What with the "other non-recourse debt" in Balance Sheet?

[M3BlueGeorgia]

"Other non-recourse debt"
Q1-19 $29M
Q2-19 $35M
Q3-19 $155M
Q4-19 $355M
Q1-20 $708M

Does anyone have an explanation for this, because "non-recourse" usually means pretty worthless debt that can't be collected.

 

[ggr]

"Other non-recourse debt"
Q1-19 $29M
Q2-19 $35M
Q3-19 $155M
Q4-19 $355M
Q1-20 $708M

Does anyone have an explanation for this, because "non-recourse" usually means pretty worthless debt that can't be collected.

It's money that has been borrowed from someone else, and hence needs to be repayed some time in the future, but that is not backed by any of the company's assets. In the event of Tesla going bankrupt, the debt won't get paid back to the lender(s).

 

[M3BlueGeorgia]

It's money that has been borrowed from someone else, and hence needs to be repayed some time in the future, but that is not backed by any of the company's assets. In the event of Tesla going bankrupt, the debt won't get paid back to the lender(s).

Doesn't sound right, since that's the definition of unsecured debt, which an entirely different animal.

 

[mblakele]

Not sure if it's correct, but this says it's debt secured solely by specific collateral. The lender can go after the collateral, but not other assets.

What You Should Know About Non-Recourse Debt

 

[M3BlueGeorgia]

Not sure if it's correct, but this says it's debt secured solely by specific collateral. The lender can go after the collateral, but not other assets.

What You Should Know About Non-Recourse Debt

That's a bit more accurate. Typically shares. Someone buys a million dollars of shares and gets a non-recourse loan to finance the purchase.
If the value of the shares drops by half, the borrower doesn't have to cough up half a million dollars as the lender is taking the risk that the share valuations won't collapse, but the borrower gets the benefit if the shares increase in value.

 

[mblakele]

The 10-Q released today might help: p21-22 of https://ir.tesla.com/static-files/bbc6e137-897a-4543-857a-59c5c2dbeadc

 

[Doggydogworld]

"Other non-recourse debt"
Q1-19 $29M
Q2-19 $35M
Q3-19 $155M
Q4-19 $355M
Q1-20 $708M

Does anyone have an explanation for this, because "non-recourse" usually means pretty worthless debt that can't be collected.

It's mostly the GF3 loan. Chinese banks have recourse to Tesla's Chinese subsidiary corporation, but not to the US parent Tesla, Inc.

The Table on p21 of the 10-Q shows 756m of non-recourse Chinese loans. This includes the factory loan and a credit line that's secured by new car inventory. The Update letter includes the credit line in "Vehicle and energy product financing (non-recourse)" and includes the factory loan in "Other non-recourse debt".