company to comply with these public statements or with other federal, state or international privacy-related or data protection laws and regulations could result in proceedings against the Company by governmental entities or others.

In addition to reputational impacts, penalties could include ongoing audit requirements and significant legal liability. Political events, international trade disputes, war, terrorism, natural disasters, public health issues, industrial accidents and other business interruptions could harm or disrupt international commerce and the global economy, and could have a material adverse effect on the Company and its customers, suppliers, contract manufacturers, logistics providers, distributors, cellular network carriers and other channel partners.

For example, trade tensions have led to a series of tariffs imposed by the U. These increased costs adversely impact the gross margin that the Company earns on its products. Global climate change could result in certain types of natural disasters occurring more frequently or with more intense effects.

Following an interruption to its business, the Company could require substantial recovery time, experience significant expenditures to resume operations, and lose significant sales. Because the Company relies on single or limited sources for the supply and manufacture of many critical components, a business interruption affecting such sources would exacerbate any negative consequences to the Company.

While the Company maintains insurance coverage for certain types of losses, such insurance coverage may be insufficient to cover all losses that may arise. The Company expects its quarterly net sales and operating results to fluctuate.

Further, the Company generates a significant portion of its net sales from a single product and a decline in demand for that product could significantly impact quarterly net sales. The Company believes its stock price should reflect expectations of future growth and profitability.

The Company also believes its stock price should reflect expectations that its cash dividend will continue at current levels or grow, and that its current share repurchase program will be fully consummated. If the Company fails to meet expectations related to future growth, profitability, dividends, share repurchases or other market expectations, its stock price may decline significantly, which could have a material adverse impact on investor confidence and employee retention. The weakening of foreign currencies relative to the U.

In some circumstances, for competitive or other reasons, the Company may decide not to raise international pricing to offset the U. Conversely, a strengthening of foreign currencies relative to the U. The Company uses derivative instruments, such as foreign currency forward and option contracts, to hedge certain exposures to fluctuations in foreign currency exchange rates. The use of such hedging activities may not be effective to offset any, or more than a portion, of the adverse financial effects of unfavorable movements in foreign exchange rates over the limited time the hedges are in place.

The Company is exposed to credit risk and fluctuations in the values of its investment portfolio. The Company is exposed to credit risk on its trade accounts receivable, vendor non-trade receivables and prepayments related to long-term supply agreements, and this risk is heightened during periods when economic conditions worsen.

The Company distributes its products through third-party cellular network carriers, wholesalers, retailers and resellers. The Company also sells its products directly to small and mid-sized businesses and education, enterprise and government customers. The Company also has unsecured vendor non-trade receivables resulting from purchases of components by outsourcing partners and other vendors that manufacture sub-assemblies or assemble final products for the Company.

In addition, the Company has made prepayments associated with long-term supply agreements to secure supply of inventory components. While the Company has procedures to monitor and limit exposure to credit risk on its trade and vendor non-trade receivables, as well as long-term prepayments, there can be no assurance such procedures will effectively limit its credit risk and avoid losses. The Company could be subject to changes in its tax rates, the adoption of new U. The Company is subject to taxes in the U.

Due to economic and political conditions, tax rates in various jurisdictions may be subject to significant change. The Company is also subject to the examination of its tax returns and other tax matters by the U. Internal Revenue Service and other tax authorities and governmental bodies. The Company regularly assesses the likelihood of an adverse outcome resulting from these examinations to determine the adequacy of its provision for taxes.

There can be no assurance as to the outcome of these examinations. The Company believes its existing facilities and equipment, which are used by all reportable segments, are in good operating condition and are suitable for the conduct of its business.

The Company is subject to legal proceedings and claims that have not been fully resolved and that have arisen in the ordinary course of business. Not applicable. Total Number. Average Price Paid Per Share. Total Number of Shares. Purchased as Part of Publicly. Announced Plans or Programs. Approximate Dollar Value of.

Under the Plans or Programs 1. June 30, to August 3, Open market and privately negotiated purchases. August 4, to August 31, February ASR. September 1, to September 28, In August , the purchase period for this ASR ended and an additional 6. In total, Company Stock Performance. Note that historic stock price performance is not necessarily indicative of future stock price performance.

All rights reserved. September Dow Jones U. Technology Supersector Index. Total net sales. Net income. Earnings per share:. Cash dividends declared per share. Shares used in computing earnings per share:. Total cash, cash equivalents and marketable securities. Total assets. Non-current portion of term debt. Other non-current liabilities. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact.

The following discussion should be read in conjunction with the consolidated financial statements and accompanying notes included in Part II, Item 8 of this Form K. This section of this Form K generally discusses and items and year-to-year comparisons between and Fiscal Period. Fiscal Highlights. The weakness in foreign currencies had a significant unfavorable impact on net sales during Products and Services Performance.

Beginning in the first quarter of , the Company classified the amortization of the deferred value of Maps, Siri and free iCloud services, which are bundled in the sales price of iPhone, Mac, iPad and certain other products, in Services net sales.

Historically, the Company classified the amortization of these amounts in Products net sales consistent with its management reporting framework. As a result, Products and Services net sales for and were reclassified to conform to the presentation. The following table shows net sales by category for , and dollars in millions :.

Net sales by category:. Mac 1. Wearables, Home and Accessories 1 2. Services 3. Products net sales include amortization of the deferred value of unspecified software upgrade rights, which are bundled in the sales price of the respective product.

Services net sales also include amortization of the deferred value of Maps, Siri and free iCloud services, which are bundled in the sales price of certain products. Wearables, Home and Accessories net sales increased during compared to due primarily to higher net sales of AirPods and Apple Watch. Services net sales increased during compared to due primarily to higher net sales from the App Store, licensing and AppleCare.

Segment Operating Performance. The Company manages its business primarily on a geographic basis. Americas includes both North and South America. The following table shows net sales by reportable segment for , and dollars in millions :. Net sales by reportable segment:. Greater China. Rest of Asia Pacific. Americas net sales increased during compared to due primarily to higher Services and Wearables, Home and Accessories net sales, partially offset by lower iPhone net sales.

The weakness in foreign currencies relative to the U. Europe net sales decreased during compared to due to lower iPhone net sales, partially offset by higher Wearables, Home and Accessories and Services net sales. Greater China net sales decreased during compared to due primarily to lower iPhone net sales, partially offset by higher Wearables, Home and Accessories and Services net sales.

Japan net sales decreased during compared to due to lower iPhone net sales, partially offset by higher Services and Wearables, Home and Accessories net sales. The value of the Japanese Yen relative to the U. Rest of Asia Pacific net sales increased during compared to due primarily to higher Wearables, Home and Accessories and Services net sales, partially offset by lower iPhone net sales.

Gross Margin. Products and Services gross margin and gross margin percentage for , and were as follows dollars in millions :. Gross margin:. Total gross margin. Gross margin percentage:. Total gross margin percentage. Products Gross Margin. Products gross margin and Products gross margin percentage decreased during compared to due primarily to lower iPhone unit sales and the weakness in foreign currencies relative to the U. Products gross margin increased during compared to due primarily to a favorable shift in mix of iPhones and the strength in foreign currencies relative to the U.

Year-over-year Products gross margin percentage decreased during due primarily to higher product cost structures, partially offset by the strength in foreign currencies relative to the U. Services Gross Margin. Year-over-year Services gross margin increased during and due primarily to higher Services net sales and a different services mix.

As a result, the Company believes, in general, gross margins will be subject to volatility and remain under downward pressure. Operating Expenses. Operating expenses for , and were as follows dollars in millions :. Research and development. Percentage of total net sales. Selling, general and administrative.

Total operating expenses. Selling, General and Administrative. The year-over-year growth in selling, general and administrative expense in was driven primarily by increases in headcount-related expenses and higher spending on marketing and advertising and infrastructure-related costs. Interest and dividend income. Interest expense. The weighted-average interest rate earned by the Company on its cash, cash equivalents and marketable securities was 2.

Provision for Income Taxes. Provision for income taxes, effective tax rate and statutory federal income tax rate for , and were as follows dollars in millions :. Provision for income taxes. Effective tax rate. Statutory federal income tax rate. On December 22, , the U.

By operation of law, the Company applied a blended U. The Act also created a new minimum tax on certain foreign earnings. Management believes it is more likely than not that forecasted income, including income that may be generated as a result of certain tax planning strategies, together with future reversals of existing taxable temporary differences, will be sufficient to recover the net deferred tax assets.

The Company will continue to evaluate the amount of the valuation allowance, if any, by assessing the realizability of deferred tax assets. Recent Accounting Pronouncements. ASU expands component and fair value hedging, specifies the presentation of the effects of hedging instruments, and eliminates the separate measurement and presentation of hedge ineffectiveness.

The Company will adopt ASU in its first quarter of utilizing the modified retrospective transition method. Financial Instruments. The Company will adopt ASU utilizing the modified retrospective transition method through a cumulative-effect adjustment at the beginning of its first quarter of Liquidity and Capital Resources.

Cash, cash equivalents and marketable securities 1. Property, plant and equipment, net. Commercial paper. Total term debt. Working capital. Cash generated by operating activities. Cash used in financing activities. The Company believes its existing balances of cash, cash equivalents and marketable securities, along with commercial paper and other short-term liquidity arrangements, will be sufficient to satisfy its working capital needs, capital asset purchases, dividends, share repurchases, debt repayments and other liquidity requirements associated with its existing operations over the next 12 months.

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Our wireless connectivity products provide additional connectivity for mobile devices, tablets, laptops, other consumer electronics, other IoT applications and automotive telematics and infotainment systems. QCT also offers standalone Wi-Fi, Bluetooth, fingerprint sensor, applications processor and Ethernet products for mobile devices, consumer electronics, computers, other IoT applications, other connected devices and automotive telematics and infotainment systems.

Our networking products include Wi-Fi, Ethernet and Powerline chips, network processors and software. These products help enable home and business networks to support the growing number of connected devices, digital media and data services. Other than for our RFFE modules and RF filter products, QCT utilizes a fabless production model, which means that we do not own or operate foundries for the production of silicon wafers from which our integrated circuits are made.

