Tesla is not making it attractive to pay for a model S, 3, X or Y in bitcoin.
This week, CEO Elon Musk announced via Twitter (where else?) that his upstart automaker had begun letting interested buyers pay for their electric vehicles in bitcoin. It’s part of a corporate push to acquire as much of the original cryptocurrency as possible – or at least that’s how it seems because the manufacturer has no plans to convert the cryptocurrency to fiat.
But the idiosyncrasies of crypto make it difficult to take advantage of this option. For example, according to the company’s Bitcoin Payment Terms and Conditions, bitcoin transactions must be completed within a certain window of time or else the price in BTC expires and the buyer must ask for a new price.
“You have about 30 minutes to make a payment,” a Tesla representative for the Northeast region said Thursday.
While that condition is not surprising given bitcoin’s infamous volatility – depending which direction the price moves, either the car buyer or Tesla could get hosed by a wide swing – it underscores how even in a roaring bull market crypto still struggles to gain widespread acceptance as a payment method.
The fault lies with the native complexities of the Bitcoin system, the U.S. tax policy around cryptocurrencies and, in this case, a paucity of information available from Tesla’s customer support team. (At least, if you’re a member of the press looking for answers.)
No BTC discount
Tesla has been notoriously media-shy after disbanding its public relations department late last year. So after calling headquarters in Palo Alto, Calif., and getting bounced around, and then separately emailing Chief Financial Officer Zach Kirkhorn and the black-hole address for press inquiries, this reporter phoned a number of Tesla retailers based in the Northeast and along the West Coast and learned very little about purchasing a vehicle with bitcoin.
“It’s very simple. If they ask about purchasing it, we can assist them with making an appointment,” the Northeast Tesla representative said, unhelpfully. To be fair, a New Jersey resident who is actually in the market for a vehicle said she called a Tesla branch and got all her questions answered.
She told CoinDesk the Paramus-Route 17 gallery accepts bitcoin – though was told flat-out there was no early-adopter’s discount.
But we were able to glean a few telling insights, including the 30-minute payment window.
Another is that Tesla will only accept exact amounts and will not reimburse payments sent to an incorrect alpha-numeric address.
In fact, a bolded passage punctuates the company’s Bitcoin Payment Terms & Conditions document with a warning that includes the following:
“IF YOU INPUT THE BITCOIN ADDRESS INCORRECTLY, YOUR BITCOIN MAY BE IRRETRIEVABLY LOST OR DESTROYED.”
“YOU MUST EXERCISE CARE WHEN INPUTTING THE BITCOIN ADDRESS INTO THE RECIPIENT FIELD BECAUSE BITCOIN TRANSACTIONS CANNOT BE REVERSED. WE ARE NOT RESPONSIBLE FOR ANY FAILURE TO ACCURATELY INPUT THE ALPHANUMERIC CODE INTO THE RECIPIENT FIELD.”
‘Not quite sure’
That document says nothing about tax liabilities, though this is another consideration for U.S. buyers. Under current policy, a purchase of goods or services made with cryptocurrency is a taxable event – even if it’s just a cup of coffee.
That means car buyers must account for potential gains or losses if their bitcoin is worth more or less now than when they first purchased it.
Finally, there are the deflationary incentives in the Bitcoin ecosystem that may discourage potential buyers from spending their coins on cars, or anything. A hard cap of 21 million coins, a decreasing rate of issuance and a growing number of buyers create favorable conditions for the price of BTC to rise, all else equal.
While Lamborghinis have long been the objet petit a for many bitcoiners, those who have made the purchase – or any purchase – often come to regret it. In 2013, someone purchased a $103,000 Tesla Model S Performance for 91.4 BTC. Those coins today would be worth $4.7 million.