Tesla Targets Better Service

Tesla Motors S Model
Source: Teslamotors.com
Tesla Motors S Model

Tesla CEO Elon Musk admits his company can do a better job taking care of its customers and their Tesla vehicles. So the electric car company is beefing up its service business by making the warranty on its battery packs "unconditional" while also offering new services to Model S owners who need work done on their car.

"I think our service is OK, but not great and it needs to be great," said Musk during a conference call with reporters. "This is not about having OK service or good service it's really about the perspective, what is the service and warranty program that you wish you could have from any carmaker?"

Unconditional Battery Warranty

Tesla will now give Model S owners an unconditional 8 year warranty, meaning that those who have a battery pack that fails will get it replaced automatically. Musk says he created the unconditional warranty to give owners of the electric cars peace of mind.

"All damage is covered by warranty including improper maintenance or unintentionally leaving the battery at low state of charge for years on end. The basic intent is to provide complete peace of mind about owning the Model S even if you never read or followed the instructions in the manual," says Musk.

('Cost of Ownership' Key to Tesla's Lease Program)

The electric car company says it will also offer performance versions of the Model S as loaner vehicles for those who are having their cars worked on by Tesla technicians. The company is building a fleet of loaner Performance Model S vehicles it will distribute around the country. In addition, Tesla will offer a valet service for those calling for service.

Inconsistent Service

So why is Tesla beefing up its service program? While Musk will not call the current service program a weakness for his company, he admits that it is inconsistent. Musk says it's very good in some parts of the country, and not as strong in others. For example, in Los Angeles and southern California Tesla does not have enough service centers. As a result, Musk says Tesla has not given customers in that area the service they deserve.

Musk summarized the service improvement saying, "What is the best service and warranty that we could possibly envision and still afford to do. This is what we have come up with here."

Tesla reports first-quarter earnings after the bell on May 8. Last month Musk said Tesla operations had turned the corner and the company would show a profit for the quarter.

—By CNBC's Phil LeBeau; Follow him on Twitter @LeBeauCarNews

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