Tesla’s latest earnings report gave investors reason to celebrate — and worry.Hannibal Hanschke/Reuters Tesla, the emission credits and crypto company The electric carmaker posted record quarterly earnings yesterday, beating Wall Street forecasts. But a closer look shows that its core business — you know, making vehicles — wasn’t the only story, and that might be why the company’s stock fell in aftermarket trading. Tesla reported a quarterly profit of $438 million, its highest ever. But financial maneuvers flattered this number: Tesla’s $1.5 billion purchase of Bitcoin, and subsequent sale of a chunk of its holdings, led to a $101 million accounting boost. Bitcoin “so far has proven to be a good decision,” Zach Kirkhorn, Tesla’s C.F.O. (no, we’re not using his other title), told analysts yesterday, adding that the company would continue to invest in crypto as a place to park excess cash. (The company’s holdings will also grow as customers start buying cars with Bitcoin.) Tesla also made $518 million from selling emissions credits to other carmakers, up from $354 million a year ago. This has been a steady, high-margin side hustle for Tesla as it ramps up auto production. The business of selling cars is headed in the right direction, but faces supply problems. Vehicle deliveries came to 184,000, ahead of expectations, even as sales of Model S and X cars fell ahead of lineup revamps. But Elon Musk, Tesla’s C.E.O. (or, fine, “Technoking,” if we must), conceded that problems in sourcing components — notably, the global shortage of computer chips — had led to “some of the most difficult supply-chain challenges that we’ve ever experienced.” The real pinch may come in the second quarter, so it’s a good thing that Tesla has so many other businesses to fall back on. Safety issues could be a bigger, long-term risk. Tesla is still dealing with an investigation into a fatal crash in Texas this month involving one of its vehicles, in which the police say no one was behind the wheel. Tesla’s chief engineer cited new evidence yesterday that potentially contradicts that claim. And the company is trying to put out a P.R. crisis in China, after the state news media accused it of “being arrogant” in its handling of a customer’s complaints about her car’s brakes. Continue reading the main story PAID POST: A MESSAGE FROM DARKTRACE Cybersecurity: Not a Human-Scale Problem With the World Economic Forum warning of ‘’A.I.-enabled threats,” humans are struggling to keep pace. Autonomous Cyber AI interrupts in-progress cyberattacks in seconds – wherever they strike. LEARN HOW > “The main line in the sand now for the bulls and bears is not the near-term chip shortage,” Dan Ives of Wedbush wrote in a research note this morning. More important to Tesla’s finances is its ability to grow in China, he wrote, which could account for 40 percent of its deliveries by next year.
It fell because it was maxed out p/e-wise, and others are entering the space. But every other manufacturer will try to earn credits as well - nothing new there. Though not every manufacturer will try to leverage bitcoin's current popularity the way Musk has. What Tesla does with capacity and growth into new markets will say a lot about market share and stock price going forward.