Tesla Model S owners, rejoice! The car manufacturer has extended drive unit warranties, matching those of battery packs.
Elon Musk made the announcement in a blog post on the company's website Friday, saying that an 85kWh Model S now has an eight-year warranty for both the drive unit and the battery pack. Mileage won't matter as well because the warranties have been tagged to be of the "infinite mile" type.
But what's even more impressive is the fact that the extended warranty will also be applied to previous owners of the Model S, meaning both new and old owners of the unit will be able to take advantage of the warranty. For those who change vehicles every few years, reselling a Tesla Model S just got easier too because the extended warranty will remain in effect regardless of how many times a vehicle changes hand. As long as the car is still under warranty, it is eligible for free repairs should problems come up.
The announcement is definitely good news to Model S owners but it's possible Tesla investors may not share their sentiment. Musk, however, addressed potential concerns as well in the blog post. "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. 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," he wrote.
Investors may have little to be worried though because Tesla has said that its warranty reserve was at $84.4 million at the end of the second quarter, more than double of the $36.9 million it had in 2013 for the same quarter.
Tesla aims to produce up to 60 percent more cars this year, targeting to deliver a minimum of 35,000 cars by the end of 2014. If production meets the ideal 50,000 by year-end, it should be more than possible for Tesla to double capacity to 100,000 by the time 2015 ends.
The Tesla Model S is the best-reviewed car for 2014 so far, receiving a mark of 99 out of 100 from Consumer Reports in February. Its previous warranty was only for four years or 50,000 miles, which can be extended to eight years or 100,000 miles for $4,000.