Tesla’s Q4 2024 financial results were a mixed bag, with Bitcoin surges contributing to a boost in the company’s balance sheet but weaker vehicle pricing and declining profit margins overshadowing overall performance.
Bitcoin’s Role in Tesla’s Financial Boost
Tesla’s Bitcoin holdings were a major bright spot in an otherwise disappointing quarter. At the close of Q3 2024, Tesla’s Bitcoin stash was valued at $184 million, well below its market worth of $729 million. However, the surge in Bitcoin prices during Q4 led to a massive rise in value, with Tesla’s holdings now worth $1.08 billion—an increase of approximately $347 million.
The electric vehicle giant remains one of the largest corporate Bitcoin holders globally, holding 9,720 BTC. Despite the boost in value, Tesla hasn’t made any new purchases or sales, indicating its long-term commitment to its crypto holdings. A recent change in accounting rules, allowing companies to mark digital assets to market on a quarterly basis, further benefited Tesla’s Q4 results. This policy shift added 68 cents per share to earnings and contributed $600 million to net income, offering a rare highlight amidst weaker performance in other areas.
Core Business Struggles Amid Bitcoin Gains
Despite the Bitcoin windfall, Tesla’s core automotive business underperformed, missing Wall Street expectations. Adjusted earnings per share came in at 73 cents, falling short of the anticipated 76 cents. Revenue for the quarter reached $25.71 billion, below the forecasted $27.26 billion, with automotive revenue declining by 8% to $19.8 billion.
Operating income dropped 23% to $1.6 billion, largely due to lower average selling prices across Tesla’s vehicle lineup. Net income plummeted 71% to $2.32 billion, largely driven by a decrease in profit margins and a lack of one-time tax benefits that boosted last year’s earnings.
Overall, while Bitcoin’s surge provided much-needed relief, Tesla’s automotive business continues to face challenges, making its future performance uncertain as the company navigates these mixed results.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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