Tesla intros 10-year Model Y battery warranty with $500 deductible

After extending the coverage on other expensive components, Tesla is now bringing an option for a longer high-voltage battery and drive unit warranty period in the US and Canada.

While not the rumored 12-year Model Y battery warranty, the move does give owners an extra piece of mind when it comes to the dreaded out-of-warranty battery replacement costs.

The main competition of Tesla's electric vehicles in the US and Canada comes from the Hyundai-Kia conglomerate that offers a 10-year battery warranty despite that its EVs run on modern 800V powertrains and offer much faster charging.

Model Y extended battery warranty price

• $2,000
• $500 deductible 

Tesla, as usual, has found a way to introduce a longer Model 3 and Model Y battery warranty as a paid option, even though Hyundai and Kia offer it for free.

Currently, Tesla only gives an 8-year warranty for the high-voltage battery and the drive unit, guaranteeing just a 70% capacity retention during that time. 

Those willing to get two extra years of battery warranty for their Model Y or Model 3 can now shell out $2,000 (CA$2,800) for the privilege, but there is also a $500 deductible in case they need their battery replaced in this extended 24-month period.

Previous leaks claimed that Tesla will introduce up to four years of extended warranty for the high-voltage battery on a subscription basis starting at $100/month. In reality, however, Tesla demands the money upfront, regardless of whether the battery gives up the ghost toward the beginning or the end of the period, or whether the unfortunate event happens at all.

The extended Model 3 and Model Y battery warranty will only show as available in the app for the registered vehicle owner before their factory one has expired. Fortunately, what Tesla calls the Extended Service Agreement (ESA) for an out-of-warranty battery replacement beyond the initial eight years of coverage is transferable to a new owner, too.

This way a Model Y can be sold on the seventh year of ownership and still have three years left on the battery warranty to spruce up the used EV market a bit. Tesla may be feeling the heat from longer battery warranties offered by its competitors both in the US and in China, where the push now is to standardize a 15-year EV battery warranty at 85% capacity retention.

Modern EV battery chemistries are perfectly capable of pulling those longer warranties off as standard. Tesla, however, ran the numbers and deduced that it can charge up to $2,500 for a replacement or repair at cost. In the majority of cases, it will simply pocket the one-time ESA payment, as it knows perfectly well that the Model 3 or Model Y battery packs can last much longer than their default 8-year warranty.

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