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Live Blog Tesla Announcement April 26 - Elon Musk

Sara Muron (new) head of corporate communications makes introduction.

Elon:

Design & Engineering
Supply Chain
Factory turn rate of 20,000

Now focus turns to service and warranty
1. 80 fully loaded Model S as loaners. They will available for purchase with discount of 1% per month off of new price.
2. Valet program for pickup and delivery
3. Annual service contract AND checkup is optional. Warranty will be valid.
4. All damages covered including leaving battery at low state of charge.

Phil Lebeau What is driving this?

Elon: Service is good but not great. What is the service and warranty program you WISH you could have.

@SamoSam - Thanks for doing this!

Wired: What does unconditional warranty? Transferrable?

Elon: Open the pack, use it for target practice, no intentional damage to the pack then you are covered. Complete piece of mind. Don't worry if you don't read the manual. Any product that needs a manual is broken.

It does transfer to whoever buys it.

Follow Up: What will be the replacement?

Elon: The same or better battery.

Q: How many in the service fleet

Elon: First batch is ~100 / 20,000K built.
Several hundred will eventually be placed in service. Whatever is needed to ensure good service.

Q: how many at each location

Elon: how many ever each service centers serve but from 2 to 10

Bloomberg News: how long will the service fleet be in operation?

Elon: We don't want a fleet of old loaners. 2-3 months should be the outer limit (with outliers)

> Annual service contract AND checkup is optional. Warranty will be valid.

Zoinks! I may want to cancel my service contract then...

> Any product that needs a manual is broken.

I've always thought that. Nice to hear someone say it.

CNN Money: The battery warranty hasn't changed?

Elon: 8 years stays the same. No fault warranty.

Ron White LA Times: Can loaner be purchased?

Elon: Customer can buy loaner with discount on current car of 1%/month and $1/mile

The warranty bits sound interesting. Can't wait to get more details...

Q: Personal backing of trade-in?

Elon: I want to give people piece of mind. Everyone should have the happiest personal transport experience.

Q: Did research into battery life make you change the warranty?

Elon: No battery has ever failed at the module level.

Q: Any accordianing going on for demand?

Elon: These decisions are made independent of demand. Each piece of the customer experience should be world class.

I've told Tesla service division that their job is to NEVER make a profit. Operate the business at the zero profit point.

Regular franchises make most of their profits on the service, not on the sale. This isn't good.

Q: What were the problems that drove you to make this announcement?

Elon: This is not tactical. This is a relative focus moving from design, engineering, to service. We've just now gotten to the service portion.

Q: Lots of complaints?

Elon: Some places good, some have had more complaints. Didn't anticipate the mix. LA especially has been working out of 1 center, but we expected to be working out of 3. Permits have been issued so that should be resolved.

David Baker SF Chron: Trade-In process? Prorate by mileage and age?

Elon: Usually use automotive leasing guide.

Q: What will be done with used cars?

A: We'll sell them to customers. You'll be able to buy a new or used. It will help affordability in the future.

> I've told Tesla service division that their job is to NEVER make a profit. Operate the business at the zero profit point. Regular franchises make most of their profits on the service, not on the sale. This isn't good.

Wow... That's a refreshing point of view!

Reuters: To what extent was this designed to allay broader concerns?
Do you think the servivce program will spur sales?

Elon: Supercharger announcement (in a week or two) will address range.
What happens if my battery dies? Will I be responsible. This allays those fears Don't worry about the battery. It's going to be fine. As long as you don't INTENTIONALLY.

Mistake with annual service fee mandatory. We're fixing that. This is about giving people piece of mind with their battery.

Future sales: this is important for LONG TERM sales. Sales sells the first car, but service sells all the subsequent cars.

Paul Eisenstein Detroit Bureau: Will this service policy also be consistent with Model X and BlueStar?

Will the battery upgradeable? If you wanted to swap for a 400 mile battery.

