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In its Q1 2021 results, Tesla stated that it has liquidated 10% of its total holdings in Bitcoin netting a positive income of $101 million. The company also revealed good delivery numbers while addressing issues with semiconductor and hardware supplies.
On Monday, April 26, automobile giant Tesla Inc (NASDAQ: TSLA) announced its Q1 2021 results with a record net income of $438 million. Besides, the company also reported a record $10.39 billion in revenue at earnings of 93 cents per share. However, the most important news is that Tesla sold 10% of its Bitcoin (BTC) taking out $272 million in net proceeds. Of this, the company netted a “positive impact” and net profit of $101 million. The Tesla sale comes just two months after the automobile giant announced its $1.5 billion in mid-February 2021.
This Bitcoin sale trimmed the company’s holdings by 10%, as reported by CFO Zach Kirkhorn during Monday’s earnings call. The CFO also added that his company continues to believe in the long-term value of Bitcoin.
“We do believe long term in the value of bitcoin,” he said. “It is our intent to hold what we have long term and continue to accumulate bitcoin from transactions from our customers as they purchase vehicles,” said he.
The recent move from Tesla has also led to some speculation that Elon Musk has been involved in the classic pump and dump scheme of Bitcoin. However, the world’s second-richest man has confirmed that he hasn’t sold any of his personal Bitcoin holdings and that this move was the company’s decision to prove the liquidity of Bitcoin.
No, you do not. I have not sold any of my Bitcoin. Tesla sold 10% of its holdings essentially to prove liquidity of Bitcoin as an alternative to holding cash on balance sheet.
— Elon Musk (@elonmusk) April 26, 2021
Tesla Q1 2021 Numbers
Tesla has reported some strong numbers during the first quarter of 2021. The automobile giant reported a production of 180,338 vehicles and 184,777 deliveries. The company claimed that this has been its highest-ever production and delivery quarter despite several challenges “including seasonality, supply chain instability and the transition to the new Model S and Model X”.
Besides, the company’s Model 3 turned out to be the best-selling premium sedan in the world. It did so beating the likes of industry leaders like E-Class and 3 Series. The company further added:
“This demonstrates that an electric vehicle can be a category leader and outsell its gas-powered counterparts. We believe Model Y can become not just a category leader, but also the best-selling vehicle of any kind globally”.
Tesla remains bullish for its vehicle deliveries by the end of 2021. The company is expecting a 50% surge in vehicle delivery growth in overall 2021. Thus, by the end of this year, Tesla aims to have 750,000 vehicle deliveries. Apart from vehicle deliveries, one major area where Tesla needs to focus currently is improving its services.
Tesla customers have been reporting massively long waiting times for repairs. Looks like the company’s services expansion division isn’t keeping up much pace with the volume of vehicles sold. However, the company said that it has successfully managed to weather chip shortages that have troubled the auto industry. The company claims that it has successfully managed to pivot to new microcontrollers “while simultaneously developing firmware for new chips made by new suppliers.”
On Monday, TSLA stock price dropped 2.5% in the after-market hours. At the time of writing, TSLA shares were at $720 with a market cap of $707 billion.
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
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