Elon Musk forced to sell 75% of Tesla’s bitcoin to preserve profit

Once again, Tesla is showing resilience. While deliveries of electric cars were not there in the second quarter, the manufacturer, listed on the Nasdaq, nevertheless managed to maintain its turnover and reap profits. Despite the semiconductor crisis and the closure of its Shanghai factory, the American generated to $2.3 billion in net profit over the periodalmost twice as much as in the second quarter of last year.

However, for the first time since early 2021, its profits did not climb to a new record. Its turnover, at 16.9 billion dollars, was also a little disappointing. To deal with this small air pocket, Elon Musk announced in June the elimination of around 3 to 3.5% of the workforce, without touching the workers.

Also, to guarantee its margins, Tesla has decided to raise its prices on its models. His car the cheapest being currently sold in the United States at 48,840 dollars. “They are frankly at embarrassing levels,” Musk said. But this is to reflect “the shocks in the supply chain and on production” as well as “crazy inflation”, he added, saying he hoped to eventually be able to “reduce them a little”.

However, the gross margin of its automotive business, a particularly observed indicator, fell slightly.

Bitcoin as a cash reserve

To preserve his earnings but also his reputation on the stock market – while the billionaire will have to face a lawsuit against Twitter in October because of his takeover project -, Elon Musk pointed out that he sold 75% of the bitcoins held by You’re here to make sure he had enough cash: the operation brought him 963 million dollars. The company had created a surprise by buying $1.5 billion worth of virtual currency at the start of 2021. Bitcoin was then worth $30,000, bringing the number of tokens purchased to around 45,000.

The price of bitcoin has since suffered a significant drop since May 2022, falling back to around 20,000 euros. In view of the gain generated by the decentralized token, Elon Musk obviously anticipated the drop in production.

“We didn’t know when the confinements in China were going to ease”, justified the boss during a conference call. This transaction should not be interpreted “as a verdict on bitcoin”, he asserted, asserting that You’re here had not sold his dogecoins, another cryptocurrency, and was not giving up on buying more bitcoins.

To maintain its profits, the 6th largest market capitalization in the world also still relies on the carbon credits it sells to companies thanks to its non-polluting cars. The company has also diversified into software with a driver assistance solution, FSD beta, still in the development phase.

To improve its profitability, the group is finally counting on the acceleration of the production rate in its new factories in Berlin and Austin (Texas).

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