Lemonade has launched a new insurance product offering up to 50 percent lower rates for Tesla vehicles using Full Self-Driving technology. The announcement drove a surge in Lemonade's stock price to a three-year high. The product highlights data showing fewer accidents when FSD is engaged.
Lemonade, a digital insurance startup valued at $5.8 billion, announced on January 21, 2026, the launch of its 'Lemonade Autonomous Car Insurance' product, starting with an exclusive offer for Tesla's Full Self-Driving (FSD) enabled vehicles. The policy cuts rates by approximately 50 percent for miles driven with FSD engaged, based on data indicating significantly safer driving conditions. Lemonade plans to introduce even lower rates as Tesla releases advanced FSD versions via software updates.
The news propelled Lemonade's shares (LMND) up on Wednesday, reaching a new three-year high of $88.88 on January 13, with a 152 percent gain over the past 52 weeks. The stock traded at $81.31, maintaining a 100 percent 'Buy' technical opinion from Barchart and a Trend Seeker 'Buy' signal. However, it remains volatile, down 6 percent since the signal on January 12.
Lemonade Co-Founder and President Shai Wininger emphasized the partnership's potential, stating that Tesla's API provides 'richer and more accurate driving behavior data than traditional UBI devices.' He added, 'Traditional insurers treat a Tesla like any other car, and AI like any other driver. But a car that sees 360 degrees, never gets drowsy, and reacts in milliseconds can’t be compared to a human.' Wininger noted that 'Teslas driven with FSD are involved in far fewer accidents,' enabling precise pricing through nuanced sensor data.
Earlier in mid-December, Lemonade offered Tesla owners in California, Oregon, and Arizona direct app connections for behavior-based rates, bypassing separate telematics devices. The full product rollout begins in Arizona on January 26, followed by Oregon a month later.
Analysts rate Lemonade a 'Hold' with price targets from $30 to $98, amid high short interest at nearly 20 percent of the float. The company expects losses per share to narrow by 17.5 percent in 2025 and 31.9 percent in 2026.
