Tesla Safety Score: 150,000 Cars Participating

Tesla's Safety Score and Full Self-Driving Beta Program

Approximately 150,000 Tesla vehicles are currently utilizing the company’s newly implemented safety score system. This tool, introduced last month, serves to determine eligibility for owners seeking access to the beta version of Tesla’s Full Self-Driving (FSD) software, as detailed during the third quarter earnings call.

Limited Access to FSD Beta

While a substantial number of cars – 150,000 – are enrolled in the FSD beta program, access to the software itself remains restricted. Over the past year, only 2,000 drivers have been granted the opportunity to evaluate the FSD program. Recently, Tesla extended version 10.2 to an additional 1,000 owners who achieved perfect safety scores.

Understanding Full Self-Driving

The FSD software is priced at $10,000, and CEO Elon Musk has long predicted its eventual delivery of complete autonomous driving capabilities. However, it’s crucial to understand that Tesla vehicles currently equipped with FSD are not truly self-driving.

Instead, FSD functions as an advanced driver assistance system, incorporating features like the parking tool Summon and Navigate on Autopilot. The latter provides active guidance, navigating vehicles from highway on-ramps to off-ramps, managing interchanges, and executing lane changes.

Current Capabilities of FSD Beta

The latest FSD Beta aims to automate driving on both highways and city streets. It's important to note that this remains a Level 2 driver assistance system. Drivers are required to maintain constant attention, keep their hands on the wheel, and be prepared to assume control at any moment.

Beyond FSD: Telematics Insurance

Tesla intends to leverage the safety score for purposes beyond simply controlling access to the FSD beta. The company plans to integrate the feature into its developing telematics insurance product, which launched in Texas in early October. The safety score considers factors such as braking habits, turning maneuvers, following distance, forward collision warnings, and instances of forced autopilot disengagement to assess collision probability.

Data-Driven Safety Improvements

To date, Tesla has accumulated over 100 million miles of driving data. Analysis of this data reveals a 30% reduction in collision probability for customers utilizing the safety score compared to those who do not, according to Zachary Kirkhorn, Tesla’s chief financial officer.

“This demonstrates the effectiveness of the product and the positive response from customers,” Kirkhorn stated.

Predictive Modeling and Insurance Pricing

The interconnected nature of Tesla vehicles allows the company to analyze extensive data regarding driver attributes and their correlation with safety. This driving history data has been used to create a predictive model for collision probability over time.

“The model isn’t flawless; its accuracy is dependent on the available data,” Kirkhorn explained. “As our data set expands, we continue to refine the model with new variables, enabling more precise collision frequency predictions, which we then correlate with a pricing structure.”

Personalized Insurance Experience

This approach enables Tesla to offer individualized insurance pricing that is “seamlessly integrated into the car, the app, and the customer’s overall experience.” A feedback loop provides drivers with insights into driving adjustments needed to lower their collision probability after each trip.

Addressing Insurance Industry Shortcomings

Tesla’s research into insurance revealed that traditional companies base premiums on static data, such as accident history, marital status, age, and demographic information. Kirkhorn noted that this system often results in low-risk customers overpaying to subsidize higher-risk drivers.

“We believe this system is inherently unfair,” Kirkhorn added.

Expansion of Tesla Insurance

Tesla has been offering insurance in California for approximately two years. However, Texas represents the first state where premiums will be directly influenced by safety scores. The company intends to expand its insurance offerings to additional states as regulatory approvals are secured, with the ultimate goal of operating in every major market where Tesla vehicles are present.