Friday 15th August 2014
Hybrid Car News

Tesla Motors has taken pains to offer perceptibly progressive service policies including one in which Model S owners are entitled to an as-good-as or better Model S loaner car delivered to their location in exchange for their car needing service.

It’s a sweet deal, and the policy was announced by company Chairman, Product Architect & CEO Elon Musk in April. The way it was originally presented is if customers like the loaner car, they could buy it at a pre-arranged price. This rather unique policy is one of several accommodations Tesla is attempting to offer to make for an exemplary ownership “experience.”

We inadvertently learned today however that Tesla quietly changed its policy to reduce how much it will discount a Model S loaner by potentially thousands of dollars.

In April we and other publications originally reported Tesla’s novel policy, and quoted a blog post bylined by Musk who said 1 percent of the MSRP would be subtracted from the sales price for each month the loaner had been in service. In addition to that discount, a pro-rating of $1 per odometer mile would also be subtracted, the blog post originally said.

Tesla amended a related policy on Model S resale values not long after, and today we were informed the service loaner purchase policy was also changed some time between April and now without public notification that the 1 percent part was no longer in effect. In fact, Tesla’ official blog bylined by Musk was edited so as to erase any record of there ever having been a 1 percent discount offered.

On a $100,000 car, that would amount to $1,000 per month depreciation. If a Model S was, say six months old, that would be an additional $6,000 discount.

Company spokesperson Shanna Hendriks, who informed us of the policy change, said the omission was unintentional, and expressed disappointment that the history had been scrubbed without a subsequent blog post to correct the record.

Originally, as we and others reported, Musk’s bylined quote stated in the April 26 blog post:

“The loaners will be available for immediate purchase at a price that is lower by 1 percent per month of age and $1 per mile,” said Tesla today in a follow-up blog post. “If you like the service loaner more than your other car, you can just keep it. This ensures that the service fleet is constantly refreshed and gives customers the best optionality.”

Somewhere along the line, Tesla decided to not offer the 1 percent. The amended blog post now states:

“The Model S loaners will be available for immediate purchase at a price that is lower by $1 per mile driven. If you like the service loaner more than your other car, we will happily trade in your Model S and you may keep the loaner. This ensures that the service fleet is constantly refreshed and gives customers the best optionality.”


Tesla is still refining its approach and has been as careful as possible in its growth. It is finding its way as a new American car manufacturer and has been known to amend things on the fly before, including minor changes to the Model S, the amount it charges for reservations ($5,000 reduced to $2,500), the resale value guaranty mentioned above, and other policies. This is all as it attempts a good faith effort while facing practical realities and changes of its collective mind that occasionally crop up.

Our opportunity to find this out first hand came when we copied in the original text we’d recorded in April on another feature we wrote this week about purchasing Tesla demos direct from the Tesla store. We’ve since amended that story at Tesla’s request as well.

This followed Hendriks’ e-mail saying that one of the heads of Tesla’s sales informed her that our story this week was wrong because we reported 1 percent per month as well as $1 per mile.

In re-checking the e-mail record of our back and forth questions with Hendriks last week for the latest feature, we found she had quoted the updated policy in an e-mail, and linked the amended blog post. However, when we wrote the story, on deadline, we actually missed the note from Hendriks, and went with the original reporting including the 1 percent part, thinking our original copy and paste from the blog post was still a good quote and documentation straight from Tesla.

Today when we explained we had merely reported what was part of the prior record, she conceded the April blog post had been scrubbed of the record, and said she has sent an internal memo expressing disappointment for the situation.

Some might say this account sounds somewhat fishy, and that could be understandable how some might see it that way. Without knowing otherwise as to Tesla’s motives, we’ll say it could just as easily be chalked up to growing pains, but we did want to correct the record on what we originally reported.

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