Tesla Sells 75 Percent Of Bitcoin Reserves Due To Financial Condition, Dogecoin Reserves Not For Sale

JAKARTA - Tesla has reported the number of vehicle shipments for the second quarter, and now its full Q2 2022 financial report which reveals that it is dealing with inflation and an overall economic downturn, combined with falling prices for Bitcoin and other cryptocurrencies.

In a letter to investors, Tesla executives revealed the company had sold 75 percent of its Bitcoin holdings, adding $936 million in cash to its balance sheet.

Last year, Tesla invested $1.5 billion in Bitcoin and announced that it would accept Bitcoin as payment. Tesla started accepting Bitcoin in late March, then suddenly reversed in May, just 49 days later.

In a recent report, Tesla said the value of its remaining "digital assets" was $218 million, which had been reported at around $1.2 billion in the previous quarter. Last July, Tesla CEO Elon Musk said, “I may be pumping, but I'm not throwing… I really don't believe in getting high prices and selling or anything like that. I want to see Bitcoin succeed.”

During the investor call, Musk spoke about the crypto selloff, saying that it “should not be considered a verdict on Bitcoin.” Instead, he said, Tesla sold its Bitcoin because it was "concerned about the company's overall liquidity due to the COVID lockdown in China." Basically, Tesla needed cash.

“We haven’t sold our Dogecoin yet,” Musk was quoted as saying by The Verge, who later referred to the cryptocurrency as a “show for spectacle.”

Tesla itself reported that it made a profit of 2.26 billion US dollars this quarter, this is a decrease of about 31 percent compared to the previous quarter's report which reported a profit of 3.3 billion. Profit came from revenue of 16.9 billion US dollars, which is also down from Q1, where the company reported earning 18.7 billion US dollars.

Tesla announced earlier this month that deliveries of its cars to buyers were slowing, down about 18 percent compared to Q1. It also produced about 15 percent fewer cars this quarter compared to last.

In its earnings report, Tesla said it faced "limited production and shutdowns in Shanghai for most of the quarter" but continued to ramp up production at its new facilities in Berlin and Austin, Texas.

Other difficulties the automaker reported were rising prices on everything from raw materials to logistics, higher fixed costs per car due to the shutdown in Shanghai, and, of course, the aforementioned “drop in value of Bitcoin.”