Tesla 2016 Annual Report Download - page 9

Marketing
Ourprincipalmarketinggoalsareto:
·generatedemandforourvehiclesanddriveleadstooursalesteams;
·buildlong-termbrandawarenessandmanagecorporatereputation;
·manageourexistingcustomerbasetocreateloyaltyandcustomerreferrals,includingthroughourreferralprograms;and
·enablecustomerinputintotheproductdevelopmentprocess.
Historically,wehavebeenabletogeneratesignificantmediacoverageofourcompanyandourvehicles,andwebelievewewillcontinuetodoso.Todate,
mediacoverageandwordofmouthhavebeentheprimarydriversofoursalesleadsandhavehelpedusachievesaleswithouttraditionaladvertisingandat
relativelylowmarketingcosts.
Vehicle Service and Warranty
Service
Weprovideserviceforourelectricvehiclesatourcompany-ownedservicecenters,atourServicePluslocationsor,incertainareasforanadditionalcharge,
throughTeslaRangermobiletechnicianswhoprovideservicesthatdonotrequireavehiclelift.Weownedandoperated118servicelocationsasofDecember31,
2015.Wearecontinuingourplantobuildanumberofadditionalservicecentersinseveralmarketsworldwide.
Ourvehiclesaredesignedwiththecapabilitytowirelesslyuploadthedatatousviaanon-boardsystemwithcellularconnectivity,allowingustodiagnose
andremedymanyproblemsbeforeeverlookingatthevehicle.Whenmaintenanceorserviceisrequired,acustomercanscheduleservicebycontactingoneofour
Teslaservicecenters.OurTeslaRangers,ormobileserviceteam,canalsoperformanarrayofservicesfromtheconvenienceofacustomer’shomeorotherremote
location.
Ourcompany-ownedservicecentersenableourtechnicianstoworkcloselywithourengineersandresearchanddevelopmentteamsinSiliconValleyto
identifyproblems,findsolutions,andincorporateimprovementsfasterthanincumbentautomobilemanufacturers.
New Vehicle Limited Warranty, Maintenance and Extended Service Plans
Weprovideafouryearor50,000mileNewVehicleLimitedWarrantywitheverynewvehicle,subjecttoseparatelimitedwarrantiesforthesupplemental
restraintsystemandbattery.Forthebatteryanddriveunitonourcurrentnewvehicles,weofferaneightyear,infinitemilewarranty,althoughthebattery’s
chargingcapacityisnotcovered.
InadditiontotheNewVehicleLimitedWarranty,weofferacomprehensivemaintenanceprogramforeverynewvehicle,whichincludesplanscovering
prepaidmaintenanceforuptoeightyearsorupto100,000milesandanExtendedServiceplan.Themaintenanceplanscoverannualinspectionsandthe
replacementofwearandtearparts,excludingtiresandthebattery.TheExtendedServiceplancoverstherepairorreplacementofvehiclepartsforuptoan
additionalfouryearsoruptoanadditional50,000milesaftertheNewVehicleLimitedWarranty.
OurNewVehicleLimitedWarrantyandExtendedServiceplansaresubjecttocertainlimitations,exclusionsorseparatewarranties,includingoncertain
wearitems,suchastires,brakepads,paintandgeneralappearance,andbatteryperformance,andareintendedtocoverpartsandlabortorepairdefectsinmaterial
orworkmanshipinthebody,chassis,suspension,interior,electronicsystems,battery,powertrainandbrakesystem.Inaddition,allprepaidmaintenanceand
ExtendedServiceplansmustbepurchasedwithinaspecifiedperiodoftimeaftervehiclepurchaseorwarrantyexpiration.
Financial Services
WeofferloansandleasesforourvehiclesinNorthAmerica,EuropeandAsiaprimarilythroughvariousfinancialinstitutions.Wealsoofferfinancing
arrangementsdirectlythroughourlocalsubsidiariesincertainareasoftheUnitedStates,Germany,CanadaandtheUK.Weintendtobroadenourfinancial
servicesofferingsduringthenextfewyears.
Certainofourfinancingprogramsprovidecustomerswitharesalevalueguaranteeunderwhichthosecustomershavetheoptionofsellingtheirvehicle
backtousatapresetfuturedate,generallyduringtheperiodof36to39monthsfollowingdeliveryforapre-determinedresalevalue.Thisstructureallowsthe
customertoenjoythebenefitsofvehicleownershipwithoutconcernforresalevalue.WeintroducedthisprograminNorthAmericain2013andexpandeditto
selectedEuropeanandAPACmarketsin2014and2015.Incertainmarkets,wealsoofferresidualvalueguaranteestofinancialinstitutionswhichmayobligateus
torepurchasethevehiclesforapre-determinedprice.
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