A global challenge in the auto manufacturing industry may hold some potential effects on the Bitcoin holdings of Tesla. Tesla, one of the biggest names in the car manufacturing industry, may face a production challenge with its electric cars. The company might face a battery component shortage that will result in slower sales. A stall in Tesla sales could then impact the company’s Bitcoin holdings.
Tesla has been in the electric vehicle (EV) manufacturing business for years and has built up a reputation and strong customer base. Tesla is also one of the largest Bitcoin holders in the industry, its 48,000 BTC pile is second only to MicroStrategy’s. This makes a potential drop in sales of much importance to its Bitcoin holdings.
Tesla has warned of a potential challenge in getting enough materials to manufacture batteries for its electric vehicle. The company has reported that a regional shortage in lithium-ion might impact its production deadlines and possibly lead to slow sales. The situation is expected and Tesla has said that it would do all that it can to.
Global Lithium-Ion Materials Shortage
A report by GlobalData suggests that the electric vehicle manufacturers in the West will face a shortage of lithium-ion minerals due to an increasing difficulty in sourcing them. The demand for lithium-ion has skyrocketed following an increase in the demand for eco-friendly electric vehicles in Europe. Yet, the demand for electric vehicles is set to hit a higher level in the future.
Tesla is leading the manufacture of EVs and has set a goal to manufacture cheap and efficient batteries. GlobalData reports predict that global EVs manufacture will hit 12 million and above within 5 years as more people adopt a cleaner energy lifestyle. The proposed massive reduction in batteries for EVs will be a welcome development for massive adoption. But that can all be threatened by the scarcity of lithium-ion minerals.
Affordable recharging solutions remain a priority in Tesla as the company tries to figure out ways to effectively reduce the cost of running EVs. Failure to achieve this will greatly impact the sales and adoption of Tesla cars around the world. There are various negative results if this happens; the first being a drop in Tesla stock value.
How Will Tesla’s Bitcoin Holdings Be Affected?
When Tesla bought Bitcoin in February, it didn’t take too long for the EV manufacturer to declare a $1 billion profit on the digital asset. Tesla’s 48,000 Bitcoin is currently valued at over $3.7 billion and constitutes one of its revenue streams. As one of the publicly-traded companies with the largest Bitcoin holdings, Tesla might have to sell some of its Bitcoin to mitigate the negative effects of slow sales caused by the scarcity of lithium-ions.
If it does experience slow sales, Tesla would need to keep its stock value at a respectable price, and selling off some Bitcoin might do that trick. Tesla had previously sold 10% Bitcoin in June to “test” the Bitcoin sales process according to its CEO, Elon Musk. Elon Musk himself sold some of his Tesla shares last week, causing the value to drop by 15%.