Tesla said insurance costs for its vehicles in China have risen by an average of about 10 percent, with the Performance version at 20 percent or less.

(Image credit: CnEVPost)

News that Tesla owners are facing a big increase in insurance costs has raised concerns after exclusive insurance for new energy vehicles (NEVs) became available in China.

The company was quoted by Sina Tech on Thursday as saying that insurance costs for Tesla vehicles in China rose by an average of about 10 percent from December 30 data, with the Performance version at 20 percent or less.

Vehicle insurance is one of the important components to protect users' experience, and changes in car insurance prices vary slightly across insurers, regions and models, Tesla said.

On December 27, the Shanghai Insurance Exchange launched a NEV insurance trading platform, with the first batch of exclusive NEV insurance products from 12 insurance companies on offer.

This is expected to provide millions of NEV owners with a more convenient option when purchasing insurance products. According to China's Ministry of Public Security, the country's NEV fleet has reached 6.78 million units as of the third quarter of 2021.

The exclusive insurance is expected to allow nearly 80 percent of NEV owners to see a drop in insurance costs, China Securities Journal said earlier this week, citing industry sources.

But the information shared by Weibo bloggers showed that the amount of insurance premiums some owners will have to pay has risen sharply.

According to a CCTV report on Wednesday, one Tesla owner shared a quote that showed he was facing a cost increase of more than RMB 6,000, or 80 percent, from four days ago before the exclusive insurance became available.

Salespeople from several insurance companies said there was indeed some upward adjustment in the cost of NEV insurance, according to the report.

CCTV cited industry sources as saying that this is because NEVs cost more to repair and have a higher probability of filing a claim than traditional cars.

The expanded coverage of exclusive insurance for NEVs may also have led to the upward adjustment of premiums faced by some models, the report said.

Notably, earlier today, the price of the entry-level Model 3 was raised by RMB 10,000 to RMB 265,652 in China, and the price of the entry-level Model Y was raised by RMB 21,088 to RMB 301,840.

As of now, of all Tesla's models for sale in China, only the entry-level Model 3 is priced below RMB 300,000, making it the only model of the company that is eligible for China's state subsidies.

This means that consumers who currently order Tesla vehicles face higher insurance costs and a higher selling price for their vehicles.