Do free patents buy Tesla the competitive advantage?

We all have been talking about Tesla and what it is as a company, the company is known to produce great electric cars and the founder Elon Musk is making tremendous efforts to make a revolution in transportation industry and has continued to surprise people by delivering on promises and also revolutionizing the electric industry.Tesla has released its patents publicly for other companies to use but most of the manufacturers aren’t using those patents and developing their own technology. One of the reason behind this is the loop holes in the contract. Actually there is no formal contract which says so, Elon Musk posted on his Tesla blog,

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

Without defining the term “Good Faith”, there are no legal documents saying this and there are no terms and conditions regarding how Tesla defines “good faith”, that's why most companies and other small manufacturers aren’t using them (Except China, they have really relaxed patent and copyright laws) and most companies prefer to use their own technology instead of the patents. This helps them to develop their own technology and prevent any future lawsuits as well.

Tesla Roadster(Top) and Tesla Semi Truck(Bottom) 

But do free patents buy Tesla the competitive advantage?

What Tesla is trying to do here isn’t deceiving people or companies into using their own patents and then filing a for a patent lawsuit later. But it is trying to be the pioneer in electric industry, and yes the entire industry not only automotive. It is trying to get maximum market share in the electric car market in the long run, by using the concept of licensing. Allow me to explain…

“Suppose you go to a mall, a railway station or any public place and you want to charge your phone, Now the first thing you will do is try to find a public charging point and then choose the USB cable that fits your phone and charges it”

What about when you can’t find the desired USB cable? 

You can’t charge your phone. Now consider that every phone ever produced has the same USB port and can be charged using the same USB cable, and that you own each and every public charging station in the world. Think about the money you can make and also you can charge your phone anywhere in the world. By now you must have guessed what I am talking about. The phone here is a metaphor for electric cars, just like mobile phones it would pose a huge problem if every car has a different electric charging port and they aren’t compatible with the charging cable, Tesla is trying to unify that by publicly giving away its patents and unify the electric infrastructure, years from now they will own all the gas stations in the countries because everyone is using their technology. Just like the early days of Big Oil, when they owned all the gas stations in the US. And this is not just limited to charging cables an ports but also their battery technology, solar panels and their AC motor technology. Tesla can become a huge spare parts supplier or a third party manufacturer in electrical and electronics equipment for electric cars.

Despite the criticism of Tesla by Wall Street Experts and many other journalists, due to model 3 production issues and delays, I truly believe in the company and its vision because Elon Musk has delivered on his promises time and again. The proof being when the Tesla roadster and semi-truck were unveiled. The stats on those things are insane, the semi-truck has a lower drag coefficient than a Bugatti Chiron and Roadster claims to be the fastest supercar by doing 0-60 in 1.9 secs and has 620 mile range.

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