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This is kind of buried in the article, but it annoys me when articles lead with a clickbait title and then basically admit in their own article how their clickb

This is kind of buried in the article, but it annoys me when articles lead with a clickbait title and then basically admit in their own article how their clickbait title is bullshit. That is, even though the loss ratio is much higher than the industry average and indicates a loss, it has been going down for the past 3 years (116.6 in 2022, 114.7 in 2023, and 103.3 in 2024). I would expect that any startup offering would start out with a loss that then eventually turned to a profit over time. All that said, I think Tesla and the EV industry as a whole will need to do a lot to bring down their repair costs. It's insane that these cars are designed in such a way that even minor fender benders cost tens of thousands to repair. I actually think government should create liability limits for vehicles to incentivize car makers to make repairable cars. That is, if you're driving around with a Faberge egg as a hood ornament, and I ding it, I don't think I should be responsible for the outrageous repair charges - the recklessness was on your side, in my opinion, for putting such a fragile/expensive machine on public roads. Otherwise car makers have little incentive to improve the repairability of their cars.

moomin 1y ago
I think the real problem here is that many of the things that get wrecked are specifically designed to get wrecked rather than the driver.
philjohn 1y ago
It doesn't help that the official Tesla repair guide essentially says "Order a new side panel for the car, cut the damaged section from the car, weld in part of the side panel". And the side panel in this case stretches the entire length of the car.
bob1029 1y ago
> I actually think government should create liability limits for vehicles This is effectively already a thing in most US insurance markets. TDI (Texas) requires $25k minimum coverage for property damage, so in general this is what everyone is going to have. If your car is worth more than that and someone runs into you and totals it, you are ~fucked unless you have additional un[der]insured motorist coverage on your side. Suing someone for the difference is a 10/10 nightmare experience. Many people who are driving like ass also seem to have really bad financial situations. There is such a thing as being so poor that you are judgement proof. The overall effect of this is that drivers of high value (i.e., luxury) vehicles typically take it upon themselves to ensure the safety of their property. They don't make it the problem of everyone else. If their Faberge egg of a lambo gets wrecked, they understand the other parties probably aren't going to be able to replace it. Certainly, follow through with everyone's insurer and wring every policy dry, but the rest is up to the presumably wealthy luxury vehicle owner. If you are driving a luxury vehicle and cant handle the risk of an underinsured driver totaling it, you should question if you can actually afford the vehicle.
- curiouscats 1y ago
  Car insurance costs more if you have bad credit score. My guess is that they have data to justify that. I think some states may have disallowed this practice. Anyway that lends some credence to your beliefs.
- deleted 1y ago
  [deleted]
- Marsymars 1y ago
  Getting sued because you only had $25k in liability coverage seems like enough of a nightmare that it seems crazy to me to only have that little. I pay something like $500/year for $2 million in liability coverage.
  - aaronmdjones 1y ago
    Yeah, $25k seems really really low. My fully-comprehensive insurance was renewed for 12 months recently for just under £400, and I'm covered for third-party liability up to £20M, except at specifically-defined hazardous locations (nuclear installations, power stations, refineries, railways, etc), where it is only £1.2M.
    - Marsymars 1y ago
      I’d just add that the cost difference to insure your £20M vs my $2m is pretty low - $2m is just the max that auto policies typically have as an option in my jurisdiction. If you want more, it’s pretty straightforward to get umbrella insurance though.
moepstar 1y ago
Overall, your argument is not wrong - however... The cost comes from "Tesla approved body shops" - which have some sort of monopoly on doing body work. That is, if you don't want to possibly have arguments with Tesla if something is wrong which they may try to attribute to the car being repaired in some back-alley kind of workshop... To add, body shops apparently rather replace whole parts which could have straightened out by a skilled repair guy.. for much less, achieving the same thing and even keeping the original panels, welds etc... Talking about repairability - i really have to give Tesla credit for making the whole of all maintenance manuals (same Tesla themselves have) available for free.
- stonogo 1y ago
  That behavior violates the Magnuson-Moss act. In normal times it would be illegal and you'd easily win a lawsuit about it.
throwanem 1y ago
