- Tesla now accepts bitcoin as a form of payment for its cars.
- Bitcoin’s extreme volatility makes buying a car with the cryptocurrency a complicated process.
- Tesla says it won’t reimburse buyers who accidentally overpay for a car.
- See more stories on Insider’s business page.
Electric car buyers can now purchase a Tesla using bitcoin. However, despite Tesla CEO Elon Musk’s enthusiasm for the cryptocurrency, the transaction isn’t as simple as it may seem.
Tesla lays out just how complicated trading bitcoin for a new Model S, X, 3, or Y can be in a Bitcoin Payment Terms & Conditions document that’s linked on its payment page.
Rather than just typing in a credit card number and clicking a button, buyers need to use an outside platform to input the exact amount of bitcoin they’d like to send and the correct wallet address — a long string of numbers and letters — that Tesla provides. (Tesla also provides a QR code that can make things easier, but it says not all digital wallets support that.)
Judging by the multiple all-caps disclaimers in its terms and conditions, the carmaker appears to understand this can be tricky.
“YOU MUST EXERCISE CARE WHEN INPUTTING THE BITCOIN ADDRESS INTO THE RECIPIENT FIELD BECAUSE BITCOIN TRANSACTIONS CANNOT BE REVERSED. WE ARE NOT RESPONSIBLE FOR ANY FAILURE TO ACCURATELY INPUT THE ALPHANUMERIC CODE INTO THE RECIPIENT FIELD,” Tesla says.
Since bitcoin is a decentralized currency with no central authority, customers can’t just ask for a refund or cancel a transaction if they do something wrong. And Tesla makes it clear that it isn’t liable for any botched transactions in its terms.
“IF YOU INPUT THE BITCOIN ADDRESS INCORRECTLY, YOUR BITCOIN MAY BE IRRETRIEVABLY LOST OR DESTROYED,” Tesla says.
Bitcoin’s volatility also complicates things. Tesla provides a bitcoin-equivalent price at the time of purchase, and buyers need to complete the transaction within a specific timeframe or else that price expires and they need to start over.
Moreover, Tesla says customers aren’t entitled to be reimbursed if they accidentally overpay. If they underpay, however, they’ll need to fork over the outstanding balance.
“If you transmit more than the Bitcoin Price, you will not be entitled to reimbursement of the excess amount,” Tesla says.
When it comes to refunds, Tesla reserves the right to decide whether to reimburse buyers with bitcoin or US dollars. Given bitcoin’s massive swings, that means customers could lose out on huge gains if they buy a Tesla using crypto and then walk back the decision.
Tesla’s move to accept bitcoin as payment method comes after the company invested $1.5 billion in the currency in February. Both announcements sent the price of bitcoin soaring.