To Grow Electric Car Market, Tesla Frees Up Patents

on June 13, 2014 at 1:00 PM

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With a blog post by CEO Elon Musk entitled “All Our Patent Are Belong To You” – that’s a reference to an old Internet meme, not poor grammar – Telsa Motors has gone open source. Henceforth, Musk wrote on Thursday, “Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.”

Musk said the move was intended to help give the broader electric vehicle category a fighting chance in a petrol-powered world. “Our true competition is not the small trickle of non-Tesla electric cars being produced,” he wrote, “but rather the enormous flood of gasoline cars pouring out of the world’s factories every day.”

Even Tesla, despite its enormous market valuation and high profile, is a tiny player; sales of the expensive Model S totaled about 22,500 in 2013, and the forecast for this year is 35,000. Hardly enough to achieve Musk’s goal of remaking the entire automotive landscape and helping save the world from the scourge of climate change.

“Given that annual new vehicle production is approaching 100 million per year and the global fleet is approximately 2 billion cars, it is impossible for Tesla to build electric cars fast enough to address the carbon crisis,” he wrote.

Even more to the point, electric cars are still something of a novelty to most consumers, an interesting one, perhaps, but too expensive, not as flexible as gasoline cars. Tesla’s emphasis on driving range, its development of the Supercharger network, its plans for a more modestly priced vehicle and its “Gigafactory” battery investment are all strategies aimed at addressing those concerns, but building a whole new market is a tall order for a startup. As a powerful brand and industry leader, Musk believes he can well afford to give up some proprietary technology in if the result is a more robust and rapidly growing market.

That said, how much market impact the move might actually have was hard to gauge. In a media conference call after the blog post went up, Musk himself – despite having deftly built up expectations for the announcement – called it a “modest” move. He did mention a meeting with BMW (with no details), and cited Tesla’s small-cell battery packs and Supercharger technology as areas where there could be collaboration with other manufacturers. He also emphasized that sharing innovations would help Tesla in hiring and retaining the best engineers.

“Technology leadership is determined by where the best engineers want to work,” he said. “I think this makes a difference to (recruiting) the very best, the most creative. It also makes a difference to the people who are at Tesla. Putting in long hours for a corporation is hard, but putting in long hours for a cause is easy. I think it’s quite motivating.”

Meanwhile, Musk – already a near-mythic tech figure – appears on his way to now becoming an open-source hero, and at a time of increasing concern that patents, or at least how they’re often used, can be an impediment to technological advancement.

“Many inventors see patents as a valuable reward, encouraging invention,” Charles Duan, director of the Patent Reform Project at Public Knowledge, said in an email interview. “But not all inventors. Elon Musk has placed himself within a growing movement of startup entrepreneurs who invent not for the reward of a patent, but for the value of pioneering a new field of technology.”

Patent reform legislation failed in Congress in May, but Duan suggested that Musk’s high-profile move could help in building a foundation for change.

“Patent reform does look like a legal effort right now,” he said. “But ultimately our long-term goal is a cultural shift toward recognizing the value of openness in stimulating invention, rather than the prevailing view that the exclusive force of patents is the sole driver. So this announcement is a step toward that shift.”