Jon Quast

You're listening to Motley Fool Money.

Okay, so Tesla just reported yesterday evening.

We're taping this on Thursday, October 23rd.

Yesterday, the Tesla numbers came out.

And Matt, I just want to ask you just simply, what stood out to you?

Yeah, I want to circle back to something that you just said there regarding the profit margins.

And so Tesla's operating margin has dropped in 10 of the last 11 quarters.

I think that that's a noteworthy trend at this point.

And when you think about, okay, why would profit margins be going down?

There is one thing that stood out here on the income statement.

Through the first three quarters of the year, R&D spending is up 42% year over year for Tesla.

And so that is one expense that's rising.

And in the call, they attributed at least some of it, it had to have been a significant portion of this R&D spend to the people who are working on AI.

And so Tesla is trying to be a leader in artificial intelligence.

And it makes sense.

It really does need it for the full self-driving.

It needs it for the optimist robot plans.

So it definitely wants to be a leader in AI.

So that spending is up.

But also these regulatory credit revenue, right?