Tesla Motors Inc Spent Just $9 Million On Advertising In 2013

Tesla Motors Inc Spent Just $9 Million On Advertising In 2013
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Tesla Motors Inc (NASDAQ:TSLA) revealed some interesting facts and plans in its latest 10-K filing with the SEC. Check out our previous post on the delivery services and its foray into the energy storage systems market. Now let’s have a look at the electric vehicle maker’s operating highlights in 2013.

Tesla’s R&D spending declines 15.3%

Tesla Motors Inc (NASDAQ:TSLA)’s total revenues jumped from just $413.3 million in 2012 to $2.01 billion in 2013. The revenue growth was driven by increased delivery of Model S sedans in North American and Europe, powertrain component sales to Toyota Motor Corporation (NYSE:TM), and regulatory credit sales. Tesla’s gross margins improved from 7.3% in 2012 to 22.7% in 2013. Margins improved as the company eliminated cost inefficiencies related to the Model S production. During the fourth quarter, automotive gross margin stood at 25.7%. Profit margins were helped by strong mix of 85kWh battery packs and other options, higher ASPs, and regulatory credit sales.

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Tesla Motors Inc (NASDAQ:TSLA) said it spent $232 million on research & development in 2013, down 15.3% from $274 million in the previous year. R&D activities in 2013 involved the development of the Model X, Model S cost reductions, manufacturing process improvements, and right-hand drive Model S. Selling, General and Administrative (SG&A) expenses increased 89.9% from $150.4 million in 2012 to $285.6 million in 2013. That means the SG&A expenses jumped by 135.2 million. Of that, $62.8 million went to employee compensation as headcounts increased. Another $36.8 million was due to a jump in IT, office and facilities costs. Of the remaining sum, the company spent $17.8 million to stock based compensation expenses and another $17.8 million was due to a rise in outside and professional services costs.

Tesla doesn’t spend much on advertising

Surprisingly, Tesla Motors Inc (NASDAQ:TSLA) spent only $9 million on advertising and promotion in 2013. Though it’s much higher than $3.9 million spent in 2012 and $2.9 million in 2011. At the end of 2013, the company had $845.9 million in cash and cash equivalents. That includes $460.3 million in money market funds. Other sources of cash include the sales of powertrain components and systems, regulatory credit sales, customer deposits from Model S and Model X, development services, regulatory credit sales, and most importantly, Model S deliveries.

Tesla Motors Inc (NASDAQ:TSLA) said that its capital expenditures in 2013 were $264.2 million, up from $239.2 million in 2012. However, the company estimates its capital expenditures to rise to $650-$850 million in 2014.

Tesla Motors Inc (NASDAQ:TSLA) shares fell 1.01% to $235.40 in pre-market trading Friday.

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