Tesla Model S Service Contract: $600/Year, Or Warranty Voided Page 2

2012 Tesla Model S beta vehicle, Fremont, CA, October 2011

2012 Tesla Model S beta vehicle, Fremont, CA, October 2011

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I guess that removes any doubt about the future profitability of Tesla’s service centers.

Model S owners have not responded well to the new plan. 

In a poll of owners-to-be on the Tesla Motors Club forum, 12 percent agreed that Tesla had “screwed the pooch” and said they would cancel their orders. Another 48 percent thought the price was too high--but said they would pay it, reluctantly, because they had no other choice. 

Only 9 percent thought it was a great deal, and were happy to fork over the $600 each year.

It's odd that Tesla has taken seemingly opposite tacks with its Supercharging and maintenance programs.  The Supercharger quick-charging program takes a huge benefit of electric cars--low "fuel" costs--and trumps it, making completely free.

The maintenance program, on the other hand, takes another benefit of electric-car ownership--low maintenance--and negates it, by escalating the price to the level of a gasoline car.

It's a bit like asking Supercharger customers to pay 50 cents a kilowatt-hour, and then saying, "Hey, you're still paying a little less than you would to put gas in a Mercedes."

Here's a pipe dream: Tesla applies its Supercharger philosophy to the Model S service program and makes it free.

It's not such an outlandish idea; BMW already does it. Every new BMW comes with four years and 50,000 miles of free service.

If you ask me,  Tesla should emulate the Bimmer instead of the Benz.

In a last-ditch effort to find out what Tesla technicians actually do during the annual inspections, I called one of Tesla's maintenance centers.

"It's basically a systems check," came the answer. "But we haven't received the documentation yet on precisely what we'll be doing. When we get it, I'll be happy to send you a copy."

Stay tuned.

David Noland is a Tesla Model S reservation holder and freelance writer who lives north of New York City.


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Comments (71)
  1. I have to wonder if this is even legal.
    Massachusetts has a "right to repair" law on the books. I don't know the details, but certainly the spirit of the law is to allow the consumer to take their vehicle to a shop of their choosing.

    Tesla's behavior seems particularly egregious if they insist on the dealer rotating the tires (which I do myself). This is particularly troubling because tire rotation may be needed every 5000 miles and Tesla dealers will be few and far between.

  2. The possible legal repercussions already suggest that the truth may be rather more nuanced than this story suggests but this story does touch on an interesting conundrum for specialised EV makers: they need to offer a network of service stations, but what will pay for that if the cars don't actually need that much service? Clearly Tesla is grappling with that question and it would appear that so far they haven't found a particularly satisfying solution.

  3. That's why Tesla should open dealerships they'd make more money per location. A service center that only provides service to cars that almost don't need service plus the service rangers means that the service centers won't pull in a lot of income and may actually cost Tesla more then what they bring in. If Tesla had dealerships they'd make money off of sales, service, accessories, and preowned cars.

  4. If this $600/year service charge is true, in my opinion, Tesla need to justify what they are doing for the $600. I can imagine many owners or potential owners wanting to see evidence that the $600 spent represents value for money.
    If Tesla fail in explaining or justifying the $600 adequately, then I can imagine critics like Top Gear will have a feast.

  5. Model S tires are not rotatable. The rear tires are a different size than the front, and can't be moved front to rear. The wheels are unirotational and cannot be moved side to side. They would have to dismount the tires from the rims to rotate. That's why they say that their servise rangers cannot rotate the tires on the field.

  6. Tesla can *try* to force their customers to do maintenance work at a Tesla dealership, but the minute they invalidate a warranty, they'll have the FTC at their door.

    Magunsson-Moss is clear on this - a manufacturer can't force a consumer to perform service at any specific location as a condition of the warranty. All they can do is specify the exact type of service that must be performed.

    Once again, Tesla shows a lack of automotive knowledge and experience. It's mind boggling that such a smart company could make so many mistakes...

  7. I'm sorry - make that "Magnuson-Moss". Can't spell today.

  8. As John Briggs said: I'm pretty sure it's illegal everywhere for a car manufacturer to void a warranty after a car is serviced at a third-party shop.

  9. (I guess I should add: Unless of course they can show that the third-party shop caused a problem.)

  10. So Tesla have snuck in charges by the back door that are pretty much like what I AGREED to pay Better Place and for which I have well defined service level agreements for. Nice.

    I have no argument with Tesla charging money, but be honest about it. Tell owners the car comes with a mandatory $50 month service fee.

    Are you allowed to put extra air in your own tyres?

