Tesla Motors Offers Unlimited Battery Warranty

By · April 29, 2013

Tesla Service Center

On Friday, Tesla Motors C.E.O. Elon Musk announced what he described as "the world's best service and warranty program." The new program offers 85 kilowatt-hour Model S cars as loaners, and adds an unlimited battery warranty. Is Tesla setting a standard for the rest of the auto industry to follow with its electric cars?

According to Musk, the company's current service system is "okay, but not great." He said that customers who are satisfied with their car service are more likely to buy future cars from the same company, but leaving owners dissatisfied will make them unlikely to buy again from Tesla. While many Tesla Roadster owners returned to Tesla to buy a Model S, the company is only now expanding its market wide enough to consider how it will retain a broader customer base of potential return buyers in the coming years.

During a conference call to announce the program, Musk explained that his instructions to the service department was to never make a profit, but to strive to break even. Traditional automakers see service departments as a critical source of profit.

Unlimited Battery Pack Warranty

Tesla acknowledged that the battery pack "is obviously very important and expensive to replace." To give peace of mind to its customers, Tesla is extending the battery pack so that everything is covered by the warranty.

Musk described it as a "no-fault warranty," in which if anything goes wrong, it's Tesla's fault—that is, as long as the owner doesn't intentionally destroy the pack, such as using it for target practice.

Model S owners don't have to worry about whether they're following the owners manual. Musk said that a product requiring reading the owners manual is broken from the start. This is a dramatic reversal of policy from when, in March 2012, Tesla cast blame on its own Roadster customers, when battery packs were rendered useless by being left unplugged for months, spawning the term "bricking" for EV batteries that no longer work.

Under the new plan, Tesla battery packs will be replaced at the company's cost during the warranty period. And if better battery technology comes along in a few years, the replacement pack will be as good or better than the original one.

Tesla is now also making the annual service contract optional, keeping the warranty valid even if the customer never brings the car in for service checkups.

Top of the Line Loaners

When a customer sends their Model S in for service, Tesla will supply them with a loaner Model S. That loaner car will be an 85 kilowatt-hour top-of-the-line Model S. Additionally, the customer will have the option to permanently trade up to the premium loaner Tesla, at a discounted price based on the age and mileage of the loaner and the customer's existing Tesla vehicle. (This is a nice bit of marketing up-sell on the part of Tesla, but not really integral a service program.)

The process of sending a Model S into service has also been streamlined. The service department picks up the car, and swaps a loaner car in its place. When the service is finished, a valet returns the customer's car that has been serviced, and swaps it back out.

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