Tesla has begun accepting Bitcoin as a payment method for vehicles. After Tesla famously converted US$1.5 Billion of their $19.5B cash in the bank to Bitcoin earlier this year, the company is now ready to accept it as a payment method in the United States.
While the news will come as a surprise to many, Tesla did outline this as a possibility in their Q4 2020 10-K SEC filings – ‘we expect to begin accepting bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis, which we may or may not liquidate upon receipt.’
Despite Bitcoin being a global currency, the payment option may only be available in the US for now, Musk followed up with Tweet confirming Bitcoin support will go international later this year. If you’re a company, accepting payment in Bitcoin has a big upside, with the price of the cryptocurrency continuing to rise. At the time of writing 1 Bitcoin was worth the equivalent of A$71,089.46 (around US$53,863), or in Aussie dollars, almost exactly the same as a Model 3 SR+.
As a customer, buying a fixed value asset with a mostly appreciating asset (due to Bitcoin’s programmed scarcity) may be a decision you’ll come to regret later, but that’s a problem for another day.
If you happen to have a decent amount of Bitcoin, then parting with some of it for a real-world object like a Tesla is probably not the worst decision you’ll make. For some Bitcoin investors, their ultimate goal is to have the value of that investment grow to the point where they can exchange it for goods and now people can ask, ‘When Tesla?’, instead of ‘When Lambo’?
With this development that Tesla will accept Bitcoin for payment of vehicles, comes many new questions. In a follow up tweet, Elon has confirmed some important new detail on how the company will transact Bitcoin. I think the expectation was that the payment from customers would essentially be converted back to cash on the books for Tesla. It turns out that isn’t the case, with Elon confirming that Tesla are actually running Bitcoin nodes and Bitcoin paid will be retained as Bitcoin, not converted to fiat currency.
This information is really important to the Tesla balance sheet, as they will pay the costs of building the vehicle as expenses in USD, but won’t be able to recognize the income, very strange.
A support page on the Tesla website lists the following information about the new payment type.
How do I pay with Bitcoin?
Initiate payment from your Bitcoin wallet. You can either scan the QR code or copy and paste the Bitcoin address and the exact Bitcoin amount into your wallet.
What if I accidentally send the wrong amount?
If you did not send the exact amount due for your order deposit, your order may be cancelled. If you did not send the exact amount due for final amount due on your car, it may cause a delay in the delivery of your car.
If I have Bitcoin in multiple wallets, should I send more than one payment?
No. To ensure timely processing of your order, send the exact amount in a single Bitcoin payment.
How long does it take to process my Bitcoin payment?
Once you send Bitcoin from your wallet, the page will refresh within one minute. If it does not refresh, do not send a new payment. We will email you a confirmation once payment is received. This can take up to six hours to process.
How long do I have to complete my payment?
Once you’re on the payments page and the timer begins, you will have until the timer expires to complete your payment. Once the time runs out, the QR code, Bitcoin address and Bitcoin price will all expire and you will need to create a new order or return to your Tesla Account to initiate a new final payment.
What cryptocurrency does Tesla accept?
Bitcoin is the only cryptocurrency Tesla accepts.
What countries support Bitcoin payments?
We are only supporting Bitcoin for customers in the continental United States. We will consider expanding into new markets in the future.
What if I send a different cryptocurrency to the specified Bitcoin address?
We will not receive the transaction and it will likely result in a loss of funds for you.
We’re now seeing some owners place their orders using Bitcoin. There is one change to ordering with BTC, that’s the deposit isn’t refundable.
It looks like Tesla’s head of Supercharger UX, Michael Rihani is pretty happy about the inclusion of Bitcoin as a payment method.