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Tesla and Musk's Crypto currency fiasco - pure coincidence or planned move?

Tesla reported second-quarter vehicle production and delivery number for 2021. Tesla has delivered 201,250 vehicles including 199,360 units of model 3/Y and 1890 units of model S/X. Tesla has achieved a 200,000 delivery mark first time in a single quarter. But the company fell slightly short of analysts’ expectations. Analysts expected the figure to be around 201,820 cars from estimates range of 190,000 to 231,000 during the second quarter.

Tesla’s more affordable Model 3/Y category covers 99% of automotive sales and owing to this category, the company has achieved a steep growth in the last few quarters. Besides, due to the affordability, these models have a lower margin in comparison to older dying models S/X.

One of the things to look forward to is how Tesla is going to perform in terms of profit because in last quarter it announced a net income of $438 million which included non- automotive profits of $518 million regulatory credit sales and around $101 million gains from its Bitcoins sales and position. If we strip down the net income of credit sales and Bitcoin gains then Tesla is left with a loss of around $181 million just from selling cars.

Musk’s support for cryptocurrencies in the first quarter of 2021 shot the prices of Bitcoin up, resulting in Tesla gaining over $100 millions from Bitcoin investment alone. During the second quarter, Musk is noticingly employing a similar strategy of trying to scale the popularity and value of cryptocurrencies with a series of tweets regarding Bitcoin andDogecoin, and interestingly Dogecoin showed a 20% growth after the father of Dogeland tweeted the poll.

The question to be answered in the upcoming second-quarter filing is- whether Musk’s Tesla is strategically investing in cryptocurrencies to gain short term profits and mainly, to cover up the constant losses in the company’s vertical- all-electric automobile manufacturing business.

Regardless, the stock remains up with an increase of 1.5% on Friday morning, just after 8-K filling.

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