> It's insane that these cars are designed in such a way that even minor fender benders cost tens of thousands to repair. Twenty years ago I paid about $2000 - not inflation-adjusted, that figure - to put a new bumper on an Audi whose owner, looking back, no doubt had much better reason than I to leave our respective insurance companies out of the matter. At the time it was a shocking amount. These days, even the inflation-adjusted equivalent - nearly five grand! - seems like something a lot of car owners are happy, or at least willing, to swallow.
mschuster91 1y ago
> All that said, I think Tesla and the EV industry as a whole will need to do a lot to bring down their repair costs. It's insane that these cars are designed in such a way that even minor fender benders cost tens of thousands to repair. I actually think government should create liability limits for vehicles to incentivize car makers to make repairable cars. That's fundamentally impossible. Just look at car crash ratings and automotive deaths over the last decades. These old rigid steel frames were damn easy to repair - but were deathtraps for people inside and outside, not to mention Cw values more similar to a brick wall than a F1 car. The reason modern cars are so crash-safe is because literally everything is a crumple zone, absorbing kinetic energy. You can't just heat up and bend affected parts any more, you got to replace them. And on top of that, requirements on lower fuel usage mean that parts have to be aerodynamically optimized and as lightweight as possible, which means plastics and composite materials, hollowed out shapes and god knows what else. That's making parts more expensive to manufacture and replace as well.
- hn_throwaway_99 1y ago
  It is not impossible to build a car that both has modern crumple zones and is still repairable. This article talks in detail about why a minor fender bender of a Rivian cost $42,000 to repair. That cost is a bit of an exaggeration (e.g. it includes the ceramic coating on the vehicle), but the article talks in detail about the design choices that made that truck so expensive to repair.
jeroenhd 1y ago
> All that said, I think Tesla and the EV industry as a whole will need to do a lot to bring down their repair costs It's not just Tesla, and it's not just the EV industry either. It's not even recent. My ten year old car has some scratches in a plastic body panel and minor bumper damage thanks to me backing into something. Stupid, I know, but that thin piece of formed plastic should not cost me €700 and the bent plastic bar should not be costing anywhere near €300 to order. The mechanic is expensive enough already. Luckily I don't care about a bit of visual damage, but it's still infuriating. More and more cars are cheaply produced, with maintenance as an afterthought, and that leads to flimsy, difficult to replace, specialised components, often non-modular to save on production cost. The cost for cheap manufacturing is blindly passed onto insurance and now a kid on a bike can bankrupt their family by accidentally hitting a Tesla. It's ridiculous. But it's hardly a Tesla-only problem, and it's been going on for years.
- tptacek 1y ago
  I mean, I guess, but cars have gotten drastically more reliable over the last 40 years.
  - fc417fc802 1y ago
    Precision manufacturing, mastery of metallurgy, engineering expertise, and well thought out testing protocols seem fairly orthogonal to a design process that prioritizes the cost of production above the ability to perform basic repairs. Well aside from the fact that if your vehicle wasn't incredibly reliable you'd never be willing to accept such an abysmal ability to repair it.
phonon 1y ago
An underwriting loss, when you specialize in a very specific risk, is not something you can later make up with volume. They still have to pay for overhead, acquisition costs, etc. And customers have little loyalty for auto insurance. If they only join in the first place because your prices are lower, they will leave as soon as you raise them. Most insurance companies would be very concerned this type of concentration of risk, and having no underwriting pricing advantage. At best you can say Tesla wants their insurance to be a loss leader to encourage sales of the cars themselves, and to prevent the risk of other auto insurance companies declining to cover their models due to high repair costs and their customers having no insurance alternatives.
- hn_throwaway_99 1y ago
  You sort of touch on this, but I think it's pretty obvious that it doesn't make sense to value Tesla's insurance the same way you'd value an independent insurance company. They are an arm of a car company, designed to help them sell cars. Furthermore, I bet the loss ratio isn't even really comparable to independent insurers. Tesla itself must make some money from their parts that are needed for repairs, not to mention that they are the entire beneficiary of repairs if you use a Tesla service center, so when you factor that in I wouldn't be surprised if Tesla's insurance arm is slightly profitable.
  - phonon 1y ago
    You make good points, but including underwriting costs, systems and overhead, they must be losing something like 50 cents or more for every dollar of premium they take in (I will assume they have minimal marketing costs.) Insurance is a regulated industry, and the regulators won't allow that indefinitely.

