Column: Tesla’s dabbling in Bitcoin is a perfect distraction from its real-world

Whoever rewrote the saw about where there’s smoke there’s fire into “where there’s smoke, there’s often a smoke-making machine” (John F. Kennedy often gets the credit), there’s little question that one of the prime smoke-making machines in American life right now is Elon Musk.

Consider Musk’s latest vaporous cloud — the announcement on Feb. 8 that his Tesla electric car company had made a $1.5-billion investment in the cryptocurrency Bitcoin starting in January.

That’s more than Tesla has spent on research and development in any of the past three years.

The announcement helped send the price of Bitcoin up by as much as 25% in a day, though it seemed to have the opposite effect on Tesla shares, which have lost about 4% since then. Bitcoin reached a record $47,698 on Feb. 8 before falling back to about $45,000 by midweek, according to Coinbase.

The whole episode adds just more muddle to the enduring question of whether Tesla is grossly overvalued, especially since it has yet to turn a net profit from selling cars.

The company’s market capitalization of $780 billion far outstrips the combined valuation of General Motors and Ford (about $125 billion), even though Tesla sold 500,000 vehicles last year and the other two companies more than 10 million, combined.

Tesla’s Bitcoin announcement happened to coincide with a couple of doses of bad news for the company.

One was a Feb. 6 report in the Global Times, an English-language publication of the Chinese Communist Party, that the Chinese government had upbraided Tesla for lapses in quality control and consumer relations in China. That’s a concern because Tesla has enjoyed a very favorable relationship with the Chinese government, so far.

“Tesla has shown respect for the potential of the Chinese market, but not the same level of respect is given to Chinese consumers,” the publication reported, citing “analysts.”

The second was a report from German sources that the company’s German car and battery factories were facing months of construction delays, as well as reduced government subsidies for the battery plant.

Musk, who has been accustomed to investors’ buying into his enthusiasms and raising Tesla’s stock price, may have appreciated the extent to which commentary about Tesla focused on its Bitcoin adventure rather than its ground-level issues with Chinese regulators and European construction.

When things are going well, Musk promotes the good news relentlessly. When they’re going not so well, there are plenty of sideshows in the offing to distract followers from Tesla’s bottom line.

In recent years, these sideshows have included Musk’s public toying with taking Tesla private, an adventure that yielded a punitive response from the Securities and Exchange Commission; Musk’s war…