The company’s CEO Elon Musk announced the news via Twitter on Wednesday, citing concerns over the use of fossil fuels for Bitcoin mining.
“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 tweeted. “Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at a great cost to the environment.”
The announcement comes about three months after Tesla confirmed it had purchased $1.5 billion worth of Bitcoin as part of a long-term investment strategy. Musk said Wednesday the company doesn’t plan to sell any of the Bitcoin it acquired, as it intends to use the cryptocurrency “for transactions as soon as mining transitions to more sustainable energy.”
“We are also looking at other cryptocurrencies that use < 1% of Bitcoin’s energy/transaction,” he added.
A study by the University of Cambridge found that Bitcoin mining, which requires intensive computer calculations to verify transactions, uses the same amount of energy as the Netherlands used in 2019—a fact that conflicts with Tesla’s long-held commitment to sustainable energy.
“It is really by design that Bitcoin consumes that much electricity,” Michel Rauchs, researcher at the Cambridge Centre for Alternative Finance, told the BBC this year. “This is not something that will change in the future unless the Bitcoin price is going to significantly go down.”
According to Market Watch, the price of Bitcoin dropped from about $54,700 to $52,600 just minutes after Musk’s tweet.
Billionaire entrepreneur Mark Cuban responded to Musk’s announcement in a Tuesday night tweet, stating the Dallas Mavericks will continue to accept Bitcoin and other cryptocurrencies as a form of payment: “… we know that replacing Gold as a store of value will help the environment.”