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Comment by mschuster91 | Hacker News Reader

> It doesn't take an MBA to understand the implications of that.

And that is perhaps the greatest advantage of all that Tesla has over many other companies, especially in the car industry, but generally (excluding only Amazon and parts of Apple/Google): Tesla is not run by beancounters with a next-quarterly only mindset, but by someone with a long-term vision and a general engineering focus with deep pockets.

Not many companies these days go for extensive, ground-breaking, costly R&D that Tesla does, and those that do rarely go to the length of Tesla/SpaceX. For most companies that level of investment would flatten their stock value, shareholders would be angry... but Elon Musk (and similarly Jeff Bezos) are impressive personalities that manage to keep the beancounter hawks at bay.

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> costly R&D

huh? you realize that Tesla spends less than $300M a quarter in R&D when companies they now dwarf like Ford and GM consistently spend more than $1B each?

in fact Tesla’s R&D spend has noticeably shrunk since last year, which is another head scratcher considering how many projects they claim to be working on, including a “full rewrite of FSD”

> less than $300M a quarter in R&D when companies they now dwarf like Ford and GM consistently spend more than $1B each?

I don't think the two of you have points in contention. That is to say, I think it is accurate to say that Ford and GM _spend_ more on R&D but Tesla _executes_ more on R&D. In fact, I would say that very discontinuity forms much of the basis for Tesla's very (some would say irrationally) high P/E ratio!

I don’t buy the efficiency argument.

Either they are publicly exaggerating the scope of the projects they are working on (eg the “million mile” battery and “full rewrite of FSD”), severely underpaying engineers and understaffed, or something else.

If you read this book it will make sense https://en.m.wikipedia.org/wiki/The_Innovator%27s_Dilemma

If you have ever worked at a large company, the inefficiencies are explicitly obvious, built into the culture and structure of the company.

Starting from 0, valuing employee opinion, and removing red tape saves countless employee hours and makes good people stay.

Tesla has focus, they know pretty much exactly the future they want and they know what projects to push. FSD and batteries are the major things they need to improve on.

Other companies might consider exoskeleton a R&D thing, Tesla just handles that as part of their Cybertruck development cost.

The same goes for a lot of their developments.

What matters is how fast and how often new technology goes into your next product. If you look at the Cybertruck, how many innovative stuff there is, I really don't care how much R&D they have, I'm just impressed with how many innovations they bring to market with each iteration of their cars.

> I don’t buy the efficiency argument.

John DeLorean achieved his original initial career arc by resurrecting the Pontiac brand. Technically speaking, there wasn't a terrible amount of innovation there -- the idea was using existing products in a new way by putting a bigger engine into a smaller frame and marketing it in a sexy manner. But it took off like wildfire. He invented the idea of a muscle car.

So, as sibling comments say, you may not buy the efficiency argument, but will you buy the focus argument? Tesla made a name out of doubling down on the future instead of the past. They were first to market with a vehicle so iconic it become eponymous with the sector itself. They built a global supercharger network to challenge the whole idea of a gasoline vehicle being the norm. Personal feelings regarding the antics of their founder (and horrible mismanagement/mistreatment of ICs inside the company) aside, I have a lot of respect for the innovations that their product culture has achieved.

R&D includes both "creating new battery recycling capabilities from scratch" and "redesigning the the rear brake lights to be a deeper shade of red to match the recent coloring trends".

Only one of these has long term impacts but they are both "R&D"

And what revolutions come out of Ford, GM and everyone else for all that money?

The only ones doing real new work that is available to buy instead of investing ludicrous amounts of money shaving half grams of fleet CO2 from doomed ICEs and ungodly amounts of lobbying are Toyota with their Prius, BMW with the i3, i8 and whatever is slated for 2021 and VW with their modular platform (and all three are still not even close to catching up to Tesla). The rest are dealing, at best, with toy projects, greenwashing, that will not have any major impact. After all, SUVs have fat margins while most electric projects are cash burners.

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