Elon Musk and Tesla are showing even more confidence in their Model S. Moments ago, Musk announced that the car's drive unit warranty has been extended to match that of the Model S battery pack and will now run for 8 years from the date of purchase. The new policy, which is retroactive and covers existing owners, allows for "unlimited miles" to be driven in that time. So as long as you're within those 8 years, Tesla will service your car under warranty at no cost if there should be an issue with the drive unit. You may be on the hook for problems elsewhere, and the updated and far more generous warranty only applies to the 85 kWh Model S. Musk says this is Tesla's "most popular car by far."

Musk wants buyers feeling even more confident about their purchase

Prior to today, the Model S had a 4-year, 50,000 mile warranty that could optionally be upgraded to an extended warranty covering 8 years and 100,000 miles for an added cost of $4,000. Musk is no longer happy with that approach. "In hindsight, this should have been our policy from the beginning of the Model S program," he wrote on the automaker's blog today. "If we truly believe that electric motors are fundamentally more reliable than gasoline engines, with far fewer moving parts and no oily residue or combustion byproducts to gum up the works, then our warranty policy should reflect that."

He's also giving investors a heads up that the change will "have a moderately negative effect on Tesla earnings in the short term." But Musk thinks any downsides will be short-lived and that Tesla will come out better for having made this decision. "By doing the right thing for Tesla vehicle owners at this early stage of our company, I am confident that it will work out well in the long term. The timing isn't entirely coincidental; Edmunds recently published a report that called the reliability of Model S into question. Over the course of 17 months, Edmunds had to make an abnormally high number of maintenance visits to fix a wide variety of issues. Elon Musk maintains Edmunds received one of the earlier cars off the assembly line and many of the problems it experienced have been ironed out since. The new warranty is a pretty good way of backing up those words and making buyers both new and old feel more confident about their purchase.