Tesla just released its Q2 2022 earnings results and the results are mixed. The electric car company run by Elon Musk reported a profit of $2.3 billion in the second quarter, down from a record $3.3 billion in the first quarter of 2022. This is the first consecutive decline in profits in more than a year.

The company reported quarterly revenue of $16.9 billion, down more than 10% from $18.8 billion in the first quarter. The reason is attributed to the combination of inflation as well as increasingly fierce competition in the electric vehicle sector, which has narrowed profit margins.

Tesla also reported it converted 75% of its Bitcoins into fiat money, adding $936 million in cash to the company's balance sheet. Tesla bought $1.5 billion worth of Bitcoin in February 2022.

At that time, Bitcoin was 35% more expensive than it is now. According to a report from Coin Desk, the company lost tons of money in this crypto crash. It is possible to incur a loss of up to $460 million from investing in Bitcoin.

While the Shanghai closures aren't great for the company, Tesla revealed that the new factories in both Berlin-Brandenburg and Austin have helped boost production.

Tesla has reported high quarterly profits for the past few years, but most of that hasn't actually come from the auto business. Despite being considered an electric vehicle (EV) company, most of Tesla's income comes from selling regulatory credits to other automakers as well as government subsidies. According to information from Grid, Tesla has made at least $6 billion from selling regulatory credits over the past decade.

According to an analysis by Trefis, a financial data company, these sales have doubled in recent years, making the difference between the company posting a profit instead of a loss.

Even so, Tesla's auto business has been hit hard lately. Earlier this year, the Tesla factory in Shanghai had to be closed for 22 consecutive days due to the COVID-19 outbreak. After that, the factory was once again halted production because of supply chain problems.

In addition, Tesla has had to carry out multiple recalls for problems related to the company's "Autopilot" software. In fact, there have been so many crashes that the National Highway Traffic Safety Administration is investigating the technology. The company announced it would cut 10% of its staff, and since then, it has begun laying off 200 people in the Autopilot business.

Besides, Elon Musk's noisy Twitter acquisition also affects the company. According to a report from Barrons, the deal with Twitter caused Tesla's stock price to lose about 15% of its total value, which has yet to recover.


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