Electric vehicle checkpoint: Tesla gets boost from bitcoin

See the latest news for the top stocks in the electric vehicle space including Ford, General Motors, NIO, Lordstown Motors, Canoo, and more.

Tesla (TSLA) shares were trading more than 4 per cent lower Tuesday despite the company’s impressive first-quarter earnings.

The overall market has been struggling for direction and Tesla’s weakness doesn’t help matters given its size in the Nasdaq and the S&P 500 — although a large number of earnings this week likely doesn’t help either.

Tesla, which has been a constant beacon for all EV stocks, posted stronger-than-expected first-quarter earnings Monday thanks in part to surging deliveries in China. The electric vehicle company notched its seventh-consecutive quarterly profit and net profit on a GAAP basis reached a quarterly record of $438 million (U.S.).

Tesla earned just over $100 million from the sale of bitcoins it purchased earlier this year, the electric vehicle company revealed in its first-quarter earnings Monday.

Tesla, which unveiled a purchase of $1.5 billion on February 8 when it published its annual report, noted Monday that its ‘cash and cash equivalents stood at $17.1 billion at quarter-end, including its bitcoin holdings.

Tesla’s earnings statement said the bitcoin sale was $272 million and noted that its ‘digital assets” total at quarter-end was $1.331 billion.

Now Tesla CEO Elon Musk and CFO Zach Kirkhorn disclosed that-while Tesla had made a $1.5 billion investment in bitcoin earlier this year-that the company had raised around $101 million from selling bitcoin to prove the liquidity of the cryptocurrency.

This led to many bitcoin believers speaking out against Tesla, and even Barstool Sports founder Dave Portnoy took to Twitter to ask if he had understood the situation correctly. Portnoy asked Twitter whether or not Musk had pumped bitcoin and then sold it to make a fortune.

However, Elon Musk pushed back. Musk noted that he personally had not sold any of his bitcoin, but that Tesla the company had sold 10 per cent of its holdings.

For more in-depth coverage of the electric vehicle sector including trading recommendations and investment strategies, follow experts on Real Money.

Tesla Inc. (TSLA) shares slumped lower Tuesday as investors dug into the clean-energy carmaker’s record first-quarter earnings and offset improving margins and a robust outlook with one-time items that boosted its bottom line.

Tesla posted a Street-beating bottom line of 93 cents a share, with revenues rising 74.3 per cent to $10.39 billion and automotive profit margins jumping 100 basis points to an impressive 26.5 per cent.

However, the group’s overall profits were partly flattered by a $100 million boost from the sale of bitcoin, a 46 per cent increase in the sale of environmental credits worth $518 million, and a lower tax rate, all of which combined to add an estimated 25 cents a share to Tesla’s bottom line, according to analysts at Credit Suisse.

Still, Tesla reiterated its full-year forecast of 50 per cent annual sales growth, with founder and CEO Elon Musk predicted that the Model Y will be “the bestselling car or vehicle of any kind in the world and probably next year.”

TheStreet Quant Ratings rates Tesla as a Hold with a rating score of C.

In the meantime, the company will extend downtime at several North American factories amid the worldwide semiconductor shortage that has hampered auto production and threatened global supply chains. The automaker’s plants in Chicago, suburban Detroit, and Kansas City, Mo., will be idled the weeks of May 3 and May 10. An SUV plant in Ontario will also take an extra week of downtime in early May.

“Ford’s North American plants continue to be affected by the global semiconductor shortage — along with automakers and other industries around the world,” John Savona, Ford’s vice president of manufacturing and labour affairs, wrote in a memo to employees obtained by The Detroit News.

TheStreet Quant Ratings rates Ford as a Hold with a rating score of C.

Shares of U.S. automaker General Motors (GM) dropped this past week after U.S. regulators started investigating complaints that the airbags on thousands of GM vehicles may not inflate in a crash.

The company’s shares also slipped amid reports that the carmaker is idling another North American plant as a result of the ongoing shortage in global semiconductor supplies. CNBC said General Motors will temporarily close its facility in Spring Hill, Tennessee later this month, and reiterated the company’s estimate that chip shortages will ding its 2021 operating profit by as much as $2 million.

“Tesla is falling behind other automakers like GM and Ford that, on models with advanced driver assist systems, use technology to make sure the driver is looking at the road,” Jake Fisher, Consumer Reports’ senior director of auto testing, said in a statement.

TheStreet Quant Ratings rates GM as a Buy with a rating score of B.

Nikola (NKLA) has signed a deal under which it will open two hydrogen filling stations at California locations of truck-stop franchisor TravelCenters of America.

In a statement, the companies said they saw the accord as a first step toward building out a nationwide network of hydrogen fuel stations. If the deal closes, the filling stations would open in the first quarter of 2023. That would coincide with Nikola’s launch of its Tre fuel-cell semitruck, Bloomberg News reported.

TheStreet Quant Ratings has no rating for Nikola.

NIO (NIO) reported big gains in their first-quarter deliveries. The company said it delivered 20,060 vehicles in the first quarter, up a record 423 per cent from a year ago. It delivered 7,257 vehicles in March, a new monthly record and up 373 per cent year-over-year.
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