Musk announced the launch of Tesla’s own insurance companyAugust 8, 2020
Tesla Insurance will start operating in some states later this year. The company will sell insurance for Tesla cars, calculating the personal cost of the service for each driver, based on the data transmitted to the company by his car – from mileage, frequency and time of trips to driving style. Elon Musk is confident that the new business will become a serious new source of revenue for Tesla. Potentially, the service will immediately receive hundreds of thousands of customers – Tesla owners in the United States.
For years, drivers have complained about Tesla’s high electric car insurance rates, mainly due to the higher cost of car repairs. The company first started talking about its own auto insurance service in April last year, and a few months later tried to launch the service in California.
However, after a few hours the site was turned off due to the “algorithm update”, and the cost of insurance for those who managed to get a payment for their cars was not always lower than that of third-party companies, as the head of Tesla promised. As a result, Musk admitted that the experiment was not fully thought out and calls it “version 0.9”.
Now owners of Tesla electric vehicles are promised a full version of auto insurance, according to BI.
“We’re building something big – sort of a big insurance company,” Musk told investors at a recent meeting where he delighted them with a fourth straight profitable quarter, the most successful in the company’s history.
“Ultimately we want Tesla Insurance to be able to use the data collected by the car in the driver profile to understand the correlations and the likelihood of an accident and estimate the monthly premium for that customer,” he explained.
Obviously, the company knows everything there is to know about the owners of its cars by stuffing the car with various sensors. And on the basis of this data, collected around the clock from the first day of operation of the machine, it is able to accurately predict the likelihood of any problems – from accidents to battery drowning and mechanical damage. None of the insurance companies in the world today have anything like this in their assets and will never appear, because their business was built on different principles for assessing and calculating insurance premiums.
Musk’s new initiative is likely to revolutionize the auto insurance market – as the fleet of connected cars expands, their insurance will become the business of automakers, not third-party insurance companies. Whoever has data on the actual operating parameters of the machines will make money on them.
Musk has already invited actuaries to work for the company and said that the first insurance plans will become available in some states, most likely at the end of the year.
In addition, he announced the need to develop a cheaper version of the electric vehicle.
“It’s important to make the car affordable,” he told investors. “I don’t think we’ll succeed in our mission if we don’t make the machines available.” This is what worries me most about our development – that our machines are not affordable enough. We have to fix this. “
However, Musk did not give any specific promises, only mentioned that a budget electric car could be compact.
So far, there have been no leaks about Tesla’s development of a new even more budgetary model than the Model 3. It cannot be ruled out that this task will be largely achieved with a new type of battery, which Musk intends to present in September. In any case, Musk currently does not have the resources to launch another Tesla model into production – the company is building a new Gigafactory in Berlin, starting construction of a Gigafactory in Austin, completing a plant in Shanghai, preparing to launch industrial lines for the production of Semi trucks, Cybertruck pickups and its own batteries. So, if new models appear, then in about a year, when the current tasks will be generally solved.
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