(adds details on competitors' warranties, Consumer Reports
criticism, stock price)
Aug 15 Electric carmaker Tesla Motors Inc
said on Friday it had boosted warranty coverage on its
Model S sedan, a week after an influential U.S. consumer
magazine highlighted problems with the $70,000-plus vehicle.
Tesla announced that the drive unit warranty on the Model S
has been increased to match that of the battery pack, bringing
its coverage to eight years and "infinite" miles.
The warranty extension will apply retroactively to all Model
S cars produced since 2012, the company said on its blog (bit.ly/1AkmSLT),
and will have a "moderately negative" effect on its earnings in
the short term.
Consumer Reports last week criticized the Model S for having
"more than its share of problems," including a variety of
The magazine last year gave the Model S top marks for its
"smoothness, effortless glide and clever, elegant simplicity."
It purchased the car in January 2013 for $89,650. Tesla fixed
the problems on the magazine's Model S under warranty.
In a blog post on Friday, Tesla Chief Executive Elon Musk
said of the longer warranty, "in hindsight, this should have
been our policy from the beginning of the Model S program."
If the company believes that electric motors are more
reliable than the gasoline engines used in most conventional
cars, he added, "then our warranty policy should reflect that."
Many current conventional gasoline-powered cars have a
standard three-year/36,000-mile warranty.
Korean automaker Hyundai Motor Co, its affiliate
Kia Motors Corp and Japanese automaker Mitsubishi
Motors Corp offer U.S. buyers some of the longest
new-vehicle warranties, including standard vehicle coverage for
five years or 60,000 miles and powertrain coverage for 10 years
or 100,000 miles.
Tesla, which has been trading at or near its record high,
closed at $262.01 on Friday on the Nasdaq and was down slightly
(Reporting by Ramkumar Iyer in Bangalore and Paul Lienert in
Detroit; Editing by Maju Samuel and Paul Simao)