Elon Musk Just Made a Brilliant, Unselfish Business Decision


The news: After much speculation, Tesla Motors CEO Elon Musk announced on Thursday that he is not just giving away the company's proprietary Supercharger technology — he is giving away every Tesla patent.

That's right: The head of a major car company just said they are going fully open-source. In one single seismic quote, Musk said patents "serve merely to stifle progress, entrench the positions of giant corporations and enrich those in the legal profession, rather than the actual inventors."

While Tesla will still legally hold its patents, it will no longer sue other car makers who are using the technology in good faith. "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," Musk wrote on the company website. "Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology."

Why is Tesla doing this? As Mic noted earlier this week, "Tesla is not a charity, which is why there's an upside for them as well. While Tesla is currently dominating the electric car market, it still wants to increase the size of that market overall. Last year, the company sold 22,500 cars. But if the interest in and demand for electric cars rise, Tesla can easily boost that number."

In order to do so, Tesla has identified who they actually need to attack. "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," Musk said. "We believe that Tesla, other companies making electric cars, and the world would all benefit from a common, rapidly-evolving technology platform."

If Tesla's patented technology boosts other electric car makers' growth, they can work together to increase consumer demand and take away gasoline cars' market share — and everyone wins (well, except gasoline cars).

Better together: While Musk's decision will have long-term repercussions on the automobile industry, there are some immediate benefits as well. For instance, if other electric car makers decide to adopt the Supercharger system, they can help expand the Supercharger network and subsidize the costs. Mic noted on Tuesday that there are currently 97 Supercharger stations in North America, but only 20 in Europe and three in Asia. Tesla's plan is to increase coverage in the United States and Canada to 98% by 2015, an ambitious goal that could use a lot of help from other car makers.

Current 2014 coverage. Image Credit: Tesla

While sharing proprietary technology with competitors might seem like a strange move, Tesla's focus is not on fighting over a small slice of the pie, but rather on making a bigger slice to share. It's an "all for one, one for all" mindset that will ultimately benefit Tesla in the long run.