Warranty/Servicing - official Tesla responses (incl GeorgeB)

[hcsharp]

I apologize if my thinking wasn't clear. Let me try a different way.

A lease is a financial structure with three inter-related components:

1. A "put" option that allows you to sell the car back to the leasing company at a fixed price (the residual value);
2. A depreciation charge that collects the decrease in the value of the car (purchase price - residual value), amortized over the life of the lease;
3. An interest charge for carrying the unamortized portion of the vehicle value.

If, as @hcsharp suggests, the leasing company lowballs the residual value, the "put" option will provide little value and the depreciation charge will be substantial. In short, the lease payment will be high and the terms unattractive.

I forgot about the option. So basically low-balling the residual value will just be offset by the loss of value from the put option. They will essentially be stuck with all the cars if they have high depreciation, while the buyer holds the option if the cars keep value. I wonder who is backing the Volt lease which is surprisingly attractive.

Banks have to repo a certain number of cars and the percentage no doubt goes up if they depreciate fast. So they do bear some residual value risk yet the interest rates are the same for a Roadster as they are for a Corolla. Perhaps they require a larger down payment for riskier cars?

 

[neroden]

I quite agree with you here. If Tesla wants to inspect my car every 12,000 miles in order for my warranty to not be voided - no problem. I'm all for it.

Right. And that would be legal.

But don't hold me hostage and tell me I have to pay $600 for the inspection - that sounds like ransom right there.

Which is why that's actually illegal, under the Magnusson-Moss Warranty Act, as I and others have pointed out.

How about a compromise guys? You can inspect my car for free every year and get all the juicy data you need, provide me with a list of items that you are going to replace that are broken as part of warranty, and then provide me with a list of items that you are going to repair/replace that are not under warranty, but need to be changed in order to keep the warranty valid.

Entirely reasonable.

Somehow, I don't think $600 justifies changing the brake fluid every year.

Keep warranty separate from "service plan". Telling me to "not worry about it" is silly. I *DO* worry about it and VOIDING a warranty because I couldn't or wouldn't cough up the cash shady to me.

That's because it is shady -- to be specific, it's in violation of federal law.

Is anyone here trained in the right kind of law to get Tesla to pay attention? Tesla needs to get a slap upside the head about their bad practices before it gets them in enormous amounts of legal trouble. Hopefully they'll be behaving themselves in 3 months, but if they aren't, this is the sort of thing which could sink the company into bankruptcy due to lawsuits, and it's *totally unnecessary risk*.

- - - Updated - - -

> It is illegal if Tesla doesn't get an FTC waiver -- Magnusson-Moss Warranty Act (US Code 15 section 2302 clause c).[neroden]

Which they may already have filed for. If anyone can get a waiver you would think the mfr of a truly unique high tech vehicle could.
--

Indeed I think they could get a waiver.

However, they haven't gotten one yet. I just checked the indexes to the Federal Register, just to be absolutely sure.

You don't generally get to violate the law and *then* ask for a waiver.

 

[Fedderman]

Screw the warp drive, stickers add like 30HP each

Funny! Truth is, in California, the HOV stickers can make your car go faster...

 

[Discoducky]

Tesla Model S Service Contract: $600/Year, Or Warranty Voided

Sounds like David isn't taking this lying down. He seems to be taking the "ask Elon" route and getting answers. It's a good read with this tidbit at the end:

In a last-ditch effort to find out what Tesla technicians actually do during the annual inspections, I called one of Tesla's maintenance centers.

"It's basically a systems check," came the answer. "But we haven't received the documentation yet on precisely what we'll be doing. When we get it, I'll be happy to send you a copy."

Stay tuned.

Also, has anyone actually purchased the plan yet or passed on it and outside the purchase window? I think the first Sig owners are nearing (over) the 30 day window. It struck me reading this as TM might have just put out the highest # they thought would cover their a$$ and maybe that # will go down once the P#'s start coming out or it will go down once cars start coming in for their 4 hour "systems check" and their is nothing wrong with them (aka it's more like a 15 to 30 minute systems check). Anyway, I hope it will go down and that TM would pass that on to their owners if every car that is checked doesn't have anything wrong with it.

 

[Mycroft]

IMO, they're going to stick to their guns on this one. At least until the Model X comes out in 2014. They have to pay for the roll-out of the service centers and with nearly every owner opting for the pre-payment plan, they'll have money up-front to fund that roll-out. They'll have ~$19M from just the first 10,000 cars sold, which will pay for a few service centers.

 

[dsm363]

Again, it's only $475/year if you prepay which he doesn't mention. He doesn't even layout the entire pricing structure or 3 options.

 

[ElSupreme]

Again, it's only $475/year if you prepay

IFF you drive less than 12,000 miles a year. I plan or being close to double that.

 

[gg_got_a_tesla]

No mention of wheel alignment either; that's usually a 3-figure item in my experience. Not that it is absolutely necessary to do that every year...

