Tbone-That is exactly correct, and if I could add this bit of information: The new ESA was actual changed during the forum outage last week, even though the date shown on the new ESA says "November 2015". They post-dated it when they replaced it on the tesla motors website last week. I have both versions saved in my dropbox, and the new version has more limitations and no transferrability.
-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
My 2013 ESA has different wording than the current one which was drafted in November 2015. My ESA says that deductible is "per repair", not "per visit". Under my 2013 ESA terms I can also transfer the ESA to a subsequent buyer, something not allowed by the new terms. My question is, which terms will Tesla honor when I bring my car in - the terms of my 2013 agreement, or the terms of the revised agreement? If they proceed based upon the revised agreement, then what does that say about my right to transfer to another buyer based on my 2013 agreement? So confusing...
- - - Updated - - -
If private party prices drop more than CPO, that makes private party sale more attractive to many people. Not everyone is basing their decision on warranty, in fact most who do not participate here or in other forums wouldn't have these concerns and that is the vast majority of Model S customers. In this respect, lowering private party values will eventually lower CPO values. This isn't a vacuum.
- - - Updated - - -
It's not fine print, it's in big and bold print on the first page of the new agreement.
- - - Updated - - -
The only logical reason to deny owners of used vehicles the ability to buy the ESA would be that it is not to Tesla's financial benefit to do so. That should tell us a lot about Tesla's confidence in long term reliability. If $4,000 doesn't make financial sense to cover a used car for an additional 4 years or 50,000 miles, that means Tesla expects to spend more than that on the vehicle during that period. Or in terms of accounting, Tesla may have to offset from revenue whatever is the average cost of repair for that period of time. I don't think Tesla can claim 100% of revenue from ESAs, but I'm not a CPA.
stopcrazypp
Well-Known Member
Not a lawyer, but I don't think they can retroactively change it like that (depending on if there is a clause that allows them to do that in the original contract). At the very least they would owe you a (pro-rated) refund if they do and you don't agree.
Last edited:
I believe either the pre-paid service agreement or the ESA had a stipulation in it that said Tesla could make any change to the agreement at any time, without notice. I wish I had the language in front of me because it was breathtaking in how broadly sweeping it sounded. It basically left the impression that Tesla could do whatever it wanted to. But at the same time, elsewhere it said that the agreement could not be modified under any circumstances. So it feels like a bunch of boilerplate language thrown together without regard to actual Tesla policy.
HankLloydRight
No Roads
My guess is that when anyone goes in for ESA service, they'll honor the $200 per visit terms for everyone.
But if you go to transfer your ESA, they'll check first to confirm you are in contract for that, and then allow it, and deny it for everyone else.
Best of both worlds, really. But that's just my guess.
But if you go to transfer your ESA, they'll check first to confirm you are in contract for that, and then allow it, and deny it for everyone else.
Best of both worlds, really. But that's just my guess.
HankLloydRight
No Roads
OR... they could say "hey, you get the ability to transfer your ESA, so suck it up dude, it's $200 per repair".
Tesla is losing money on the ESA and they are limiting their exposure any way they can. I can not purchase an ESA for my 2015 CPO bought with only 2500 miles on it and less than 10 months old. Not that big a deal, in 4 years there will be independent Tesla repair shops and no one will have to pay Tesla for repairs out of warranty.
green1
Active Member
Considering how hard Tesla is fighting that, I don't share your confidence in them suddenly reversing course.
I sure hope so. independant shops will have to base their repair parts from totaled Teslas and 3rd parties though, unless Tesla opens up the OEM parts. Right now there are many parts you can't buy from Tesla at all even if you wanted to do the work yourself.
green1
Active Member
It's worse than that, replacing a part, often requires re-flashing the firmware for that part, which requires access that Tesla refuses to provide to anyone.
Anyone who thinks 3rd party shops are going to be able to do anything more than extremely minor repairs, either believes Tesla will do a complete about face on all their policies to date, or is being completely unrealistic.
And this is going to be a big shock to the "masses" who buy the Model 3. Many folks hate getting their cars serviced by the dealers due to the high costs. They are used to being able to take their car to Pep Boys or wherever to get work done cheaper. I suspect this will eventually pressure Tesla to open up, but it will take a long time to do it.
