The world’s largest electric vehicle manufacturer is bleeding funds as a result of its expansion into auto insurance.
According to new data released by released by S&P Global Market Intelligence, Tesla Inc. lost nearly US$183 million on its insurance business in 2025 despite collecting US$1.37 billion in premiums.
The company’s insurance operations lost US$182.7 million during the year, meaning Tesla burned through roughly 13 cents for every US$1 it collected in premiums after claims and operating expenses.
The losses came even as Tesla’s insurance business grew 40.7% year-over-year.
Tesla sharply expanded direct underwriting operations during 2025, taking far more insurance risk onto its own balance sheet instead of relying on outside carriers.
The company directly underwrote 75.9% of all premiums in 2025 compared with 32.6% a year earlier and 21.2% in 2022. Premiums written directly by Tesla-affiliated insurers surged 227.4% year-over-year to US$1.036 billion from US$316.7 million in 2024. At the same time, business written through outside managing general agents fell 49.7% to US$328.8 million.
Tesla’s overall direct loss ratio reached 100.4% in 2025, meaning the company paid out slightly more in claims than it collected in premiums before accounting for payroll, administration and other operating costs.
California became the centre of Tesla’s insurance expansion. Premiums written in the state jumped 584.5% year-over-year to US$725 million from US$105.9 million in 2024, accounting for nearly 70% of Tesla’s total insurance business.
With US$125.6 million in premiums written, up 15.7%, Tesla was the state's second-most popular insurer within the period. Tesla also expanded insurance operations into Arizona, Ohio, Illinois and Florida during the year.
Tesla operates its own insurance business through subsidiaries including Tesla Insurance Co. and Tesla Property & Casualty Inc., allowing the automaker to directly underwrite policies instead of relying entirely on outside insurers.
Under that model, Tesla collects premiums and assumes responsibility for paying claims and absorbing underwriting losses. The company previously relied far more heavily on third-party partners including State National Insurance Company, which handled much of Tesla’s insurance business on its behalf.
This share of Tesla-related insurance business fell from 85% in 2022 to 24% in 2025.
