Tech

Elon Musk says Tesla will launch an insurance product in about a month

Key Points
  • When asked during a Wednesday earnings call if Tesla is considering an insurance program, Musk said the company is working on one.
  • He also hinted that the carmaker will use driver data to help set rates.
Elon Musk
Jim Watson | AFP | Getty Images

Tesla CEO Elon Musk said the electric car maker may soon roll out an insurance product.

When asked during a Wednesday earnings call if Tesla is considering launching an insurance program, Musk says the company is working on one.

"The answer is yes we are creating a Tesla insurance product and we hope to launch that in about a month. It will be much more compelling than anything else out there," he said.

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In response to a subsequent question about the safety of Autopilot, Musk said Tesla gives more details about safety to insurance companies.

"We do give some more detailed information to insurance companies to help with rates. And obviously as we launch our own insurance product next month, we will certainly incorporate that information into the insurance rates," Musk said.

Tesla has access to "direct knowledge of the risk profile of customers based on the car," Musk said. This gives the company a significant "price sort of arbitrage or information arbitrage opportunity," he explained.

Musk said, if potential Tesla customers "want to buy Tesla insurance, they have to agree to not drive the car in a crazy way — or if they can, but then the insurance rate is higher."

A Tesla spokesperson said the company has no further information to share on the program at this time.

The comments come after Tesla reported a wider-than-expected loss in the first quarter. The company had previously warned that income for the quarter would "be negatively impacted" by "lower than expected delivery volumes and several pricing adjustments.

The stock was volatile after hours and was last seen about flat with its closing price as more than 1.8 million shares changed hands.

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