Howard wrote:odysseus2000 wrote:
If FSD both in Tesla cars & in licensed cars do achieve low accidents, the premiums for non FSD cars will likely rise substantially. The last thing an insurance company wants to do is to pay out money it has collected by premiums & if it has to it can argue that it needs more margin on theses so that it can lower policies for FSD drivers.
Additionally if the regulators decide that there are too many accidents from manual drive cars they can easily mandate who is allowed to drive where & when, making manual drive cars things most folk will feel are too restrictive.
Of course if FSD is not 10x humans all these arguments go away, but if it is there is plenty of case law to support safety in cars. When seat belts came in it was argued that they were too dangerous to use, but now everyone uses them, similarly air bags made cars too expensive, yet most cars have air bags & other safety features & the death rate on uk roads has gone from 20 per day, to 10 per day.
Regards,
There is a level of naivety in this argument - a lack of understanding of how insurers measure risk. Teslas are very expensive to insure both in Europe, the UK and the USA and possibly in China? They are much more expensive to repair than similar ICE cars and hybrids.
FSD is currently pretty useless at slow speeds - as evidenced by Teslas inability to self park in real life situations. FSD may offer some protection against higher speed accidents but will be useless if the car is rammed by other cars in, say a motorway accident, a city centre collision or even a slow speed parking bump.
A major part of the cost of insuring cars is the cost of repairs and this is a major problem for Tesla because of the complexity of their cars. The risk of expensive damage is significantly affected by the lifestyle of the driver - for example is the car regularly parked in city centres late at night outside a nightclub or restaurant?
The above are some of the reasons that Tesla are losing so much money providing insurance for their cars in the USA.
One interesting problem Tesla (and to be fair other manufacturers have) is that drivers can turn off the "nanny state" limitations imposed by the car. Governments will have problems forcing drivers to keep FSD switched on in all situations.
FSD may develop further, but insurance costs may be a minor factor. FSD has to prove itself to regulators. This will be a tough job.
regards
Howard
At the moment it is a purely academic discussion. We don’t know if FSD will be good enough to reduce accidents or not.
If FSD works & insurers have to pay out less on average for an FSD car they will embrace them & price accordingly.
If regulators get data that FSD cars are 10 or more times safer than non FSD cars there will be intense pressure to encourage rapid take up. As noted earlier a car that is 10x safer saves a lot of lives & a lot of money, both for insurance & health care & no regulator dare ignore such things.
If FSD can not be made to work then nothing changes.
For investors an investment or a short of Tesla is now a complex decision.
We can not know if the vote on the 13th of June will reinstate Elon Musk’s pay package & if not whether he will leave & sell his shares.
We do not know how safe the FSD cars are compared to human driven, but Tesla do.
We do not know what will happen with the proposed new smaller car.
We do not know what will be unveiled on the 8th of the 8th?
We do not know what margins Tesla is achieving.
We do not know how much money Tesla has spent on Nvidia chips & whether this has put their cash reserves into reverse.
We do not know what cyber truck or semi sales are or margins.
We do not know the future direction of interest rates.
We do not know if governments will begin to introduce carbon taxes.
We do not know if electric car sales will continue to increase. Sure it seems highly likely, but it is not 100% certain as the agents of big oil & legacy auto continue to pump out ever denser clouds of fud. Equally we do not know if ice car sales will continue to decline & how the second hand market will develop for both ice & bev.
It is never easy to make investment decisions as certainties have a way of not happening. E.g. the certainty that Nvidia sales & share price will rise relentlessly took a big hit on Friday.
Regards,
