Elon Musk stops taking bitcoin for Tesla due to climate change concerns

Tesla has suspended the use of Bitcoin for buying its vehicles due to climate concerns, CEO Elon Musk said in a tweet on Wednesday, reversing the company’s stance in the face of criticism from some environmentalists and investors.

Bitcoin, the world’s biggest digital currency, dropped over 17% after the tweet and was trading at $48,633. Tesla revealed in February it had purchased $1.5 billion of the digital currency, before it started to accept it as payment for cars in March, driving a roughly 20% increase in the world’s most widely held cryptocurrency.

Musk on Wednesday said Tesla would not sell any Bitcoin, and aims to use the digital currency for transactions as soon as mining adopts more sustainable energy.

“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,” Musk wrote.

The digital currency is created when high-powered computers rival other machines to solve complex mathematical puzzles, an energy-intensive process that often relies on electricity generated with fossil fuels such as coal.

At the existing rates, such Bitcoin mining devours about the same amount of energy per year as the Netherlands did in 2019, the latest available data from the University of Cambridge and the International Energy Agency shows.