It was a car company's worst public-relations nightmare.

Edmunds.com, the widely-read automotive website, bought a Tesla Model S for long-term testing in February 2013. After nine months and 11,000 miles, the car developed an ominous grinding noise under acceleration and deceleration.

Under warranty, Tesla replaced the drive unit, which is essentially the car's entire drivetrain--motor, inverter, and gearbox.

Tesla Model S electric motor and drive unit [photo posted by user Tam to Tesla Motors forum]

Four separate drivetrains

A few months and 8,000 miles later, the car stopped dead on a freeway on-ramp at night. The Model S was flat-bedded to the Tesla service center, where the drive unit was again replaced.

Then, just last month, the third drive unit started to make a "milling sound" after completing a 5,000-mile coast-to-coast round trip. The solution: Install drive unit No. 4.

Four drive units in 30,000 miles, all in full view of thousands of car-savvy readers. Cosmic bad luck?

Apparently not.

Motor Trend magazine's long-term test Model S has also had drive-unit problems. During a routine maintenance visit, a Tesla service tech noticed a funny sound during a test drive, and the drive unit was replaced.

Tesla Model S: the magazine's Car of the Year indeed.

2013 Tesla Model S electric sport sedan [photo by owner David Noland]

How serious is the problem?

As a Model S owner, I certainly sat up and took notice. My car, a standard 85-kWh version (VIN 3996), has had no drivetrain issues in 18 months and 22,000 miles.

But what happens when its four-year / 50,000-mile warranty (including the powertrain) runs out? For me, given my annual mileage, I go out of warranty in only another 18 months or so. What were the odds I'd be on the hook for a drive-unit replacement, rumored to cost $15,000?

Tesla owner forums gave scant comfort. A Tesla Motor Club poll of 87 Model S owners revealed that a startling 28 of them had had their drive units replaced, a rate of 32 percent. Five of them (6 percent) had had multiple replacements.

(We should note that due to the poll's built-in selection bias, that percentage of drive-unit replacements is probably not representative of the larger Model S population.)

On Tesla's own website forum, dozens of owners weighed in with their tales of drive unit woes.

"Every car in my area has had at least one DU replaced," noted one. "I'm on my fifth drivetrain at 12,000 miles," reported another.

One poor fellow was on his sixth--as far as we know, the record for drive-unit futility.

2012 Tesla Model S beta vehicle, Fremont, CA, October 2011

The good news

Looking beneath the surface, though, all is not gloom and doom.

For one thing, most drive-unit replacements are the result of funny noises--not an actual failure.

Moreover, In the Tesla Motors Club forum poll, only seven of 28 owners with new drive units reported that the original drive had actually failed.

Most simply reported milling sounds or clunks. In a few cases, it was the Tesla technicians who first detected the suspicious noise during routine service--and replaced the drive units pre-emptively.

"Milling sound" has become standard argot among Tesla repair techs. In at least one case, a factory tech apparently diagnosed the problem by listening to the car over the phone.

And in all cases, the drive units were replaced under warranty, and didn't cost the owner a cent.

2013 Tesla Model S on Chilcotin Highway, Canada [photo: owner Vincent Argiro]

Moreover, the procedure is apparently quick and easy; most owners reported getting their updated cars back within a day or two.

(The forums mention an unfortunate car-service operator who used a Model S commercially--beyond its warranty, to boot--and supposedly had to pay $15,000 for a new drive unit. I was unable to confirm this, however.)

Too generous?

From an owners' point of view, the drive-unit problem doesn't seem to be a huge deal, at least in the short term. The fix is quick and free, and Tesla has been aggressively generous to owners who have those problems.

Tesla Motors CEO Elon Musk at Tesla Store opening in Westfield Mall, London, Oct 2013

According to Tesla CEO Elon Musk, in fact, that eagerness to replace the drive units, combined with poor diagnosis, may be part of the "problem."

"In some cases, we (thought) that something (was) wrong with the drive unit, but it's actually something wrong with another part of the car," Musk said.

"And then we'd replace the drive unit, and that wouldn't solve the problem, because the drive unit wasn't the problem."

