Electric Carmakers Burn Through Cash Like Gas in a Combustion Engine

Car companies are some of the biggest spenders in the world. You’d think they’d work harder at allocating capital. But, if that’s even occurred to them as an issue, you’d never be able to tell from the amount of money they’re throwing into the still-nascent electric vehicle market.

Automakers have spent more on research and development over the last decade than they have made in profits. They account for a fifth of global R&D spending. But they don’t have much to show for it: There are only a few good electric cars on the road. Returns on invested capital and on assets have been dropping over that time. Whether and when this investment will return much of anything — and what the final cost of transition will be — is up in the air.