Tesla’s $1.5 billion bitcoin investment couldn’t have come at a better time for the electric car manufacturer. As it happened, about the time the company revealed its massive stake in the cryptocurrency on Feb. 8, Chinese officials had announced that five agencies were questioning Tesla about quality and safety issues.
Specifically, China’s State Administration for Market Regulation issued this short statement on Feb. 8 at 8:00 p.m. China Standard Time (12:00 UTC):
“Recently, the General Administration of Market Supervision and the Central Cyberspace Administration of China, the Ministry of Industry and Information Technology, the Ministry of Transport and the Fire Rescue Bureau of the Ministry of Emergency Management have jointly held talks on the consumer-reported abnormal accelerations, battery fires, and over-the-air (OTA) upgrades. Tesla Motors (Beijing) Co., Ltd. and Tesla (Shanghai) Co., Ltd. are required to strictly abide by Chinese laws and regulations, strengthen internal management, implement the main responsibility of corporate quality and safety, effectively maintain social public safety and effectively protect consumers legal rights and interests.”
Two things make that announcement particularly notable.
First, Tesla is known for its good relationship with the Chinese government and is the first foreign automaker to operate a wholly owned plant in China. Second, it came minutes before Tesla filed with the U.S. Securities and Exchange Commission (SEC) its annual 10-K report (at approximately 7:30 a.m. ET) saying it purchased about $1.5 billion worth of bitcoin (BTC) in January.
Tesla shares closed Monday up 1.3%, in no small part because of the bitcoin purchase. The cryptocurrency itself broke new record highs that same day, gaining $4,254.48 alone during the hour Tesla’s bitcoin position was reported. While publications like Bloomberg quickly noted the Chinese government’s announcement, it was eclipsed by the big moves up in Tesla…