Tesla will no longer accept the crytocurrency Bitcoin as payment for its cars, citing energy consumption and related environmental concerns.
“Tesla has suspended vehicle purchases using Bitcoin,” CEO Elon Musk announced. “We're concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”
Bitcoin is ‘mined’ using powerful computers competing against one another to solve mathematical puzzles. This process uses extensive amounts of electricity, which is often produced by fossil fuels.
Tesla began accepting Bitcoin payments in March, but the EV company now won't sell or use Bitcoin until the mining process becomes more sustainable.
“Cryptocurrency is a good idea on so many levels, and we believe it has a promising future, but this can't come at great cost to the environment,” Musk said.
“We intend to use it [Bitcoin] for transactions as soon as mining transitions to more sustainable energy. We're also looking at other cryptocurrencies that use less than 1% of Bitcoin’s energy/transaction.”
The announcement caused the value of Bitcoin to fall to its lowest point since March and comes just months after Tesla bought $1.5 billion (£1.07bn) worth of the world’s most popular digital currency.
Around 70% of Bitcoin mining takes place in China, according to data from the University of Cambridge’s Centre for Alternative Finance. Fossil fuels are the primary source of electricity there until the rainy summer months, when sources are switched to hydro power.
READ MORE
Analysis: What does the digital future of car sales look like?
Join the debate
Add your comment
What exactly has changed in the two months since Tesla began to accept bitcoin as payment?
It suggests that only now does Tesla realize bitcoin costs a lot of energy to mine, seems to me like an inexcusable oversight.
Why haven't the adolescent EV lobby come riding to Elon's rescue with their vile, hate-filled sputum? I guess they haven't woken up yet - or they don't know what bitcoin is.
BTW Mr Musk, the USA still generates 80% of its electricity from fossil fuels so, by your reasoning, you ought to withdraw from that market. Maybe start manufacturing bicycles?
Let's get this staight. The electric car king won't take a particular currency because - wait for it - it uses a lot of electricity to make?
We're being told that electric cars are the future, and that they will mandatorily replace ICE cars - because electric cars are better for the environment. Because electricity is good/green. But you can't pay for them with something that is made using electricity. Because electricity is bad/dirty.
Think about that.