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Elon Musk’s Tesla insurance plans could ultimately prove Warren Buffett wrong

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7 years ago

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During Tesla’s first-quarter earnings call, Elon Musk mentioned that the electric car maker is coming up with an insurance service for its vehicles. Musk noted that Tesla’s insurance plan would be unique in a way that it will leverage customer data collected from its fleet of vehicles. This will, according to the CEO, create a program that is “much more compelling than anything else” in the market.

Such statements sound very optimistic, and in true Elon Musk fashion, the CEO raised the bar for the upcoming service higher, adding that Tesla’s insurance program could see a launch as early as next month. These targets were unsurprisingly met with much skepticism. Tesla’s avid critics dismissed the plan and Musk’s comments as another “funding secured” moment, and even experienced investors expressed their doubts about the program’s potential success.

Doubts from the Oracle

Arguably the most notable critic of Tesla’s insurance plan is financial titan Warren Buffett, CEO of Berkshire Hathaway. Speaking at the Berkshire Hathaway annual meeting on Saturday, Buffett noted that Elon Musk’s insurance aspirations would likely fail. “It’s not an easy business. The success of the auto companies getting into the insurance business is probably as likely as the success of the insurance companies getting into the auto business,” he said.

The financial titan explained further, stating that veteran automaker General Motors had unsuccessfully attempted a similar program in the past under its Motors Insurance Company. Though Buffett, fondly known in the investment world as the “Oracle from Omaha,” admitted that the trove of data that Tesla gathers from its fleet, he argued that the electric car maker would likely not make money in its insurance endeavors.

“And I would bet against any company in the auto business (getting into insurance) being any kind of an unusual success. The idea of using telematics in terms of studying people — it is important to have data on how people drive, how hard they brake, how much they swerve, all kinds of things. So I don’t doubt the value of the data. But I don’t think the auto companies will have any advantage to that. I don’t think they’ll make money in the insurance business,” Buffett explained.

A case for Tesla’s insurance plans

Buffett holds a lot of authority in the insurance industry, with Berkshire having Geico and General Reinsurance among its numerous subsidiaries. Yet, despite these concerns, Elon Musk’s plan for Tesla’s own insurance program could actually work. Contrary to speculations from the company’s critics suggesting that Musk is merely shooting from the hip, Tesla is actually working with experienced insurance firms to develop its own program. Among these is Markel Corporation (ironically dubbed at times as a “mini-Berkshire” stock). During the firm’s quarterly conference call last week, co-CEO Richard Whitt stated that one of Markel’s subsidiaries, State National, will provide the fronting for Tesla’s insurance.

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“Often the people that have these innovative ideas have a hard time navigating the regulatory environment and being able to execute quite honestly on their innovative ideas. That’s where State National can come to the table and help them. In the case of the partnership with Tesla, State National is providing just that. They’re supporting innovative solutions that Tesla has [created] with risk-taking partners. And I don’t want to say any more than that, because obviously Tesla and the risk-taking partner have many things they probably want to say about the arrangement,” Whitt said.

Another advantage that Tesla might have with its upcoming program is that Elon Musk’s primary goal is likely not to “make money in the insurance business” in the near-term. Instead of chasing profits immediately after its rollout, Tesla’s insurance could simply be rolled out as a means to streamline the ownership experience of the company’s electric cars further. Together with several inherent advantages of the company’s vehicles, such as the absence of fuel purchases, affordable Supercharging rates, and unique driving dynamics offered by their all-electric powertrain, having a customized, worry-free insurance service could be yet another factor that can make Teslas attractive to car buyers.

A lot of the details surrounding Tesla’s insurance plans are yet to be announced, and it remains to be seen if the company could ultimately pull off an endeavor that could prove the world’s third-richest person wrong. Ultimately, just as it was far too early to discount SpaceX after the initial failures of the Falcon 1 rocket, it might simply be far too early to dismiss Elon Musk’s plans for Tesla’s own insurance program.

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Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Investor's Corner

Tesla deliveries best Wall Street guesses alongside second-best energy quarter

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6 hours ago

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October 2, 2026

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Credit: Tesla Europe & Middle East | X

Tesla (NASDAQ: TSLA) reported strong delivery figures that beat Wall Street guesses, and they were revealed alongside the company’s second-best quarter in terms of energy deployments ever.

Tesla announced this morning that it delivered 486,532 cars in Q3, while producing 464,391, exceeding analyst consensus, which sat around 462,000 units.

Meanwhile, Tesla reported 13.7 GWh of energy storage deployed for the quarter. That’s the second-best quarter Tesla has ever reported on that side of things.

Vehicle Deliveries

Deliveries were strong, and it was another quarter when Tesla had the opportunity to outshine the Wall Street pundits who are quick to criticize and slow to give credit. Tesla saw a slight decrease in deliveries compared to Q3 2025, but Tesla still had the $7,500 EV Tax Credit to use to help incentivize consumers to pick an EV.

A small decrease of 2.1 percent is pretty telling because it shows Tesla does not need massive federal credits to convince consumers to purchase its vehicles.

It was also the company’s third-best performance all-time in terms of deliveries, trailing that of Q3 2025 with 497,099 deliveries and Q4 2024, when the company handed over 495,570 cars.

We reported several days ago that Tesla Showrooms across the United States were completely bare of inventory or unclaimed units. Many locations also removed Demo Drive units, which had been bought by customers looking to take delivery sooner.

