Tesla Motors Inc. has announced on its blog that the drive unit warranty for the Model S sedan now matches that of the battery pack and will now be covered for eight years and "infinite" miles. Tesla noted that the warranty extension will have a "moderately negative" effect on its earnings in the short term.
Tesla chief executive Elon Musk wrote in the blog that there is no limit on the number of owners during the warranty period. He said that the warranty covers all customers, not just new ones. He quipped that by “doing the right thing” for customers, it will work out well in the long term.
The company said the warranty extension will cover all Model S built to date. Consumer Reports recently criticized the Model S for having "more than its share of problems," including some electrical issues. In 2013, the magazine gave the Model S top marks for its "smoothness, effortless glide and clever, elegant simplicity."
Tesla has already fixed the problems on the magazine's Model S under warranty. Last month, Edmunds reported glitches with its Model S after over a year of heavy driving.
The unit, including drivetrain, had a warranty of four years, or 50,000 miles. Alan Baum, an auto analyst at Baum & Associates, remarked that the warranty extension addresses worries that current and potential owners may have had after the negative reports.
Baum and Karl Brauer, senior industry analyst for Kelley Blue Book, both quipped that the so-called infinite warranty that Tesla is offering may help boost Model S resale values. Brauer remarked that Tesla has made it “as painless as possible” to deal with unexpected service issues.