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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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Elon Musk

Tesla board chair reiterates widely unmentioned point of Musk comp plan

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Credit: Tesla

Tesla Board Chair Robyn Denholm appeared on Bloomberg TV this morning to discuss the current status of CEO Elon Musk’s compensation plan, and used the opportunity to reiterate a widely unmentioned key point of the entire package.

Critics of the proposed pay package, which would pay Musk $1 trillion if he completes every tranche, routinely cite the sheer size of the payday.

Of course, many skeptics leave out the fact that he would only get that money if he were able to generate eight times the value the company currently has.

Tesla gains massive vote of confidence on compensation plan for Elon Musk

For Musk, it might have a little bit to do with money, but that is likely a very small percentage point of why the compensation package is being offered to him. He has reiterated that it is more about voting control and overall influence, especially as Tesla dives into robotics.

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He said during the Q3 Earnings Call:

“My fundamental concern with regard to how much voting control I have at Tesla is if I go ahead and build this enormous robot army, can I just be ousted at some point in the future? That’s my biggest concern. That is really the only thing I’m trying to address with this. It’s called compensation, but it’s not like I’m going to go spend the money. It’s just, if we build this robot army, do I have at least a strong influence over that robot army, not current control, but a strong influence? That’s what it comes down to in a nutshell. I don’t feel comfortable wielding that robot army if I don’t have at least a strong influence.”

Tesla shares the idea that Musk is a crucial part of the company, and without him being awarded the voting control he feels he deserves, he could leave the company altogether.

The company is very obviously feeling the importance of the upcoming vote, as it has advertised and pushed heavily for the comp plan to be approved, mostly to retain Musk.

Tesla Board Chair Robyn Denholm said today to Bloomberg TV that it is crucial shareholders understand it is not about Musk’s potential wealth, but more about his influence on company decisions:

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“So firstly, it is a performance package, so he gets nothing if he doesn’t perform against the pretty audacious milestones that are part of the performance criteria that’s been outlined by the board in the performance package. So, I think rather than compensation, it’s actually about the performance and the goals that we have for the company as we move forward. And so, for me, it really is about making sure that investors understand that they actually get paid if he hits the milestones before he will…Elon’s been very public, including on last week’s earnings call, about the fact that it’s around the voting influence that he could have in future shareholder meetings as opposed to the economic interests.”

Musk is not an incredibly flashy person. He does not have crazy cars or a massive house to go back to. He spends a lot of his time working and sometimes even sleeps at his office inside the factory.

He recently said he “only has what is needed” because “material possessions were making him weak.”

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The truth about Tesla ‘Mad Max’ mode from an actual user

Some people might see “Mad Max” as an extension of their daily driving.

For me, I did not see it that way. I saw it as a useful tool for certain situations, but it was certainly not something I could compare to my personal driving style.

But that does not mean that it’s wrong.

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Credit: Teslarati

There have been many headlines about Tesla’s new “Mad Max” mode, but many of those writing about the “dangerous” and “controversial” mode have probably never used it.

As a writer, I write about topics I do not have firsthand experience with, but the job requires me to take a fair stance and report what is known. The problem is the nature of driving and driving modes, specifically, is subjective.

Some people might see “Mad Max” as an extension of their daily driving.

For me, I did not see it that way. I saw it as a useful tool for certain situations, but it was certainly not something I could compare to my personal driving style.

But that does not mean that it’s wrong.

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NHTSA Probes Tesla Over “Mad Max”

Last week, the NHTSA launched a bit of a probe into Mad Max mode, requesting additional information on the Speed Profile and reiterating that the driver of the car is still required to be in ultimate control.

Tesla ‘Mad Max’ gets its first bit of regulatory attention

It’s important to keep the latter portion of that sentence in mind for the true thesis of this piece.

Now, it is no surprise to me that Mad Max garnered attention from regulatory agencies, as it is definitely a more spirited driving profile than the others.

Is Mad Max That Big of a Deal?

Regulatory agencies are responsible for keeping people safe, and it is important to note that their control is somewhat necessary. However, this type of drive mode is optional, requires the driver’s attention, and should be used responsibly for safe travel.

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Playing Devil’s Advocate, how is Mad Max any different than the performance modes that some sports cars have? Because they require the driver to operate fully, and they are not semi-autonomous like Tesla can offer with Mad Max in Full Self-Driving (Supervised), are they safer?

