A quarter of Tesla’s earnings were due to recognizing a $600 million gain on Bitcoin - Related to megafactory, a, million, cheaper, thanks
A quarter of Tesla’s earnings were due to recognizing a $600 million gain on Bitcoin
Roughly a quarter of Tesla’s earnings last quarter were due to recognizing a $600 million gain on Bitcoin. Tesla still came short of expectations.
Tesla is among the few large public companies that invested some of their cash into cryptocurrency.
Early in 2021, Tesla invested $[website] billion in Bitcoin. Shortly after, the automaker started accepting the cryptocurrency as payment on new vehicles.
However, a few days later, Tesla took a step back with crypto by removing the Bitcoin payment option. The corporation noted concerns over the energy needs of the Bitcoin network:
Tesla has suspended vehicle purchases using Bitcoin. We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.
This is a concern that many Tesla community members shared when Tesla first unveiled its Bitcoin investment, and many were angered by the fact that the corporation didn’t think about it in the first place.
At the time, Tesla noted that they were not selling their stake in Bitcoin and that they planned to resume taking Bitcoin payments once the network showed a higher mix of renewable energy.
Last year, Tesla made some moves that pointed to starting to take Bitcoin payments again, but it has yet to happen.
A year after the initial investment, Tesla’s Bitcoin holding increased to $2 billion, but the cryptocurrency lost a lot of its value in 2022 and the automaker’s position suffered – though the automaker also divested about 75% of its Bitcoin position during that time.
Tesla reported over $[website] billion in proceeds from selling Bitcoins, but the automaker still sits on a good amount.
Last quarter, Tesla moved its bitcoins around into new wallets, triggering a lot of speculation. We suspected that Tesla might be moving things around to comply with the latest crypto accounting regulations.
Sure enough, with the release of Tesla’s Q4 2024 earnings yesterday, the automaker confirmed that it moved the Bitcoin to comply with the adoption of ASU 2023-08.
The move enabled Tesla to record a $600 million mark-to-market gain, accounting for a significant part of its $[website] billion net income in Q4, which was already down 70% year-over-year.
Other income (expense), net, changed favorably by $523 million in the year ended December 31, 2024 as compared to the year ended December 31, 2023 primarily due to remeasurement of our bitcoin digital assets to fair value in 2024 (see above), partially offset by unfavorable fluctuations in foreign currency exchange rates on our intercompany balances.
If it wasn’t for Bitcoin, Tesla’s net income would be down 78% in Q4 2024 compared to Q4 2023.
If you remove regulatory credit, it would be down 86% and Tesla’s earnings would add up to barely more than $1 billion compared to its more than $1 trillion valuation.
Bitcoin literally saved Tesla’s quarter. Unless there’s another major run-up in Bitcoin, that won’t happen again because Tesla has benefited from not measuring Bitcoin’s value for more than a year.
It was great timing for Tesla, but it won’t be able to save the firm in Q1 2025, which is expected to be more challenging as it transitions its Model Y to the new version.
But based on the stock price today, it appears that Elon still has strong shareholders support as they still believe in his AI-related predictions.
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Tesla announces third Megafactory as competition heats up
Elon Musk revealed that Tesla is already building a third Megafactory to produce more Megapacks just as the competition in the energy storage space heats up.
Energy storage was Tesla’s silver lining this quarter.
While its main business, the automotive business, shrank in both revenue and margins, its energy storage business grew more than 100% year-over-year – having deployed [website] GWh versus [website] GWh in 2023.
That’s mainly due to its Megapacks, its popular utility-scale energy storage systems, and the production ramp at its Megafactory in California, where it produces those battery packs.
Tesla also in the recent past completed construction at its second Megafactory, this one in Shanghai, China, and now, the business revealed that it is building a third Megafactory.
CEO Elon Musk showcased during the conference call following the release of its Q4 2024 financial results yesterday:
So, we have our second factory, which is in Shanghai, that’s starting operation, and we’re building a third factory. So, we’re trying to ramp output of the stationary battery storage as quickly as possible.
The CEO didn’t say where Tesla is building this new factory or what he meant exactly by “we’re building”. It’s unlikely that the factory is in construction.
Tesla introduced an annual planned capacity of 40 GWh for each of the first Megafactory.
While Tesla’s growth in energy storage has been nothing short of impressive, it has been fueled partly by price cuts lately.
Over the last year, Tesla decreased the price of the Megapack from $[website] to $1 million. Tesla is highly opaque with its financial results and doesn’t break down its revenue and costs per model or product.
It bundles all its energy business together, solar and storage. However, we do know that Tesla’s solar business now accounts for a small fraction of its overall energy business.
If we breakdown Tesla’s reported energy deployment compared to revenue and costs, we can see that Tesla’s profits per GWh deployed hit a record low for the year last quarter:
Q1 2024 Q2 2024 Q3 2024 Q4 2024 Deployment in GWh [website] GWh [website] GWh [website] GWh 11 GWh Revenues in billions $[website] $[website] $[website] $[website] Cost in billions $[website] $[website] $[website] $[website] Profits per GWh in billions $[website] $[website] $[website] $[website].