Eager to please

His comments came during a conference call with stock analysts last week, following the release of Tesla's second-quarter earnings report,

The notorious Edmunds car, according to Musk, was an example of this misdiagnosis and eagerness to please.

Onsite service by Tesla Motor technicians on 2013 Tesla Model S, upstate NY [photo: David Noland]

"The service team was ultra-proactive with the Edmunds car," he told the stock analysts.

"They were doing their best to make Edmunds happy, and unfortunately I think this resulted in them changing things up, just on the off-chance something might go wrong....The drive units (were) replaced even though it wasn't a drive unit problem, that happened to them twice."

In that same conference call, Musk revealed that the the drive-unit issue boiled down to "a few items."

One problem is a loose cable that touches the drive unit, transmitting vibrations to the body shell. Replacing the drive unit didn't solve the vibration problem, but simply tightening the cable did.

2012 Tesla Model S beta vehicle, Fremont, CA, October 2011

The 50-cent solution

According to Musk, one particular drive unit problem involved the differential, the gear-set that allows the rear wheels to turn at different speeds as the car is turning.

"We need to shim the differential," said Musk. "(The problem) doesn't require drive unit replacement, it just requires a technician to insert a shim. We are going to have to do that on a fair number of cars. But that is like a 50-cent shim....it's the equivalent of replacing a minor gasket on an internal combustion engine."

So why on earth would Tesla give the customer a $15,000 drive unit when all that was really necessary was a 50-cent shim?

2014 Tesla Model S in China

According to Musk, "Our optimization was customer happiness. And so we knew exactly what to do. We just wanted to give people their car back right away."

Added Tesla's chief technology officer, JB Straubel, "(The drive units) are being replaced ....for expedience, so they get the car back on the road for the customer in the minimum time."

In future: repair, not replace

Obviously, giving customers a $15,000 solution to a 50-cent problem is not a good way to stay in business for very long.

"Going forward, we're looking at ways to repair them and give people back their same drive unit very, very quickly, in about the same amount of time," Straubel told the analysts.

Elon Musk signs new 2013 Tesla Model S at Tesla Store opening, Austin, Texas [photo: John Griswell]

So it appears that Tesla understands the drive-unit problems and knows how to fix them.

In the words of a Tesla spokesman, "the two issues that were affecting some drive units are well identified, and we are fixing those as service items for any customer [who] experiences problems."

The drive-unit problem seems limited to early production cars, built during a period when Musk concedes "we definitely had some quality issues."

But Musk assured the analysts that "the vast majority (of early quality control problems) have been addressed in cars that are being produced today."

2012 Tesla Model S beta vehicle, Fremont, CA, October 2011

Minimal powertrain warranty

My own Model S, of course, is an early production car, delivered the same week as the troublesome Edmunds Model S.

My concern is simply this: What happens if my car develops a drive-unit problem after my four-year, 50,000-mile warranty expires? At, say, five years and 60,000 miles?

A $500 bill for a shim installation is certainly better than a $15,000 bill for a drive unit replacement. But should I pay for a longstanding powertrain problem that has its origins in admitted quality-control problems at the factory?

I'm not aware of any out-of-warranty drive-unit replacements, so as yet, it's unclear what Tesla's answer to that question would be.

2015 Kia Forte EX

Keeping up with Kia

But one thing is certain: Several other car manufacturers would answer that question, "No, you shouldn't have to pay for it." Honda and Ford cover the powertrain for five years or 60,000 miles. General Motors ups the ante to five years or 100,000 miles, while luxury brands Lexus and Lincoln set the bar at six years or 70,000 miles.

The industry leaders are Hyundai and Kia, which each offer 10-year/100,000-mile powertrain warranties to the vehicle's first owner.

For all Musk's chest-pounding about customer happiness and quality that's 10 times that of ordinary cars, it's odd indeed that Tesla falls so short of the industry standard for powertrain warranties.

Perhaps the drive-unit saga will produce one good outcome: a spotlight on this little-noticed hole in Tesla's grand customer-satisfaction strategy.

Your move, Mr. Musk. Can you keep up with Kia?

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