“As of the end of Q2, we have converted approximately 75% of our Bitcoin purchases into fiat currency,” Tesla wrote in a letter to shareholders on Wednesday as part of the company’s earnings report. “Conversions in Q2 added $936M of cash to our balance sheet.”
CEO Elon Musk has long been an avid supporter of crypto, announcing that both Tesla and SpaceX would accept Dogecoin for merchandise. Previously, his car manufacturing company added support for payments in Bitcoin in March, but then abruptly reversed its policy after less than two months.
Supply chain disruptions and Covid shutdowns in China heavily impacted Tesla’s balance sheet, as the company reported that it made profits of $2.26 billion, a 31 percent decrease compared to $3.3 billion in Q1. Still, the car manufacturer is doing better than it did a year ago when it made a shy $1.1 billion.
Less than two months before today’s crypto sell-off, Musk told his top managers he had a “super bad feeling” about the economy, directing them to freeze hiring and cut about 10% of staff. Except that even this drastic move didn’t help Tesla much, as it scrambles for cash after being forced to temporarily shut down its Shanghai Gigafactory due to pandemic lockdown restrictions.
Now, when Tesla added nearly $1 billion in cash to its balance, it can deploy these funds to keep factories operating. The company didn’t disclose the size of the impairment. “We have sufficient liquidity to fund our product roadmap, long-term capacity expansion plans and other expenses,” the report reads.
“This should not be taken as some verdict of bitcoin,” Musk said during an investor call on Wednesday. “We haven’t sold any of our Dogecoin.”