Tesla is developing an insurance product, which could be launched in about a month, CEO Elon Musk said during a call with analysts Wednesday after its first-quarter earnings report.
“It will be much more compelling than anything else on the market,” he said.
Musk didn’t provide further details on what the insurance product may look like, but it will most certainly place value on its own Autopilot system, an innovative driver assistance system that’s considered among the most robust and at times, most controversial, in the industry.
Musk added that Tesla already shares information with insurance companies about Autopilot. The information is meant to help reduce insurance prices.
“As we launch our insurance product we’ll certainly incorporate that information into the insurance rates,” Musk said.
Tesla has an “data arbitrage opportunity,” Musk said. The business is able to capture driving data, giving knowledge of their risk profile of the driver and car to the company. If customers want to get Tesla insurance they might need to agree to “not drive the vehicle in a manner,” stated Musk, who added that they can, they have a higher insurance rate.
Firms like insurance startup Root have introduced programs that give Tesla owners a discount when their vehicles are equipped with Autopilot.
Tesla reported Wednesday wider-than-expected loss of $702 million, or $4.10 a share, in the first quarter following disappointing delivery numbers, costs and pricing adjustments to its vehicles threw the automaker from its profitability track.
The loss included $188 million of non-recurring charges. When adjusted for one-time reductions, Tesla lost $494 million, or $2.90 a share, compared with a loss of $3.35 per share a year ago. Tesla reported that it also incurred $67 million due to a combination of restructuring and other non-recurring charges.
Tesla’s first-quarter revenues were $4.5 billion, compared to $7.2 billion in the fourth quarter. The organization s operating cash flow less capital expenditures dropped to $920 million, compared to a positive $910 million in the fourth quarter.
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