Reducing insurance rates also reflects Tesla’s confidence in its products and technologies.
Good news came one after another, Tesla shares rose more than 3% in the local time on the 29th. After weeks of weakness, Tesla shares have finally rebounded slightly.
At the local time on the 28th, Tesla announced the launch of its insurance business, claiming that insurance costs will be “30% cheaper than the competition”, and will start in California and gradually spread to other markets within the next year.
Next, sec.Wedbush analyst Dan Ives released a new report on the 29th, introducing Tesla model3 European demand backlog situation. According to the report, In the next few weeks, Tesla will have a shipment of products to Europe and deliver it to European customers. Europe’s demand for Model 3 remains strong. With Tesla’s Shanghai Super Factory (Gigafactory 3) construction is nearing completion and will be put into production in the fourth quarter, raising investors Confidence in Tesla’s market in Europe and China.
In the teleconference after the release of Tesla’s Q1 earnings report in April this year, Musk revealed the progress of Tesla’s insurance business, saying that it will be launched next month. After three months of delay, Tesla officially announced its own insurance business yesterday.
Tesla has been in the insurance business for a long time. It launched the Insure My Tesla program in 2016 to provide a customized insurance plan for Tesla vehicles and is underwritten by a large insurance company that cooperates with Tesla. It can be seen as the first step in Tesla’s self-operated insurance business.
Last year, Tesla hired Alex Tsetsenekos to take charge of Tesla’s insurance business. Alex Tsetsenekos has experience in several large US insurance companies and is a former senior manager of Liberty Mutual, a partner of Tesla’s Insure My Tesla business.
The conflict between Tesla and the traditional car insurance provider has increased its determination to do self-insurance. It had a dispute with the car insurance provider AAA in 2017. AAA said that based on the analysis of the Highway Loss Data Institute and other data sources, compared to vehicles of the same class, Model The S and Model X models claim unusually high frequency and cost, and the company decided to increase Tesla’s premium by 30%.
Tesla does not agree with this assessment method, saying that the analysis of AAA is flawed and does not reflect the real situation – the US Highway Loss Data Institute chose the wrong comparison object for the Tesla model, if Comparing Tesla with cars of the same class, the data on the accidents obtained will not be so negative, and the cost will not be as high as the price of AAA.
Muske believes that the traditional car insurance scheme is outdated and cannot adapt to the upcoming era of autonomous driving. According to data from the National Highway Traffic Safety Administration (NHTSA), self-driving cars will reduce the number of accidents by more than 90%. Based on the above reasons, Tesla insists on launching its own insurance business. hopes to use its internal data advantages to reduce consumer insurance costs.
Compared with traditional insurance, Tesla’s self-insurance has a clear advantage. After the original price drops by 20% to 30%, the insurance price of most car owners will be between 120-200 dollars. At the same time, the cost can be adjusted according to the owner’s experience. When the vehicle chooses the more active safety function, the insurance price will have a corresponding discount. According to the new plan, the owner can also cancel the insurance at any time without any hidden fees.
Of course, lowering the premium rate, in addition to reducing the burden on the owner, also reflects Tesla’s confidence in its own products and autonomous driving technology.