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Tesla Model S Drive Unit Replacement by the Numbers
During my early days of researching the Tesla Model S, I had concerns about a number of things that were emerging in the press. Fires, Model S drive unit issues, and handling in the snow. Tesla quickly addressed the “firegate” issue by retrofitting the Model S with a titanium shield. My concerns around winter driving, in particular handling in the snow, also became a non-issue after watching several winter driving videos put together by Bjørn Nyland.
Within no time, I became a new Model S owner and quickly learned that driving in the winter could actually be quite fun with a good set of winter tires. Tesla later introduced the all-wheel drive “D” models putting to rest any remaining doubt that the Model S could be the best and safest handling car in the world.
But one question still remains for me, Has Tesla dealt with the Drive Unit issues?
Model S Drive Unit Replacement by the Numbers
There is a group of Model S owners across the forums, but also validated by major publications such as Edmunds, that have had one or more drive unit replacements.
Early reports of drive unit issues ranged from total failures that left the Model S inoperable, to more recent complaints of clunking and milling noises. Elon has said in the past that many of these pre-emptive drive unit replacements were unnecessary and a simple $0.50 shim was all that was really needed, yet Tesla Service centers have been proactively replacing drive units.
The following polls from TMC show that a majority of Model S owners have had their drive units replaced.
While the poll only represents a small sample of Model S owners, one might draw significance in the numbers as the density circles around owners needing a drive unit replacement at relatively low mileage, and without any harsh driving prior to failure.
The polls also give insight to the motive behind each drive unit replacement.
Though it appears the issues mainly center around earlier versions of the Model S, there’s been reports of newer Model S with Autopilot hardware hearing milling noises coming from the drive unit. One viewer described the sound as “sawing wood”.
Tesla’s Response to Drive Unit Issues
In typical Tesla fashion, the company acted fast to address the issues, and curb concerns by offering an unlimited mile/8 year warranty on the drive unit. I think this was a great response by Tesla which put to rest any concerns about the quality and long term durability of their drive units.
Elon is now talking about building a power train that will last a million miles and I believe Tesla continues to put significant energy into improving the drive units. Tesla continues to honor the warranty and is proactively replacing drive units that show early signs of problems.
My Experience
After 12 months of Model S ownership and 30k miles drive, I started hearing a humming noise from the rear of my Model S during highway cruising. The noise was unusual as I had gotten used to hearing only the noise of the tires and wind, but there was a new noise only noticeable when cruising or decelerating with regeneration at 65 MPH and over. The noise continued to become more audible over the next few months, but I learned to live with it and did not contact Tesla. My personal rule of thumb on noise related issues is to wait for passengers to comment on it first. It’s my self crazy check.
Two months after the original drive unit humming noises began, a higher pitched milling type noise started occuring when traveling at speeds of 20 MPH or less. The sound varied depending on how much power was being used. That’s when I reached out to Tesla.
Tesla service record
Tesla service had me come in for a test drive which they can do on demand without you needing to wait. We drove about a block before the Tesla service technician said the drive unit needed to be replaced.
The explanation was that tolerances inside the drive unit have led to metal particles getting into the fluid around the drive unit, and as the concentration of particles increased, it caused the noise from the drive unit to become louder when under load. The new drive units evidently have better tolerances and are less prone to having metal particles being shaved off.
At that time, Tesla service has been very backed up here in Massachusetts so my appointment for the drive unit replacement was scheduled six weeks out. I put on another 4,000 miles during that wait time, with an increasingly louder drive unit, before it was finally replaced.
When Tesla replaces a drive unit, they replace both the drive unit and inverter as you can see from a copy of the parts list. The last letter in the drive unit part number (“M” in my case) seems to indicate the generation of the drive unit. The later the letter the better, with the “Q”s seeming to have the best longevity according to the forums.
I’m happy to say that I’ve logged 8,000 miles of happy and noise-free driving after my drive unit replacement. The replacement was done recently so my guess is that I have a newer unit, and thus hope this will be my only replacement.
Thankfully for all of us, Tesla has a first class warranty and level of service. While it goes without saying that inconveniences such as this may happen, rest assured that Tesla has you covered and will always strive to make things right.
Elon Musk
Tesla CEO Elon Musk drops massive bomb about Cybercab
“And there is so much to this car that is not obvious on the surface,” Musk said.
Tesla CEO Elon Musk dropped a massive bomb about the Cybercab, which is the company’s fully autonomous ride-hailing vehicle that will enter production later this year.
The Cybercab was unveiled back in October 2024 at the company’s “We, Robot” event in Los Angeles, and is among the major catalysts for the company’s growth in the coming years. It is expected to push Tesla into a major growth phase, especially as the automaker is transitioning into more of an AI and Robotics company than anything else.
The Cybercab will enable completely autonomous ride-hailing for Tesla, and although its other vehicles will also be capable of this technology, the Cybercab is slightly different. It will have no steering wheel or pedals, and will allow two occupants to travel from Point A to Point B with zero responsibilities within the car.
Tesla shares epic 2025 recap video, confirms start of Cybercab production
Details on the Cybercab are pretty face value at this point: we know Tesla is enabling 1-2 passengers to ride in it at a time, and this strategy was based on statistics that show most ride-hailing trips have no more than two occupants. It will also have in-vehicle entertainment options accessible from the center touchscreen.
It will also have wireless charging capabilities, which were displayed at “We, Robot,” and there could be more features that will be highly beneficial to riders, offering a full-fledged autonomous experience.
Musk dropped a big hint that there is much more to the Cybercab than what we know, as a post on X said that “there is so much to this car that is not obvious on the surface.”
