Why Elon Musk Is Exceedingly Clever
13. June 2014
Yesterday, Elon Musk, CEO of Tesla, announced that the company has opened up its patents for its electric vehicle technology. According to Musk, it was done “in [the] spirit of the open source movement, for the advancement of electric vehicle technology.”
It is that series of words after that comma that is the most important.
Back in March, Tesla announced the “Gigafactory” concept. This is a plan to build as many batteries from a single site in 2020 as had been made world-wide in 2013. This means economies of scale. This means the price of batteries goes down. This means the number of electric vehicles goes up. This means that Tesla, which presumably would continue to be a developer and purveyor of exquisite, desirable EVs, would become more successful.
In the initial announcement, Tesla had it that it would be producing some 500,000 vehicles per year by 2020.
And maybe, they’ve concluded that that wouldn’t happen.
So by opening up its patents, what is Tesla doing?
Creating more customers for the Gigafactory.
Musk, in making his announcement, expressed disappointment (?) or disgust (?) or distress (?) in observing, “We felt compelled to create patents out of concern that the big car companies would copy our technology and then use their massive manufacturing, sales and marketing power to overwhelm Tesla. We couldn’t have been more wrong. The unfortunate reality is the opposite: electric car programs (or programs for any vehicle that doesn’t burn hydrocarbons) at the major manufacturers are small to non-existent, constituting an average of far less than 1% of their total vehicle sales.”
Maybe they’ll be more likely to develop more EVs by using Tesla’s tech.
Because the question is whether the whole “not-invented here” approach still exists in many offices at OEMs.
The price of a Gigafactory is on the order of $5-billion. A big bet. So now Musk is increasing the odds that it will pay off.
But you’ve got to give Musk big credit for this belief in his people and what they have, can and will accomplish: “Technology leadership is not defined by patents, which history has repeatedly shown to be small protection indeed against a determined competitor, but rather by the ability of a company to attract and motivate the world’s most talented engineers. We believe that applying the open source philosophy to our patents will strengthen rather than diminish Tesla’s position in this regard.”
Engineers elsewhere should only hope that their bosses are as confident in their skills, talents and capabilities.