Therefore, we primarily rely on third-parties to perform the manufacturing and assembly, and most of the testing, of our integrated circuits based primarily on our proprietary designs and test programs. Our suppliers also are responsible for the procurement of most of the raw materials used in the production of our integrated circuits.

Integrated circuits are die cut from silicon wafers that have completed the package assembly and test manufacturing processes. The semiconductor package supports the electrical contacts that connect the integrated circuit to a circuit board. Die cut from silicon wafers are the essential components of all of our integrated circuits and a significant portion of the total integrated circuit cost.

We employ both turnkey and two-stage manufacturing models to purchase our integrated circuits. Under the turnkey model, our foundry suppliers are responsible for delivering fully assembled and tested integrated circuits. Under the two-stage manufacturing model, we purchase die in singular or wafer form from semiconductor manufacturing foundries and contract with separate third-parties for manufacturing services such as wafer bump, probe, assembly and the majority of our final test requirements.

The majority of our foundry and semiconductor assembly and test suppliers are located in the Asia-Pacific region. QCT primarily uses internal fabrication facilities to manufacture RFFE modules and RF filter products, and its manufacturing operations consist of front-end and back-end processes. The front-end processes primarily take place at manufacturing facilities located in Germany and Singapore and involve the imprinting of substrate wafers with the structure and circuitry required for the products to function also known as wafer fabrication.

The back-end processes include the assembly, packaging and test of RFFE modules and RF filter products and their preparation for distribution. The back-end manufacturing facilities are located in China and Singapore. QCT generally allows customers to reschedule delivery dates within a defined time frame and to cancel orders prior to shipment with or without payment of a penalty, depending on when the order is canceled.

The industry in which QCT operates is intensely competitive. QCT competes worldwide with a number of U. As a result of global expansion by foreign and domestic competitors, technological changes, lengthening replacement cycles for mobile devices, device manufacturer concentrations and the potential for further industry consolidation, we anticipate the industry to remain very competitive.

We believe that the principal competitive factors for our products include performance, level of integration, quality, compliance with industry standards, price, time-to-market, system cost, design and engineering capabilities, new product innovation, growth and scaling of distribution channels, desire by certain customers to use multiple suppliers and customer support.

QCT also competes in both single-mode and multimode environments against alternative communications technologies. Additional competitive factors exist for QCT product offerings that have expanded into adjacent industry segments or applications beyond mobile, including automotive and IoT. The automotive industry is subject to long design-in time frames, long product life cycles and a high degree of regulatory and safety requirements, necessitating suppliers to the industry to comply with stringent qualification processes, very low defect rates and high reliability standards, all of which results in a significant barrier to entry and may result in increased costs.

QCT also faces competition from products internally developed by our customers, including some of our largest customers, and from some early-stage companies. Our competitors devote significant amounts of their financial, technical and other resources to develop and market competitive products and, in some cases, to develop and adopt competitive digital communication or signal processing technologies, and those efforts may materially and adversely affect us.

QTL Segment. We grant licenses or otherwise provide rights to use our cellular standard-essential patents including 3G, 4G and 5G for both single-mode and multimode devices on a worldwide basis, and our standard practice in China is to offer our cellular standard-essential Chinese patents for 3G, 4G and, now, 5G for devices sold for use in China separately from our other patents.

We also offer licenses to our cellular standard-essential patents together with other Qualcomm patents that may be useful to such licensed products for licensees that desire to obtain the commercial benefits of receiving such broad patent rights from us. Since , an increasing number of new and existing licensees have elected to enter into worldwide license agreements covering only our cellular standard-essential patents. Our licensees manufacture wireless products including mobile devices including handsets , other consumer devices e.

Since our founding in , we have focused heavily on technology development and innovation. These efforts have resulted in a leading intellectual property portfolio related to foundational, system level technologies for the wireless industry. We have an extensive portfolio of United States and foreign patents, and we continue to pursue patent applications around the world.

Our patent portfolio is the most widely and extensively licensed in the industry, with more than licensees. These include certain video codecs, audio codecs, Wi-Fi, memory interfaces, wireless power, GPS and positioning, broadcast and streaming protocols, and short-range communication functionalities, including NFC and Bluetooth. Our patents cover a wide range of technologies across the entire wireless system, including the device handsets and other wireless devices , not just the portion of such patented technologies incorporated into chipsets, and the network.

We have licensed or otherwise provided rights to use our patents to hundreds of companies on industry-accepted terms. Unlike some other companies in our industry that hold back certain key technologies, we offer companies substantially our entire patent portfolio for use in cellular devices and cell site infrastructure equipment.

By licensing or otherwise providing rights to use our patents to a wide range of equipment manufacturers, 5G will continue to encourage innovative applications through enhanced mobile broadband services with lower latency and multi-gigabit user data speeds and bring more capacity and efficiency to wireless networks. Standards bodies have been informed that we hold: patents that might be essential for all 3G standards that are based on CDMA; patents and pending patent applications that are potentially essential for LTE standards, including FDD and TDD versions; and patents and pending patent applications that are potentially essential for 5G technologies.

We have committed to such standards bodies that we will offer to license our essential patents for these standards consistent with our commitments to those bodies. We have made similar commitments with respect to certain other technologies implemented in industry standards.

QTL licensing revenues include royalties and, to a lesser extent, license fees. Licensees pay quarterly royalties based on their sales of products incorporating or using our licensed intellectual property and may also pay a fixed license fee in one or more installments.

Sales-based royalties are generally based upon a percentage of the wholesale i. We broadly provide per unit royalty caps that apply to certain categories of complete wireless devices, namely smartphones, tablets, laptops and smartwatches, and provide for a maximum royalty amount payable per device. Revenues generated from royalties are subject to quarterly and annual fluctuations. Some of our inventions that serve as foundational technologies for 3G and 4G also serve as foundational technologies for 5G.

We have invested and continue to invest in the development of 5G and continue to play a significant role in driving advancements of 5G. Nevertheless, we face competition in the development of intellectual property for future generations of digital wireless communications technologies and services.

Separate and apart from licensing manufacturers of wireless devices and network equipment, we have entered into certain arrangements with competitors of our QCT segment. QSI Segment. QSI makes strategic investments primarily through our Qualcomm Ventures arm that are focused on expanding or opening new opportunities for our technologies as well as supporting the design and introduction of new products and services or enhancing existing products or services.

Many of these strategic investments are in early-stage companies in a variety of industries and applications, including, but not limited to, artificial intelligence, automotive, digital healthcare, enterprise, IoT, mobile and networking. Investments primarily include non-marketable equity securities and to a lesser extent, marketable equity securities the majority of which resulted from initial public offerings of certain non-marketable equity investments and convertible debt instruments.

In addition, QSI segment results include revenues and related costs associated with development contracts with one of our investees OneWeb. As part of our strategic investment activities, we intend to pursue various exit strategies for each of our QSI investments in the foreseeable future. Other Businesses. Nonreportable segments include our Qualcomm Government Technologies or QGOV business, our cloud AI inference processing initiative and other technology and service initiatives.

QGOV provides development and other services and sells related products to U. Segment Information. Corporate Structure. We have developed our corporate structure in order to address various legal, regulatory, tax, contractual compliance, operational and other matters. Substantially all of our products and services businesses, including QCT, and substantially all of our engineering, research and development functions, are operated by Qualcomm Technologies, Inc.

Revenue Concentrations and Significant Customers. Revenues in fiscal were negatively impacted by our prior dispute with Apple and its contract manufacturers. Research and Development. The wireless communications industry is characterized by rapid technological change, evolving industry standards, frequent new product introductions and, with the introduction of 5G, the expansion into new industry segments or applications such as automotive and IoT, requiring a continuous effort to enhance existing products and technologies and to develop new products and technologies.

Using these engineering resources, we expect to continue to invest in research and development in a variety of ways in an effort to extend the demand for our products, and to utilize that research and development in adjacent industry segments or applications beyond mobile such as automotive and IoT , including continuing the development of CDMA, OFDMA and other technologies such as RFFE , developing alternative technologies for certain specialized applications, participating in the formulation of new voice and data communication standards and technologies, and assisting in deploying digital voice and data communications networks around the world.

Our research and development team has a demonstrated track record of innovation in voice and data communication technologies and application processor technology, among others. We also engage in acquisitions and other transactions, such as joint ventures, to meet certain technology needs, to obtain development resources or open or expand opportunities for our technologies and to support the design and introduction of new products and services or enhancing existing products and services for voice and data communications and new industry segments or applications beyond mobile.

We make investments to provide our integrated circuit customers with chipsets designed on leading-edge technology nodes that combine multiple technologies for use in consumer electronic devices e. In addition to 3G, 4G and 5G technologies, our chipsets support other wireless and wired connectivity technologies, including Wi-Fi, Bluetooth, Ethernet, location positioning and Powerline communication.

Our integrated chipsets often include multiple technologies, including advanced multimode modems, application processors and graphics engines, as well as the tools to connect these diverse technologies. We continue to support Android, Windows and other client software environments in our chipsets. We develop on our own, and with our partners, innovations that are integrated into our product portfolio to further expand the opportunity for wireless communications and enhance the value of our products and services.

These innovations are expected to enable our customers to improve the performance or value of their existing services, offer these services more affordably and introduce revenue-generating broadband data services ahead of their competition. We continue to use our substantial engineering resources and expertise to develop new technologies, applications and services and make them available to licensees to help grow the communications industry and generate new or expanded licensing opportunities. Sales and Marketing.

Sales and marketing activities of our operating segments are discussed under Operating Segments. Other marketing activities include public relations, branding, digital marketing and social media, technical marketing, product marketing, participation in technical conferences and trade shows, development of use cases and white papers, competitive analyses and industry intelligence and other marketing programs, such as co-marketing with our customers or licensees.

Our Corporate Marketing department provides information on our company website and through other channels regarding our products, strategies and technology to investors, industry analysts, media, prospective job applicants, consumers and others. Competition faced by our operating segments is discussed under Operating Segments. Competition in the wireless communications industry throughout the world continues to increase at a rapid pace as consumers, businesses and governments realize the potential of wireless communications products and services.

