Tesla’s Q1 Profit Comes from Bitcoin, More

The company announced during yesterday’s earnings call that it had sold off 10% of its $1.5 billion in bitcoin it had purchased in February.

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Elon Musk, Tesla; Source: Shutterstock

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key takeaways

  • Tesla’s $438 million in first quarter profits were helped along by proceeds from bitcoin and regulatory credit sales
  • Executives say another sale isn’t planned soon as this one was at test to demonstrate the liquidity of bitcoin

Tesla’s bitcoin play has proven to be incredibly lucrative for the company, accounting for $101 million of its quarterly net profit of $438 million. 

The company announced during yesterday’s earnings call that it had sold off 10% of its $1.5 billion in bitcoin it had purchased in February. On an earnings deck it noted that it had received $272 million in proceeds from the sale, which in turn meant a $101 million “positive impact” towards profitability for the quarter. The company also said it had sold off $518 million in regulatory emissions credits from its stash of nearly $1.6 billion.

During the earnings call, Tesla’s CFO Zach Kirkhorn explained why the company made its $1.5 billion bet. 

“Elon and I were looking for a place to store cash,” he said. “Bitcoin has proved to be a good decision, a good place to put some of our cash that’s not being used for daily operations and be able to get some return on that.”

Kirkhorn confirmed that Tesla intends to hold the rest of the bitcoin for the long term, and this was merely an experiment to demonstrate the liquidity of bitcoin as an alternative reserve asset for corporations. 

Shortly after Tesla announced that it was buying bitcoin, the company also said customers could buy a Tesla automotive with bitcoin. However, it’s unclear just how many people have made a purchase with crypto. As Blockworks has previously reported, buying a Tesla car with crypto might not be as popular as one would think as it would create a major capital gains event if the purchaser was a long-time HODLer. 

The price of bitcoin appears to be unaffected by the news, as its up 1.6% in the last 24 hours to approximately $54,600. The world’s largest digital asset by market cap is still down 2% on week.

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