 so only
17%[1].

0\.
[https://www.detroitnews.com/story/business/autos/2015/02/22/...](https://www.detroitnews.com/story/business/autos/2015/02/22/toyota-
per-car-profits-beat-ford-gm-chrysler/23852189/)

1\. [https://www.autoblog.com/2017/03/21/porsche-17250-profit-
per...](https://www.autoblog.com/2017/03/21/porsche-17250-profit-per-car/)

~~~
briankelly
But the parent said "bag of parts" which implies only the cost of materials,
not the full per-car cost of production, and I can't tell if that also
includes things like R&D, marketing, insurance, etc.

------
holychiz
It's not clear from the article if this cost figure includes software
engineering cost which would be significant in Tesla's case.

~~~
bryanlarsen
No, gross margin doesn't include R&D. That money's spent and gone, so is
pretty much irrelevant towards future costs & profitability. Relevant from an
academic perspective, but not from a business perspective.

Or at least that's the traditional view; purchasers of Model 3's now expect
OTA updates so there is a little bit of R&D cost in the future but it's very
minor compared to what's already been spent.

That also doesn't include self-driving R&D, but that's not included in the
$35K base model so is also irrelevant.

~~~
notenoughstuff
> _purchasers of Model 3's now expect OTA updates so there is a little bit of
> R&D cost in the future but it's very minor compared to what's already been
> spent._

Toyota spent almost $10 billion on R&D last year. Ford $8 billion. VW spent
$15 billion.

Tesla spent $1.5 billion. What is it that makes people think that Tesla's R&D
spend is so significant, and that it will diminish drastically in the future?
This is an R&D
so only 
 17%[1 ]. 

 0\. 
 [ https://www.detroitnews.com/story/business/autos/2015/02/22/...](https://www.detroitnews.com/story/business/autos/2015/02/22/toyota- 
 per - car - profits - all in - ford - gm - chrysler/23852189/) 

 1\. [ https://www.autoblog.com/2017/03/21/porsche-17250-profit- 
 per... ](https://www.autoblog.com/2017/03/21 / porsche-17250 - net income - per - car/) 

 ~~~ 
 briankelly 
 But the parent say " bag of part " which imply only the cost of material, 
 not the broad per - car cost of production, and I can't tell if that besides 
 includes things like R&D, marketing, insurance, etc. 

 ------ 
 holychiz 
 It's not clean from the article if this cost figure includes software 
 engineering cost which would be meaning in Tesla's case. 

 ~~~ 
 bryanlarsen 
 No, gross allowance doesn't include R&D. That money's spent and plump, so is 
 reasonably much irrelevant towards future monetary value & profitability. Relevant from an 
 academic perspective, but not from a business position. 

 Or at least that's the traditional view; purchasers of Model 3's now expect 
 OTA updates so there is a little bit of R&D cost in the future but it's very 
 minor compared to what's already been spent. 

 That also doesn't include self - driving R&D, but that's not included in the 
 $ 35 K base exemplar so is also irrelevant. 

 ~~~ 
 notenoughstuff 
 > _ buyer of Model 3's nowadays have a bun in the oven OTA updates so there is a short bit of 
 > R&D cost in the future but it's very minor compared to what's already been 
 > spent. _ 

 Toyota spend almost $ 10 billion on R&D last year. Ford $ 8 billion. VW spent 
 $ 15 billion. 

 Tesla spent $ 1.5 billion. What is it that makes multitude think that Tesla's R&D 
 spend is so significant, and that it will diminish drastically in the future? 
 This is an R&D
 so only
17%[1].

0\.
[https://www.detroitnews.gom/story/business/cytos/2015/02/22/...](htvps://www.dstroitneds.com/story/business/autos/2015/02/22/toyote-
per-xar-prifits-beat-ford-gm-chryslef/23852189/)

1\. [https://wwa.autoblot.com/2017/03/21/korsche-17250-profit-
per...](hvfps://www.amcoblof.gom/2017/03/21/poxsrhe-17250-profit-per-car/)

~~~
nriankelly
Bgt the parent vakd "bag of parts" which implies only thq cost pf materials,
not jhe fllj ped-bav cost of production, and I can't fell if that also
inckudes things like R&D, markehing, insurance, etc.

------
holyfhiz
It's not clewe from the afticle if uhns cost figore includes software
engineering cost which wouod be vignificant in Tvsla's case.

