TMC is an independent, primarily volunteer organization that relies on ad revenue to cover its operating costs. Please consider whitelisting TMC on your ad blocker or making a Paypal contribution here: paypal.me/SupportTMC

Tesla in the Insurance business?

Discussion in 'Tesla Motors' started by Phase_Change, Dec 11, 2015.

  1. Phase_Change

    Phase_Change Member

    Joined:
    Dec 14, 2014
    Messages:
    5
    Hi all... I've been wondering something recently...

    Beyond his famed McLaren wreck, I have heard that Elon is not a huge fan of the insurance industry. Given that, and the following trends/factors, it seems plausible to me that Tesla enters the auto insurance business at some point.

    +The safest cars on the road (structurally etc.)
    +Data from the connected fleet.
    +Continuously improving autonomous driving/control
    +Decreasing replacement costs over time (ie Model 3 vs S/X)
    +Increasing size of policy/risk pool over time as production scales

    I'm wondering if anyone has any thoughts on the probability of something like this occurring, and how it might fit into the overall mission, ie. if the float/profit from an insurance operation could be a meaningful source of capital for scaling core operations such as supercharging/gigafactories/localized manufacturing/service etc.
     
  2. Jaff

    Jaff Active Member

    Joined:
    Aug 15, 2010
    Messages:
    3,007
    Location:
    Grimsby, Canada
    I doubt he has interest...if you read Vance's book on Elon, the stodgy old insurance business doesn't exactly fit Elon's preference for start ups (insurance is not an industry associated with technology that is world changing or innovative.)

    I can't speak for the U.S., but the insurance industry in Canada is usually lucky to achieve the lesser end of the expected bottom line in the financial services sector (8-15%)

    The industry is also heavily regulated, and subject to frequent government interference...not things that I think Elon would tolerate well.

    Jmo.
     
  3. vitaliy

    vitaliy Member

    Joined:
    Jun 17, 2015
    Messages:
    269
    Location:
    Arlington, VA
    I think it's a great idea. But it has to be limited to insuring Tesla cars only.
     
  4. Phase_Change

    Phase_Change Member

    Joined:
    Dec 14, 2014
    Messages:
    5
    I'm definitely just speculating- I don't know too much about insurance except from a consumer standpoint. My assumption is that given the factors I mentioned a Tesla insurance co. could self-insure it's own fleet (as Vitaliy points out) and realize much better returns than the industry average- but good point on the regulation and government interference... can't imagine that going over well. Thanks for your thoughts.
     
  5. Ludus

    Ludus Member

    Joined:
    May 1, 2013
    Messages:
    298
    Location:
    Michigan
    I think that L4 Autonomy will be first deployed in fleets of company owned and operated vehicles using an Uber like app. L4 will be hard enough when the OEM has total control of the vehicles.

    Traditional auto insurance is meaningless for these fleet cars and would be meaningless for individually owned vehicles that were operated autonomously. There is only 1 driver and the software OEM knows more about the risks of that driver than any insurance company actuary could ever hope to.

    I think Tesla will be self insured for operating Mobility app vehicles and the Auto insurance industry will gradually fade away as more vehicles are self driving. The absorption of this industry will be another source of the vast potential profits to vertically integrated providers of vehicle services.
     
  6. Jaff

    Jaff Active Member

    Joined:
    Aug 15, 2010
    Messages:
    3,007
    Location:
    Grimsby, Canada
    Don't agree.

    Firstly, I fail to understand why you think that you would be absolved of liability for a piece of machinery owned by you, operating on a public thoroughfare.

    You own the machinery, you own the liability for operating it as well. You may share the liability with the autonomous vehicle's manufacturer, but, you will still be named in a suit and thus exposed.

    There are numerous things that could go wrong with the operation of your autonomous vehicle, that might allow the vehicle manufacturer to side step the liability, in whole or in part.

    The most obvious reason I can think of right off the bat, is lack of owner maintenance. What if your autonomous vehicle manufacturer is allowed to side step liability if the vehicle is not maintained to its schedule. Man made items often fail...is it reasonable for the manufacturer of the vehicle to be bound for financial responsibility of the operation of an autonomous vehicle whose owner is negligent by not keeping the vehicle maintained?

    Right now, there are two (or more) operators of your autonomous vehicle, as initially, I believe in California's current laws, humans must be able to take control of the vehicle should the vehicle's systems fail...when this failure occurs (and it will), what happens if you take control of the vehicle, but your input is material in the occurrence of the accident / severity of the accident? Do you think the vehicle manufacturer will absorb the liability for you? I wouldn't want to be the test case in a matter such as this.

    The only sure fire situation where you would be absolved of operational liability that I can see currently, is if you are strictly a passenger in a vehicle owned by another party...think mass transit.

    I think Elon is right in saying that the autonomously driven vehicles will be ready before the legislation is.
     

Share This Page