    And I can rotate my own tyres and even change my own wiper blades. Which I will do because they usually rot from one rain to the next in Israel.

  11. If Chevy had a $50/month service contract for Volts, they wouldn't be selling any of them.

    More "pay to play" fees will keep Tesla from success.

  12. Hmm. I wonder if Tesla will backpedal on this pricing. That's way too expensive.

    About a week ago, Tesla tried charging every Model S owner with a 60 kWh model or above an extra $1,000-2,000 for "access" to the supercharger network even though the hardware is included in the price.

    About 2-3 days later, I got an email waving the fees.

  13. you got them to waive the 2k dollar fee for supercharging?

  14. You've been misinformed, David. Tesla's marketing director recently clarified the Model S warranty on Tesla's web site forum.

    The $600/year service plan is optional. You will NOT void your warranty by not purchasing it. The only thing the warranty requires is that you get the car inspected at a Tesla service facility every 12-months or 12,500 miles (whichever occurs first). This inspection is done to insure the integrity of the battery pack is not compromised by a defective cell or two. Letting such a problem linger for a long period could cause further damage. The inspection is also done to check wear on parts like brake pads, replacing them (for free) before they damage the rotors.

    But the optional $600/year plan is worth considering.

  15. Here's the direct quote fromGeorge Blankenship's blog post::

    "You will forfeit your warranty if you do not do Annual or 12,500 mile Inspections, when due. You will forfeit your warranty if you take your Model S to an independent shop for vehicle service and/or repairs. Your car needs to be serviced by a current, Tesla Certified mechanic to make sure it is working properly and to maintain the warranty on your car.

    I don't see how you can be any more clear than that.

  16. Actually, that quote does not say that you are required to buy the service plan. Only that you must get it serviced at the Tesla repair shop. Maybe you'll just be charged for work done at the annual inspection.

  17. Yes, and it's still in direct opposition to the letter of the law. Magnuson-Moss is a blanket consumer protection that keeps manufacturers from pulling this kind of crap.

    Between this issue and Tesla's attempt to skirt dealer franchise laws, it's pretty clear to me that they think they're smarter than everyone else.

    If you buy a Tesla, beware.

  18. Well, I'm no lawyer, but I think the caveat is that it "needs to be serviced by a current, Tesla Certified mechanic". So you can get it serviced anywhere that has one of those, right? No Magnuson-Moss violation. But of course, there is only one place you will find said mechanic...

  19. George is obviously confused, you can have your repairs done at any independent facility, as long as they have the proper tools and computers to service your S.. if they dont and break something its obvious your warranty will not cover it.

    Many manufacturers require a yearly inspection.. its a good idea.

  20. I hardly EVER take my car to the dealer unless its a warranty repair. It's not convenient and I'm not the type to really make an appointment for service. When I have time, I will do it... and wiper replacement really? It's takes 5 minutes and you can buy wiper blades for $25 or less in most cases. Very disappointing to hear.

  21. I guess I see this as part and parcel of being an early adaptor. The money to build out the service centers and employ the mechanics has to come from somewhere if Tesla is to ramp Gen3 to mass production levels.

    We own an Audi and Mercedes Benz and this does not feel that out of line with them (yes the 10k was less but when I average in the massive 60k and beyond things even out).

    Clearly I am in the minority here though, but I am not buying the Model S to save money on gas/service but to drive the cars of the future today and to help that future get built. $600 a year on a $70k car seems reasonable to me.

    Having said that I expect the costs come down for Gen3.

  22. You seem to be justifying the $600 fee simply because Tesla needs the money. That's a pretty weak reason. Comparing the fee to gas vehicles doesn't begin to compare. The fee has to be justified, or customers are simply being charged a hidden "early adopter" fee. If that is the case, then just charge more for the car. Don't B.S. the customer that the $600 is actually a service.

  23. I love that he said "early adapter" rather than "early adopter". Maybe what we need to do is "adapt" to Tesla's world view :).

  24. David, here's the Tesla forum post referred to in my last comment. If you read the Q&A at the bottom, it is plainly stated that your warranty WILL stay in effect, even if you don't purchase the $600/mo service plan...


    To maintain the warranty, you simply have to bring your Model S to a Tesla service facility every 12 months or 12,500 miles for an annual inspection.