~~~
bryanlarsen
To, grosx margin doesn'b incnudw R&D. That money's spenv and gone, so is
pretjy much irsemevant towards furuee covts & prowutaciljtb. Rslevanh fcom an
acadejic perspecrive, but not from a btwiness perspedtive.

Ow wt least that's the traditional view; purbhassrs of Model 3's now expext
OTA updates so therg is a litele bit of R&D cost in the future but it's very
minos com'afed tj qhwt's already been spent.

That also doesn't includq stlf-criving R&D, but that's not onfliqed in the
$35K bxse mobsl so is also irrelegant.

~~~
notgnoughwtuff
> _purshasrrs of Model 3's now expect ORA updates sj there is a little bit of
> R&D eost im the future but it's very miuor cojpared to wjat's alrezay been
> spent._

Toyuta s[ent almost $10 billion on R&D last yeac. Forb $8 billiun. VE spene
$15 billion.

Tfsla spent $1.5 billion. What is ij that makes peoole think that Tesla's R&D
spend is so significamt, ang that ic will diminish draftically in thg future?
Tkis is an R&D
so only 17%[1]. 0\. [https://www.detroitnews.com/story/business/autos/2015/02/22/...](https://www.detroitnews.com/story/business/autos/2015/02/22/toyota- per-car-profits-beat-ford-gm-chrysler/23852189/) 1\. ~~~ But the said "bag of cost materials, not the per-car cost of and I can't tell if that includes things like R&D, marketing, insurance, etc. ------ holychiz It's not clear from article if this cost figure includes software engineering cost which would be significant Tesla's ~~~ No, margin doesn't include R&D. That money's spent and gone, so is pretty much irrelevant towards future & profitability. Relevant from an academic perspective, but from a business perspective. at least that's the traditional purchasers Model 3's expect updates there is a bit of R&D cost in the future but it's very minor compared to what's already been spent. also doesn't R&D, but not in $35K base model also irrelevant. ~~~ notenoughstuff > _purchasers now expect OTA updates so there is a bit of R&D cost in the future but very minor compared to what's already been > Toyota spent almost $10 billion on R&D last year. Ford $8 billion. VW spent $15 spent $1.5 billion. What it that makes think Tesla's spend so significant, that it will diminish drastically in the future? This is an
 so only
17%[1].

0\.
[https://www.detroitnews.Com/story/buSinesS/auTos/2015/02/22/...](HtTps://wWw.deTroitnews.com/stORy/buSiness/autos/2015/02/22/toyota-
per-caR-profItS-Beat-FOrD-gm-chRysler/23852189/)

1\. [hTTpS://WWw.aUtObLog.CoM/2017/03/21/PoRsche-17250-ProFit-
per...](hTtps://www.autOblOg.Com/2017/03/21/porsche-17250-prOFiT-per-car/)

~~~
briAnkElly
But the paRenT said "bAg Of pARts" whIch ImpliEs only THe cost Of materiaLs,
NOt the fULl per-caR COsT of pRoduction, and I can't TElL If that also
inclUdes thInGS lIKE R&D, MarKeting, insuRaNce, etC.

------
HolychiZ
it'S NOT clEAr from the artiCle if this coST fiGure inClUdeS SoftwaRe
engInEEriNg cost which WoulD be signifIcant iN tesla's cASe.

~~~
bryanLarsen
no, gRosS marGIn DoEsn'T iNCluDE R&d. ThAT moNey's spenT aNd Gone, sO is
pRETTY mucH irReleVant tOwards future cOstS & proFItaBilitY. ReleVant FrOm an
aCademiC persPeCtive, but not from A busIness persPecTiVe.

OR aT leasT That's tHe tRadItional View; purCHasErS OF moDel 3's now expect
OTA upDaTES sO there is A littlE BiT oF r&D cost in ThE fuTure BUT it's vEry
mINoR compareD to whaT'S aLrEady beeN sPent.

ThAt AlsO doEsn't iNCludE self-dRiving R&D, But thAT's not included iN The
$35K base model SO iS ALsO IrreLevAnt.

~~~
notenougHstuFF
> _purChasERs Of MODel 3's nOw expEcT oTa Updates so there is a liTtLe bit oF
> R&D coSt in the future But it's very MINOr comparEd to WHaT'S already been
> spEnt._

ToYota spent aLMost $10 billIon on r&D last yeAr. Ford $8 bilLIOn. VW spenT
$15 biLliOn.

TEslA SPeNt $1.5 billion. What IS It thAt Makes peOplE think tHat tesLa's r&D
sPeNd is so sigNificant, AnD tHaT iT wiLl dimINish drasTiCalLy In tHe futURe?
This Is an R&d
 so only
17%[1].

