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Tesla’s first quarter performance was better than Wall Street’s expectations, as Bitcoin sales and environmental credit increased revenue

Electric car maker Tesla’s (Tesla) performance on Monday slightly exceeded Wall Street’s revenue expectations for the first quarter, thanks to a surge in environmental credit sales to other automakers and the liquidation of some bitcoins.

Although the global chip shortage has severely hit competitors in the automotive industry, Tesla’s deliveries in the first quarter still hit a record high, but its profits were not driven by car sales.

Chief Financial Officer Zachary Kirkhorn said that Tesla, which has invested $1.5 billion (approximately Rs 112 crore) in Bitcoin, cut its position by 10% this quarter. Tesla said that the digital asset sales revenue totaled 272 million U.S. dollars (approximately 20.03 billion rupees), with a “positive impact” of 101 million U.S. dollars (approximately 7.5 billion rupees).

He said: “We believe in the long-term value of Bitcoin.” “Our intention is to preserve our long-term assets and continue to accumulate Bitcoin from customer transactions when customers purchase vehicles.”

Musk said on Twitter that he did not sell any of his personal bitcoins.

Tesla has posted profits for seven consecutive quarters, most of which have been driven by environmental credit.

Tesla received US$518 million (approximately 387 billion rupees) in revenue from the sale of these credits, an increase of 46% over the same period last year. Tesla earned points for exceeding emissions and fuel economy standards and sold them to other automakers that did not meet the standards.

Net profit was reduced by CEO Elon Musk receiving US$299 million (approximately Rs 223.0 billion). Tesla’s quarterly performance reached its target, enabling the billionaire entrepreneur to qualify for two option payments totalling US$11 billion (approximately Rs 223.0 billion).

Craig Irwin, analyst at Roth Capital Partners, said: “Higher regulatory credit, lower taxes, and Bitcoin sales have boosted financial performance. Excluding these results, This is a big loss.”

In the extended transaction, the company’s stock price fell by about 2%.

Although the global chip shortage has severely hit competitors in the automotive industry, Tesla’s delivery volume in the first quarter still hit a record high.

Despite this, the share price of the world’s most valuable automaker has risen by more than eight times last year, and it still faces the challenge of living up to its valuation and management expectations.

The company said it can solve the problem of global chip supply shortages, partly because it can quickly switch to new chips while developing software for chips produced by new suppliers.

Musk said that due to chip shortages, it “faces some of the most difficult supply chain challenges.” He said: “Most of us don’t have this particular problem.”

As the production of expensive Model S and Model X cars was discontinued before major renewals, the average sales price of their cars dropped by 13%.

Tesla said that its costs have decreased, with the average cost per vehicle in the first quarter being less than US$38,000 (approximately 2.8 million rupees), compared to US$84,000 (approximately 6.3 million rupees) in 2017.

Tesla will begin delivering the new Model S next month and begin mass production in the third quarter. Shanghai’s Y-model productivity continues to increase, stimulating demand in China.

Tesla said it expects sales growth of more than 50% this year, and said it is expected to start production and deliveries at its planned plants in Texas and Berlin this year.

Revenue increased from US$5.99 billion (approximately Rs 44,740 crore) a year ago to US$10.39 billion (approximately Rs 77,570 crore). According to Refinitiv’s IBES data, analysts had previously expected revenue of US$10.29 billion (approximately Rs 76,860 crore).

Adjusted earnings per share were 93 cents, exceeding the 79 cents commonly expected by the Wall Street market.

Tesla crash

In the United States, Tesla’s complete self-driving software is facing 28 new federal investigations into Tesla car crashes, including a recent crash in Texas that killed two people.

Tesla said in a conference call with investors that it inspected the car with investigators and found that the steering wheel was deformed, which increased the possibility that someone might be sitting in the driver’s seat during a crash.

A Tesla official said on the phone: “It was found that the seat belt was not loose after the fall.”

“When the impact occurred, we were unable to recover data from the SD card, but local authorities are working hard to do so, and we are waiting for their report.”

Neither federal investigators nor police immediately responded to calls seeking confirmation of Tesla’s account. The police told Reuters last week that they would issue a subpoena to the company to transmit data from the car to the cloud before the fiery crash.

Thomson Reuters 2021 ©


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