Self-proclaimed Bitcoin figureheads Tesla and Elon Musk have turned their backs on the cryptocurrency leader. After two months of offering customers Bitcoin as a payment option, after dozens of tweets extolling the virtues and ideal of a new economy, Bitcoin has become that ecological abyss that would be a shame to be associated with .
Many fans on the Internet pointed to this trend reversal. The French media CoinTribune said: “Elon Musk and Tesla discover how Bitcoin works”. This Thursday, the billionaire yesterday added a new tweet to his statement listing the electricity consumption figures for the functioning of the cryptocurrency.
“It’s funny, but the consumption curves were already on the ceiling when Tesla bought 1.5 billion Bitcoin. This guy is always… confusing, ”commented journalist Raphael Grably from BFMTV.
“Elon probably didn’t investigate how much energy it takes to power the other (non-cryptographic) currencies that Tesla accepts,” tweeted the founder and CEO of Binance, one of the world’s leading platforms. Buying cryptocurrencies.
The energy consumption trend over the past few months is insane https://t.co/E6o9s87trw pic.twitter.com/bmv9wotwKe
– Elon Musk (@elonmusk) May 13, 2021
May 12th, chronicle of a change in strategy
As an electric car maker promoting environmentally friendly and sustainable mobility, it is clear that it is difficult on paper to promote the merits of a carbon footprint system equivalent to the city of Hong Kong.
That said, this Wednesday, May 12th, Tesla’s decision was made after two months of no internal questioning. What to ask: What could he have changed the mind of the manufacturer and Elon Musk?
A plausible explanation takes us back a few hours before Elon Musk’s tweet (published Thursday, May 13th at 12:20 am in France, Wednesday, May 12th afternoon in California). In the morning, Reuters released a report showing that the automaker had applied to join the U.S. renewable fuel loan program.
Since 2005, a federal program to encourage the country to switch to renewable fuels has created a credit market (e.g. carbon credits) that rewards those involved in this ecological transition. Until then they were producers of biofuels, but under the administration of Biden the project to integrate electricity actors who generate their energy through environmentally friendly plants is being discussed.
Put all odds on his side
Tesla would be among the first eight companies to apply to expand the Renewable Fuel Standard (RFS) program. “The market generated around 18 billion loans in 2020 and is currently dominated by ethanol manufacturers,” writes Reuters.
For President Biden, a move in favor of integrating power generators would cause problems with the biofuel companies. A conflict of interest would arise if Tesla endorses electricity and rejects biomass fuels as a solution to the ecological transition.
If the negotiations confirm that Tesla’s request is being discussed, it is clear that the manufacturer must actively seek a way to put all odds on its side. Start by moving away from sensitive topics. Bitcoin first.
Like the carbon credits that Tesla sold to thermal car manufacturers, the renewable fuel credits would enable it to generate a new form of profit for the next several years. Circumstances this month in May have never been so favorable: Last week, Stellantis (the group that emerged from the merger of PSA and FCA) announced that it would stop buying carbon credits from Tesla.
With net income of $ 438 million, including $ 500 million revenue from carbon credits, Tesla would have lost $ 62 million if it hadn’t 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 drives.
Of course, Tesla already sees the end of the tunnel in terms of economic equilibrium. Profitability will soon be achieved solely through car sales. However, in order to keep investing (especially in autonomous cars, new batteries, etc.) the brand needs to protect its rear end.
To enter this new market with 18 billion in loans granted by the federal government, Tesla announced in the voice of one of its executives that all of its compressors will be powered by renewable energy starting this year. A promise that the manufacturer has been repeating for nine years. But their economic interests have never been more important.