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Tesla Gigafactory Nevada battery cell production line (Photo: Super Factories) Tesla Gigafactory Nevada battery cell production line (Photo: Super Factories)

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Tesla reveals it is spending drastically more money on R&D

Tesla Gigafactory Nevada battery cell production line (Credit: Super Factories)

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Tesla is spending drastically more money on Research and Development for its vehicles and other technologies like battery cell development, it revealed in a 10-Q filing with the SEC. However, the most expensive portion of the increase in R&D expenditures came from drastic growth in employee and labor-related expenses as Tesla’s workforce continues to grow. Still, the redesign of the Model S and X, along with the development of proprietary battery cells, also contributed to the exponential growth in money spent.

Tesla is one of the fastest-growing companies in the world. It is already the most valuable car company in existence, and as the electric automaker expands its footprint to other countries and regions, it is hiring a vast number of new people to handle any responsibility. From executives to production workers, Tesla is hiring in nearly every facet of its business, and its expenses are growing as a result.

Expenses in R&D increased $342 million, or 106% in Q1 2021 compared to Q1 2020. Tesla attributes the increase in R&D costs to a growth in the employee workforce, including anything from more people working at the company to an appreciation of the stock price.

Tesla wrote:

“R&D expenses increased $342 million, or 106%, in the three months ended March 31, 2021, as compared to the three months ended March 31, 2020. The increase was primarily due to a $147 million increase in employee and labor related expenses due to an increase in headcount and increased payroll taxes related to appreciation of our stock price.”

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Earlier this month, we reported that Tesla’s workforce had grown considerably, according to the 10-K filing it released with the SEC. The workforce increased by 22,651 total full-time employees in 2020 compared to 2019, and the number continues to expand as Tesla opens more factories, service centers, and showroom locations globally.

Tesla’s Fremont factory workforce is growing and the automaker is preparing for it

Past the increased workforce and overall company growth, a significant amount of money was pumped into expensed materials. These expenditures contributed to the “expanding product roadmap,” which included the redesigned and refreshed Model S and Model X, along with the 4680 battery cell project that Tesla has been working on.

Tesla recorded “a $122 million increase in R&D expensed materials and outside services and a $60 million increase in stock-based compensation expense. These increases were to support our expanding product roadmap, such as the new versions of Model S and Model X and technologies including our proprietary battery cells.”

The percentage of expenses due to the increased revenue increased from 5 to 6% Year-over-Year, but the increased expenditures were offset by “an increase in total revenues from expanding sales,” Tesla said.

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Tesla has shown it funnels plenty of money into its products and aims to improve product functionality through internal expenditures. For years, Elon Musk has stood by his strategy not to hold a budget for advertising but instead funnel that money into the product itself. “Other companies spend money on advertising & manipulating public opinion, Tesla focuses on the product,” Musk said.

Joey has been a journalist covering electric mobility at TESLARATI since August 2019. In his spare time, Joey is playing golf, watching MMA, or cheering on any of his favorite sports teams, including the Baltimore Ravens and Orioles, Miami Heat, Washington Capitals, and Penn State Nittany Lions. You can get in touch with joey at joey@teslarati.com. He is also on X @KlenderJoey. If you're looking for great Tesla accessories, check out shop.teslarati.com

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Tesla top exec Tom Zhu highlights Elon Musk’s “prime directive” for FSD

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Credit: Tesla AI/X

Tesla Senior Vice President for Automotive Tom Zhu, a key executive behind the company’s success in China and Giga Texas, recently highlighted the “prime directive” of Full Self-Driving (FSD).

Zhu’s comments emphasize Tesla’s uncompromising focus on safety, which has made the company’s vehicles among the safest on the road.

Echoing Musk’s vision for safe autonomous driving

Zhu’s post quoted Musk’s statement from 2021, where the CEO reportedly stated that FSD must avoid accidents even if the most ridiculous events happened in the middle of the road. Zhu stated that beyond everything, Tesla’s systems like Autopilot and FSD are designed to keep passengers safe.

“Elon said it in 2021: “For self-driving, even if the road is painted completely wrong and a UFO lands in the middle of the road, the car still cannot crash and still needs to do the right thing. The prime directive for the autopilot system is: Don’t crash. That really overrides everything. No matter what the lines say or how the road is done, the thing that needs to happen is minimizing the probability of impact while getting you to your destination conveniently and comfortably,” Zhu stated.

“The prime directive, the absolute priority, is to minimize the probability of injury to yourself or to anyone on the road, to pedestrians, or anything like that. It can’t be dependent on the road markings being correct.”

