Tesla has already reported the number of vehicle shipments for the second quarter, and now the full financial report for the second quarter of 2022 (pdf) reveals that it is handling inflation and the general economic downturn, combined with a fall in the prices of Bitcoin and other cryptocurrencies. In the letter to investors, Tesla executives reveal that the company has sold 75 percent of its Bitcoin holdings, adding $ 936 million in cash to the balance sheet.
Last year, Tesla made a $ 1.5 billion investment in Bitcoin and announced that it would accept Bitcoin as payment. Tesla began accepting Bitcoin in late March, turning abruptly in May, just 49 days later.
In the latest report, Tesla says the value of the remaining “digital assets” is $ 218 million, which they had reported at around $ 1.2 billion in previous quarters. In July last year, Musk said: “I may be able to pump, but I do not dump … I definitely do not believe in getting the price high and selling or anything like that. I would like to see Bitcoin succeed. “
When it comes to its business of making electric cars – where new competitors appear to be announced every day – and solar energy products, the company reports that it earned $ 2.26 billion in profit this quarter, down about 31 percent from the previous quarter when it posted a profit of $ 3.3 billion. The profit was earned at $ 16.9 billion in revenue, which is also down from Q1, where the company reported raising $ 18.7 billion.
In terms of profitability, the company is still doing better than it did in Q2 2021, where it earned $ 1.1 billion on $ 11.9 billion in revenue. The company attributes this to several factors, including “lower inventory-based compensation cost”, more vehicle deliveries compared to last year, and an improved average selling price. This is the first full quarter since Tesla raised the prices of all its cars by as much as 10 percent, and it raised the prices again on selected models in June. Despite the price increases, the company has broken the trend of earning more per car every quarter. In the first quarter, the gross margin for the automotive industry was 32.9 percent. This quarter it was 27.9 percent.
Tesla announced earlier this month that deliveries have declined, falling by around 18 percent compared to Q1. It also produced around 15 percent fewer cars this quarter compared to the previous one. In its earnings report, Tesla said it faced “limited production and closures in Shanghai for most of the quarter”, but that it continued to increase production at its new facilities in Berlin and Austin, Texas.
Other difficulties the carmaker reports are rising prices for everything from raw materials to logistics, higher fixed costs per car due to the closures in Shanghai, and, of course, the aforementioned “Bitcoin reduction.”
Compared with the previous quarter, the company’s revenues from selling regulatory credits to other car manufacturers fell by almost 50 percent. In Q1, it raised $ 679 million from the credits, and in Q2 it earned only $ 344 million. The credits help other companies that do not make enough “clean” vehicles to meet regulatory standards in the US and the EU.
Culturally, it has been a turbulent quarter at Tesla. In late April, CEO Elon Musk sold billions of dollars worth of shares in the company to help pay for Twitter (a deal that has been a big mess and is now on its way to Delaware’s Court of Chancery after Elon tried to cancel the scheme). Musk is also said to have said that he has a “super bad feeling” about the economy when he announced layoffs and layoffs in the company. These layoffs have affected the autopilot team, and Tesla has been accused of violating labor laws after allegedly firing more than 500 Gigafactory workers. The company also lost the head of AI earlier this month.
However, there has been no bad news. Tesla’s partnership with Uber and Hertz, where qualified carpoolers can rent electric cars to ferry passengers around, seems to be going well based on a report from Uber in June. It also looks like 2022 will be the year that non-Tesla EVs will have access to the Supercharger network in the US, based on a fact sheet released by the White House.
The company will discuss the results for the second quarter at an investor meeting at 17.30 ET / 14.30 PT, which you can listen to here.