Tesla’s second quarter of 2022 ended on a shaky note as the electric car maker reported a drop in profits after struggling to meet demand due to the closure of its Shanghai factory and production difficulties at new plants. The company also sold 75% of its bitcoin holdings, leading to a drop cryptocurrency price.
Tesla’s second quarter profit fell 32% record levels in the first quarter, the company reported net income of $2.26 billion on Wednesday.
Earnings report CEO Elon Musk said in more than a month “Super Bad Feeling” about the economy and said the company would need to cut about 10% of its salaried employees.
The company was not immune to global supply chain challenges and economic challenges. Earlier this quarter, Tesla was forced to temporarily close its Shanghai Gigafactory to comply with pandemic restrictions, causing a rare drop in delivery numbers. Company delivered 254,000 vehicles this quarter, down 18% from the previous quarter. Tesla also announced a hiring freeze and began to lay off employees Earlier this month, including 229 employees working on Autopilot, Tesla’s driver assistance technology.
Tesla reported its quarterly earnings amid Musk’s ongoing saga with Twitter, which has seen the billionaire sue over a deal to buy the social media platform. A test is appointed will start in October.
In the income statement, Tesla said the company continued to experience production slowdowns due to supply chain and other issues that limited its ability to consistently operate its factories at full capacity. Although the Shanghai Gigafactory was fully and then partially closed for most of the quarter, the company reported record monthly production levels at the location.
Due to uncertainty over when the quarantine will be lifted in Shanghai, Musk said Tesla has unloaded 75% of its bitcoin reserves to maximize its cash position. “This shouldn’t be seen as some judgment of bitcoin,” Musk said on Wednesday’s earnings call. “We haven’t sold any of our dogecoins.”
Still, bitcoin prices fell after Tesla reported earnings on Wednesday.
However, Musk said the company is not focusing too much on cryptocurrency. “It’s not something we think too much about,” Musk said on the call. “It’s a side show of a side show … The main benefit of Tesla and the reason we’re doing this is that the day of sustainable energy is coming sooner. This is our goal. We are neither here nor there in cryptocurrency.
Musk also revealed that the company’s newest factories in Berlin and Texas are losing “billions of dollars right now” as supply chain issues halt production.
“Just trying to run the factories in the last couple of years has been a very difficult thing as the supply chain disruption has been severe, extremely severe,” Musk said in May. interview.
“The last two years have been an absolute nightmare of one supply chain disruption after another, and we’re still not out of it.”
However, Musk sounded optimistic on Wednesday about the state of the economy in the coming months. “I would accept it at least a little… I think inflation will decrease by the end of this year.”
Musk also said the company is on track to release a beta version of its fully self-driving capabilities by the end of the year. last ride Andrej Karpathy, a key member of Tesla’s autonomous technology team and chief AI officer.
Reuters contributed to the report
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