Tesla is disruptive with a capital ‘D’, and its latest warning shot across the bows of the car industry will have executives around the world scratching their heads. In any industry where 3 year warranties are still the norm, Tesla has announced that the 8 year warranty that previously covered the battery pack has now been extended to cover the drive unit too. Not only this but the cover will include all Model S cars built since launch in 2012.
In typically unorthodox style, the announcement was made via the official Tesla blog rather than through a press release which has meant that the news has gone under the radar. The full post written by CEO Elon Musk reads:
“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 by products 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.”
The move means that Model S owners now have a 4 year 50,000 mile warranty covering the whole car and either an unlimited mileage 8 year battery and drive unit warranty with 85 kWh battery models or a 125,000 mile 8 year battery and drive train warranty for 60 kWh models.