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Warranty/Servicing - official Tesla responses (incl GeorgeB)

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As a software engineer, I can tell you we often charge a lot more than $600/year for access to our support lines, bug fixes, and new features. I wouldn't be surprised if a big chunk of that $600 is paying for the fact that you are going to be receiving bug fixes and new features regularly.

This is something new that you can't easily compare to other ICE maintenance. Other car software doesn't really change much from year-to-year, not because it doesn't need to, but because traditional car companies are not software companies and don't realize how important that is to the modern consumer. Ask my wife about her MyFord Touch; we've received one major update which just barely brought the system into a state that I would consider "usable".

I would happily pay $150 a year (maybe even more) if I saw updates like new skins, a 3rd party app store, creep on/off, speed warning chimes, performance improvements, voice controls, additional graphs and gauges, new media sources and integration (Pandora or Spottily maybe?), etc., etc. coming down the pike at a reasonable rate. Now, for that price I expect some pretty rapid and awesome incremental improvement with high quality, but yeah, I think that's reasonable.

I also think that we need to keep the scale in mind. It takes the same number of software engineers to develop this stuff for one model car with 20,000 owners, as it does for an entire model lineup with millions of owners. Maybe we can see the price come in a bit as the cost of all this stuff is spread across more owners.
 
That will definitely add to their bottom line.

That might be true; but at the same time I want Tesla to have longevity as a company and that means they must be profitable.

All this was announced AFTER I signed the MVPA a few weeks ago. Bait and switch, lack of full disclosure - rather they hadn't made up their decision at the time I signed.

I get that you're upset by the surprise but the only way to have had full disclosure would have been to wait. (I wasn't surprised so maybe it's easy for me to say).
 
Hi Ron,

Perhaps you're right, but from the webpage that you referenced:



I'm guessing that Tesla is able to definitively specify the nature of the routine scheduled maintenance necessary to maintain their warranty without the FTC saying they can't. So although some of the routine maintenance functions no doubt can be performed by others without an issue, other functions are going to require proprietary diagnostics. Is the FTC going to compel Tesla to reveal and provide others with the means of developing proprietary diagnostic equipment? If not, George and Tesla probably have nothing to worry about.

Larry

Incorrect, unfortunately. The mere *statement* (assuming it's actually a provision somewhere) that the warranty will become void if you get scheduled maintenance from a non-Tesla-certified mechanic violates the law.
 
As a software engineer, I can tell you we often charge a lot more than $600/year for access to our support lines, bug fixes, and new features. I wouldn't be surprised if a big chunk of that $600 is paying for the fact that you are going to be receiving bug fixes and new features regularly.

This is something new that you can't easily compare to other ICE maintenance. Other car software doesn't really change much from year-to-year, not because it doesn't need to, but because traditional car companies are not software companies and don't realize how important that is to the modern consumer. Ask my wife about her MyFord Touch; we've received one major update which just barely brought the system into a state that I would consider "usable".

I would happily pay $150 a year (maybe even more) if I saw updates like new skins, a 3rd party app store, creep on/off, speed warning chimes, performance improvements, voice controls, additional graphs and gauges, new media sources and integration (Pandora or Spottily maybe?), etc., etc. coming down the pike at a reasonable rate. Now, for that price I expect some pretty rapid and awesome incremental improvement with high quality, but yeah, I think that's reasonable.

I also think that we need to keep the scale in mind. It takes the same number of software engineers to develop this stuff for one model car with 20,000 owners, as it does for an entire model lineup with millions of owners. Maybe we can see the price come in a bit as the cost of all this stuff is spread across more owners.
And those are cool things to add, no question.
But shouldn't we have a menu of options?
Bronze Program)$100/ 12,500 mile inspection only (all parts and repairs extra plus hourly installation charges at industry standard, no towing or Ranger, no bonus skins/wallpapers)
Silver Program)$250/ 12,500 mile inspection with wear parts up to every 25,000 miles, up to 20 mile towing, no ranger, no bonus skins/wallpapers
Gold Program)$400/ 12,500 mile inspection with all wear parts up to every 25,000 miles, 50 mile towing, no ranger, bonus skins and wallpapers included
Platinum Program)$600/ 12,500 mile inspection with all wear parts as needed up to every 12,500 miles, 50 mile towing, range up to 100 miles, bonus skins and wallpaper, VIP scheduling, courtesy vehicle use


Now, there are some carrots, a discount program for those willing to gamble and not subsidize everyone else. Hardly any different than what's been announced for the $600 price point and the extras I added are of negligible cost to Tesla.
 
