Tesla offers, for a $12,000 fee at time of purchase, a replacement policy that will replace the battery AFTER 8 years of use, and only after 8 years of use. This brings the price of the 240 mile range model to $91,900, plus tax and licensing. It is not a warranty that replaces the battery if it fails. It offers no coverage before 8 years, and at 8 years one may replace at any time.

The 6800 3100mA 3.7V Panasonic 18650 Li-ion battery cells used in the Tesla S battery pack have an expected recharge life of 500 charges, which is just over a year if you commute and recharge daily, and is less if you do high amperage recharging such as by using supercharger stations. Most current users are commuting on occasion with their Tesla and do not recharge daily, but 2-3 times a week, so the battery, by avoiding Superchargers, will likely last 4-5 years before the range is reduced to the point that it becomes a problem. This leaves the driver with a car that has a significantly reduced driving range for years 5 through 8 of ownership while waiting for the replacement policy to kick in. (Also worth noting is that for Li Ion battery technology, battery life is damaged by high operating temperature, Arizona drivers in particular should expect shorter life, Alaskan drivers can expect longer life.)

Tesla does offer a $40,000 at-cost replacement for drivers whose batteries have bricked due to not being recharged properly, left in parking lots, or are more than a few years old. This is consistent with the lowest wholesale costs of these battery cells on the global market, with no markup for their added value of the battery enclosure, cooling, heating, monitoring, and recharging hardware, thus it is a fair deal and good value as Tesla is clearly not taking any profit at this battery price point.