It is also possible that the prices we charge for our products and services may continue to decline as competition continues to intensify. Our success depends in part on our ability to adapt to such change and compete effectively; and such change and competition could result in decreased demand for our products and technologies or declining average selling prices for our products or those of our customers or licensees. With the world becoming increasingly connected, we have a tremendous opportunity to shape a better future.

We believe in the power of technology. As such, our corporate responsibility vision is to be a facilitator of innovation for a sustainable world, connected wirelessly. We understand that the success of our business is fundamentally connected to the well-being of our world. We focus our efforts in four key areas where we believe we can have the biggest impact:.

We integrate responsible and sustainable practices throughout our organization. Our products are designed to not harm individuals, communities or the environment. We continually look for ways to conserve water, minimize energy consumption, lower emissions and reduce waste. Because privacy and security are critical for success in the wireless industry, we constantly seek to promote data protection across the mobile ecosystem.

We strive to make Qualcomm an inspiring and inclusive workplace to advance the development of leading-edge technologies. Our success is only possible with the hard work and dedication of our employees. We celebrate diversity among our workforce and recognize that our varied backgrounds, experiences and ideas are critical to innovation.

We foster inclusive practices in our operations around the world in order to reflect the communities in which we do business. We invent breakthrough technologies that enable life-changing products and experiences. We also work to broaden our impact by bringing advanced wireless technologies to underserved communities around the world.

In doing so, we believe that we have enriched the lives of millions of people while creating new opportunities for our business. We seek to inspire the next generation of inventors and advance workforce development for STEM-related careers science, technology, engineering and mathematics. Our initiatives are designed to promote and improve STEM education at all levels and to expand opportunities for underrepresented students. We encourage you to review our March Corporate Responsibility Report located on our Internet site at www.

Nothing on our website, including our Corporate Responsibility Report or sections thereof, shall be deemed incorporated by reference into this Annual Report. Human Capital. In order to continue to produce the innovative, breakthrough technologies for which we are known, it is crucial that we continue to attract and retain top talent.

To facilitate talent attraction and retention, we strive to make Qualcomm a diverse, inclusive and safe workplace, with opportunities for our employees to grow and develop in their careers, supported by strong compensation, benefits and health and wellness programs, and by programs that build connections between our employees and their communities. During fiscal , the number of employees increased by approximately 4,, primarily due to increases in engineering resources.

Our employees are represented by more than self-identified nationalities working in over locations in 32 different countries around the world. Collectively, we speak more than 60 different languages. Our global workforce is highly educated, with the substantial majority of our employees working in engineering or technical roles many of whom help develop foundational technologies for both our QCT semiconductor business and our QTL licensing business.

Diversity and Inclusion. We believe that a diverse workforce is critical to our success, and we continue to focus on the hiring, retention and advancement of women and underrepresented populations. Our recent efforts have been focused in three areas: inspiring innovation through an inclusive and diverse culture; expanding our efforts to recruit and hire world-class diverse talent; and identifying strategic partners to accelerate our inclusion and diversity programs.

We continue to recruit technical talent in diverse communities, including by engaging as a high-level sponsor of professional conferences, such as the Grace Hopper Celebration, the Society of Hispanic Professional Engineers National Convention and the National Society of Black Engineers National Convention.

Our continued engagement with organizations that work with diverse communities has been vital to our efforts to increase women and minority representation in our workforce. For example, we partner with AnitaB. We, alongside other top technology companies, helped form the Reboot Representation Tech Coalition, which aims to double the number of Black, Latinx and Native American women receiving computing degrees by In collaboration with the National Foundation for Autism Research, we started an internship program to welcome those with autism into our Company.

In an effort to provide additional transparency into our efforts to increase underrepresented populations in our workforce, we intend to disclose our Consolidated EEO-1 Report after our submission of the report to the U. Equal Employment Opportunity Commission. From a governance perspective, our HR and Compensation Committee, through its charter, provides oversight of our policies, programs and initiatives focusing on workforce diversity and inclusion.

Health, Safety and Wellness. The success of our business is fundamentally connected to the well-being of our people. Accordingly, we are committed to the health, safety and wellness of our employees. We provide our employees and their families with access to a variety of innovative, flexible and convenient health and wellness programs, including benefits that provide protection and security so they can have peace of mind concerning events that may require time away from work or that impact their financial well-being; that support their physical and mental health by providing tools and resources to help them improve or maintain their health status and encourage engagement in healthy behaviors; and that offer choice where possible so they can customize their benefits to meet their needs and the needs of their families.

In response to the COVID pandemic, we implemented significant changes that we determined were in the best interest of our employees, as well as the communities in which we operate, and which comply with government regulations. This includes having the vast majority of our employees work from home, while implementing additional safety measures for employees continuing critical on-site work. Compensation and Benefits.

We provide robust compensation and benefits programs to help meet the needs of our employees. In addition to our broad-based equity award programs, we have used targeted equity-based grants with vesting conditions to facilitate retention of personnel, particularly those with critical engineering skills and experience.

Talent Development. We invest significant resources to develop the talent needed to remain a world-leading wireless innovator. Our talent development programs provide employees with the resources they need to help achieve their career goals, build management skills and lead their organizations.

We provide a series of employee workshops around the globe that support professional growth and development. Additionally, our manager and employee forum programs provide an ongoing opportunity for employees to practice and apply learning around conversations aligned with our annual review process. We also have an employee development website that provides quick access to learning resources that are personalized to the individual's development needs.

We believe that building connections between our employees, their families and our communities creates a more meaningful, fulfilling and enjoyable workplace. Through our engagement programs, our employees can pursue their interests and hobbies, connect to volunteering and giving opportunities and enjoy unique recreational experiences with family members.

Leveraging our partnerships with various local. Since our employees are passionate about many causes, our corporate giving and volunteering programs support and encourage employees by engaging with those causes. In our offices around the world, our employee-led Giving Committees select local organizations to support, often in the form of grants that are primarily funded by the Qualcomm Foundation which was established in to support charitable giving and volunteerism.

We also frequently collaborate with these organizations on volunteer activities for our employees. Additionally, during fiscal , thousands of our employees around the world utilized our charitable match program, benefiting more than 1, charitable organizations. Available Information. Our Internet address is www.

There we make available, free of charge, our Annual Report on Form K, quarterly reports on Form Q, current reports on Form 8-K, proxy statements and any amendments to those reports among others , as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission SEC. We also make available on our Internet site public financial information for which a report is not required to be filed with or furnished to the SEC.

Our SEC reports and other financial information can be accessed through the investor relations section of our Internet site. The information found on our Internet site is not part of this or any other report we file with or furnish to the SEC. Information about our Executive Officers.

Steve Mollenkopf, age 51, has served as Chief Executive Officer since March and as a director since December Mollenkopf joined Qualcomm in as an engineer and throughout his tenure at Qualcomm has held several other technical and leadership roles.

Mollenkopf has been a member of the board of directors of Boeing Company since April Mollenkopf served as a member of the board of directors of General Electric Company from November to April Mollenkopf holds a B. Prior to joining Qualcomm, Ms. Prior to May , Ms. Ace holds a B. Cristiano R. Amon, age 50, has served as President, Qualcomm Incorporated since January Amon joined Qualcomm in as an engineer and throughout his tenure at Qualcomm has held several other technical and leadership positions.

Amon holds a B. Brian T. Prior to joining Qualcomm, Mr. Prior to joining Deutsche Bank, Mr. Modoff was a research analyst at several financial institutions from November to March Modoff previously worked in defense electronics, including at Rockwell International in manufacturing management, and for the U. Navy as a communications technician. Modoff holds a B. He served in various other finance roles since joining Qualcomm in March Palkhiwala was an Analyst at KeyBank.

Palkhiwala has an undergraduate degree in Mechanical Engineering from L. College of Engineering in India and an M. A from the University of Maryland. Alexander H. Prior to transitioning to QTL, Mr. Rogers joined Qualcomm in January as an attorney. Rogers holds a B. Donald J. From May to November , Mr.

Rosenberg has served as a member of the board of directors of NuVasive, Inc. Rosenberg holds a B. James H. Thompson joined Qualcomm in as a senior engineer and throughout his tenure at Qualcomm held several other technical and leadership positions. Thompson holds a B. You should consider each of the following factors in evaluating our business and our prospects. However, the risks and uncertainties described below are not the only ones we face.

Additional risks and uncertainties not presently known to us or that we currently consider immaterial may also negatively impact our business, results of operations, cash flows and financial condition, and require significant management time and attention. In that case, the trading price of our common stock could decline. The recent coronavirus COVID pandemic has had an adverse effect on our business and results of operations, and we expect its impact will continue, at least in the near term.

The rapid, global spread of COVID and the fear it has created has resulted in significant economic uncertainty, significant declines in business and consumer confidence and global demand in the wireless industry among others , a global economic slowdown, and has led to a global recession. Specifically, the decline in demand for smartphones and other consumer devices sold by our customers or licensees has resulted in decreased demand for our integrated circuit products which are incorporated into such devices and a decrease in the royalties we earn on the licensing of our intellectual property which is dependent upon the number of such devices sold that utilize our intellectual property.

We expect that demand for our products and demand for the products of our customers and licensees will continue to be negatively impacted in the near term. Although the spread of COVID has caused us to modify our workforce practices, such as having the vast majority of our employees working from home, we have not experienced a significant negative impact to our business or results of.

The COVID pandemic could also impact our business, results of operations and financial condition through delayed, reduced or cancelled customer orders; the inability of our customers or licensees to purchase or pay for our products or technologies; the insolvency of key suppliers, customers or licensees; delays in reporting or payments from our customers or licensees; or failures by other counterparties.

The degree to which the COVID pandemic impacts our future business, results of operations and financial condition will depend on future developments, which are uncertain, including but not limited to the duration, spread and severity of the pandemic, government responses and other actions to mitigate the spread of and to treat COVID, and when and to what extent normal business, economic and social activity and conditions resume.

We are similarly unable to predict the extent to which the pandemic impacts our customers, licensees, suppliers and other partners and their financial conditions, but adverse effects on these parties could also adversely affect us. Finally, the COVID pandemic makes it challenging for management to estimate the future performance of our business.

