Tesla Inc TSLA CEO Elon Musk on Wednesday said the electric vehicle company’s operating expense is “embarrassingly high."
What Happened: The billionaire entrepreneur was reacting to a Twitter post that compared Tesla’s first-quarter operating expenses with that of Rivian Automotive Inc’s RIVN from its fourth quarter.
Tesla opex is embarrassingly high imo!
— Elon Musk (@elonmusk) April 21, 2022
Tesla reported $1.86 billion operating expense in the first quarter, a year-on-year jump of 15%. Rivian’s fourth-quarter operating expense was $2.07 billion.
See Also: How To Buy Tesla (TSLA) Stock
In 2021, Tesla reported operating expenses of $7 billion, while Rivian's came at $3.75 billion. The Musk-led company’s adjusted gross margin was 27% in 2021.
Besides rent, inventory costs, marketing, research and development, and payroll, operating expenses also include day-to-day business operations.
Tesla reported first-quarter financial results on Wednesday. Rivian is due to report earnings on May 11.
Related Link: Elon Musk Says Tesla Likely To Make Over 1.5M Cars This Year
Why It Matters: Tesla’s operating expenses have risen significantly over the past three years due to higher SG&A components. The EV maker, however, spends nothing on advertising and sells its vehicles online, unlike legacy players who rely on dealers.
Tesla reported operating expenses of $4.1 billion in 2019 and adjusted gross margins of 18.9%.
Price Action: Tesla stock closed 4.96% lower at $977.2 a share on Wednesday.
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