And there is so much to this car that is not obvious on the surface
— Elon Musk (@elonmusk) January 2, 2026
As the Cybercab is expected to enter production later this year, Tesla is surely going to include a handful of things they have not yet revealed to the public.
Musk seems to be indicating that some of the features will make it even more groundbreaking, and the idea is to enable a truly autonomous experience from start to finish for riders. Everything from climate control to emergency systems, and more, should be included with the car.
It seems more likely than not that Tesla will make the Cybercab its smartest vehicle so far, as if its current lineup is not already extremely intelligent, user-friendly, and intuitive.
Investor's Corner
Tesla Q4 delivery numbers are better than they initially look: analyst
The Deepwater Asset Management Managing Partner shared his thoughts in a post on his website.
Longtime Tesla analyst and Deepwater Asset Management Managing Partner Gene Munster has shared his insights on Tesla’s Q4 2025 deliveries. As per the analyst, Tesla’s numbers are actually better than they first appear.
Munster shared his thoughts in a post on his website.
Normalized December Deliveries
Munster noted that Tesla delivered 418k vehicles in the fourth quarter of 2025, slightly below Street expectations of 420k but above the whisper number of 415k. Tesla’s reported 16% year-over-year decline, compared to +7% in September, is largely distorted by the timing of the tax credit expiration, which pulled forward demand.
“Taking a step back, we believe September deliveries pulled forward approximately 55k units that would have otherwise occurred in December or March. For simplicity, we assume the entire pull-forward impacted the December quarter. Under this assumption, September growth would have been down ~5% absent the 55k pull-forward, a Deepwater estimate tied to the credit’s expiration.
“For December deliveries to have declined ~5% year over year would imply total deliveries of roughly 470k. Subtracting the 55k units pulled into September results in an implied December delivery figure of approximately 415k. The reported 418k suggests that, when normalizing for the tax credit timing, quarter-over-quarter growth has been consistently down ~5%. Importantly, this ~5% decline represents an improvement from the ~13% declines seen in both the March and June 2025 quarters.“
Tesla’s United States market share
Munster also estimated that Q4 as a whole might very well show a notable improvement in Tesla’s market share in the United States.
“Over the past couple of years, based on data from Cox Automotive, Tesla has been losing U.S. EV market share, declining to just under 50%. Based on data for October and November, Cox estimates that total U.S. EV sales were down approximately 35%, compared to Tesla’s just reported down 16% for the full quarter. For the first two months of the quarter, Cox reported Tesla market share of roughly a 65% share, up from under 50% in the September quarter.
“While this data excludes December, the quarter as a whole is likely to show a material improvement in Tesla’s U.S. EV market share.“
Elon Musk
Tesla analyst breaks down delivery report: ‘A step in the right direction’
“This will be viewed as better than feared deliveries and a step in the right direction for the Tesla story heading into 2026,” Ives wrote.
Tesla analyst Dan Ives of Wedbush released a new note on Friday morning just after the company released production and delivery figures for Q4 and the full year of 2025, stating that the numbers, while slightly underwhelming, are “better than feared” and as “a step in the right direction.”
Tesla reported production of 434,358 and deliveries of 418,227 for the fourth quarter, while 1,654,667 vehicles were produced and 1,636,129 cars were delivered for the full year.
Tesla releases Q4 and FY 2025 vehicle delivery and production report
Interestingly, the company posted its own consensus figures that were compiled from various firms on its website a few days ago, where expectations were set at 1,640,752 cars for the year. Tesla fell about 4,000 units short of that. One of the areas where Tesla excelled was energy deployments, which totaled 46.7 GWh for the year.
🚨 Wedbush’s Dan Ives has released a new note on Tesla $TSLA:
“Tesla announced its FY4Q25 delivery numbers this morning coming in at 418.2k vehicles slightly below the company’s consensus delivery estimate of 422.9k but much better than the whisper numbers of ~410k as the…
— TESLARATI (@Teslarati) January 2, 2026
In terms of vehicle deliveries, Ives writes that Tesla certainly has some things to work through if it wants to return to growth in that aspect, especially with the loss of the $7,500 tax credit in the U.S. and “continuous headwinds” for the company in Europe.
However, Ives also believes that, given the delivery numbers, which were on par with expectations, Tesla is positioned well for a strong 2026, especially with its AI focus, Robotaxi and Cybercab development, and energy:
“This will be viewed as better than feared deliveries and a step in the right direction for the Tesla story heading into 2026. We look forward to hearing more at the company’s 4Q25 call on January 28th. AI Valuation – The Focus Throughout 2026. We believe Tesla could reach a $2 trillion market cap over the coming year and, in a bull case scenario, $3 trillion by the end of 2026…as full-scale volume production begins with the autonomous and robotics roadmap…The company has started to test the all-important Cybercab in Austin over the past few weeks, which is an incremental step towards launching in 2026 with important volume production of Cybercabs starting in April/May, which remains the golden goose in unlocking TSLA’s AI valuation.”
It’s no secret that for the past several years, Tesla’s vehicle delivery numbers have been the main focus of investors and analysts have looked at them as an indicator of company health to a certain extent. The problem with that narrative in 2025 and 2026 is that Tesla is now focusing more on the deployment of Full Self-Driving, its Optimus project, AI development, and Cybercab.
While vehicle deliveries still hold importance, it is more crucial to note that Tesla’s overall environment as a business relies on much more than just how many cars are purchased. That metric, to a certain extent, is fading in importance in the grand scheme of things, but it will never totally disappear.
Ives and Wedbush maintained their $600 price target and an ‘Outperform’ rating on the stock.
Tesla CEO Elon Musk drops massive bomb about Cybercab
Tesla Q4 delivery numbers are better than they initially look: analyst