Increasingly, we also depend on operators of wireless networks, our customers and licensees and other third parties to incorporate these technologies into new device types and into industries and applications beyond mobile, such as automotive and IoT, among others.

We have historically been successful during wireless technology transitions, including 3G, 4G and now 5G. Commercial deployments of 5G networks and devices have begun and will continue. However, the timing and scale of such deployments, in certain regions, have been and may in the future be delayed due to the COVID pandemic. We believe it is critical that we remain a leader in 5G technology development, standardization, intellectual property creation and technology licensing, and that we develop, commercialize and be a leading supplier of 5G integrated circuit products, in order to sustain and grow our business long-term.

Our industry is subject to intense competition in an environment of rapid technological change. Our products and technologies face significant competition. We expect competition to increase as our current competitors expand their product offerings, improve their products or reduce the prices of their products as part of a strategy to maintain existing business and customers or attract new business and customers, as new opportunities develop, and as new competitors enter the industry.

We anticipate that additional competitors will introduce products as a result of growth opportunities in wireless communications, the trend toward global expansion by foreign and domestic competitors, and technological and public policy changes.

Additionally, the semiconductor industry has experienced and may continue to experience consolidation, which could result in significant changes to the competitive landscape. For example, if any key supplier of technologies and intellectual property to the semiconductor industry was sold to one of our competitors, it could negatively affect our ability to.

We expect that our future success will depend on, among other factors, our ability to:. We compete with many different semiconductor companies, ranging from multinational companies with integrated research and development, manufacturing, sales and marketing organizations across a broad spectrum of product lines, to companies that are focused on a single application, industry segment or standard product, including those that produce products for mobile, automotive and IoT, among others.

Most of these competitors compete with us with respect to some, but not all, of our businesses. Further, certain of those customers have developed, are developing or may develop their own integrated circuit products effectively making them competitors , which they have in the past utilized, currently utilize and may in the future utilize in some or all of their devices, rather than our products. Certain of our competitors also develop and sell infrastructure equipment for wireless networks and can optimize their integrated circuit products to perform on such networks to a degree that we are not able to, which again puts us at a competitive disadvantage.

Competition in any or all product tiers may result in the loss of business or customers, which would negatively impact our business, revenues, results of operations, cash flows and financial condition. Such competition may also reduce average selling prices for our chipset products or the products of our customers and licensees.

Certain of these dynamics are particularly pronounced in emerging regions and China where competitors may have lower cost structures or may have a willingness and ability to accept lower prices or lower margins on their products. Reductions in the average selling prices of our chipset products, without a corresponding increase in volumes, would negatively impact our revenues, and without corresponding decreases in average unit costs, would negatively impact our margins.

We derive a significant portion of our revenues from a small number of customers and licensees, and particularly from their sale of premium tier devices. If revenues derived from these customers or licensees decrease or the timing of such revenues fluctuates, our business and results of operations could be negatively affected. We derive a significant portion of our revenues from a small number of customers, and particularly from their sale of premium tier devices, and we expect this trend to continue in the foreseeable future.

Our industry is experiencing and may continue to experience concentration of device share among a few companies, particularly at the premium tier, contributing to this trend. Chinese OEMs continue to grow their device share in China and are increasing their device share in regions outside of China, and we derive a significant portion of our revenues from a small number of these OEMs as well.

These efforts may not require or result in purchase commitments from such customers or we may have lower purchases from such customers than expected, and consequently, we may not achieve the anticipated revenues from these efforts, or these efforts may result in non-recoverable costs. Any such reduction in revenues would also impact our cash resources available for other purposes, such as research and development.

Further, the concentration of device share among a few companies, and the corresponding purchasing power of these companies, may result in lower prices for our products which, if not accompanied by a sufficient increase in the volume of purchases of our products, could have an adverse effect on our revenues and margins. Apple purchases our MDM or thin modem products, which do not include our integrated application processor technology, and which have lower revenue and margin contributions than our combined modem and application processor products.

Further, to the extent Apple takes device share from our customers who purchase our integrated modem and application processor products, our revenues and margins may be negatively impacted. Our industry has also experienced, and we expect it will continue to experience, slowing growth in the premium-tier device segment due to, among other factors, lengthening replacement cycles in developed regions, where premium-tier smartphones are common; increasing consumer demand in emerging regions where premium-tier smartphones are less common and replacement cycles are on average longer than in developed regions and are continuing to lengthen; and a maturing premium-tier smartphone industry in which demand is increasingly driven by new product launches and innovation cycles.

A reduction in sales of premium-tier devices, a reduction in sales of our premium-tier integrated circuit products which have a higher revenue and margin contribution than our lower-tier integrated circuit products , or a shift in share away from OEMs that utilize our premium-tier products, would reduce our revenues and margins and may harm our ability to achieve or sustain expected financial results.

Although we have more than licensees, we derive a significant portion of our licensing revenues from a limited number of licensees, which includes a small number of Chinese OEMs. In the event that one or more of our significant licensees fail to meet their reporting and payment obligations, or we are unable to renew or modify one or more of their license agreements under similar terms as their existing agreements, our revenues, results of operations and cash flows would be adversely impacted.

Moreover, the future growth and success of our core licensing business will depend in part on the ability of our licensees to develop, introduce and deliver high-volume products that achieve and sustain customer acceptance. We do not have control over the product development, sales efforts or pricing of products by our licensees, and our licensees might not be successful.

Our business, particularly our semiconductor business, may suffer as a result of our customers vertically integrating i. Certain of our largest integrated circuit customers for example, Samsung develop their own integrated circuit products, which they have in the past utilized, and currently utilize, in certain of their devices and may in the future utilize in some or all of their devices, rather than our products and they have and may continue to sell their integrated circuit products to third parties, discretely or together with certain of their other products, in competition with us.

In April , we entered into a new multi-year chipset supply agreement with Apple and began shipping modems under this agreement in the third quarter of fiscal Accordingly, Apple is expected to use its own modem products, rather than our products, in some or all of its future devices. Similarly, we derive a significant portion of our revenues from Chinese OEMs. A significant portion of our business is concentrated in China, and the risks of such concentration are exacerbated by U.

We derive a significant portion of our revenues from Chinese OEMs, and from non-Chinese OEMs that utilize our integrated circuit products in their devices and sell those devices into China, which has the largest number of smartphone users in the world.

We also source certain critical integrated circuit products from suppliers in China. Due to various factors, including pressure, encouragement or incentives from, or policies of, the Chinese government including its Made in China campaign , concerns over losing access to our integrated circuit products as a result of actual, threatened or potential U.

Political actions, including trade protection and national security policies of the U. Given our revenue concentration in China, if, due to actual, threatened or potential U. Efforts by some OEMs to avoid paying fair and reasonable royalties for the use of our intellectual property may require the investment of substantial management time and financial resources and may result in legal decisions or actions by governments, courts, regulators or agencies, Standards Development Organizations SDOs or other industry organizations that harm our business.

In addition, certain licensees have disputed, underreported, underpaid, not reported or not paid royalties owed to us under their license agreements or reported to us in a manner that is not in compliance with their contractual obligations, and certain companies have yet to enter into or have delayed entering into or renewing license agreements with us for their use of our intellectual property, and they or others may engage in such behavior in the future.

The fact that one or more licensees dispute, underreport, underpay, do not report or do not pay royalties owed to us may encourage other licensees to take similar actions or not renew their existing license agreements, and may encourage other licensees or unlicensed companies to delay entering into, or to not enter into, new license agreements.

Further, to the extent such licensees and companies increase their device share, the negative impact of their underreporting, underpayment, non-payment or non-reporting on our business, revenues, results of operations, cash flows and financial condition will be exacerbated. We have been in the past and are currently subject to various litigation and governmental investigations and proceedings.

Commitments and Contingencies. Additionally, certain of our direct and indirect customers and licensees have pursued, and others may in the future pursue, litigation or arbitration against us related to our business. Unfavorable resolutions of one or more of these matters have had and could in the future have a material adverse effect on our business, revenues, results of operations, cash flows and financial condition. In addition, in connection with our participation in SDOs, we, like other patent owners, generally have made contractual commitments to such organizations to license those of our patents that would necessarily be infringed by standard-compliant products as set forth in those commitments.

Some manufacturers and users of standard-compliant products advance. Further, some companies or entities have proposed significant changes to existing intellectual property policies for implementation by SDOs and other industry organizations with the goal of significantly devaluing standard-essential patents. For example, some have put forth proposals which would require a maximum aggregate intellectual property royalty rate for the use of all standard-essential patents owned by all of the member companies to be applied to the selling price of any product implementing the relevant standard.

They have further proposed that such maximum aggregate royalty rate be apportioned to each member company with standard-essential patents based upon the number of standard-essential patents held by such company. Others have proposed that injunctions should not be an available remedy for infringement of standard-essential patents and have made proposals that could severely limit damage awards and other remedies by courts for patent infringement e.

Some SDOs, courts and governmental agencies have adopted, and may in the future adopt, some or all of these interpretations or proposals in a manner adverse to our interests, including in litigation to which we may not be a party. We expect that such proposals, interpretations and strategies will continue in the future, and if successful, our business model would be harmed, either by limiting or eliminating our ability to collect royalties or by reducing the royalties we can collect on all or a portion of our standard-essential patent portfolio, limiting our return on investment with respect to new technologies, limiting our ability to seek injunctions against infringers of our standard-essential patents, constraining our ability to make licensing commitments when submitting our technologies for inclusion in future standards which could make our technologies less likely to be included in such standards or forcing us to work outside of SDOs or other industry groups to promote our new technologies, and our revenues, results of operations and cash flows could be negatively impacted.

In addition, the legal and other costs associated with asserting or defending our positions have been and continue to be significant. We expect that such challenges, regardless of their merits, will continue into the foreseeable future and will require the investment of substantial management time and financial resources.

Changes in our patent licensing practices, whether due to governmental investigations or private legal proceedings challenging those practices, or otherwise, could adversely impact our business and results of operations. We may become subject to other litigation or governmental investigations or proceedings in the future. If we were required to reduce the royalty rates in our patent license agreements, our revenues, earnings and cash flows would be negatively impacted absent a sufficient increase in the volume of sales of devices upon which royalties are paid.

