On February 7, Tesla's 10-K annual report file submitted to the US Securities and Exchange Commission (SEC) showed that Tesla's revenue in the Chinese market reached $13.844 billion in 2021, a year-on-year increase of 107.8%.
It is worth noting that in 2021, due to changes in the book value of the company's bitcoins, an impairment loss of about US$101 million (about 642 million yuan) was recorded.
The filing also discloses that on November 16, 2021, the U.S. Securities and Exchange Commission issued a subpoena to Tesla to provide information about the management process involved in fulfilling the 2018 settlement.
Speculation Bitcoin "rollover"
In its latest 10-K filing, Tesla disclosed that in the year ended December 31, 2021, it had accrued an impairment loss of about $101 million (about 642 million yuan) due to changes in the book value of the company's bitcoins.
According to Tesla's annual report documents, as of December 31, 2021, the fair market value of bitcoin held by Tesla was $1.99 billion.
As of the early morning of February 8, Beijing time, Bitcoin rose 3% in a single day to $42,956.
According to public information, Tesla bought $1.5 billion in bitcoin in early 2021 at a price of about $35,000 per coin. In February 2021, Tesla once purchased bitcoin with a floating profit of more than 71%, and the floating profit amount exceeded $1.069 billion.
Tesla CEO Elon Musk has publicly stated that he decided to hold part of the company's cash in the form of bitcoin because this asset is better than cash. "The interest on fiat money is negative, and only a fool would stare at fiat money." Musk said.
Musk not only actively holds Bitcoin, but also focuses on promoting its circulation and use. On February 8, 2021, Tesla said in a filing with the U.S. Securities and Exchange Commission that it would begin accepting bitcoin as a form of payment to a limited extent as permitted by law.
In March 2021, Tesla's official website in the United States showed that users can choose to pay in bitcoin when purchasing a vehicle. But Tesla only uses internal open source software to operate Bitcoin nodes directly, that is, the bitcoins paid to Tesla will be retained as bitcoins and will not be converted into fiat currency.
On May 13, 2021, Bitcoin purchases of Tesla were also terminated due to concerns about the impact of cryptocurrencies on the environment. Musk said that once the share of renewable energy in the bitcoin mining process increases by 50%, the company will accept bitcoin payments again.
Musk was once known as a Bitcoin "manipulator," and every time his remarks about Bitcoin were released, the price of Bitcoin fluctuated wildly. For example, after February 8, 2021, the price of Bitcoin soared by $10,000; on May 13, 2021, the price of Bitcoin plummeted by $10,000.
The SEC is once again eyeing Musk
In the K10 documents disclosed this time, Tesla also disclosed that the company was concerned by the U.S. Securities and Exchange Commission because of Musk. On November 16, 2021, the SEC issued a subpoena to the company asking Tesla to provide information about the management processes involved in the previous settlement, the documents show.
Although Tesla did not elaborate on what exactly the subpoena was investigating in its annual report, just 10 days before the SEC issued the subpoena, Musk posted an investigation on Twitter, asking netizens whether he should sell 10% of Tesla's positions. Affected by this news, the company's stock price fell by 16% in the following two days. Musk began to reduce his holdings of Tesla shares, with a cumulative reduction of more than $10 billion. The receipt of a subpoena from the U.S. Securities and Exchange Commission is highly likely to be related to this.
In addition to the SEC investigation, some Tesla shareholders appealed to court to review the company's internal documents and investigate whether the vote violated previous agreements with the SEC.
In 2018, Musk had said on social media that he was trying to take the company private, and was subsequently accused of securities fraud by the SEC. In September 2018, the two sides reached an agreement that Tesla would need to regulate Musk's public statements. In 2019, Musk again made remarks about Tesla's production and triggered stock price fluctuations, and the U.S. Securities and Exchange Commission also investigated it again. The two sides adjusted the settlement in April of that year, clearly stipulating that Musk could not take a public position without the permission of the company's lawyers.
In addition, in December 2019, the SEC also conducted an investigation into Tesla's financial data and contracts, but the investigation was closed in December 2021.
Tesla "ghost brake" complaints surged
U.S. regulators are investigating
Notably, in recent times, the National Highway Traffic Safety Administration (NHTSA) has received an increasing number of complaints about accidental and unnecessary braking incidents in Tesla vehicles, and regulators say they are investigating.
