TSLA · 10-Q · 2026Q1 · Full report

Operating Expense Trends

Tesla, Inc. · 2026-04-23 · Importance 72 · Surprise 74

Research and development expense increased $537 million (38%) to $1,946 million in Q1 2026 versus Q1 2025, driven by higher costs related to AI and other programs and a $145 million increase in stock-based compensation. R&D as a percent of revenue rose from 7% to 9% year over year. Selling, general and administrative expense increased $582 million (47%) to $1,833 million, driven by a $294 million increase in stock-based compensation, a $139 million rise in employee and labor costs (including professional services), and an $87 million increase in other operating expenses including legal charges. Both expense categories reflect the company’s higher spending on AI initiatives, headcount-related costs and stock-based compensation in the quarter.