Lemonade on Wednesday launched the Lemonade Autonomous Car insurance, designed specifically for self-driving cars, starting with Tesla FSD.
- The new offering cuts per-mile rates for FSD-engaged driving by approximately 50% and Lemonade said that the decision reflects the data which showed it significantly reduced risk during autonomous operation.
- The product will begin rolling out in Arizona on January 26 and in Oregon a month later, Lemonade said.
Tesla (TSLA) CEO Elon Musk said on Wednesday that digital insurance company Lemonade (LMND) has halved the price of its pay-per-mile insurance for Tesla vehicles when full self-driving (FSD) technology is activated because it enhances security “so much.”
Musk was referring to Lemonade’s new Autonomous Car insurance in his post on social media platform X.
Lemonade’s Rate Cut For FSD
Lemonade on Wednesday launched the Lemonade Autonomous Car insurance, designed specifically for self-driving cars, starting with Tesla FSD.
The new offering cuts per-mile rates for FSD-engaged driving by approximately 50% and Lemonade said that the decision reflects the data which showed it significantly reduced risk during autonomous operation. The offering, Lemonade said, is the result of a collaboration with Tesla under which the company got access to vehicle telemetry data. The data fed by Tesla will be used to distinguish between FSD-led driving and human driving, it added.
The product will begin rolling out in Arizona on January 26 and in Oregon a month later, Lemonade said.
Shares of TSLA traded 3% higher at the time of writing while LMND stock rose 8%.
Insurer Rationale
“Traditional insurers treat a Tesla like any other car, and AI like any other driver,” said Shai Wininger, co-founder and president at Lemonade. “But a car that sees 360 degrees, never gets drowsy, and reacts in milliseconds can’t be compared to a human.”
Lemonade expects further risk reduction as Tesla releases FSD software updates. Wininger said on Wednesday that the company’s prices will drop as FSD becomes safer
Tesla’s FSD allows for automaking certain driving tasks but does not make the vehicle fully autonomous. It requires the driver to be alert to take over as required and has been at the receiving end of regulatory scrutiny over traffic regulation violations and accidents including at the time of adverse weather conditions.
How Did Stocktwits Users React?
On Stocktwits, retail sentiment around LMND stayed within the ‘bearish’ territory over the past 24 hours while message volume remained at ‘low’ levels.
Sentiment around TSLA meanwhile rose from ‘bearish’ to ‘neutral’ territory, coupled with ‘low’ message volume.
While shares of TSLA have gained 2% over the past 12 months, LMND shares have added 161%.
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