Tesla Model S owners can now drive their electric cars for an infinite number of miles with the drivetrain under warranty, or for eight years — whichever comes first.
CEO Elon Musk made the announcement on the company’s blog [emphasis added]:
The Tesla Model S drive unit warranty has been increased to match that of the battery pack. That means the 85 kWh Model S, our most popular model by far, now has an 8 year, infinite mile warranty on both the battery pack and drive unit. 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. In hindsight, this should have been our policy from the beginning of the Model S program. 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.
To investors in Tesla, I must acknowledge 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. This is amplified by the fact that we are doing so retroactively, not just for new customers. However, by doing the right thing for Tesla vehicle owners at this early stage of our company, I am confident that it will work out well in the long term.
Reading between the lines a bit, Tesla could be making this move due to some recent, negative long-term reviews of the Model S, notably from Consumer Reports. Hence my emphasis: Tesla does believe that electric motors are better and in fact thinks that it’s solved most of the problems that showed up in early production versions of the Model S.
The “infinite mile” language is of course brilliant on Musk’s part, as traditional carmakers define the mileage on their warranties.
We’ll follow up on all this and see if we can add some insight.
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