Tesla: Bitcoin sales and environmental credits boost profits

Elon Musk’s Tesla made a strong start to the year with profits up and record deliveries of its electric cars.

It came despite production hurdles due to a global shortage of computer chips that has also hit other carmakers.

Mr Musk said the chip shortage caused “supply chain challenges”, although that “particular problem” had eased.

Profits for the first three months of the year were $438m (£315m), up from $16m last year, bolstered by sales of Bitcoin and environmental credits.

But the profits were dented by a $299m payment to Mr Musk as part of a controversial compensation plan struck in 2018.

Revenue rose to $10.4bn, from $6bn in the same quarter last year.

Mr Musk claimed Tesla’s Model 3, its midsize sedan, was the “best-selling luxury sedan of any kind in the world” for the quarter.

He also predicted the company’s midsize sport utility Model Y would become the best-selling car or truck of any kind in the coming years.

“We’ve seen a real shift in customer perception of electric vehicles, and our demand is the best we’ve ever seen,” Mr Musk said.

The company said the Model Y had so far received a strong reception from consumers in China, where Tesla began manufacturing last year.

China is possibly the world’s most competitive market for electric vehicles, with hundreds of manufacturers vying for a slice of the growing market.

Bitcoin move
However, not all of the company’s revenues came from selling cars.

The company bought $1.5bn of Bitcoin during the first quarter, but then cut its position by 10%, which contributed $101m to its revenues.

Tesla recently made it possible for customers to purchase the cars in Bitcoin, allowing it to accumulate more of the cryptocurrency.

“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,” the company’s chief financial officer, Zachary Kirkhorn, told investors.

Tesla also earns credits for exceeding emissions and fuel economy standards and then selling them to other carmakers that fall short so they can avoid penalties.

The company earned $518m from sales of those credits in the first quarter, an increase of 46% over the same quarter in 2020.

Tesla said it delivered roughly half a million cars in 2020, and 185,000 in the January-to-March period.

Agencies