Tesla showrooms picked clean ahead of Q3 end as demand looks strong

Energy Generation

Tesla’s Energy Generation performance in Q3 was also very strong, as the company deployed 13.7 GWh of energy storage over the past three months. The only quarter when Tesla reported stronger energy deployment figures was Q4 2025, when 14.2 GWh of energy storage was deployed.

Tesla’s Q3 performance in energy generation has continued to grow each quarter, with the company increasing its deployments by ten-fold since Q3 2021, when just 1.3 GWh was deployed.

It is also nearly double what it was in Q3 2024, when the company reported 6.9 GWh. This is one of Tesla’s quickest-growing divisions, and it flies under the radar with fans and analysts, as many are focused on self-driving or the vehicles themselves.

Tesla Stock

Shares rose 5.07 percent to $372.06 at just after 10 a.m. on the East Coast. This is a rarity for Tesla after a strong delivery report, as positive news usually brings the stock down. Many quarters with extremely robust delivery reports have not been as kind to the Teslanaires of the world.

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Elon Musk

Elon Musk and Trump are closer than ever, and Tesla could be the big winner

Elon Musk sat beside Trump as AI leaders signed a voluntary White House safety accord.

Published

3 days ago

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September 29, 2026

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Elon Musk had the seat right next to President Donald Trump on Tuesday as the White House hosted the leaders of America’s biggest artificial intelligence companies for a lunch that ended with a voluntary industry accord on AI safety.

A seating chart Trump posted on Truth Social placed Musk at the president’s left in the East Room, with Nvidia CEO Jensen Huang on his right, according to an Associated Press reporter. Anthropic CEO Dario Amodei, OpenAI President Greg Brockman, Meta’s Mark Zuckerberg, Google’s Sundar Pichai, Microsoft’s Satya Nadella and Amazon founder Jeff Bezos also attended, along with Vice President JD Vance and House Speaker Mike Johnson.

After the lunch, Trump told reporters outside the West Wing that the executives had signed “The White House Accord on Superintelligence: A Joint Commitment on Frontier SI Responsibilities.” Johnson described it as a voluntary statement of principles built on “robust internal controls and layers of internal and external review,” while Zuckerberg said company boards would independently review reports from outside auditors. Trump called the document “morally binding,” said he would name a new AI czar within days, and signed an executive order formally renaming artificial intelligence “super intelligence,” CNBC reported.

Musk was not in the room for Tesla alone. Since SpaceX absorbed xAI, he runs the company behind Grok and one of the largest AI training operations anywhere. On September 25, he said another 220,000 Nvidia GB300 chips would come online at Colossus 2 within a week, with more expected in November and December.

SpaceX confirms third massive compute deal at Colossus data center

 

Musk also used the trip to restate his energy ambitions. “SpaceX is aiming together with Tesla to do 200 gigawatts of solar production per year,” he said at an event in Washington. It is the same combined target he laid out that feeds directly into Terafab, the Tesla and SpaceX chip venture that will need enormous amounts of power.

The showing between Musk and Trump has come a long way, since the two had the very public split in mid 2025 after Musk opposed the “Big Beautiful Bill” and left DOGE. They reconciled at Charlie Kirk’s memorial that September, and Trump later called their relationship “good”. Since then, Musk has joined Trump’s China delegation in May and attended last week’s White House state dinner for Chinese President Xi Jinping.

For Tesla, that access to government official could pay dividends. As Teslarati noted in January, federal autonomy rules, NHTSA oversight and a single national standard for driverless vehicles all run through an administration Musk can more easily reach directly as Tesla works to scale Robotaxi and Cybercab beyond Texas.

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Investor's Corner

Tesla showrooms picked clean ahead of Q3 end as demand looks strong

Published

3 days ago

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September 29, 2026

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Credit: @thaichiminh1907/X

Tesla (NASDAQ: TSLA) showrooms have been picked clean ahead of the end of the third quarter of the year, as demand looks to be strong and delivery estimates for new vehicles are pushed into late 2026 and early 2027.

Tesla appears to have sold out of many of its Model 3 and Model Y trim levels in the United States, as only the Model Y RWD and Model Y All-Wheel-Drive are available for delivery before the end of the year.

Additionally, many showrooms are either completely empty or void of all but just one demo unit within the buildings themselves in an effort to bolster what could be one of Tesla’s best quarters in vehicle deliveries in recent memory.

Additionally, when I spoke to the guys at Tesla Mechanicsburg two weeks ago, when I returned the Model Y L, their third hauler of the week had just arrived, and every vehicle on it, along with every vehicle in their delivery lot, was accounted for and had a name attached to it for delivery.

Tesla saw a 25 percent increase in deliveries in Q2 compared to the same quarter the year before. The vast majority of the 480,126 units it delivered, 467,762 vehicles to be exact, were the Model 3 and Model Y.

In Q3 2025, Tesla delivered 497,099 vehicles, once again a figure that was dominated by the company’s two mass-market vehicles. Analysts have unusually wide predictions for this quarter, likely because so many firms missed the Q2 delivery figure by such a substantial margin; Wall Street predicted 408,000 cars, while Tesla delivered 480,000.

Goldman Sachs has Tesla slotted for 435,000 deliveries in Q3, while JPMorgan said it anticipates 482,000. The median guess is about 449,000 deliveries for Q3.

Interested in ordering a Tesla? Use my referral code for three free months of Full Self-Driving (Supervised) here.

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