Business

Tesla extends warranty on Model S — because electric cars are 'fundamentally more reliable'

Tesla Model S
Image Credit: Tesla Motors

Tesla CEO Elon Musk announced yesterday that he is upgrading the warranty of Tesla’s model S in the only way a true nerd could: by invoking infinity.

The new warranty increases coverage of the Model S’s drive unit to match the lifetime coverage on the battery pack.

“Model S, our most popular model by far, now has an 8-year, infinite mile warranty on both the battery pack and drive unit,” Musk wrote on the company blog.

“There is also no limit on the number of owners during the warranty period. Moreover, the warranty extension will apply retroactively to all Model S vehicles ever produced.”

This announcement doubles the previous warranty (4 years). It also multiplies the 50,000 mile guarantee to, well, the edges of the universe and back. Interestingly enough, Musk acknowledges that this “will have a moderately negative effect on Tesla earnings in the short term, as our warranty reserves will necessarily have to increase above current levels.”

“In hindsight, this should have been our policy from the beginning of the Model S program,” Musk wrote. “If we truly believe that electric motors are fundamentally more reliable than gasoline engines, with far fewer moving parts and no oily residue or combustion byproducts to gum up the works, then our warranty policy should reflect that.”

The warranty change will matter a lot to companies that Tesla in their corporate fleet. I’ve seen Teslas driven around San Francisco as part of car-ownership sharing service, Get Around. Hertz rent-a-car has also added Tesla’s to their options. The U.K government is reportedly considering Tesla as part of their large government fleet.

Early reviews from Consumer Reports and Edmonds found significant maintenance issues, which Musk now believes are addressed. This announcement may be to pre-empt any continued issue with Tesla’s reputation.


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