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Investment in sustainable and eco-friendly companies is at an all-time high on the back of North American governments’ pledge to meet their zero-emission targets by 2050. Although some analysts term this “over-investment” in renewable enterprises as the "green bubble" because of their overvaluation, investors continue to show their faith in the booming green industry.
Electric vehicle (EV) maker Tesla Inc (US:TSLA, NASDAQ:TSLA), a giant in the field of green industries, has made headlines with its unprecedented 408 per cent return in one year. On Monday, April 26, the company created a buzz once again when it reported all-time high quarterly earnings, outperforming analysts’ estimates.
This was Tesla’s seventh consecutive quarter result that beat the analysts’ expectations. But this record quarterly profit was boosted by its non-core segments, such as cryptocurrency investment and carbon credits sale. Hence, the EV manufacturer’s stock tumbled almost three per cent in the premarket trading on Tuesday, April 27.
©Kalkine Group 2021
Tesla’s Bitcoin Investment Pays Off
Tesla’s US$ 1.5-billion investment in Bitcoin, and the following trading of cryptocurrency, returned US$ 101 million in the first quarter of financial year 2021. Chief Financial Officer Zach Kirkhon stated that their digital asset investment proved to be a good move, adding that Tesla would continue investing excess cash in the biggest electronic currency.
On top of that, the automotive firm expects to grow its bitcoin holdings as EV buyers start paying in Bitcoin for its cars.
Carbon Credit Sale Boom
Tesla posted a bottom line of over US$ 1 billion for the first time, and interestingly, more than half of its profit came from its emissions credits. It traded carbon credits worth US$ 518 million with other automobile firms in Q1 2020, an increase of over 46 per cent year-over-year (YoY) against that of US$ 354 million in Q1 2020.
Business tycoon Elon Musk’s company kept its long-term outlook unchanged with a pegged 50 per cent auto production growth. The company delivered 184,000 EVs and surpassed expectations with the Model 3 sedan topping the delivery tally. However, Model S and X car sales dropped because of lined-up revamps.
The operation of commercializing EV cars is moving in the right direction, but it could face supply issues. More EV deliveries would mean more carbon credit rewards. Hence, the company could expect higher earnings from this segment, as per its guidance. However, the ongoing global chip shortage could hurt its EV supply in the upcoming quarter.
