Game changing news: Elon Musk announced that Tesla Motors has “open sourced” its patent portfolio. They even went so far as to take down the wall of patents at their headquarters! (a bit of overkill, in my opinion) In other words, they will allow others to use their patents without charge or threat of legal action. This came as a surprise to many people, including me. The reactions I’ve seen from people are quite varied. One guy said, “Excuse me, but I’ve got to get to a computer and sell my Tesla stock.” People enthusiastic about the EV movement, were very excited by the news. They saw it as a huge leap forward for electric vehicles, allowing companies to stand on the shoulders of Tesla Motors, in their quest to bring their own EV to market, or improve their current EV offerings. This will potentially have the effect of lowering the cost of entry and therefore the risk of developing electric vehicles. I can’t help but wonder how the current employees of Tesla view this. They have the world by the tail now, and as I try to see this news from their perspective, I wonder if they feel their job security (and stock option value) may have been weakened by this.
Everything I’ve seen Elon Musk say publicly about his and Tesla Motors’ mission in life actually made this announcement inevitable. Still, it came as a surprise. Musk seems to genuinely want to leave the world a better place than he found it. He wants electric vehicles to become the norm, rather than the niche product it is today, in order to reduce pollution and (hopefully) stave off climate change. This is in sharp contrast to a couple of billionaire brothers who seem to be busy buying elections in order to try to preserve their fossil fuel empire for as long as possible. As much as you-know-who have been vilified over their behind-the-political-scene machinations, Elon Musk should be praised for this act of generosity.
Is this a completely charitable action? Of course not. Mr. Musk is a successful businessman and he’s already announced his intention to build “giga-factories” to produce the incredibly large numbers of batteries that will be needed for the electrification of the world’s vehicles. If a company decides to use the Tesla Motors’ patents to get a leg up in developing their own EV, wouldn’t it behoove them to purchase their battery packs from Tesla? This is especially true, if they become the only game in town that can produce the enormous number of battery packs needed. After the “giga-factory” announcement, there were rumors that several of these factories may be built. Unless Tesla Motors foresaw huge growth in their market, these factories would churn out many more batteries than they alone would require. Someone had to do this, if the EV revolution was to thrive.
If you’ve been following this blog long enough, you probably know I used to work for Apple. I am a huge fan of Steve Jobs and I couldn’t help but think of him, the iPhone and the Android/Samsung lawsuits when I heard the Tesla announcement. In my opinion, Steve Jobs was absolutely justified, when he said, “I will spend my last dying breath if I need to, and I will spend every penny of Apple’s $40 billion in the bank, to right this wrong. I’m going to destroy Android, because it’s a stolen product. I’m willing to go thermonuclear war on this.” All it takes is a look at how mobile phones looked before and after the introduction of the iPhone, to understand why he was so angry.
But what did the thermonuclear war bring? Well, a lot of lawyers (on both sides) made lots and lots of money. Apple got judgements in their favor. Then there were retrials and reduced awards. Did it stop their competitors from making iPhone- and iPad-like devices? Hell no! The market was too lucrative. If the competitors did not build clones, they would already be in the dustbin of history. Although, the lawsuits may have caused trepidation, in the long run, the costs involved were seen as much as a “cost of doing business” as are real innovation and product development. It was a risk Apple’s competitors obviously felt they had to take for survival. This goes back to my analogy of corporations as living creatures. Mr. Musk has also hinted at this when he stated in the announcement that, “these days they (patents) serve merely to stifle progress, entrench the positions of giant corporations and enrich those in the legal profession, rather than the actual inventors.”
Point, game and match to Elon Musk. (sorry Steve)
In the long run, it does not matter if the Tesla announcement references a completely charitable move or a savvy business transition to a more profitable business vertical. It will have the effect of moving electric vehicle production and adoption forward. For this, I thank Mr. Musk whole heartedly. Let the brighter future commence! Mankind has entered a new age. Just like the Stone Age, Iron Age, or Bronze Age, we have seen the beginning of the end of the Oil Age.
It’s about time.
