Tesla Bitcoin Losses Hit $170M in First 9 Months of 2022
The electric vehicle maker's actual BTC losses are much lower, with $64 million in profits previously made to offset the decline.
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According to Tesla's latest third-quarter earnings report filed with the U.S. Securities and Exchange Commission, the electric vehicle (EV) maker revealed it had invested a total of $1.5 billion dollars in Bitcoin (BTC) since the beginning of 2021. Of this amount, the company is currently sitting at $170 million in unrealized loss due to the change in the fair value of its investment. This is offset by a $64 million gain from Bitcoin profits at various times over the past two years, resulting in a net loss of $106 million at the end of the third quarter.
Tesla's losses did not materially impact its core business, the filing said. Year-over-year, the electric vehicle maker's profits rose 169% to $3.3 billion in the first nine months of 2021. However, Tesla says it only owns approximately $218 million worth of Bitcoin on its balance sheet.
According to accounting rules, digital assets are considered intangible assets with an indefinite life. As a result, any decrease in their fair values will force Tesla to record impairment charges, while the company makes no upward revisions to price increases until sale. In such favorable tax treatment, losses can be deducted from profits to reduce tax liability, while capital gains are only taxed at the time of sale.
Related: Binance, Sequoia Still Backs Elon Musk's Bid on Twitter
Tesla CEO Elon Musk is well known in the crypto space for his support of digital assets, an affinity for memecoins, such as Dogecoin (
The electric vehicle maker's actual BTC losses are much lower, with $64 million in profits previously made to offset the decline.
New
According to Tesla's latest third-quarter earnings report filed with the U.S. Securities and Exchange Commission, the electric vehicle (EV) maker revealed it had invested a total of $1.5 billion dollars in Bitcoin (BTC) since the beginning of 2021. Of this amount, the company is currently sitting at $170 million in unrealized loss due to the change in the fair value of its investment. This is offset by a $64 million gain from Bitcoin profits at various times over the past two years, resulting in a net loss of $106 million at the end of the third quarter.
Tesla's losses did not materially impact its core business, the filing said. Year-over-year, the electric vehicle maker's profits rose 169% to $3.3 billion in the first nine months of 2021. However, Tesla says it only owns approximately $218 million worth of Bitcoin on its balance sheet.
According to accounting rules, digital assets are considered intangible assets with an indefinite life. As a result, any decrease in their fair values will force Tesla to record impairment charges, while the company makes no upward revisions to price increases until sale. In such favorable tax treatment, losses can be deducted from profits to reduce tax liability, while capital gains are only taxed at the time of sale.
Related: Binance, Sequoia Still Backs Elon Musk's Bid on Twitter
Tesla CEO Elon Musk is well known in the crypto space for his support of digital assets, an affinity for memecoins, such as Dogecoin (
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