Tesla Hands Over The Keys To Its Electric Car Technology

At the start of this year, Tesla had been issued 203 patents covering its batteries and other key features that distinguish its electric cars from gasoline-powered vehicles. Another 280 patent applications are still pending in the US and other countries, according to Tesla’s regulatory filings.

The earliest any of Tesla’s current patents expires is in 2026, so the company is relinquishing a potentially valuable long-term advantage by giving away its intellectual property to its rivals.

But other companies have shown that technology giveaways can pay off. Even though it spent millions designing Android, Google made the software available to all comers at no charge. Google was more interested in expanding the market for mobile devices and ensuring its search engine and other digital services supported by advertising would be prominently featured on them.

The strategy has worked out well for Google so far. Android is now on more than 1bn devices, surpassing Apple’s iOS as the world’s most widely used mobile operating system.

The open-source movement has long appealed to the egalitarian mindset of most technologists, so the patent decision could help recruit talent. Musk named his company for Nikola Tesla, a famous inventor who became so exasperated with the legal system that he finally stopped patenting his ideas.

“Technology leadership is determined by where the best engineers want to work,” Musk said. “Putting in long hours for a corporation is hard. Putting in long hours for a cause is easy.”

Analysts said the announcement has little downside for Tesla, and could solidify its leadership in the market.

“By opening its patents, Tesla rightly realises it’s better to be the best product in a large industry than the only product in a niche one,” observed Silicon Valley entrepreneur Aaron Levie, the CEO of file-storing company Box Inc.

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