Tesla is making another attempt to establish its own car insurance firm in China. This marks the second effort by the electric vehicle giant to break into the Chinese insurance market.
In recent years, Tesla has explored various insurance models, both in collaboration with existing insurance companies and through its proprietary insurance arm that utilizes real-time data from its vehicle fleet. Currently, this proprietary model is only available in the United States.
Tesla Wants to Build Insurance Business in China
(Photo : Manny Becerra from Unsplash)
For the second time, Tesla is trying to build its own car insurance firm in China. The previous effort was not a big hit. This time, it hopes to be successful.
Tesla initially attempted to launch its own insurance firm in China in 2020 but withdrew its application a few months later. Now, Tesla is making a renewed effort.
According to official records, Tesla has filed to register the company again. As reported by Reuters, the new company was established on July 30 in Beijing's Central Business District with a registered capital of 50 million yuan ($6.92 million).
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Aiming to Reduce Premiums
Diving into the insurance business aims to lower premiums for Tesla owners. Traditional insurers have been known to charge high premiums for Tesla vehicles.
By entering the insurance market directly, the electric vehicle maker hopes to offer more competitive rates to its customers. This move comes shortly after BYD, Tesla's major competitor in China, acquired a bankrupt insurance firm with a similar goal in mind.
Tesla Wants its Presence to Be 'More' Felt in the Region
Tesla's renewed effort to enter the Chinese insurance market could be a part of its strategy to strengthen its presence in China. This move comes as Tesla CEO Elon Musk shifts focus from India to China, securing support from Chinese government officials for various initiatives, including the launch of Tesla's Full Self-Driving (FSD) package in the country.
A significant motivation behind Tesla's insurance program is its preparation for the future of self-driving technology. Tesla has long promised a driverless ride-hailing system, which would require strong insurance solutions.
Insuring these vehicles through traditional insurers could result in prohibitively high costs. Therefore, Tesla's own insurance arm would likely be essential to manage these risks and costs effectively, according to Electrek.
In summary, by offering competitive insurance premiums and preparing for a future of self-driving technology, Tesla aims to address both current and future challenges in the automotive industry. Based on its motive, it's clear that the automaker wants to expand its connection in Asia so it can reach other target markets in the region.
In another Tesla-related report, a fresh rumor revealed some interesting information about the new Model Y Juniper Refresh. The circulating images suggest that it is set to receive major improvements. Some of the leaked details include ambient lighting and illuminated Tesla bade at the rear of the prototype.
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