Tesla (TSLA) Extends Model S Warranties to 8 Years and Infinite Miles

Tesla Motors (TSLA) CEO and founder Elon Musk just announced via his company’s blog that the 85 kWh Model S, Tesla’s most popular model by far, now has an 8 year, infinite mile warranty on both the battery pack and the drive unit. Originally, the Model S carried a 4-year/50,000 mile limited warranty that could be extended to 8-years/100,000 miles for an additional $3,800 fee.

Musk also said that there is no limit on the number of owners during the warranty period, and that the new arrangement applies retroactively to all Model S vehicles ever produced too. That means, it will benefit both existing and new owners.

“In hindsight this should have been our policy from the beginning of the Model S program”, Musk wrote. “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.”

According to Musk, the change is expected to have a “moderately negative effect on Tesla earnings in the short term”, since the car maker’s warranty reserves will have to increase above current levels. However, he says the move is designed to benefit the company long-term.

Shares of Tesla closed at $262 and change on Friday.

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