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Comment by encoderer | Hacker News Reader

Possibly because other auto manufacturers do include R&D in their COGS? Tesla, instead, treats it as an OpEx which to be fair, most non-automotive companies do as well. Still, it's not standard for the industry the are in.

tldr: Because if Tesla did their accounting the way Toyota does, they have a negative gross margin.

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Actually, per their latest earnings reports[1], if they did what Toyota does and roll their R&D expenses into their cost of revenue, they would still show a gross profit. It would just be $70M for Q1'16 instead of $252M.

[1] https://finance.yahoo.com/q/is?s=TSLA

I guess I made a gross assumption? Thanks for the link -- i had just accepted the premise of the question.

Their losses do not increase in each unit sold, they actually go down. It is an important difference (shared by other auto companies also), so it is technically true that "they do not lose more money on each car sold."

In other words, the marginal cost of producing a car is lower than its selling price?

That would fit the common understanding of the phrase "not losing money on every X sold".

It's really not correct to say Tesla "loses money on every car" if the marginal cost is less than the sale price, because the implication of the phrase is Tesla would lose even more money if they sold more cars.

tesla isn't a company like Toyota though.

Yes, Toyota has solid financials.

So does Walmart (compared to Amazon). I'd still be betting on Amazon.

Why not bet on both?

Why are you so dismissive of walmart?

They're a just in time logistics company that uses technology, not a technology company focused on logistics. Big difference in my mind.

But does not grow its sales 40% every year.

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