Tesla has fallen victim to the chaos of the supply chain in China and a damaging bet on Bitcoin, which has led to a sudden end to a series of record profits for Elon Musk’s car company.
The electric vehicle maker also sold a portion of its stakes in Bitcoin, the company said Wednesday, as its bet on the cryptocurrency deteriorated.
Tesla’s revenue fell 9% between the second and first quarter to $ 16.9 billion (£ 14.1 billion), although it was still 42% more than a year earlier.
Its revenue fell to a record three-month revenue of $ 18.8 billion it released earlier this year amid supply chain problems and a factory shut down in China due to Covid restrictions.
Telsa said he “faced certain challenges, such as limited production and closures in Shanghai for most of the quarter,” but said he “continued to make significant progress in the business during the second quarter of 2022. “.
Earlier this month, Tesla reported that it had delivered more than 254,000 electric vehicles, down from 300,000 in the previous quarter.
Tesla’s Shanghai plant was closed for nearly two months due to ongoing coronavirus blockages in China as the company faced a number of supply chain problems. However, the electric car maker added that it had enjoyed a record month at its Fremont factory and had produced 1,000 vehicles in a single week from its Berlin Gigafactory.
The company said it posted an operating profit of $ 2.5 billion in the three months ending June. Shares rose 4% after trading hours in New York after promising a “record of the second half of 2022.”
Shares of Tesla have fallen about 40% so far this year with technology sales wiping out hundreds of millions of dollars in value from the electric car maker even though it posted record results in April. It is currently worth about $ 770 billion.
However, the electric car maker has remained dominant in the US and has rejected the downward trend in car sales to rival manufacturers. Current operators such as Volkswagen have seen sales fall to a 10-year low due to a semiconductor supply chain crisis. Ford sales fell 17% earlier this year. BMW sales fall 20 units in its latest set of results.
Emerging Chinese players like BYD have proven to be more challenging. BYD surpassed Tesla’s electric car sales in early July.
His latest results also seemed to mark the end of Mr.’s love story. Musk with Bitcoin. Tesla said it had deteriorated its holdings in Bitcoin and sold 75% of its cryptocurrency for $ 936 million in cash.
In early 2021, Tesla bought Bitcoin worth $ 1.5 billion, at which time it bought the coins worth about $ 36,000. The price of Bitcoin has fallen this year and was worth about $ 19,000 at the end of June, the end of Tesla’s financial period.
Musk has been open about his fears about the economy in general, warning in June that he had “a very bad feeling about the economy.” He also called the company’s factories in Texas and Berlin “giant money furnaces” that are burning billions of dollars.
The Tesla CEO has unveiled plans to reduce Tesla staff by 10%, calling the recession “inevitable.” Other electric vehicle rivals have been forced to cut jobs. Arrival, a British electric van company, said it was cutting 800 people, while US electric vehicle maker Rivian plans to cut hundreds of jobs after its stock price plunged 70% this year.
Despite the drop in electric vehicle stocks, Tesla has continued to be a favorite of retail investors who have flocked to Musk’s company. Its valuation has also been driven in part by its efforts in automatic driving. These months were once given to them by the departure of their Autopilot chief, Andrej Karpathy.
The electric car maker behind the Model 3 and Model Y has already raised the price of its electric vehicles as inflation rises.
Tesla’s share price has also been hit by Musk’s $ 44 billion bold attempt to acquire Twitter, which has become a litigation after Tesla’s boss tried to withdraw from it. ‘agreement.
The acquisition has made comparisons with the latest bold attempt at mergers and acquisitions by Mr. Musk, who saw him try to take Tesla privately at $ 420 a share in 2018.
Twitter is now trying to force Mr. Musk to continue with the acquisition, which was to be funded largely by sales of Tesla shares.
On Tuesday, Twitter won the first phase of its legal fight against Musk, forcing a speedy trial in October. Mr Musk’s legal team had tried to postpone any trial until 2023.
The billionaire argues that Twitter has not been open about the number of “bots” or spam accounts on the social network. He is using this as an excuse to break the merger agreement. Twitter, however, argues that Mr. Musk should be forced to buy Twitter and cannot retire.