Electric automaker Tesla reported record earnings this quarter, with a substantial boost from its cryptocurrency speculation.
The company announced $438 million in net income for the quarter, with a $101 million “positive impact” on profits from selling Bitcoin, according to its quarterly earnings report.
The company put $1.5 billion into the volatile cryptocurrency earlier this year, then sold about ten percent of its holdings to realize that profit, the company said.
“Elon and I were looking for a place to store cash that wasn’t being immediately used, trying to get some level of return on this, but also preserve liquidity,” Zach Kirkhorn, Tesla’s chief financial officer – and “master of coin” – said on the earnings call.
Kirkhorn also cited the extremely low rate of return that conventional cash-like investments are offering at the moment.
“Bitcoin seemed at the time, and so far has proven to be, a good decision — a good place to place some of our cash that’s not immediately being used,” he said.
Tesla CEO Elon Musk later said on Twitter that the sale was “essentially to prove liquidity of Bitcoin as an alternative to holding cash on balance sheet,” rather than to take advantage of appreciation in the cryptocurrency’s value.
Tesla is also accepting cryptocurrency as payment for its vehicles. Some critics have noted that the environmental impact of Bitcoin, which is very energy-intensive, is at odds with with the eco-friendliness of an electric vehicle.
Tesla also reported record production figures for the quarter, despite struggling with the same supply chain issues other automakers are grappling with.
As usual, the company also brought in significant revenue as a result of initiatives designed to boost electric vehicles. When other automakers don’t produce enough zero-emissions vehicles to meet government requirements, they pay Tesla for “regulatory credits” that allow them to count Tesla’s battery-powered vehicles against their own quotas.