Tesla starts selling its own car insurance in California
- Tesla launched Tesla Insurance in California on Wednesday.
- Musk told shareholders in an earnings call in April that Tesla would be launching its own auto insurance product in May.
- Warren Buffett has criticized this move, and predicted that Tesla will struggle as it ventures into auto insurance, a field in which Berkshire Hathaway thrives.
Tesla on Wednesday announced that it is now offering Tesla Insurance to customers in California.
The company said its offering may be as much as 30% less than other insurance plans, although it did not provide specific costs.
Tesla Insurance is only available in California to start, but the company said it will "expand to additional U.S. states in the future." Tesla customers in California can get a quote in as little as a minute, and those who have already ordered cars can request a quote with their vehicle identification number.
Tesla Insurance can be canceled at any time, Tesla said.
CEO Elon Musk told shareholders in an earnings call in April that Tesla would be launching its own auto insurance product, likely by the end of May.
After Musk announced those plans, Warren Buffett criticized the strategy for Tesla. The "oracle of Omaha," predicted that the Tesla would struggle as it ventures into auto insurance, a field in which Berkshire Hathaway thrives.
"It's not an easy business," Buffett told shareholders at the Berkshire Hathaway annual meeting. "The success of the auto companies getting into the insurance business is probably as likely as the success of the insurance companies getting into the auto business."
As Automotive News previously reported, "While auto insurance rates vary greatly and depend on factors including age, location and driving history, Teslas have generally been more expensive to insure than competing vehicles because of their technology and parts costs."
Largely owing to the high costs of repairing a Tesla after a collision, ValuePenguin estimates the average cost of insuring a Tesla vehicle in the US ranges from $1,913 per year for a Model 3, the company's most affordable model, to $2,963 per year for a Model S 90 D, its highest-end car.
Follow @CNBCtech on Twitter for the latest tech product news.