Tesla Insurance influences vehicle designs to make them cheaper to repair

Tesla Insurance first launched in California in 2019, and has since expanded to more than a dozen states across the US. While the product has helped reduce insurance premiums for thousands of owners, it has also had another side effect in that it helps makes Teslas cheaper to repair.

One of the primary motivations behind starting Tesla Insurance was to lower the overall cost of ownership for owners, according to CFO Zach Kirkhorn during the Q4 earnings call on Wednesday. Kirkhorn said the lower premiums that Tesla is able to charge owners forces other insurance providers to also lower their rates in order to stay competitive.

However Elon Musk then added that there is another, perhaps more significant benefit in having the feedback loop that is Tesla Insurance. Musk explained this provides them valuable insight that allows them to alter certain design aspects of the car to make them cheaper to repair.

“Previously we didn’t have good insight into [the cost of repair]. The other insurance companies would cover the cost, and the cost in some cases would be unreasonably high. So we have actually adjusted the design of the car, and made changes in the software of the car, to minimize the cost of repair,” Musk explained.

But using data from Tesla Insurance doesn’t just make the cars easier to repair, it also speeds up the repair process at the same time.

“We’re actually solving how to get somebody’s car repaired very quickly and efficiently and back in their hands quickly,” he added.

Musk gave the example of making design changes to the front bumper, saying “it’s remarkable how making small changes in design of the bumper and improving the logistics of providing spare parts needed for collision repair have an enormous effect on the repair cost.”

There is also the added benefit of Tesla’s active safety features which help reduce the chances of a collision, leading to Musk using one of his favourite adages, “the best repair is no repair.”

This is just one example of how Tesla is able to use the vast amount of data they have at their fingertips to improve vehicle design and safety. Using those safety features previously mentioned, Tesla sent out a free over-the-air (OTA) software update last year that improved seatbelt pre-tensioning. Before the update the seatbelt would only pretension when the airbags activated, but after the update the seatbelt pretension would active a few milliseconds earlier when the vehicle detects an impact using its on-board cameras.

You can listen to the segment of the earnings call on Tesla Insurance below.

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