jrmckinley

A few weeks ago, I posted a thread about how much new cars may "know" about your driving habits and wondered if this would get sent to auto insurance companies. Now, Tesla appears to be expressing interest in offering insurance - they claim they will offer lower rates because they'll know the exact driving behavior of the individual and rates would go down due to their autopilot functions.

So, will Tesla actually get into this game and prove Warren Buffett wrong (Buffett is saying they won't be successful in that endeavor)? And what are your thoughts on the concept that a computer is a better driver than a human (rates will decrease based on autopilot usage)?

https://www.fool.com/investing/2019/...s-insuran.aspx

Toys4RJill

I think it might work. But from a purchase point incentive of the Tesla brand for new owners.

jrmckinley

Yes, they may show it as an additional savings on total cost of ownership compared to ICE vehicles. I just hope they wouldn't market and present it the same way they do gas savings...

tex2670

Just what I want: insurance from a company of questionable financial viability.

KahnBB6

iTrader: (5)

The part that gives me pause is that it's directly tied to their Autopilot system and how often it is expected that the owner use it. And also they have some extremely vague wording about "not driving crazy". I'd be very curious to know specifically what Tesla and their insurance partner would deem as "driving crazy" compared to what most regular people would with their own common sense characterize as "driving crazy".

I'll take traditional insurance and a disabled Autopilot system, thanks. Unless I'm not actually buying a car I see this as being far more canted in favor of Tesla's upcoming Level 5 Autopilot ride hailing fleet (Rent out your Tesla like an Uber when you're not using it-- like a TimeShare car that you own and still incur depreciation and upkeep on) than it would be an actual boon for customers who just want to own and enjoy the use of a very good electric luxury car.

LeX2K

What is traditional insurance exactly? Mine offers a device that stores telemetry and can potentially lower my rates. I declined the device but that's basically what Tesla is offering.
Even if the car has the option you don't have to use it, or buy one without the option what's the problem?

mmarshall

IMO, Tesla, with all of its company-owned facilities, has already bitten off more than they can chew without swallowing an even bigger mouthful by having to pay out a bunch of accident repair-bills and/or medical expenses.

LeX2K

Tesla's bankruptcy is a mere formality at this point.

KahnBB6

iTrader: (5)

I am aware and based on what I've learned from other people's experiences with similar add-on OBD port and phone bluetooth connected "drive monitoring and save" programs I will like you pass on it. I don't like the monitoring to begin with but the metrics used to determine what is "safe" seems to make even the most bland and cautious drivers at risk for raised insurance rates simply, for instance, because they accelerated normally (not like a road demon) to the speed limit or because they had to give the car throttle to safely merge into aggressive highway traffic.

The problem is that it is always working passively in the background whether you use it or not and whether you paid for the option or not. Also, Tesla has announced recently that Autopilot will very soon be a standard feature on all their models and no longer an option.

It gets very complicated very quickly but it is probably technically possible to software and hardware disable Autopilot but this would involve a lot more work going forward and would undoubtedly set off alarm bells with Tesla's servers which collect and analyze that passive information from every one of their car's Autopilot sensor and processor suites. This would throw off their Over The Air update system (something I don't particularly like as it's already been seen to be a case of God (Elon Musk) giveth a feature and randomly and out of the owner's control to say no or pick changes a la carte next month God (Elon Musk) taketh away or drastically change a feature).

That would very likely flag the car's VIN/identifier and with the sheer amount of control the OTA update system has over all the current Teslas, will likely result in an update specifically intended to brick the owner's self-modified car or at least disable it until they tow it to an authorized Tesla service center where they certainly won't want allow the car to get back on the road even if hypothetically the modifications were done expertly and would cause no averse malfunction to the car's operation in manual mode at all.

This, assuming one has the Canbus stream and driveline control hardware reverse engineering expertise to totally remove all of the Autopilot system in the first place.

And I'll add that they're among the companies that legally oppose Right To Repair legislation in whatever states such bills happen to show up in.

Tesla is the company that reserves the right to brick old Teslas that people restore back to what they were if a VIN for one number ever went into Salvage status and the owner rebuilt the car with the intention of getting it changed to Rebuilt after a state inspection clears it.

I've seen far better results from skilled electronics engineers who are DIY EV hobbyists reverse engineering wrecked Tesla drivetrains to use custom designed open source logic boards in place of the ones Tesla installs from their factory.

