The image above has been circulating on social media. I laughed the first time I saw it because it is genius. As a customer, you can pay for your car using either USD or BTC. But when it comes to refunds, Tesla reserves the right to refund you in either Bitcoin or U.S. Dollars. Why would anyone pay in Bitcoin? Even if you acquired the coins illegally, it’s still not worth it.
Risk 1: the customer gets a car that they may or may not love
Risk 2: the customer is giving up an asset that has a chance to appreciate for a liability that’s more likely to depreciate (yea yea, but robotaxis aren’t here yet)
Risk 3: the customer absorbs the pain that comes with any fluctuation in the price of Bitcoin. If it spikes, Tesla refunds in USD and pockets the appreciation. If it tanks, Tesla refunds in BTC. Tesla is also in charge of the refund deadline.
There’s also the pain the customer will feel knowing that they could’ve bought two Teslas if only they held on to their BTC for a little longer. The enjoyment from getting a new vehicle will wear off in about two weeks, but the pain of missing out on a 100% spike in Bitcoin will last much longer.
And finally, taxes. Imagine owing capital gains tax on top of sales tax? When you buy something in Bitcoin, it’s as if you’re liquidating an asset. In this case, you’ll pay whatever capital gains tax applies to the Bitcoin you liquidated on top of sales taxes for your purchase.
However you cut it, this is a horrible deal for customers. I’m by no means a bitcoin bull. I still don’t know what to think about the alternative digital asset. But that doesn’t make this deal any less terrible.