Elon Musk stops Tesla from taking Bitcoin payments due to fossil fuel concerns

James Titcomb
·2 min read
Musk posted the announcement on his Twitter account - AFP
Musk posted the announcement on his Twitter account - AFP

Tesla has stopped accepting Bitcoin as payment for its cars due to concerns about its carbon emissions, Elon Musk has said.

Mr Musk said that the company had stopped vehicle purchases with the virtual currency due to “rapidly increasing use of fossil fuels for Bitcoin mining”. Bitcoin’s price fell by around 4pc immediately after the statement, posted on Mr Musk’s Twitter account.

Tesla’s chief executive has been one of the cryptocurrency’s most high profile supporters and announced earlier this year that the company had invested $1.5bn in Bitcoin.

Tesla also started accepting the cryptocurrency as a form of payment in March.

“Tesla has suspended vehicle purchases using Bitcoin,” Mr Musk posted on Twitter. “We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.

“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.

“Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy. We are also looking at other cryptocurrencies that use [less than 1pc] of Bitcoin’s energy [per] transaction.”

Bitcoin has been widely criticised for its energy usage, which is now more than the total electricity consumption of Sweden and Argentina, according to the University of Cambridge’s Centre for Alternative Finance.

The cryptocurrency network is maintained and new Bitcoins created using an energy-intensive process known as mining, which involves high-powered computers solving complicated calculations.

Its supporters have argued that the concerns are overblown and that much of Bitcoin is mined with renewable energy. Last month, he gave his support to research claiming that the cryptocurrency could incentivise renewables, a claim that was questioned by energy experts.

Tesla retains a substantial investment in Bitcoin, even after selling some of its holdings recently. It said in April that it was sitting on $2.5bn in Bitcoin. In March, it said its chief financial officer Zach Kirkhorn would adopt the title "Master of Coin".

Mr Musk has also been seen as responsible for a wild surge in the price of Dogecoin, a joke cryptocurrency based on an internet meme that peaked in 2013. Dogecoin's price recently fell after the Tesla chief used an appearance on Saturday Night Live to call it a "hustle".

On Tuesday - a day before he announced Tesla had stopped taking Bitcoin - Mr Musk asked his 54m followers if Tesla should accept Dogecoin as a form of payment.

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