I am not quite sure everybody understands what they are buying with the Model S. Sometimes I feel more than a few want all the positives that come with being a early adopter, but refuse the negatives.
We are buying a rather innovative product from a rookie in the car production business. They are selling a product that could hit it out of the ball park, but there is still a chance of failure. Tesla is walking a thin rope here without a safety net. If they screw up, they're dead. Simple!
Now how to minimalize the risk of making a fatal screw up?
-Avoid any handyman customer or Cooter messing with the car. They may have the best intentions, but if they screw up it will tarnish Tesla's reputation with consequences beyond Tesla's control. With a highly complex machine like Tesla Model S it is easy to over estimate one's qualifications. No Mercedes mechanic will put his paws on my Model S, leave alone Cooter.
- Tesla may have put many miles on the Alpha's and Beta's, but nothing compared with the big OEM's. We are in a way guinea pigs. There will be defects whether Elon likes it or not, but by taking a very close look at EVERY car every 12k mi or 1 year, faults may be caught in time and repaired in recalls or during regular service.
- More bad news. We are paying (partly) for the build up of Tesla's service network. Gen III owners may thank you later, but probably not.

What were the alternatives? Increase the service interval to 2 years or 25k mi. After 1.5 years or 20k mi some Model S's have a dramatic break down and guess who will be here at TMC crying foul again? It's like playing russian roulette without knowing if there is a round in the revolver. Everything could go just fine, but if you're wrong... You can check the gun after every time you pull the trigger or you could wait a little bit longer and take your chances. I am not saying chances are 1 in 6, but the consequences could be just as lethal.
Maybe Tesla should give you the option to ignore their recommendation and go for 2 years/25k mi. Just if something should go wrong between 12k and 25k mi it will be your dime.
I'd like to think a lot in this discussion is expectations. You may say Tesla did not inform you enough; maybe you have to ask yourself if you put enough thinking before buying a $100k electric car.
OK guys, shoot!

Nothing for me to shoot at. I think you've done an excellent job of pointing out an inconvenient truth.

Well done.

Larry

- - - Updated - - -

Incorrect, unfortunately. The mere *statement* (assuming it's actually a provision somewhere) that the warranty will become void if you get scheduled maintenance from a non-Tesla-certified mechanic violates the law.

George is not on the legal team. Do you think that you'll be able to find a written provision in our paperwork that in itself is a violation of the law?

Larry
 
That might be true; but at the same time I want Tesla to have longevity as a company and that means they must be profitable.



I get that you're upset by the surprise but the only way to have had full disclosure would have been to wait. (I wasn't surprised so maybe it's easy for me to say).

I agree Tesla must be profitable to survive BUT does it justify trying to gain more profits from a mandatory service plan that if not paid will VOID your warranty? I service my cars when they need servicing and at the service provider of my choice. You tie in manditory service while holding warranty hostage over the owner's head - thats definitely NOT a quality inspiring product (any product - not just cars)

Wait for full disclosure? Thats a joke - they said if I didn't respond in 30 days my reservation position is jeopardized.

tisk tisk tesla....
 
Incorrect, unfortunately. The mere *statement* (assuming it's actually a provision somewhere) that the warranty will become void if you get scheduled maintenance from a non-Tesla-certified mechanic violates the law.
Do you know the laws around whether manufacturers need to make service info available to others? I found some verbiage about exposing EPA centric stuff from the on board computer port, but nothing yet about general service info. In essence, can anyone other than Tesla effectively do the service if Tesla isn't required to publish service manuals? I'd guess there's some requirement on this or normal manufacturer's would have made sure only dealer's had the necessary info.
 
Wait for full disclosure? Thats a joke - they said if I didn't respond in 30 days my reservation position is jeopardized.

Just noting that actually some people on this forum did decide to defer their order because they wanted more information about this or the other. There's areas where we can praise Tesla and areas where we can criticize Tesla, but in fairness we each took our own decisions based on our assumptions. Would we all have been happier if we'd had the service information earlier? Yes, but like you I still took the decision to sign my MVPA not knowing exactly what was coming.
 