But while I think it's theoretically possible to fully disable Autopilot it would be a mountain of complex work to remove it from all their newest cars. And because they're designed to talk to Tesla's own servers on a regular basis that introduces the problems I went into above.

Realistically even while most automakers are developing some version L3-L4 semi-self driving modes that might be L5 capable in the future and while it's known that they all want to get in on the driving data collection, monitoring and data marketing business they may all do it a little differently and some with far more restraint as to owner privacy than others.

What Tesla is offering with their own in-house insurance is a slippery slope and it is based on the idea of a constantly monitored semi-autonomous and autonomous fleet. The long term goal is to push their Autopilot system and to launch and grow their proposed ride hailing service with a mix of their own cars and owner's private cars. The Tesla Model 3 interior was designed the way it was specifically to make it easy to remove the steering wheel from some production models or make it an added cost option in the future or to eliminate the steering wheel as an option on the 3 altogether eventually.

Not sure where the Model S, X and Roadster fall into this but the 3 and Y directly fall into this particular long term business plan.

Freds430

Another of Musk's failed attempts to try to save his failing company. The Model S has the highest insurance of any car and the Model 3 is as high as a Porsche. Musk is a riot. He is the captain of the Titanic and in constant bail out mode. The electric vehicle is the wave of the future bought it will not be through Tesla. Their quality is horrendous and their dependability is as bad. Consumer Reports ranks them 27 out of 29 in reliability. SUV out sell trucks and sedans. Tesla's Model X is $100,000 with a $3,750 rebate which goes to $1,875 July 1 and disappears in 2020. Consumer Reports rated their ten dogs to avoid and the Model X was #1. Sales for the X were 4,100 units in December and have averaged 1,408 units per month in the 1st quarter of 2019. Tesla's overall sales are down 31% from the fourth quarter of 2018 to the first quarter of 2019. Their 15th year (2017) was their worst year with a loss of 1.96 billion. In 2018, they lost 1.1 billion. They lost over 700 million in the 1st quarter of this year. This year their 19th year in business they are on course to lose 2.8 billion. Tesla stock is down YTD -26.43% while the S&P is up +14.86%.

https://www.usatoday.com/story/money...sure/35234533/

https://www.autonews.com/article/201...sive-to-insure

jrmckinley

99% of this response has nothing to do with Tesla potentially offering insurance. How is it a "failed attempt to save his failing company" when he hasn't even attempted the insurance concept yet? We all understand your disdain for Tesla. Most of this post is simply copy/paste from your prior responses. And you can't take Q1 performance and multiply it times 4 quarters to say what a company's year will look like... SMH.

Freds430

You are correct. The annual loss could be much worse. Do you think just maybe the insurance scheme is because of their big drop in sales and profit and this is Musk's way of stopping the bleeding. At this point he is grasping for straws. We have a total different point of view of comments. When I read a comment that I don't agree with or not interesting I just stop reading it. You on the other hand find the need to take the time to respond with snarky remarks. Regarding my previous post with similar FACTS, I sure hope there are new members and different members reading the comments other than you and I.

jrmckinley

In bold- yes. I think Musk is seeking out any and every opportunity of revenue streams with decent profit margins.

In regards to the rest of your statements above, I just don't see how you pointing out Tesla "reliability" from Consumer Reports, rebates dropping, and unit sales is in any way, shape or form relevant to the topic of Tesla potentially starting an insurance arm to their business. You and I clearly disagree on certain facets of Tesla (though I'm agreeing with what's in bold above) and I have actually thanked you for your opposition stance on Tesla in the past. I can disagree with someone and still appreciate their point of view. Not being snarky, I just get tired of reading copy/paste response on things that have absolutely nothing to do with the topic and you have pointed out all of the CR "reliability", "dogs to avoid" stuff so many times.

coolsaber

While no one holds the magic 8 ball on predictions, I think the idea here is more so envelope the customer in a one stop shop experience. You get your loans, leases, service, sales, etc and hope that the customer loves the experience (which considering Tesla's demographic can never find anything wrong) or your just stuck in that universe since you have invested so much.

Imho if it has not worked well for the traditional brands of insurance promising "low rates" with driver data, I dont see much in the way of Tesla doing things differently. Insurance is a cut throat business, and eventually even the best of intentions end at the earnings call, which Tesla knows all too well.

riredale

It could be because the auto insurance business is profitable. Or I suspect it's because Tesla senses that insurance companies will begin to blacklist Autopilot cars as random fatal accidents pile up. So they will step in when others won't.