Tesla released its 2022 Q2 earnings Wednesday and the outcomes are combined: Elon Musk’s electrical automobile maker reported $2.3 billion in second-quarter revenue, down from a file $3.3 billion within the first quarter of 2022. That’s the corporate’s first sequential decline in earnings in over a 12 months.

The EV firm additionally reported quarterly revenues of $16.9 billion, down greater than 10% from $18.8 billion within the first quarter, as a mixture of inflation and elevated competitors within the EV house made margins shrink.

Tesla additionally reported that it transformed 75% of its bitcoin into fiat forex, which added $936 million in money to the corporate’s steadiness sheet. It’s value noting, although, that Tesla purchased $1.5 billion in bitcoin in February 2021, when costs have been greater than 35% greater then they’re now. The firm reportedly misplaced tons of cash within the crypto crash, and will incur as much as a $460 million “impairment charge” (i.e. loss) from its bitcoin holdings alone, based on a report from Coin Desk.

In Wednesday’s letter to buyers the corporate wrote: “We continued to make significant progress across the business during the second quarter of 2022. Though we faced certain challenges, including limited production and shutdowns in Shanghai for the majority of the quarter, we achieved an operating margin among the highest in the industry of 14.6%, positive free cash flow of $621M and ended the quarter with the highest vehicle production month in our history.”

While the Shanghai shutdown wasn’t nice for the corporate, Tesla did say that new factories in each Berlin-Brandenburg and Austin have been serving to with output.

Tesla has been reporting excessive quarterly earnings for the previous couple of years, however a lot of that possible isn’t actually coming from automotive gross sales. Though it payments itself as an EV firm, a lot of its earnings come from promoting regulatory credit to different auto producers and government subsidies. The firm has earned no less than $6 billion in regulatory credit score gross sales alone previously decade, based on reporting from Grid.

“These sales have twice in recent years made the difference between the company posting a profit instead of a loss, according to an analysis by Trefis, a financial data firm,” mentioned the Grid report.

Even so, Tesla’s automotive enterprise has taken a number of hits lately. Earlier this 12 months, the corporate’s Shanghai manufacturing facility shut down for 22 straight days on account of a Covid-19 outbreak. Then, even after instituting a lockdown the place staff slept on the facility, the identical manufacturing facility needed to halt manufacturing once more over provide chain points.

Then, there’ve been the a number of remembers surrounding software program points, and the accumulating quantity of crashes associated to the corporate’s a lot touted ‘Autopilot’. In reality, there’ve been so many collisions, that the National Highway Safety Administration is investigating Tesla’s tech, and may recall the corporate’s whole driver help function. The firm introduced in June that it will reduce employees by 10%, and has since begun layoffs with 200 staff from the Autopilot sector.

Plus there’s the Musk’s ongoing Twitter hullabaloo which has had reverberations past the social media firm. The preliminary Twitter deal price Tesla’s share costs about 15% of their whole worth, and the inventory has but to get well, based on a report from Barrons.

But Tesla’s pushing ahead, writing to buyers, “With each of the Fremont and Shanghai factories achieving their highest-ever production months and new factory growth, we are focused on a record-breaking second half of 2022.”