Tesla Recovers Premarket After Dropping Bitcoin As Means To Buy Its Vehicles

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Investing.com – Tesla (NASDAQ:TSLA) shares erased their losses premarket and were up 1% in Thursday’s volatile trade after its CEO Elon Musk said consumers could no longer use Bitcoin to buy its vehicles.

At one point, the shares were down 1.5%.

“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,” Musk tweeted while explaining his rationale for the decision.

Musk’s U-turn caught everyone by surprise given that Tesla and he, in his personal capacity, had both invested in the cryptocurrency.

The investment had led to a temporary surge in Tesla’s share price as well as value of Bitcoin.

Tesla had invested $1.5 billion in February, which it partly liquidated later.   

Musk added the company is looking at cryptocurrencies that use less than 1% of Bitcoin’s energy and would also look at using the biggest crypto for transactions as soon as its mining transitions to a more sustainable energy.

Tesla has been facing mounting problems elsewhere too, particularly in China where it faces social media backlash over claims of faulty brakes in its vehicles.

A Reuters report Tuesday said the company has dropped plans to expand capacity in China, its largest market outside the U.S.

The report said Tesla has halted plans to buy land to expand its Shanghai plant and make it a global export hub. Tesla had earlier considered expanding exports of its China-made entry-level Model 3 to more markets, including the U.S.

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