Photograph by Noah Berger/Bloomberg
Elon Musk at the Tesla's assembly plant in Fremont, California on July 10, 2013
Why Elon Musk Just Opened Tesla's Patents
to His Biggest Rivals
Annoyed, frustrated and exasperated, Elon Musk has decided to give Tesla Motors’(TSLA) patents away.
Well, “give away” might be too dramatic. But on Thursday, Musk did announce that Tesla will let other companies use its inventions under an open-source-inspired agenda at the company. Here’s how Musk put it in a blog post: ”Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.”
This move looks drastic at first blush. Tesla has hundreds of approved patents—and many additional ones pending—for all manner of spectacular inventions tied to electric-vehicle technology. Tesla pioneered innovations that lowered the cost and increased the safety of battery packs. Its cars recharge much faster than others on the market, thanks to connector, software, and power-management advances. Now this public company will offer these smarts up to its rivals and ask nothing but goodwill in return.
According to Musk, Tesla made this gesture to—once again—try to nudge the rest of the automotive market along. Tesla’s Model S has proved that there’s massive interest in a well-made, fun-to-drive electric car. Still, Tesla is barely making a dent in the massive auto market. Musk wants to promote a more dramatic shift toward electric cars, so he will do what he can to accelerate things. “I don’t think people quite appreciate the gravity of what is going on [with regard to global warming] or just how much inertia the climate has,” Musk said during a conference call. “We really need to do something. It would be shortsighted if we try to hold these things close to our vest.”
Sun Microsystems (ORCL) once made a similar intellectual-property move in the computer world. Famed for its pricey, proprietary software, Sun opted to open-source all its products. The decision came when Sun had fallen on hard times and was looking to gin up interest in its gear to revive the company.
Tesla is in quite a different situation. Its share price has been on a tear for a year as sales of the Model S soared. That car—just the second made by Tesla—has already earned just about every automotive award imaginable, along with top safety and customer-service ratings. Next year, Tesla plans to begin shipping the Model X, a sports-utility vehicle.
From a competition standpoint, Musk considers Tesla’s place secure. “What we are doing is a modest thing,” he said. “You want to be innovating so fast that you invalidate your prior patents, in terms of what really matters. It’s the velocity of innovation that matters.” As long as Tesla keeps inventing and pushing the limits of the technology, it will remain of ahead of rivals.
Musk believes that opening up the patents around the charging technology could lead to important partnerships. He has talked this week to executives from BMW(BMW:GR) about sharing the cost of building recharging stations and creating a common infrastructure.
Tesla’s nationwide network of recharging stations and its plans to build huge battery factories really bring Musk’s point home. No other automaker is making anything like these types of investments in electric cars. At best, Tesla’s rivals are trying to make more interesting electric cars than they have in the past. Musk would like to see the industry step up its game and move from treating electric vehicles like a hobby to making them a top priority.
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