Tesla's second-quarter earnings hit by supply chain issues and Bitcoin
Tesla said on Wednesday that second-quarter profits fell nearly a third from the first quarter as shipments slowed due to shutdowns and shortages of raw materials in the automaker's Shanghai plant.
Profit for the quarter was $2.3 billion, Tesla said, compared with $3.3 billion in the first quarter, which was a record. Sales fell to $16.9 billion from $18.8 billion in the first quarter.
The automaker was also hit by a sharp drop in price bitcoin. Tesla said in early 2021 that it had invested $1.5 billion in cryptocurrency. The company said on Wednesday that it had sold around 75% of its Bitcoin by the end of June.
Compared to the second quarter of 2021, earnings have almost doubled. And earnings for the quarter beat analysts' estimates. But because Tesla is a fast-growing company, its progress, or lack thereof, from quarter to quarter is being watched more closely by investors.
Tesla dominates the global market for electric vehicles and is growing, while traditional automakers like Toyota and General Motors are seeing steep declines in sales. But the last quarter has been a bumpy one.
Tesla's April-June vehicle deliveries fell 18% from the first three months of the year, an unusual drop for a company that in recent years has posted strong quarter-over-quarter gains. (Shipments were up 26% over the previous year.)
In China, which accounts for about 40% of Tesla's sales, the Shanghai factory has been plagued by pandemic-related shutdowns and shortages of essential parts and materials. Tesla was unable to ramp up production at new factories in Austin, Texas, and near Berlin as planned.
"It's a little supply chain hell,” Tesla chief executive Elon Musk said on a conference call Wednesday.
He told interviewers a company fan club last month that the factories in Austin and Berlin were "money furnaces" costing the company billions of dollars while producing few vehicles. Getting them up to speed and restoring the Shanghai factory to normal operation is Tesla's top priority, he said. the factories progressed. “We are focused on a record second half of 2022,” Tesla said in its earnings presentation.
The electric vehicle market is becoming more competitive and traditional automakers are eroding Tesla's advance. Hyundai, Kia and Ford Motor gained significant market share, while Tesla lost ground in the United States. Tesla held 66% of the US electric vehicle market at the end of the second quarter, according to figures compiled by Kelley Blue Book, compared to 78% in the fourth quarter of 2021.
The Tesla's problems are mostly short-term and earnings should improve in the coming months, Laura Hoy, an equity analyst at investment firm Hargreaves Lansdown, said in an email. But she expressed concern about Tesla's exposure to Bitcoin.
"Bitcoin's losses underscore an important part of Tesla's investment case - its owner eccentric," Ms Hoy said. "While Musk's impressive innovation has served the company well, his personal flair is beginning to raise governance questions."
Mr. Musk said Tesla sold its bitcoin holdings to increase its cash cushion in light of the troubles in Shanghai. "This shouldn't be taken as a verdict on Bitcoin," he said W...
Tesla said on Wednesday that second-quarter profits fell nearly a third from the first quarter as shipments slowed due to shutdowns and shortages of raw materials in the automaker's Shanghai plant.
Profit for the quarter was $2.3 billion, Tesla said, compared with $3.3 billion in the first quarter, which was a record. Sales fell to $16.9 billion from $18.8 billion in the first quarter.
The automaker was also hit by a sharp drop in price bitcoin. Tesla said in early 2021 that it had invested $1.5 billion in cryptocurrency. The company said on Wednesday that it had sold around 75% of its Bitcoin by the end of June.
Compared to the second quarter of 2021, earnings have almost doubled. And earnings for the quarter beat analysts' estimates. But because Tesla is a fast-growing company, its progress, or lack thereof, from quarter to quarter is being watched more closely by investors.
Tesla dominates the global market for electric vehicles and is growing, while traditional automakers like Toyota and General Motors are seeing steep declines in sales. But the last quarter has been a bumpy one.
Tesla's April-June vehicle deliveries fell 18% from the first three months of the year, an unusual drop for a company that in recent years has posted strong quarter-over-quarter gains. (Shipments were up 26% over the previous year.)
In China, which accounts for about 40% of Tesla's sales, the Shanghai factory has been plagued by pandemic-related shutdowns and shortages of essential parts and materials. Tesla was unable to ramp up production at new factories in Austin, Texas, and near Berlin as planned.
"It's a little supply chain hell,” Tesla chief executive Elon Musk said on a conference call Wednesday.
He told interviewers a company fan club last month that the factories in Austin and Berlin were "money furnaces" costing the company billions of dollars while producing few vehicles. Getting them up to speed and restoring the Shanghai factory to normal operation is Tesla's top priority, he said. the factories progressed. “We are focused on a record second half of 2022,” Tesla said in its earnings presentation.
The electric vehicle market is becoming more competitive and traditional automakers are eroding Tesla's advance. Hyundai, Kia and Ford Motor gained significant market share, while Tesla lost ground in the United States. Tesla held 66% of the US electric vehicle market at the end of the second quarter, according to figures compiled by Kelley Blue Book, compared to 78% in the fourth quarter of 2021.
The Tesla's problems are mostly short-term and earnings should improve in the coming months, Laura Hoy, an equity analyst at investment firm Hargreaves Lansdown, said in an email. But she expressed concern about Tesla's exposure to Bitcoin.
"Bitcoin's losses underscore an important part of Tesla's investment case - its owner eccentric," Ms Hoy said. "While Musk's impressive innovation has served the company well, his personal flair is beginning to raise governance questions."
Mr. Musk said Tesla sold its bitcoin holdings to increase its cash cushion in light of the troubles in Shanghai. "This shouldn't be taken as a verdict on Bitcoin," he said W...
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