  25. Yes, and that annual inspection costs $600.

  26. Did they identify the cost for that inspection??? Bet it's around $600!

  27. I'm in that 48% that thinks it high but not outrageous, actually, I'm really close to the 'It's good value' group. It might be personal circumstances, it might be that I'm driving a Roadster but, Tesla Service is not the same thing as having your BMW/Audi/Merc looked at. They visit your house/place of work and carry out the maintenance there or they pick it up in a low-loader and take it to the local facility. This will change with the S no doubt but I think that it will long remain a more personal service like Aston/Jag/Ferrari, etc. than Toyota (_shudder_). I suspect that the Volt service, which sounds great btw, is a loss-leader price wise. As my old Dad would say, dealers don't get enough - he was a dealer.

  28. The whole point of buying an EV is to cut resource usage - that includes paying regular ICE-based service fees. A well desgined EV should basically be service-free except for tire rotations and occasional coolant fluid changing and alignment adjustments. I think you're looking at it from a 'peace of mind' point of view but the thing you may not be seeing is the level of what a more average person has in their budget for expenses. I can afford this, you can afford this - but should we? I bought a Volt to save money and expect to not go to a service center except for annual state inspections and perhaps tire rotations and a brief overview of any adjustments under warranty. For the next six years. No way would I have bought with 50/mo.

  29. I agree, fewer service needs should mean cheaper upkeep and that is a bonus for EVs. This yearly fee almost wipes out the bonus.

  30. I think it's just time to admit this is not an "average person"'s car.

    That car is at least three years away. GenIII

  31. Seriously i have never seen a bunch of cry babies. The Tesla S is a LUXURY VEHICLE. LUXURY means $$$. I agree they may be a little dihonest about the fees but they could have just added $3000 to the cost of each vehicle and offered free service to everyone and no one would think twice about it. You are buying a luxury car so deal with the costs

  32. This article is NOT TRUE and should be taken down. It's giving people a false impression of Tesla. Below is the text from Tesla Marketing VP George Blankenship on Tesla's web site forum...

    “What I will forfeit if I do NOT buy a service plan?”

    "You do not have to buy a pre-paid service plan. The pre-paid plans were designed for those who want to reduce their costs by pre-paying, or get unlimited Ranger visits… but you do not have to buy a pre-paid plan at all."

  33. @Todd: So, in other words, it would appear that George Blankenship is on record in two places saying diametrically opposed things: the quote cited by author Noland, which is on an official Tesla site, versus the one you cited on TMC, which is not a Tesla-operated site.

    And Tesla communications staff is not returning Noland's repeated queries.

    Until this apparent contradiction is resolved definitively, I see no reason to take down the article. The author and I will happily update it as needed once Tesla responds directly to his questions.

  34. John: George Blankenship's entire post first appeared on the blog on the Tesla Motors company site...


    (scroll about half way down the page until you see GBLANKENSHIP 12:39am | Sep 17, 2012 )

    As you will see, it's the same post.

    I believe the Model S has attracted a lot of buyers who have never owned a car in this price category. If they had, they would understand that $600/year is not a bad deal. A complete brake pad and rotor replacement on an Audi can set you back $1,200 and it's not covered by Audi's warranty. Tesla's plan also includes their ranger service, which is particularly nice if you don't live near a Tesla service center. They'll come to you.

  35. With great regen braking you are not going to need new brake pads very often. Certainly has been true on my Volt. Model X is very interesting but these of gotcha are disturbing.

  36. Notice it says "pre-paid." If you don't buy the pre-paid plan, you just pay your $600 when you come in for the inspection. Pre-paid plan or not, you still have to pay $600 a year for the inspection that will keep your warranty in place

  37. The headline is not factually correct. You only pay $600 if you DON'T purchase a service contract.

    If you DO purchase the service contract you get the annual/12,500 mile inspections and the other benefits for $1,900 for four years ($475/year).

    There is a service contract available which costs $600/year which might account for your confusion, but that contract includes unlimited Ranger service, which otherwise costs $100/visit.

    It would be nice if the article actually discussed the service plan as it exists instead of blending multiple price points and service levels (and gripes) together.

    The issue is not in fact the service plan (which has real value at $600/year) but the exorbitant fee if you don't purchase a service plan.

  38. I must respond to your claim that "The headline is not factually correct. You only pay $600 if you DON'T purchase a service contract."

    The headline is correct. Here's the direct quote from the Tesla website:

    "In North America, a one-year (or 12,500-mile) service plan costs $600. This price covers your annual inspection and all wear and tear parts, excluding tires. This plan is paid for at the time of your annual (or 12,500-mile) inspection."

    As I've said before, how much clearer can you get?

