Tesla Posts Record Net Income Due To Bitcoin Sales

Tesla Posts Record Net Income Due To Bitcoin Sales
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After the bell on Monday, Tesla reported its first-quarter results. The company beat expectations in a big way, with Bitcoin and regulatory credits sales giving them a massive boost.

The company announced in a statement that the sale of $272 million worth of Bitcoin provided a $101 million positive impact in the quarter.

“Year over year, positive impacts from volume growth, regulatory credit revenue growth, gross margin improvement driven by further product cost reductions and sale of Bitcoin ($101M positive impact, net of related impairments, in Restructuring and another line), were mainly offset by a lower ASP, increased SBC, additional supply chain costs, R&D investments, and other items,” Tesla added in an accompanying 30-page slide.

“Model S and Model X changeover costs negatively impacted both gross profit as well as R&D expenses.” Overall, Tesla’s Bitcoin position was lessened by 10% with the amount that it sold.

The net profit of the car company reached a record $438 million on a GAAP basis in Q1. They also got another $518 million in revenue from sales of regulatory credits.

Tesla of course, only recently got into the Bitcoin business. The company purchased $1.5 billion in the world’s largest crypto back in February, sending it to a then-record high. Just last month it was announced that they would also be accepting Bitcoin as payment for its vehicles.

Tesla Plans To Hold Bitcoin For The Long Term

Tesla now owns $1.331 billion worth of “digital assets,” which is believed to be all Bitcoin. Chief Financial Officer Zack Kirkhorn also noted in the conference call Tesla’s plans to hold on to the crypto long-term.

“We do believe in the value of bitcoin long term, and we will hold bitcoin long term, and accumulate bitcoin from the transactions from our customers buying vehicles,” Kirkhorn said. He also discussed why Tesla chose to invest in Bitcoin in the first place.

Kirkhorn said during the call that the car company was looking for alternative ways to store money that could be quickly accessed while still potentially gaining value. This was due to yields being so low.

Overall, Tesla’s earnings were 93 cents per share as opposed to an expected 79 cents. Revenue was up 74 percent from a year ago at $10.39 billion. Additionally, Elon Musk said that they expect vehicle delivery growth to exceed 50% this year. This implies minimum deliveries of roughly 750,000 vehicles for 2021. 

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