The car
Published on October October 24, 2020 |
By Jonah Creeder
October 24, 2020 By Joanna Creeder
The next day in Tesla’s Q3 earnings, Elon Musk touched some of Tesla’s most valuable business units. One of them was Tesla insurance. He said, “Naturally, insurance is significant. So, insurance can be very good, I don’t know, 30%, 40% of the business value of the car, honestly. “
Being the most valuable car manufacturer in the Tesla industry, it means that its insurance business will be very valuable. Value Penguin has a list of the top 10 most expensive auto insurance companies today. State Farm ranks 1st, with 42 billion and 17% market share. State Farm is followed by Giko (.1 33.1 billion) and Progressive (.1 27.1 billion).
What is 30%?
Right now, Tesla’s insurance is only available in California, but eventually, it will enter other states. Back in July, Tesla’s value exceeded that of almost every company in the S&P 500. Tesla currently has a market cap of $ 391.95 billion. If Tesla Insurance were 30% of Tesla’s market cap today, it would be 11 117.6 billion. This would knock State Farm out of its # 1 position (remember its market cap is 42 42 billion).
Responsive loop
Elon Musk gave an insight into some of Tesla’s opportunities in this area at a conference call. “And as we’ve talked about before, with a better feedback loop rather than being statistical, it can be niche. And obviously, no one needs to choose our insurance. But I think a lot of people will. It will cost less and be better, so why not? The feedback loop is the main advantage of Tesla insurance. Tesla will be able to better investigate the cost of repairing its vehicles. In the long run, this will save Tesla customers money, while allowing Tesla to make the necessary changes to bring down the cost of general repairs, or make them less likely.
Elon Musk also spoke about this during Tesla’s Q22020 earnings. “This was really helpful for you to get a feedback loop to see what driving insurance costs are. That’s a lot – it’s a bit like Fender Bender, and the net Fender Bender, because of the way the body collision is being repaired, costs, 15,000 or something crazy. “And then we can really adjust the design of the car and adjust how the repairs are done to reduce the basic cost of solving that problem. So this is basically what we were doing without understanding Helped under the whole set. But the problem is, in general, with insurance. If insurance, like, you can eat all, the feedback loop for improvement is weak, “he said.
Low prices
Speaking of lower prices, Tesla’s insurance has already reduced the costs many owners are paying. Back in August Gust, James Locke shared his story with me about how he recently switched from State Farm to Tesla for both of his family vehicles. With State Farm, he paid a monthly stipend of 551.21 for both vehicles. With Tesla, that number dropped to 193.25, saving 64 64.9% per month.
According to Lok, one way Tesla can improve its insurance is with more flexible software for people traveling across the country and between countries. “I was really surprised to find it difficult to move our Canadian accounts to the US and allow us to see and access the same features on the webpage as other California people,” he said. He also noted that Tesla’s phone support was faster and shorter.
In Tesla’s Q3C call yesterday, Elon Musk also used insurance as an example of a product created by Tesla’s internal application team. “Something like insurance is a good example of a product that is basically created by our internal application team. So, we created the insurance product and linked it to the car, look at the data, calculate the risk. It’s all built-in – basically a built-in software application. ”
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About the author
Jonah Creeder is a baton rug artist, gem, and mineral collector, a member of the International Like Congregation, and a Tesola shareholder who believes in Elon Musk and Tesla. Elon Musk advised him to “bill in good” in 2018. Tesla is one of the many good things to believe. You can find Joanna on Twitter
