Tesla’s Second-Quarter Earnings Hurt By Supply Chain Problems and Bitcoin

Tesla said that production in Shanghai rebounded in June and that the Berlin and Austin factories were making progress. “We are focused on a record-breaking second half of 2022,” Tesla said in its earnings presentation.

The market for electric vehicles is becoming more competitive, and traditional carmakers are eroding Tesla’s lead. Hyundai, Kia and Ford Motor have gained significant market share, while Tesla has lost ground in the United States. Tesla had a 66 percent share of the U.S. electric vehicle market at the end of the second quarter, according to figures compiled by Kelley Blue Book, down from 78 percent in the fourth quarter of 2021.

Tesla’s problems are mostly short term, and profits should improve in months to come, Laura Hoy, an equity analyst at the investment firm Hargreaves Lansdown, said in an email. But she expressed concern about Tesla’s exposure to Bitcoin.

“The Bitcoin losses point out an important part of the Tesla investment case — its eccentric owner,” Ms. Hoy said. “While Musk’s impressive innovation has served the company well, his personal flair is starting to raise governance questions.”

Mr. Musk said Tesla had sold its Bitcoin holdings to increase its cash cushion in light of the problems in Shanghai. “This should not be taken as some verdict on Bitcoin,” he said Wednesday. Tesla has not sold its holdings of another cryptocurrency, Dogecoin, he said.

Tesla had $18.3 billion in cash and cash equivalents during the quarter, according to the company.

Cryptocurrency is a “sideshow” and “not something we think about a lot,” Mr. Musk said.

Article source: https://www.nytimes.com/2022/07/20/business/tesla-earnings-elon-musk.html