Tesla’s recent annual report for the year ended December 31, 2022, filed with the US Securities and Exchange Commission (SEC) showed the fair market value of the electric car company’s bitcoinholdings to be $191 million. The report also recorded $204 million of impairment losses resulting from changes in the prices of bitcoin.
Tesla’s Investment in Digital Assets and Bitcoin
Tesla, led by billionaire Elon Musk, filed its annual report for 2022 with the SEC on Monday. The filing showed the fair market value of Tesla’s bitcoin holdings to be $191 million at the end of the year, with a carrying value of $184 million. The report noted that during the two years ended December 31, 2022, the company purchased and received $1.5 billion of digital assets, of which bitcoin accounted for the majority.
The electric car company invested $1.5 billion in bitcoin in Q1 2021 but sold 75% of its holdings in Q2 2022 due to concerns about the company’s overall liquidity. The report also mentions the company accepting dogecoinfor some merchandise, which accounted for an “immaterial amount” of digital assets.
Tesla’s Impairment Losses from Bitcoin
According to the SEC filing, digital assets are considered “indefinite-lived intangible assets” and any decrease in their fair value below their carrying value will result in impairment charges. As a result, Tesla recorded $204 million in impairment losses for the year ended December 31, 2022, resulting from changes to the carrying value of their bitcoin. The company also recorded gains of $64 million on certain conversions of bitcoin into fiat currency.
The company only sold its bitcoin once in Q2 2022, selling 75% of its holdings, adding $936 million in cash to its balance sheet. CEO Elon Musk stated at the time that the company was “certainly open to increasing our bitcoin holdings in [the] future” and the sale was due to concerns about the company’s overall liquidity.
Tesla’s SEC filing highlights the electric car company’s investment in digital assets and bitcoin, with a fair market value of $191 million and impairment losses of $204 million for the year ended December 31, 2022. The company remains open to increasing its bitcoin holdings in the future and may make changes to its digital assets based on business needs and market and environmental conditions.