bitcoin on yellow background

US Customers Can Now Purchase Teslas With Bitcoin

Elon Musk’s Announcement

Elon Musk announced earlier this week that US customers can now purchase Tesla (TSLA) vehicles using bitcoin. International customers will be able to buy Teslas with the cryptocurrency later in 2021, Musk said.

Last month, the electric car company shared that it had purchased $1.5 billion worth of bitcoin and that it planned to begin accepting the cryptocurrency as payment. The system for customers to do this is now officially in place.

Tesla Will Not Convert Bitcoin to Dollars

Tesla’s decisions, and other contributing factors, have caused the price of bitcoin to hit record highs in recent weeks. Though it continues to be volatile, the price of the cryptocurrency passed the $60,000 mark earlier this month.

Tesla says that when customers buy cars with bitcoin, it plans to hold the digital currency instead of converting it to dollars. It will handle cryptocurrency transactions internally. Essentially, Tesla will turn one-time payments into assets with changing value.

Environmental Concerns

Many cryptocurrency enthusiasts have cheered Tesla’s moves to embrace Bitcoin.

But others are critical of the company’s investments in Bitcoin because of the cryptocurrency’s environmental impact. Tesla builds sustainable vehicles, but Bitcoin is not currently an environmentally sustainable form of conducting transactions. The annual carbon emissions from the electricity that goes into mining Bitcoin and processing transactions is equal to the carbon emissions of all of New Zealand. Tesla’s moves into Bitcoin seem at odds with its goal of making vehicles more sustainable.

Tax Implications

One thing to keep in mind, should you choose to use Bitcoin for a Tesla purchase, is the potential tax liability. The IRS views Bitcoin and other cryptocurrencies as property, so when you sell it or exchange it for a product, taxes have to be paid on any appreciation in value from when it was purchased.

If you’ve owned your cryptocurrency for less than 12 months, you’ll pay short-term capital gains rates, which are the same as your normal income tax rate. If you’ve owned it for more than a year, you’ll pay long-term capital gains rates, which vary from 0% to 20% depending on your income.

Things are changing daily within the financial world. Sign up for the SoFi Daily Newsletter to get the latest news updates in your inbox every weekday.

Sign up

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store SoFi Android App, Get it on Google Play

ABOUT SoFi SoFi helps people achieve financial independence to realize their ambitions. Our products for borrowing, saving, spending, investing, and protecting give our more than one million members fast access to tools to get their money right. SoFi membership comes with the key essentials for getting ahead, including career advisors and connection to a thriving community of like-minded, ambitious people. For more information, visit Want an easy and convenient way to manage your financial life? Get the SoFi app. For iOS and Android.

TLS 1.2 Encrypted
Equal Housing Lender