Warren Buffett on the risk from Tesla's self-driving tech to Berkshire's insurance businesses

This questions for Warren Energy. It’s from Jeff Oyster. As a Berkshire and Tesla shareholder, I would like to hear your thoughts on the potential financial effects to GEICO, assuming Elon Musks delivers on his fully autonomous driving goal. On Teslas most recent earnings call, Elon said if you’ve got at scale a statistically significant amount of data that shows conclusively that the autonomous car has let’s say, half the accident rate of a human driven car, I think that’s difficult to ignore. Assuming Elon succeeds in reducing accidents by 50% versus human drivers, wouldn’t auto insurance rates fall to reflect the reduced underwriting risk, thereby adversely impacting Geico’s revenues and float and perhaps margins too? Well, yeah, if it, if it, if it if. Well. Let’s just take the extreme example. Let’s say there are only going to be 3 accidents in the United States next year for some crazy reason that that anything that reduces accidents is, is going to reduce costs, but that that’s been harder to do than people have done before. But obviously, but if it really happens, the figures will show it and our data will show it and the prices will come down. I wouldn’t, there have been a lot of people talk about doing that in the past. I mean, General Motors used to be very big in the insurance business and and when Uber first started, they they used some firm, which now is I think a Jetal confirmed. They’re close to bankruptcy now, aren’t they, because of taking things out at the wrong prices. Is that true? Yeah. Yeah. Insurance always looks easier than it is. And it’s so much fun because you get the money at the start, you know, and then you find out whether you’ve done something stupid later on. But but you know it’s it’s it’s it’s a very tempting business when somebody hands you money and you hand them a little piece of paper but really knowing whether you’re I mean if if if accidents get reduced 50% it’s going to be good for society and it’s going to be bad for insurance companies volume but but but but you know good for society is is what we’re looking for so far this you might find kind of interesting I mean the the number of people killed per 100 million passenger miles driven. I think it actually was when I was young, it was like 15. But even post World War Two and only fells of like 7 or thereabouts. And and Ralph Nader probably has done more for the American consumer than just about anybody in in history because that’s seven or six has now come down to under two. And. And I don’t think it would have come down that way without him. There have been some kind of fluke figures of what people did during the pandemic which are quite interesting because they they didn’t drive immediately. They didn’t drive as many miles, but they they drove more dangerously, didn’t they? Is that right as Jean? Yeah. Yeah. So the point I want to make in terms of Tesla and the fact that they feel that because of their technology, the number of accidents do come down and that is certainly proof proofable. But I think what needs to be factored in as well is the repair cost of each one of these accidents has skyrocketed. So if you multiply the number of accidents times the cost of each accident, I’m not sure that total number has come down as much as Tesla would like us to believe. Tesla has been toying with the idea of writing insurance directly or indirectly, and so far it hasn’t really sort of been much of A success. Time will tell, but I think, you know, automation just shifts a lot of the expense from the operator to the equipment provider.