Tesla Insurance: 17% of Eligible Customers Use It; 20% Growth

By Kevin Armstrong
Tesla Insurance continues to expand
Tesla Insurance continues to expand

Tesla is shaking up the traditional insurance industry with its innovative approach to vehicle insurance while forcing the industry to provide better rates for Teslas. The company's insurance arm also provides valuable information that Tesla is using to improve its products.

Tesla Insurance reported an annual premium run rate of $300 million as of the end of last year and growth of 20 percent a quarter. It's quickly becoming a significant player in the market. Tesla Insurance is now available in 12 states, with an average of 17% of customers using a Tesla Insurance product, which continues to rise. But there are several ripple effects Tesla creates as it disrupts another industry.

How Tesla Insurance is Different

As a refresher, Tesla insurance uses the driver's safety score to provide the premium. So basically, drive aggressively with that Model S Plaid and pay a higher premium. This is a significant improvement from the old fashion way the industry charges premiums, a formula that takes the driver's age and sex and the car's make, model and year to spit out a magic number to pay.

Tesla Forced the Competition to Respond

While Tesla has a fairer approach to the system, it's also shown other benefits. The motivation behind starting the Tesla Insurance business was to reduce the total cost of ownership for Tesla vehicles, which saw high premiums from third-party insurance companies. The company's priority remains to keep costs low and make insurance affordable for customers while maintaining a healthy bottom line. As the company continues to grow its insurance business, it is challenging the established insurance providers and forcing them to re-evaluate their pricing and offerings.

During the fourth quarter earnings call, Elon Musk said, "So it has a bigger effect than you think because it improves total cost, or insurance costs, even when they don't use Tesla Insurance, because now the other guys of the world have to compete with Tesla and cannot charge outrageous insurance for Teslas. So, it's great."

Helps Tesla Reduce Repair Costs

Tesla uses data collected from its insurance company to minimize the cost of repairing a Tesla after a collision. This collection of data and feedback has allowed Tesla to adjust the design of the car and the software to minimize repair costs while still maintaining its advanced safety features. Tesla is also working to improve its spare parts logistics, which can significantly impact repair times and costs.

The improvements made through this feedback loop are not limited to new cars but also apply to older vehicles, helping to reduce the total cost of ownership for all Tesla owners. In this way, Tesla is providing its customers with insurance options that better meet their needs and revolutionizing the entire automotive insurance industry.

Tesla's innovative approach to insurance has not only created a new standard in the industry but also has had a positive impact on its car designs. In addition, Tesla's use of insurance information is a prime example of how technology and data can be leveraged to enhance the product and customer experience.

Tesla Will Accelerate the Release of Its Next-Gen Model, While the Robotaxi Takes a Backseat

By Cláudio Afonso

Today, Tesla published its 2024 Q1 report, showing revenue of $21.3 billion, 9 percent lower than the same period last year and a total GAAP gross margin of 17.4%, down 19.1% in Q1 2023.

The company teased its upcoming Robotaxi and its next-generation platform saying its “purpose-built Robotaxi product will continue to pursue a revolutionary ‘unboxed’ manufacturing strategy”.

Tesla mentioned that it suffered “numerous challenges“ during the first quarter including the Red Sea conflict and the arson attack on its GigaFactory in Berlin and the ramp-up of the updated Model 3. Earlier today Tesla officially announced its new Model 3 Performance model.

Accelerating the Launch of its Next-Gen Model

The company said it will accelerate the launch of new models including its upcoming “$25k,” next-gen vehicle. Tesla stated:

“We have updated our future vehicle line-up to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025. These new vehicles, including more affordable models, will utilize aspects of the next generation platform as well as aspects of our current platforms, and will be able to be produced on the same manufacturing lines as our current vehicle line-up.”

When it comes to layoffs, Tesla says it undertook “a cost-cutting exercise to increase operational efficiency” adding it is “focused on profitable growth” by “leveraging existing factories and production lines to introduce new and more affordable products”.

The automaker reaffirmed its focus on autonomous driving with the recent price cuts on the purchase and subscription of its FSD software in the US and Canada.

“The future is not only electric, but also autonomous. We believe scaled autonomy is only possible with data from millions of vehicles and an immense AI training cluster. We have, and continue to expand, both. To make FSD (Supervised) 5 more accessible, we reduced the price of subscription to $99/month and the purchase price to $8,000 in the US.”