Thanks George for providing some clarity, though I think there remains a lot of unanswered questions, most notably after the 4 year / 50k mile period is up. $600/year for the first 4 years is considerably more than many had anticipated for a car that's been touted as low-maintenance, so we have a lot of concerns what surprises might lie beyond year 4. Based on the high cost of maintenance for the first 4 years (when you'd suspect little should go wrong with the car), many of us are bracing for the worst beyond that period. Many people had already signed their MVPA prior to this maintenance information being released (and are certainly not pleased by that), so you can understand how many would have apprehension committing to a car that's still cloaked in a bit of mystery when it comes to its long-term maintenance. Having already prepared ourselves for a likely 5 figure replacement cost for the battery down the road in order to have the car operate as it did when we first purchased it, the last thing we want to find ourselves doing is paying for an expensive PEM repair at 100k miles. Or some major overhaul of the motor or complex battery cooling system.

I think Tesla owes it to its costumers to provide the full maintenance schedule of the car just as most car manufacturers do, with a list of maintenance and repairs necessary at certain milestones of the car's lifetime.


I have a few remaining questons.

1.) Does Tesla fully charge your vehicle when bringing it to a service center?
2.) I understand Tesla may replace my wiperblades every year, but what about the brake pads? How do you determine if they need replacement? I would suspect under normal driving conditions, most people would not need their brake pads replaced within 50k miles especially with regenerative braking. So it's difficult to see the benefit of brake pad replacement within the first 4 years unless Tesla is committed to replacing them once before the warranty period is up, regardless of their condition.
3.) Similar to question 2, who determines when something like the headlamps need replacement? Is it only if they completely burn out (something I don't anticipate to happen within 50k miles)? Or is it even if they've lost some of their intensity, which is obviously a subjective thing. Again, it would be nice if Tesla were committed to replacing the headlamps prior to the end of the warranty period even if they're only slightly less bright then they were originally.

I also recognize the value in having new features added to the Model S over the years. Currently Tesla seems to have a backlog of features that need to be added that were once promised or mentioned previously. But once those are completed, if Tesla truly delivers by adding some innovative features through software upgrades (especially ones that its customers request) then I really do see the value in the annual maintenance cost.
 
There seems to be quite a few comments explaining away or excusing Tesla’s actions because this is a new car and we are first adopters, beta testers etc. I see this as the exact opposite. If we are the ones taking the leap of faith, I fully expect Tesla to take the leap with us and cut us a little more slack than those that come after us. Tesla exists because many of us have had this faith for 3 years or longer, we all want it to succeed and be part of the reason it gets to the next phase. That faith of ours should not be repaid by gouging. In the scheme of things it doesn’t make a lot of difference if Tesla is profitable after 8000 cars, as they say they will be, or 8500 cars. It does make a difference to me and everyone else who will own a model S that we be delighted by the car and the service not disappointed by hidden extras costs after being locked in.
 
There seems to be quite a few comments explaining away or excusing Tesla’s actions because this is a new car and we are first adopters, beta testers etc. I see this as the exact opposite. If we are the ones taking the leap of faith, I fully expect Tesla to take the leap with us and cut us a little more slack than those that come after us. Tesla exists because many of us have had this faith for 3 years or longer, we all want it to succeed and be part of the reason it gets to the next phase. That faith of ours should not be repaid by gouging. In the scheme of things it doesn’t make a lot of difference if Tesla is profitable after 8000 cars, as they say they will be, or 8500 cars. It does make a difference to me and everyone else who will own a model S that we be delighted by the car and the service not disappointed by hidden extras costs after being locked in.

Even at the least expensive Model S configuration, that is barely 1% "gouging" per year of the vehicle's cost.

How does that compare to the mercenary rates extorted by big-box electronic stores or name brand franchises like Apple?

Those are astronomically higher than 1% per year, usually well into the double digit percentage range!
 
I appreciated GeorgeB's communication with us. And I applaud Tesla for simply being straightforward with their customers. We are not unreasonable people. All we ask as loyalists/early adopters is a little communication. We want to love Tesla. We share their vision and we want them to succeed.

I feel much better about this whole warranty/service thing after a little frank communication from Tesla. I understand that a conversation like George gave us is not appropriate for the website. But I really think it would serve them well in the future to follow such big announcements with a little frank discussion in the private section of their forums once they see what their public is concerned about.

What I took away from GeorgeB's comments was 'yes guys, we're going to charge you to take care of your car. But that's because we want you to have a good experience and a car that fulfills our and your dreams. We know you're taking a chance on us and the Model S and we appreciate that. Invariably there will be issues with the Model S we didn't anticipate. And we know that this car is so far ahead technologically that no one else out there other than us can help you. But don't worry, we're going to stand by our cars and stand by you. Just like we did with the roadster. We'll get there together. Yeah we could have raised the price of the car $2500 and included maintenance but we didn't. And rather than risk the car falling short of your expectations. And rather than get into issues of what's maintenance and what's warranty (like other carmakers)...because we don't even know yet what issues with the car might come up...we decided we'd charge a flat $600/yr for a yearly service inspection and take care of everything....except tires!"

