The second-quarter profit of $2.3 billion was down from a record $3.3 billion in the first quarter of the year. The company has had a decline in profits over the last year.
A combination of inflation and increased competition in the EV space made the EV company's revenues shrink in the second quarter.
The company reported that it added $936 million in cash to its balance sheet by converting 75% of its digital currency to a new form of monetary unit. It is worth pointing out that in February of 2021, when the price was more than 30% higher than it is now,Tesla bought more than one billion dollars in the virtual currency. According to a report from coin desk, the company lost a lot of money in the crash and could have to pay up to a half a billion dollars in losses.
In the letter to investors, the company said that they continued to make progress. We achieved an operating margin among the highest in the industry of 14.6%, positive free cash flow of $621M and ended the quarter with the highest vehicle production month in our history, despite limited production and shutdowns in Shanghai for most of the quarter.
New factories in Berlin-Brandenburg and Austin have helped with production at the company.
For the past couple of years, the company has reported high quarterly profits, but most of them aren't related to car sales. Most of its earnings come from selling regulatory credits to other auto manufacturers and the government. The company has earned at least $6 billion in regulatory credit sales in the past 10 years.
According to the report, the sales have made the difference between the company posting a profit and a loss twice in the last few years.
The car business has taken a number of hits. The company shut down its factory in China for 22 days due to an outbreak. The same factory had to stop production again due to supply chain issues after instituting a lock down where workers slept.
There have been multiple software issues and crashes related to the company's much talked about autopilot. There have been so many accidents that the National Highway Safety Administration is looking into the tech of the company. The company announced in June that it would cut staff by 10% and has since laid off 200 workers.
There is an ongoing Musk hullabaloo which has had repercussions outside of the social media company. According to a report, the initial deal cost the company 15% of their value, and the stock has yet to recover.
With each of the Fremont and Shanghai factories achieving their highest-ever production months and new factory growth, we are focused on a record-breaking second half of 2020.
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