The difficulty underscores how even in a roaring bull market, crypto still struggles to gain widespread acceptance as a payment method.
Tesla is not making it attractive to pay for a model S, 3, X or Y in BTC.
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 – as 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 one.
“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 exchange rate 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 is notoriously media-shy, after disbanding its PR department late last year. So after calling headquarters in Palo Alto and getting bounced around, and then separately emailing CFO 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 that 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 alphanumeric address.
In fact, bolded passage punctuate the company’s Bitcoin Payment Terms & Conditions document with warning including:
"IF YOU INPUT THE BITCOIN ADDRESS INCORRECTLY, YOUR BITCOIN MAY BE IRRETRIEVABLY LOST OR DESTROYED.”
And…
"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.
This means that 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 over the years, all else equal.
While Lamborghinis have long been the objet petit a for many Bitcoiners, those that 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.
Asked whether there has been any interest from HODLers since Musk tweeted this week, the Tesla representative said, “Not quite sure if anything sold yet in bitcoin.”
But another employee sounded excited: “I don’t really know that much, and don’t want to take on the liability of speaking to the press, to be frank. It’s great news,” this Tesla representative said.
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