Robotaxi

Tesla also revealed that its Robotaxi will now differ from its next-gen vehicle. Although Tesla will follow more traditional processes for producing its more affordable vehicle, Tesla says the Robotaxi will still follow the new, more efficient, “unboxing” manufacturing strategy. This comes just days after Musk said the Robotaxi will essentially be its next-gen model without a steering wheel.

Tesla’s quarter-end cash, cash equivalents and investments were $26.9 billion.

Earlier today, Tesla launched officially the highly expected Model 3 Performance with deliveries starting in May. The new version starts at $45,490 (after applying the $7,500 Federal EV tax credit).

In recent weeks, the company has been reducing prices in its primary markets, including China and the United States. The initiative followed the recent introduction of lower and even 0% interest financing programs in certain markets.

At the time of this writing, Tesla stock is currently trading 7 percent higher at $145 per share.

Tesla Officially Launches the New Model 3 Performance, Deliveries Start Next Month

By Cláudio Afonso

Today, a few hours before releasing their first quarter financial results, Tesla launched the highly anticipated Model 3 Performance. The new version starts at $45,490 (after applying the $7,500 Federal EV tax credit) and deliveries are scheduled to start in May.

With 510 horsepower and a top speed of 163 mph, the new Performance variant brings an improved sound system, a re-designed interior featuring more comfortable rear seats with some features coming directly from the recently revamped Model 3. Tesla also says that the new Performance model has “significantly less” road and wind noise thanks to the rear spoiler and changes to the front bumper.

“The front and rear fascias, rear diffuser and carbon fiber spoiler work together to help reduce drag and improve lift balance at high speeds”

Tesla’s most powerful Model 3 ever is now cheaper than the Model 3 Long Range after the federal tax credit. The Model 3 Performance model is the only Model 3 variant that is eligible for the government incentive.

Performance

The new Performance model comes with 20
The new Performance model comes with 20

While the new Performance model is largely based on the recently revamped Model 3, while including design changes to the front and rear diffuser, as well as the addition of a rear spoiler. In terms of performance, the model announced today offers a 22% increase in continuous power, a 32% increase in peak power, and an additional 16% of peak torque. The Performance model now has 500 hp and includes a “performance” motor that’s unique to the Performance model.

The new Model 3 Performance is capable of going 0 to 60 in 2.9 seconds, 0.2 seconds faster than the previous incarnation. It didn’t take long for Tesla’s CEO Elon Musk to comment on X stating that the Model 3 Performance is “quicker than a Porsche 911.”

Specs of the new Tesla Model 3 Performance
Specs of the new Tesla Model 3 Performance

Track Mode V3

The new Model 3 Performance is equipped with an updated Track Mode, v3, that features an all-new calibration for the powertrain and adaptive suspension.

Tesla's Track Mode V3
Tesla's Track Mode V3

Range

The Model 3 Performance has an EPA range of 296 miles (476km) on a single charge, an increase of 10 miles (16km) when compared to the previous version while being slightly lower than the Long Range variant.

Rear Display

As seen in the revamped version of the Model 3, Tesla is also bringing the rear 8” touchscreen with climate controls, Bluetooth connectivity and entertainment for the rear passengers. With Tesla update 2024.14, Tesla is improving the rear screen by adding trip information, time and temperature information to the top of the display.

Exterior view of the new Tesla Model 3 Performance
Exterior view of the new Tesla Model 3 Performance

All-new Adaptive Suspension

According to Tesla, the new adaptive dampening system adjusts to driver and road input in real-time. While the new Model 3 already included suspension improvements over the previous generation, the Performance model takes it one step further.

New Seats

The new model includes the new Sport Seats that we’ve seen in spy shots before. Although the new model is officially named “Performance,” the sport seats feature the Ludicrous badge. The seats include improved side and cushion bolsters to help keep you in an ideal driving position

The new Sport seats feature the Ludicrous badge
The new Sport seats feature the Ludicrous badge

Deliveries

The model just went up for sale a few hours ago, but orders placed minutes after the launch show an estimated delivery of May/June 2024 in the United States. In Canada, where the Model 3 Performance starts at CA $69,990, the estimated delivery is currently slated for June/July.

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