Tesla now offers an extended warranty in some regions
Not a Tesla App
Tesla has begun offering an extended warranty called Extended Service Agreement (ESA) in the U.S. The service provides further coverage for eligible vehicles following an accidental leak last year on their mobile app.
You may recall Tesla unintentionally revealed a new extended warranties program when version 4.11.0 of the mobile app went live in July 2022. A new item appeared in the Upgrades section titled Tesla ESA, priced at $7,700.
The description was unclear, with several grammatical errors, spelling mistakes, and poor formatting, suggesting that it was not ready for public consumption. It was unknown whether the ESA was being prepared for all models or if the price was a placeholder.
Fast forward to today, Tesla's Vehicle Extended Service Agreement (Vehicle ESA) is now officially available for eligible Model S, Model X, Model 3, and Model Y owners. The Vehicle ESA commences when the Basic Vehicle Limited Warranty expires and ends upon reaching the selected time or mileage threshold, whichever comes first.
Eligibility and Coverage
To be eligible, the new vehicle must be purchased directly from Tesla, and the Vehicle ESA must be purchased no later than when the Basic Vehicle Limited Warranty expires.
Pricing
The pricing for the Vehicle Extended Service Agreement (in USD) is:
Model S (2 years or 25,000 miles, whichever occurs first): $3,100.00
Model X (2 years or 25,000 miles, whichever occurs first): $3,500.00
Model 3 (2 years or 25,000 miles, whichever occurs first): $1,800.00
Model Y (2 years or 25,000 miles, whichever occurs first): $2,000.00
These prices are notably lower than the previously leaked $7,700 price tag. The Vehicle ESA purchase price does not include applicable state and local taxes.
The new ESA covers Model S built between 2012 and 2020, and Model X built between 2015 and 2020. There are no similar production date limitations for Model 3 and Model Y.
Unfortunately, there is no grace period. The ESA must be purchased before the Basic Vehicle Limited Warranty expires (4 years or 50,000 miles). This means 2018 and some early 2019 Model 3 sedans are not eligible.
Exclusions and Deductible
The ESA covers the repair or replacement necessary to correct defects in the materials or workmanship of most parts manufactured or supplied by Tesla during the coverage period. However, it does not include the high-voltage battery or drive unit, which have their own standard 8-year warranty.
Tesla clarifies that the ESA is not a Maintenance Plan and will not cover wear and tear items like brake pad replacements.
The deductible for Model 3 and Model Y is $100 per visit, and it's believed it will be $200 for Model S and Model X.
How to Get ESA
To purchase the ESA, open the Tesla mobile app, go to the 'Upgrades' tab, and select the 'Extended Service Agreement' option. Follow the prompts to complete the purchase, and the ESA will be added to your account. It's important to note that the ESA only takes effect after your Basic Vehicle Limited Warranty expires. It can be transferred to the next owner, which the company says can improve aftermarket value.
Tesla's Vehicle Extended Service Agreement has evolved from last year's accidental leak to its current official offering. This additional protection aims to provide greater peace of mind and an improved ownership experience for Tesla customers.
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In this article, we’ll cover Tesla’s updates on Optimus, batteries, and Tesla Energy.
Optimus
Tesla has been working away on their humanoid robot and continues to make progress in software and hardware.
First, Tesla is preparing the Fremont factory for the Optimus pilot production line, which is scheduled for completion later this year. Once it is, wider deployments of Optimus for internal use within Tesla’s facilities are expected as well. Tesla aims to have several thousand Optimus units working in its North American factories by the end of the year once the pilot production line is operational.
Tesla’s goals for production remain extremely lofty - 1 million units per year by 2030. However, they could face some challenges when ramping production.
Key components like the shoulder actuators use specialized permanent and rare-earth magnets, which are currently sourced from China. Due to recent Chinese restrictions on the overseas sale of these magnets, Tesla is seeking an exemption or alternative suppliers. They have not yet looked into modifying the shoulder actuator but will likely do so if they cannot obtain the necessary materials.
Batteries
Batteries are another item that Tesla’s teams have been working on behind the scenes for years now. The second generation of the 4680 - the Cybercell - has been IRA-compliant for some time now. This means that the Cybertruck is eligible for the US Federal EV rebate.
