Tesla Motors is modifying the warranty for its electric Model S sedan by offering unlimited mileage for the drive unit and battery pack for eight years for new and existing customers to ease any reliability concerns.

The "drive-unit warranty has been increased to match that of the battery pack," Elon Musk, Tesla's chief executive officer and co-founder, said on the company's website. "There is also no limit on the number of owners during the warranty period."

The changes in Model S warranty will have a "moderately negative effect" on earnings in the short term, said Musk, who is also Tesla's biggest shareholder. The company is making the change to reinforce its belief that electric motors are more reliable than gasoline engines, he said.

The move comes after Tesla's flagship vehicle, ranked as the best-reviewed car of the year by Consumer Reports in February, exhibited flaws following continued use, according to the magazine. In July, automotive data and pricing company Edmunds also reported glitches with its Model S after more than a year of heavy driving. The entire vehicle, including drivetrain, previously had a warranty for four years, or 50,000 miles.

Consumer Reports and Edmunds both said flaws they experienced with the Model S, priced from $71,000 in the U.S., were repaired by Palo Alto-based Tesla and covered under warranty at no additional cost.

Tesla fell less than 1 percent to $261.85 in Friday's trading. Shares had gained 74 percent this year.



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