Similarly, if we were required to reduce the base on which our royalties are calculated, our revenues, results of operations and cash flows would be negatively impacted unless there was a sufficient increase in the volume of sales of devices upon which royalties are paid or we were able to increase our royalty rates to offset the decrease in revenues resulting from such lower royalty base assuming the absolute royalty dollars were below any relevant royalty caps. If we were required to grant patent licenses to chipset manufacturers which could lead to implementing a more complex, multi-level licensing structure in which we license certain portions of our patent portfolio to chipset manufacturers and other portions to OEMs , we would incur additional transaction costs, which may be significant, and we could incur delays in recognizing revenues until license negotiations were completed.

In addition, our licensing revenues and earnings would be negatively impacted if we were not able to obtain, in the aggregate, equivalent revenues under such a multi-level licensing structure. If we were required to sell chipsets to OEMs that do not have a license to our patents, our licensing program could be negatively impacted by patent exhaustion claims raised by such unlicensed OEMs i. Such sales would provide OEMs with a defense in the event we asserted our patents against them to obtain licensing revenue for those patents.

This could have a material adverse effect on our licensing program and our results of operations, cash flows and financial condition. The impact of any such changes to our licensing practices could vary widely and by jurisdiction, depending on the specific outcomes and the geographic scope of such outcomes. In addition, if we were required to make modifications to our licensing practices in one jurisdiction, licensees or governmental agencies in other jurisdictions may attempt to obtain similar outcomes for themselves or for such other jurisdictions, as applicable.

The continued and future success of our licensing programs requires us to continue to evolve our patent portfolio and to renew or renegotiate license agreements that are expiring or to cover additional future patents. We own a very strong portfolio of issued and pending patents related to 3G, 4G, 5G and other technologies. It is critical that we continue to evolve our patent portfolio, particularly in 5G. If we do not maintain a strong portfolio that is applicable to current and future standards, products and services, our future licensing revenues could be negatively impacted.

Further, the licenses granted to and from us under a number of our license agreements include only patents that are either filed or issued prior to a certain date. As a result, there are agreements with some licensees where later patents are not licensed by or to us. Additionally, our patent license agreements in effect that constitute a significant portion of our licensing revenues are effective for a specified term.

In order to license or to obtain a license to such later patents or after the expiration of the specified term, and to receive royalties after the expiration date of the specified term, we will need to extend or modify such license agreements or enter into new license agreements with such licensees more frequently than we have done historically. We might not be able to extend or modify license agreements, or enter into new license agreements, in the future without negatively affecting the material terms and conditions of our license agreements with such licensees, and such modifications or new agreements may negatively impact our revenues.

In some circumstances, we may extend, modify or enter into new license agreements as a result of arbitration or litigation, and terms imposed by arbitrators or courts may be less favorable to us than existing terms and may impact the financial or other terms of license agreements not subject to the litigation or arbitration.

Further, if we are unable to reach agreement on such modifications or new agreements, it could result in patent infringement litigation with such companies. Our business may suffer as a result of adverse rulings in government investigations or proceedings.

We have been in the past and are currently subject to various governmental investigations and proceedings. We are leveraging many of the component-level technologies from our vehicles to advance our energy storage products, including high density energy storage, cooling, safety, charge balancing, structural durability, and electronics management.

By taking a modular approach to the design of battery systems, we are able to maximize manufacturing capacity to produce our Powerwall, Powerpack and Megapack products. Additionally, we are making significant strides in the area of bi-directional, grid-tied power electronics that enable us to interconnect our battery systems seamlessly with global electricity grids while providing fast-acting systems for power injection and absorption.

Solar Energy Systems. We are continually innovating and developing new technologies to facilitate the growth of our solar energy business. For example, we have developed proprietary software to reduce solar energy system design and installation timelines and costs, and the Solar Roof is designed to work seamlessly with Powerwall.

Design and Engineering. We have created significant in-house capabilities in the design and test engineering of electric vehicles and their components and systems. We design, engineer and test bodies, chassis, exteriors, interiors, heating and cooling and low voltage electrical systems in-house, and to a lesser extent, in conjunction with our suppliers.

Our team has core competencies in computer aided design and crash test simulations, which reduces the product development time of new models. We continue to grow our capabilities, including for on-site crash testing, durability testing and component validation. Additionally, our team has expertise in selecting and working with various materials.

For example, given the impact of mass on range, which is very important for passenger vehicles, Model S and Model X are built with lightweight aluminum bodies and chassis which incorporate a variety of materials and production methods that help optimize vehicle weight, and Model 3 and Model Y are built with a mix of materials to be lightweight and safe while also increasing cost-effectiveness for these mass-market vehicles.

On the other hand, to accommodate the durability required of work vehicles, we plan to use a thick cold-rolled stainless steel alloy and ultra-strong glass for Cybertruck while employing our expertise in battery engineering to maintain excellent range. We have an in-house engineering team that both designs our energy storage products themselves, and works with our residential, commercial and utility customers to design bespoke systems incorporating our products.

We also have an in-house team that designs a customized solar energy system or Solar Roof for each of our customers, including an integrated energy storage system when requested by the customer. We have developed software that simplifies and expedites the design process and optimizes the design to maximize the energy production of each system.

This team completes a structural analysis of each building and produces a full set of structural design and electrical blueprints that contain the specifications for all system components. Additionally, this team specifies complementary mounting and grounding hardware where required. Sales and Marketing. Historically, we have been able to generate significant media coverage of our company and our products, and we believe we will continue to do so. Such media coverage and word of mouth are the current primary drivers of our sales leads and have helped us achieve sales without traditional advertising and at relatively low marketing costs.

Direct Sales. We market and sell our vehicles directly to customers using means that we believe will maximize our reach, improve the overall customer experience and maximize capital efficiency. Currently, our sales channels include our website and an international network of company-owned stores. In some states, we have also opened galleries to educate and inform customers about our products, but such locations do not actually transact in the sale of vehicles.

We believe this infrastructure enables us to better control costs of inventory, manage warranty service and pricing, educate consumers about electric vehicles and charging, maintain and strengthen the Tesla brand, and obtain rapid customer feedback. We reevaluate our sales strategy both globally and at a location-by-location level from time to time to optimize our current sales channels.

Sales of vehicles in the automobile industry also tend to be cyclical in many markets, which may expose us to volatility from time to time. Used Vehicle Sales. The Tesla and non-Tesla vehicles we acquire through trade-ins are subsequently remarketed, either directly by us or through third-parties. We also receive used Tesla vehicles to resell through lease returns and other sources.

Public Charging. Each Tesla Supercharger is an industrial grade, high-speed charger designed to recharge a Tesla vehicle significantly more quickly than other charging options, and we continue to evolve our technology to allow for even faster charging times at lower cost to us. Where possible, we are co-locating Superchargers with our solar and energy storage systems to further reduce costs and promote renewable power.

Supercharger stations typically are strategically placed along well-traveled routes and in dense city centers to allow Tesla vehicle owners the ability to enjoy quick, reliable and ubiquitous charging with convenient, minimal stops. Use of the Supercharger network is either free under certain sales programs or requires a competitive fee. We also work with a wide variety of hospitality, retail, and public destinations, as well as businesses with commuting employees, to offer additional charging options for our customers.

These Destination Charging and workplace locations deploy Tesla Wall Connectors to provide charging to Tesla vehicle owners who patronize or are employed at their businesses. We also work with single-family homeowners and multi-family residential entities to deploy home charging solutions in our communities.

We market and sell our solar and energy storage products to individuals, commercial and industrial customers and utilities through a variety of channels. In the U. Outside of the U. We also sell Powerwall directly to utilities. In the case of products sold to such utilities or channel partners, such partners typically sell and install the product in customer homes. We sell Powerpack and Megapack systems to commercial and utility customers through our international sales organization, which consists of experienced energy industry professionals in all of our target markets, as well as through our channel partner network.

In certain jurisdictions, we also sell installed solar energy systems with or without energy storage to commercial customers through cash, lease and PPA transactions. Service and Warranty. Performing vehicle service ourselves provides us with the capability to identify problems, find solutions, and incorporate improvements faster, and optimize logistics and inventory for service parts better, than traditional automobile manufacturers. Our vehicles are also designed with the capability to wirelessly upload data to us via an on-board system with cellular connectivity, allowing us to diagnose and remedy many problems before ever looking at the vehicle.

Each new vehicle has a four year or 50, mile New Vehicle Limited Warranty, subject to separate limited warranties for the supplemental restraint system, battery and drive unit, and body rust perforation. The Extended Service plans cover the repair or replacement of vehicle parts for up to an additional four years or up to an additional 50, miles after the expiration of the New Vehicle Limited Warranty. Energy Storage Systems.

In addition, we offer certain extended warranties, which customers are able to purchase from us at the time they purchase an energy storage system, including a 20 year extended protection plan for Powerwall and a selection of 10 or 20 year performance guarantees for Powerpack and Megapack. In circumstances where we install a Powerwall or Powerpack system, we also provide certain warranties on our installation workmanship. All of the warranties for our energy storage systems are subject to customary limitations and exclusions.

For retrofit solar energy systems, we provide a workmanship warranty for up to 20 years from installation and a separate warranty against roof leaks. We also pass-through the inverter and module manufacturer warranties typically 10 years and 25 years respectively. When we lease a retrofit solar energy system, we compensate the customer if their system produces less energy than guaranteed over a specified period. For the Solar Roof, we provide a warranty against defects for 25 years, a 25 year weatherization warranty and a power output warranty.

For all systems retrofit and Solar Roof we also provide service and repair either under warranty or for a fee during the entire term of the customer relationship. Financial Services. Purchase Financing and Leases. In certain international markets, we offer resale value guarantees to customers who purchase and finance their vehicles through one of our specified commercial banking partners, under which those customers have the option of selling their vehicles back to us at preset future dates, generally at the end of the terms of the applicable loans or financing programs, for pre-determined resale values.

