Following Consumer Reports’ review in which it said its long-term Tesla Model S had “more than its share of problems,” the California-based electric vehicle company has announced it will extend the warranty on all Model S sedans sold to date. The announcement was made on the company’s official blog by CEO Elon Musk.
In the blog post, Musk said the warrnaty extension will have a “moderately negative” effect on the company’s earnings going forward, but it won’t last. Musk also noted there is also no limit on the number of owners the car can have during the now extended warranty period and the warranty will apply to all Model S’ sold to date.
“This is amplified by the fact that we are doing so retroactively, not just for new customers,” Musk said in the announcement. “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.”
In addition to the recent Consumer Reports review about the electrical issues with the Model S, Edmunds’ also reported glitches with its example of the electric sedan. Automotive analyst Alan Baum told Automotive News the warranty extension was implemented in response to the concerns raised by Consumer Reports and Edmunds.
“This obviously addresses concerns owners and potential owners may have had after those reports,” said Baum. “The bigger issue is have they resolved the manufacturing issues that led to these problems?”
Baum also said the extended warranty will help current Model S owners sell the car down the road. The warranty may convince would-be buyers to go ahead with their purchase when they previously may have been influenced otherwise due to expensive electric vehicle repairs.
Musk said the warranty was an obvious move which should have been implemented from the beginning of the Model S launch.
“In hindsight, this should have been our policy from the beginning of the Model S program,” he wrote. Musk also added that if electric motors are indeed more reliable and better than gasoline engines like the company believes, then their “warranty policy should reflect that.”
Previously, the Model S had a four-year, 50,000 mile warranty. It should be noted many of the problems Consumer Reports experienced did not involve powertrain problems, but other small issues such as glitches with the huge center screen in the car, problems with the trunk not opening and a creak in the passenger side door pillar. Nevertheless, Tesla’s new warranty applies to the entire car.
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