Elon Musk is giving away all Tesla's patents for free

In a blog posted last night, Musk said he was making Tesla's patents available to anyone who wants them. 'The world will benefit' - or it's a genius PR move.

by Emma Haslett
Last Updated: 13 Jun 2014

They say intellectual property is the backbone of any manufacturing business, but zillionaire Tony Stark-alike Elon Musk laughs in the face of convention. In an astonishing blog posted last night, he said his electric car company, Tesla, will make all its patents available for free.

‘Yesterday there was a wall of Tesla patents in the lobby of our Palo Alto headquarters… that is no longer the case. They have been removed, in the spirit of the open source movement, for the advancement of electric vehicle technology.’

He goes on to explain that having taken precautions to patent all his inventions at his first company, Zip2, ‘I realised that receiving a patent really just meant that you bought a lottery ticket to a lawsuit’.

‘At Tesla, however, 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.’

‘Our 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.’

‘We believe that Tesla, other companies making electric cars, and the world would all benefit from a common, rapidly-evolving technology platform.’

What’s he playing at? Among its many innovations, Tesla has found a unique way to keep the cost of car battery packs down, and allow them to recharge much faster than many of its rivals. That puts it at the forefront of the electric car market - so this is a radical move. Imagine what the shareholders of, say, General Motors, would say if its chief executive did the same thing.

The open source movement is more closely associated with the internet industry (of which Musk, the founder of PayPal, is an alumnus), so Musk knows how it works. There could be method to his madness. Firstly, because Musk is about to decide on the location for a $5bn factory which produces up to 500,000 car battery packs a year. Someone will have to buy some of them. Why not make the technology available to make that easier?

Secondly, because defending patents costs a lot in both money and time (as he says he's discovered). So in the long term, giving them away may be good for Tesla - particularly if it means more demand for electric cars.

At an event last week, Musk told MT that ‘we’re not even close’ to producing enough sustainable vehicles.

‘The world really needs to move to sustainable transport, but at the current pace we’re not even close. Ninety million new vehicles are made a year and only a few hundred thousand of those are electric.’ This is a brave move - but it could be a game changer.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

When spying on your staff backfires

As Barclays' recently-scrapped tracking software shows, snooping on your colleagues is never a good idea....

A CEO’s guide to smart decision-making

You spend enough time doing it, but have you ever thought about how you do...

What Tinder can teach you about recruitment

How to make sure top talent swipes right on your business.

An Orwellian nightmare for mice: Pest control in the digital age

Case study: Rentokil’s smart mouse traps use real-time surveillance, transforming the company’s service offer.

Public failure can be the best thing that happens to you

But too often businesses stigmatise it.

Andrew Strauss: Leadership lessons from an international cricket captain

"It's more important to make the decision right than make the right decision."