Lockdowns caused by the Covid surge in China caused sales and profits to fall at Tesla compared to the first three months of the year, the first time since the pandemic surfaced in early 2020 that the company did not report a record profit.

Tesla reported adjusted income of $2.6 billion in the second quarter, down from the $3.7 billion in the first quarter, but $1 billion more than it earned a year earlier. Revenue of $16.9 billion in the quarter fell 10% from the first quarter, but was up 42% from a year ago.

Earnings were better than forecast by analysts surveyed by Refinitiv, while revenue was slightly below expectations.

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It also disclosed it had sold 75% of its bitcoin holdings, which it said added $936 million in cash to its balance sheet. CFO Zachary Kirkhorn said the company made a profit on the value of those sales, despite the sharp drop in the value of Bitcoin in recent months. But the company's overall profit took a $106 million hit from the lower value of its remaining bitcoin holdings.

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CEO Elon Musk said the bitcoin sale was due to the the need to have additional cash on hand to deal with the lockdown of the Shanghai plant.

"So it was important for us to maximize our cash position, given the uncertainty of the Covid lockdowns in China," he told investors during a conference call Wednesday. "We are certainly open to increasing our bitcoin holdings in future, so this should not be taken as some verdict on bitcoin." Tesla has not sold any of its dogecoin holdings, he added.