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Insurance to be ‘major product’ of Tesla, suggests Elon Musk

6th February 2020 - Author: Charlie Wood

Elon Musk, the Chief Executive Officer of US electric vehicle manufacturer Tesla, believes insurance is going to become a major product of the company over time, and has laid down plans to offer a ride-hailing app with its own driver cover in the near future.

“The amount of money that people spend on car insurance is like a remarkably big percentage of the cost of a car,” said Musk during a recent earnings call.

“A lot of that insurance cost is just because the insurance companies don’t have good information about the drivers.”

Tesla, which already offers insurance to drivers based in California, is perfectly positioned to leverage the valuable, real-time information its  sophisticated vehicles produces. Such cover would also supposedly utilise the forthcoming ‘Autopilot’ mode, which Musk says will reduce the insurance costs as well as the probability of injury.

During Tesla’s Q4 earnings call, Musk also reiterated the idea of creating a ride-hailing app in which drivers are covered by the company’s in-house insurance. The move, which would rival similar services offered by well-known firms such as Uber and Lyft, would represent a step towards Musk’s much-touted, fully-automated ‘robotaxi’ fleet.

“I think it will probably make sense to enable car sharing in advance of the kind of robotaxi fleet because the car sharing can be done before Full Self-Driving is approved by regulators,” explained Musk.

“So it’s probably something that we would enable before a sort of robotaxi fleet is enabled.”

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