Self-proclaimed Bitcoin figureheads Tesla and Elon Musk have turned their backs on the cryptocurrency leader. After two months of offering the token as a payment option to customers, after dozens of tweets extolling the merits and the ideal of a new economy, Bitcoin has become this ecological chasm which it would be a shame to join.
On the web, many aficionados pointed to this turnaround. French media CoinTribune titled: “Elon Musk and Tesla Discover How Bitcoin Works”. This Thursday, the billionaire added a new tweet to his statement yesterday showing the electricity consumption figures for the operation of cryptocurrency.
“It’s funny, but the consumption curves were already on the ceiling when Tesla bought 1.5 billion bitcoin. This guy is more and more … confusing Commented journalist Raphael Grably, from BFMTV.
“Elon probably hasn’t researched the amount of energy needed to run the other (non-crypto) currencies Tesla accepts.”, for his part, tweeted the founder and CEO of Binance, one of the main buying platforms for Bitcoin.
– Elon Musk (@elonmusk) May 13, 2021
May 12, chronicle of a change in strategy
As an electric car manufacturer advocating green and sustainable mobility, it is clear that praising the merits of a the carbon impact equivalent to the city of Hong Kong is delicate on paper.
That said, it was on Wednesday May 12 that Tesla’s decision was taken, after two months without any internal questioning. What to wonder: why did Elon Musk and Tesla suddenly change their mind?
A plausible explanation leads us back a few hours before Elon Musk’s tweet (published Thursday May 13 at 12:20 am in France, Wednesday May 12 in the afternoon in California). In the morning, Reuters published a dispatch revealing that the builder had applied to join the U.S. renewable fuel credit program.
Since 2005, a federal program aiming to encourage the country to turn to renewable fuels has created a credit market (such as carbon credits) rewarding the actors participating in this ecological transition. Until then, they were producers of biofuels, but under the Biden administration, the integration project for electricity players, producing their energy by green installations, is discussed.
Put all the chances on his side
Tesla would be among the first eight companies to apply for the expansion of the program called Renewable Fuel Standard (RFS). “The market has generated some 18 billion credits in 2020 and is currently dominated by ethanol producers, ”writes Reuters.
For President Biden, a move in favor of integrating power producers would spark anger among biofuel companies. A conflict of interest would be born while Tesla advocates electricity and rejects fuels from biomass as a solution for the ecological transition.
If the negotiations are confirmed, that Tesla’s request is discussed, then it is clear that the manufacturer must actively seek a way to put all the chances on his side. To start with move away from sensitive issues. Bitcoin in the first place.
Like the carbon credits Tesla was selling to manufacturers of thermal cars, credits on renewable fuels would allow it to generate a new form of profit for the next few years. The circumstances of this month of May have never been so favorable: last week, Stellantis (the group born from the merger of PSA and FCA) announced that it was going to stop buying carbon credits from Tesla.
With a net profit of $ 438 million including $ 500 million in revenue from carbon credits, Tesla would have finished in the red of $ 62 million if it had not found customers to sell its carbon credits. Demand will continue to decline as more and more automotive groups have a sufficient fleet of hybrid / electric powertrains in their up-to-date lineup.
Of course, Tesla is already seeing the end of the tunnel in terms of economic equilibrium. Its profitability will soon be achieved exclusively through its sales of cars. But to continue investing (especially in autonomous cars, new batteries, etc.) the brand must protect its rear.
To hope to enter this new market with 18 billion credits injected by the federal government, Tesla also announced – through the voice of one of its executives – that all of its Superchargers will run on renewable energy as of this year. A promise that the manufacturer has been reiterating for nine years now. But whose economic interests have never been so important.