Tesla backtracks on selling autos for bitcoin

Business | 13 May 2021 8:05 am

Tesla Inc has suspended the use of bitcoin to purchase its vehicles because of climate concerns, Chief Executive Officer Elon Musk said in a tweet on Wednesday, reversing the company's stance in the face of an outcry from some environmentalists and investors, Reuters reports.

Bitcoin, the world's biggest digital currency, fell by more than 7 percent after the tweet and was trading at US$52,669.

Tesla Inc revealed in February it had bought US$1.5 billion of bitcoin, before it began accepting it as payment for cars in March, driving a roughly 20 percent surge in the world's most widely held cryptocurrency.

Musk on Wednesday said Tesla would not sell any bitcoin, and intends to use bitcoin for transactions as soon as mining transitions to more sustainable energy.

"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," Musk wrote.

The digital currency is created when high-powered computers compete against other machines to solve complex mathematical puzzles, an energy-intensive process that currently often relies on electricity generated with fossil fuels, particularly coal.

At current rates, such bitcoin mining devours about the same amount of energy annually as the Netherlands did in 2019, the latest available data from the University of Cambridge and the International Energy Agency shows.

Some investors cast doubt on the use of bitcoin for Tesla purchases months ago.

"We are of course very concerned about the level of carbon dioxide emissions generated from bitcoin mining," said Ben Dear, CEO of Osmosis Investment Management in February, shortly after Tesla's bitcoing holdings became public. Osmosis is a sustainable investor managing around US$2.2 billion in assets that holds Tesla stock in several portfolios.

 



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