Musk: Tesla accepts bitcoin as payment, won’t convert it “to fiat currency”

Illustration of coins with the letter
Getty Images | Chesnot

Tesla has begun accepting bitcoin as payment from car buyers in the continental US, and CEO Elon Musk said the company plans to expand the new payment option to other countries later this year.

Musk announced the news on Twitter today. “You can now buy a Tesla with Bitcoin… Tesla is using only internal & open source software & operates Bitcoin nodes directly. Bitcoin paid to Tesla will be retained as Bitcoin, not converted to fiat currency,” Musk wrote.

Tesla recently bought $1.5 billion in bitcoin, a move that sent the cryptocurrency’s price soaring. A Tesla regulatory filing on February 8 said the company would begin accepting bitcoin as payment “in the near future.” While Musk is betting big on bitcoin, customers may prefer to buy Tesla cars in dollars if they expect the price of bitcoin to keep rising.

The bitcoin payment process is described on Tesla’s website in a support FAQ and terms and conditions. “Bitcoin is the only cryptocurrency Tesla accepts,” the company said. Sending other cryptocurrency to Tesla “will likely result in a loss of funds for you.”

Tesla’s bitcoin support FAQ is noncommittal on accepting bitcoin outside the US, saying that Tesla “will consider expanding into new markets in the future.” But another tweet from Musk said, “Pay by Bitcoin capability available outside US later this year.”

Be careful

The bitcoin option is shown in Tesla’s online checkout process, right under “order with card.” Tesla will continue to price its products in US dollars. The terms and conditions say:

If you choose to make a payment using Bitcoin, you must pay an amount of Bitcoin that is of equivalent value to the U.S. Dollar purchase price of the product that you purchase. We will provide you with a U.S. Dollar price for the product or service that you are purchasing, as well as a Bitcoin equivalent price (the “Bitcoin Price”). You must initiate the transfer of the Bitcoin Price to us within the time period that we provide to you together with the Bitcoin Price (the “Bitcoin Price Window”). If you do not initiate the transfer of the Bitcoin Price to us within the Bitcoin Price Window, the Bitcoin Price will expire, and we will provide you with a new Bitcoin Price and Bitcoin Price Window upon your request.

An all-caps warning from Tesla told buyers to be careful of mistakes that could result in lost cryptocurrency. “We will provide to you a digital wallet address (‘Bitcoin Address’) in both alphanumeric and QR code form. This is the payment address location to which you will need to send Bitcoin from your digital wallet… IF YOU INPUT THE BITCOIN ADDRESS INCORRECTLY, YOUR BITCOIN MAY BE IRRETRIEVABLY LOST OR DESTROYED,” Tesla said.

On any refunds of purchases made with bitcoin, Tesla will decide whether to give the customer dollars or bitcoin. This could result in a loss of value for customers because the price of bitcoin changes rapidly.

“If you are entitled to a refund of your payment or to a buyback, we reserve the right to refund to you either the exact Bitcoin Price that you provided to us at the time of purchase or an amount of U.S. Dollars that is equivalent to the U.S. Dollar price of the product that you purchased, at our sole and absolute discretion, taking into consideration operational efficiency,” Tesla said.

The price of one bitcoin today was over $56,000, more than the starting price of some Tesla models. Bitcoin hit $50,000 for the first time in mid-February. The price has more than doubled since the last week of December.