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Elon Musk’s Tesla suspends vehicle purchase using Bitcoin due to climate concerns

Tesla has suspended vehicle purchases using bitcoin due to climate change concerns, its CEO Elon Musk said in a tweet.

Bitcoin fell by more than 10% after the tweet, while Tesla shares also dipped.

Tesla’s announcement in March that it would accept the cryptocurrency was met with an outcry from some environmentalists and investors.




The electric carmaker had in February revealed it had bought $1.5 billion of the world’s biggest digital currency.

But on Thursday, it backtracked on its previous comments.

“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,” Mr Musk wrote.



“Cryptocurrency is a good idea… but this cannot come at great cost to the environment.”

He also said the electric carmaker would not sell any of its bitcoin, and intends to use it for transactions as soon as mining shifts to using more sustainable energy.

Market analysts see the move as an attempt by Tesla to assuage the concerns of investors who are focused on climate change and sustainability.

BITCOIN EMISSIONS

Bitcoin is created by miners using high-powered computers to compete against each other to solve complex mathematical puzzles.

It is an energy-intensive process that often relies on electricity generated with fossil fuels, particularly coal.

The dominance of Chinese bitcoin miners and lack of motivation to switch from cheap fossil fuels to more expensive renewable energy sources could mean there are few quick solutions to the emissions concerns over bitcoin.

China accounts for more than 75% of bitcoin mining around the world, according to recent research. The cryptocurrency’s carbon footprint is as large as one of China’s ten largest cities, the study found.




That is because those bitcoin miners tend to use electricity produced with fossil fuels, primarily coal, for most of the year, only shifting to renewable energy, mostly hydropower, during the rainy summer months.