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Tesla leadership rallies behind global FSD rollout

Tom Zhu, who previously led Tesla China through its record-breaking growth phase, now oversees automotive operations worldwide. He has reportedly become a problem solver for Elon Musk over the years, with previous reports stating that he was brought in to help Giga Texas optimize its vehicle production ramp.

Zhu’s comments may sound ambitious, but FSD has proven that it values safety above all else over the years. This was highlighted recently in an incident in Australia, when a Model Y was hit by what could very well be a meteor. Despite the impact and part of its windshield melting, the vehicle was able to drive safely and keep its passengers safe.

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Elon Musk’s biggest tech rival just canceled his Tesla Roadster

“I really was excited for the car! And I understand delays. But 7.5 years has felt like a long time to wait,” Altman said.

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Tesla Roadster at Tesla Battery Day 2020 Credit: @BLKMDL3 | Twitter

Elon Musk’s biggest tech rival just canceled his reservation for a Tesla Roadster, the supercar the company has been developing for nearly eight years.

Sam Altman, the CEO of OpenAI, announced on X on Thursday evening that he canceled his Tesla Roadster reservation, or at least is trying to:

Altman placed his Tesla Roadster reservation with a $50,000 deposit way back on July 11, 2018. However, he recently decided that he had waited long enough and decided to email the company to officially cancel the order.

“Hi, I’d like to cancel my reservation. Could you please refund me the $50k?” Altman emails to reservations@tesla.com.

He then received an immediate response, but not from Tesla. Instead, it was a bounce-back message from Google, stating that the message could not be delivered to the email because it was not active.

Altman then provided a reason for his cancellation, and it was not related to the intense rivalry he had with Elon Musk:

“I really was excited for the car! And I understand delays. But 7.5 years has felt like a long time to wait.”

Altman and Musk have a lengthy history with one another that dates back to 2015, when OpenAI was created. The feud has resulted in lawsuits over breaching founding agreements by prioritizing profits.

Musk has been especially critical in recent years because of Altman’s decision to turn OpenAI into a for-profit business that he says is “built on a lie.”

This year, Musk offered over $97 billion to buy OpenAI, and a judge blocked his request to stop the company from being converted into a for-profit in March.

OpenAI then countersued Musk in April, while xAI, Musk’s company, sued OpenAI for allegedly stealing secrets through poached employees in September.

Elon Musk explains why xAI sued OpenAI over alleged trade secret theft

Regarding the Roadster, Tesla has been developing it for several years and has delayed its release for five consecutive years. The company says it will have a demo of what it has changed since it was unveiled in 2017 later this year, but no date has been set quite yet.

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Neuralink’s first human patient reflects on 21 months with brain implant “Eve”

He credited Neuralink and Elon Musk for giving him “the opportunity to be the first,” as the experience has been life-changing.

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Credit: Neuralink

Nolan Arbaugh, the first person to receive Neuralink’s brain implant, shared his 21-month update this week, reflecting on how far he’s come since his groundbreaking surgery. 

Arbaugh, who became paralyzed after a diving accident, stated that his Neuralink implant, which he fondly calls “Eve,” continues to transform his daily life.

Arbaugh celebrates Neuralink’s progress

In his post on X, Arbaugh revealed that his hands-on involvement with Neuralink has decreased as more participants have joined the program. “The team might call me to test something once in a blue moon,” he wrote, adding that he’s happy to see others experience the technology’s full potential, from operating robotic arms to typing on keyboards with thought alone.

He credited Neuralink and Elon Musk for giving him “the opportunity to be the first,” as the experience has been life-changing. Despite a recent pressure sore that temporarily kept him bedridden, Arbaugh noted that he is still very optimistic, describing his journey as one of resilience, faith, and gratitude. He also teased “big news” coming for his two-year update in early 2026.

Studies and a growing public speaking career 

These days, Arbaugh stated that he is focused on his studies in neuroscience, taking full-semester courses in chemistry, biology, and pre-calculus while earning top grades. He credited “Eve” for making school possible again, as his current academic workload would have been “impossible without Neuralink.” Arbaugh stated that he has also begun building a speaking business after delivering a paid talk at Fortune’s Brainstorm Tech conference.

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“At the beginning of September I attended the Fortune Brainstorm Tech conference in Park City, Utah, as a paid speaker. That sentence seemed like an impossibility two years ago. But it’s just the beginning. My business is built, my legal is near complete, I’m surrounding myself with a team of amazing folks, and I plan on speaking once or twice a month in the same fashion beginning as soon as January. 

“Conferences, interviews, podcasts—you name it, and I want to be there spreading the word about how amazing this technology is, the growth it’s experiencing, the possibilities of the future, and how it has so deeply affected my life,” Arbaugh stated.

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