According to Tesla's financial report for the third quarter, none of its bitcoin has been sold. The company's most recent balance sheet reveals that Tesla still has $184 million worth of bitcoin in its possession. Elon Musk, the CEO of Tesla, has expressed concern about how the auto sector is being impacted by the high interest rate environment.
Report on Q3 earnings for Tesla
On Wednesday, Tesla (Nasdaq: TSLA) announced the results of its third quarter. In comparison to the prior quarter, the company's $23.35 billion in revenue and $1.85 billion in earnings both decreased.
Even though the electric car company's results fell short of Wall Street projections, its balance sheet still shows $184 million in net digital assets. Tesla has reported the same value for its digital assets, which primarily consist of bitcoin (BTC), for the fourth consecutive quarter.
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| Tesla’s Q3 balance sheet. Source: Tesla Inc. |
In Q1 2021, Tesla invested $1.5 billion in Bitcoin, but by Q2 2022, it had sold 75% of those holdings. When asked why the company sold the bitcoin, Musk responded that it was because it was worried about its overall liquidity "given Covid shutdowns in China." He added that the company is "certainly open" to expanding its bitcoin holdings in the future. According to Tesla's SEC filing, "We may increase or decrease our holdings of digital assets at any time based on the needs of the business and our view of market and environmental conditions." The fair market value of Tesla's BTC holdings at the end of 2022, according to the company's SEC report from January, was $191 million.
The maker of electric vehicles also takes the meme cryptocurrency dogecoin (DOGE) for select purchases, which, according to the company's SEC filing, accounted for a "immaterial amount" of digital assets.
Elon Musk, the CEO of Tesla, raised various issues harming his company's profitability during the Q3 earnings call on Wednesday, including the high interest rate environment. He emphasized:
We currently live in a high interest rate environment, which worries me. I simply cannot overstate how important the monthly payment is to the vast majority of consumers who purchase cars.
The percentage of that monthly payment that includes interest naturally rises when interest rates climb, according to Musk. "It will be harder for customers to purchase a car if interest rates stay high or rise more. Simply put, they cannot afford it.
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