What Tesla’s Open Patent Policy Means

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Sue Hwang / GOBankingRate

To say that Elon Musk is a risk taker would be an understatement – after all, you’re talking about a guy whose side business is space travel. He is known to bet big, and not always for better results. On February 21, he was the richest person in the world. On February 22, he lost $ 15 billion in a single day after a wild bet on Bitcoin sent Tesla shares plunging 25%.

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One of his most daring bets, however, didn’t come on the highway or in the cosmos, but on paper. On June 12, 2014, Musk announced that he was releasing Tesla’s hotly contested and high-profile patents to the general public. It was an amazing decision for a company built on cutting edge technology, innovative ideas and revolutionary inventions. Technology, ideas and inventions, after all, are exactly what patents are designed to protect.

At first Tesla applied for patents like everyone else

In 2006, the Department of Energy loaned $ 465 million to a California startup called Tesla to open a whole new kind of auto factory. Its dynamic young leader, Elon Musk, has promised to build fully electric luxury cars that could travel over 200 miles on a single charge. The previously unthinkable idea was made possible by exciting new technology developed by Tesla, including its revolutionary lithium-ion batteries.

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Tesla piled up the patents. Without them, Musk feared the big and powerful automakers would steal Tesla’s technology, flood the market with their own electric vehicles, and use their influence and money to extract Musk from the all-electric future he envisioned.

But Musk changed his mind

Almost a decade later, in 2014, Musk expressed a philosophical shift in a now famous blog post with a headline apparently written by Borat titled “All of our patents are yours.” After all these years, the big automakers still only published a bunch of disappointing EVs. Gas, oil, and global warming ruled the day and Musk now found himself wanting the flood of affordable, high-performance electric vehicles he once feared.

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The dream of a zero-emission future was far too ambitious for Tesla to achieve on its own, but the major automakers were still mostly on the sidelines. Musk announced that Tesla “will not take patent lawsuits against anyone in good faith who wishes to use our technology.” The statement remains at the heart of Tesla’s Patent Pledge.

The results were almost immediate

Soon after Tesla’s announcement, Toyota followed suit and opened 5,600 patents, most of which were also related to alternative fuels like hydrogen fuel cells. Ford was not far behind. He has opened up many of his own patents, also related to electric vehicles, to anyone who is willing to pay for a license. Within a year, several companies were already using Tesla’s newly released patents.

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So what does this mean for you and anyone else outside the market for open source patents dealing with lithium ion and hydrogen? Above all, Musk has done himself and Earth a service by accelerating the inevitable march towards an all-electric future. When Musk opened his patents in 2014, less than 500,000 electric vehicles were sold. Just five years later, in 2019, that number had climbed to over 2 million.

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In 2019, Musk doubled down on his open patent policy and his dream of an industry-wide collaboration towards a carbon neutral future with this tweet: “Our real competition is not the small net of electric cars. not Tesla produced, but rather the huge flood of gasoline cars coming out of factories around the world every day.

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This article originally appeared on GOBankingRates.com: What Tesla’s Open Patent Policy Means


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