Tesla’s Altruism Is For Its Own Good

In an unprecedented move in the automotive industry, Elon Musk, CEO of Tesla Motors, has announced that the all-electric car manufacturer will be releasing hundreds of its patents for open-source development. 

Global vehicle production is nearing 100 million annually and there are approximately 2 billion cars on the road worldwide. Considering that electric vehicles make up only 1% of new car and light truck sales, ‘it is impossible for Tesla to build electric cars fast enough to address the carbon crisis,’ said Musk in his statement published on Tesla Motors’ blog. The best-selling EV, the Nissan Leaf, which sells for less than half the price of a Tesla Model S, only recently pass the 100,000 units mark after being in the market for more than three years.

The earliest patent expiry for Tesla is in the distant year of 2026, so Tesla is being undeniably generous in its latest move. The company promises that it will ‘not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.’ At the moment, it is unclear how the patented technology will be licensed to other companies, but we imagine competitors and other companies who stand to gain from the technology are already picking out the ones that they could use (see list of Tesla Motors patents here).

The Patent Wall at Tesla Motors

While this may seem like an unusual move for an automotive company, other tech companies have embraced the open-source approach. Google, for instance, published an Open Patent Non-Assertion Pledge vowing that no legal action will be taken against open-source project like Hadoop, which uses technology first developed by Google to crunch massive amounts of data. Another tech company which you might have heard of – Microsoft – never bothered too much about enforcing its patents and had only filed four patent suits by 2010. It is now, perhaps, a new age of business and the mentality is such that it is better to work together than against each other. Other companies, like Apple and Samsung, have been engaged in ceaseless patent lawsuits against each other. 'You wonder who’s really benefiting there. And it seems like neither one. It doesn’t seem like it’s actually serving shareholders,’ Musk commented.

Musk also said, ‘If a company is truly relying on patents it means they aren't innovating, or not innovating fast enough.’

Considering that the resources used to fight these lawsuits can instead be channeled into discovering new technologies, Tesla may have a point – those who are altruistic, if you believe in karma, are the ones who gain the most from the act of ‘kindness’, anyway. Case in point, Tesla’s patents include the high-speed battery-charging technology. Building a comprehensive network of charging stations has been one of Tesla’s greatest challenges. If the same Tesla technology was adopted by more carmakers, then more parties would gain in building more charging stations and allow for greater economies of scale - the cost could be distributed according to proportionate use of the network and collectively these EV makers would be a stronger force in lobbying for policies that support EV adoption.

Already, Tesla and BMW are in talks about sharing Tesla’s “supercharging” technology. In allowing more models to be built on its platform, Tesla is also growing a market for the batteries that will be manufactured by its US$5 billion battery gigafactory. At the risk of sounding naive, we’d like to think that the more you give, the more you get.

Tesla, by the way, is named after Nikolai Tesla, who despite being a clever ‘fella’ who invented hundreds of inventions, many of which are ubiquitous today (the radar, for instance), he lived out his latter years destitute because he failed to patent many of his inventions. Let’s hope that his namesake does not suffer the same fate. 

image: greenoptimistic.com