Tesla sank $1.5 billion in Bitcoin in Q1, made small profit

Tesla said it made a small profit in Bitcoin after it sold about 10% of a $1.5 billion investment in the alternative currency, as crypto prices generally soared around the globe.

Elon Musks's Tesla this afternoon reported Q1 revenue slighty below consensus, but beat by a wide marging on the bottom line, helped by higher volume of sales and Bitcoin profits.

The results follow better-than-expected deliveries numbers reported earlier this month for Tesla's Model 3 and Model Y sedans. 

The report sent Tesla shares down slightly in late trading. 

Revenue in the three months ended in March rose to $10.39 billion, yielding a net profit of 93 cents a share, excluding some costs.

Analysts had been modeling $10.48 billion in revenue and 75 cents per share, according to FactSet. (Some wire services are reporting a beat for Tesla based on a lower consensus estimate.)

Tesla revenue includes the automotive revenue, but also the smaller solar energy business. 

tsla-q1-2021-financial-summary.jpg

Tesla said its profit was helped by Bitcoin, offsetting declining prices for its cars, on average:

Year over year, positive impacts from volume growth, regulatory credit revenue growth, gross margin improvement driven by further product cost reductions and sale of Bitcoin ($101M positive impact, net of related impairments, in Restructuring&Other line), were mainly offset by a lower ASP, increased SBC, additional supply chain costs, R&D investments and other items. Model S and Model X changeover costs negatively impacted both gross profit as well as R&D expenses

Tesla piled money into Bitcoin last quarter, stating that its quarter-end cash and cash equivalents balance "decreased to $17.1B in Q1, driven mainly by a net cash outflow of $1.2B in cryptocurrency (Bitcoin) purchases, net debt and finance lease repayments of $1.2B, partially offset by free cash flow of $293M."

On the conference call this evening with analysts, the company's CFO, Zachary Kirkhorn, who has been renamed the company's "Master of Coin," said the company had put $1.5 billion into Bitcoin last quarter: "We also invested $1.5 billion in Bitcoin during the quarter, then trimmed our position by 10%, which contributed to a small gain in our Q1 financials."

For its outlook, Tesla reiterated a previously stated intention to increase deliveries 50% per annum:

We plan to grow our manufacturing capacity as quickly as possible. Over a multi-year horizon, we expect to achieve 50% average annual growth in vehicle deliveries. In some years we may grow faster, which we expect to be the case in 2021. The rate of growth will depend on our equipment capacity, operational efficiency and capacity and stability of the supply chain. 

Regarding a revamped Model S sedan, Tesla said "First deliveries of the new Model S should start very shortly." The company added that "Model Y production rate in Shanghai continues to improve quickly and two new factories in Berlin and Texas are making progress. There is a lot to be excited about in 2021." Read more at: https://thefly.com/n.php?id=3289567