Tesla Reveals Big Bitcoin Gain, New Regulatory Issues

Tesla (TSLA) on Wednesday revealed more details about its Bitcoin holdings and new regulatory hurdles. Tesla stock dipped.


According to a 10-K filing, the EV maker said the value of its Bitcoin holdings as of March 31 was $2.48 billion.

Bitcoin Reverses From April Surge

But while the price of Bitcoin surged in mid-April to top $63,000, it recently fell below where it was at the end of Q1.

In February, Tesla said it invested $1.5 billion in Bitcoin and announced it would accept the cryptocurrency as payment for EVs. On Monday, the company reported in its Q1 earnings that it sold an aggregate $272 million in Bitcoin in Q1.

CFO Zach Kirkhorn later explained the Bitcoin investment on the earnings call with analysts. “Elon and I thought it was a good place to place some of our cash that’s not being used currently and get a good return.”

Meanwhile, Tesla received a notice from the Environmental Protection Agency. The notice alleges it failed to provide compliance records regarding emissions standards related to the surface coating of vehicles. The company says it has responded to all information requests and refutes the allegations.

Tesla is also facing regulatory hurdles in Germany, where the opening of its plant slipped to at least until the end of the year. The filing states that German authorities have fined Tesla 12 million euros ($14.5 million). That notice alleges that the company failed to make public “notifications and take-back obligations with respect to end-of-life battery products.” 

“This is primarily relating to administrative requirements, but Tesla has continued to take back battery packs,” the company said in the 10-K. It added that “Although we cannot predict the outcome of this matter, including the final amount of any penalties, we have filed our objection.” Tesla said it doesn’t expect that to have a material adverse impact on its business.

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Tesla Stock

Shares fell 1.15% to 696.63 on the stock market today after dropping 4.5% Tuesday despite beating earnings estimates, boosted by Bitcoin and record regulatory credit revenue. Tesla stock has a buy point of 780.89 from a cup-with-handle base, according to MarketSmith chart analysis. The relative strength line is trending lower. While Tesla stock is trading above its 50-day line, that benchmark is also sloping downward. Shares were testing their 50-day line Wednesday.

Among U.S. automakers with a growing slate of EVs, General Motors (GM) was down 0.8% and Ford (F) was flat. Ford reports earnings later today.

China-based rival Nio (NIO), which reports earnings tomorrow, edged up 0.6%, hitting resistance at its falling 50-day line. Xpeng (XPEV) was up 0.7% and Li Auto (LI) fell 2%.

Regulatory Woes

Emissions violations at Tesla’s paint shop in the Fremont, Calif., plant have come up before. The Bay Area Air Quality Management District issued 18 notices of violation and 21 permit deviations in 2018 and 2019 to Tesla.

Tesla said in the filing that the matter remains open and as it has “disputed certain of these allegations and have asserted that there has been no related adverse community or environmental impact.”

In a separate matter, in 2018, Tesla agreed to pay $139,500 in fines for using malfunctioning burners at its assembly plant in Fremont that emitted dangerous levels of nitrogen oxides.

Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.


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