Elon Musk and Tesla: Altruistic or Ulterior Motive? - Real Time Insight

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 company.

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 demand.

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 at all.

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 day.

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

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.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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