Elon: What about a 500 mile battery? There is a good chance that this will occur.

Step changes will happen in 4-5 years. Like roadster to Model S.

This would allow to put a LOT more range. So that's probably more likely than not.

I love upgrades. Today is not about that, but that would be a good thing to do in the future.

Model X - yes.

Bluestar - we are trying, but we may have to unbundle some of these things to make it more affordable. But I can't say with certainty.

Q: All luxury vehicles say that 4x4 is a requirement for certain segments of the market.

Elon: Model X will have a dual motor all-wheel drive. Dynamically shift torque at the millisecond level. Much better than mechanical connection. "Mind Blowing"

I don't want to say anything definitive on future models, but I share you sentiment.

Great news today. I like the idea that I may be able to get into a used Model S sooner.

Wonderful news. Love the fact that service is not a profit center, always hated that part of owning an ICE. Love my Model S even more now.

So is it over now? I'd love to see a formal announcement as I feel like some things were lost in the live blogging of it...

> Wired: What does unconditional warranty? Transferrable?

Unconditional warranty on what? I'm guessing the battery based on Elon's answer.

> Elon: Open the pack, use it for target practice, no intentional damage to the pack then you are covered.

That sentence I think got mangled. The first half is at odds with the second half. Was there supposed to be an "as long as you don't" in front?

Elon is Steve Jobs resurrected. I love this guy!!!!! LONG LIVE TESLA

"Any product that needs a manual is broken" - Best quote of the morning

Where is the LIKE button???

@geek ev exactly. as long as you dont intentionally harm the battery then it continues to be covered

TM is pulling away from the ICEpack.

Seizing the opportunities that gas cannot match.

Bravo Elon, well done.

So I have 5 days left to buy my service program. Since I live 15 miles from Menlo and 20 from Fremont, I am assuming the only thing I need to purchase is the 4 year extended Warranty.

Why would anyone buy the optional service plans??? given that they are optional, other than to pay $2500 for a ranger visit?

Tesla Service includes:

Annual inspection (or every 12,500 miles)
**Replacement parts like brake pads and windshield wipers (excluding tires)
***24 hour roadside assistance
System monitoring
Remote diagnostics
****Software updates
*New features

*I suppose the "New Features" might provide an incentive.

**Break pads and wipers don't do much to account for the price.

***Roadside assistance is nice but I have AAA for that.

****Software updates if they are only available to service plan at some later date might make it worth it.

Good question. I've asked about a refund on a plan already purchased...

@chicagoniner - Good point, we'll need more clarification what their intentions are with "software updates" and *new features".

Fantastic announcement! Redeemed himself from oversold finance announcement.

Strategic gold. Peace of mind is the mainstream problem with EVs. This just chipped away at that in a big way. Add in the supercharger announcement soon, the road will be further paved for the broader consumer to make the switch without much anxiety. And the hint at a possible 500 mi battery range in the future... watch the f**k out... a trillion dollar industry will be turned upside down in a matter of years and Tesla will have the patents and tech to lead the market instantly. That's the potential here in my mind. Again, strategic gold...

@jk2014, totally second your post. I'm pretty sure other car manufacturers would have never dreamed such a smart move, leave alone executing on it. I particularly liked the quote from the call that Tesla Service centers are not profit centers and that is exactly where traditional dealers make their big bucks. Elon and his team keeps impressing with their grand vision and execution. Going to put down the deposit for Model X now that I'm more than loving my Model S.

Exactly why he can't use the franchise model. EVs most likely will never make money on maintenance, so a totally different business model is required.

Elon's job with the state legislates will be to make this difference loud and clear...

@JK2014 You've hit this on the head and this is something Elon should bring up more frequently. EVERYONE I know hates to take their car in for service because it seems like the dealerships are focused on raising revenue when your car is broken.

What choices do we have?

The car needs to be fixed.

Pretty much encapsulates the phrase "over a barrel"


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