Tesla will offer 12-year Model Y battery warranty to ward off competitors

As the world's biggest battery maker strives to make a 15-year EV warranty official together with major EV brands like NIO, Tesla is taking notice.

It currently offers an 8-year warranty for its high-voltage battery, a shorter period than the 10-year coverage that Hyundai or Kia give in the US. To top it all off, the warranty stipulates that during this 8-year period, the battery in a Model Y won't degrade below 70% of its original capacity.

Chinese automakers like NIO, on the other hand, have joined forces with CATL to make a 15-year EV battery warranty mandatory across the industry, but guarantee an 85% capacity retention. The technology is out there, as modern LFP batteries like the ones that are everywhere, from the Anker Solix 2 mobile power station discounted on Amazon, to mass market electric cars, have already proven to last well beyond the typical warranty that manufacturers give.

Extended Model Y battery warranty

Tesla will be introducing up to four years longer battery warranty for the Model Y, Model 3, and the rest of its fleet. In an email to customers, Tesla explains that the extended coverage options will be offered starting in 2026. The extended Tesla battery warranty, however, is likely to be available as a subscription pricing starting from $100 a month for the longer coverage periods.

Needless to say, Tesla has run the numbers and knows that the new battery chemistries that it currently installs in its vehicles can last way beyond the official 8-year warranty, so it plans to simply pocket the subscription. If Tesla asks for $100/month to extend its battery capacity guarantee with another four years, it will earn nearly five grand in the process. In the unlikely event that some of the batteries degrade below 70% during that time, it would simply swap them at cost.

CATL is already giving a 12-year battery warranty for the packs that it loads in NIO's EV battery swap stations, and building out a network of its own with the goal to extend the coverage to 15 years. Its LFP batteries for energy storage are guaranteed to last even longer, up to 20 years, with zero degradation in the first five years of service.

According to NIO, there will be 20 million electric vehicles coming out of warranty in the next five years or so, which would make for a moribund second-hand EV industry. This is why it is working with CATL to make a 15-year EV battery warranty a standard that will breathe new life in the used EV industry, essentially nullifying one of the major concerns of future electric car owners. Tesla is seemingly following suit, but with a profit margin preservation twist of its own, as it plans to introduce the extended battery warranty as a subscription service.