Tesla sold 75% of its Bitcoin, but Musk dogged about Dogecoin

NEW DELHI: Tesla has sold 75 per cent of its Bitcoins, adding $936 million in cash to its balance sheet in the second quarter (Q2) this year, as it deals with economic meltdown amid cryptocurrencies falling off the cliff.

Last year, Tesla made a $1.5 billion investment in Bitcoin and announced that it would accept Bitcoin as payment.

In the Q2 earnings call with analysts, Tesla CEO Elon Musk said the reason the company sold a bunch of its Bitcoin holdings “was that we were uncertain as to when the Covid lockdowns in China would alleviate”.

“So it was important for us to maximise our cash position, given the uncertainty of the Covid lockdowns in China. We are certainly open to increasing our Bitcoin holdings in future. So this should not be taken as some verdict on Bitcoin,” he noted.

Musk said that the company was concerned about overall liquidity for the company given shut downs in China.

“And we have not sold any of our Dogecoin,” he added.

Zachary Kirkhorn, CFO, Tesla, said the company converted a majority of Bitcoin holdings to Fiat for a realised gain, “offset by impairment charges on the remainder of our holdings, netting a $106 million cost to the P&L included within restructuring and other”.

After less than two months of going bullish on Bitcoin, Tesla applied brakes on the popular cryptocurrency as a payment mode to buy its electric vehicles, citing environmental harm.

Musk then said the electric car maker will not sell any Bitcoin and intends to use them for transactions as soon as mining moves to more sustainable energy.

Tesla profits dip in Q2 due to China lockdowns

Meanwhile, amid supply chain disruptions and extended COVID-19 lockdowns in China, Tesla has reported $16.9 billion in revenue for the second quarter (Q2), down from $18.8 billion in the Q1 this year. Tesla reported $2.3 billion in second-quarter profit, below its record quarterly profit of $3.3 billion in the first quarter this year. The company reported its first sequential decline in quarterly profit in more than a year.

“We continued to make significant progress across the business during the second quarter of 2022,” the company said. “Though we faced certain challenges, including limited production and shutdowns in Shanghai for the majority of the quarter, we achieved an operating margin among the highest in the industry of 14.6 per cent, positive free cash flow of $621 million...” it added.

The company, however, ended the quarter with the highest vehicle production month in its history. The electric car company said it earned $2.3 billion, or $1.95 a share, in the second quarter, compared with $1.1 billion, or $1.02 a share, a year ago. In the Q1 of 2022, Tesla delivered 3,10,048 electric vehicles.