Bitcoin Purchases Reduce Tesla’s Cash And Cash Equivalents In Q1

Tesla reported that quarter-end cash and cash equivalents fell to $17.1 billion in the first quarter of 2021, fueled partly by a net cash outflow of $1.2 billion in bitcoin purchases, according to an investor presentation.

However, Tesla also reported $272 million in “proceeds from sales of digital assets,” according to financial statements included in its investor presentation.

The automotive company also reported that total revenue increased by 74 percent year over year in the first quarter, attributing the rise mainly to a sizable increase in vehicle deliveries in addition to expansion “in other parts of the business.”

“In Q1, we achieved our highest ever vehicle production and deliveries. This was in spite of multiple challenges, including seasonality, supply chain instability and the transition to the new Model S and Model X,” Tesla said in its investor presentation.

Tesla said it is developing Model Y capacity at Gigafactory Texas and Gigafactory Berlin and is on pace to begin production and deliveries from both places this year. The company said that Gigafactory Shanghai will “continue to expand further over time.”

“First deliveries of the new Model S should start very shortly, Model Y production rate in Shanghai continues to improve quickly and two new factories — Berlin and Texas — are making progress. There is a lot to be excited about in 2021,” Tesla said in the presentation.

In addition, Tesla said its pre-owned vehicle business continues to expand in terms of total volume and “improve financially.”

All in, Tesla reported 93 cents in non-GAAP earnings per share (EPS) on $10.39 billion in revenues for Q1 2021. The results exceeded analyst estimates of 79 cents per share in earnings on $10.29 billion in revenues.

In terms of digital currency, Tesla joins the ranks of other big corporates that have been purchasing digital currencies — arguably, most visibly bitcoin — in recent months. For instance, MicroStrategy has been adding to its bitcoin holdings. According to an SEC filing in February, the company said it had purchased another $10 million worth.

And, in late 2020, Square said on Twitter that it purchased $50 million in bitcoin, and the digital currency represents “an instrument of economic empowerment and provides a way to participate in a global monetary system, which aligns with the company’s purpose.”