Tesla Motors has increased the Model S drive unit warranty to match that of the battery pack—i.e., the 85 kWh Model S, the company’s most popular model, now has an 8-year, “infinite-mile” warranty on both the battery pack and drive unit. The warranty extension will apply retroactively to all Model S vehicles ever produced.
There is also no limit on the number of owners during the warranty period. No other changes have been made to the warranty.
In hindsight, this should have been our policy from the beginning of the Model S program. 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.
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. This is amplified by the fact that we are doing so retroactively, not just for new customers. 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.