 

[djp]

Here's the checklist for the Roadster annual maintenance, which is also $600.

Prep

• Fit protective covers to seats, footwells, steering wheel and rear body. Remove rear under-tray diffuser assembly.

Transmission

• Inspect for leaks and check fluid level
• Inspect/check torque reaction mount, and tighten sub-frame bolt to 80Nm

Motor

• Inspect shroud for damage/blockage
• Clean insulator ring
• Inspect motor cable and clean phase lugs
• Hi-pot test motor and motor cable assembly
• Apply Penetrox to motor cable lugs at the PEM during re-assembly
• Inspect motor cable routing
• Visually inspect motor encoder for contamination
• Clean motor fan

Battery Pack

• Check torque of mounting hardware
• Inspect BMB cover gasket
• Check cooling system (manifold, end fittings, hoses and clamps)
• Check level of cooling fluid and record specific gravity __
• Perform battery monitor test

HVAC

• Inspect condensor and lines. Clean condensor finning (if needed)
• Evacuate and refill refrigerant charge

Brakes

• Check operation of parking brake and adjust if necessary
• Inspect brake pads and discs. Specify pad thickness: Front Driver side __ Front Passenger side __ Rear Driver side __ Rear Passenger side __
• Inspect hoses, pipes and hydraulic units
• Check brake fluid level

Steering / Suspension

• Check condition of front and rear suspension, including ball joints and gaiters
• Check that the torque of rear toe link inboard fixing is 60Nm
• Inspect dampers
• Inspect front and rear wheel bearings for end play
• Inspect drive shaft gaiters
• Inspect steering wheel function

Wheels / Tires

• Inspect tire condition and record tread depths: Front Driver side __ Front Passenger side __ Rear Driver side __ Rear Passenger side __
• Check that the torque of wheel bolts is 105Nm
• Check Tire Pressure Monitoring System (TPMS) and specify setting: Comfort __ Range __
• Set and specify tire pressures: Front Driver side __ Front Passenger side __ Rear Driver side __ Rear Passenger side __

Electrical

• Inspect operation of charge port door and lubricate connector ramps
• Inspect operation of all interior and exterior lights

Body

• Inspect operation of (lubricate and adjust if needed) all hinges, latches and locks (including drivers door, trunk and ignition)
• Inspect operation and condition of seat belts
• Check wiper operation, washer jet position and refill reservoir
• Replace wiper inserts
• Check horn operation
• Check operation of alarm and keys
• Replace battery in both keys

PEM

• Visually inspect PEM chassis for damage
• Check operation of PEM and/or motor fan
• Check condition of baffle
• Clean megapole heat sinks when PEM is removed
• Check torque of mounting hardware during installation
• Measure ground strap resistance __
• Inspect seals of Motor Inlet Cable Cover and Top Access Hatch
• Clean PEM fan

VMS

• Download and review vehicle logs
• Check firmware revision and update before and after service, if necessary
• Reset service interval indicator (12 month/12,000 mile service)

Drive

• Perform vehicle test drive

Clean

• Vacuum interior and wipe all interior surfaces
• Wash vehicle exterior
• Fit soft-top and adjust tension cable

Charge

• Charge battery to full capacity in Standard Mode

 

[dsm363]

IFF you drive less than 12,000 miles a year. I plan or being close to double that.

I agree the article is right to bring up the issue but should include all the options and questions including for people who drive more than 12,500 miles per year.

 

[MikeK]

I'm not surprised Tesla is trying to remain silent on this. When you're doing something indefensible, any attempted explanation just sounds pathetic.

 

[RDoc]

Here's the checklist for the Roadster annual maintenance, which is also $600.

<snip> list of inspections and maintenance items </snip>

That's an interesting list in that there's nothing at all exotic on it. Except for the vehicle logs and a few other items, everything seems pretty simple. Mostly it looks like an inspection. For example, with the exception of the A/C refrigerant, the fluid are just checked and topped up.

I'm still not seeing anything that justifies cancelling the entire warranty. Neither of the earlier examples of the transmission catastrophically failing while still full of oil, nor the display dying would be caught by this check list.

 

[strider]

That's an interesting list in that there's nothing at all exotic on it. Except for the vehicle logs and a few other items, everything seems pretty simple. Mostly it looks like an inspection. For example, with the exception of the A/C refrigerant, the fluid are just checked and topped up.

As I posted up-thread, there is actually a fair amount of work that goes into Roadster service. This is related to the motor and PEM being air-cooled and the complex mechanisms by which this achieved. Tesla techs have to remove the PEM, clean it out, check and clean out the blowers, etc. Also the battery mgmt is 1st generation so I would expect there are tests that can only be performed with a Tesla laptop plugged into the car. I'm fine with this.

But w/ Model S being liquid cooled and the battery mgmt should be more advanced I just don't see how it can take $600 worth of labor every 12k miles. If Tesla can convince me otherwise I'll pay it.

