The news reverberated strongly across the world of not just finance and auto industry, but through the mainstream public as well – Tesla Motors is now accepting BTC as a means of payment. From now on, buyers of Tesla models can pay for them in BTC tokens. The precise number of users that want to do the same is still likely incredibly low. Even the most affordable Tesla car would still end up being somewhere around 40,000 USD and this is a massive amount of money for most bitcoin holders.
Other Tesla models would cost even more. So, it is not likely that crypto enthusiasts are lining up around the block to buy their brand new Tesla model. However, the benefits of this decision are numerous and will leave a positive impact on the company almost for sure. In fact, most analysts believe that Elon Musk conducted a perfect marketing maneuver that has literally nothing to do with cryptocurrencies or any other cutting-edge technology. Instead, it is simply exploited perfectly as an opening in pop culture and piggybacked on it in a truly spectacular manner when it comes to promotional undertakings.
Promise Made, Promise Kept
Tesla Motors aims to be a company unlike any other. That includes making bold claims and then seeing them through. In early February, the business made headlines when it stated that it will start taking BTC payments for their vehicles. Some were dismissive of this idea, noting that other companies tried to dabble with bitcoin payments but then quietly dropped the whole deal at some future point.
However, Tesla and Elon Musk did deliver on this particular pledge and now anyone can buy a car from this manufacturer with the same cryptocurrency as easily as anyone can do it with USD. Not only that, but Musk also explained what the company is planning to do with those freshly-generated BTC. It will not convert them into fiat but keep the same tokens as a part of its current BTC holdings. This also goes against the grain of the present model of doing traditional business while accepting crypto payments.
Crypto into Fiat
The practice of merchants accepting digital currencies is not that unusual in the domain of retail services. For several years, companies decided to take this route both because it provided them with an additional influx of funds (even though small) but also because it offered them some free exposition. Here, the marketing effect was even back then the more relevant aspect of this decision. However, even those who did accept crypto usually used third-party services to immediately change the same digital fund into USD or some other fiat currency.
That move voice is completely understandable, having in mind the huge level of volatility of digital currencies, as well as the fact that any B2B transaction that this business might have would likely not be available in the crypto form. Because of that many merchants, like esports players and some other early adopters, simply used crypto just as an intermediary. There is little doubt that most of them are now regretting that fact, especially if they did possess any amount of BTC in, for example, 2018, only to see it exploding in value 3 years later. This is a move that Tesla wants to avoid altogether, so it will hold the digital tokens it gets for its products.
Despite many problematic and controversial aspects of Elon Musk’s approach to business, it appears that he had the company squarely behind cryptocurrencies. So far, Tesla Motors invested over 1.5 billion USD into bitcoin. the coffers of the company will now get even more digital tokens thanks to the same decision. Even with the present pandemic and its financial fallout, the target audience for Tesla automobiles are likely doing better than ever before. First of all, as an expensive purchase even before the pandemic, these vehicles have not lost their appeal to the more affluent members of the US and global society, and especially those who are working actively in the technology industries.
Chances are these individuals actually managed to profit or at least accumulate capital during the pandemic lockdown. Almost all of them easily translated their jobs and business activities to home offices, while their usual spending went down because of the closed borders and other restrictions. Furthermore, the unbalanced nature of the US stimulus package program means that many of the same individuals and households will receive tracks that are far beyond the 1,400 USD the most Americans can expect in their mailboxes. Instead, a lot of them will get up to 10,000 USD in this form. ma a lot of those fans will go directly to purchases that are basically luxury lifestyle editions. Tesla Motors vehicle perfectly fits into that category for the same demographic. It is reasonable to expect that the company will make a killing thanks to this combination of positive factors and an enormous amount of free publicity.
Despite the success of this move, some analysts are pointing out that Tesla Motors actually is trying to divert attention from a range of bad news the company got in the previous period. There were murmurs coming from China that are not very good for the company. They are pointing to the possibility of the Chinese government and its regulatory bodies taking Tesla vehicles and testing them drastically for safety and quality issues. The results of those tests could be quite negative and unpleasant not just for Elon Musk but for the company’s stock as well.
In the US, some government officials also decided to criticize the autopilot feature inside of the Tesla models. Under the right circumstances, that feature could present a huge issue in traffic safety occurrences as well as the legal battles that come after that. So, shining a spotlight on those topics is also a win-win scenario for Musk. However, there is no denying that taking on bitcoin is a brilliant marketing move nevertheless.