Tesla insurance had been available in 11 states, but today Tesla has added another state to the list.
Tesla Insurance is now officially available in Minnesota, making it the 12th state in the U.S. to support Tesla's insurance initiative.
Tesla needs to apply and receive approval in each state so it's a slow and long process, but Tesla has been making good progress since it first added California in 2019.
Rate Increase for Some
Although Tesla Insurance usually offers lower rates, two states are about to see a significant rate increase. According to Coverager, a go-to source for insurance information, Tesla General Insurance, the carmaker's subsidiary insurance carrier, is requesting a 30% rate increase in Maryland and a 24.5% rate increase in Oregon. Tesla's insurance initially pegged rates at 30% less, meaning this move could remove the discount for safe drivers.
However, that might not be the case. Insurance premiums in those states have been on a steady rise. Tesla addressed the reasons behind the increases, "Based on competitor rate activity and the inflationary environment that has persisted since our initial submission, we are proposing to target a higher rate level than originally submitted. The revised target rate level is still well within competitor rate levels that have been on-leveled to their most recent indicated rate."
There are 1,508 policyholders in Maryland who got access to Tesla insurance in July. In addition, 937 drivers have gotten a policy with Tesla since it started in that state in April. Tesla Insurance is also available in Arizona, California, Colorado, Illinois, Nevada, Ohio, Texas, Utah, Virginia and now Minnesota.
The news comes while plans to expand Tesla insurance to Florida continue to be delayed. Originally, Tesla owners were told the company's insurance would be available on October 20, 2022. But, according to a letter posted on Reddit, the state was looking for more information from the company just before the launch. Tesla responded on November 10, and it seems the rates the company first believed it would be able to offer must increase for reasons similar to Oregon and Maryland. Tesla has just released an updated telematics model for some states, including Florida. That is the Safety Score tool.
It's the safety score that makes Tesla insurance unique. While companies charge higher premiums for luxury cars, Tesla has kept rates low by monitoring the driver's safety score. The program is looking for Forward Collision Warnings, Hard Braking, Aggressive Turning, Unsafe Following, Forced Autopilot Disengagement and now Late Night Driving. It combines the factors to provide an overall safety score, which reflects how much the Tesla driver is paying for insurance.
It's believed that even with the increases, Tesla will still be the most affordable provider as competition is raising rates. The real question may be which state will see similar hikes and when.
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Tesla's fourth quarter and 2022 earnings call with investors was mostly good news unless you were planning to drive a Cybertruck soon. While company executives eagerly jumped on every question asked by investors, there was a noticeable pause when a point-blank question was asked about Cybertruck's mid-year production date.
Elon Musk responded "um, we do expect production to start, I don't know, maybe sometime this summer. But I always like to try to downplay the start of production because the start of production is always very slow. It increases exponentially, but it's always very slow at first. So I wouldn't put too much thought in start of production."
Volume Production Next Year
If the millions of people with Cybertruck reservations were in attendance, you might have felt the air leave the room. The previous belief was mass production would start by the end of 2023. There may be some stainless-steel beauties on the road by then, but only a few. "It's kind of when does volume production actually happen, and that's next year," said Musk.
Perhaps sensing some disappointed buyers, Lars Moravy, Tesla's Vice President of Vehicle Engineering added, "(I'd) like just to emphasize on that, we've started installation of all the production equipment here in Giga Texas, castings, general assembly, body shops. We built all our beta vehicles, some more coming still in the next month, but as you said, the ramp will really come 2024."
The Cybertruck Will be Elon's Next Car
Cybertruck was originally announced in 2019 at the memorable event that included the unbreakable armor glass smashing. Musk was wearing the smashed glass Cybertruck t-shirt while taking questions from investors. While the wait continues, he is adamant that it will be worth it, "So it's an incredible product. I can't wait to drive it personally. It will be the car that I drive every day… it's just one of those products that only comes along once in a while, and it's really special."
The original release deadline was set for 2021. However, the production date has been delayed due to unforeseen circumstances, like a global pandemic. Nevertheless, it is a positive sign that beta vehicles have been produced. Images of what appears to be a Cybertruck were leaked a few months ago.
Recently, chief designer Franz von Holzhausen did confirm that the Cybertruck was ready for production, but it's a work in progress. Every Tesla beta product gets thoroughly examined and meticulously reviewed before the next step. But at least it's a step in the right direction.
Tesla set new records in production and deliveries while beating analyst expectations.
Tesla published their Q4 2022 and full-year financial results, setting new records in production and deliveries while beating analyst expectations. Tesla’s annual profit rose to $12.6 billion in 2022, from $5.5 billion in 2021. Annual revenue rose to $81.5 billion, from $53.8 billion the year prior. Tesla reported fourth-quarter revenue of $24.32 billion beating analysts' $24.07 billion estimate. The automaker also reported earnings per share of $1.19 beating analysts' $1.12 estimate.
Tesla’s stock rose more than 5% in after-hours trading following the earnings release and surged more than 10% the next day.
Tesla's Q4 2022 revenue set a new record for the company, up 59% from a year earlier. In addition to automotive revenue of $21.3 billion, Tesla recognized $324 million of deferred revenue from the company’s driver assistance systems.
FSD Beta Numbers
Tesla reported that 90 million miles have now been driven with FSD Beta, up from 58 million miles in the previous quarter. The company also confirmed that they have about 400,000 FSD Beta users in North America, a sizeable increase since the last report. With such a steep increase in miles driven and FSD Beta becoming widely available in North America, Tesla is making significant progress with its autonomous driving software.
In late 2022 and into this year, Tesla began cutting prices on its cars globally. Elon spoke about how recent price cuts have fueled a surge in demand for Tesla: “Thus far in January we’ve seen the strongest orders year-to-date than ever in our history. We’re currently seeing orders of almost twice the rate of production.” He added: “These price changes really make a difference for the average consumer.” Tesla acknowledges that average sales prices have to decrease over time because affordability is part of Tesla's mission to grow into a company that sells multiple millions of cars annually.
Price cuts will impact profitability, but margins should remain healthy, Tesla CFO Zach Kirkhorn affirmed. Tesla has wider operating margins than the industry average, which allows them to make such price cuts.
Elon issued an uncertain forecast for 2023, saying Tesla planned on 1.8 million vehicles for the year without specifying whether that was a target for production or deliveries. If the company were to deliver 1.8 million vehicles in 2023, that would result in 37% annual growth.
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