Quarterly report pursuant to Section 13 or 15(d)

Inventory, Net

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Inventory, Net
9 Months Ended
Sep. 30, 2022
Inventory Disclosure [Abstract]  
Inventory, Net INVENTORY, NET
Inventory, net consisted of the following:

September 30, 2022 December 31, 2021
Raw materials $ 33,514,473  $ 66,238,615 
Work in process 25,129,247  20,826,644 
Finished goods 100,631  — 
58,744,351  87,065,259 
Less: inventory reserves (47,176,744) (76,997,892)
Inventory, net $ 11,567,607  $ 10,067,367 
We reserve inventory for any excess or obsolete inventories or when we believe the net realizable value of inventories is less than the carrying value.
As of September 30, 2022 and December 31, 2021, the Company recorded inventory reserves of $47.2 million and $77.0 million, respectively. The $29.8 million decrease in inventory reserves as compared to December 31, 2021 is primarily driven by the Company’s efforts to dispose of inventory that is not expected to be used in future production. During 2021, the Company significantly increased its inventory reserves due to its decision to produce the C1000 vehicle platform at low-volume and transition to a new all-electric delivery truck platform in the future. This decision was based on results of extensive testing performed on the C1000 vehicles in early 2022.
During the three months ended September 30, 2022, we sold inventory which was being carried at zero cost as it had been fully reserved for in prior periods in connection with the Company's decision regarding the future of the C1000 vehicle platform. The Company recognized a gain on the sale of $13.4 million, net of $0.5 million of selling costs, in Other Income in the Condensed Consolidated Statements of Operations. The selling costs of $0.5 million represent a commission paid to a related party who was a former executive of the Company.