This fact will probably really kill resale values of Model 3's even more than Model S's. At least used Model S buyers know they are buying a finicky luxury vehicle that will cost a lot to maintain but they are getting a luxury super-car in return. used Model 3 buyers are going to be all about value and being forced to pay Tesla prices for service will be a killer.
Last edited:
Yes.
Leasing may be better when acquiring new technology from a small company.
The resale value of Model S is probably too high considering the possibility of extraordinarily high repair costs.
I think it was the prepaid service agreement, which gave a list of services that were covered (like alignment) and said that list could be changed at any time by Tesla.
BertL
Active Member
Either earlier in this thread or one of the other parallel ones with similar discussion, a person sent the question to tech support and got a reply same day... Basically saying the terms you agreed to when you purchased the agreement are what will be followed. That is exactly as it should be. If you question it, you could always fire your own email off to tech support asking what terms are in effect for your situation -- I suspect you'll get the same reply.
But it was mentioned in the earnings call that the reliability figures for the newer cars rolling out the assembly line are much better so with that being the case, why go to all these lengths to deny the availability of extended warranty coverage?
Sounds like they hired lawyers with too much time on their hands. Maybe they should have spent the money on some experienced software engineers to fix some of the BS bugs in the UI and usability, and they wouldn't have me complaining up and down this forum.
travwill
Active Member
Well, there is no reason it can't be changed back if all owners complain and really provide negative feedback on this. I wrote them providing my disappointment with this change for the many reasons mentioned in this thread. I'd encourage everyone to do so. I wrote [email protected]. ;-)
-T
-T
BertL
Active Member
I still believe what I wrote back in post #28... i.e. to sell more new cars. My side thoughts sort of supporting that include (even though there are huge flaws from my POV if any of them are true):
- Tesla does not make money from service (but as I've said, perhaps they should as it would incent them to act differently, and frankly better to owners) so indirectly Tesla does not care as much about longer-term ownership as say other mfgrs do that love to sell dealer service and parts to really help their bottom line. Tesla is clearly not as focused on long-term customer sat with things they can delay or not provide, e.g. Think about software bugs that have not been corrected, only basic media player and Nav functions that have seen no significant enhancements for MX or since MS was introduced, etc..
- Newer builds may have better reliability than the first MS off the line, but that says nothing about the real costs Tesla is now projecting to cover warranty and extended warranty costs some 3 years into the game with real numbers and costs. Remember, Elon has now said 2016 will generate profit, so IMHO he's gonna cut every place he can to make that number or Wall Street will kill Tesla by next year this time. Tesla also was sort of boxed-in ... They couldn't raise the cost of extended warranty too much from what it was or that would have sent a very clear signal this problem exists, but increasing it just a bit as they did, looks like a price increase, not a big warning gong going off -- even if it didn't really fix their internal problem.
- The longer a person owns a Tesla with any sort of warranty the longer Tesla gets to keep dealing with those owners and incurring indirect costs for tech support, software deliveries, etc... So, if extended warranties are limited to only original owners, that reduces out-year costs by selling less extended warranties.
- Tesla does not appear to have really focused on things like residual value of MS as it was initially created, say like Lexus did as one of their primary objectives when they first created their brand and created the whole CPO environment for the industry... So as the reality is setting in with some fairly high costs of initial ownership for MS compared to some other luxury brands, and now M3 comes into play at a $35K entry price point, I wonder what correlation there may be in Tesla's view between all that... Difficult to say as none of us have enough facts...
- Only by selling new cars is there revenue to pay for infrastructure build out... New and ongoing Supercharger network, web sites, tech support lines, people and machines needed to design and build M3. If early estimates were off and insufficient dollars were set aside to accomplish all that from each sale, the only way to get more cash so they can pay what must be paid and still generate a profit is build and sell more cars. Since Service is not a profit center, incidental Tesla Shop sales will never be enough to offset what is likely required and I can't think of anything else in Tesla's business model to generate real revenue to offset costs except selling NEW cars.
Similar threads
