Tesla has been increasing S & X deliveries, in part, by expanding into geographically more remote and thinner markets such as Mexico, South Korea, UAE, Ireland, Portugal, Jordan, etc., all of which require build-out and operation of new sales/service centers and supercharger locations, many of which involve shorter-term operating leases until the market is validated.
Other, more established markets such as Denmark, Hong Kong, and the UK where the EV subsidies are contracting still have operating expenses for the embedded infrastructure that do not decline anywhere near as sharply as new sales apparently have.
Then, there is the promised tripling of Supercharger pedestals before year end 2018. "There are currently 6,124 Superchargers around the world. By the end of 2018 there should be over 18,000 worldwide. Eventually you’ll be able to go anywhere on Earth using the Superchargers," Elon said on Friday night. To the extent site leasehold improvements for expansion are on shorter-term operating lease locations, those costs will also be expensed rather than capitalized. Tesla allocates SC operating costs between COGS and SG&A. The more that is allocated to SG&A, the higher the reported GM%, but it all washes out at the Net Income (Loss) level.
The greatest driver of SG&A will obviously be the growth in total deliveries (and servicing)--say from ~76,000 in 2016 to ~350,000 +/- during 2018. It's not just the increase in volume but also the amount of "hand-holding" of new, down-market customers that will be required. Through 6/30/17, Tesla had delivered ~230,000 Ss & Xs world-wide. I'd guesstimate that about 80% were to multiple car households and about 20% were to customers who had previously owned Teslas. Most of the customers in that demographic could readily write a check for their purchase and/or the difference between the Tesla they were returning and their new one. A far greater percentage of M3 customers will be single vehicle households, have un-paid loans/leases on non-Tesla vehicles, and are not nearly as financially astute nor well off as S and X purchasers. IMO, Tesla will have to expend a lot of SG&A to accommodate the new customer demographic to avoid complaints from disgruntled ones who are always more vocal than the more tolerant types.
As far as R&D growth goes, IMO Tesla cannot stay on schedule with plans for a new MY (on a entirely new platform in an entirely new factory), the Class 8 tractor, the pick-up, the solar shingles etc. without significant growth in R&D during 2018.
YMMV.
