Chief Executive Elon Musk said on Wednesday said Tesla Inc will not accept anymore bitcoin for car purchases, citing long-brewing environmental concerns for a swift reversal in the company’s position on the cryptocurrency.
Bitcoin fell more than 10 percent after Musk tweeted his decision to suspend its use, less than two months after Tesla began accepting the world’s biggest digital currency for payment. Other cryptocurrencies, including ethereum, also fell before regaining some ground in Asia trade.
The use of bitcoin to buy Tesla’s electric vehicles had highlighted a dichotomy between Musk’s reputation as an environmentalist and the use of his popularity and stature as one of the world’s richest people to back cryptocurrencies.
Some Tesla investors, along with environmentalists, have been increasingly critical about the way bitcoin is “mined” using vast amounts of electricity generated with fossil fuels.
“Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment,” he tweeted. Tesla shares fell 1.25 percent after hours.
Tesla revealed in February it had bought $1.5 billion of bitcoin, before accepting it as payment for cars in March, driving a roughly 20 percent surge in the cryptocurrency.
Tesla would retain its bitcoin holdings with the plan to use the cryptocurrency as soon as mining transitions to more sustainable energy sources, Musk said.