Tesla Motors almost doubled its staff in 2014 to 10,161 employees from 5,859 a year earlier as it plans to expands its product line. The EV manufacturer is making efforts to push sales to 500,000 in just a few years from 33,000 in 2014.
Surge in R&D, admin expenses
Tesla Motors’ selling, general and administrative expenses surged to $603.7 million in 2014 from $285.6 million a year earlier. The rise in the cost could be the outcome of increased hiring. Along with the increase in SG&A expenses, the company’s spending on research and development also surged, climbing to $464.7 million from $232 million in 2013.
The expansion in manpower is driven by the opening of a new facility in Lathrup, Calif. and the expanded use of its Fremont, Calif. assembly plant for manufacturing and engineering. The Palo, Alto-based company is estimating that its operating expenses, including R&D and selling and general and administrative costs, to rise by around 45% to 50% in 2015, according to a filing on Thursday. Capital spending will rise substantially to $1.5 billion in the year, and around $300 million will be for the gigafactory, which is under construction in Reno, Nev.
Rising ad budget for Tesla
One of the major attractions in the filing is the stated advertising and marketing costs. Costs increased to $48.9 million in 2014 from $9 million in 2013 and $3.9 million in 2012, which is $1,493 per vehicle in 2014 compared to $400 per vehicle in 2013, according to a report from The Wall Street Journal. Tesla is not dedicated to regular advertising, but it sponsors events for current and potential customers. Despite the increase, the budget allocated by Tesla is only a fraction of what other auto companies are spending. Tesla has also mentioned the supercharger network in its filing, reporting that it spent $107.8 million.
Tesla Motors is the only automaker operating from the Silicon Valley and has a long term sales goal of delivering millions of vehicles globally by the year 2025. Also the company’s short-term projections are impressive with plans of selling 55,000 vehicles, a rise from its 32,733 global EV sales in 2014. Also Tesla CEO Elon Musk is looking forward to a growth trajectory that would raise the company’s valuation to more than $700 billion to match Apple’s current value. Tesla’s current market capitalization is around $26 billion.