Tesla's Spending on R&D and Marketing, Compared to Other Automakers
Connect with us

Datastream

Comparing Tesla’s Spending on R&D and Marketing Per Car to Other Automakers

Published

on

The Briefing

  • Tesla spends $0 of its budget on advertising, but instead spends a dramatic amount on research and development (R&D)

Tesla’s Spending Per Car Sold vs. Other Automakers

It’s often said that word of mouth is the best form of advertising.

In the case of Tesla and their rapid ascent to the top of the global automobile business, this might be true. After all, the electric vehicle company somehow manages to spend $0 on advertising year after year, despite the fact that marketing is typically a significant expense line item for most other auto manufacturers.

On the flip side, Tesla is spending an average of $2,984 per car sold on research and development (R&D)—often triple the amount of other traditional automakers.

AutomakerR&D spend per car soldAd spend per car soldR&D per dollar of advertising
Tesla$2,984$0$0
Ford$1,186$468$2.53
Toyota$1,063$454$2.34
General Motors$878$394$2.22
Chrysler$784$664$1.18

On this per vehicle sold basis, Tesla’s $2,984 in R&D spend per car is far greater than that of other car manufacturers. It’s even higher than the collective amount going to R&D per car from three of the other automakers (Ford, GM, and Chrysler) combined.

When it comes to advertising, the average spend among traditional automakers is $495 per vehicle. And while Tesla technically spends nothing on advertising, the company is a marketing machine that is rated as the world’s fastest growing brand, and Tesla often dominates press mentions and social media chatter.

Capital Allocation: R&D and Advertising

The balance of expenditures between R&D and advertising is part of capital allocation, a decision every business needs to make. Generally speaking, more R&D can improve and advance the quality of either your goods or service, relative to your competitors. If executed correctly, it has the potential to lead to greater pricing power that will reflect in the margins.

In contrast, advertising can spread awareness and promote the business. But it’s a tricky balance that isn’t always easy to get right.

While capital allocation is vital, one factor that differentiates Tesla from the rest, is Elon Musk himself. With over 60 million followers on Twitter, his wild popularity has no doubt aided in Tesla’s brand recognition, where they’ve arguably become synonymous with the electric vehicle revolution.

Automobiles Of Tomorrow

For Americans, 85% still use an automobile as their primary method of transportation to work. As a result, automobiles will likely undergo a serious shake up as the world continues on its path towards a greener future.

With increasing investments made in the electric vehicle space—poised to be worth a trillion dollar market by 2028—how will R&D and advertising budgets of tomorrow look for major automobile companies?

Where does this data come from?

Source: 10-K Filings
Notes: Data covers automobile figures for 2020

Click for Comments

Datastream

Charted: The Ukraine War Civilian Death Toll

Using data from the UN, this chart shows civilian death toll figures resulting from Russia’s invasion of Ukraine.

Published

on

Ukraine war death toll

The Briefing

  • In total, since the war began in February there have been over 7,031 Ukrainian civilian deaths
  • Most of the civilian casualties recorded were caused by the use of explosive weapons, such as missiles and heavy artillery

Charted: The Ukraine War Civilian Death Toll

Russia’s war of aggression in Ukraine has wrought suffering and death on a mass scale, with many Russian attacks targeted at civilians.

We’ve created this visual using data from the UN Office of the High Commissioner for Human Rights (OHCHR) to better understand how many civilians have died in Ukraine as a result of the war, as well as how many were injured and how many were children.

The Numbers

As of early December, it is reported that 7,031 people in Ukraine have died because of the war — 433 of them children. Another 11,327 have been injured, 827 of which are children. In total, this is over 18,000 people killed or injured.

The figures are difficult to verify due to differing reports coming out of both Russia and Ukraine. The UN OHCHR anticipates that the numbers could be even higher.

The State of the Conflict

The war began on February 24th, 2022 and less than a year in, millions of people have been displaced by the conflict, and thousands of civilians have been injured or killed.

According to the UN, most of the civilian deaths have been caused by wide-ranging explosives such as heavy artillery shelling, missiles, and air strikes, and have been concentrated in Donetsk and Luhansk and in other territory still held by Ukraine.

Additionally, new estimates from Kyiv report approximately 13,000 Ukrainian military or soldier deaths, which has yet to be confirmed by the army.

Where does this data come from?

Source: The United Nations Office of the High Commissioner for Human Rights monthly reports on civilian deaths in Ukraine.

Note: Data on deaths and injuries can vary wildly depending on the source.

Continue Reading

Subscribe

Popular