Tesla is developing an insurance product, which could be launched in about a month, CEO Elon Musk said during a call with analysts Wednesday following its first-quarter earnings report.
“It will be much more compelling than anything else out there,” he said.
Musk didn’t provide further details on what the insurance product might look like, but it will most certainly place value on its Autopilot system, an advanced driver assistance system that is considered one of the most robust and at times, most controversial, in the industry.
Musk later added that Tesla already shares information with insurance companies about Autopilot. The information is meant to help reduce insurance rates.
“As we launch our own insurance product next month, we will certainly incorporate that information into the insurance rates,” Musk said.
Tesla has an “information arbitrage opportunity,” Musk said. The company is able to capture driving data, giving the company direct knowledge of the risk profile of the driver and car. If customers want to buy Tesla insurance they might have to agree to “not drive the car in a crazy way,” said Musk, who added they can, they’ll just have a higher insurance rate.
Companies like insurance startup Root have introduced programs that give Tesla owners a discount if their electric vehicles are equipped with Autopilot.
Tesla reported Wednesday wider-than-expected loss of $702 million, or $4.10 a share, in the first quarter after disappointing delivery numbers, costs and pricing adjustments to its vehicles threw the automaker off of its profitability track.
The loss included $188 million of non-recurring charges. When adjusted for one-time losses, Tesla lost $494 million, or $2.90 a share, compared with a loss of $3.35 a 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 company’s operating cash flow less capital expenditures dropped to a loss to $920 million, compared to a positive $910 million in the fourth quarter.