Elon Musk, Tesla’s chief executive officer, who recently added “technoking” to his title, said Wednesday that the company would accept Bitcoin as a means of payment for cars in the US, which goes against the company’s image as an environmentally friendly electric car maker.
Tesla will hold the digital currency instead of converting payments to dollars and handle the crypto transactions in-house, Musk said.
“Bitcoin paid to Tesla will be retained as Bitcoin and not converted into fiat currency,” Musk said in a tweet. That said, if someone buys a Tesla with Bitcoin, the price of the car can go up or down over time. In other words, Tesla is converting one-time payments into assets with a shift in value, or essentially investments.
Buyers outside the US will have the option to use Bitcoin “later this year,” Musk said.
Mr. Musk’s acceptance of Bitcoin has been welcomed by many cryptocurrency enthusiasts, but the impact of digital currency on climate change is increasingly being studied.
“Bitcoin uses more electricity per transaction than any other method known to man, so it’s not a great climate thing,” Bill Gates recently told the New York Times. Depending on the study, the annual carbon emissions from the electricity used to mine Bitcoin and process its transactions equals the amount emitted by all of New Zealand. Or Argentina.
There’s also an e-waste-related problem with bitcoin mining, argues Alex de Vries, an economist who compiles the bitcoin energy consumption index and tracks the unintended consequences of digital trends. Bitcoin mining is done with highly specialized equipment that has a short lifespan and the tools cannot be reused, which makes investing in the digital currency even more problematic from an environmental point of view, he told The Times.
Mr Musk said last month that the company bought $ 1.5 billion in bitcoin for its treasury. Wednesday’s announcement confirms speculation in the crypto community that Tesla would not simply make payments to a third party and treat Bitcoin like dollars.
Since Tesla bought Bitcoin in February, the price of Bitcoin and other cryptocurrencies has soared to record highs, but trading has been volatile.
Analysts are at least happy with the symbolism. “This is a crucial moment for Tesla and the crypto world,” write Daniel Ives and Strecker Backe, analysts at the investment firm Wedbush. “This morning’s news formalizes Musk and Tesla’s strategy of delving into the deep end of the pool of bitcoin and crypto from a transactional perspective.”