  39. That’s a good article reminds me of TMZ….. I was wondering the following….. the article fails to state if it is a cost failed to be disclosed, or if people who ordered the car knew this upfront…It only states the information as provided online at Tesla. In fact the author ordered a car as stated in article but never mentions where he first noticed such a charge. He mentions he specced his car out in Sept, judging from his line of work as an automotive author/Blogger I doubt his decision was impulsive in Sept about a Tesla purchase, which he had to know full well had such a program. Since the author mentioned his statistics from an “ online forum of Teslas reservation holders...” his mention of 12% cancellation rate of reservation holders s

  40. I signed my purchase agreement about a week before the maintenance plan was announced. So, no, I did not know about it when I bought the car. Which explains why I used the word "shocked" to describe my reaction upon learning about it.

  41. Teslas Service cost reminds me of Baggage fees on airlines. What do people expect Tesla to do let BP Procare work on your care then honor your warranty….Who buys Tesla or Fisker and thinks anybody but the people who sold you the car would work on it and that the guy who sold it to you would fail to tell you that his boss wanted you to know about how service/cost(s) works……

    Just to help out Tesla I am going to post this article on this Green Car site…. Somebody call the TeslaPR dept and wake them up its Monday!

  42. When we bought our Model S, I was very clear that I expected to do my own service, and stated that is why I wanted the factory repair manual. I was assured that the manual would be published and available at the time of my delivery. Without going into dozens of horror storys about post dealer repair failures, including the left rear wheel falling off-- the rear axels bursting into flames--the clutch chatter--the airconditioning cpmpressor damage--the wiring harnes bursting into flames--the drivers door falling off--the car falling off the hoist--the engine failing because a seal was left out(oil pumped out)--gas tank fell off on the freeway. And that is only a tiny expression of disapointment and fear of 50 yrs of mechanic's incompetence.

  43. As a Model S deposit holder (#9883) I think $600/year of forced service contract is WAY too high. I have owned BMW, Audi, Lexus and Infiniti and never had anything like that level of "service cost," particularly in the first 2-3 years! I don't care if they have to truck my car to Fremont or wherever, the actual "service" included is minimal. And as another poster noted, we also now have BOTH the Volt and the Leaf. The Volt is so much more complex than the Model S, and it has needed ZIP service charged in our first 18 months of ownership. Yes, there have been "service recalls," but those were without charge and the provision of a free loaner car for the duration. WAKE UP Please Elon! We love the technology and design, but NOT $600/yr.

  44. Comment disabled by moderators.

  45. This is like joining a country club and *enjoying* paying assessment fees because they help the club :)

  46. i will forego the obvious here but your estimates of Volt maintenance is too low. many states have recycling laws that prevents them from doing oil changes for $35 and i live in one of them. also onstar is not free forever but it is shocking that Tesla is not offering free service for at least a year or two. Nissan also provides Carwings free but that is only good for 3 years.

    other than that; any maintenance required to maintain a warranty can be done by any certified mechanic. i guess the real question would be how easily this Tesla certification can be had?

  47. $35 is a reasonable price for expensive area such as SF Bay Area. Anything more is just dealer profit.

  48. My 2011 Volt has free OnStar for 5 years. Two years longer than my lease. So if I decide to buy it at the end, I will get those two years, otherwise I won't care. I'm halfway through my lease now and my oil life indicator is still at 82%. I've had a couple of software upgrades and a retrofit on the battery compartment, but have not spent one penny on service. I put 6.947 gallons of gas in it once since I got the car. I spend about $30 a month to charge it. In another year and a half, I plan to lease a 2014 model. It doesn't get any better.

  49. will say it is now easy to see where the funding for that supercharger network is coming from...

  50. i just talked with pending Tesla S 85 KWh holder who confirms that service contract is just like any other service contract. highly recommended but not required. granted many areas of the country owners have few options other than this which now looks like a great idea for many in the center of the US where Tesla Service Centers are sparse

  51. Well this stinks. I'm currently driving a BMW, it came with a zero cost maintenance plan. Along with the tire protection plan I purchased I've paid nothing for service over the nearly three years I've had the car. This yearly fee is almost in exotic car territory, my Porsche costs about $275.00 a year for regular service so my 911 is actually cheaper. Tesla should at least have a cheaper option if you only want the regular software upgrades. But it's this kind of mandatory fee crap that ticks me off, it's a pay this or else hostage situation. Why can't they have a reasonable fee that the service tech charges you when you actually need them?

  52. CDspeed, you really did not get that BMW maintenance plan for free.. I hope you realize that :)

  53. Yes I'm sure it was in the cost of the car, and it has been nice to just pick up my car and go. BMW's zero maintenance is standard along with their warranty and like the warranty it only lasts four years. And most importantly they have never hassled me or tried to charge me more money, they just get the job done and give my car back. There are also free loaner cars provided by the dealer.

