5 reasons Tesla wants you to use its proprietary tech

Image Credit: via Flickr

Tesla releasing its patents to the will of the public and private sector is certainly a bold move and leaves a lot of questions unanswered: Like why the heck would it do something like that? Here’s some theories on what sparked the company to “clear the path to the creation of compelling electric vehicles.”

1. Publicity

Remember the Hyperloop, Elon Musk’s beautiful and well-illustrated idea for developing a superfast transit line between L.A. and San Francisco? It was a theory that garnered Musk a lot of press for being a crazy genius. Publicity stunts are not new for the startup entrepreneur, and opening up Tesla’s patents likely earned Musk major kudos with the open source community. While it’s certainly noble, “opening” the patents is a verbal agreement. Until those patents expire, using the tech they protect is a risky business move.

2. Tesla has the EV-battery market cornered

So far, no car company has been able to develop a battery as efficient and long-lasting as Tesla’s. There are hybrids, there are short-range EVs, and there are luxury EVs, but none of them offer Tesla’s sports car-like handling and the capability to supercharge on the go. The rest of the electric vehicle market severely lags behind Tesla’s tech, and this potentially holds back the industry. Opening up Tesla’s signature technology could help breed electric innovation beyond Tesla and maybe reinvigorate electric-vehicle development.

3. Not enough consumer interest

The U.S. has less than 30,000 electric stations and plug-in outlets for the 170,000 electric and hybrid vehicles on its road. Most EVs only go 75 miles to 125 miles before they need to refuel. Additionally, electric cars take anywhere from 40 minutes to 15 hours to charge depending on the level of voltage coming from the plug. The average person, therefore, has a lot of reasons to pass on an EV. Opening up supercharge stations and Tesla’s patents could spur innovation and interest in electric vehicles — especially in the creation of EVs at lower prices.

4. Enthusiasm for electric cars is cooling

Toyota, one of the top sellers of EV and hybrid cars, struck up a partnership with Telsa in 2010 so it could take advantage of Tesla’s battery technology for an electric Rav4. Despite Tesla’s definite cool factor, the car didn’t sell well. In May of this year, Toyota allowed its battery supply contract with Tesla to lapse and has said its shifting its focus entirely. The whole experiment showed that consumers just may not want a fully electric vehicle.

5. Fuel Cell

Auto makers have a renewed interest in fuel-cell cars. In 2015, at least five car companies are launching FCVs. Fuel-cell veteran Honda Clarity is building it’s 2015 generation. Hyundai has already released its fuel-cell ix35 in Europe and is investing in a fuel-cell station in California. Meanwhile, Mercedes-Benz is piloting its B-Class F-Cell around California. Nissan signed an agreement in January of 2013 with Daimler and Ford to build a common fuel-cell system and hopes to release a fuel-cell EV in 2017. Toyota will also be among them.

Sure there are barely any hydrogen fueling stations, but fuel-cell cars go at least 240 miles before they need to refuel — about twice as far as the average EV — and only take five minutes to fill-up. At the very least, automakers are very interested in FCVs, which may be a scary prospect for Tesla.

More information:

Tesla's goal is to accelerate the world's transition to electric mobility with a full range of increasingly affordable electric cars. Palo Alto, California-based Tesla designs and manufactures EVs and EV powertrain components. Tesla ha... read more »

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James Diamond
James Diamond

thats right the greedy rich oil companies are at it again trying to put people off idiots this guy is trying to do the world a favor and the greedy rich oil companies just love burning the planet and why was this not done before now oil means money oops oil means burning the planet just nearly forgot. 

Chung Yang
Chung Yang

Proprietary tech? Kind of an asinine title don't you think? First of all, proprietary technology implies that Tesla is somehow trying to make money by licensing or selling its technology to other auto makers. Which is simply not the case here. Secondly, proprietary tech also implies there are somehow other competing "standard" out there that that Tesla is trying to capture, which is also not the case. Since Tesla has done the most research in the area of electric vehicles to date. Basically what Elon Musk is saying is that use any knowledge and know how that Tesla have developed to make electric vehicle for free and is open sourcing the technology. The intent is to encourage anyone to do research and create products based on their technology (not only electric vehicles) to reduce carbon footprint. YES including fuel cell technology, you may need electronic vehicle control system which Tesla also has quite a few patents on.

Ryan Dancey
Ryan Dancey

There is no evidence that interest is cooling.  Tesla is selling every battery it can make.  It has a waiting list with people who have made $5,000 downpayments. It is selling every drive train it can make.  It's limit to growth is batteries and that is why Musk is building the new battery factory.  I think the problem Toyota has (and every other entrenched automaker has) is that they don't want to make a car that isn't as good as a Tesla, and the only way to make a car as good as a Tesla is to charge $80k for it.  They're all stuck trying to wait out the competition - let someone else fund the economies of scale and production efficiencies and new technology that will get the price down to $30-$40k, but until then, they keep nibbling around the edges.

Musk is betting that entrepreneurs will take those patents and do the kind of work on the ecosystem that he doesn't have the time or the resources to do himself.  Tesla is already building the network of charging stations.  That's like Ford having to build gas stations.  Musk is hoping that someone grabs that tech and decides to be the Mobil of charging stations.  He'd love to have someone take that load off of Tesla.  If the patent risk is meaningful, he gains a lot more by getting rid of that risk than by keeping the patents.  (And de-risking the patents probably requires nothing more at this point than an exchange of letters between lawyers and maybe a 2-page patent license, which is, from what I read on Musk's blog, essentially what he's offering anyone who wants to use the patents).