September 26, 2023

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Tesla Sells 75% of Bitcoin as Profits Slip Due to Production Challenges | Tesla

The second quarter of 2022 came to an uncertain end for Tesla as the electric car maker reported a decline in profits after it struggled to meet demand due to the closure of its Shanghai factory and production challenges at new plants. The company also sold 75% of its bitcoin holdings, driving it down Cryptocurrency price.

Tesla’s second-quarter profit fell 32% from record levels in the first quarter, with the company reporting net profit of $2.26 billion on Wednesday.

The earnings report comes more than a month after CEO Elon Musk announced that he has ‘Very bad feeling’ About the economy and that the company needs to lay off about 10% of its wage earners.

The company was not immune to global supply chain and economic problems. Earlier this quarter, Tesla was forced to temporarily shut down its Shanghai Gigafactory to comply with pandemic lockdown restrictions, resulting in a rare drop in delivery numbers. company Delivered 254,000 vehicles this quarter, down 18% from the previous quarter. Tesla also announced a hiring freeze and He started laying off workers Earlier this month, including 229 employees who worked on Tesla’s driver assistance technology, Autopilot.

Tesla reported its quarterly earnings on the back of Musk’s ongoing saga with Twitter, which has sued the billionaire for abandoning his consent to buy the social media platform. trial set To start in October.

In its earnings report, Tesla He said the company is still suffering from a manufacturing slowdown due to supply chain and other issues that have limited its ability to consistently run its factories at full capacity. While Shanghai Gigafactory was completely closed and then partially closed for most of the quarter, the company reported a record monthly production level at that location.

Given the uncertainty about when the lockdown will be lifted in Shanghai, Musk said that Tesla has emptied 75% of its bitcoin holdings to maximize its cash position. “This should not be taken as a judgment on Bitcoin,” Musk said in an earnings call on Wednesday. “We have not sold any of our Dogecoin.”

However, bitcoin prices fell after Tesla announced its earnings on Wednesday.

However, Musk said that the company is not focused too heavily on cryptocurrencies. It’s not something we often think about, Musk said on the call. “It’s a sideshow for a sideshow… A key feature of Tesla and the reason we are doing this is that Sustainable Energy Day will come soon. That is our goal. We are neither here nor there in the crypto space.”

Musk also revealed that the company’s newest plants in Berlin and Texas are losing “billions of dollars right now” as supply chain problems halt production.

“Trying to keep factories running for the past two years has been very difficult, as supply chain disruptions have been severe, like very severe,” Musk said in May. an interview.

“The past two years have been quite a nightmare for supply chain disruptions, one thing after another, and we are not out of it yet.”

However, Musk appeared optimistic on Wednesday about the state of the economy in the coming months. “I would approach this with caution…I think inflation will come down towards the end of this year.”

Musk also said the company is still on track to launch a beta version of its fully autonomous driving capabilities by the end of the year, although last departure Andrej Karpathy, a key member of the Tesla Independent Technology Team and Senior Director of Artificial Intelligence.

Reuters contributed to the report

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