Tesla Sets up Insurance Firm in Beijing, May Sell EV Policies

US carmaker Tesla has registered an insurance broking firm in China, according to a national corporate information database.

The move, on Tuesday July 30, suggests that Tesla will try to win approval to sell insurance policies in the country.

The new company, located in Beijing’s central business district, was set up with a registered capital of 50 million yuan ($6.92 million), the National Enterprise Credit Information Publicity System showed.

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Tesla sought regulatory approval to sell insurance products in China more than three years ago, when it had registered a company in 2020 but removed that registration in April this year.

Electric vehicles are expensive to repair, posing a challenge to insurance providers accustomed to the demands of conventional combustion engine vehicles.

By selling insurance directly to consumers, Tesla could potentially offer lower-cost EV insurance products, which are usually more expensive than those for gasoline cars.

Tesla did not immediately respond to a Reuters’ request for comment.

Tesla’s biggest Chinese rival BYD was approved to take over a bankrupt online insurance unit Yi’an P&C Insurance Co last May.

China, which is Tesla’s second largest market, has increased its support for the US carmaker, which plans to build a data training centre and roll out its Full Self Driving software in the country this year, despite ongoing tensions with the United States over tech rivalry.

Tesla won an endorsement from the country’s top auto industry association that said in April the data collection by Tesla fleets in China was compliant. Since then, Tesla cars have been allowed to enter some government and military compounds where they were previously banned.

The company is also building a new factory in Shanghai, where it plans to make power storage units.