Tesla has increased spending on research and development (R&D) in 2023. The company reported that its capex spending will exceed $9 billion. Tesla expects to spend between $7 billion to $9 billion in each of the following two fiscal years.
Tesla is a rapidly growing company that has huge spending on research and development. The manufacturer innovates at each stage of its development, which sets it apart from its competitors. In a 10-Q filing with the U.S. Securities and Exchange Commission, Tesla reported its expected costs for this and the next two fiscal years.
The company said its capital expenditures are generally difficult to predict beyond the short term. This is because it has a large number of major projects and because they may also be affected by the uncertainty of future global market conditions. Tesla is simultaneously ramping up the production of new products, creating or expanding manufacturing facilities on three continents, piloting the development and production of new battery cell technologies, expanding its Supercharger network, and investing in autonomous driving and other products to support the development of artificial intelligence.
The manufacturer said its costs may vary depending on “overall priority among projects, the pace at which we meet milestones, production adjustments to and among our various products, increased capital efficiencies and the addition of new projects.” Assessing the overall situation, Tesla said it expects its “capital expenditures to exceed $9.00 billion in 2023 and to be between $7.00 to $9.00 billion in each of the following two fiscal years.”
Despite high capital expenditures, the company’s business consistently generates cash flow from operations. It exceeds its capital expenditure level due to more efficient working capital management. Tesla’s sales growth is also generally contributing to positive cash generation. The manufacturer said it will continue to “utilize such cash flows, among other things, to do more vertical integration, expand our product roadmap and provide financing options to our customers.” This means Tesla expects elevated levels of capital expenditures in certain periods depending on the specific pace of its capital-intensive projects and other potential variables. Overall, the company expects its ability to “self-funding to continue as long as macroeconomic factors support current trends in our sales.”