moomin 1y ago

I think the real problem here is that many of the things that get wrecked are specifically designed to get wrecked rather than the driver.

philjohn 1y ago

It doesn't help that the official Tesla repair guide essentially says "Order a new side panel for the car, cut the damaged section from the car, weld in part of the side panel". And the side panel in this case stretches the entire length of the car.

bob1029 1y ago

> I actually think government should create liability limits for vehicles This is effectively already a thing in most US insurance markets. TDI (Texas) requires $25k minimum coverage for property damage, so in general this is what everyone is going to have. If your car is worth more than that and someone runs into you and totals it, you are ~fucked unless you have additional un[der]insured motorist coverage on your side. Suing someone for the difference is a 10/10 nightmare experience. Many people who are driving like ass also seem to have really bad financial situations. There is such a thing as being so poor that you are judgement proof. The overall effect of this is that drivers of high value (i.e., luxury) vehicles typically take it upon themselves to ensure the safety of their property. They don't make it the problem of everyone else. If their Faberge egg of a lambo gets wrecked, they understand the other parties probably aren't going to be able to replace it. Certainly, follow through with everyone's insurer and wring every policy dry, but the rest is up to the presumably wealthy luxury vehicle owner. If you are driving a luxury vehicle and cant handle the risk of an underinsured driver totaling it, you should question if you can actually afford the vehicle.

curiouscats 1y ago
Car insurance costs more if you have bad credit score. My guess is that they have data to justify that. I think some states may have disallowed this practice. Anyway that lends some credence to your beliefs.
deleted 1y ago
[deleted]
Marsymars 1y ago
Getting sued because you only had $25k in liability coverage seems like enough of a nightmare that it seems crazy to me to only have that little. I pay something like $500/year for $2 million in liability coverage.
- aaronmdjones 1y ago
  Yeah, $25k seems really really low. My fully-comprehensive insurance was renewed for 12 months recently for just under £400, and I'm covered for third-party liability up to £20M, except at specifically-defined hazardous locations (nuclear installations, power stations, refineries, railways, etc), where it is only £1.2M.
  - Marsymars 1y ago
    I’d just add that the cost difference to insure your £20M vs my $2m is pretty low - $2m is just the max that auto policies typically have as an option in my jurisdiction. If you want more, it’s pretty straightforward to get umbrella insurance though.

moepstar 1y ago

Overall, your argument is not wrong - however... The cost comes from "Tesla approved body shops" - which have some sort of monopoly on doing body work. That is, if you don't want to possibly have arguments with Tesla if something is wrong which they may try to attribute to the car being repaired in some back-alley kind of workshop... To add, body shops apparently rather replace whole parts which could have straightened out by a skilled repair guy.. for much less, achieving the same thing and even keeping the original panels, welds etc... Talking about repairability - i really have to give Tesla credit for making the whole of all maintenance manuals (same Tesla themselves have) available for free.

stonogo 1y ago
That behavior violates the Magnuson-Moss act. In normal times it would be illegal and you'd easily win a lawsuit about it.

throwanem 1y ago

> It's insane that these cars are designed in such a way that even minor fender benders cost tens of thousands to repair. Twenty years ago I paid about $2000 - not inflation-adjusted, that figure - to put a new bumper on an Audi whose owner, looking back, no doubt had much better reason than I to leave our respective insurance companies out of the matter. At the time it was a shocking amount. These days, even the inflation-adjusted equivalent - nearly five grand! - seems like something a lot of car owners are happy, or at least willing, to swallow.

