Net loss attributable to Tesla’s common stockholders was 976 million U.S. dollars in 2018. In the same year, the California-based company burnt through a total of about 1.06 billion U.S. dollars of cash. The electric vehicle manufacturer's low profitability stands in stark contrast to that of many peers, such as i.e. Ford's positive net income of about 3.6 billion U.S. dollars.

Focus on innovation drives costs

  Net losses began to accelerate in 2014 and peaked in 2017. Beginning in 2014, Tesla’s research and development (R&D) expenses have increased consistently. The company has the highest R&D intensity in the sector, largely due to the focus on innovative technologies, including electric vehicle batteries and charging infrastructure. However, the company had to invest significantly more capital than expected towards ramping up production of its new Model 3. As a result of increasing demand for Model 3 batteries, Tesla has also begun pouring money into a Gigafactory plant in Shanghai.

Cost improvement trend

  Tesla's selling, general, and administrative (SG&A) expenses jumped from 1.4 billion U.S. dollars in 2016 to more than 2.4 billion U.S. dollars in the following year. SG&A expenses increased moderately by an additional 358 million U.S. dollars to reach 2.8 billion U.S. dollars in the most recent fiscal year, indicating that Tesla managed to put a halt to rising SG&A costs in 2018.