Tesla’s Second-Quarter Earnings Hurt By Supply Chain Problems and Bitcoin

Tesla said Wednesday that profit in the second quarter fell nearly one-third from the first quarter as deliveries slowed because of shutdowns and raw materials shortages at the carmaker’s factory in Shanghai.

Profit in the quarter was $2.3 billion, Tesla said, compared with $3.3 billion in the first quarter, which was a record. Sales fell to $16.9 billion from $18.8 billion in the first quarter.

The automaker was also hurt by a sharp fall in the price of Bitcoin. Tesla said in early 2021 that it had invested $1.5 billion in the cryptocurrency. The company said on Wednesday that it had sold about 75 percent of its Bitcoin by the end of June.

Compared with the second quarter of 2021, profit nearly doubled. And earnings in the quarter exceeded analyst estimates. But because Tesla is a fast-growing company, its progress, or lack of, from quarter to quarter is more closely watched by investors.

Tesla dominates the global market for electric vehicles and is growing, while traditional carmakers like Toyota and General Motors record steep declines in sales. But the last quarter was bumpy.

Tesla’s vehicle deliveries from April through June fell 18 percent from the first three months of the year, an unusual decline for a company that in recent years has posted solid gains from quarter to quarter. (The deliveries were up 26 percent from a year earlier.)

In China, which accounts for about 40 percent of Tesla’s sales, the Shanghai factory has been plagued by shutdowns related to the pandemic and to shortages of key parts and materials. Tesla has not been able to increase production at new factories in Austin, Texas, and near Berlin as planned.

“It’s kind of been supply chain hell,” Elon Musk, the Tesla chief executive, said during a conference call on Wednesday.

He told interviewers from a company fan club last month that the Austin and Berlin factories were “money furnaces” costing the company billions of dollars while producing few vehicles. Getting them ramped up and restoring the Shanghai factory to normal operations are Tesla’s main priority, he said.

Tesla said that production in Shanghai rebounded in June and that the Berlin and Austin factories were making progress. “We are focused on a record-breaking second half of 2022,” Tesla said in its earnings presentation.

The market for electric vehicles is becoming more competitive, and traditional carmakers are eroding Tesla’s lead. Hyundai, Kia and Ford Motor have gained significant market share, while Tesla has lost ground in the United States. Tesla had a 66 percent share of the U.S. electric vehicle market at the end of the second quarter, according to figures compiled by Kelley Blue Book, down from 78 percent in the fourth quarter of 2021.

Tesla’s problems are mostly short term, and profits should improve in months to come, Laura Hoy, an equity analyst at the investment firm Hargreaves Lansdown, said in an email. But she expressed concern about Tesla’s exposure to Bitcoin.

“The Bitcoin losses point out an important part of the Tesla investment case — its eccentric owner,” Ms. Hoy said. “While Musk’s impressive innovation has served the company well, his personal flair is starting to raise governance questions.”

Mr. Musk said Tesla had sold its Bitcoin holdings to increase its cash cushion in light of the problems in Shanghai. “This should not be taken as some verdict on Bitcoin,” he said Wednesday. Tesla has not sold its holdings of another cryptocurrency, Dogecoin, he said.

Tesla had $18.3 billion in cash and cash equivalents during the quarter, according to the company.

Cryptocurrency is a “sideshow” and “not something we think about a lot,” Mr. Musk said.

“The fundamental good of Tesla, the reason we’re doing this, my primary motivation,” he said, “is to have the day of sustainable energy come sooner.”