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You're highlighting the absurdity of claiming the $100k loss per vehicle - except for Tesla, the auto industry is one of the few that amortizes all of their R&D
by mikeyouse 2y ago
You're highlighting the absurdity of claiming the $100k loss per vehicle - except for Tesla, the auto industry is one of the few that amortizes all of their R&D for a new model into the COGS. So if Ford spends $1 billion on R&D and $1 billion on advertising for a new model they expect to sell for 10 years, they'll claim $200M/year in expense - so if they only sell 1 car with an actual materials cost of $25k - in their financials, that car will "cost" $200,025,000.
- PreInternet01 2y agoYeah, that's indeed absurd, and something that if I were to try that, I'd probably go to jail for...
- ryan93 2y agoWhat on earth do you think the crime is?
- PreInternet01 2y agoImproper amortization of R&D expenses? In most locales, including (from what I can gather) the US, there are (generous) initial tax subsidies, followed by a 5-to-15-years earn-back period. Simply including R&D costs, imagined or otherwise, in COGS seems... fraudulent?
- voisin 2y agoIf you were vital to the economy, you could do it too!