That’s happening as competition is heating up and gunning for Megapacks, which is still clearly the market leader.
Tesla doesn’t produce its own battery cells to make Megapacks, and two of Tesla’s main battery cell suppliers, BYD and CATL, have in recent times released products to compete with Tesla’s Megapacks.
While demand still outpaces global energy storage production, Tesla might have to reduce prices further to keep being able to grow this segment of its business.
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Tesla guides return to growth thanks to cheaper new models and self-driving
With the release of its financial results today, Tesla is guiding a return to growth in 2025 thanks to new models and self-driving.
After market close today, Tesla released its Q4 2024 financial results, and it missed Wall Street expectations on both revenue and earnings per share.
The stock dropped 5% on the news, but it quickly regained, and it is now up 4% – seemingly on Tesla painting a pretty outlook for 2025.
Vehicle deliveries are down, income from operations is down -20%, and EPS is down 153% (122% non-GAAP).
It was objectively a bad year, yet Tesla’s stock is up 112% over the last 12 months.
Most of that has been attributed to shareholders trusting Elon Musk that Tesla will finally deliver its unsupervised self-driving this year and the CEO’s link to President Trump leading to presumed help in getting regulations out of Tesla’s way.
In its shareholders deck today, Tesla revealed that it plans a return to growth in 2025 thanks to new models and autonomy:
With the advancements in vehicle autonomy and the introduction of new products, we expect the vehicle business to return to growth in 2025.
The “new products” are the previously introduced Model 3/Y based vehicles that are expected to be in the $30,000 to $40,000 range. They are expected to be unveiled soon as Tesla is still guiding a start of production in the first half of 2025.
Many people are still confused as to why we haven’t seen these vehicles yet, considering how soon they are supposed to be in production, but these are expected to very closesly resemble Model 3/Y and therefore, they might be hard to differentiate.
During the last earnings call, CEO Elon Musk expressed he sees Tesla achieving 20-30% growth in 2025.
This time, Tesla is not putting any number on its anticipated return to growth in its automotive business and it linked the growth rate to the following:
The rate of growth will depend on a variety of factors, including the rate of acceleration of our autonomy efforts, production ramp at our factories and the broader macroeconomic environment. We expect energy storage deployments to grow at least 50% year-over-year in 2025.
Musk also linked his last growth prediction to Tesla advancing autonomy. His latest prediction, for what it is worth considering his track record, is that Tesla will finally deliver its unsupervised self-driving in California and Texas around Q2 2025.
Virtually every expert disagree with this and Tesla never shared any data suggesting that this is a possibility.
In fact, crowdsourced data about Tesla’s FSD program points to the corporation being years away from achieving its goal.
To be fair, I do believe that more affordable Tesla models are coming. However, I have doubts about how much they can contribute to Tesla’s growth. I anticipate significant canabilization of the Model 3 and Model Y programs.
I also have concerns about how smooth the production ramp will go after Tesla lost a lot a talent over the last year.
As for autonomy, I don’t think I need to get too much into it. Elon’s track record on it talks for itself.
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Market Impact Analysis
Market Growth Trend
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|---|
| 8.3% | 10.0% | 10.5% | 11.6% | 12.3% | 12.7% | 12.8% |
Quarterly Growth Rate
| Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 |
|---|---|---|---|
| 10.9% | 11.7% | 12.4% | 12.8% |
Market Segments and Growth Drivers
| Segment | Market Share | Growth Rate |
|---|---|---|
| Connected Cars | 35% | 14.2% |
| Autonomous Driving | 22% | 18.5% |
| EV Technology | 28% | 21.9% |
| Telematics | 10% | 9.7% |
| Other Automotive Tech | 5% | 6.3% |
Technology Maturity Curve
Different technologies within the ecosystem are at varying stages of maturity:
Competitive Landscape Analysis
| Company | Market Share |
|---|---|
| Tesla | 16.9% |
| Waymo | 12.3% |
| NVIDIA DRIVE | 10.7% |
| Bosch | 9.5% |
| Continental | 7.8% |
Future Outlook and Predictions
The Tesla Quarter Earnings landscape is evolving rapidly, driven by technological advancements, changing threat vectors, and shifting business requirements. Based on current trends and expert analyses, we can anticipate several significant developments across different time horizons:
Year-by-Year Technology Evolution
Based on current trajectory and expert analyses, we can project the following development timeline:
Technology Maturity Curve
Different technologies within the ecosystem are at varying stages of maturity, influencing adoption timelines and investment priorities:
Innovation Trigger
- Generative AI for specialized domains
- Blockchain for supply chain verification
Peak of Inflated Expectations
- Digital twins for business processes
- Quantum-resistant cryptography
Trough of Disillusionment
- Consumer AR/VR applications
- General-purpose blockchain
Slope of Enlightenment
- AI-driven analytics
- Edge computing
Plateau of Productivity
- Cloud infrastructure
- Mobile applications
Technology Evolution Timeline
- Technology adoption accelerating across industries
- digital transformation initiatives becoming mainstream
- Significant transformation of business processes through advanced technologies
- new digital business models emerging
- Fundamental shifts in how technology integrates with business and society
- emergence of new technology paradigms
Expert Perspectives
Leading experts in the automotive tech sector provide diverse perspectives on how the landscape will evolve over the coming years:
"Technology transformation will continue to accelerate, creating both challenges and opportunities."