This phenomenon is often referred to as "ghost brakes". Refers to a vehicle equipped with advanced driver assistance systems that is unsettling and potentially dangerous for consumers. This failure is a potential hazard for other vehicles following behind the car.
Drivers who have been in this situation have consistently called these ghost brake events "creepy" and potentially "catastrophic."
According to the Washington Post, reports of unprovoked braking have risen to 107 in the past three months, compared with 34 in the previous 22 months.
That point in time coincides with Tesla's decision to stop using radar sensors on its vehicles and instead use a camera-only system.
Phil Koopman, a professor at Carnegie Mellon University who focuses on the safety of self-driving cars, said: "Ghost braking is what happens when developers don't set the decision threshold correctly to decide when something is present with a false alarm. "What other companies have done is they're using multiple different sensors and cross-checking between them — not just multiple cameras, but multiple types of sensors.
For example, a bag floating on the road may appear to the camera as a truck braking, but if it can be cross-verified by radar or LiDAR, ghost braking may be avoided.
Revenue in China increased by 107.8% year-on-year
In terms of revenue, in 2021, Tesla's Chinese market performed well, with revenue reaching $13.844 billion, up 107.8% year-on-year. Tesla's revenue in the Chinese market in the first three quarters of 2021 was $9.015 billion. Based on this calculation, Tesla's revenue in China in the fourth quarter of 2021 was $4.829 billion.
According to data from the China Association of Passenger Vehicles, Tesla's deliveries in China will reach 484,130 units in 2021, accounting for 51.7% of Tesla's global 936,000 deliveries. In addition to the United States, China is Tesla's second largest market, accounting for 25.7% of the company's total revenue in 2021; the revenue of the US market reached 23.973 billion US dollars, accounting for 44.55% of the company's total revenue.
Tesla CFO Zach Kirkhorn said model Y is key when it comes to Tesla's margin improvement because it has a much higher margin than the Model 3. The localization of the Shanghai Gigafactory is also an important factor, which is of great help to the profit margin. Price increases in some markets have also helped to improve profit margins.
On December 31, 2021, Tesla's official website in China showed that the price of the Model 3 rear-wheel drive version was adjusted to 265,652 yuan, an increase of 10,000 yuan compared with the previous price; the price of the Model Y rear wheel-drive version was adjusted to 301,840 yuan, an increase of 21,088 yuan compared with the previous price.
Tesla said the supply chain is a major constraint on development at the moment and could continue into 2022. The company still faces chip restrictions in 2022 and will be alleviated in 2023.
Kirkhorn said that Tesla's software business is the focus of development in the future, because the profit margin of the software business is very high. When FSD and Robotaxis finally emerge, the advantages will be revealed.
Strengthen Bitcoin regulation globally
Regulators around the world are generally wary of virtual currencies, including Bitcoin. Martin Gruenberg, acting chairman of the Federal Deposit Insurance Corporation (FDIC), recently released a list of priorities that regulators need to provide "strong guidance" to the banking industry on the risks associated with digital asset management. Banking institutions must consider the risks posed by cryptocurrencies and "determine the extent to which banking organizations can safely participate in crypto-asset-related activities."
According to Xinhua News Agency, on January 25, the executive board of the International Monetary Fund (IMF) urged the Central American country of El Salvador to revoke bitcoin's legal tender status, warning that there are great risks to bitcoin use in terms of financial stability and so on.
The IMF Executive Board issued a statement after concluding its Article IV consultations with El Salvador that the executive directors believed that there was a need for greater regulation of Bitcoin, whose use was risky in terms of financial stability, financial integrity, consumer protection, and related fiscal and debt, and urged the Salvadoran authorities to revoke Bitcoin's legal tender status. Some executive directors have expressed concern about the risks of issuing bitcoin-backed bonds.
The Salvadoran parliament passed a bill last June approving bitcoin as the country's legal tender. The bill went into effect last September, and El Salvador became the first country in the world to officially recognize Bitcoin as legal tender. The Salvadoran government also plans to issue bitcoin bonds in 2022. Due to the large fluctuations in the value of Bitcoin, the difficulty of practical operation, and the chaos of financial supervision, many Salvadoran people oppose the setting of Bitcoin as legal tender.
On February 4, local time, the chairman of the U.S. Securities and Exchange Commission (SEC) Gensler said that he refused to approve a Bitcoin ETF on the grounds that Bitcoin is susceptible to fraud and manipulation.
Source: China Business Daily synthesized from China Securities News, 21st Century Business Herald, Securities Times, Brokerage China, etc
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