Tesla's insurance business is struggling with a loss ratio of 103.3 in 2024, meaning it pays out more in insurance claims than it collects in premiums, significantly worse than the industry average of 66.1. Initially aimed at reducing insurance costs for electric vehicle owners, the company's strategy has backfired. Elon Musk's vision of using extensive vehicle data to underwrite safer driving proved ineffective, leaving Tesla in a difficult financial position. This situation raises concerns about the affordability of repairs for its cars following accidents.
Tesla's insurance operations reported a loss ratio of 103.3 in 2024, indicating that it pays out more in claims than it collects in premiums.
Despite hopes to lower insurance rates for electric vehicles, Tesla's insurance arm is currently losing money and paying out more than it earns.
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