Tesla is known for its smart, data-driven car insurance in the US and UK. However, it may not be able to use the same approach in India due to strict data privacy laws and insurance regulations.
Tesla is preparing to enter the Indian market with its popular Model Y. It might skip launching its advanced telematics-based insurance model. Instead, the company plans to take a safer route—just like it did in China and parts of Europe—by partnering with local insurance companies to offer basic car insurance at the time of sale.
According to sources, Tesla is in talks with insurance firms like Acko, Zurich Kotak, and Liberty General Insurance. They aim to create bundled car insurance plans for Indian buyers. Tesla would include these policies with the vehicle purchase, much like regular auto insurance plans, rather than pricing them based on real-time driving behaviour.
Tesla’s original insurance model, introduced first in the US, calculates premiums based on how the driver actually drives. It uses real-time data collected from the car’s sensors. This data helps assess things like sudden braking, fast acceleration, or mobile phone use while driving. Drivers who score well for safety get cheaper monthly premiums. Tesla manages the entire process—from collecting driving data to selling the insurance—without third-party companies.
But in India, this kind of system may not be allowed. The Digital Personal Data Protection Act (DPDPA), passed in 2023, requires companies to get clear and specific consent before collecting or using any personal or behavioural data. This includes driving habits, speed, and location.
Under this law, companies like Tesla must clearly inform users about the data they want to collect. They must also explain how they will use it. Users must then agree to that use. Importantly, users can withdraw their consent at any time and ask the company to delete their data.
India’s insurance regulator, IRDAI, hasn’t yet approved full-scale usage-based insurance (UBI). This model depends on real-time data and behaviour tracking. Without this approval, Tesla can’t use its dynamic insurance model in India. Without this approval, Tesla can’t use its dynamic insurance model in India.
So, Tesla may follow the same strategy it uses in China and Germany, where strict data rules also make real-time insurance pricing difficult. In China, Tesla partners with local insurers because the government mandates storing all vehicle data within the country. In Europe, the GDPR law also restricts how companies can use personal data.
A senior official at one of the insurers said that Tesla is focusing on bundled, easy-to-purchase insurance policies for now. These will be based on traditional factors like age, location, and vehicle model—just like other Indian car insurance plans.
Tesla’s insurance will likely be available through its website or in showrooms, making it convenient for buyers to choose a policy during the purchase process.
This approach makes sense for now, sources said, especially since Tesla’s telematics-based insurance business has had financial challenges. Even though it has grown quickly in the US and UK, Tesla Insurance reportedly lost $42 million in the first nine months of 2024 due to high claim costs and complex regulations.
For now, Tesla seems to be avoiding risks in India by sticking to simple insurance offerings and local partnerships—at least until the rules become more favourable for their advanced insurance model.