Lemonade's New Insurance Product Boosts Tesla (TSLA) FSD Narrative, Analyst Says

Tesla, Inc. (NASDAQ:TSLA) is one of the AI Stocks Analysts Are Watching. On January 22, Morgan Stanley analyst Andrew Percoco reiterated an Equalweight rating on the stock with a $425.00 price target. The rating affirmation follows digital insurance company Lemonade’s launch of “Autonomous Car Insurance” that slashes per-mile rates for Tesla’s FSD-engaged driving by approximately 50%.

According to Lemonade, it’s newly launched insurance product marks a significant step forward in “legitimizing autonomous driving, and in particular, Tesla’s Full Self-Driving (FSD) technology.”

The policy serves as a direct link between insurance pricing to miles driven under Tesla’s FSD, which cuts rates by up to 50% for those miles. It differentiates between human-driven and FSD-driven mileage, signaling how its underwriting models recognize autonomous operations as carrying a lower risk.

This is a notable shift in how insurers treat advanced driver-assistance and autonomy features, signaling confidence in real-world driving data, particularly from Tesla’s fleet.

Morgan Stanley’s investor note highlights how Lemonade’s insurance product can encourage increased FSD usage and adoption. Moreover, lower insurance premiums offer financial incentives for drivers to use Tesla’s FSD more frequently, which reinforces Tesla’s value proposition.

Particularly for Tesla, this means that FSD is beginning to gain recognition beyond mere experimentation, transitioning towards its broader acceptance.

As insurers incorporate increasingly granular driving data into pricing, technologies that demonstrably reduce risk should be rewarded faster and more transparently. For Tesla, this marks another step toward external recognition that FSD is moving from an experimental feature to an economically relevant safety system.

Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives.

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