> why are they not taking the liability of the cars.
Because that's still incredibly costly. We as a society care greatly about a decrease in net risk, but that doesn't mean that net risk is small enough for one party to bear.
If they make driving safer, they could insure cheaper and make more profit than existing insurance companies. Or they could collaborate with insurers to reduce the insurance cost for Tesla drivers, e.g. by underwriting the costs of deadly accidents, and splitting the profit. 35000 deaths, that's a lot of dough. A money making machine like Tesla must surely have thought of that, if it is remotely true.
Because that's still incredibly costly. We as a society care greatly about a decrease in net risk, but that doesn't mean that net risk is small enough for one party to bear.