Tesla Motors’ Patents Up for Grabs: Any Takers?

CEO Elon Musk says he wants to drive electric vehicle innovation

17 June 2014

Credit: Tesla

Tesla Motors has devoted an entire wall of its Palo Alto, Calif., headquarters to displaying its electric vehicle technology patents, which include its battery pack venting system, state-of-charge range, vehicle charge connector, plus another 187 innovations the company has chosen to protect. But this week, those patents have all been taken down and its intellectual property is now available to the public for free. The company says it made this unusual decision “in the spirit of the open-source movement.”

While the patents aren’t actually open source (Tesla still owns those patents), founder and CEO, Elon Musk announced on 12 June that the company "will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology." In a blog post on the company’s website, Musk said he hopes this change in the way Tesla handles its patents will spur the growth of the electric vehicle market, which today represents just about 0.5 percent of overall vehicle sales (despite growing EV sales of 67 percent this year).

Tesla Motors’ wall of patents in its headquarters in Palo Alto, Calif. Photo: Steve Jurvetson

Although some are wondering whether this is simply a business strategy, Musk admits that he cannot build EVs fast enough to solve the bigger problem at hand. "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 said.

However, there is something in it for the company and that’s in the infrastructure that supports these EVs. The company is currently installing a network of high-speed charging stations called the Supercharger network that has been designed solely for Tesla owners throughout the United States. In a call with the media after the patent announcement was made, Musk said carmakers BMW and Nissan are already in talks with Tesla about sharing its Supercharger network. The increasing availability of charging stations, Musk said, will drive acceptance of and consumer demand for electric vehicles. Not just for Tesla, he added, but for other manufacturers as well.

In his blog post, Musk said there is so much room for growth in the EV market that the only true competition right now is “the enormous flood of gasoline cars pouring out of the world's factories every day.”

For Musk, sharing his patents could be a win-win situation. Not only might this send more business his way, but it could also help his company attract and keep the most talented engineers who believe in his mission in creating sustainable, zero-emission vehicles. As he said in the media call, “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 for people.” [Note: The company had 187 engineering job openings as of 17 June.]

And while Tesla will not charge royalties for its patents moving forward, it is already profiting from the decision in another way, as are its investors. Tesla stock hit its highest value since April in the days after the announcement and continues to rise.

What do you think about Tesla’s decision to make its patents available to the public? Is this an altruistic move on the part of the company, or is it merely a way to drive up its profits?

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