Tesla Lost IDR 1.6 Trillion in Bitcoin Investment in Q3, But Still Profits in Car Sales

JAKARTA - According to Tesla's latest Q3 earnings report filed with the United States Securities and Exchange Commission, the electric vehicle (EV) manufacturer revealed that it has invested a total of 1.5 billion US dollars (IDR 23 trillion) into Bitcoin since early 2021.

Of this amount, the company currently suffers a loss of 170 million US dollars (IDR 2.6 trillion) which has not been realized from changes in the fair value of its investment. However, this was offset by a gain of USD 64 million (IDR 987 billion) of realized gains on Bitcoin at various points in the last two years. This brings Tesla's total net loss to 106 million US dollars (IDR 1.6 trillion) at the end of Q3.

According to the report, Tesla's losses did not materially affect its core operations. Year over year, the EV maker's profits from the automaker led by Elon Musk grew 169% from USD 3.3 billion in the first nine months of 2021. However, Tesla says it only holds about USD 218 million worth of Bitcoin on its balance sheet.

Under accounting rules, digital assets are considered intangible assets with an indefinite life. As a result, any decline in its fair value would require Tesla to recognize an impairment charge, whereas the company does not make any upward revisions to any price increases until the sale.

In such favorable tax treatment, losses are deductible against profits to reduce tax liability, while capital gains are not taxed until the time of sale.

Tesla CEO Elon Musk is well known in the crypto space for his support of digital assets, interest in memecoins, such as Dogecoin and his $44 billion ambition to take over social media giant Twitter.