**UPDATE** This morning, a friend posted an article from the Austin American-Statesman newspaper, about a new pilot project Tesla is running in California: namely, back up batteries for homes equipped with solar panels (another of Mr. Musk’s companies, SolarCity leases solar panels to homeowners). You may remember that is the company we selected to install ours. Many EV owners have expressed a wish for an inverter to allow their vehicle’s battery pack to be used as a back up power supply for their home, in the event of a utility outage. One proposed used for EV batteries, once their capacity drops low enough that the vehicle owner would want to replace them, is as a storage device for electricity, generated by residential solar panels or wind turbines. If this were done, the homeowner would not have to depend on utilities buying their excess electricity and then buying it back, at a higher price, after the sun goes down or the wind stops blowing. (It would also insulate them from the whims of politicians who seem to respond to the wishes of large donors, i.e. energy companies, instead of their constituents…) It’s an interesting article and seems to support my previous paragraph’s assertions.. I suggest you read it. One note: although the article date shows, “Updated: 6:51 p.m. Monday, July 14, 2014 | Posted: 6:25 p.m. Saturday, June 14, 2014,” I did not travel to the future to get it. 😉
It is starting to look like several giga-factories may be needed.
Mr. Jobs was also the one who used (stole?)the mouse and icon desktop interface originated at the Xerox Palo Alto research center to start up his Macintosh world. While part of Steve Job’s genius was to make products that people could not even imagine wanting, it has been Apple, Inc. who has acted more like the “Big Brother” thought control machine that was depicted in the famous super bowl commercial.
Personally I much prefer the actions of Mr. Musk, who as you say, wants to leave the world a better place than Apple Inc., who outsources manufacturing to horrendous conditions and embraces a corporate strategy of greatest profits for itself and hoarding cash and not reinvesting it into the economy. Not all genius is concerned with making the world a better place, much of it is spent on demeaning others, bolstering personal egos and accumulating wealth for seemingly no other purpose than personal satisfaction.
Let us celebrate the openness of Tesla if it does result in a massive shift from the dependence on petroleum to at least a competing alternative. Perhaps it was done with the intent of becoming the source for other vendors and ends up benefiting Tesla. If so it may be Mr. Musk’s legacy that there is potential for a strategy that results in a win for everyone involved. I would find that a far better world than the legacy of Apple Inc. and its corporate actions.
Having been on the inside at Apple, I know they have tried very diligently to improve workers’ lives at their vendors, including publishing their workplace requirements and performing on-site audits of vendors. That being said, they have not always gotten complete cooperation from their suppliers and have terminated the most egregious violators of their rules.
Steve Jobs was definitely known for his arrogance and short temper. I would have been terrified and excited if ever given the chance to meet him. Once he returned to Apple, he had a $1 per year salary as well as a company jet at his disposal. He was no saint but he wasn’t evil either. His speech to the Macintosh engineers about “putting a dent in the universe” is telling. He absolutely saw the personal computer as a way to level the playing field for individuals and small businesses against huge corporations and the government. He was (as I’m sure most of us are) a very complex person. I highly recommend his biography by Walter Isaacson. As much as I had read about Apple and Jobs before I read Isaacson’s book, there was so much more there.
I think we are not likely to see a whole parcel of Tesla knock-offs flooding the market in six months. There are many good reasons, some financial, for releasing patents, or free-sourcing the engineering. One would be to inspire further development, perhaps a new solution provided by an engineer half-a-world away, that Tesla might quickly purchase, is one. Another is taxes, such as to offset a stock sale. (?)
But, we’re talking about efficient personal transportation versus personal connectivity.
Maybe, we agree that a smart phone is likely a prerequisite to driving an electric car.
Then, tell me what the world would be like today if Apple had open-sourced the iPhone. It would be different from today? Just iPhone knock-offs, and no Android…? And, the prices would be different?
Well, I’m sure we can all agree that … we all gain from Mr. Musk and Tesla’s move. We should thank him for that.
Saying Jobs stole the mouse is incorrect. Xerox gave Jobs permission to go through Xerox facilities and see what they had. He was also given permission to move forward with anything they saw. Jobs saw a mouse, and then gave his engineers on the Mac team directions to reproduce it, but only better. And they did.
Hi Buzz,
I’m really sad that I missed your panel. I just found out about it, and for me it was undoubtedly the most intriguing one at MOVE this year. Is there any chance to watch the replay?
P.S. I live in Austin, and it would be great to invite you for lunch or a beer one of these days and have a chat about selling EVs at dealerships.
My startup is working on solving this issue, and in the US, MB dealerships, in particular, are quite sensitive to the topic. I would love to hear your thoughts on the matter.
Best,
Edoardo
Unfortunately, I don’t think anyone made a recording of my presentation. I live in Fort Worth. The next time I’m scheduled to be in Austin is for Electrify Expo, November 10-12.