Home Business Sideline businesses pump up Tesla’s profit

Sideline businesses pump up Tesla’s profit

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For the seventh time in a row, the electric car manufacturer Tesla is profitable. Without the sale of emission certificates and Bitcoin speculation, however, the result would not look so impressive.

By Thomas Spinnler, tagesschau.de At first glance, the Tesla growth story looks completely intact. In the first quarter, sales rose by 74 percent to 10.4 billion euros. The bottom line was that the group earned 438 million dollars, which corresponds to 362 million euros. In the first quarter of 2020, Tesla had only made a profit of $ 16 million. Tesla made just under $ 600 million operationally from January to March. The US group delivered 184,877 electric cars – a new record and more than twice as many as in the previous year.

Lucrative side business

However, the result once again benefited in particular from trading in emissions certificates. In the first quarter, Tesla turned over $ 518 million. That is 46 percent more than a year ago. Trading in the cryptocurrency Bitcoin also had a positive effect on the result. Tesla had acquired bitcoins for $ 1.5 billion. The group had sold 300 million again and made gains of more than 100 million in the process.

New Tesla cars are in a showroom in Berlin | JENS SCHLUETER / EPA-EFE / Shutterst Side business for Tesla In order to force the auto industry to build more climate-friendly cars, many US states and the EU have issued criminally enforced climate protection guidelines. Manufacturers who are above the limit values ​​can buy emissions certificates from competitors who meet these emission standards in order to improve their emissions balance.

Since Tesla only manufactures electric vehicles, the fleet’s eco-balance is so good that the Californian company has considerable leeway here and can trade with the lucrative certificates.

“A bit more opaque”

“The profits in trading with emission certificates and with Bitcoin speculations have to be deducted from the operating result,” explains the Nord LB economist Frank Schwope tagesschau.de . “Basically, Tesla still doesn’t make any money selling cars.” Bitcoin trading in particular makes the Tesla business model a bit more opaque, said the expert. Tesla boss Elon Musk is considered a great advocate of Bitcoin, who recently made positive comments about the cryptocurrency via Twitter. This should not have harmed the price development – for his own benefit and for the benefit of Tesla. Customers can now also pay for their Tesla model with Bitcoin . “Higher emissions certificates, lower taxes and bitcoin sales drive earnings,” said Craig Irwin, analyst at Roth Capital Partners. If these factors were excluded, the figures would be a disappointment, according to the expert.

Investors dissatisfied

This also explains the negative reaction from investors. Despite the record profit, the Tesla paper has lost more than two percent today. Because investors are of course aware that the profits made through bitcoins and emissions certificates are not sustainable. After all, the competition is noticeably catching up with electromobility. And the more electrical and therefore more climate-friendly the competitor’s fleets become, the less money Tesla will be able to earn through certificates. In addition, it is uncertain in which direction the Bitcoin price will develop in the future, especially in view of the ongoing discussions about possible regulation.

“Quality takes precedence over speed”

The start of production at the new Tesla factory in Grünheide is also uncertain. The final environmental approval is still pending. “The first car will roll off the assembly line when the final approval is in place and the plant has been built,” said Brandenburg Minister for Economic Affairs, Jörg Steinbach (SPD) today. When the approval process will be completed, he could not give a specific date. The principle of quality over speed applies. So far, the start of production was expected in the middle of this year. According to the information in the annual report, production is expected to start late in 2021.