Extended Service Options

Tesla finally put together its extended service options:  $12,000 for battery replacement and $5,000 for an additional 3 year/36,000 mile extended warranty coverage.  The owner has 90 days from date of purchase to decide on these options; current owners have till May 31, 2010.

An owner has several considerations before buying either coverage:

1.  Length of car ownership.  The extended warranty would cover the car while it is 4 to 6 years old, the battery replacement expected date seems to occur around year 7.  Although I typically keep my cars around for 10 years, a more typical car owner changes cars more frequently.  Both warranties are transferred to new owners if the vehicle is sold.  But both warranties are worthless of the vehicle is totaled.

2.  Battery length expectation.  Tesla has estimated the length the batteries but no real world data is available.  Perhaps driving style and charging habits can extend the battery life.  Another consideration is the performance of an old battery.  If my range and performance is somewhat limited, can I wait a few years before replacing the battery?

3.  Opportunity cost of money.  Always a consideration when buying something for the future.  The current cost to replace a battery is $30,000 but you can buy a warranty for 7 years down the line for $12,000.  The legal document does have some fine print in regards to when you replace your battery:

You (or a transferee of the vehicle) may only request a replacement battery at any time after the expiration of the New Vehicle Limited Warranty for your Roadster, but no later than 10 years from the date of originalsale of the vehicle. If a replacement battery is requested after the seventh anniversary of the original date of vehicle sale by Tesla, there will be no additional charge for the service.  However, Tesla will issue to the then-current owner a refund of $1,000 for every year beyond the eighth anniversary of the original vehicle sale date, and will be paid at the time of battery replacement.  If a battery replacement is requested prior to the seventh anniversary of the original vehicle sale date then a $2,000 additional charge for every year prior to the seventh anniversary of the original vehicle sale date will be imposed. residents of the US and Canada, and the laws of England govern this Agreement for residents of Europe.

4.  Alternative battery sources.  Perhaps a separate company will offer a battery or you could buy one from a totaled Roadster.


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