mschuster91 1y ago

> All that said, I think Tesla and the EV industry as a whole will need to do a lot to bring down their repair costs. It's insane that these cars are designed in such a way that even minor fender benders cost tens of thousands to repair. I actually think government should create liability limits for vehicles to incentivize car makers to make repairable cars. That's fundamentally impossible. Just look at car crash ratings and automotive deaths over the last decades. These old rigid steel frames were damn easy to repair - but were deathtraps for people inside and outside, not to mention Cw values more similar to a brick wall than a F1 car. The reason modern cars are so crash-safe is because literally everything is a crumple zone, absorbing kinetic energy. You can't just heat up and bend affected parts any more, you got to replace them. And on top of that, requirements on lower fuel usage mean that parts have to be aerodynamically optimized and as lightweight as possible, which means plastics and composite materials, hollowed out shapes and god knows what else. That's making parts more expensive to manufacture and replace as well.

hn_throwaway_99 1y ago
It is not impossible to build a car that both has modern crumple zones and is still repairable. This article talks in detail about why a minor fender bender of a Rivian cost $42,000 to repair. That cost is a bit of an exaggeration (e.g. it includes the ceramic coating on the vehicle), but the article talks in detail about the design choices that made that truck so expensive to repair.

jeroenhd 1y ago

> All that said, I think Tesla and the EV industry as a whole will need to do a lot to bring down their repair costs It's not just Tesla, and it's not just the EV industry either. It's not even recent. My ten year old car has some scratches in a plastic body panel and minor bumper damage thanks to me backing into something. Stupid, I know, but that thin piece of formed plastic should not cost me €700 and the bent plastic bar should not be costing anywhere near €300 to order. The mechanic is expensive enough already. Luckily I don't care about a bit of visual damage, but it's still infuriating. More and more cars are cheaply produced, with maintenance as an afterthought, and that leads to flimsy, difficult to replace, specialised components, often non-modular to save on production cost. The cost for cheap manufacturing is blindly passed onto insurance and now a kid on a bike can bankrupt their family by accidentally hitting a Tesla. It's ridiculous. But it's hardly a Tesla-only problem, and it's been going on for years.

tptacek 1y ago
I mean, I guess, but cars have gotten drastically more reliable over the last 40 years.
- fc417fc802 1y ago
  Precision manufacturing, mastery of metallurgy, engineering expertise, and well thought out testing protocols seem fairly orthogonal to a design process that prioritizes the cost of production above the ability to perform basic repairs. Well aside from the fact that if your vehicle wasn't incredibly reliable you'd never be willing to accept such an abysmal ability to repair it.

phonon 1y ago

An underwriting loss, when you specialize in a very specific risk, is not something you can later make up with volume. They still have to pay for overhead, acquisition costs, etc. And customers have little loyalty for auto insurance. If they only join in the first place because your prices are lower, they will leave as soon as you raise them. Most insurance companies would be very concerned this type of concentration of risk, and having no underwriting pricing advantage. At best you can say Tesla wants their insurance to be a loss leader to encourage sales of the cars themselves, and to prevent the risk of other auto insurance companies declining to cover their models due to high repair costs and their customers having no insurance alternatives.

hn_throwaway_99 1y ago
You sort of touch on this, but I think it's pretty obvious that it doesn't make sense to value Tesla's insurance the same way you'd value an independent insurance company. They are an arm of a car company, designed to help them sell cars. Furthermore, I bet the loss ratio isn't even really comparable to independent insurers. Tesla itself must make some money from their parts that are needed for repairs, not to mention that they are the entire beneficiary of repairs if you use a Tesla service center, so when you factor that in I wouldn't be surprised if Tesla's insurance arm is slightly profitable.
- phonon 1y ago
  You make good points, but including underwriting costs, systems and overhead, they must be losing something like 50 cents or more for every dollar of premium they take in (I will assume they have minimal marketing costs.) Insurance is a regulated industry, and the regulators won't allow that indefinitely.