Musk says Tesla’s repair costs are falling as OEM’s insurance arm grows in popularity

Tesla CEO Elon Musk said earlier this week in the company’s fourth-quarter 2022 earnings call that Tesla’s crash repairs are starting to get cheaper, and that purchase prices are now coming down.

Musk said the reduction in repair costs is due to Tesla providing auto insurance and tweaking the design of the car and its software.

“…Tesla operating our car insurance at a competitive rate will encourage other auto insurers to offer Tesla a better rate, improving the total cost or cost of insurance. The effect is bigger than you think, GEICO in the world has to compete with Tesla, and you can’t charge Tesla with exorbitant insurance, so don’t use Tesla insurance.”

Tesla Insurance was first offered in Arizona, California, Illinois, Ohio and Texas and expanded to Oregon, Virginia and Colorado last year. Also available in Maryland, Minnesota, Nevada, and Utah. According to CFO Zach Kirkhorn, as of December 31, 2022, the annual premium rate for OEM insurance was $300 million.

“We’re growing 20% ​​quarter-over-quarter, so we’re growing at a faster pace than the automotive business,” he said. “And in the states in which we operate, on average, 17% of customers in the states use Tesla insurance products. “The numbers continue to grow, and we see that most adoption occurs at the time a new vehicle is delivered, when setting up insurance for the first time, rather than going back and switching when the insurance is already in place.”

Discussing the repair, Musk said: Fully autonomous driving intelligence for active safety and active collision avoidance.

“Most accidents are really small. They’re like a broken fender or a scratch on the side of a car…but we’ve actually repaired someone’s car very quickly and efficiently.” We’re working out how to put it back in their hands… …these improvements actually apply to older cars.”

Tesla was accused last year in California of falsely promoting Autopilot and fully autonomous Advanced Driver Assistance Systems (ADAS) features by pretending to advertise the FSD as being fully autonomous. . The National Highway Traffic Safety Administration (NHTSA) is also investigating deaths allegedly related to Autopilot, FSD, and other of his ADAS features.

Musk added that a slight design change to the bumper would “improve the logistics of delivering the spare parts needed for crash repairs” and reduce costs.

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Main image credit: Tesla

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