Tesla sells 75% of its bitcoins as profits plummet due to production issues | Tesla

Tesla’s second quarter of 2022 came to a shaky end as the electric-car maker reported a fall in profit after struggling to meet demand due to the closure of its Shanghai plant and production problems at new plants. The company also sold 75% of its Bitcoin holdings, leading to a plunge the cryptocurrency price.

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

The earnings report comes more than a month after CEO Elon Musk said he had one “super bad feeling” about the economy and that the company had to lay off about 10% of its employees.

The company wasn’t immune to global supply chain issues and economic woes. Earlier this quarter, Tesla was forced to temporarily close its Shanghai Gigafactory to comply with pandemic lockdown restrictions, prompting a rare drop in shipments. The enterprise delivered 254,000 vehicles in the quarter, down 18% sequentially. Tesla also declared a hiring freeze and started laying off workers Earlier this month, including 229 employees who worked on Tesla’s Autopilot driver-assistance technology.

Tesla reported its quarterly earnings amid Musk’s ongoing saga with Twitter suing the billionaire for breaching his agreement to purchase the social media platform. a process is set begin in October.

In his results report Tesla said the company continued to experience production delays due to supply chain and other issues that limited its ability to consistently operate its factories at full capacity. While the Shanghai Gigafactory was fully and then partially closed for much of the quarter, the company reported record monthly production levels at the site.

Due to uncertainty over when the lockdown will be lifted in Shanghai, Musk said Tesla dumped 75% of its Bitcoin holdings to maximize its liquidity position. “This should not be taken as a judgment on Bitcoin,” Musk said in a conference call Wednesday. “We have not sold any of our Dogecoins.”

Still, bitcoin prices fell after Tesla reported earnings on Wednesday.

However, Musk said the company is not heavily focused on cryptocurrencies. “We don’t think about it much,” Musk said on the call. “It’s a sideshow of the sideshow… The fundamental good thing about Tesla and the reason we’re doing this is that the day of sustainable energy is coming sooner. That’s our goal. We are neither here nor there in terms of cryptocurrency.”

Musk also revealed that the company’s newest factories in Berlin and Texas are “currently losing billions of dollars” as supply chain issues shut down production.

“Just trying to keep the factories running for the past few years has been a very difficult thing because the supply chain disruptions have been severe, in fact extremely severe,” Musk said in a May interview.

“The last two years have been an absolute nightmare of supply chain disruptions, one thing at a time, and we’re not out yet.”

However, Musk was optimistic on Wednesday about the economic situation in the coming months. “I would take that with a grain of salt … I think inflation will come down towards the end of this year.”

Musk also said the company remains on track to release a beta version with full self-driving capabilities by the end of the year, despite the last exit by Andrej Karpathy, a key member of Tesla’s autonomous technology team and Senior Director of Artificial Intelligence.

Reuters contributed to the coverage

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