The 2024 – and, hopefully, the 2025 – cryptocurrency bull market is appearing increasingly likely to, along with Bitcoin’s (BTC) stellar performance, bring back another development from 2021: Tesla’s (NASDAQ: TSLA) acceptance of BTC payments.
Specifically, Elon Musk’s electric vehicle (EV) maker made its initial investment in the world’s premier cryptocurrency in January 2021 and announced it would begin accepting it as payment in March of the same year but reneged just one month later.
At the time, the South African-Canadian-American billionaire revealed Tesla would reconsider the decision once Bitcoin mining is more than 50% fueled by clean energy.
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In December 2024, such a situation not only emerged but turned decisive as BTC’s green energy share exceeded 56%.
Why Tesla is unlikely to reconsider Bitcoin payments over green energy
In the current climate of BTC aiming for new all-time highs (ATH) – despite the late December downturn – and multiple companies benefitting from investing in or owning the cryptocurrency, Tesla’s return to digital assets transaction could help its already-strong rally.
Still, it remains uncertain if Elon Musk will truly reconsider Bitcoin payments at this stage. Indeed, data retrieved from WooCharts on December 30 reveals that the coin crossed the 50% threshold already in 2022.
Furthermore, despite what its industry might suggest, there is room for doubt about the actual energy sustainability of Tesla Motors itself.
Despite the vehicles themselves being ‘green’ in the sense they don’t burn fossil fuels, many skeptics have made the argument that EVs can only be as green as global electricity production is.
Indeed, data from the International Energy Agency (IEA) reveals that by 2023, fossil fuels accounted for 49.2% of electricity production in Organisation for Economic Co-operation and Development (OECD) countries.
If recent trends continued, the share could have decreased to between 45% and 49%, but it could have also remained level or even slightly increased by press time. Furthermore, it is worth pointing out that Russia, China, India, as well as most Asian, South American, and African countries, are not part of the OECD.
Finally, some critics have cast doubt on the actual ‘greenness’ of the EV industry as a whole – and, thus, on Tesla Motors itself – due to its use of lithium batteries. Lithium mining is notoriously ‘dirty’ with 2024 technologies and is generally confined to remote and desert areas.
The potential damage from the extraction of the mineral is highlighted in a 2024 study published in Nature that describes the risks to Serbia’s water supply and agricultural land that would emerge should Rio Tinto’s (ASX: RIO) project Jadar be set into motion.
What could drive Tesla to reconsider Bitcoin payments in 2025
Ultimately, Tesla’s decision about Bitcoin transactions is more likely to be based on the cryptocurrency’s performance and the Trump administration’s policy approach toward digital assets.
While some firms – Michael Saylor’s MicroStrategy (NASDAQ: MSTR) being the prime example) – they have continued investing in Bitcoin, but similar activity has somewhat died down as BTC began facing late December headwinds.
Indeed, after experiencing a remarkable climb from the range between $67,000 and $67,000 at the start of November to ATH above $108,000 in mid-December, Bitcoin experienced something of a plunge in more recent weeks and is trading at $93,574 at press time on the penultimate day of the year.
Next year could, however, bring a significant resurgence for the Bitcoin rally as, on the one hand, many notable analysts believe the bull market will persist, and on the other, as the incoming U.S. administration – an administration Elon Musk’s will play a part in – is expected to be cryptocurrency-friendly.
Featured image via Shutterstock
