Boston, MA 08/18/2014 (wallstreetpr) – Tesla Motors Inc. (NASDAQ:TSLA) has decided to extend the warranty of 85Kwh Model S Sedans. TLSA announced recently that the service warranty of all the S models had been extended.
Details:
Prior to the announcement, Tesla Motors Inc. (NASDAQ:TSLA)’s S model used to come with 50,000 miles and four-year drive unit warranty. It was way more than the 36,000 miles and three-year warranty of any internal-combustion engine (ICE) vehicle. The main reason behind extending the warranty period is but the market competition. The company wants to get ahead of other market players that are providing standard three years warranty. Although it is still behind from the automotive companies like Mitsubishi Motors Corp. which offer hefty 100,000 miles and ten-year service guarantee.
Initially, TSLA allowed the owners of Model S to extend the warranty terms to 100,000 miles and eight years by paying extra $4000. According to Elon Musk, CEO TSLA, “The new-extended warranty would be part of the model S program of the company right from the start.” TSLA reported its quarterly results on July 31, 2014. It was not a good quarter for the company as it reported a GAAP loss that nearly doubled from the one that company posted a year ago. According to Tesla Motors Inc. (NASDAQ:TSLA), the extended warranty offer on all the model S cars will have a moderately negative impact on the company’s financial position.
The announcement came after the consumer reports which stated that TSLA had minor issues with 17-inch display screen, the charger adapter and retractable door handles. All of these items were covered by the warranty given by the company. The same consumer report gave 99 out of 100 score to S model the previous year. It was not the only platform where TSLA got negative feedback. Once it went through all the reports, Tesla Motors Inc. (NASDAQ:TSLA) found it better to extend the warranty period than to counter the feedbacks given by various public platforms and individuals.
