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Worse case warranty question

Discussion in 'Model S' started by nleggatt, Dec 7, 2011.

  1. nleggatt

    nleggatt Member

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    What happens to warranties if tesla goes out of biz? Any historical cases of this happening? Ie we buy a 80k car and they don't get gov funding and close there doors and next day my at won't start... Am I screwed? Just curious...
     
  2. NigelM

    NigelM Recovering Member

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    If a company simply shuts shop and disappears then warranties are largely useless, However, if the company was to be bought (taken over) then in general the new owner takes on the existing liabilities (read warranties); there are also a thousand exceptions to any stated eventuality....

    Now to reality: Tesla has already stated they have not applied for and do not require further government finding. Elon Musk has stated several times that he expects Tesla to be profitable in 2013 and that the company has plenty of cash to see them through.

    Those of us who have been watching the company (and investing in it) for a while are not having any sleepless nights. :biggrin:
     
  3. Tech26

    Tech26 Member

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    Tesla's not going to go out of business. A few years ago when it looked like they might be in danger of going out of business the CEO, Elon Musk, said he would buy back all the Roadsters. In a couple years when you go out to your Model S, and it doesn't start, there will be a Tesla Technician to fix it. Most likely for free because it will still be under warranty.

    Tesla is not just a company that builds really cool electric cars. Tesla is an idea. Tesla is a thought that has occoured to millions of people who just didn't have the resources or the know how to proceed with developing a better solution to a problem that billions of people face every day. Tesla has built a vehicle that is based on centuries of innovation, and in the process, developed the most recent answer to a question we've been asking since time began: How do I get from where I am to where I want to be?
     
  4. AnOutsider

    AnOutsider S532 # XS27

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    That's all well and good, but none of that guarantees a successful company. Great ideas and sunshine wont help if some major recall or horrible accident causes a huge dent in public image for example... In that case, the boats going to sink, no matter how many kittens and rainbows are onboard.

    To the OP: I think it's right that Tesla will be profitable and stick around at least for the next 5 years. That said, as has been said, if they are acquired the burden would likely go to the purchaser. If not, we may be SOL. If you're worried though, you can wait a year and see if things take off or plummet before buying, or perhaps look into third party warranties?
     
  5. Tech26

    Tech26 Member

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    #5 Tech26, Dec 7, 2011
    Last edited: Dec 7, 2011
    Maybe I was being a little too poetically optimistic. Some people really like the charged words and enthusiasm.

    You're right though. If "scientists" come out with a study that says driving a Tesla causes cancer we can add it to the list of products that cause cancer and watch Tesla Motors go down in flames. There will be no one to provide the warranty, and you wont be able to drive your $80,000 cancer mobile. It's best not to risk throwing your hat over the wall for the good of mankind and just stick with what you know.
     
  6. richkae

    richkae VIN587

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    Tesla is going to sell 20,000 cars a year into a market of 30+ million cars.
    Fearmongers can say lots of stupid lies and scare lots of sheep, I think there will still be 20,000 smart people who see through it and buy the cars.

    I feel it is very likely that Tesla will sell all their cars, any difficulty they run into will be because of cost overruns.

    If Tesla does run into financial trouble, I am very confident that they will get bought by a larger car company and not die.
     
  7. nleggatt

    nleggatt Member

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    FYI I am a res holder, but was just wondering how this could play out!
     
  8. AnOutsider

    AnOutsider S532 # XS27

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    Ive already got a reservation, and not for the good of mankind (solely anyway). It's shaping up to be a great car, with great tech and paving the way towards the future. I think people should buy for their own reasons (and there's lots to love about it), and not because they're guilted into thinking that if they don't they're helping to destroy the planet.
     
  9. ckessel

    ckessel Active Member

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    #9 ckessel, Dec 8, 2011
    Last edited: Dec 8, 2011
    Tesla needs people to buy the car because it's a great car. I think it's the right way to go for the country (less oil, pollution, etc), but it's the mostly the fact that Tesla is creating a compelling car that will sell it, not those other factors.

