Tesla earnings meet Q2 expectations, sells 75% of its Bitcoin

After the closing bell on Tuesday, Tesla ( TSLA), reported Q2 earnings, meeting analysts’ expectations, following a long COVID-induced shut down at its Shanghai production plant.

According to the company, 75% of its Bitcoin was sold, which turned it into fiat currency. This added $936 million to its cash balance. However, Tesla ended its streak of reporting record revenues for the quarter.

These are the most significant numbers in the report, compared to Wall Street’s estimates.

Tesla shares rose more than 3% after the report.

The company released a statement saying that despite facing certain challenges (limited production in Shanghai, shutdowns in Shanghai) the operating margin was among the best in the industry at 14.6% and positive free cash flow of $621M, and that the quarter ended with the most vehicle production month in history.

Quarter-over-quarter, the electric automaker’s revenues took a substantial hit in Q2, dropping from $18.76 million in Q1 2022 to $11.95 billion year-over.

Tesla previously reported it produced 258,580 cars during the quarter and delivered 254,695 vehicles. This is far more than the 206 421 vehicles the company produced and the 201 250 it delivered in Q2 2020 . However, it’s still below the 305 407 it built and the 310 048 it delivered this year.

Tesla claims it will still see 50% annual growth in vehicle delivery.

Both production and deliveries fell due to COVID lockdowns that were implemented in China. This led to the closure of Tesla’s Shanghai factory. It was frequently operating with fewer workers than usual when the facility was opened.

Tesla however stated that June was its highest-ever month of vehicle production. Goldman Sachs’ Mark Delaney said that the Shanghai plant is nearing capacity, while work continues at Tesla’s Austin and Berlin facilities.

Dan Ives, an analyst at Wedbush, believes that Tesla is on track to ship 1.4 million units by 2022.

Elon Musk, Tesla CEO, previously stated to company managers that he had a’super bad feeling about the economy’, Reuters reported.

Although production seems to be in good shape, Tesla could face increasing inflation and high interest rates as a major concern.

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