Tesla sold 75% of its BTC holdings – Elon Musk explains why

During yesterday’s Tesla earnings call, Tesla CEO Elon Musk explained the reason for the company’s sale of 75% of its BTC holdings, worth approximately $936 million, as noted in the company’s Q2 earnings report. Tesla’s second quarter of 2022 came to a shaky end as the electric carmaker reported a slump in profits after it struggled to meet demand due to a shutdown of its Shanghai factory and production challenges at new plants.

A month ago Elon Musk was quoted as saying that he had a “super bad feeling” about the economy and that the company needed to lay off about 10% of salaried workers.

The uncertainty around the timing of lifting lockdowns in Shangai, triggered the BTC sale move. Tesla also wanted to improve their cash position and this sale of digital assets does put them in a better position. In the words of Musk:

“The reason we sold a bunch of our Bitcoin holdings was that we were uncertain when the COVID lockdowns in China would alleviate,” Musk said on the call. “So it was important for us to maximize our cash position, given the uncertainty of COVID lockdowns in China.”

Elon Musk cleared his stance and suggested that this move should not be taken as some kind of verdict on cryptocurrencies and that they still have not sold any of their Dogecoin! Despite the sell off, he said that Tesla is open to increasing its coin holdings in the future.

He also added by saying that “It is not something we think about a lot. It is a side show to side show. The fundamental good of Tesla and the reason we’re doing this is to have the day of sustainable energy come sooner. That is our goal. We’re neither here nor there on cryptocurrency.”

Tesla has been affected like most other big players. Musk cited supply chain issues as a major hurdle in the recent times. Tesla’s newest factories in Berlin and Texas have been losing billions of dollars as the supply issues have stalled production.

“Just trying to keep the factories operating the last couple years has been a very difficult thing, like supply chain interruptions have been severe, like extremely severe,” Musk said in a May interview.

“The past two years have been an absolutely nightmare of supply chain disruptions, one thing after another, and we are not out of it yet.”

However, he seemed optimistic on Wednesday about the state of the economy in the coming months. “I would take this with a grain of salt … I think inflation will decline towards the end of this year.”

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