4 ms·
> Specifically they don't subtract R&D costs from their margins. R&D costs should not be subtracted in order to calculate gross margin. They are a part of net
by ericb 10y ago
> Specifically they don't subtract R&D costs from their margins.
R&D costs should not be subtracted in order to calculate gross margin. They are a part of net margin only. Payroll is not part of gross margin either.
Here's a source: http://www.investopedia.com/ask/answers/122314/what-difference-between-gross-margin-and-net-margin.asp http://www.investopedia.com/ask/answers/122314/what-differen...
- mikeyouse 10y agoIn most industries you're right but the autos have always included R&D in COGS instead of OpEx. Tesla is the only auto manufacturer who does it the other way.
- gizmo 10y agoTesla likes to quote their gross margins because they look incredible at face value. However Tesla doesn't use a dealership model, so they have expenses for the sales process that other car manufacturers don't have. To get an apples-to-apples comparison with the margins of other car manufacturers you have to make adjustments like the ones I described earlier.