Selling three-quarters of its bitcoin holdings added $936m in cash to Tesla’s balance sheet as it steers through economic headwinds.
Tesla has sold 75pc of its bitcoin holdings, the company revealed in its latest earnings report.
CEO and founder Elon Musk has long been a proponent of cryptocurrency. Tesla invested $1.5bn in bitcoin early last year, and by March the EV maker had begun accepting bitcoin as payments for cars.
However, in less than two months, Tesla backed away from crypto purchases and Musk cited environmental concerns for the U-turn. The price of bitcoin plunged following that announcement and fluctuation in the crypto market has continued well into 2022.
In its latest quarterly report, Tesla confirmed that it sold off three-quarters of its bitcoin and added approximately $936m in cash to its balance sheet.
According to the report, the value of its remaining digital assets is $218m. The company had consistently reported a figure of $1.2bn in previous quarters.
Musk cautioned investors on the earnings call that the move “should not be taken as some verdict on bitcoin”. He cited concerns over the overall liquidity of Tesla in light of Covid-19 shutdowns in China as the main incentive to sell bitcoin and add extra cash.
Tesla made a profit of $2.26bn in the latest quarter, which is almost a third lower than last quarter’s $3.3bn. Revenue stood at $16.9bn, which was also lower than last quarter’s $18.7bn.
While these figures may have dipped quarter-on-quarter, they remain significantly higher than last year’s second quarter, when Tesla made a $1.1bn profit on $11.9bn in revenue.
However, automotive gross margin came in at 27.9pc. This is down from 32.9pc last quarter and 28.4pc a year ago, as the company deals with inflation and more competition for EV components.
According to The Verge, this is the first full quarter since Tesla raised the prices on all of its cars by as much as 10pc, followed by another raise on selected models last month.
Musk also said on the earnings call that the company hopes to start delivering the Cybertruck, its electric pickup that has faced delays, in the “middle of next year”.
The earnings results come amid conflict between Musk and Twitter, after the billionaire entrepreneur backed out of a $44bn deal the buy the social media company. Twitter is now suing Musk and the trial is set to begin in October.
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