Hit by China shutdown, Tesla boosts auto prices and sells bitcoin

Tesla reported solid quarterly earnings despite a hit from Covid-19 lockdowns in Shanghai that Chief Executive Elon Musk said prompted the company to liquidate most of its bitcoin holdings.
Musk, who has generated recent headlines over his controversial withdrawal from a $44-billion acquisition of Twitter, said the company had navigated a tricky environment with the Shanghai closure and lingering supply chain problems that have raised costs.

The electric vehicle maker reported second-quarter profits of $2.3-billion, about twice that in the year-ago period as the automaker lifted car prices to “embarrassing” levels, as Musk put it.

Although Tesla profits topped estimates, they lagged behind those in the first quarter, the first sequential profit drop since late 2020, which coincided with a fall in automotive profit margins due to rising costs. And while revenues jumped 42 percent to $16.9-billion, they came in below the $17.1-billion projected by analysts.

Musk described the period as a “unique quarter,” but told investors and analysts on a conference call that the restart of the Shanghai plant and the ramp-up of new factories in Germany and Texas create “the potential for a record-breaking second half of the year.”

The company cited the drag from Shanghai, where its factory was shuttered for part of the quarter. But Tesla said it finished the three-month period with “a record monthly production level” after the China restart.

Tesla said supply chain challenges remain an ongoing headache, as factory shutdowns, labour shortages, logistics and other issues “limited our ability to consistently run our factories at full capacity

During the quarter, Tesla liquidated about 75 percent of its holdings in bitcoin, the value of which has declined sharply in 2022. The moves on bitcoin resulted in one-time costs of $106-million, said Chief Financial Officer Zachary Kirkhorn.

Source: eNCA

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