Tesla cars have been the target of protests, boycotts, and vandalism worldwide following controversies involving CEO Elon Musk, a close advisor of US President Donald Trump.
These controversies include an alleged Nazi salute and the dismissal of thousands of federal employees.
Edmunds, a national car shopping platform, reports that drivers are trading in their Teslas at unprecedented rates, despite Trump's public purchase of a Tesla at a White House event as a "show of confidence and support" for Musk.
Protests have erupted across the United States, Germany, and the UK, with incidents of cars being set alight, shot at, and defaced with large red swastikas.
To deter vandals, some owners are modifying their Teslas by "rebadging" them or applying stickers stating they bought the car "before Elon went crazy", as the company's stock continues to fall.
However, potential tariffs and ongoing protests could lead to increased auto insurance rates for these electric vehicles, according to industry experts, reports Express US.
"The more expensive a vehicle and the pricier the parts, the higher the auto insurance will typically be," said Laura Adams, a Senior Analyst with Aceable.com.
Adams explained that auto insurance depends on numerous factors, including the driver, the make and model of the vehicle, driving history, credit score, mileage, and more. She also noted that adverse weather conditions, such as floods and storms, have contributed to rising auto insurance rates.
"What could happen is if there are a significant number of people damaging Teslas in high numbers, auto insurance companies could eventually say these vehicles are more risky," Adams explained, which might lead to steeper insurance premiums.
Yet, for such a trend to impact insurance policies, a considerable and consistent rise in claims regarding damaged Teslas would be necessary.
"We have not got to that point yet," she clarified, but cautioned, "May not happen in a month or two but may happen in the long term."
Models like Hyundai and Kia cars, often targeted by thieves, traditionally carry higher insurance rates. Now, vandalism could join theft as a potential reason for rate increases.
Insurance providers rely on algorithms that assess risk based on statistical data specific to certain locales.
"If it becomes a pattern and if companies see they get more claims that will trigger algorithms to come up with ratings" for the cars, Adams mentioned, potentially leading insurers to revise their rates.
Owning a Tesla doesn't come cheap, with entry-level models starting at a formidable $35,000. Insuring a Tesla will set you back an average of $800 more annually than covering a Toyota Camry, according to NerdWallet.
Specifically, a 2021 Tesla Model 3's insurance cost can be a staggering 54% higher than insuring a 2023 Toyota Camry, as reported by MarketWatch.
Adams has predicted that the tariffs will also indirectly lead to an increase in insurance costs.
On Feb. 1, 2025, the Trump administration announced a 25% tariff on imports from Canada and Mexico, with an additional 10% levied on Chinese goods.
This move has triggered retaliatory tariffs from these nations, sparking global trade wars. The new trade policies of the Trump administration are set to take effect on April 2, with the Federal Reserve projecting slower growth and higher inflation for 2025.
According to Adams, the tariffs could affect several car parts imported from other countries, making them more expensive and leading to increased prices.
The cost of repairing cars is also expected to rise, which would result in higher insurance costs.
"Some vehicles have parts coming from different countries so they could be subject to tariffs even if it is made in America," she explained. This could "indirectly cause the cost of the vehicle to go up and increase insurance rates."
Many dealerships, left in the dark, are preemptively raising prices as they anticipate possible changes due to the tariffs, Adams said.
"We are seeing prices rising maybe because manufacturers are worried about it. Even if tariffs don't happen we could see prices rise," she added.
Auto insurance rates are fluctuating, but there seems to be an upward trend. Despite a brief respite during the pandemic due to fewer accidents and low mileage, insurance rates rose by 20% in 2023 and over 127% in 2024, according to the Bureau of Labor Statistics.
"That's a trend that will probably continue," Adams stated.
