Tesla's entry into India to bring innovation in EV insurance space

Tesla's entry into India will drive innovation in the EV insurance market, prompting insurers to rethink product offerings and embrace technology-driven solutions

Tesla’s entry into the Indian market is poised to bring fresh innovation to the electric vehicle (EV) insurance sector, according to industry insiders, who say the US-based firm’s advanced technology and high-quality battery systems are likely to push domestic insurers to rethink and upgrade their offerings.

 

Last week, Tesla launched its Model Y, a fully electric car priced from ₹60 lakh, by opening its first showroom in Mumbai’s Bandra Kurla Complex (BKC). In the wake of the launch, ACKO, Zurich Kotak, and Liberty General announced they had been chosen as “preferred insurance partners” for Tesla customers in India. 

 

Insurers are now providing comprehensive cover that includes essential EV charging infrastructure such as cables, wall-mounted units and adaptors. A battery secure option, offered as an add-on, is tailored to protect the battery with coverage for repairs and replacement, helping preserve long-term performance.

 

Also available are policies offering full depreciation shield, gap value protection, consumables and tyre coverage, key replacement, protection for personal belongings, EMI support, and passenger assistance -- all designed to align with Tesla’s premium ownership experience.

 

“Entry of Tesla will impact the larger EV insurance market as Tesla owners are likely to opt for a wider variety of coverages. Secondly, Tesla’s presence will likely drive broader market transformation and EV specific infrastructure growth in the country, encouraging more consumers to consider EVs. This shift may lead to increased demand for EV-specific insurance products as adoption rises,” said Animesh Das, managing director and chief executive of ACKO General Insurance. 

 

In addition to Tesla’s preferred insurers, companies such as New India, HDFC ERGO, and ICICI Lombard General Insurance are offering cover for the company’s vehicles. Premiums range from ₹42,000 for standard cover to ₹1.4 lakh for comprehensive policies based on an insured declared value (IDV) of ₹56.89 lakh.

 

 

Paras Pasricha, business head of motor insurance at Policybazaar, said: “Tesla’s entry will significantly impact the EV insurance landscape, especially in the luxury segment. Major insurance companies -- ICICI Lombard, Reliance, HDFC ERGO, and New India -- are offering comprehensive policies for Tesla, including critical add-ons like battery protection and zero depreciation. While the insurance coverages for Tesla are largely similar to other EVs, the sophistication in claims processing, repair network, and data-driven personalisation will evolve with time.”

 

Pasricha added that Tesla’s ability to collect and analyse vehicle data could lead to more dynamic and tailored pricing models. “Insurers expect more dynamic, user-specific products as real-world performance and claims data from Indian roads emerge,” he said.

 

Tesla’s battery system and electronic control module are among its key technological features. In most EVs, the battery accounts for 50 per cent to 60 per cent of the vehicle’s insurance cost. A superior battery not only enhances vehicle safety and longevity but also translates into more favourable pricing due to its lower risk of damage.

 

“From an insurance standpoint, these innovations enhance vehicle performance, reduce breakdown probability, and offer greater safety -- all of which give underwriters additional comfort during pricing and risk assessment,” said Pankaj Verma, chief technical officer at Zurich Kotak General Insurance. “Tesla’s battery technology -- with its longer life, lower susceptibility to damage, and better thermal control -- results in more favourable insurance parameters and differentiated pricing.”