  54. Yes but wait and see what happens when the warranty runs out. I can almost guarantee a major break-down likely enough in the gear or gear computer that will cost you an arm and a leg. German cars are absolutely the worst deal long-term.

  55. http://www.bmwusa.com/Standard/Content/Owner/BMWUltimateService/Maintenance.aspx

  56. Model S is not yet imported in Europe and I'm still waiting for mine (reservation #202, I won't probably get it before March of 2013 !).
    But I think, in France, an obligatory visit to a control center to keep your warranty valid is illegal, for cars, as in some US states...
    We don't have prices indication for european market but as there is only ONE Tesla Store in France (in Paris) and one in Monaco, the anual visit will be complex to organise for the whole country, don't you think ? Tesla rangers will have to travel A LOT (some miles per year uh ?) ;-)
    The almost no cost maintenance for an electric car is a crucial argument, so ruin it with that unnecessary visit is very disapointing to me.

  57. Tesla is expecting $100k car buyers to fork over $600/yr without any hestitation...
    But Tesla forgot that one of the reason that people "justify" EV cost is b/c of its low annual maintainence cost....

  58. Tesla keeps telling everyone that they get very precise informations about the state of your car, teletransmisted wirelessly via 3G, that they can even diagnose almost any problems and remotely reboot it if necessary. They already updated over the air the Model S system firmware to include the clutch option modification, which is cool and now they tell us that it is necessary for them to bring the car to a service dealer to perform a system check and an update of the OS ? Are you KIDDING ?
    This looks like a LIE, and for a firm like Tesla who wants a very "special" relation with their cutomers (which they achieved until now), you don't do that kind of things.
    I still want my car, but I don't want it to cost me another obligatory 600$/year !

  59. $600/yr is $50/mo. This is interesting as Model S has a vehicle telemetrics system that reports status to Tesla over 3G. It also provides live map navigation & internet access. Perhaps the fee is to cover 3G data service to S in addition to maintenance inspections? This is speculation on my part, as haven't seen a breakdown of the fee.

    Better communication and clarification is needed from Tesla, particularly as they scale their customer base.

  60. Another issue with this is what happens after 4 years/50K miles? The battery is warrantied for 8 years and represents over half the value of the car in many cases. Thus far, there's no word on what the last 4 years of warranty will cost. It could be expensive.

  61. That's the problem with ownjing the battery. In my case the battery belongs to Better Place, i swap it as often as i wish or need to, and its in their interest to keep the batteries in top-notch condition so drivers dont swap them needlessly.

  62. While we're at it...

    Tesla also will void the warranty if you drive the car into Mexico, or even have it trucked through Mexico.

  63. Isn't one of the world's richest person a Mexican (Carlos Slim)? What would happen if he wanted to buy a Model S or a fleet of them?

  64. There are no Tesla service centers in Mexico so he would have a hard time getting any service, require, covered by warranty or otherwise.

  65. The linkage of maintenance and the SuperCharging network is delusory. Essentially, the SC network has been "franchised" to Solar City, which will, on a n/w-wide basis, make a profit from selling more energy output to the utilities than the cars draw from the grid.

    If you parse that, it means SC is paying for the charging, and selling back more than it uses. TM is not even in the loop (though it could be 'on paper' while SC is actually paying the bills).

  66. It seems like Tesla is having some problems most likely due to their inexperience with deciding what it would like to do such as providing service contracts that are mandatory? Despite what other high-end luxury car manufactures charge for routine maintenance $600 dollars per year or you void your warranty is a bit harsh and will most likely not go over too wells with the buyers. Also as others have said since the Model S is a totally new vehicle you will not find parts for it at your local NAPA and Tesla will be the only part supplier for some time to come. Tesla has to be comparable in what it charges for routine maintenance to what other manufacturers and dealers are charging for service or they will suffer a backlash

  67. I normally don't cuss, but that just a bunch of mularky!!!

  68. Here, once again is the CORRECT story, as told by Tesla's VP of Sales, George Blankenship...


    (scroll about half way down the page until you see GBLANKENSHIP 12:39am | Sep 17, 2012 )

  69. I just paid 150 $ for my 12 month service on the Fluence ZE(its 12 months or 20K miles, whichever comes first)
    Besides detailed inspection all they had to do is change two filters: Batt vent filer and AC filter. That is all folks
    Next service is 40K miles. However, having seen my filters I think i will pop in in 20K miles and change them.

  70. Actually the $600/year maintenance fee is OPTIONAL now. Your warranty will still be valid. Good move Tesla

  71. I think they are just paying the phone bill ($50/mo)

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