Tesla’s second quarter of 2022 came to a shocking end when the electric car manufacturer reported a fall in earnings after it struggled to meet demand due to a closure of the Shanghai plant and production challenges at new plants. The company also sold 75% of its bitcoin holdings, which led to a fall in the price of cryptocurrency.
Tesla’s second-quarter profit fell 32% from record highs in the first quarter, and the company reported a net profit of $ 2.26 billion on Wednesday.
The earnings report comes more than a month after CEO Elon Musk said he had a “super bad feeling” about the economy and that the company had to lay off around 10% of salaried employees.
The company has not been immune to global supply chain problems and economic problems. Earlier this quarter, Tesla was forced to temporarily shut down its Shanghai Gigafactory to comply with pandemic lock-in restrictions, leading to a rare drop in delivery figures. The company delivered 254,000 vehicles this quarter, a decrease of 18% from the previous quarter. Tesla also announced layoffs and began laying off workers earlier this month, including 229 employees who worked with Tesla’s driver assistance technology, Autopilot.
Tesla reported its quarterly results based on Musk’s ongoing saga with Twitter, which sued the billionaire for terminating his deal to buy the social media platform. A trial is set to begin in October.
In its results report, Tesla said that the company continues to experience a decline in production due to the supply chain and other problems that limited the ability to consistently operate its factories at full capacity. While the Shanghai Gigafactory was completely and partially closed for much of the quarter, the company reported a record-high monthly production level at this location.
Uncertain about when the shutdown will be lifted in Shanghai, Musk said Tesla unloaded 75% of its bitcoin holdings to maximize its cash position. “This should not be taken as a judgment of bitcoin,” Musk said in an earnings interview on Wednesday. “We have not sold any of our dogecoin.”
Nevertheless, bitcoin prices fell after Tesla reported earnings on Wednesday.
However, Musk said the company is not strongly focused on cryptocurrency. “It’s not something we think about much,” Musk said during the conversation. «It’s a side show to the side show… The basic good thing about Tesla and the reason we do this is that the day for sustainable energy comes earlier. That is our goal. We are neither here nor there on cryptocurrency. “
Musk also revealed that the company’s newest factories in Berlin and Texas are losing “billions of dollars right now” as supply chain problems stopped production.
“Just trying to keep the factories in operation for the last couple of years has been a very difficult thing, as supply chain disruptions have been serious, as extremely serious,” Musk said in an interview in May.
“The last two years have been an absolute nightmare of supply chain outages, one thing after another, and we are not out of it yet.”
Musk, however, seemed optimistic on Wednesday about the state of the economy in the coming months. “I will take this with a pinch of salt … I think inflation will slow down towards the end of this year.”
Musk also said the company is still on track to release a beta of full self-driving capabilities by the end of the year, despite the recent departure of Andrej Karpathy, a key member of Tesla’s autonomous technology team and senior director of artificial intelligence.
Reuters contributed with reporting