Tesla endured production disruptions in China and high costs of expanding new plants in Texas and Germany to report a 57% increase in earnings adjusted per share in its last quarter.
The second-quarter results of the electric car maker brought some relief after the company had warned of production and supply tensions. Revenue, $ 16.9 billion, was up 42% from a year earlier, though the figure fell slightly below the $ 17.1 billion Wall Street expected.
Tesla also revealed that it had largely canceled out the controversial $ 1.5 billion bitcoin bet last year by converting three-quarters of its stake in fiat currencies in the face of falling cryptocurrency prices. .
CEO Elon Musk’s enthusiasm for cryptocurrencies meant the automaker was one of the first companies to park a portion of its cash in digital assets.
Musk warned in an internal email last month that he had a “super bad feeling” about the economy.
Asked on Wednesday if demand was weakening, the Tesla boss said “something, maybe,” but added, “We have so much excess demand that it’s not a problem for us.” Chief Financial Officer Zach Kirkhorn said any drop in demand “was not material.”
Instead, Musk said Tesla’s “problem is overwhelmingly that of production.”
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Supply chain pressures and Covid-19-related closures in Shanghai have meant the company needs about 935,000 vehicle deliveries during the second half of the year to reach the total of 1.5 million that many analysts they expected, or a 70 percent increase over the same period in 2021.
Musk did not give a production forecast for the rest of the year, except to say that the company would likely achieve a “record” production. He also said Tesla’s plans called for it to reach full production by the end of the year, at an annualized rate of 2 million vehicles.
Tesla had revealed that production shutdowns in Shanghai and parts shortages had wiped out up to a quarter of its vehicle deliveries in the three months ended June 30. While the figure of 254,695 vehicles it shipped was still 27% more than a year earlier, it represented the first sequential quarterly drop in more than two years.
Expenditure on new production facilities brought Tesla’s observed near-profit gross profit margin of up to 27.9%, compared with the record margin of 32.9% reported. the first quarter.
Musk said Tesla’s cryptocurrency sales “should not be taken as a verdict on bitcoin” and that they were made to maximize the company’s cash position in the face of uncertainty over Covid-related closures in the China. Tesla was “certainly open to increasing bitcoin holdings in the future” and had not sold any of its dogecoins, he added.
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The price of bitcoin has dropped by about half since late last year, when Tesla valued its stake at just under $ 2 billion. He said recent sales had raised $ 936 million and he had assumed a $ 106 million impairment charge in addition to a $ 101 million charge charged last year.
Prior to the release of the results, Tesla’s share price had fallen 36 percent since Musk first revealed he had amassed a significant stake in Twitter. Twitter’s involvement fueled concern about whether its stake in the social media company would lead to the sale of a portion of its Tesla holding company. The high-tech Nasdaq Composite fell 13% in the same period.
Shares of Tesla initially rose more than 4% after Wednesday’s results, but cut their advance to 0.5%.
For the second quarter, Tesla reported adjusted earnings per share of $ 2.27, up from $ 1.45 the previous year. In accordance with formal accounting principles, earnings per share rose to $ 1.95, from $ 1.02.