Tesla Posts $112 Million After-Tax Mark-to-Market Loss on Bitcoin in Q2

Tesla reported a $112 million after-tax mark-to-market loss on its Bitcoin holdings for the second quarter, reflecting sharp swings in crypto prices, according to its shareholder update. The company said it made no Bitcoin purchases or sales in the three months ended June 30, leaving its position unchanged at 11,509 BTC. Blockchain tracker Arkham Intelligence likewise shows 11,509 BTC in wallets linked to Tesla. Bitcoin volatility drove the quarterly hit. BTC traded around $83,000 at the start of the period, fell to roughly $58,000 in late June, and later rebounded to about $65,840 by the time Tesla released results. Under Tesla's current accounting approach, digital assets are measured at fair value at each reporting date, so the recovery after quarter-end did not offset the Q2 loss. Accounting change In 2024, Tesla adopted the Financial Accounting Standards Board's updated crypto accounting standard. Under the new rules, eligible crypto assets are carried at current market prices, and mark-to-market gains or losses flow through earnings each quarter. As a result, the $112 million figure is an after-tax fair-value loss rather than an impairment charge under the prior model, which required companies to record declines but generally prevented recognition of recoveries unless the asset was sold. Value of the position and background Using the roughly $65,840 price at the time of release, Tesla's 11,509 BTC would be worth about $758 million, though the accounting value depends on the precise quarter-end price. Tesla's Bitcoin exposure dates to February 2021, when it disclosed a $1.5 billion purchase to diversify cash holdings. The company briefly accepted BTC payments in the U.S. before pausing the option in May 2021, citing energy-use concerns. In Q2 2022, Tesla sold about 75% of its holdings, converting roughly $936 million of Bitcoin into cash, pointing to COVID-related uncertainty in China and a desire to strengthen liquidity rather than a change in its view on Bitcoin. Since then, the remaining coins have stayed on the balance sheet through major cycles, including Bitcoin's slide below $16,000 in late 2022 and the latest swing down toward $58,000. Broader financial context Tesla characterized the $112 million digital-asset loss as a non-cash, volatility-driven item, not a cash outflow associated with selling Bitcoin. For Q2, Tesla reported revenue of $28.2 billion (above the roughly $26.4 billion Street estimate and up from $22.5 billion a year earlier), adjusted EPS of $0.33 (missing estimates), and net income of about $1.11 billion (versus $1.17 billion a year earlier). Vehicle deliveries totaled 480,126, roughly 25% higher year over year. Profitability pressures persisted. Automotive gross margin excluding regulatory credits was 16.3% versus about 15% a year earlier, but below the 19.2% posted in Q1 2026. Free cash flow was negative $1.1 billion as Tesla continued heavy spending on AI infrastructure, manufacturing, robotaxi development, and its Optimus humanoid program. The company ended the quarter with around $43.5 billion in cash and investments. What to watch With the Bitcoin position unchanged, Tesla remains exposed to price moves at future quarter-ends. Under mark-to-market accounting, earnings volatility tied to the crypto line is likely to persist unless Tesla alters its holdings or sells coins.