Tesla Q2 2022 report shows crypto sell-off and profit decline


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Tesla has already reported Q2 vehicle shipments and now its full Q2 2022 financial report (pdf) shows the company is dealing with inflation and a general economic downturn coupled with falling prices for bitcoin and other cryptocurrencies. In a letter to investors, Tesla executives reveal that the company has sold 75 percent of its bitcoin holdings, adding $936 million to its balance sheet in cash.

Last year, Tesla invested $1.5 billion in bitcoin and announced that it would accept bitcoin as payment. Tesla started accepting bitcoin at the end of March and then reversed sharply in May, just 49 days later.

In the latest report, Tesla says its remaining “digital assets” are worth $218 million, up from $1.2 billion in previous quarters. Musk said last July, “I could have pumped, but I didn’t fold… I definitely don’t believe that the price will be high, but selling or anything like that. I would like bitcoin to succeed.”

In terms of its electric vehicle business, where new competitors are announced every day, and solar-powered products, the company says it made a profit of $2.26 billion this quarter, down about 31 percent from last quarter. when she published the report. profit of 3.3 billion dollars. The profit came from $16.9 billion in revenue, also down from the first quarter when the company reported $18.7 billion in revenue.

In terms of profitability, the company is still doing better than it did in the second quarter of 2021, when it made $1.1 billion on $11.9 billion in revenue. The company attributed this to several factors, including “lower stock compensation costs,” higher vehicle shipments year-over-year, and an improvement in the average selling price. This is the first full quarter since Tesla raised prices on all of its vehicles by as much as 10 percent, and then raised prices on some models again in June. Despite rising prices, the company has broken its trend of earning more per car every quarter. In the first quarter, its gross automotive margin was 32.9 percent. In this quarter, it amounted to 27.9 percent.

Tesla announced earlier this month that its shipments have slowed, falling about 18 percent from the first quarter. In addition, about 15 percent fewer vehicles were produced this quarter compared to last year. In its earnings report, Tesla says it faced “limited production and shutdowns in Shanghai for most of the quarter” but continued to ramp up production at its new facilities in Berlin and Austin, Texas.

Other difficulties reported by the automaker are higher prices for everything from raw materials to logistics, higher fixed costs per vehicle due to the Shanghai closure, and of course the aforementioned “bitcoin depreciation.”

Compared to the previous quarter, the company’s revenue from the sale of regulatory loans to other automakers fell by almost 50 percent. It brought in $679 million in loans in the first quarter and only $344 million in the second. The loans help other companies that don’t make enough “clean” cars to meet US and EU regulatory standards.

Culturally, it was a turbulent quarter for Tesla. In late April, CEO Elon Musk sold billions of dollars worth of company stock to help pay for Twitter (a deal that turned into a huge mess and is now heading to the Delaware Chancellery after Elon tried to cancel the deal). Musk also reportedly said he had a “very bad feeling” about the economy when he announced the suspension of hiring and layoffs at the company. These layoffs have affected the Autopilot team, and Tesla has been accused of violating labor laws after allegedly laying off over 500 Gigafactory workers. Earlier this month, the company also lost its head of artificial intelligence.

However, it wasn’t all bad news. Tesla’s partnership with Uber and Hertz, where qualified drivers can rent electric vehicles to transport passengers, seems to be going well, according to a June report from Uber. It also looks like 2022 will be the year non-Tesla electric vehicles get access to the Supercharger network in the US, based on a fact sheet published by the White House.

The company will discuss its second-quarter results in an investor call at 5:30 pm ET / 2:30 pm PT, which you can listen to here.

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