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Tesla to expand its insurance programme to New Zealand

Tesla has created a customised insurance program, InsureMyTesla, that claims to be cheaper than traditional plans because its specifically tailored to their advanced safety features, such as the Autopilot system.

InsureMyTesla is already available in twenty countries and is underwritten by insurers partnering with Tesla. In New Zealand, Tesla is partnering with Vero Insurance.

The insurance package demonstrates how the insurance industry is bound for disruption as cars get safer with self-driving capabilities.

Until then, Tesla’s safety features should theoretically reduce insurance rates. However some Tesla owners have reported that they have been paying higher than average premiums to drive their electric cars.

Tesla CEO Elon Musk has said that insurance agencies should adjust their prices for Tesla vehicles because the cars come with Autopilot, the company’s advanced assisted feature.

“Not to the exclusion of insurance providers but if we find that insurance providers are not matching the insurance proportionate to the risk of the car, then if we need to, we will in-source it,” Musk said in February.

The deal with Vero Insurance shows how New Zealand insurance agencies are starting to understand that they must adjust their prices as cars get safer.

In the near future Tesla hopes to package the price of insurance and maintenance into the price of future vehicles.

“It takes into account not only the Autopilot safety features but also the maintenance cost of the car,” Jon McNeill, Tesla’s vice president of sales and services, has said of InsureMyTesla. “It’s our vision in the future we could offer a single price for the car, maintenance, and insurance.”

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Tesla posts a record quarterly loss

Tesla posted a NZ$895.9m loss in the third quarter as it spent heavily to make up for production bottlenecks to bring in its more affordable Model 3 sedan to market.

Tesla said the bottlenecks in the production of the Model 3 sedan stemmed from its battery module assembly line at its Nevada Gigafactory, where Tesla had to redesign part of the production process.

This has caused a loss of US$3.70 per share, a far bigger decline than what Wall Street had predicted. Analysts polled by FactSet forecasted a loss of US$2.85 per share.

The affordable US$35,000 Model 3 would move Tesla from a luxury automaker into the mainstream. 

Tesla chief executive Elon Musk promised that the Model 3, which has a waitlist of 500,000 potential buyers, would be simpler to make than Tesla’s previous vehicles. However the company produced only 220 Model 3s in the third quarter, far fewer than the 1,500 Musk promised.

And while some customers may be annoyed by the delays, they’re not necessarily losing faith in Tesla.

“It is disappointing, but I would rather that Tesla make the car correctly and to an optimal finish than rush and turn out a disappointing product,” said Lisa Gingerich, who reserved a Model 3 within minutes.

 

Tesla had other major expenses in the quarter. The company opened 18 stores and service stations worldwide and set up 126 Supercharger stations in preparation for the increase in demand for Model 3 vehicles.

Sales of Tesla’s two other vehicles, the Model S sedan and Model X SUV, increased by 4.5 per cent to 25,915. Tesla said net orders for those vehicles hit a record level in the third quarter, setting the stage for record deliveries in the fourth quarter.

The company says it’s on track to deliver 100,000 Model S and Model X vehicles in 2017, up 30 per cent from 2016.

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Tesla job cuts

Job cuts have been made by Tesla company-wide, according to a statement on Saturday by the electric vehicle manufacturer.

The Palo Alto-based company confirmed the cuts but did not disclose how many of its 33,000 workers would be affected.

According to reports, it is estimated by former employees that as many as 400 to 700 employees may have been fired from a range of roles including administration, sales and manufacturing.

Meanwhile, an unspecified number of workers received bonuses and promotions following their reviews, according to the company.

The company said earlier in the month that “production bottlenecks” had left Tesla behind its planned ramp-up for the new Model 3 mass-market sedan.

The company delivered 220 Model 3 sedans and produced 260 during the third quarter. In July, it began production of the Model 3, which begins at (US)$35,000.

However, targets were missed for producing vehicles to a waiting list of more than 450,000 customers.

According to a statement from the company, the decision was made in order to boost morale, as high-performing employees have been rewarded.

Despite the mass firings, Tesla plans to hire hundreds more workers in the near future.

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