Buffett knocks Elon Musk’s plan for Tesla to sell insurance: ‘It’s not an easy business’

KEY POINTS

  • “The success of the auto companies getting into the insurance business is probably as likely as the success of the insurance companies getting into the auto business,” says Buffett.
  • Musk told analysts in an earnings conference call last month that Tesla would be launching its own insurance product later in May.
  • Buffett is not impressed, however. “I’d bet against any company in the auto business” getting into insurance, he said.

OMAHA, Neb. — Warren Buffett said Elon Musk’s Tesla will probably struggle as it ventures into the insurance business, a field in which Berkshire Hathaway thrives in.

“It’s not an easy business,” Buffett told shareholders at the Berkshire Hathaway annual meeting. “The success of the auto companies getting into the insurance business is probably as likely as the success of the insurance companies getting into the auto business.”

Musk told analysts in an earnings conference call last month that Tesla would be launching its own insurance product later in May. He said that Tesla has “direct knowledge” of a person’s risk profile “based on the car,” which gives it an “information arbitrage opportunity.”

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