Tesla and insurers taking different approaches to avoid high repair costs
Technology
We want to minimize repairing cost, Musk cites changes to vehicle design and software
(Reuters) - Repair costs for Tesla Inc. s electric vehicles are so high that the carmaker and insurers are taking quite different approaches to the problem.
Tesla s CEO Elon Musk claims that the company is making design and software adjustments to its cars to reduce maintenance costs and insurance charges.
Meanwhile, insurance companies are writing off low-mileage Tesla Model Ys involved in collisions and selling them at salvage auctions since many of them are too expensive to fix.
Musk said that premiums from third-party insurance firms "in certain circumstances were unacceptably expensive" and that the EV maker s insurance arm was exerting pressure on those carriers by providing reduced rates to Tesla customers. Musk made these remarks during Tesla s fourth-quarter earnings call.
Musk also said "we want to minimize the cost of repairing a Tesla if it s in a collision," citing changes to vehicle design and software.
"It s amazing how little modifications in the bumper s design and the availability of spare components needed for accident repair have such a significant impact on the repair cost," he added. Most collisions are fairly minor—a damaged fender or a scrape on the car s side.
A request for more comments received no response from Tesla.
The demand, which Musk claims is far outpacing the company s capacity to create, does not appear to have been affected by Tesla s reputation for pricey vehicle repairs so far.
In August 2019, Tesla announced the creation of its own insurance subsidiary, with rates up to 30% cheaper than rivals.