 

[hcsharp]

That's an interesting list in that there's nothing at all exotic on it. Except for the vehicle logs and a few other items, everything seems pretty simple. Mostly it looks like an inspection. For example, with the exception of the A/C refrigerant, the fluid are just checked and topped up.

I'm still not seeing anything that justifies cancelling the entire warranty. Neither of the earlier examples of the transmission catastrophically failing while still full of oil, nor the display dying would be caught by this check list.

It was made clear to me before I bought my Roadster that the annual service was optional and would not void the warranty if I failed to do it (unless failing to do it caused damage normally covered by warranty). We haven't seen the list for the MS, but there is a lot that needs to be done at a Roadster annual service, justifying the fee IMHO. Due to being built for easier servicing in the first place, and water cooling, the MS requires a lot less at its annual (this was confirmed by a service tech - not that he's an authority).

Tesla usually does the right thing when confronted with their mistakes. I'm waiting (hoping) for them to do that again.

 

[dsm363]

I'm hoping they can just make it $475 or $600 per year and leave the 12,500 miles up to you in terms of servicing items on your own if you choose to do so. If you do the appropriate things and bring your car in once a year then the warranty stays intact.

 

[digitaltim]

I'm hoping they can just make it $475 or $600 per year and leave the 12,500 miles up to you in terms of servicing items on your own if you...

+1000 dsm363

It is either this or no fee for first 4 years. I have lobbed my opinion into TM.

 

[westerndh]

I find it interesting that so many people are against this charge, yet I’ve seen few real world examples of what people have spent on service/repairs over many years.

In my case, I just sold my 2004 Volvo XC70 and I kept a record of all service costs over 9 years ownership which I've summarized the numbers below.

First number = I paid, second number = Extended warranty paid

2012 $908 $1,179
2011 $294 $0
2010 $1,050 $6,963
2009 $1,496 $6,231
2008 $298 $70
2007 $629 $518
2006 $319 $21
2005 $1,035 $576
2004 $0 $0

Total $6,029 $15,558

Average I paid per yr $669
Average warranty company paid per year $1,728

Bottom line, over 9 years, I paid $6,029 and the warranty work paid was over $15k (mostly after the 4 year factory warranty expired). Including the cost to purchase 2 extended warranties, my total out of pocket was $11k, an average $1.2k a year.

Ok, so I know my car was a Ford era Volvo, but I don't think these numbers are that different to many real life experiences I hear people talk about, so in my view, Tesla's offering is a no brainer, particularly adding in the convenience of Tesla Rangers coming to my home and the positive experiences people have reported with them.

Cheers

 

[Chas F]

I find it interesting that so many people are against this charge, yet I’ve seen few real world examples of what people have spent on service/repairs over many years.

In my case, I just sold my 2004 Volvo XC70 and I kept a record of all service costs over 9 years ownership which I've summarized the numbers below.

First number = I paid, second number = Extended warranty paid

2012 $908 $1,179
2011 $294 $0
2010 $1,050 $6,963
2009 $1,496 $6,231
2008 $298 $70
2007 $629 $518
2006 $319 $21
2005 $1,035 $576
2004 $0 $0

Total $6,029 $15,558

Average I paid per yr $669
Average warranty company paid per year $1,728

Bottom line, over 9 years, I paid $6,029 and the warranty work paid was over $15k (mostly after the 4 year factory warranty expired). Including the cost to purchase 2 extended warranties, my total out of pocket was $11k, an average $1.2k a year.

Ok, so I know my car was a Ford era Volvo, but I don't think these numbers are that different to many real life experiences I hear people talk about, so in my view, Tesla's offering is a no brainer, particularly adding in the convenience of Tesla Rangers coming to my home and the positive experiences people have reported with them.

Cheers

I think many people opposed to this amount (including me) feel that you can't compare maintenance of an ICE car to the Model S because of the greatly reduced complexity. Assuming the S has 80% (somewhat random number) less moving/wearable components than an ICE, we would expect to pay 80% less for maintenance, or around $120/year on average. You could argue that software updates would bump that number up, but really? My yearly iPhone OS updates are free so why would I expect to pay so much to maintain an EV?

 

[mnx]

I think many people opposed to this amount (including me) feel that you can't compare maintenance of an ICE car to the Model S because of the greatly reduced complexity. Assuming the S has 80% (somewhat random number) less moving/wearable components than an ICE, we would expect to pay 80% less for maintenance, or around $120/year on average. You could argue that software updates would bump that number up, but really? My yearly iPhone OS updates are free so why would I expect to pay so much to maintain an EV?

Just like there is a cost for those iOS updates (you paid for them through the price of the phone), there is a cost to building out service centers...

 

[Chas F]

I

Just like there is a cost for those iOS updates (you paid for them through the price of the phone), there is a cost to building out service centers...

Another argument for including it in the cost of the car....