Elon Musk, Tesla’s CEO, and insurance companies hold divergent perspectives on managing claims regarding damaged Teslas. Musk asserts that the auto manufacturer is strategizing. design and software changes To aid in reducing the expense of repairs after an accident.
Conversely, insurance firms are more inclined to consider vehicles – particularly those with lower mileage – as total losses. Model Y – After accidents, they look at Electric Vehicles (EVs) as overly costly to fix and therefore, they dispatch them to salvage auctions. Reuters Musk reportedly asserted that in some instances, premiums from third-party insurance providers were excessively high.
In response to this, Tesla’s internal insurance section has been lobbying insurance providers by proposing to lower the rates for Tesla owners. Furthermore, Musk intends to decrease the expense of fixing a Tesla involved in a crash through the mentioned design modifications.
“Musk highlighted the significant effect of minor alterations to the design of the bumper or the provision of necessary spare parts for accident repair on the overall cost. He pointed out that most accidents result in minor damages, such as a cracked fender or a scuffed car side.”
Tesla owners are very fond of their vehicles, however, a less frequently addressed subject is the substantial costs of repairs. This is not a recent concern. Several years back, numerous owners confronted the same predicament. long repair wait times at Tesla service centers Due to a shortage of mechanics and technicians trained specifically in Tesla repairs, and an insufficient number of repair centers, two crucial issues emerged.
Musk committed to address these problems, showing significant progress. Even with the increased maintenance expenses, the desire for Tesla’s vehicles has continued to rise.
Reuters After examining more than 120 completely damaged Model Ys, it was found that most had traveled less than 10,000 miles, and their retail prices varied from $60,000 to more than $80,000. It doesn’t make financial sense for insurance companies to repair these vehicles once the projected repair cost is calculated.
For instance, a particular Model Y that had damage at the front was initially sold for $61,388, but the estimated cost for repairing it was $50,388. This situation revealed a potential opportunity that Tesla could exploit.
Its in-house insurance affiliate In the summer of 2019, a new initiative was launched which claimed to provide rates 30% lower than its competitors. It seems to be making a significant impact. During a recent earnings discussion, the CFO of Tesla revealed that by the end of 2022, Tesla Insurance was dealing in annual premiums worth $300 million, with a steady growth rate of 20% per quarter.
“He further added that this is growing at a quicker rate than our vehicle business.”
