Comparing Tesla’s Spending on R&D and Marketing Per Car to Other Automakers

This post is by Aran Ali from Visual Capitalist

The Briefing

  • Tesla spends $0 of its budget on advertising, but instead spends a dramatic amount on research and development (R&D)

Tesla’s Spending Per Car Sold vs. Other Automakers

It’s often said that word of mouth is the best form of advertising.

In the case of Tesla and their rapid ascent to the top of the global automobile business, this might be true. After all, the electric vehicle company somehow manages to spend $0 on advertising year after year, despite the fact that marketing is typically a significant expense line item for most other auto manufacturers.

On the flip side, Tesla is spending an average of $2,984 per car sold on research and development (R&D)—often triple the amount of other traditional automakers.

AutomakerR&D spend per car soldAd spend per car soldR&D per dollar of advertising
General Motors$878$394$2.22

On this per vehicle sold basis, Tesla’s $2,984 in R&D spend per car is far greater than that of other car manufacturers. It’s even higher than the collective amount going to R&D per car from three of the other automakers (Ford, GM, and Chrysler) combined.

When it comes to advertising, the average spend among traditional automakers is $495 per vehicle. And while Tesla technically spends nothing on advertising, the company is a marketing machine that is rated as the world’s fastest growing brand, and Tesla often dominates press mentions and (Read more...)