The argument here really comes down to whether FSD is being used responsibly and correctly; any accelerated drive mode becomes more of a risk if the vehicle operator is not paying attention. This applies to any car company or drive mode they choose to use on their cars.

My Personal Experience with Mad Max

I have used Mad Max probably ten times since it rolled out to Early Access Program (EAP) members a few weeks ago.

I’ll admit: it did a lot of things I would never do driving a car manually. It passed people on the right. It was the fastest vehicle on the interstate, at least until I crossed into Maryland. Then, it seemed to be just another car on the road.

It drove quickly, and not so fast that I felt concerned for my safety, which I never feared for, but fast enough that, at certain points, I was concerned that a cop would pull me over. I never encountered that scenario, but I wouldn’t be surprised if it resulted in some tickets.

With that being said, I don’t particularly think I’d use Mad Max in more than a handful of applications: driving the Baltimore Beltway would be one instance, navigating traffic in Baltimore, Philadelphia, or Pittsburgh during heavy traffic, or cruising on I-95, where cars routinely are going 100 MPH, much faster than Mad Max would ever travel.

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Is it too quick for me in residential settings? For me, yes. Is it faster than every human driving on those roads? Absolutely not. In my experience, it is quicker than some, slower than others, just like any other Speed Mode Tesla offers, even Sloth, which refuses to go over the posted speed limit.

I think it’s wrong to sit here and act as if Mad Max is some incredibly dangerous and life-threatening hazard. If a driver is uncomfortable with the maneuvers or speed, they do not have to use it. However, it is no different from how many other cars travel on the road; it is far from an anomaly.

Tesla FSD’s new Mad Max mode is getting rave reviews from users

With that being said, it will be interesting to see if the NHTSA does anything about Mad Max, whether it will require Tesla to “nerf” the Speed Profile, or remove it altogether. It’s also important to note that this is my personal experience with Mad Max, and what I’ve experienced might differ from others’.

I would love to hear your thoughts on how Mad Max has driven for you, or your impressions of it.

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Tesla prepares for full-throttle manufacturing of major product

Tesla has the second quarter of 2026 as its projected start date for Cybercab production. It also plans to launch Semi and Megapack 3 for “volume production” starting next year, which will also be two major contributors to the company.

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(Credit: Tesla North America | X)

Tesla is preparing for a full-throttle manufacturing effort of potentially its biggest product in company history, job postings on the company’s website show.

In preparation for its foray into fully autonomous travel, Tesla is gearing up for Cybercab manufacturing with 30 job postings, ranging from repair technicians to manufacturing specialists.

Elon Musk sets definitive Tesla Cybercab production date and puts a rumor to rest

The jobs are all located in Austin, Texas, where the company’s Gigafactory Texas facility is located. This is where Cybercab production is going to take place.

Tesla has made major strides in the Cybercab project over the past few months, including launching the vehicle on the Fremont Test Track in California and conducting crash testing at Gigafactory Texas.

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All of these indicate the company is preparing for an imminent production effort of the vehicle, which, as Elon Musk said during last week’s Earnings Call, will be void of a steering wheel or pedals.

Tesla has the second quarter of 2026 as its projected start date for Cybercab production. It also plans to launch Semi and Megapack 3 for “volume production” starting next year, which will also be two major contributors to the company.

Musk spoke in great detail during the Earnings Call last week about Cybercab’s potential to change the grand picture of the automotive market, comparing other vehicles in the Tesla lineup to “a little bit of the horse-carriage thing.”

He said:

“That’s really a vehicle that’s optimized for full autonomy. It, in fact, does not have a steering wheel or pedals and is really an enduring optimization on minimizing cost per mile for fully considered cost per mile of operation. For our other vehicles, they still have a little bit of the horse carriage thing going on where, obviously, if you’ve got steering wheels and pedals and you’re designing a car that people might want to go very direct past acceleration and tight cornering, like high-performance cars, then you’re going to design a different car than one that is optimized for a comfortable ride and doesn’t expect to go past sort of 85 or 90 miles an hour.”

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Cybercab production is imminent, given the job postings and the company’s proposed timeline for manufacturing to begin. Of course, there is always the potential that Tesla is late to the party, as it has been with other projects.

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