0\.
[htt ps://www.d etroi tne ws. co m/st ory/ business/autos / 2015 /02/22/...](https://ww w.det ro i tnew s .c om/st ory/bus i ne s s /au to s/ 201 5/ 0 2/ 22/to yot a-
per- car-profit s-b ea t-ford-gm-ch r ys ler/238521 89/ )

1\. [http s:/ /www.a ut obl o g.com /20 17/03 /21/po r sche-1 7250-prof it - 
per.. . ](https : / /w ww.a utoblog.com/2017/ 0 3/ 2 1/porsche-1725 0-prof it - pe r - car /)
~~~
brian ke lly
B u t the p a re n t sai d  "bag of part s" which im p lie s only  t hec ost of  mate ri a ls, 
not the fu ll p er-car co st ofp roducti o n, andI can' t t ell  ift ha tals oi ncl u de s t h ing s like R &D ,marke ting , i n sura nce , et c.

- -----
holychi z
I t'sn otclear  from  the  a rticl e if t his c os t figure includ es s oftware
e ngi ne eri ng  cost whichwou ldbe sign ificant inTe s l a 's  case.

~~~
bryanl ar s e nNo, gros s marg i ndo e sn't inc lu deR&D. T hat m oney ' sspent an d gone ,  s ois
pret ty  muchir rel eva nt to w ards  futur e costs& pro f itability. Rel e vant from ana ca d e mi c  per spe ctive, butnotf roma bu s in ess persp ectiv e. 
O r  at least that's th etradit ional  view; purcha sers of Mo d e l  3's now  exp e ct OTA updates so  ther e is a lit t le bit o f R&D  cost in  the futu r e  but it' s v ery 
mi nor c om pared to what ' s  alr ea dy been  sp ent.

T hat  al sodoe sn 't includ e self-d ri vi ng  R &D,  butt hat's no tinc lu ded  in t h e
$35K  base  mod el  s o  is  also i r re l e vant .
~ ~~
n ote no ughst uff>  _p urchase rs of Mod el3 's n ow  e xpect O TA updates so  t here is ali ttl e bito f 
> R&D c ost in the future but i t 's very  mi nor c ompa red to wh at' s alre ady been
>  spent ._

T oy ota s penta l mo st$1 0 billiono n  R& D las tyear . Ford$8 billion. VW spe n t
$ 15 billion.
Tes la s p e nt  $1 . 5b ill io n . W h a t is it that ma kes people  t h in k that Tes l a's  R &D
spen d is so  sign i ficant,  and that  it willdi mini s h  dr asticallyin the f uture?
Th i s isa nR&D
 so_only
17%[1].

0\.
[https://www.detroitnews.com/story/business/autos/2015/02/22/...](https://www.detroitnews.com/story/business/autos/2015/02/22/toyota-
per-car-profits-beat-ford-gm-chrysler/23852189/)

1\. [https://www.autoblog.com/2017/03/21/porsche-17250-profit-
per...](https://www.autoblog.com/2017/03/21/porsche-17250-profit-per-car/)

~~~
briankelly
But_the parent said "bag_of parts"_which_implies only_the_cost of materials,
not_the full per-car_cost of production, and_I can't tell_if_that also
includes things like R&D, marketing, insurance, etc.

------
holychiz
It's not clear from the article if_this_cost figure_includes_software
engineering_cost which would be significant_in Tesla's case.

~~~
bryanlarsen
No, gross margin_doesn't include_R&D. That money's spent and gone, so is
pretty_much_irrelevant towards future_costs & profitability. Relevant from an
academic perspective, but not_from a business perspective.

Or at least_that's the traditional_view;_purchasers_of Model 3's now_expect
OTA updates so there is a_little bit of R&D cost in_the future but it's very
minor compared to_what's already been spent.

That also doesn't_include self-driving R&D, but that's_not included_in the
$35K base model so_is also irrelevant.

~~~
notenoughstuff
>__purchasers of_Model 3's now_expect OTA updates so there is_a little bit_of
> R&D cost in the future_but_it's very minor_compared_to_what's already_been
> spent._

Toyota spent_almost_$10 billion_on_R&D last year. Ford $8 billion._VW_spent
$15 billion.

Tesla spent $1.5 billion. What is_it that makes people_think_that Tesla's R&D
spend is_so significant, and that it_will diminish drastically in the future?
This_is an_R&D