Tesla Inc. has hinted for a while that they have ambitions that are larger than just the automotive and clean-energy market. Now, founder Elon Musk has revealed that the next industry Tesla is looking to branch out into is insurance.
That’s right, the Tesla CEO spoke during a recent earnings call saying that the company is in the process of creating its own line of insurance products. This is really good news for Tesla owners who have been forced to pay obscene amounts to insure their vehicles.
Expensive insurance rates for Tesla owners has long plagued the company. It completely undermines the company’s claim that Tesla’s are some of the safest vehicles on the market. Knowing that, it makes sense that Tesla is interested in helping to bring insurance costs down for their customers. While Tesla’s are rather affordable, even the cheapest model is out of reach for many simply because of the incredibly high insurance premiums.
Musk recently gave some details about what the Tesla insurance product will look like. “It will be much more compelling than anything else out there,” said Musk. “We have direct knowledge of the risk profile of customers, and based on the car, and then if they want to buy a Tesla insurance, they would have to agree to not drive the car in a crazy way. Or they can, but then their insurance rates are higher.”
This isn’t the first time Tesla has attempted to mitigate the astronomical costs of insurance for their vehicles. Those who follow this space will remember back to 2017 when Telsa partnered with Liberty Mutual Insurance for their InsureMyTesla product. While somewhat successful, the quotes offered by Liberty were still extremely high.
Will an insurance product be good news for Tesla? Maybe. Some worry that it will be a distraction from manufacturing issues that Tesla still needs to navigate. On paper it does seem like a good idea. By offering more reasonable insurance rates more people will be able to afford Teslas. Will that be enough to truly help the company? Only time will tell.