In certain markets, we also offer vehicle buyback guarantees to financial institutions, which may obligate us to repurchase the vehicles for pre-determined prices. In August , we launched an insurance product designed for our customers, which offers rates that are often better than other alternatives. This product is currently available in California, and we plan to expand both the markets in which we offer insurance products and our ability to offer such products, as part of our ongoing effort to decrease the total cost of ownership for our customers.

We currently offer a loan product to residential customers who purchase Powerwall together with a new solar energy system, and lease and PPA options to commercial customers who purchase a Powerpack system together with a new solar energy system.

We intend to introduce financial services offerings for customers who purchase standalone energy storage products in the future. We are an industry leader in offering innovative financing alternatives that allow our customers to take direct advantage of available tax credits and incentives to reduce the cost of owning a solar energy system through a solar loan, or to make the switch to solar energy with little to no upfront costs under a lease or PPA.

Our solar loan offers third-party financing directly to a qualified customer to enable the customer to purchase and own a solar energy system. We are not a party to the loan agreement between the customer and the third-party lender, and the third-party lender has no recourse against us with respect to the loan.

Our solar lease offers customers a fixed monthly fee, at rates that typically translate into lower monthly utility bills, and an electricity production guarantee. Our solar PPA charges customers a fee per kWh based on the amount of electricity produced by our solar energy systems.

We monetize the customer payments we receive from our leases and PPAs through funds we have formed with investors. We also intend to introduce financial services offerings for our Solar Roof customers in the future. We have also selected a site near Berlin, Germany to build a factory for the European market, which we refer to as Gigafactory Berlin. Manufacturing Facilities in the Bay Area, California.

We manufacture our vehicles, and certain parts and components that are critical to our intellectual property and quality standards, at our manufacturing facilities in the Bay Area in California, including the Fremont Factory, and other local manufacturing facilities. Our Bay Area facilities contain several manufacturing operations, including stamping, machining, casting, plastics, body assembly, paint operations, seat assembly, final vehicle assembly and end-of-line testing for our vehicles, as well as production of battery packs and drive units for Model S and Model X.

Some major vehicle component systems are purchased from suppliers; however, we have a high level of vertical integration in our manufacturing processes at our Bay Area facilities. Gigafactory Nevada. Gigafactory Nevada is a facility where we work together with our suppliers to integrate battery material, cell, module and battery pack production in one location.

We use the battery packs manufactured at Gigafactory Nevada for Model 3, Model Y and our energy storage products. Finally, the assembly of Megapack systems takes place at Gigafactory Nevada, allowing us to ship deployment-ready systems directly to customers. We have designed Gigafactory Nevada to allow us access to high volumes of lithium-ion battery cells while achieving a significant reduction in the cost of our battery packs, and we have an agreement with Panasonic to partner with us on Gigafactory Nevada with investments in production equipment that it is using to manufacture and supply us with battery cells.

Given its importance to the production of our vehicle and energy storage products, in particular Model 3, Model Y and Megapack, we continue to invest in Gigafactory Nevada to achieve additional production output there. Gigafactory New York. We have primarily used our manufacturing facility in Buffalo, New York, which we refer to as Gigafactory New York, for the development and production of our Solar Roof and other solar products and components, energy storage components, and Supercharger components, and for other lessor-approved functions.

In particular, our manufacturing operations at Gigafactory New York are increasing significantly as we ramp the production of the third generation of our Solar Roof there. Gigafactory Shanghai. In December , we commenced production of Model 3 vehicles at Gigafactory Shanghai, which we have established in order to increase the affordability of our vehicles for customers in local markets by reducing transportation and manufacturing costs and eliminating certain tariffs on vehicles imported into China from the U.

At Gigafactory Shanghai, we have installed annual production capacity for , Model 3 vehicles that we believe we will eventually be able to push to actual rates of production in excess of such number , subject to local production of battery packs, which we began ramping there later than other processes. We have also commenced construction of the next phase of Gigafactory Shanghai to add Model Y manufacturing capacity at least equivalent to that for Model 3. Much of the investment in Gigafactory Shanghai has been and is expected to continue to be provided through local debt financing, including a RMB 9.

We are supplementing such financing with limited direct capital expenditures by us, at a lower cost per unit of production capacity than that of Model 3 production at the Fremont Factory. Other Manufacturing. Generally, we continue to expand production capacity at our existing facilities.

We also intend to further increase cost-competitiveness in our significant markets by strategically adding local manufacturing, including at our planned Gigafactory Berlin. Supply Chain. Our products use thousands of purchased parts that are sourced from hundreds of suppliers across the world. We have developed close relationships with vendors of key parts such as battery cells, electronics and complex vehicle assemblies.

Certain components purchased from these suppliers are shared or are similar across many product lines, allowing us to take advantage of pricing efficiencies from economies of scale. As is the case for most automotive companies, most of our procured components and systems are sourced from single suppliers. Certain key components we use have multiple available sources, and we work to qualify multiple suppliers for each such component where it is sensible to do so, in order to minimize production risks owing to disruptions in their supply.

We also mitigate risk by maintaining safety stock for key parts and assemblies and die banks for components with lengthy procurement lead times. Our products use various raw materials including aluminum, steel, cobalt, lithium, nickel and copper. Pricing for these materials is governed by market conditions and may fluctuate due to various factors outside of our control, such as supply and demand and market speculation.

We currently believe that we have adequate access to raw materials supplies in order to meet the needs of our operations. Governmental Programs, Incentives and Regulations. Globally, both the operation of our business by us and the ownership of our products by our customers are impacted by a number of government programs, incentives and other arrangements.

Our business and products are also subject to a number of governmental regulations that vary among jurisdictions. Programs and Incentives. Gigafactory Nevada—Nevada Tax Incentives. In connection with the construction of Gigafactory Nevada, we have entered into agreements with the State of Nevada and Storey County in Nevada that provide abatements for sales, use, real property, personal property and employer excise taxes, discounts to the base tariff energy rates and transferable tax credits.

As a result, as of December 31, , we had earned the maximum amount of credits. Under the lease and a related research and development agreement, there continues to be, on behalf of the SUNY Foundation, installation of certain utilities and other improvements and acquisition of certain manufacturing equipment designated by us to be used at Gigafactory New York. The terms of such agreement require us to comply with a number of covenants, including required hiring and cumulative investment targets, which we have met to date as of the applicable measurement dates.

We have a lease arrangement with the local government of Shanghai for land use rights at Gigafactory Shanghai. Under the terms of the arrangement, we are required to meet a cumulative capital expenditure target and an annual tax revenue target starting at the end of , which we believe will be attainable even if our actual vehicle production at Gigafactory Shanghai were far lower than the volumes we are forecasting. Tesla Regulatory Credits. We have sold these credits, and will continue to sell future credits, to automotive companies and other regulated entities who can use the credits to comply with emission standards and other regulatory requirements.

These laws provide that automakers may bank or sell to other regulated parties their excess credits if they earn more credits than the minimum quantity required by those laws. Tesla also earns other types of saleable regulatory credits in the United States and abroad, including greenhouse gas, fuel economy, renewable energy, and clean fuels credits. Likewise, several U. Energy Storage Systems—Incentives.

The regulatory regime for energy storage projects is still under development. Nevertheless, there are various policies, incentives and financial mechanisms at the federal, state and local levels that support the adoption of energy storage. In addition, California and a number of other states have adopted procurement targets for energy storage, and behind the meter energy storage systems qualify for funding under the California Self Generation Incentive Program.

Order is currently under review before the U. Court of Appeals for the D. These incentives include tax credits, cash grants, tax abatements and rebates. We claim the Section 48 commercial credit when available for both our residential and commercial projects, based on ownership of the solar energy system.

The federal government also provides accelerated depreciation for eligible commercial solar energy systems. Customers who purchase their solar energy systems for cash or through our solar loan offering are eligible to claim the Section 25D investment tax credit. In addition to the federal ITC, many U.

Vehicle Safety and Testing. Our vehicles fully comply with all applicable FMVSSs without the need for any exemptions, and we expect future Tesla vehicles to either fully comply or comply with limited exemptions related to new technologies. Additionally, there are regulatory changes being considered for several FMVSS, and while we anticipate compliance, there is no assurance until final regulation changes are enacted.

As a manufacturer, we must self-certify that our vehicles meet all applicable FMVSS, as well as the NHTSA bumper standard, or otherwise are exempt, before the vehicles can be imported or sold in the U. Numerous FMVSS apply to our vehicles, such as crash-worthiness requirements, crash avoidance requirements, and electric vehicle requirements.

In addition, this law allows inclusion of city and highway fuel economy ratings, as determined by EPA, as well as crash test ratings as determined by NHTSA if such tests are conducted. Our vehicles sold outside of the U. Many of those regulations are different from those applicable in the U. These changes could impact the rollout of new vehicle features in Europe.

There are no federal U. Certain U. This patchwork increases the legal complexity for our vehicles. In Europe, certain vehicle safety regulations apply to self-driving braking and steering systems, and certain treaties also restrict the legality of certain higher levels of self-driving vehicles. Self-driving laws and regulations are expected to continue to evolve in numerous jurisdictions in the U. Automobile Manufacturer and Dealer Regulation.

State laws regulate the manufacture, distribution, sale and service of automobiles, and generally require motor vehicle manufacturers and dealers to be licensed in order to sell vehicles directly to consumers in the state.

As we open additional Tesla stores and service centers, we secure dealer licenses or their equivalent and engage in sales activities to sell our vehicles directly to consumers. To sell vehicles to residents of states where we are not licensed as a dealer, we generally conduct the transfer of title out of the state. As we expand our retail footprint in the U. We expect that the dealer associations will continue to mount challenges to our business model. Battery Safety and Testing.

The regulations vary by mode of shipping transportation, such as by ocean vessel, rail, truck, or air. We have completed the applicable transportation tests for our battery packs, demonstrating our compliance with applicable regulations. We use lithium-ion cells in our high voltage battery packs in our vehicles and energy storage products. The use, storage, and disposal of our battery packs is regulated under federal law. We have agreements with third party battery recycling companies to recycle our battery packs and we are also developing our own recycling technology.

