Tesla to accept Bitcoin payments for its EVs

Seems Tesla boss Elon Musk is all over cryptocurrency at the moment. Last week he threw his social media weight behind Reddit-fuelled cryptocurrency Dogecoin.

Now, according to its Securities and Exchange Commission filing for 2020, Tesla is planning to allow customers to buy its electric cars using Bitcoin as well as investing in the cryptocurrency. 

News on Tesla’s investment pushed Bitcoin’s value up nearly 13% as of Monday February 8th. And while the car manufacturer didn’t exactly lay out an explicit timeline for when you’ll be able to snap up a Tesla with the cryptocurrency, the policy will extend to other products from the company as well. The closest we get to a timeframe in the filing is sometime in the “near future.”

Tesla’s move to “hold digital assets from time to time or long-term” to maximize cash returns comes as CEO Musk gets behind Dogecoin. With just one word, “Doge,” on social media the currency rocketed upward by more than 50% last week. To be clear, Tesla made no mention of accepting Dogecoin in the SEC filing.

Says Danyaal Rashid, Head of Thematic Research at GlobalData: 

“This is a massive move by Tesla. By accepting bitcoin as a form of payment, Tesla is unleashing the first major consumer experiment in not just bitcoin but cryptocurrency as whole. Tesla, being the fifth-largest company in the world by market cap, will send out a bold statement if it can successfully integrate bitcoin payments into its business.

“The main sticking point will be the volatility of the cryptocurrency. The firm cannot accept $35,000 for a Model 3 today and then $29,000 tomorrow – it is just not good business. In bitcoin, swings of 10-20% in price in a matter of days are not uncommon. However, if the adoption of bitcoin becomes more widespread, volatility is likely to fall.”

The news comes as Tesla plans to recall 135,000 Model S luxury sedans and Model X sport-utility vehicles in the US over touch-screen failures. This follows the National Highway Traffic Safety Administration’s (NHTSA) request of a recall last month, saying the touch screen in some models can fail when a memory chip runs out of storage capacity. This can affect functions such as defrosting, turn-signal functionality and driver assistance on the vehicles. 

Tesla to recall Model S and Model X over touch-screen failures