Tesla also achieved the lowest cost-per-kWh of any of its cells with the 4680 battery - and it is potentially one of the cheapest cells being manufactured by any vehicle battery manufacturer at this point. With dry-cathode still being worked on, Tesla may be able to squeeze more optimizations and cost efficiencies from the 4680 cells.
Additionally, Tesla is progressing with its plans for lithium refining and cathode production in the US, both of which are scheduled to commence in 2025. While the company says they’re no longer supply-constrained for non-LFP vehicle batteries, on-shoring production and sourcing critical minerals from nations outside of China will be key.
LFP batteries continue to be supply-constrained, namely for the Tesla Energy division. LFP batteries and their materials are sourced from China. Due to tariffs and limited exports, Tesla can’t obtain enough and is considering potentially building an LFP production facility in North America.
Energy
Tesla’s energy division is still experiencing some of the highest growth of any of its divisions. Year over year, Tesla saw a 154% increase in energy storage deployments, including both Megapack and Powerwall - for a total of 10.4 GWh deployed in just Q1 2025. While deliveries in energy storage remain volatile due to the nature of Megapack installations, Tesla expects growth to continue rapidly in this segment.
Tesla also deployed 1GWh of Powerwall 3 residential storage this quarter, marking its strongest quarter. Powerwall 3 has received positive feedback from customers, many of whom appreciate its new capabilities with its built-in inverter for solar.
Megapack is continuing to see demand increases, currently highlighted by utility-scale Megapack systems, as well as data centers requiring stable power delivery. Megafactory Shanghai is also online now and producing Megapacks - with an annual production capacity of 20GWh today and up to 40GWh in the future. The site has also produced over 100 Megapacks this quarter, which are all awaiting delivery.
There was a lot of interesting news from Tesla’s Q1 2025 Earnings Call, covering everything from FSD and Robotaxi - to the less glamorous but equally important Megapack and Powerwall.
Tesla is heavily leaning into artificial intelligence, and its insurance offering is just another example of how it’s improving its product or lowering costs by leveraging AI.
Tesla recently started offering an insurance discount in select states when drivers use FSD for at least 50% of their drives and now it’s introducing an AI to help handle customer claims.
Tesla has developed an in-house voiced AI agent that can assist customers in handling simple support requests for Tesla Insurance.
For customers calling in from those states, the new AI agent provides a unique way to address the most common support calls. And it’s not just answering common questions but actually making requested changes to the owner’s account.
Policy Changes
The first key item is that it automates policy changes. Simple policy updates, including adjusting your deductible or coverage limits, are now done via AI. For policyholders who are simply looking to make quick changes and don’t have any questions, this makes the process a lot quicker by not having to wait for a representative. Tesla isn’t eliminating representatives, but this could reduce the number of representatives required or reduce wait times.
Continue Where You Left Off
The second item here, highlighted by Raj Jegannathan from Tesla’s internal IT team, is that Tesla’s AI agent is able to offer summaries of the user’s last interaction with Tesla Insurance. It will summarize your last interaction and provide assistance on that particular topic if you need to continue it. That means that you don’t have to wait for a human to review your file - the AI will kick off right where you left off.
Tesla appears to be focused on improving efficiency and making support more accessible. While actual items like claims are left up to humans due to their inherently complex nature, this helps free up employees to handle more complex items. While there’s no doubt Tesla will continue to develop this AI like they do everything else, we may soon see it take on even more tasks.
More AI
This isn’t the first AI agent that Tesla has demoed - there is now a chat-based AI sales agent available on the front page of Tesla’s website, which is able to answer common questions on Tesla vehicles.
Tesla has also been improving their AI support tool available in the Tesla App is able to provide feedback on common issues and also guide users towards either solving the problem or placing a support request.
Tesla’s strategy here is to influence the cost-heavy areas associated with having humans address simple requests and instead leverage AI, which can offer instant answers and reduce support costs.
Roll Out to More States
While this new AI is currently limited to just 12 states, it is likely to follow Tesla Insurance’s expansion. Insurance seems to have been at a bit of a standstill lately. Tesla continues to improve features such as the improvements to Safety Score V2.2, but we haven’t seen Tesla roll out support to new states since it added Minnesota in November of 2022.
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