Solar Energy—General. To operate our systems, we obtain interconnection agreements from the utilities. In most cases, interconnection agreements are standard form agreements that have been pre-approved by the public utility commission or other regulatory body.

Sales of electricity and non-sale equipment leases by third parties, such as our leases, PPAs and subscription agreements, face regulatory challenges in some states and jurisdictions. Solar Energy—Net Metering. Most states in the U. Net metering typically allows solar customers to interconnect their on-site solar energy systems to the utility grid and offset their utility electricity purchases by receiving a bill credit for excess energy generated by their solar energy system that is exported to the grid.

In certain jurisdictions, regulators or utilities have reduced or eliminated the benefit available under net metering, or have proposed to do so. Solar Energy—Mandated Renewable Capacity. Many states also have adopted procurement requirements for renewable energy production, such as an enforceable renewable portfolio standard, or RPS, or other policies that require covered entities to procure a specified percentage of total electricity delivered to customers in the state from eligible renewable energy sources, such as solar energy systems.

We believe that our vehicles compete in the market both based on their traditional segment classification as well as based on their propulsion technology. Competing products typically include internal combustion vehicles from more established automobile manufacturers; however, many established and new automobile manufacturers have entered or have announced plans to enter the alternative fuel vehicle market.

Overall, we believe these announcements and vehicle introductions promote the development of the alternative fuel vehicle market by highlighting the attractiveness of alternative fuel vehicles, particularly those fueled by electricity, relative to the internal combustion vehicle. Many major automobile manufacturers have electric vehicles available today in major markets including the U.

In addition, several manufacturers offer hybrid vehicles, including plug-in versions. Our vehicles also compete in the market based on the compelling user experience that they offer. We believe that a key factor in our success will be our Autopilot and FSD technologies that currently enable the driver-assistance features in our vehicles, and in which we are making significant strides through our proprietary and powerful FSD computer and remotely updateable artificial intelligence software.

Ultimately, while we are subject to regulatory constraints over which we have no control, our goal is a fully autonomously-driven future that improves safety and provides our customers with convenience and additional income through participation in an autonomous Tesla ride-hailing network. This network, which will also include our own fleet of vehicles, will also allow us to access a new customer base even as modes of transportation evolve. Finally, our vehicles offer unparalleled in-vehicle entertainment features, currently including Internet search, music services, passenger karaoke, and parked video streaming and gaming.

The market for energy storage products is also highly competitive. Established companies, such as AES Energy Storage, Siemens, LG Chem and Samsung, as well as various emerging companies, have introduced products that are similar to our product portfolio. There are several companies providing individual components of energy storage systems such as cells, battery modules, and power electronics as well as others providing integrated systems.

We compete with these companies based on price, energy density and efficiency. We believe that the specifications of our products, our strong brand, and the modular, scalable nature of our Powerpack and Megapack products give us a competitive advantage when marketing our products. The primary competitors to our solar energy business are the traditional local utility companies that supply energy to our potential customers. We compete with these traditional utility companies primarily based on price, predictability of price and the ease by which customers can switch to electricity generated by our solar energy systems.

We also compete with solar energy companies that provide products and services similar to ours. Many solar energy companies only install solar energy systems, while others only provide financing for these installations. In the residential solar energy system installation market, our primary competitors include Vivint Solar Inc. The electricity produced by solar installations still represents a small fraction of total U. We also believe that residential solar energy generation is gaining favorable regulatory momentum, as exemplified in part by the state of California recently requiring that new homes be built with solar generation starting in Intellectual Property.

We place a strong emphasis on our innovative approach and proprietary designs which bring intrinsic value and uniqueness to our product portfolio. As part of our business, we seek to protect the underlying intellectual property rights of these innovations and designs such as with respect to patents, trademarks, copyrights, trade secrets and other measures, including through employee and third party nondisclosure agreements and other contractual arrangements.

For example, we place a high priority on obtaining patents to provide the broadest and strongest possible protection to enable our freedom to operate our innovations and designs within our products and technologies in the electric vehicle market as well as to protect and defend our product portfolio.

We have also adopted a patent policy in which we irrevocably pledged that we will not initiate a lawsuit against any party for infringing our patents through activity relating to electric vehicles or related equipment for so long as such party is acting in good faith. We made this pledge in order to encourage the advancement of a common, rapidly-evolving platform for electric vehicles, thereby benefiting ourselves, other companies making electric vehicles, and the world. To date, we have not experienced any work stoppages, and we consider our relationship with our employees to be good.

Available Information. In addition, the SEC maintains a website www. Our website is located at www. The information posted on our website is not incorporated by reference into this Annual Report on Form K. ITEM 1A.

You should carefully consider the risks described below together with the other information set forth in this report, which could materially affect our business, financial condition and future results. The risks described below are not the only risks facing our company. Risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and operating results.

Risks Related to Our Business and Industry. We have experienced in the past, and may experience in the future, delays or other complications in the design, manufacture, launch, and production ramp of our vehicles, energy products, and product features, or may not realize our manufacturing cost targets, which could harm our brand, business, prospects, financial condition and operating results.

We have previously experienced launch and production ramp delays or other complications in connection with new vehicle models such as Model S, Model X and Model 3, and new vehicle features such as the all-wheel drive dual motor drivetrain on Model S and the second version of our Autopilot hardware.

For example, we encountered unanticipated supply chain constraints that led to initial delays in producing Model X and an isolated supplier limitation in the manufacture of Model 3. Similarly, during our initial Model 3 production ramp, we had challenges ramping fully automated processes, such as portions of the battery module assembly line, material flow system and the general assembly line, which we addressed by reducing the levels of automation and introducing semi-automated or manual processes.

In addition, we have used a number of new manufacturing technologies, techniques and processes for our vehicles, such as aluminum spot welding systems and high-speed blow forming of certain difficult to stamp vehicle parts, and we may introduce new processes in the future. We have also introduced unique design features in our vehicles with different manufacturing challenges, such as large display screens, dual motor drivetrain, hardware for our Autopilot and FSD features and falcon-wing doors.

There is no guarantee that we will be able to successfully and timely introduce and scale any such new processes or features. In particular, our future business depends in large part on the high-volume production of Model 3 and Model Y, which we believe are our vehicles with the largest markets. We have limited experience to date in manufacturing Model 3 at high volumes and continuously increasing its production rates, particularly across multiple vehicle manufacturing facilities, which we commenced in the fourth quarter of with Gigafactory Shanghai coming online.

Bottlenecks such as those we have experienced in the past with new product ramps and other unexpected challenges may also arise as we ramp production, and it will be important that we address them promptly while continuing to reduce our manufacturing costs. Moreover, we will need to hire, train and compensate skilled employees to operate high-volume production facilities to support our vehicle ramp at the Fremont Factory and Gigafactory Shanghai, as well as at Gigafactory Nevada to support the manufacture of battery packs and drive units for certain of our vehicles.

Finally, because our vehicle models, in particular Model 3 and Model Y, may share certain parts, suppliers or production facilities with each other, the volume or efficiency of production with respect to one model may impact also the production of other models or lead to bottlenecks that impact the production of all models. Likewise, we may encounter delays with the design, construction and regulatory or other approvals necessary to build and bring online future manufacturing facilities, including our planned Gigafactory Berlin in Germany.

Any significant delay or other complication in the production ramp of our current products or the development, manufacture, launch and production ramp of our future products, features and services, including complications associated with expanding our production capacity and supply chain or obtaining or maintaining related regulatory approvals, or inability to manage such ramps cost-effectively, could materially damage our brand, business, prospects, financial condition and operating results.

We may be unable to meet our growing product sales, delivery and installation plans and vehicle servicing and charging network needs, or accurately project and manage this growth internationally, any of which could harm our business and prospects.

Concurrent with developing, launching and ramping our products, our success will depend on our ability to continue to significantly increase their sales, deliveries, installations and servicing worldwide, while allocating our available resources among multiple products simultaneously. As we expand globally, we will also need to ensure we are in compliance with any regulatory requirements applicable to the sale, installation and service of our products, the sale of electricity generated through our solar energy systems and operation of Superchargers in various jurisdictions, which could take considerable time and expense.

These plans require significant cash investments and management resources and there is no guarantee that they will ultimately generate additional sales or installations of our products. We continuously evaluate, and as appropriate evolve, our retail operations and product offerings in order to maximize our reach and optimize our costs, vehicle line-up and model differentiation, and purchasing experience. However, there is no guarantee that each step in our evolving strategy will be perceived as intended by prospective customers accustomed to more traditional sales models.

In particular, we are targeting with Model 3 and Model Y a global mass demographic with a broad range of potential customers, in which we have limited experience projecting demand and pricing our products. Until we ramp local production at Gigafactory Shanghai and in the future at Gigafactory Berlin, we will have to contend with predominantly single-factory vehicle production at the Fremont Factory for numerous international variants.

If our specific demand expectations for these variants prove inaccurate, we may not be able to timely generate sales matched to the specific vehicles that we produce in the same timeframe or that are commensurate with our operations in a given region, which may negatively impact our deliveries and operating results in a particular period. Likewise, as we develop and grow our energy storage product and solar business worldwide, our success will depend on our ability to correctly forecast demand for our products in different markets.

Moreover, because we do not have independent dealer networks, we are responsible for delivering all of our vehicles to our customers and meeting their vehicle servicing needs. While we have substantially implemented and improved many aspects of our delivery and service operations, we still have relatively limited experience with, and may face difficulties in, such deliveries and servicing at high volumes, particularly in international markets as we expand.

For example, significant transit time may be required to transport vehicles in volume into international markets, and we also saw challenges in initially ramping our logistical channels in China and Europe as we delivered Model 3 there for the first time in the first quarter of Likewise, because of our unique expertise with our vehicles, we recommend that our vehicles be serviced by our service centers, Mobile Service technicians or certain authorized professionals that we have specifically trained and equipped.

If we experience delays in adding such servicing capacity or experience unforeseen issues with the reliability of our vehicles, particular higher-volume and newer additions to our fleet such as Model 3 and Model Y, it could overburden our servicing capabilities and parts inventory. Finally, the increasing number of Tesla vehicles also requires us to continue to rapidly increase the number of our Supercharger stations and connectors throughout the world.

