Elon Musk, the CEO of Tesla, revealed late Tuesday that bitcoin can now be used to purchase Tesla vehicles in the US. Last month, the automaker announced that it had acquired 1.5 billion in bitcoin and would soon begin accepting the world’s most famous cryptocurrency as a type of payment.
“You can now buy a Tesla with Bitcoin,” Musk, who was dubbed the “Techno king of Tesla” earlier this month, tweeted. According to a support page on Tesla’s website, customers can pay for their Tesla with digital currency. Until taxes, the company’s electric vehicles range in price from 37,990 to 124,000 dollars.
Outside the US, people will be able to buy a Tesla with bitcoin “later this year,” Musk said, without naming the countries. Tesla is using “internal” and “open source tools” to approve the invoice, according to Musk.
Tesla “directly runs bitcoin nodes,” he said. On the bitcoin network, nodes are machines that operate to validate transactions and prevent the cryptocurrency from being spent twice. Tesla warned consumers in its refund policy that if they wanted to return their electric car and get a refund, the company will pay them in either US dollars or bitcoin. Tesla notes that it reserves the right to issue a refund in US dollars at the same price of bitcoin at the time of purchase.
This will ostensibly allow Tesla to profit from price fluctuations in the cryptocurrency or fiat currency, thus leaving consumers with less than they would have been entitled to with a refund based on a straight dollar transaction. Tesla isn’t expected to start accepting bitcoin payments until the second half of this year, according to Daniel Ives, an analyst at Wedbush Securities.
“With Musk now cutting the red ribbon on Bitcoin transactions within the wider Tesla ecosystem, this is a pivotal moment for Tesla and the crypto world,” Ives said. “Over the next 12 to 18 months, we expect bitcoin to account for less than 5% of transactions, but this may change as crypto acceptance increases in the coming years,” he added.
The picture of Tesla as an environmentally friendly automaker contrasts sharply with the vast carbon footprint of the bitcoin network. According to researchers at the University of Cambridge, it absorbs more energy annually than Argentina as a whole. Bitcoin emissions alone could drive global warming above 2 degrees Celsius, according to a 2018 paper published in Nature, arguably the world’s most prestigious academic journal.
Musk has supported bitcoin more than any other big tech CEO, despite its weak environmental credentials. Over the last several months, he has been tweeting about cryptocurrencies on and off, causing concern in some quarters. He’s also been talking about ether and dogecoin on Twitter. Tesla’s stock price is now directly linked to the value of bitcoin, according to Ives, who told CNBC last month.
Tesla’s stock price and bitcoin’s value have soared in the last year, with Tesla stock growing from about 100 to over 600 and bitcoin rising from about 7,000 to over 55,000. Some investors, on the other hand, believe that both Tesla and bitcoin are in bubble territory. Per Lekander, a fund manager at Lansdowne Partners, told CNBC last week that he believes Tesla is in a bubble and that he is shorting Musk’s company, which means he can benefit if Tesla’s stock price falls.
In the 12 months leading up to January, Tesla’s market cap soared to over 800 billion, before plummeting to less than 600 billion in February. It is now worth around 635 billion. After closing at 662.16 on Tuesday, Tesla’s stock was up about 0.6 percent in after-hours trading. Bitcoin is currently valued at 55,444.93.
