US electric vehicle company Tesla is continuing with its preparations to enter the Israeli market. Sources inform "Globes," that the company has been holding talks with companies in Israel's insurance and financial sector in recent weeks. Tesla's representatives reportedly met with executives from Direct Insurance - Financial Investments Ltd. (TASE: DRIN). Market sources believe that Tesla is looking to set up a unique insurance model for its cars although the details are not yet clear.
Tesla has its own independent insurance company which began operating in August 2019 for its clients, in the first stage only in California. Tesla's insurance is based on data analysis streamed from the car to the cloud with algorithms that calculate the cost of insurance based on the profile of the way the vehicle is being driven, the level of risk and the locations where the car regularly drives to.
New Tesla car owners can join the insurance plan using the company's phone app and can reportedly receive an online offer within minutes. The price is revised as more data is gained on the use of the car. According to reports in the US, the average cost of insurance is much lower thorough Tesla's insurance than through external insurance companies.
Recent reports say that Tesla is eager to expand its insurance model to all the markets in which it operates with China and Europe being the most immediate targets. The company recently hired senior executives from the insurance sector for its offices in London and Berlin.
In this way Tesla's electric vehicles are presenting a challenge to traditional insurance companies in two ways. Firstly because Tesla controls all its own repair costs in a coordinated way and secondly because of the company's advanced Tesla Pilot and autonomous driving systems.
In Israel, everything related to the company's advanced technology remains open, even though cars with autonomous systems that require minimal driver intervention are already being imported.
Insurance in Israel is divided into two sectors. Tesla is unlikely to deal with compulsory insurance which covers injury to drivers, passengers and pedestrians but only likely to sell comprehensive and third party insurance covering damage to the vehicles damaged during accidents.
It was first announced that Tesla planned entering Israel's market in October 2019 and the following month the company started its search for a CEO to lead its Israel operations. In January 2020, Tesla's research unit set up a representative office in Israel and the following month it set up an Israeli subsidiary that will also deal in renewable energy. The next stage will be direct marketing of Tesla's electric vehicles in Israel.
Published by Globes, Israel business news - en.globes.co.il - on September 2, 2020 © Copyright of Globes Publisher Itonut (1983) Ltd. 2020