E-carmaker Tesla edges past Wall Street target

Electric carmaker Tesla Inc marginally beat Wall Street expectations for first-quarter revenue on Monday boosted by a jump in environmental credit sales to other automakers and liquidating some bitcoins.

Tesla posted record deliveries in the first quarter despite a global chip shortage that has slammed auto sector rivals, but its profit was not driven by auto sales.

Tesla, which had invested US$1.5 billion in bitcoin, trimmed its position by 10 percent during the quarter, said Chief Financial Officer Zachary Kirkhorn. Tesla said proceeds from sales of digital assets amounted to US$272 million with a US$101-million “positive impact.”

“We do believe long term in the value of bitcoin,” he said. “It is our intent to hold what we have long term and continue to accumulate bitcoin from transactions from our customers as they purchase vehicles.”

Chief Executive Elon Musk tweeted that he has not sold any of his personal bitcoins.

Tesla has posted profits for seven quarters in a row, most quarters driven by environmental credits.

Tesla earned US$518 million from sales of those credits, up 46 percent from a year earlier. The American company earns credits for exceeding emissions and fuel economy standards and sells them to other automakers that fall short.

Net profit was dented by a US$299-million award to Musk. Tesla’s quarterly performance hit targets qualifying the billionaire entrepreneur for two options payouts worth a combined US$11 billion.

“Higher regulatory credits, lower taxes, and bitcoin sales buoyed financial results. Back these out, and it was a large miss,” Roth Capital Partners analyst Craig Irwin said.

Tesla posted record deliveries in the first quarter despite a global chip shortage that has slammed auto sector rivals.

Still, the world’s most valuable automaker, whose shares jumped more than eight-fold last year, faces challenges of living up to its valuation and managing expectations.

The company said it was able to navigate through global chip supply shortage issues in part by pivoting quickly to new chips, while simultaneously developing software for chips made by new suppliers.

Its vehicle average selling price fell by 13 percent as production of pricier Model S and Model X vehicles ground to a halt ahead of major updates.

Tesla said its costs decreased, with its average cost per vehicle below US$38,000 in the first quarter, compared with US$84,000 in 2017.

Tesla will start deliveries of the new Model S next month and high-volume production in the third quarter. The Model Y production rate in Shanghai continued to improve, spurring demand in China.

Revenue rose to US$10.39 billion from US$5.99 billion a year earlier. Analysts had expected revenue of US$10.29 billion, according to IBES data from Refinitiv.