There is a reason that Tesla Motors Inc (NASDAQ:TSLA) and its CEO, Elon Musk, are so popular. They not only astonish fans and potential customers with new innovations, but also make sure that the old customers remain loyal and ‘in love’ with the brand. Musk wrote a post on August 15 on Tesla Motors Inc (NASDAQ:TSLA)’s blog, and announced that the eight year, infinite mile warranty has been extended to drive unit of Tesla Motors Inc (NASDAQ:TSLA)’s Model S, previously covering only the battery pack. That’s not all, the warranty has been extended retroactively, which means every Model S that has been ever produced is covered under the warranty.
Though this might be a great thing for Tesla Motors Inc (NASDAQ:TSLA)’s Model S owners, but perhaps not for Tesla Motors Inc (NASDAQ:TSLA)’s shareholders. Musk acknowledged this in his post, saying this will have a moderate negative effect on the company’s earnings in the short run, but he feels this will “work out” in the long run. Musk acknowledged that this warranty should have been provided right from the start.
“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,” Musk wrote.