Tesla vs GM: R&D Cost, Growth, and Ratio to Expenses

Side by side: Chevrolet Bolt and Tesla Model 3. Source: Flickr Image.

Tesla and General Motors (GM) are two prominent players in the automotive industry, both heavily investing in research and development (R&D) to innovate and lead in the evolving market, especially in electric vehicles (EVs) and autonomous driving technologies.

However, their approaches and scale of R&D investment can differ significantly, reflecting their corporate strategies and market positions.

Tesla’s R&D efforts are more concentrated on EVs and related technologies, reflecting its position as a pure-play electric vehicle company.

In contrast, GM’s R&D is more diversified, reflecting its broader product portfolio, including internal combustion vehicles.

In this article, we will look into the research and development (R&D) numbers of Tesla and General Motors. Apart from the absolute values, we also compare the R&D of both companies with respect to their revenues and expenses.

Let’s get started!

Investors interested in the R&D spending of other companies may find more resources in these pages:

R&D Comparison: Automotive

• Ford vs Tesla,
• Tesla vs BYD,
• Tesla vs Chinese EV makers,

R&D Comparison: Semiconductor

• TSMC vs Samsung,
• Intel vs TSMC,
• AMD vs Nvidia,
• AMD vs Intel,

R&D Comparison: Social Media

• Meta vs Twitter, Pins, and Snapchat,

R&D Comparison: Software and Hardware

• Palantir vs Nvidia,
• Apple vs Alphabet,
• Apple vs Microsoft,
• Apple vs Samsung,

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Definitions

To help readers understand the content better, the following terms and glossaries have been provided.

R&D to Revenue Ratio: The ratio of Research and Development (R&D) to revenue is a financial metric measuring the proportion of a company’s revenue invested in research and development activities. It is calculated by dividing the company’s R&D expenses by its total revenue over a specific period.

This ratio is crucial for understanding how much of a company’s sales are reinvested into developing new products, services, or processes. A higher ratio may indicate a company heavily investing in innovation with the expectation of future growth and competitive advantage. In comparison, a lower ratio could suggest a focus on current operations and profitability.

This metric is particularly relevant in technology, pharmaceuticals, and other industries where ongoing R&D is critical for maintaining a competitive edge.

R&D to Costs And Expenses Ratio: The R&D to Costs and Expenses Ratio is a financial metric that measures the proportion of a company’s research and development (R&D) expenses to its total costs and expenses.

This ratio is significant because it indicates how much of a company’s resources are allocated to R&D activities compared to other operational costs. A higher ratio suggests that the company is investing more resources in innovation and development, which could indicate a focus on long-term growth and competitiveness.

This metric is particularly relevant in industries where innovation and technological advancement are crucial, such as pharmaceuticals, technology, and biotechnology.

R&D to Gross Profit Ratio: The R&D to gross profit ratio is a financial metric measuring the proportion of a company’s gross profit that is spent on research and development (R&D).

This ratio helps investors and analysts evaluate how much of a company’s gross profit is being reinvested into innovation and future growth.

The formula for the R&D to gross profit ratio is:

\[\text{R&D to Gross Profit Ratio} = \left( \frac{\text{R&D Expenditures}}{\text{Gross Profit}} \right) \times 100\%\]

A higher R&D to gross profit ratio indicates a greater investment in innovation relative to the company’s profitability, which can be a sign of a commitment to long-term growth and competitiveness.

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Insight & Summary of Tesla and GM’s R&D Comparison

The following analysis consolidates the trends observed across Tesla and General Motors in R&D comparison, consisting of R&D spending, growth, and several ratios for the 2016–2025 period.

• While General Motors continues to outpace Tesla in absolute R&D capital expenditure—averaging $9.2 billion annually over the last three periods compared to Tesla’s $5.0 billion—the directional trajectories of their investments are diametrically opposed.

• Tesla is aggressively accelerating its innovation funding with an average year-over-year growth rate of 28.2%, targeting autonomous driving and AI infrastructure. Conversely, GM is in a phase of strategic contraction, reducing its R&D spend by an average of 4.6% annually over the same period.

• Despite the gap in absolute dollars, both automakers exhibit remarkably similar operational footprints, with R&D constituting approximately 5.5% to 5.8% of total costs and operating expenses for both firms in recent years.

• However, the ultimate strategic divergence appears in their gross profit utilization. GM’s declining gross margins mean its R&D burden now consumes an average of 67.2% of its gross profit (spiking to an alarming 96.1% in 2025).

• In contrast, Tesla’s highly efficient manufacturing model requires only 28.7% of its gross profit to fund its rapidly expanding R&D pipeline, affording it significant structural flexibility to out-innovate legacy peers without crippling its bottom line.

The table below combines all key Research and Development metrics into a single view for the latest three fiscal years.

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Tesla vs GM: Research And Development Spending & Growth

As shown in the chart above, GM’s research and development spending is much larger than Tesla’s. In fact, GM has spent roughly twice the amount that Tesla has spent on research and development.

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Tesla vs GM: R&D to Revenue Ratio

The definition of R&D to revenue ratio is available here: R&D to revenue ratio.

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Tesla vs GM: R&D to Gross Profit Ratio

The definition of R&D to gross profit ratio is available here: R&D to gross profit ratio.

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Tesla vs GM: R&D to Total Costs and Expenses Ratio

The definition of R&D to total costs and expenses ratio is available here: R&D to costs and expenses ratio.

The costs and expenses include the costs of revenue and operating expenses for both companies.

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References and Credits

1. All financial figures presented were obtained and referenced from the companies’ respective annual and quarterly reports published on the following investor relations pages:

– Tesla Investor Relations
– GM Sec Filings.

2. Flickr Images.

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Disclosure

We may use artificial intelligence (AI) tools to assist us in writing some of the text in this article. However, the data is directly obtained from original sources and meticulously cross-checked by our editors multiple times to ensure its accuracy and reliability.

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