Price increases are common in the automotive industry so the recent $2,500 jump in prices for upcoming Tesla Model S vehicles wasn't exactly a surprise. Still, most vehicle MSRPs don't go up two-and-a-half grand, and so to explain why the price for the award-winning electric vehicle was so "high," George Blankenship, Tesla vice president of worldwide sales and ownership experience, has written on the company blog with numbers and details.

For example, Blankenship says that inflation has gone up 8.75 percent since Tesla first mentioned a $57,400 base price for the Model S in 2009. Compared to a flat 8.75 price increase (which would be $5,000), the $2,500 jump could be seen as relatively reasonable. Even more reasonable is that anyone on the fence about a Model S can still order through the end of the year and get the current, $57,400 base price. There are other changes (heated front seats will now be standard, for example), which you can read about here, so you're not just getting charged more.

There are also new warranty and battery replacement costs and options. On top of the included four-year, 50,000-mile warranty, you can buy a four-year, 50,000-mile extension for $2,500. You can also buy a extension to the prepaid Tesla Ranger program. Details on how, exactly, these extensions will work (e.g., what is the deadline to buy them?), have not been announced.

Perhaps the biggest surprises are the low costs for replacement batteries: $8,000 for the 40-kWh battery, $10,000 for the 60-kWh and $12,000 for the 85-kWh pack. It sounds like you will need to buy this "warranty" soon, and then it "will provide you a new battery anytime after the end of the eighth year." We are curious to learn more about the math and expected rate of uptake on this, because it would be flatly shocking that an 85-kWh pack costs just $12,000, even eight years from now.

Canadians, your price increase for the Model S is $2,600 and Europeans will learn "very soon" what their new, higher costs will be. Actually, since Tesla has never announced the European Model S price, Tesla will "automatically deduct €1,700 (or the local equivalent in other countries) from the base price for everyone who has or makes a reservation by end of day on December 31, long as they finalize their order within a reasonable, predefined timeframe after being invited to configure their Model S."

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