Tesla Reports $140 Million Net Loss in 2022 Due to Bitcoin Investment
Electric vehicle giant Tesla, led by billionaire Elon Musk, has faced a significant setback from its Bitcoin investment over the past year.
According to a filing with the U.S. Securities and Exchange Commission (SEC) on January 31, Tesla reported a total loss of $204 million for 2022 from its Bitcoin investment. However, the company's trading between BTC and fiat yielded a gain of $64 million, resulting in a net loss of $140 million for the year.
In the filing, Tesla classified Bitcoin holdings as indefinite intangible assets, which are periodically assessed to determine their value on the balance sheet relative to market value.
In Q1 2021, Tesla invested $1.5 billion in Bitcoin, making it one of the largest corporate holders of the cryptocurrency globally (only behind MicroStrategy). At that time, Bitcoin was priced around $46,000.
The electric vehicle maker initially accepted Bitcoin payments from U.S. customers but quickly reversed this policy a few months later. Elon Musk cited concerns about Bitcoin mining's excessive energy consumption, which conflicted with Tesla's commitment to alternative energy. He stated that Tesla would consider accepting Bitcoin again once the energy use for mining exceeded 50% from renewable sources.
During its holding period, Tesla only cut its losses once, selling 75% of its Bitcoin investment (approximately $936 million) in Q2 2022, after maintaining its position in the previous two quarters. The company confirmed it did not buy or sell any Bitcoin in Q3 and Q4. With its entry price for Bitcoin ranging between $33,000 and $38,000, Tesla continues to face ongoing losses.
Tesla's TSLA stock performance has also been lackluster, impacted by macroeconomic conditions and investor confidence waning as Musk has spent considerable time on Twitter following his acquisition of the social media platform.
TSLA Stock Price Trends from June 2022 to Present. Source: TradingView
Alongside the 51-year-old billionaire, it's impossible not to mention Dogecoin (DOGE). Tesla began accepting DOGE payments in January 2022 after distancing itself from Bitcoin. Recent news of Musk's acquisition of Twitter has fueled a rapid growth in DOGE's value.
