Faced with production problems, Tesla defends itself by raising prices and selling bitcoins

Tesla announced strong second-quarter results on Wednesday. The net profit of Elon Musk’s company, by the way embroiled in a legal battle over the takeover of Twitteramounted to 2.3 billion dollars (2.23 billion Swiss francs) over the period, almost twice as much as in the second quarter of last year.

For the first time since the start of 2021, its profits did not rise to a new record, however. And its turnover, at 16.9 billion dollars (16.42 billion Swiss francs), was also a little disappointing.

But Tesla had already indicated that its deliveries had fallen by 18% compared to the previous quarter due in particular to the closure of its Shanghai factory for several weeks, because of the Covid. The manufacturer must also juggle the shortage of semiconductors, which has affected the entire automotive sector since the beginning of 2021, with rising raw material prices and sometimes with a lack of personnel.

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.

Read also: Marked by a “very bad feeling”, Elon Musk wants to reduce the workforce of Tesla by 10%

963 million dollars obtained with the sale of bitcoins

The electric vehicle maker raised prices and sold off most of its bitcoins to help it cope with the temporary closure of its factory in China, logistical challenges and inflation. On Wednesday, the entrepreneur pointed out that he had sold 75% of the bitcoins held by Tesla to ensure that he had enough cash: the operation brought him 963 million dollars (935.6 million Swiss francs). The company had created the surprise by buying for 1.5 billion dollars (1.46 billion Swiss francs) of the virtual currency at the beginning of 2021.

Read again: Despite ongoing logistical difficulties, Tesla achieves record results in early 2022

“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 Tesla had not sold its dogecoins, another cryptocurrency, and was not giving up buying other bitcoins.

The group has also increased the price of its vehicles, its cheapest model currently being sold in the United States at 48,840 dollars (47,450.50 Swiss francs). “They are frankly at embarrassing levels,” said Elon Musk. 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 be able to eventually “reduce them a little”.

A long-term goal

This did not prevent the gross margin of its automotive activity, a particularly observed indicator, from falling slightly. For Garrett Nelson of CFRA, however, Tesla’s quarter as a whole was “impressive considering the challenges they faced.”

Despite these challenges, Tesla has maintained its long-term goal of growing deliveries by an average of 50% per year, which would amount to around 1.4 million vehicles in 2022. Already in June, production at its factories in Fremont, Calif., and Shanghai, had returned to an all-time high. And the group is counting on accelerating the pace in its new factories in Berlin and Austin (Texas).

Tesla also continues to profit from the sale to other companies of the carbon credits granted to it because its cars do not emit pollutants, earning 344 million dollars (334.21 million Swiss francs) in the process.

For further: Elon Musk, whimsical icon of a world obsessed with technology

More than 100,000 Tesla drivers are now testing Tesla’s improved driver assistance software, FSD beta, Elon Musk also said on Wednesday. It should be offered to all Tesla owners by the end of the year in North America and then, depending on the green light from the authorities, in Europe.

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