Yesterday Tesla CEO Elon Musk made a shocking announcement. Rather
than keep the car companies many patents on its technology private,
Musk made the decision to allow the entire world to freely use the
patents. It's the first "open source" automobile manufacturing
Other companies have gone this route in the past, but never an
automobile manufacturer. Google, for example, has an open source
platform for its android software. This way developers have access
the inner workings of the software framework, allowing them to
create more efficient and elegant programs that allow the platform
to work better for consumers.
Musk hopes that by opening up his patents to the world that other
automakers can improve upon its designs, making them more efficient
and effective. The real plan for Musk is that automakers around the
world begin to produce more and more electric vehicles in order to
cut into the global fleet estimated at 2 billion cars currently at
a pace of 100 million cars per year. There is no way that Tesla
itself could manufacture enough electric cars to keep up with the
Below is the blog post from Musk:
"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.
Tesla Motors was created to accelerate the advent of sustainable
transport. If we clear a path to the creation of compelling
electric vehicles, but then lay intellectual property landmines
behind us to inhibit others, we are acting in a manner contrary to
that goal. Tesla will not initiate patent lawsuits against anyone
who, in good faith, wants to use our technology.
When I started out with my first company, Zip2, I thought patents
were a good thing and worked hard to obtain them. And maybe they
were good long ago, but too often these days they serve merely to
stifle progress, entrench the positions of giant corporations and
enrich those in the legal profession, rather than the actual
inventors. After Zip2, when I realized that receiving a patent
really just meant that you bought a lottery ticket to a lawsuit, I
avoided them whenever possible.
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.
At best, the large automakers are producing electric cars with
limited range in limited volume. Some produce no zero emission cars
Given that annual new vehicle production is approaching 100 million
per year and the global fleet is approximately 2 billion cars, it
is impossible for Tesla to build electric cars fast enough to
address the carbon crisis. By the same token, it means the market
is enormous. 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
We believe that Tesla, other companies making electric cars, and
the world would all benefit from a common, rapidly-evolving
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."
Is Elon Musk being altruistic or is there an ulterior motive?
I think after he's made the billions he already has that Elon is
trying to do something big for the greater good of the planet. Call
me a sap, but I think he really is being altruistic and there isn't
any greedy ulterior motive behind his actions. Elon gets it. He's
in a position to change the world and what more could you give to
the guy who has everything?
Let me know what you think about Elon's latest stunt.
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
TESLA MOTORS (TSLA): Free Stock Analysis Report
To read this article on Zacks.com click here.