Tuesday
August, 16

Tesla Gains In China Despite COVID, Bitcoin Sale

Despite a setback from the Covid-19 lockdowns in Shanghai, which Chief Executive Elon Musk said forced the business to sell off the majority of its bitcoin holdings, Tesla posted strong quarterly earnings on Wednesday.

Musk, who recently made headlines for his contentious decision to back out of buying Twitter for $44 billion, claimed that the company had to navigate a challenging environment due to the Shanghai closure and persistent supply chain issues that have increased expenses.

The automaker increased car pricing to “embarrassing” levels, according to Musk, which resulted in the electric vehicle manufacturer reporting second-quarter profits of $2.3 billion, or roughly twice that of the prior year’s period.

Despite exceeding expectations, Tesla’s profits fell short of those in the first quarter, the company’s first sequential profit decline since late 2020, which coincided with a decline in automotive profit margins as a result of higher costs.

And although revenues increased by 42% to $16.9 billion, they fell short of the $17.1 billion experts had predicted.

On a conference call with investors and analysts, Musk called the period a “unique quarter,” but added that the restart of the Shanghai facility and the expansion of additional factories in Germany and Texas have “the potential for a record-breaking second half of the year.”

The business blamed Shanghai’s negative impact when its factory was closed for a portion of the quarter. After China’s restart, Tesla claimed that it had “a record monthly production level” at the end of the three months.

Due to factory closures, labor shortages, logistics problems, and other factors, Tesla said supply chain challenges continue to be a problem. These factors “limited our ability to consistently run our factories at full capacity.”

sale of bitcoin

Tesla sold out roughly 75% of its bitcoin assets during the quarter, even though the cryptocurrency’s value has fallen precipitously since 2022.

According to Chief Financial Officer Zachary Kirkhorn, the bitcoin changes resulted in one-time charges of $106 million.

Musk explained the decision by saying that it was necessary to acquire money because it was unclear when Shanghai operations would resume.

At the beginning of the conversation, Musk stated that the transaction “should not be seen as any conclusion on bitcoin.”

In contrast to the objective of expediting the energy transition, however, cryptocurrencies are a “sideshow to the sideshow,” according to Musk, who cited the sweltering heat that is currently afflicting many nations as evidence that change is required.

Tesla has been able to pass on higher charges to customers thanks to the booming demand for Musk’s electric cars.

The Model 3, Tesla’s entry-level car in the US, costs close to $50,000.

Our prices have increased significantly; they are now, very simply, at embarrassing levels. said Musk. But in addition, there have been numerous manufacturing and supply chain shocks, and inflation has been out of control.

I’m hopeful that at some point we can lower the pricing a little bit, he added, adding that this is not a promise or anything.

READ MORE: US Mortgage Markets Worsening Over Inflation

Positive for the rest of 2022

Because of the Shanghai factory lockdown and other supply chain concerns, many analysts had predicted that Tesla’s second quarter would be its lowest of the year.

On the other hand, a lot of Tesla observers are optimistic about the second half of 2022 given the company’s rising production profile.

Given the challenges of the Shanghai closure and the costs of increasing production at new plants, CFRA Research analyst Garrett Nelson told AFP that the second quarter was “particularly excellent.”

Musk has demonstrated unwavering confidence in Tesla’s capacity to revolutionize the auto industry, leading the business as it has surpassed production goals for its flagship model even if the vehicles remain out of reach for many buyers.

Musk, though, has recently shown less optimism about the state of the economy as a whole, declaring last month that a recession “appears more likely than not” and announcing plans to cut the company’s paid workforce by around 10%.

Most recently, the contentious CEO got into an ugly argument with Twitter after pulling out of the takeover deal. To establish whether Musk will be required to complete the transaction, the case will go to trial in October.

In the after-hours trade, Tesla shares rose 1.6 percent to $754.45 per share.

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Despite a setback from the Covid-19 lockdowns in Shanghai, which Chief Executive Elon Musk said forced the business to sell off the majority of its bitcoin holdings, Tesla posted strong quarterly earnings on Wednesday.

Musk, who recently made headlines for his contentious decision to back out of buying Twitter for $44 billion, claimed that the company had to navigate a challenging environment due to the Shanghai closure and persistent supply chain issues that have increased expenses.

The automaker increased car pricing to “embarrassing” levels, according to Musk, which resulted in the electric vehicle manufacturer reporting second-quarter profits of $2.3 billion, or roughly twice that of the prior year’s period.

Despite exceeding expectations, Tesla’s profits fell short of those in the first quarter, the company’s first sequential profit decline since late 2020, which coincided with a decline in automotive profit margins as a result of higher costs.

And although revenues increased by 42% to $16.9 billion, they fell short of the $17.1 billion experts had predicted.

On a conference call with investors and analysts, Musk called the period a “unique quarter,” but added that the restart of the Shanghai facility and the expansion of additional factories in Germany and Texas have “the potential for a record-breaking second half of the year.”

The business blamed Shanghai’s negative impact when its factory was closed for a portion of the quarter. After China’s restart, Tesla claimed that it had “a record monthly production level” at the end of the three months.

Due to factory closures, labor shortages, logistics problems, and other factors, Tesla said supply chain challenges continue to be a problem. These factors “limited our ability to consistently run our factories at full capacity.”

sale of bitcoin

Tesla sold out roughly 75% of its bitcoin assets during the quarter, even though the cryptocurrency’s value has fallen precipitously since 2022.

According to Chief Financial Officer Zachary Kirkhorn, the bitcoin changes resulted in one-time charges of $106 million.

Musk explained the decision by saying that it was necessary to acquire money because it was unclear when Shanghai operations would resume.

At the beginning of the conversation, Musk stated that the transaction “should not be seen as any conclusion on bitcoin.”

In contrast to the objective of expediting the energy transition, however, cryptocurrencies are a “sideshow to the sideshow,” according to Musk, who cited the sweltering heat that is currently afflicting many nations as evidence that change is required.

Tesla has been able to pass on higher charges to customers thanks to the booming demand for Musk’s electric cars.

The Model 3, Tesla’s entry-level car in the US, costs close to $50,000.

Our prices have increased significantly; they are now, very simply, at embarrassing levels. said Musk. But in addition, there have been numerous manufacturing and supply chain shocks, and inflation has been out of control.

I’m hopeful that at some point we can lower the pricing a little bit, he added, adding that this is not a promise or anything.

READ MORE: US Mortgage Markets Worsening Over Inflation

Positive for the rest of 2022

Because of the Shanghai factory lockdown and other supply chain concerns, many analysts had predicted that Tesla’s second quarter would be its lowest of the year.

On the other hand, a lot of Tesla observers are optimistic about the second half of 2022 given the company’s rising production profile.

Given the challenges of the Shanghai closure and the costs of increasing production at new plants, CFRA Research analyst Garrett Nelson told AFP that the second quarter was “particularly excellent.”

Musk has demonstrated unwavering confidence in Tesla’s capacity to revolutionize the auto industry, leading the business as it has surpassed production goals for its flagship model even if the vehicles remain out of reach for many buyers.

Musk, though, has recently shown less optimism about the state of the economy as a whole, declaring last month that a recession “appears more likely than not” and announcing plans to cut the company’s paid workforce by around 10%.

Most recently, the contentious CEO got into an ugly argument with Twitter after pulling out of the takeover deal. To establish whether Musk will be required to complete the transaction, the case will go to trial in October.

In the after-hours trade, Tesla shares rose 1.6 percent to $754.45 per share.

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