Tesla Tunes Up Model S Warranty, Loaner Cars, Service Plan

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2013 Tesla Model S before DC-to-Boston road trip, Feb 2013 [photo: Aaron Schildkraut]

2013 Tesla Model S before DC-to-Boston road trip, Feb 2013 [photo: Aaron Schildkraut]

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On Friday, Tesla held a media call to reveal another in the series of announcements touted in tweets by CEO Elon Musk.

This time, the news covered enhancements to the warranty and service experience on its Tesla Model S electric luxury sport sedan.

Tesla Motors [NSDQ:TSLA] is now delivering several hundred Model Ses each week and, Musk said, taking feedback from buyers to heart.

Its goal has always been to create "the world's best service and warranty program" for any car on the market, he said, with the "overriding principle" being, "I want give people peace of mind" to ensure they have "the happiest possible transport experience."

The revisions to Tesla's service and warranty policies include three main points.

The $600-per-year service plan is now optional rather than mandatory.

This had been a source of considerable grumbling among Model S owners forced to pay $600 each year for a service plan on a car that, at least in theory, should need only wiper blades and tires replaced.

"We made a slight mistake," said Musk in a rare admission, "in making the service fee mandatory."

And, he revealed, unlike current automakers, his charge to the Tesla service department is "never to make a profit" from owners--just to break even.

That varies from today's conventional model, in which new cars are sold at relatively little profit by dealerships, which makes the bulk of their profits through service work and the sale of used cars.

Musk even quoted what he termed an adage in the car business: "Sales sells the first car, but service sells all the subsequent ones."

Any battery failure for any reason (within reason) is covered for the warranty term.

The goal here is not to require Model S buyers to read their owner manuals to understand how best to take care of their battery, Musk said.

"Any product that needs an owner's manual to work is broken," he said--a much-repeated Silicon Valley belief not always actually taken to heart by designers of consumer products.

And the company specifically included "user error" in its list of things that are now covered.

"This is to address electric-car concerns like, What if my battery dies?" said Musk.

'Revenge of the Electric Car' premiere: Tesla Motors CEO Elon Musk on red carpet

'Revenge of the Electric Car' premiere: Tesla Motors CEO Elon Musk on red carpet

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"We want to say, don't worry about the battery, it's going to be fine."

Whether that includes leaving the car for long periods without plugging it in was not addressed on the company's call, but a notorious "bricking" incident with a Tesla Roadster received much coverage a couple of years ago.

Coverage excludes deliberate damage--owners attacking their battery packs with sledgehammers are likely not covered--but it seems a smart move on Tesla's part.

Loaner cars at Tesla Service Centers will be new top-of-the-line 85-kilowatt-hour Model S Performance versions.

And if owners decide they prefer the driving experience of the loaner to their own Model S, they can buy that car on the spot. Its price will be the new-car price minus 1 percent for each month it's been in service plus $1 for each mile it's covered.

Musk said that each service center will have two to 10 such cars, depending on its service volume. The fleet altogether would number about 100 cars.

These loaner cars will also be delivered to whatever destination the Model S owner specifies, by a valet service, and the company will pick up the car to be serviced wherever it's located.


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Comments (10)
  1. Is Tesla guaranteeing the capacity of the battery? They didn't say that specifically.

    I think most of us Model S owners worry more about long-term capacity loss than bricking. I do, anyway.

    In the aftermath of the Leaf's hot-weather problems, Nissan now guarantees that the Leaf battery will maintain at least 70 percent capacity after five years. If Tesla wants to have an industry-leading battery warranty, they need to beat Nissan. As far as I can tell, at this point they haven't even matched Nissan.

    I talked to a Tesla sales guy at a local event yesterday, and he said they've tested Roadster batteries that are five years old with 100k-plus miles, and they still retain 90-plus percent capacity. If true, that's a very good sign.

  2. I bought my Tesla with the expectation that it would lose about 3% range annually and about 30% over 10 years. I also had the expectation that I would be able to upgrade the battery to the latest-greatest and cheapest in about 5 years, and retire my present battery to my solar panel system- maybe charge it off-peak and push the power onto the grid on-peak at a nice premium. Elon's comments about a 500 mile battery went a long way to reinforce my evil plan.

  3. I think battery anxiety is easily exaggerated. Former GCR contributor Nikki Gordon Bloomfield only experienced 1% capacity loss after 35K miles on her Leaf despite the small, heavily cycled and in her case routinely fastcharged battery that lacks active cooling. The bigger and better engineered Model S is likely to easily match that and unlike the Leaf also in hotter conditions than chilly UK.

    If the S/85 battery lasts the expected 2000 cycles at an average of 85% residual capacity that's more than 400K miles. I don't think you can use this battery up by cycling it before calendar life catches up with it.

  4. I think the odds are low that I will lose anywhere near 3% but I like to set my expectations very low, so that I am continuously pleasantly surprised. So far the Model S has been pleasantly surpising the heck out of me.

  5. Tesla certainly keeps sweetening the deal with a free to use supercharge network, great finance and great service. It needs those orders to keep pouring in of course. For now it's doing all right: Model S is on track to be the hottest selling EV this quarter on the US market and stock prices are going through the roof.

  6. "Whether that includes leaving the car for long periods without plugging it in was not addressed on the company's call"

    No, but it was addressed in Elon's blog post here -


    Where Elon specifically stated "all damage is covered by warranty, including improper maintenance or unintentionally leaving the pack at a low state of charge for years on end."

    It's not possible to leave a Model S in a low state of charge "for years on end" unless it is unplugged. "Bricking" is very much covered, and also (per previous comments from Tesla) something the Model S was designed to prevent.

  7. Although, I guess you could make a case as to whether a car was intentionally or unintentionally left unplugged.

    A customer would need to be a fool to admit to intentionally leaving the battery unplugged, but in context I think he just means that Tesla wont cover deliberate damage, like blowing it up or cutting it open with a blowtorch.

  8. I think the impressive takeaway point here is that when Tesla Motors does make a mistake (IF the $600 annual service plan is a mistake, I'll let others, especially owners comment on that), it's almost always quickly improved its response, commercial terms, etc...

    Sure, if Tesla eventually gets much larger it will be harder to be as responsive due to more models, etc., but at this stage, the level of attention to customer satisfaction and improvement is commendable, IMO. Kudos to Mr. Musk and Tesla again here.

  9. I'm interested in buying the Tesla Model S, but I live in Hawaii, and I'm wondering how delivery and service would work?

  10. Is there any chance that the service manual for Model S be available for the public? Regular cars have service manuals so people can research how their vehicle works and how to do repairs. Eventually can consumers do the same thing when this car, maybe when the car is out-dated?
    I don't want Tesla to be Apple-esque in being closed.

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