Tesla continues increasing R&D spending

June 26th, 2018

Tesla’s revenue continues to increase and subsequently so does their research and development. In 2017 Tesla’s R&D spending reached $1.378 billion which is actually not that large in comparison to other auto companies. General Motors spent $7.3 billion, Volkswagen spent €13.135 billion and Mercedes and BMW spent over €6 million.

While Tesla’s R&D spending may seem a lot smaller than that of other auto companies, their R&D devotion is quite impressive when comparing it to their percentage of revenue. Tesla is also a much newer and up and coming company compared to the other well established auto companies previously mentioned.

In 2017 Tesla spent nearly 12% of its total revenue on R&D where as other auto companies remained in the single digits. While this figure is impressive from an R&D perspective is has also brought the company into some trouble, as the total R&D spend of $4,276 billion between 2008-2017 has contributed to a significant operating loss of $4.186 billion.

It has been suggested that Tesla reduce their innovative spending by 25%, which will allow a significant boost to their operating income, which will benefit the company’s profitability. Although, Tesla takes great pride in being a lead innovator and it is therefore unlikely that they will pull back on their R&D spending any time soon.

Ultimately Tesla does have plenty of room to cut costs and become profitable if things become critical, therefore the future of the company is still proving to be reasonably positive. The question will simply lay in the company’s priorities and whether this is to become profitable or remain a lead innovator.

Swanson Reed R&D Tax Consultants help companies to claim the R&D tax incentive and help ensure that companies receive the maximum eligible claim amount. If your company is developing novel solutions, take our online eligibility quiz to find out whether you qualify for a tax rebate.

Post a Comment

(*) indicates required field.

Categories

Archives

Swanson Reed - Specialist R&D Tax Advisors
Swanson Reed - Specialist R&D Tax Advisors
39 Google reviews
Daniel McGregor
Daniel McGregor
2022-08-11
I have been using Swanson Reed for my clients for more than a decade. Having a specialist firm that can provide practical and commercial advice that produces real outcomes is very important and we have received great feedback from our clients. Highly recommended.
John
John
2022-06-15
Damian and the rest of the team at Swanson Reed have been supporting us for several years. We always appreciate their insights, expertise, and efforts.
Rueben Rajasingam
Rueben Rajasingam
2022-06-06
Experienced responsive Team. They have been a great help to me and my company navigate the R&D tax claim process and have provided invaluable advice.
Enrique Esquivel
Enrique Esquivel
2022-06-06
Damian and the team at Swanson Reed have been extremely helpfully and professional during all of our consultations. Highly recommended.
Jess at Y&C
Jess at Y&C
2022-06-03
Anatole Kononewsky
Anatole Kononewsky
2022-06-02
The Swanson Reed team have provided our company with exceptional professional advice and assistance for all of our R&D claims for many years - have always achieved great results with excellent value for their services.
Payam Toloo
Payam Toloo
2022-06-02
Damian Smyth and his team are very helpful, supportive and experts in their field of R&D Tax claims. I'm always happy with the work they do and been a customer of their for over 5 years.
Melissa Doddy
Melissa Doddy
2022-05-31
The Team at Swanson Reed are very experienced R&D Tax Advisors and gave us ongoing support with all of our R&D Claims, the consultants ensured we were always working with current legislative guidelines, gave us assistance with compiling technical and government documentation and went out their way to ensure they were with us for the entire process from beginning to end. Highly recommended to anyone who needs assistance with working through what can at times be a daunting process.
Gary Watson
Gary Watson
2022-05-31
We can highly recommend Swanson and Reed as an R & D accountant. We have worked with them for several years now as they make our R & D claim so easy and communicate quickly with both us and our accountant.
Rob van den Bergh
Rob van den Bergh
2022-05-31
Always professional.