Elon Musk Says Tesla Won’t Accept Bitcoin For Car Purchases Any More
Tesla is executing a rapid U-turn on Bitcoin.
Months after Tesla embraced Bitcoin, CEO Elon Musk said on Wednesday the auto maker would no longer accept the cryptocurrency for car purchases due to its environmental impact.
Bitcoin is very energy-intensive. The “coins” are created through a process called “mining,” in which powerful computers solve difficult math problems. That requires electricity — a mind-boggling amount of it.
“We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions,” Musk explained in a tweet, “especially coal, which has the worst emissions of any fuel.”
The tweet comes just three months after Tesla surprised many by saying it would allow customers to pay for their electric vehicles with Bitcoin. Not only that, the company said at the time it also invested $1.5 billion in the cryptocurrency.
It was a good investment. In its most recently quarterly statement, Tesla’s bitcoin holdings contributed substantially to its net profits.
But on Wednesday, Musk also said Tesla would no longer sell the cryptocurrency.
From the start, the company came under fire for embracing a currency with a substantial carbon footprint even though Musk has said that Tesla is dedicated to fighting climate change,
Bitcoin enthusiasts point out that renewable energy can power that mining. But critics point out that doesn’t mean there’s no impact.
And in some cases, Bitcoin mining has actually kept fossil fuel power plants in production when they would otherwise be inactive, adding to the world’s carbon footprint.
“Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment,” Musk also said on Twitter, a platform he frequently uses to comment on his companies.
Bitcoin values fell by thousands of dollars in the minutes immediately after Musk’s tweet. But the price is still north of $50,000 per Bitcoin — 100 times what they were trading for five years ago.
In his tweet, Musk added the company is open to other cryptocurrencies with significantly fewer energy requirements.
The announcement comes days after Musk led to a plunge in another cryptocurrency, Dogecoin, after calling it a “hustle” while hosting Saturday Night Live.
Dogecoin, which started as a joke but became backed with real money, had previously surged in value after Musk expressed support for the cryptocurrency.