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US biggest electric car maker Tesla gives away its patents – but why?

Published time: June 13, 2014 19:38
A visitor looks at a Tesla Model S electric car at the Motorexpo in Canary Wharf, London, June 13, 2014 (Reuters / Marika Kochiashvili)

A visitor looks at a Tesla Model S electric car at the Motorexpo in Canary Wharf, London, June 13, 2014 (Reuters / Marika Kochiashvili)

Tesla CEO Elon Musk has announced that his company will allow others to use Tesla’s technology in electric car production in the hope that this will advance his vision of building more electric vehicles globally.

Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use its technology.

“The mission of the company is to accelerate the widespread adoption of electric cars. If Tesla acts as the catalyst for other manufacturers...that will have been achieved,” Tesla spokesperson Simon Sproule told Wired magazine in an interview before the patent announcement was made.

In a conference call with Wired, Musk rammed his point home by saying, “Putting in long hours for a corporation is hard, putting in long hours for a cause is easy.”

And for Musk it really is a cause, rather than a money-spinning exercise.

“I don’t think people quite appreciate the gravity of what is going on [with regard to global warming] or just how much inertia the climate has. We really need to do something. It would be shortsighted if we try to hold these things close to our vest,” he told Bloomberg.

At the moment, the company only produces the Model S, which is made for a niche market. But in order for electric cars to be anything other than niche, the public must stop thinking of them as electric cars and start thinking of them as cars.

The Model S costs $90,000 and is popular with celebrities and the Silicon Valley elite, but has virtually no appeal for most Americans. Tesla by themselves are “never going to convert the average American into an electric car fan, even with great press and great publicity,” Kelly Blue Book analyst Karl Brauer told Wired.

Right now in the US, the Model S is the only car that can even attempt to compete with petrol and diesel powered vehicles. It has a range of more than 200 miles (322 km) and rapid charging stations that now stretch from the east to west coast across 96 stations, with dozens more coming in North America, Europe, and Asia.

As Nissan and other manufacturers are now working out for themselves, their cars have a range of 70-100 miles (112-160km) – and that's simply not enough when compared to their gasoline-powered competitiors.

Tesla wants to make a car for around $30,000 with a 200 mile-plus range – but this won’t be possible unless it teams up with a company with enough resources to realize this dream, or if an already established car maker creates it themselves.

By allowing other companies to use its patented technology, Tesla hopes electric cars will transform from being unusual and nerdy to normal modes of transportation. But this won’t be easy, as people have become so accustomed to petrol and diesel vehicles.

This is partly because many cars are now so fuel efficient that buying electric doesn’t make sense. So the biggest risk for Musk is that nobody will buy electric cars in any quantity unless automotive giants like Ford or BMW use his technology.

Tesla is in good shape as a company. The Model S has won a number of automotive awards and sales are soaring. A new sports utility vehicle, the Model X, is due out next year and in spite of Musk’s announcement to share its technology, Tesla’s share price is trading only slightly lower.

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