At the same time, Musk said Tesla is continuing to work on design and software changes for its electric vehicles, which will generally lower repair costs and insurance premiums, Reuters first reported.
“We want to reduce the cost of repairs if Tesla is in a collision,” he said.
Despite the price tag for their repairs, Tesla’s electric vehicles continue to experience high demand, which Musk described as outpacing Tesla’s production capacity.
By 2022, we have manufactured and delivered 1.3M+ vehicles💪
In Q4, our highest quarterly revenue, operating income & net income → https://t.co/6WkUryAhKO pic.twitter.com/aOzmL76uja
— Tesla (@tesla) January 25, 2023
But a new data analysis by Reuters shows another side of the story, where crashed, low-mileage Teslas like Tesla Model Ys show up more often at salvage auction houses.
The data showed that a total of more than 120 Model Ys were left after the collisions — meaning Tesla decided it was cheaper to reimburse the owner than to scrap the EV entirely and pay for its repairs. These insurers listed them in the auction from December 2022 to early January this year.
Kobart and the IAA, two of the nation’s largest salvage auction companies, scanned the odometers of Tesla EVs and found that ‘most’ had done less than 10,000 miles in collision and total, according to Reuters.
Retail prices for Tesla’s electric vehicles range from about $60,000 to $80,000. An Austin-built 2022 Model Y long-range EV involved in a front-end collision earlier this year was listed by the IAA with a retail price of $61,388 and an estimated repair cost of $50,388.
A second Austin-built Model Y, this time involved in a side collision, was listed by the IAA with a retail price of $72,667 and an estimated repair cost of $43,814.
Gopart and IAA auction listings only indicate the location of the collision on the vehicle’s body — the front, rear, or side of the vehicle — usually with a post-accident photo of the vehicle. Although listings typically do not disclose other details about vehicle damage, Copart sometimes lists the names of the companies that have repossessed the wrecked vehicles in the auction. Insurers are among the companies that have listed Tesla EVs in bulk State FarmGeico, Progressive, and FarmersReuters reported.
A total of 15 Tesla Model Y long-haul vehicles built at the company’s Austin, Texas plant between June and November 2022 were auctioned off in a crash, and all but one had less than 10,000 miles on the odometer, according to Reuters.
Tesla launched its own insurance division, Tesla Insurance, in 2019, offering insurance rates nearly a third (30%) lower than competitors. Tesla Insurance, which is growing faster than Tesla’s own auto business, generates about $300 million worth of premiums annually, said Chief Financial Officer Zachar Kirkhorn.