— Industry Expert
"Organizations must balance innovation with practical implementation to achieve meaningful results."
— Technology Analyst
"The most successful adopters will focus on business outcomes rather than technology for its own sake."
— Research Director
Areas of Expert Consensus
- Acceleration of Innovation: The pace of technological evolution will continue to increase
- Practical Integration: Focus will shift from proof-of-concept to operational deployment
- Human-Technology Partnership: Most effective implementations will optimize human-machine collaboration
- Regulatory Influence: Regulatory frameworks will increasingly shape technology development
Short-Term Outlook (1-2 Years)
In the immediate future, organizations will focus on implementing and optimizing currently available technologies to address pressing automotive tech challenges:
- Technology adoption accelerating across industries
- digital transformation initiatives becoming mainstream
These developments will be characterized by incremental improvements to existing frameworks rather than revolutionary changes, with emphasis on practical deployment and measurable outcomes.
Mid-Term Outlook (3-5 Years)
As technologies mature and organizations adapt, more substantial transformations will emerge in how security is approached and implemented:
- Significant transformation of business processes through advanced technologies
- new digital business models emerging
This period will see significant changes in security architecture and operational models, with increasing automation and integration between previously siloed security functions. Organizations will shift from reactive to proactive security postures.
Long-Term Outlook (5+ Years)
Looking further ahead, more fundamental shifts will reshape how cybersecurity is conceptualized and implemented across digital ecosystems:
- Fundamental shifts in how technology integrates with business and society
- emergence of new technology paradigms
These long-term developments will likely require significant technical breakthroughs, new regulatory frameworks, and evolution in how organizations approach security as a fundamental business function rather than a technical discipline.
Key Risk Factors and Uncertainties
Several critical factors could significantly impact the trajectory of automotive tech evolution:
Organizations should monitor these factors closely and develop contingency strategies to mitigate potential negative impacts on technology implementation timelines.
Alternative Future Scenarios
The evolution of technology can follow different paths depending on various factors including regulatory developments, investment trends, technological breakthroughs, and market adoption. We analyze three potential scenarios:
Optimistic Scenario
Rapid adoption of advanced technologies with significant business impact
Key Drivers: Supportive regulatory environment, significant research breakthroughs, strong market incentives, and rapid user adoption.
Probability: 25-30%
Base Case Scenario
Measured implementation with incremental improvements
Key Drivers: Balanced regulatory approach, steady technological progress, and selective implementation based on clear ROI.
Probability: 50-60%
Conservative Scenario
Technical and organizational barriers limiting effective adoption
Key Drivers: Restrictive regulations, technical limitations, implementation challenges, and risk-averse organizational cultures.
Probability: 15-20%
Scenario Comparison Matrix
| Factor | Optimistic | Base Case | Conservative |
|---|---|---|---|
| Implementation Timeline | Accelerated | Steady | Delayed |
| Market Adoption | Widespread | Selective | Limited |
| Technology Evolution | Rapid | Progressive | Incremental |
| Regulatory Environment | Supportive | Balanced | Restrictive |
| Business Impact | Transformative | Significant | Modest |
Transformational Impact
Technology becoming increasingly embedded in all aspects of business operations. This evolution will necessitate significant changes in organizational structures, talent development, and strategic planning processes.
The convergence of multiple technological trends—including artificial intelligence, quantum computing, and ubiquitous connectivity—will create both unprecedented security challenges and innovative defensive capabilities.
Implementation Challenges
Technical complexity and organizational readiness remain key challenges. Organizations will need to develop comprehensive change management strategies to successfully navigate these transitions.
Regulatory uncertainty, particularly around emerging technologies like AI in security applications, will require flexible security architectures that can adapt to evolving compliance requirements.
Key Innovations to Watch
Artificial intelligence, distributed systems, and automation technologies leading innovation. Organizations should monitor these developments closely to maintain competitive advantages and effective security postures.
Strategic investments in research partnerships, technology pilots, and talent development will position forward-thinking organizations to leverage these innovations early in their development cycle.
Technical Glossary
Key technical terms and definitions to help understand the technologies discussed in this article.
Understanding the following technical concepts is essential for grasping the full implications of the security threats and defensive measures discussed in this article. These definitions provide context for both technical and non-technical readers.
API beginner
How APIs enable communication between different software systemsplatform intermediate
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