Tesla now accepts bitcoin as payment for its cars

NEW YORK • Having stunned the market with its audacious bet on bitcoin earlier this year, Tesla will now start accepting the world's largest electronic currency as payment for its electric cars.

Chief executive officer Elon Musk on Wednesday tweeted that "you can now buy a Tesla with bitcoin" and that paying by bitcoin will also be available to customers outside the United States later this year.

He added that Tesla will use only internal and open-source software and that any bitcoin paid to the company will be retained as bitcoin and not converted to a fiat currency.

All vehicles will be priced in US dollars.

California-based Tesla disclosed its US$1.5 billion (S$2 billion) investment in bitcoin last month and said it intended to begin accepting the cryptocurrency as a form of payment, sending prices to a record high.

The world's leading electric vehicle (EV) maker made the bitcoin bet after updating its investment policy in January to allow it to buy digital assets.

Bitcoin climbed as high as 5.1 per cent to US$57,204. The token has fluctuated wildly after hitting a record US$61,742 on March 13.

Tesla shares are up more than 500 per cent in the past year.

Tesla's embrace of the cryptocurrency fuels a debate over whether longer-term investors such as corporate treasurers, family offices and insurers will seek exposure to the digital token. While prominent Wall Street figures have come out in support of bitcoin, there are big challenges for any companies following suit by adding virtual coins to balance sheets.

"Tesla and other companies are showing that crypto is here to stay, and its mainstream adoption is only going to increase," said Mr Simon Peters, an analyst at investment platform eToro.

In addition to lending increased legitimacy to electronic currencies, Mr Musk's embrace of bitcoin fits his maverick image. The billionaire has often tweeted about cryptocurrency-related topics and recently called bitcoin "a good thing" in an interview.

Dogecoin, the once tongue-in-cheek digital currency, also soared to records last month after Mr Musk, rapper Snoop Dogg and Kiss bassist Gene Simmons tweeted about it.

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A version of this article appeared in the print edition of The Straits Times on March 26, 2021, with the headline 'Tesla now accepts bitcoin as payment for its cars'. Subscribe