In my opinion, there are a few reasons of why Elon Musk releases their patent to the public. Firstly, he wants to control the standards in the industry and speed up the adoption of electric vehicles. This is aligned with their company’s mission to “accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible.” By obtaining the patents in the first place, he is discouraging any other company from adopting the same technology to innovate and create a mass market for electric vehicles.

Secondly, having competitors who leverage Tesla patent work actually serve as validation such that their technologies are viable and desirable. It can serve as a strategy to allow Tesla to reach a larger crowd – Crossing the Chasm, over a doubting public.

Thirdly, Tesla have made early investments into production facilities like the Gigafactory, they may be able to change their business model such as to manufacture parts for other automobile manufacturers who are in the same playing fields. This will provide them with an alternate revenue stream until the time when those manufacturers have developed their own supply chains.

Lastly, having such an open environment that encourages information sharing may be the best way to spur creativity and allowing Tesla to challenge themselves constantly to innovate and improve in order to stay in the age of technological advancement.

Liked it? Why not to share then?

2 Thoughts on “Why did Tesla open their patent?

  1. Avatar anirudh_shetty on April 8, 2016 at 9:16 am said:

    I would add on to that saying, it is also a very good PR statement.
    The customer base would start associating Tesla with companies working towards collective good from early on in electric car era.

    The perception and brand loyalty will be key factor in future of Tesla. The product is also marketed in a similar way, and Tesla is going in a right direction for now.

    But exact effects on their immediate and long term competition and revenue has to be observed.

  2. Avatar pontusnil on April 8, 2016 at 12:01 pm said:

    Kim Yong – interesting thoughts.
    As I’ve read online I’ve noticed that there have been a lot of discussion weather or not this was solely an altruistic decision of the company to take. In my opinion, I believe that entering the open source movement is a way for Tesla to further pave the way for this industry.

    Time has changed, and Tesla is a very modern company. Thus, sharing their knowledge and exploiting common interests with their competitors might lead to them being able to ”collaborate” and collectively get more customers. The biggest challenge for Tesla is probably not the technology, but actually the mindset of their potential customers – their thoughts of electric cars.
    Sure, Tesla might loose some customers as a result of this decision but if other companies start to invest more into own development of electric cars these companies will also have to do a lot of marketing. Every marketing campaign will matter, and as electric cars becomes more generally accepted, Tesla will benefit.
    And as you mentioned @anirudh_shetty, I also think this is a strategic way of Tesla to become even more of the “good guy” in the industry.

    I don’t think this was solely a altruistic decision of Tesla to make. But I guess it all depends on weather or not you read between the lines. To be honest, I don’t think they would have done it if there were no personal gain in it, because there is, in the long term.

Leave a Reply

Post Navigation