Tesla Extends Model S Warranty To Infinity And Beyond

Giuseppe Macri Tech Editor
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Tesla Motors CEO Elon Musk announced Friday owners of its leading electric Model S were being given a new extension on their battery warranties — life.

“In hindsight, this should have been our policy from the beginning of the Model S program,” Musk wrote in a blog post on the company’s website.

“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 Model S will now include an 8-year, “infinite-mile” warranty that will apply retroactively for past and future customers alike.

In an additional rare business move, Musk warned investors this will have a short-term negative impact on the company’s earnings, which will suffer hits from the cost of addressing expanded issues covered under the new warranty.

“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,” Musk wrote. “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.”

Tesla shares closed at an all-time high of $262.01 this week, despite taking hits in recent consumer reviews from Edmunds and Consumer Reports, which said the Model S “had more than its share of problems.”

After a year of regular use both publications reported having to replace a number of parts on the car including batteries — some multiple times, including the main display touchscreen.

Tesla defended itself by saying the glitches and part replacements required by the models reviewed had already been addressed in the latest version of the Model S.

Carter Driscoll, a senior analyst of clean technology at investment bank MLV & Co. told The Huffington Post earlier this week that the Model S reviewed “was their first iteration, the first car they built, and it was bound to have a number of issues.”

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