We are also expanding our installation capabilities for the Solar Roof as we continue its manufacturing ramp by training both our own personnel and third party installers. If we are not successful in growing this overall installation capability to keep pace with our increasing production, or if we experience unforeseen delays in the production ramp or inaccurately forecast demand for the Solar Roof, our operating results may be negatively impacted.

There is no assurance that we will be able to ramp our business to meet our sales, delivery, servicing, charging and installation targets globally, that our projections on which such targets are based will prove accurate, or that the pace of growth or coverage of our customer infrastructure network will meet customer expectations. Moreover, we may not be successful in undertaking this global expansion if we are unable to avoid cost overruns and other unexpected operating costs, adapt our products and conduct our operations to meet local requirements and regulations , implement required local infrastructure, systems and processes, and find and hire a significant number of additional sales, service, electrical installation, construction and administrative personnel.

If we fail to manage our growth effectively, it could result in negative publicity and damage to our brand and have a material adverse effect on our business, prospects, financial condition and operating results. We operate in the automotive industry, which is generally susceptible to cyclicality and volatility. Our growth is highly dependent upon the worldwide adoption by consumers of alternative fuel vehicles in general and electric vehicles in particular.

Although we have successfully grown demand for our vehicles thus far, there is no guarantee of such future demand, or that our vehicles will not compete with one another in the market. Moreover, the target demographics for our vehicles, in particular the mass market demographic for Model 3 and Model Y, are highly competitive.

If the market for electric vehicles in general and Tesla vehicles in particular does not develop as we expect, develops more slowly than we expect, or if demand for our vehicles decreases in our markets, our business, prospects, financial condition and operating results could be harmed. We have only relatively recently achieved high-volume production of vehicles, and are still at an earlier stage and have limited resources relative to our competitors.

Moreover, the market for alternative fuel vehicles is rapidly evolving. As a result, the market for our vehicles could be affected by numerous factors, such as:. In addition, sales of vehicles in the automotive industry tend to be cyclical in many markets, which may expose us to increased volatility, especially as we expand and adjust our operations and retail strategies. Specifically, it is uncertain as to how such macroeconomic factors will impact us as a company that has been experiencing growth and increasing market share in an industry that has globally been experiencing a recent decline in sales.

We are dependent on our suppliers, the majority of which are single-source suppliers, and the inability of these suppliers to deliver necessary components of our products according to our schedule and at prices, quality levels and volumes acceptable to us, or our inability to efficiently manage these components, could have a material adverse effect on our financial condition and operating results.

Our products contain thousands of purchased parts that we source globally from hundreds of direct suppliers. We attempt to mitigate our supply chain risk by entering into long-term agreements where it is practical and beneficial to do so, including agreements we entered into with Panasonic to be our manufacturing partner and supplier; qualifying and obtaining components from multiple sources where sensible, such as the PV panels for our retrofit solar installations that we purchase from a variety of suppliers; and maintaining safety stock for key parts and assemblies and die banks for components with lengthy procurement lead times.

However, our limited, and in most cases single-source, supply chain exposes us to multiple potential sources of delivery failure or component shortages for our production, such as those which we experienced in and in connection with our slower-than-planned Model S and Model X ramps. The loss of any supplier, particularly a single- or limited-source supplier, or the disruption in the supply of components from our suppliers, could lead to product design changes, production delays of key revenue-generating products, idle manufacturing facilities, and potential loss of access to important technology and parts for producing, servicing and supporting our products, any of which could result in negative publicity, damage to our brand and a material and adverse effect on our business, prospects, financial condition and operating results.

We may also be impacted by changes in our supply chain or production needs. We have experienced in the past, and may experience in the future, cost increases from certain of our suppliers in order to meet our quality targets and development timelines as well as due to our design changes.

While we believe that we will be able to secure additional or alternate sources of supply for most of our components in a relatively short time frame, there is no assurance that we will be able to do so or develop our own replacements for certain highly customized components. Additionally, we continuously negotiate with existing suppliers to obtain cost reductions and avoid unfavorable changes to terms, seek new and less expensive suppliers for certain parts, and attempt to redesign certain parts to make them less expensive to produce.

If we are unsuccessful in our efforts to control and reduce supplier costs, our operating results will suffer. Furthermore, as the scale of our vehicle production increases, we will need to accurately forecast, purchase, warehouse and transport components to our manufacturing facilities and servicing locations internationally and at much higher volumes.

If we are unable to accurately match the timing and quantities of component purchases to our actual needs or successfully implement automation, inventory management and other systems to accommodate the increased complexity in our supply chain, we may incur unexpected production disruption, storage, transportation and write-off costs, which could have a material adverse effect on our financial condition and operating results.

Any problems or delays in expanding Gigafactory Nevada or ramping and maintaining operations there could negatively affect the production and profitability of our products, such as Model 3, Model Y and our energy storage products. In addition, the battery cells produced there store large amounts of energy. To lower the cost of cell production and produce cells in high volume, we have vertically integrated the production of lithium-ion cells at Gigafactory Nevada, where we also manufacture battery packs and drive units for certain vehicles and energy storage products and assemble our Megapack product.

Production of lithium-ion cells at Gigafactory Nevada began in , and we have no other direct experience in the production of lithium-ion cells. Given the size and complexity of this undertaking, it is possible that future events could result in issues or delays in further ramping our products and expanding production output at Gigafactory Nevada.

In order to achieve our volume and gross margin targets for our vehicles and energy storage products, we must continue to sustain and ramp significant cell production at Gigafactory Nevada, which, among other things, requires Panasonic to successfully operate and further ramp its cell production lines at significant volumes.

Although Panasonic has a long track record of producing high-quality cells at significant volume at its factories in Japan, it has relatively limited experience with cell production at Gigafactory Nevada. In addition, we produce several components for Model 3 and Model Y, such as battery modules incorporating the lithium- ion cells produced by Panasonic and drive units including to support Gigafactory Shanghai production , at Gigafactory Nevada.

Some of the manufacturing lines for such components took longer than anticipated to ramp to their full capacity. While we have largely overcome this bottleneck after deploying multiple semi-automated lines and improving our original lines, additional bottlenecks may arise as we continue to increase the production rate and introduce new lines. If we are unable to maintain Gigafactory Nevada production, ramp output additionally over time as needed, and do so cost-effectively, or if we or Panasonic are unable to hire and retain a substantial number of highly skilled personnel, our ability to supply battery packs or other components for Model 3, Model Y and our other products could be negatively impacted, which could negatively affect our brand and harm our business, prospects, financial condition and operating results.

In addition, the high volumes of lithium-ion cells and battery modules and packs manufactured at Gigafactory Nevada are stored and recycled at our various facilities. Any mishandling of battery cells may cause disruption to the operation of such facilities.

While we have implemented safety procedures related to the handling of the cells, there can be no assurance that a safety issue or fire related to the cells would not disrupt our operations. Such disruptions or issues could negatively affect our brand and harm our business, prospects, financial condition and operating results.

Any issues or delays in meeting our projected timelines, costs and production at or funding the ramp of Gigafactory Shanghai, or any difficulties in generating and maintaining local demand for vehicles manufactured there, could adversely impact our business, prospects, operating results and financial condition.

As part of our continuing work to increase production of our vehicles on a sustained basis, and in order to make them affordable in international markets by accessing local supply chains and workforces, we have established Gigafactory Shanghai in China. Currently, we have installed annual production capacity for , Model 3 vehicles there that we believe we will eventually be able to push to actual rates of production in excess of such number , and we have commenced construction of the next phase of Gigafactory Shanghai to add Model Y manufacturing capacity at least equivalent to that for Model 3.

The ramp and further expansion of Gigafactory Shanghai are subject to a number of uncertainties inherent in all new manufacturing operations, including ongoing compliance with regulatory requirements, maintenance of operational licenses and approvals for additional expansion, potential supply chain constraints, hiring, training and retention of qualified employees, and the pace of bringing production equipment and processes online with the capability to manufacture high-quality units at scale.

We have limited experience to date with operating manufacturing facilities abroad, and only recently began to sell Model 3 in China. If we experience any issues or delays in meeting our projected timelines, costs, capital efficiency and production capacity for Gigafactory Shanghai, or in maintaining and complying with the terms of local debt financing that we intend will largely fund it, or in generating and maintaining demand locally for the vehicles we manufacture at Gigafactory Shanghai, our business, prospects, operating results and financial condition could be adversely impacted.

In particular, local manufacturing is critical to our expansion and sales in China, which is the largest market for electric vehicles in the world. Our vehicle sales in China have been negatively impacted in the past by certain tariffs on automobiles manufactured in the U.

If we are not able to successfully and timely ramp Gigafactory Shanghai, we may continue to be exposed to the impact of such unfavorable tariffs, duties or costs to our detriment compared to locally-based competitors. We face risks associated with our international operations, including unfavorable and uncertain regulatory, political, economic, tax and labor conditions, and with establishing ourselves in new markets, all of which could harm our business.

We have a global footprint with domestic and international operations and subsidiaries. Accordingly, we are subject to a variety of legal, political and regulatory requirements and social, environmental and economic conditions over which we have little control. For example, we may be impacted by trade policies, environmental conditions, political uncertainty and economic cycles involving geographic regions where we have significant operations, which are inherently unpredictable.

We are subject to a number of risks associated in particular with international business activities that may increase our costs, impact our ability to sell our products and require significant management attention. These risks include conforming our products to various international regulatory and safety requirements as well as charging and other electric infrastructures, organizing local operating entities, difficulty in establishing, staffing and managing foreign operations, challenges in attracting customers, foreign government taxes, regulations and permit requirements, our ability to enforce our contractual rights, trade restrictions, customs regulations, tariffs and price or exchange controls, and preferences of foreign nations for domestically manufactured products.

Increases in costs, disruption of supply or shortage of materials, in particular for lithium-ion cells, could harm our business. We may experience increases in the cost of or a sustained interruption in the supply or shortage of materials. Any such increase, supply interruption or shortage could materially and negatively impact our business, prospects, financial condition and operating results.

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