On June 12, 2014, the CEO of Tesla Motors (Tesla), Elon Musk, posted an external memo entitled “All Our Patent Are Belong To You.” In short, the memo details why Tesla is opening up its patent portfolio to the market. The primary reason given for this drastic move seems to be a David versus Goliath mentality. Musk wrote, “[o]ur true competition is not the small trickle of non-Tesla electric cars being produced, but rather the enormous flood of gasoline cars pouring out of the world’s factories every day.”
While most people know Tesla as an electric car manufacturer, it is really a successful battery company that has been focusing its efforts on building a market for its battery technology. As of late June 2014, 120 of Tesla’s 172 issued patents related to battery and charging technologies. While at first glance the decision by Tesla to open its patent portfolio seems altruistic and selfless, it is likely a power play to strengthen the electric vehicle market as a whole and increase Tesla’s potential market for its battery technology. In 2013, less than 1% of all vehicles sold were electric, and Tesla accounted for approximately 25% of that 1%. Musk would likely rather see Tesla make up a much smaller percentage of a much larger market.
Musk seems eager to inject a bit of competition into the electric vehicle market in order to spur innovation, increase customer adoption, and share the load in convincing the public that electric vehicles are a viable option. Tesla is at a stage in its life that not many businesses will ever see – Tesla is lobbying for a shift in the way millions of people conduct their daily lives from something that is quick, easy, and convenient to something that is new, lacking infrastructure, and unpredictable from the point of view of the consumer. Only time will tell if Tesla’s bold move will pay off, but one thing is certain – it is the only chance Tesla has at moving the electric vehicle market forward.