Tesla earlier this month announced to its users that the company has bought bitcoins worth of $1.5 billion. The company also announced its decision to accept bitcoins as a payment method for its car products. The important thing to notice here is that the value of bitcoins surged immediately as the Tesla took this decision. The effective trading value of bitcoins has now passed the $1 trillion mark. The company Tesla and its CEO Elon Musk are being credited for this increase in the bitcoins value.
A LITTLE BIT ABOUT TESLA AND ITS HISTORY
Tesla is now a leading car company in the world thanks to the innovation and creativity in the designs and the structure of its models brought in by its makers. It is an American company which manufactures electric cars and clean energy. Initially it was called ‘Tesla motors’ and was founded in 2003 by entrepreneurs Martin Eberhard and Marc Tarpenning. Martin Eberhard was the CEO whereas Marc Tarpenning was the CFO of the company back then. The funds for the establishment of the company came from a plethora of sources, the maximum of which came from Elon Musk, who is now the richest person on this planet. According to Forbes’ estimates, he is now worth $182.9 billion, which makes him the wealthiest man in the world. Elon Musk contributed around 30 million dollars for the establishment of this new venture and has now become the chairman of the very same company starting 2004. At that time, he was the biggest shareholder of the company ‘PayPal’.
In the year 2008, Tesla released its very first electric called ‘Tesla roadster’ (first generation). The efficiency of the car (as recorded in September 2008) was 20 MPGe (2.0 L/100 km). It was designed on taking lotus elise chassis into consideration. The vehicle’s motor was powered by lithium cells which could be charged from a regular electric outlet and the cost of the car was around $109,000 which made it an item that only rich could afford to have. Only 1,650 of the vehicles were sold worldwide by the end of April 2011.
“The Roadster accomplished everything we asked of it–it served as a catalyst for the EV industry, and it has allowed us to refine electric technology for future, and more affordable EVs,” explains Tesla spokesperson Khobi Brooklyn in an email to Fast Company.
Whatever may be the case, The Tesla roadster (first generation) was still discontinued in 2012 as they were trying to focus more on the model S that was going to be released in the upcoming years.
In late 2007, Martin Eberhard resigned from the post of the CEO of the company, however he still remained as one of the shareholders of the company. Later in 2008, the CFO: Marc Tarpenning resigned as well and that’s when Elon Musk took over to be the CEO of the company.
June 22, 2012 Tesla model S, which was an all-electric five-door liftback sedan, was introduced. It had amazing features, came with three different battery options, high acceleration levels, extra storage in front and later on, a feature of semiautonomous driving was added in the year 2014.
In the year 2012, various stations were built for tesla owners to help them charge their batteries in America and Europe. These were called the ‘superchargers’
In 2015, model X was introduced. It has an Acceleration of 3.8 s 0-60 mph with Top Speed as 155 mph, Drag Coefficient of 0.25 Cd, Weight 5,185 lb, Powertrain Dual Motor with Supercharging Max250 kW.
In the year 2016, Tesla merged with solar panel company ‘SolarCity’. SolarCity is a company that sells and develops solar panels and solar roof tiles. In 2017, the company changed its name to Tesla, Inc. to clarify that it no longer sold just cars.
Tesla began selling its model 3 in the year 2017.It’s features include Battery Long Range with an acceleration of 3.1s 0-60 mph, Range 315 miles and Drive Dual Motor with a Seating of 5 Adults.
In August, 2018 Elon Musk started tweeting about taking the company private. Later in the next month his tweets were alleged “false and misleading” by the U.S. Securities and Exchange Commission (SEC). Afterwards it was known that Tesla’s board rejected the the U.S. Securities and Exchange Commission (SEC)’s proposal because Elon Musk had threatened to resign. Later on a different, a new harsher deal was accepted which required Musk to step down from the post of chairman for at least three years. However, he was allowed to remain as the CEO of the company.
On March 13, 2020, Tesla released its model Y is an electric compact crossover utility vehicle (CUV) which was capable of running in rain, snow, mud and off-road.
Tesla is now leading not because it manufactures a number of great luxurious cars that are in everyone’s tip of tongue, but because the makers always try to think of the future when making these designs, they communicate their ideas well with their followers like Elon Musk does in his tweets.
And it was known that Tesla’s stock surged by more than 700% in 2020, making it the world’s most valuable automaker by far.
NOW WHY DID THE COMPANY DECIDE TO INVEST IN BITCOINS?
Well the main reason that the company has given to its users is that the bitcoins provide more flexibility to further diversify and maximize returns on their cash. Also, recently in a response tweet to Bloomberg, the CEO of the company indirectly called cash “dumb”. He basically called some bitcoins “a Less Dumb Form of Liquidity than Cash”. Two weeks ago, he also added the hashtag #bitcoin to his twitter bio, helping the crypto currency gain more attention in the market. Immediately after this move, the price value of the crypto currency went up by almost 20%.
WHAT EXACTLY ARE BITCOINS?
Bitcoins basically are a new sort of payment method. It is a cryptocurrency invented by a group of people going by the name of Satoshi Nakamoto. It was invented in 2008. In India, currently, its value has gone upto Rs. 41,72,322.09.
THE FUTURE OF THIS DECISION BY THE TESLA COMPANY
As much as people are seeing this as a “publicity stunt” by the Tesla company, it sure has involved a huge risk in buying bitcoins worth of $1.5 billion. We can not possibly forget the fact of this asset being greatly volatile in nature involving sharp price volatility. Let’s see what the future holds for both the companies.