    While there's definitely a green market, not many people demonstrate they actually care much about saving the planet based on their actions. Or perhaps I should say, people care, but outside of the green niche market they don't care enough to spend money on the green aspect. I'm probably as guilty as anyone, largely because the costs of such pollution aren't very visible, particularly if the cost is born by another country (e.g. toxic slag heaps in China). Unfortunately, because people (well, USA people at least) don't demonstrate green has much value to them, manufacturers don't make much attempt to even look into green alternatives even if their cost would turn out to be competitive. I applaud Tesla for trying to create a compelling car that has green elements because they work both financially and functionally.
     
  10. gg_got_a_tesla

    gg_got_a_tesla Model S: VIN P65513, Model 3 Res Holder

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    Any former DeLorean owners on here?! :wink:

    From Wikipedia:
    If Tesla does go under, maybe, someone might let it "live on" in some form...
     
  11. Jaff

    Jaff Active Member

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    Bang on Richkae...this is why I'm not worried in the least...it's a non-issue...

     
  12. Tessier

    Tessier Member

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    If you remember when GM and Chrysler were on the brink of disaster the federal government stepped in to guarantee the warranties of the failing auto industry. They did it to reassure would be buyers that they wouldn't be stuck holding the bag if one of the big three went under. If Tesla entered into bankruptcy your thinking that your going to be SOL:cursing: would be correct! This is a start up in a very difficult time in a very difficult industry.

    BUT like several have pointed out Tesla is in pretty good shape. There CEO once again appears to have very deep pockets and has made it know that his company will outlast his personal fortune if need be. Another point to consider is several large key auto manufactures have invested in Tesla and own a stake in the company. If Tesla goes under they still own a stake of what is left which would include lots of IP and lots customers that are very loyal to the brand and it's ideals. I am sure that alone would be a very worth while and valuable purchase to anyone looking to advance in the auto industry. Lastly Tesla makes money by selling and designing it's IP into other manufactures cars as well as building it's own. Several of those models are approaching production readiness which mean's Tesla's balance sheet is only going to look better and better as they ramp up production.:love:
     
  13. strider

    strider Active Member

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    Yeah, Toyota, Mercedes, and Panasonic have all invested in Tesla. Someone would buy them for the Intellectual Property, patents, etc. and would inherit the warranties. After that, I'm confident people on this board would figure out how to keep them running - side businesses could be started where smart folks on here would figure out how to repair packs and such. That is one benefit of using standard-sized cells, they would be available even if Tesla went under.
     
  14. Lush1

    Lush1 Member

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    If Tesla goes under early the cars will be collectors items. The fewer they make, the rarer they'll be and the more they will be worth, though maybe not immediately. Wonder how much they will fetch at Barret-Jackson?

    I don't think Tesla will fail though. I hope to hell they don't. I'm Model S reservation #1712. I am betting on Tesla to thrive and profoundly change the automobile landscape.
     
  15. jaanton

    jaanton Roadster NA #1026

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    IMO the biggest danger to Tesla now is regulatory or political. If the battery tech gets a bad enough image due to (probably other manufacturer's) safety problems or politically a change of administration takes a hostile position Tesla could be in trouble. If the economy doesn't pick up in a couple years that could be another problem - i.e. when Tesla needs to move into more affordable markets those markets are still under too much of a strain - and fuel prices stay down because of an extended poor economy - and other automakers move into the EV market - Tesla might never make an "affordable" vehicle. There are several hurdles over the next few years each of which could be a problem.
     
  16. vfx

    vfx Well-Known Member

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    Didn't Elon's speech at the factory tour hint at oil companies being the concern?
     
  17. Doug_G

    Doug_G Lead Moderator

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    Sure did. It came across a bit funny to me... I started looking for my tin foil hat.

    I believe he was suggesting that some of the FUD campaigns we've seen are backed by oil companies.
     
  18. dmckinstry

    dmckinstry Model S - U.S. P - #1649

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    I don't have to know any specifics at all to believe that Elon is absolutely correct about that. I don't doubt a bit that oil companies are contributing to the negative press, although not necessarily publicly.
     
  19. vfx

    vfx Well-Known Member

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    I keep thinking he knows something we don't. Maybe he has had a direct interaction. Maybe a messy valvelhead on his bed.
     
  20. ckessel

    ckessel Active Member

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    Fortunately, Nissan's been hitting the Leaf adds pretty heavily on prime time shows (and NFL games), which can only help the cause of EVs in general.
     

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