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Auto Industry’s Race to Crypto: First Tesla, Now Ferrari, When Lambo?

Published October 16, 2023 12:42 PM
Teuta Franjkovic
Published October 16, 2023 12:42 PM

Key Takeaways

  • Ferrari recently embraced cryptocurrency payments in response to affluent customer requests.
  • Tesla’s rollercoaster ride with BTC payments, suspension, and environmental commitments changed the crypto narrative.
  • Ferrari’s commitment to carbon neutrality by 2030 and crypto plans hint at a luxury brand’s sustainability efforts despite PoW concerns.

Since Bitcoin and other cryptocurrencies are too volatile for use in trade, the vast majority of blue-chip firms have shied away from them. The use of cryptocurrencies as a form of payment has also been hampered by patchy regulation and excessive energy consumption, but it seems this habit is slowly but surely fading.

Following requests from its affluent customers, Ferrari is the last of the carmakers that has decided to accept  cryptocurrency payments.

From Bitcoin to Ferraris: The Evolution of Crypto Car

Between 2021 and 2023, both the price of Bitcoin and its purchase power fell after a series of market crashes and spiraling real-world inflation saw investors take their money elsewhere. In 2021, you needed a Bitcoin to purchase a Tesla. And while Tesla cars didn’t change their price, Bitcoin did.

An average Tesla car price hovers in a bracket that many white-collar workers deem affordable. However, when talking about Ferrari – there is no such thing as an entry-level.

The Roma is the least costly Ferrari  currently on sale, with a base price of roughly $225,000 before options, and like any Ferrari, many choices are available. Most Expensive: The SF90 Stradale is a display of Ferrari’s performance prowess.

However, big carmakers, such as BMW, implemented blockchain technology for their ongoing business processes a long time ago.

Since 2018, the BMW team has employed decentralized technologies . Their initial technology implementation secured moral behavior in its cobalt supply chain. The company ensures that the cobalt is sourced by vendors from the conflict-torn Democratic Republic of the Congo, where some suppliers are said to have employed children as mineworkers.

Many automakers  have seen an opportunity to expand their consumer base as cryptocurrencies like Bitcoin gain popularity. As a result, plenty of car dealerships now accept cryptocurrency payments from their clients. Still, because of BTC volatility, it’s not 1 BTC for a Tesla anymore – but you can still purchase a nice Nissan instead.

1 BTC = 1 Tesla

Elon Musk, the CEO of Tesla, promised to bring back the Bitcoin payment option after miners reached a 50% clean energy threshold when the company discontinued Bitcoin payments in 2021 due to environmental concerns.

In the meantime, Bitcoin emissions have decreased by up to 37.5% from their high in mid-2021, and according to some researchers, more than half of the electricity utilised for Bitcoin mining globally comes from renewable energy sources. 

However, the massive infrastructural initiatives that are already in the works promise to fundamentally alter the ratio of clean to fossil fuel-generated electricity in the future. Musk might eventually be compelled to fulfil his earlier promise.

According to the Ferrari, the company is committed  to achieving carbon neutrality by 2030 across its entire value chain, addressing direct and indirect GHG emissions and focusing on energy and materials, in addition to its electrification journey.

Enrico Galliera, Ferrari’s Chief Marketing and Commercial Officer, revealed  that the company had made efforts to lower its carbon footprint by introducing new technologies and using more renewable energy sources.

Our target to reach for carbon neutrality by 2030 along our whole value chain is absolutely confirmed,” he said.

As many of its clients have invested in cryptocurrencies, Ferrari claimed that the decision was made in response to requests from the market and dealers.

Some of these investors are young people who have made their fortunes by investing in cryptocurrencies, he said. Some other investors are more established and wish to diversify their investments.

Bitcoin continues to face criticism for its energy-intensive mining, even if some cryptocurrencies, like the second-largest, ether, have improved their energy efficiency.

In the first half of this year, Ferrari shipped more than 1,800 vehicles  to its Americas region, which includes the United States.

Galliera omitted to mention how many automobiles Ferrari anticipated selling using cryptocurrency. He claimed that even though the company’s order pipeline was robust and fully committed through 2025, it still wanted to explore this burgeoning market.

This will enable us to interact with individuals who may not typically be our clientele but may yet buy a Ferrari, he claimed.

The Italian firm intends to expand the cryptocurrency program to Europe by the first quarter of next year and eventually to other places where cryptocurrency is accepted legally. In 2022, the company sold 13,200 automobiles, with prices starting at over 200,000 euros ($211,000) and going as high as 2 million dollars.

Ferrari’s largest market , accounting for 46% of its total vehicle exports in the first half of this year, is Europe, the Middle East, and Africa (EMEA).

Driven to Acceptance – Buying Car With Crypto Pro’s And Con’s

Using cryptocurrencies to buy a car enables the buyer to sell it later on without having to pay capital gains taxes. By doing this, the buyer can avoid paying a fee to convert cryptocurrency back into a preferred currency.

Also, the chance to leverage Bitcoin assets or income to purchase a real-world asset is an exciting one for cryptocurrency owners. Most Bitcoin users are accustomed to tracking the ups and downs of their assets as the currency exchanges happen quickly.

A traditional payment method like a bank transfer, financing, or credit card is likewise quick and easy, but cryptocurrency adds an extra layer of protection because it is anonymous.

However, the volatility of the Bitcoin market is well-known. Making the right decisions on when to enter and leave the market can be challenging.

When Lambo?

In the Bitcoin and cryptocurrency communities, the phrase “when Lambo” describes the moment when someone achieves financial success enough to purchase a Lamborghini sports car. The phrase is frequently employed as a metric for success or riches, and many people in the industry may have it as a goal.

Although there is no defined sum of money that one must own to be deemed a “When Lambo,” it is generally agreed that it is a very high sum. “When Lambo” might be only a fantasy for some people, but it might also be a very real possibility.

A Lamborghini is a high-end Italian car that costs between $200,000 and $500,000. Early cryptocurrency investors who bought one  with their profitable crypto investment made it their status symbol.

When a crypto investor asks, “When Lambo?” they are asking when his investments will be profitable enough for him to buy a Lamborghini.

Ferrari, therefore, chose BitPay as its payment processor in order to make sure that the virtual currencies are not generated via illegal activity and are not intended to be used to dodge taxes or to launder the proceeds of crime.

The bulk of Ferrari’s American dealers have already agreed to this crypto plan.

Be it as it may, although Ferrari is a world-famous brand, its acceptance of Bitcoin probably won’t make too much of an impact on BTC’s price or the carmaker sales. Still, it is good to see traditional company owners accepting crypto as a legal way of payment.

And as Galliera said, “I am confident others will join soon.”

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