This time, he is promising a “major insurance company” despite the failure of last year’s rollout.
Tesla is pushing forward for a full Tesla car insurance product that will use data collected using its vehicles about the habits of its drivers.
The goal is to use real driving data to provide policyholders with lower premiums than traditional insurers.
“We’re building a great, like a major insurance company,” said CEO Elon Musk when speaking about the Tesla car insurance to investors during the second-quarter earnings conference call. This occurred on the heels of announcing the company’s fourth consecutive profitable period, which is its longest streak so far.
“Ultimately,” he added, “where we want to get to with Tesla Insurance is to be able to use the data that’s captured in the car, in the driving profile of the person in the car, to be able to assess correlations and probabilities of crash and be able then to assess a premium on a monthly basis for that customer.”
This latest version of the Tesla car insurance effort follows substantial struggles and failures.
Musk has been interested in creating and selling a cheaper auto policy to the electric vehicle company’s drivers for several years. The vehicle owners have complained that their coverage through traditional insurers is very high, particularly due to the cost of repairing these electric cars. Tesla first started talking about the idea of selling its own policies in April 2019. Only a few months later, it launched its first product in California.
That said, the first rollout in California was riddled with problems. Only hours after the site went live, it was taken back down again due to an “algorithm update.” There were some customers who were able to receive quotes before the site’s algorithm update. They reported that the premiums they would be paying through the electric automaker would have bene higher than the ones they were already paying through their conventional insurers. This, despite Tesla’s marketing claims that drivers could expect 20 percent lower rates. That product was labeled “version 0.9,” said Musk.
Now, Tesla car insurance is trying again. It is using driving data collected by the vehicles, which isn’t a new concept. All the biggest auto insurers in the US already have their own versions of telematics devices and programs that allow drivers to save based on safe driving habits. That said, many are speculating that Tesla would be able to collect a broader range of data than would be possible through other insurer telematics devices.