Tesla reported its second quarter earnings Tuesday evening. Earnings met analysts’ predictions, amid the prolonged Covid shutdowns in China which shuttered Tesla’s Shanghai factory.
Tesla also sold 75% of its Bitcoin holdings, converting it to fiat currency and adding $936 million in cash to its ledger. That would imply the Bitcoin was sold for an average price of about $29,000 per bitcoin. In the company’s earnings call, Elon Musk said this should not be taken as any sort of verdict on Bitcoin, and that the company was open to increasing its holdings in the cryptocurrency in the future. Tesla left its Dogecoin holdings untouched. This was the end of Tesla’s streak of record revenue reports.
In a statement, Tesla said, “Though we faced certain challenges, including limited production and shutdowns in Shanghai for the majority of the quarter, we achieved an operating margin among the highest in the industry of 14.6%, positive free cash flow of $621M and ended the quarter with the highest vehicle production month in our history.”
Revenues dropped from the previous quarter falling from $18.76 in the first quarter to $16.93 billion, but rising over the previous year’s second quarter revenue of $11.95 billion.
Tesla produced 258,580 vehicles, and delivered 254,695 vehicles. That is compared to 2021’s Q2 production of 206,421 vehicles, and delivery of 201,250. It was, however, below Q1’s 305,407 produced and 310,048 delivered. Tesla said it expected to see a 50% annual growth in vehicle deliveries going forward.
Tesla suffered from a number of factors reducing production in the second quarter. Difficulties with sourcing batteries and tooling shuttered Tesla’s Berlin and Austin factories, causing CEO Elon musk to refer to them as, “money furnaces.” The Shanghai factory was also shuttered by Covid-19 lockdowns, and the times when it was open, it was minimally staffed and not full operational.
Tesla has since noted, however, that it has had its highest vehicle production month ever in June. This prompted Goldman Sach’s Mark Delaney to comment that it appears the Shanghai plant is well on its way to returning to operations at full capacity, while the Austin and Berlin factories are clearly ramping back up as well.
Wedbush analyst Dan Ives has noted that Tesla would appear to be on course to deliver 1.4 million units in 2022.
Now analysts’ attentions are turning to the question of what effects rising inflation and a slowing economy might have on Tesla’s business.
