In 2021, Tesla's R&D spending increased by 74% year-on-year, an increase of $1.1 billion. With the continuous development of new plants and new products, the main costs are related to personnel costs. For reference, their R&D expenditure in 2020 was $1.491 billion, an increase of $148 million from $1.343 billion in 2019, an increase of 11% year-on-year.
In Tesla's 10-K filing with the U.S. Securities and Exchange Commission (SEC), the company said its R&D expenses mainly include labor costs for manufacturer teams in the engineering and research fields, costs for manufacturing engineering and manufacturing testing agencies, prototyping costs, contract and professional services fees, and depreciated equipment expenses.
In 2021, R&D spending increased by $1.1 billion, or 74% year-over-year. Tesla said the increase was primarily due to an increase of $506 million in employee and labor-related expenses, a $263 million increase in R&D expense materials, a $211 million increase in facilities, external services, freight and depreciation expenses, and an increase of $103 million in stock-based compensation expenses.
Those spending support Tesla's expanding product roadmap, such as new versions of the Model S and Model X. In addition, this includes the development of new technologies, including Tesla's own new 4680 battery. The company also reported additional R&D spending as it is in the pre-production phase of the Texas Gigafactory and the Berlin Gigafactory.
It should be noted, however, that the percentage of revenue from R&D expenses remained unchanged at 5% compared to the previous year. As a result, the increase in R&D expenses is only proportional to the increase in total revenue from expanded sales.