Tesla is unlikely to accept Bitcoin again following the news that the American company has offloaded 75% of its holdings in the cryptocurrency.
The company’s earnings report for 2021 revealed CEO, Elon Musk, sold off around £1.7bn worth of Bitcoin at the end of 2021 to firm up the company’s position after uncertainties surrounding lockdowns in Shanghai, where some Tesla cars are made.
The news comes despite the firm investing around £1.2 billion into Bitcoin in February 2021. Musk has also revealed that his company hasn’t sold any of its Dogecoins, another type of cryptocurrency.
> Skip to how to buy a car with Bitcoin
Did Tesla accept Bitcoin?
From March to May 2021 Tesla accepted Bitcoin as payment in the U.S. However, Musk canned the coin due to climate change worries.
In May 2021 Musk tweeted: ‘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.’
What is Bitcoin?
Bitcoin is a virtual currency which can be used to buy products and services online. Some physical shops accept it too. El Salvador even accepts it as legal tender.
Each Bitcoin is essentially a file, which you can store in a digital wallet. Every Bitcoin transaction is recorded in a public list called the blockchain.
Can you buy a Tesla with Bitcoin?
The short and sweet answer to ‘can you buy a Tesla with Bitcoin’ is no. You used to be able to in the U.S., but that was cancelled in May 2021.
What about other cryptocurrencies?
In a submission to the USA’s Securities and Exchange Commission in 2021 Tesla stated: ‘We may in the future restart the practice of transacting in digital assets for our products and services.’
And in early 2022 Musk hinted about other currencies in a very Musk way, via a Twitter picture of his new dog. If you think the arrival of a pet doesn’t seem like a worthy addition to this article you clearly don’t know a great deal about Musk. Many crypto commentators have said it may point to dogecoin (another cryptocurrency) being accepted in the future.
Musk added heat to these rumours in January 2022 by formally accepting Dogecoin as payment for some Tesla merchandise. It’s only available in the USA and is limited to certain pieces of merchandise, such as belt buckles. Tesla UK has yet to confirm whether Dogecoin will be accepted in the UK in the future.
Tesla merch buyable with Dogecoin
— Elon Musk (@elonmusk) January 14, 2022
How to buy a car with Bitcoin in the UK
The good news is that you can buy a car with Bitcoin in Europe and the UK.
No car manufacturers in the UK are currently accepting Bitcoin payments. But some private dealerships are.
Autocoincars is a digital marketplace that connects buyers who want to buy via Bitcoin with dealers.
Director of Operations for Autocoincars, Luke Willmott, says: ‘From the customer’s perspective it works like this: come to the website, find a car, contact the dealer, go for a test drive, and do everything the traditional way.
‘Once the customer is happy and the deal is done we get an invoice.
‘Dealers don’t want to deal with crypto. So we generate a live rate for the customer. This stays open for 30 minutes. The customer pays with their Bitcoin wallet. Once we receive three validations on the blockchain we mitigate the risk.
‘The dealer gets their money in fiat [a currency backed by a government e.g. pounds sterling] and the customer gets to pay for their car with crypto.’
The Bitcoin network charges a network fee, and your Bitcoin wallet provider might also charge a separate one.
The buying process can vary depending on who you buy from. And so can the payment window. The short time available (30 minutes in Autocoincars’ case) is because of Bitcoin’s volatility.
Sending the correct figure is imperative too. The dealerships we’ve spoken to in the UK promise that if you send the wrong amount a refund is possible. But when Tesla USA was accepting Bitcoin, it said that there was ‘no guarantee’ of a refund.
Sell a car with Bitcoin
Selling a car with bitcoin is a bit trickier. If you’re a private seller it’s very complex and will most likely not be worth your time. Especially as the first hurdle will be to find someone willing to buy a car with Bitcoin in the first place.
If you’re a car dealer you can try and do it yourself, or get an intermediary to deal with the transaction for you.
Should you buy a car with Bitcoin?
People use Bitcoin to buy and sell things for a variety of reasons. Bitcoin isn’t controlled by a government or bank. Which means transactions are virtually anonymous.
Generally Bitcoin is popular among younger people, and people who trade in shares. If Bitcoin continues to grow in the way it has been doing, it makes complete sense for car dealers to offer this as a payment option. They don’t want to be turning down money.
However, Bitcoin is extremely volatile. This is the main reason car manufacturers in the UK are staying well clear of it for now.
Just how volatile? The head of the Bank of England, Andrew Bailey, said in 2020 that he was ‘very nervous’ about people using Bitcoin to buy physical items because of its fickleness.
