Revenues

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Revenues

NOTE 3. REVENUES

Disaggregation of Revenue

Revenue by type was as follows:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
Revenue type
Product revenue	$	263,465	$	353,081	$	393,091	$	429,924
Shipping revenue		22,462		34,017		37,867		40,507
Subscription revenue		-		7,457		1,785		8,075
Service income		-		1,543		-		1,543
	$	285,927	$	396,098	$	432,743	$	480,049

Contract Liabilities

The Company recognizes a contract liability when a consideration is received, or if the Company has the unconditional right to receive consideration, in advance of satisfying the performance obligation. A contract liability is the Company’s obligation to transfer goods or services to a customer for which the Company has received consideration, or an amount of consideration is due from the customer. The table below details the activity in the Company’s contract liabilities during the six months ended June 30, 2020 and as of December 31, 2019, and the balance at the end of each period is reported as deferred revenue in the Company’s consolidated balance sheet.

	June 30, 2020			December 31, 2019
Balance, beginning of year	$	-		$	9,999
Additions		71,404			-
Transfer to revenue		(7,500	)		(9,999	)
Balance, end of period	$	63,904		$	-

Warranty Reserve

The Company records a reserve for warranty repairs upon the initial delivery of vehicles to its dealer network. The Company provides a product warranty on each vehicle including powertrain, battery pack and electronics package. Such warranty matches the product warranty provided by its supply chain for warranty parts for all unaltered vehicles and is not considered a separate performance obligation. The supply chain warranty does not cover warranty-based labor needed to replace a part under warranty. Warranty reserves include management’s best estimate of the projected cost of labor to repair/replace all items under warranty. The Company reserves a percentage of all dealer-based sales to cover an industry-standard warranty fund to support dealer labor warranty repairs. Such percentage is recorded as a component of cost of revenues in the statement of operations. As of June 30, 2020 and December 31, 2019, warranty reserves were recorded within accrued expenses of $33,099 and $27,375, respectively.