Tesla reports smaller than expected profit drop on price hikes

It also converted about 75 percent of its Bitcoin purchases into fiat currency to increase liquidity.

Tesla Inc has reported a smaller-than-expected drop in quarterly profit as a string of price increases on its electric vehicles (EVs) helped offset production challenges caused by COVID-19 lockdowns in China.

Chief Financial Officer Zachary Kirkhorn on Wednesday said Tesla was still pushing to reach 50 percent growth in deliveries this year, adding that while the target had become more difficult, “it remains possible with strong execution”.

Chief Executive Elon Musk said he expects inflation to start easing by end-2022 and most commodity prices to stabilise.

Tesla does not have a demand problem but a production problem, Musk told a conference call. He dismissed the idea that global economic issues were hurting interest in Tesla, despite vehicle prices rising to what he called “embarrassing levels”.

The US price of Tesla’s Model Y long-range version, now $65,990, is up more than 30 percent since the start of 2021.

Shares of Tesla were up about 1 percent in after-hours trading. The shares are down about 40 percent from their peak in November.

Tesla’s China factory ended the second quarter with a record monthly production level. Musk said new factories in Berlin and Texas aimed to produce 5,000 cars a week by the end of the year, adding that the German plant produced 1,000 cars a week in June.

Musk had previously said the new factories were “gigantic money furnaces” and that he had “a super bad feeling about the economy”.

SOURCE: NEWS AGENCIES