I think part of the issue is that we're used to the typical auto industry with warranties and service policies and maintenance policies, that have limitations and exclusions that are unilaterally beneficial. Tesla is supposed to be a new kind of car company, but frankly we've been burned before by car dealers and so we have reason to be skeptical and doubt. But here Tesla is trying to be a new car company and are trying to sell their cars with a truly inclusive service policy where they will provide a no worry ownership experience for a yearly fee.

....but just so we're clear, it doesn't cover tires.
 
Bottom line is this.... Tesla is wanting $2,400 additional from EVERY SINGLE TESLA sold - likely to pad their profits -....


Once you drive the car in the door it's costing them money. People to move it around, rent for the enclosed floor space, tying up a profit making lift, logistics, etc.
Here in CA there is a list of required safety things that all certified auto mechanics have to do to any car that comes in their shop, I might guess that's 15 to 20 minutes of mechanics time.
 
I understand people's concerns - in particular the feelings around the bait-and-switch aspect. This was announced too late, and really should have been in place before MVPAs were presented.

For me, it comes down to 'is the price too high/unreasonable?'.

For inspection, wear-and-tear parts, service, roadside assistance, remote monitoring and new features, Tesla is charging US$475/year prepaid for the first 4 years (let's leave ranger service out of this, but if you want to include it, add it into the list of what is provided and it is an extra US$125/year).

My question is: what is the comparable offering from BMW or Mercedes for a comparable US$50k-US$100k car?

Anyone? And, please, not a brake pads and windscreen wipers comparison, because that is clearly not what Tesla are offering/requiring. Do BMW / Mercedes even offer something similar?

Should Tesla offer an inspection-only, keep your warranty, US$100/year program with nothing else? That would probably please a lot of people here, but seems not to be the business Tesla wants to be in.
 
There seems to be quite a few comments explaining away or excusing Tesla’s actions because this is a new car and we are first adopters, beta testers etc. I see this as the exact opposite. If we are the ones taking the leap of faith, I fully expect Tesla to take the leap with us and cut us a little more slack than those that come after us. Tesla exists because many of us have had this faith for 3 years or longer, we all want it to succeed and be part of the reason it gets to the next phase. That faith of ours should not be repaid by gouging. In the scheme of things it doesn’t make a lot of difference if Tesla is profitable after 8000 cars, as they say they will be, or 8500 cars. It does make a difference to me and everyone else who will own a model S that we be delighted by the car and the service not disappointed by hidden extras costs after being locked in.

It is true that Tesla exists today because of early adopters. The most noteworthy are the early Roadster reservation holders. They gambled big bucks at a time when the viability of the company was very shakey. However, it goes without saying that the scale of current operations are orders of magnitude larger than when Roadsters were practically hand-built. Despite its improved viability Tesla is still in the red and is still is a small company, with limited resources when compared with the competition. It is pursuing activities it has never done before, with new technology and parts never released before. Not only is Tesla rapidly ramping up production rates, it is rapidly expanding stores and service centers along with the necessary staff. It is no accident that it is the most shorted stock available on the market.

With such a background it is only prudent that Tesla would take a conservative approach to avoid any fatal missteps that could sink the company before it becomes profitable. We are all spending a lot of money on this ground-breaking car. Wouldn't it be ironic if after spending many tens of thousands of dollars that we would balk at spending a few hundred dollars a year to ensure that we get superior service and more importantly increase the likihood that Tesla will continue to remain viable.

I fully appreciate your disappointment, but this purchase requires a longer view. Yes, it may be true that the temperment of a true early adopter requires a higher threshold of pain than a typical consumer.

Larry
 
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I think that the Tesla warranty requirement is legal for all who have not yet signed their MVPA. For those who have seen it and not yet received a car, Tesla would likely win a legal battle for the "limited" warranty. For the lucky one hundred whose car delivery preceded the service contract there would be a small amount of legal gray.

Seriously, this is an expensive premium car and the service contract is completely in line with the competition. It is a lot more than the service for my Chevy Malibu which cost one fourth as much.

We are early adopters and need service contracts. I expect 40kWh owners on average would save money by going bare. (No service.) The problem is the enormous cost if something goes wrong. I have these type of tools in my business and it is usually best to get a warranty on things with moving parts.